Document:

exv10w2

 

Exhibit 10.2

GUARANTEE

     FOR VALUE RECEIVED, the sufficiency of which is hereby acknowledged, and in connection with
that certain funding agreement (the “Funding Agreement”), entered into by and between Principal
Life Insurance Company, an Iowa insurance company (“Principal Life”), and Principal Life Income
Fundings Trust 29, a New York common law trust (the “Trust”), relating to the notes (the “Notes”)
issued by the Trust, Principal Financial Group, Inc., a Delaware corporation and the indirect
parent company of Principal Life (the “Guarantor”), hereby furnishes to the Trust its full and
unconditional guarantee of the Guaranteed Amounts (as hereinafter defined) as follows:

     1. Guarantee.

               (a) The Guarantor hereby fully, irrevocably, absolutely and unconditionally guarantees, as a
guarantee of payment and not merely as a guarantee of collection, immediate payment when due to the
Trust any payments required to be made by Principal Life to the Trust under the Funding Agreement
which shall become due and payable regardless of whether such payment is due at maturity, on an
interest payment date or as a result of redemption or otherwise (the “Scheduled Payments”) but
shall be unpaid by Principal Life (the “Guaranteed Amounts”). Notwithstanding anything to the
contrary contained herein, in no event shall the Guaranteed Amounts exceed the Deposit (as defined
in the Funding Agreement) of the Funding Agreement, plus accrued but unpaid interest and any other
amounts due and owing under the Funding Agreement, less any amounts paid by Principal Life to the
Trust.

               (b) In the event that Principal Life fails to make a Scheduled Payment in full when due (the
“Payment Notice Date”), then the Trust or Citibank, N.A., as indenture trustee for the benefit of
the holders of the Notes (the “Indenture Trustee”), pursuant to the indenture (the “Indenture”)
between the Trust and the Indenture Trustee, may present the Guarantor with notice (each, a
“Payment Notice”) of such failure in writing on or after the Payment Notice Date. The Payment
Notice shall identify (1) the Funding Agreement, (2) the Trust, (3) the Payment Notice Date and (4)
the amount of the Scheduled Payments not paid by Principal Life to the Trust as of the Payment
Notice Date. Upon receipt of such Payment Notice, the Guarantor will immediately pay the
Guaranteed Amounts pursuant to Section 7.

               (c) In the event that, after receipt of a Payment Notice from the Trust, the Guarantor fails
to make immediate payment to the Trust or the Indenture Trustee of the Guaranteed Amounts, then
the Trust and the Indenture Trustee may enforce the obligations of the Guarantor under this
Guarantee, including by immediately bringing suit directly against the Guarantor (without first
bringing suit against Principal Life) for the Guaranteed Amounts not paid to the Trust as of the
Payment Notice Date.

               (d) This Guarantee is an unsecured, unsubordinated and contingent obligation of the Guarantor
and ranks equally with all other unsecured and unsubordinated obligations of the Guarantor.

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               2. Termination. This Guarantee is a continuing and irrevocable guarantee of the
Guaranteed Amounts now or hereafter existing and shall terminate and be of no further force and
effect with respect to the Funding Agreement and the Notes upon the full payment of the Scheduled
Payments or upon the earlier extinguishment of the obligations of Principal Life under the Funding
Agreement.

               3. Amendments. Subject to the trust agreement relating to the Trust and the Indenture, no
provision of this Guarantee may be waived, amended, supplemented or modified, except by a written
instrument executed by the Trust and the Guarantor.

               4. Assignment; Governing Law. This Guarantee shall inure to the benefit of the Trust and its
successors, assigns and pledgees. This Guarantee shall be governed by, and construed in accordance
with, the laws of the State of New York without regard to conflict of law principles.

               5. Notices. All notices given pursuant to this Guarantee shall be in writing, and shall
either be delivered, mailed or telecopied to the locations listed below or at such other address or
to the attention of such other persons as such party shall have designated for such purpose in a
written notice complying as to delivery with the terms of this Section 5. Each such notice shall
be effective (i) if given by telecopy, when transmitted to the applicable number so specified in
this Section 5 (such notice shall also be sent by mail, with first class postage prepaid), (ii) if
given by mail, three days after deposit in the mails with first class postage prepaid, or (iii) if
given by any other means, when actually delivered at such address.

If to the Guarantor:

Principal Financial Group, Inc.

711 High Street

Des Moines, Iowa 50392

Attention: General Counsel

Telephone: (515) 247-5111

Facsimile: (515) 248-3011

With a copy to:

Principal Life Insurance Company

711 High Street

Des Moines, Iowa 50392

Attention: Jim Fifield

Telephone: (515) 248-9196

Facsimile: (866) 496-6527

If to the Trust:

Principal Life Income Fundings Trust (followed by the number of the Trust specified in this Guarantee)

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c/o U.S. Bank Trust National Association

100 Wall Street, 16th Floor

New York, New York 10005

Attention: Janet P. O’Hara

Telephone: (212) 361-2527

Facsimile: (212) 809-5459

With a copy to:

Citibank, N.A.

Corporate and Investment Banking

388 Greenwich Street, 14th Floor

New York, New York 10013

Attention: Jennifer H. McCourt

Telephone: (212) 816-5680

Facsimile: (212) 816-5527

               6. Representations and Warranties. The Guarantor represents and warrants that: (i) it is duly
organized and in good standing under the laws of the jurisdiction of its organization and has full
capacity and right to make and perform this Guarantee, and all necessary authority has been
obtained; (ii) this Guarantee constitutes a legal, valid and binding obligation of the Guarantor
enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency and similar
laws affecting creditors’ rights and general principles of equity, regardless of whether
enforcement is sought in a proceeding in equity or at law; (iii) the making and performance of this
Guarantee does not and will not violate the provisions of any applicable law, regulation or order,
and does not and will not result in the breach of, or constitute a default under, any material
agreement, instrument or document to which it is a party or by which it or any of its property may
be bound or affected, except to the extent disclosed in the registration statement registering the
issuance of this Guarantee and the Funding Agreement, as amended, supplemented or modified from
time to time (the “Registration Statement”), and to the extent that any such violation, breach or
default does not result in a material adverse effect on the Guarantor; and (iv) all consents,
approvals, licenses and authorizations of, and filings and registrations with, any governmental
authority required under applicable law and regulations for the making and performance of this
Guarantee have been obtained or made and are in full force and effect, except to the extent
disclosed in the Registration Statement and to the extent that the failure to acquire any such
consent, approval, license, authorization, filing or registration does not result in a material
adverse effect on the Guarantor.

               7. Notice of, and Consent to, Security Interest. The Trust hereby notifies the Guarantor that
it has granted to the Indenture Trustee, on behalf of the holders of the Notes, a security interest
in the Collateral (as defined in the Indenture), including, but not limited to, any and all payment
to be made by the Guarantor to the Trust under this Guarantee. The Trust hereby notifies the
Guarantor that it has collaterally assigned to the Indenture Trustee, for the benefit of the
holders of the Notes, this Guarantee. The Guarantor, by executing this Guarantee, hereby (i)
affirms that it has made or simultaneously will make changes to its books and records to reflect
such security interest and collateral assignment, (ii) consents to the security interest

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granted, and collateral assignment made, by the Trust to the Indenture Trustee of this
Guarantee, (iii) agrees to make all payments due under this Guarantee to the Collection Account (as
defined in the Indenture) or any other account designated in writing to the Guarantor by the
Indenture Trustee and (iv) agrees to comply with all orders of the Indenture Trustee with respect
to this Guarantee without any further consent from the Trust.

               8. WAIVER OF JURY TRIAL; FINAL AGREEMENT. TO THE EXTENT ALLOWED BY APPLICABLE LAW, THE
GUARANTOR WAIVES TRIAL BY JURY WITH RESPECT TO ANY ACTION, CLAIM, SUIT OR PROCEEDING ON OR ARISING
OUT OF THIS GUARANTEE. THIS GUARANTEE REPRESENTS THE FINAL AGREEMENT BETWEEN THE GUARANTOR AND THE
TRUST AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS AMONG SUCH PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG SUCH PARTIES.

	 	 	 	 	 	 	 
	 	 	PRINCIPAL FINANCIAL GROUP, INC.
	 
	 	 
	 

	 	By:	 	/s/ James C. Fifield	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	James C. Fifield	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	Assistant General Counsel 	 	 
	 

	 	 	 	 	 	 
	 

	 	Date:
	 	The Effective Date (as defined in the Funding Agreement)	 	 

Acknowledged and Agreed:

THE PRINCIPAL LIFE INCOME FUNDINGS

TRUST DESIGNATED IN THIS GUARANTEE

	 	 	 	 
	By:

	 	U.S. Bank Trust National Association,
not in its individual capacity, but solely in its
capacity as trustee	 
	 
	 	 
	By:

	 	Bankers Trust Company, N.A.,
under Limited Power of Attorney, dated February 16, 2006
	 
	 	 
	By:
	 	/s/ Debra Williams
	 

	 	 
	 
	 	 
	Name:
	 	Debra Williams
	 

	 	 
	 
	 	 
	Title:
	 	Vice President
	 

	 	 
	 
	 	 
	Date:

	 	The Effective Date (as defined in the Funding Agreement)

4exv10w1

 

Exhibit 10.1

EMPLOYMENT AGREEMENT

(Chief Financial Officer)

     THIS EMPLOYMENT AGREEMENT (“Agreement”) is made and entered into effective as of the 19th
day of March, 2007 (“Effective Date”), by and between E ENERGY Adams, LLC, a Nebraska limited
liability company (“E ENERGY”) and Larry Brees (“Employee”).

     WHEREAS, the parties acknowledge that E ENERGY was formed for the purpose of developing a
project to build and operate a 50 million gallon dry mill corn-processing ethanol plant in Gage
County, Nebraska near Adams (the “Business of E ENERGY”); and

     WHEREAS, the parties agree and acknowledge the Business of E ENERGY is a highly competitive
one, both inside of and outside the state of Nebraska; and

     WHEREAS, the parties agree and acknowledge E ENERGY has, is and will likely continue to
develop valuable confidential techniques and valuable proprietary and confidential information,
forms and methods for use in the Business of E ENERGY; and

     WHEREAS, Employee agrees and acknowledges that Employee will have access to said valuable
techniques and employ said valuable proprietary and confidential information, forms and methods in
earning income in the employ of E ENERGY; and

     WHEREAS, the parties further agree and acknowledge that Employee’s position is one of
considerable responsibility and requires considerable experience and requires Employee to develop
and maintain good relationships with E ENERGY: (i) suppliers and potential suppliers, (ii)
customers and potential customers and (iii) employees, and that E ENERGY will incur substantial
time and expense to replace an employee who has the experience and relationships of Employee; and

     WHEREAS, as a condition of employment and continued employment of Employee by E ENERGY, the
parties mutually agree that confidentiality is required in connection with the Business of E ENERGY
and in connection with the identity of E ENERGY’S suppliers and customers, and that accordingly, it
is vital that E ENERGY be protected from direct or indirect competition from Employee during his
employment and for a reasonable period of time thereafter; and

     WHEREAS, E ENERGY and Employee now desire to provide for the employment of Employee by E
ENERGY, after the effective date of this Agreement, upon the terms and conditions set forth in this
Agreement.

     NOW THEREFORE, in consideration of the mutual covenants contained herein and for other good
and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto agree as follows:

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AGREEMENT

1. Employment and Duties. Effective as of the Effective Date, E ENERGY will employ Employee
and Employee will accept such employment upon the terms and conditions set forth in this Agreement.
Employee shall be the Chief Financial Officer for E ENERGY and shall report directly to the Board
of Directors and CEO/General Manager or to such other person as the CEO designates only after the
Executive Committee has given permission to do so, which permission shall not be unreasonably
withheld. Employee shall devote substantially his entire time and attention to the Business of E
ENERGY. In so doing, Employee agrees to contribute his best skills and services at all times for
the business and benefit of E ENERGY. Employee hereby represents and confirms that he is under no
contractual or legal commitment that would prevent him from fulfilling his duties and
responsibilities as set forth in this Agreement. During his employment with E ENERGY, Employee may
participate in charitable activities and personal investment activities to a reasonable extent and
he may serve as a director of business and civic organizations so long as such activities do not
interfere with the performance of his duties and responsibilities hereunder. Employee may
participate in other business activities that do not otherwise interfere with his duties under this
Agreement with the prior consent of the CEO.

2. Term and Termination of Employment. The term of Employee’s employment under this
Agreement shall commence on the Effective Date of this Agreement and shall continue thereafter
until terminated as follows:

     a. E ENERGY may terminate this Agreement without cause by notifying Employee of such
termination at least 30 days in advance of the effective date of such termination. E ENERGY may
terminate this Agreement for cause at any time without prior notice to Employee.

     b. This Agreement shall automatically terminate upon the death or permanent disability
(as determined in good faith by the Board of Directors) of Employee.

     c. Employee may terminate this Agreement by notifying the CEO of such termination at
least 60 days in advance of the effective date of such termination, However, in the event Employee
terminates this Agreement prior to one year from the Effective Date, Employee will be required to
repay all reasonable recruiting costs incurred by E ENERGY in recruiting him and his replacement.

Except as provided herein, all of Employee’s right to compensation and other benefits hereunder
shall terminate upon the date his employment terminates, except: as may be mandated by law with
respect to health insurance or other benefits.

3. Position and Duties. Employee shall be the Chief Financial Officer of E ENERGY
and shall have the authority, duties, and responsibilities commensurate and consistent with such
position and title as designated by the CEO and the Board of Directors from time to time,
including, within established limitations, (a) budgeting, managing and controlling

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departmental or office-specific expenditures, as applicable; (b) planning, developing and
implementing strategy for operational management and development so as to meet such
performance plans, budgets and timescales as may be adopted by the Board; (c) establishing and
maintaining appropriate systems for measuring key aspects of operational management and
development; and (d) monitoring, measuring and reporting on operational issues; and (e) ensuring
compliance with any relevant requirements for quality management, health and safety, legal
stipulations, and general duties of care. Employee additionally will be responsible for all such
duties as listed in E ENERGY’s job description for the Chief Financial Officer position.

4. Compensation.

     a. Base Salary. For all services rendered by Employee to E ENERGY hereunder, Employee
shall be paid an annual base salary of Ninety Five Thousand Dollars ($95,000.00). In addition a
$5,000 per year (prorated monthly) housing allowance will be provided until such time as the
Employee’s family moves to the Adams/Lincoln area. Upon moving family to the local area, Employee
will receive a one time $7,500 moving allowance. Base salary payments shall be paid in accordance
with E ENERGY’S payroll policies and procedures as established from time to time. During each year
after the first year of Employee’s employment hereunder, the CEO and Board of Directions will
conduct an annual performance review of Employee and thereafter establish Employee’s base salary
for the upcoming year.

     b. Pre-Start up Bonus. For exceptional services rendered by Employee to E ENERGY
prior to startup, a bonus up to and including, but not greater than, Twenty Thousand
Dollars ($20,000) may be awarded at the discretion of the CEO and Board of Directors.

     c. Annual Performance Bonus. Beginning ninety (90) days after the startup, Employee
will be eligible for an annual performance bonus up to and including, but not greater than, 50% of
his base salary at the discretion of the CEO and Board of Directors. Such bonus will be based upon
achievement of certain profitability and operational efficiencies relative to the industry and
such other criteria that the CEO and Board of Directors from time to time determine in
their sole discretion.

     d. Employee Benefits. While Employee is employed by E ENERGY hereunder, Employee
will be entitled to participate in all employee benefit plans and programs of E ENERGY, including
without limitations, a 401(K) plan, Section 125 Cafeteria Plan, and medical, dental, life, long
term disability, and disability insurance plans, to the extent E ENERGY offers such plans , in its
sole discretion, and to the extent that Employee meets the eligibility requirements of each
individual plan or program as generally applicable to other employees of E ENERGY provided,
however, that except as herein otherwise provided E ENERGY provides no assurance as to the adoption
or continuance of any particular employee benefit plan or program and Employee’s participation in
such plan or program is subject to the provisions, rules and regulations generally applicable to
other employees of E ENERGY.

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     e. Expenses. While Employee is employed by E ENERGY hereunder,
E ENERGY will reimburse Employee for reasonable and necessary out-of-pocket business, travel and
educational expenses incurred by him in the performance of his duties and responsibilities
hereunder, subject to E ENERGY’S policies and procedures for expense verification and documentation
in effect from time to time

     f. Paid Time Off and Holidays. While Employee is employed by E ENERGY
hereunder, Employee shall be entitled to paid PTO days as follows:

Year 0 (1st year of employment) -10 days per year

Years 1 to 4 of employment — 20 days per year

Years 5 to 14 of employment — 25 days per year

Years 15 + of employment — 30 days per year

The PTO policy is subject to annual review and amendment by the Executive Committee and subject to
change.

5. Confidential Information.

     a. For purposes of this Agreement, (1) “Confidential Information” shall mean
any information, other than Trade Secrets (as defined herein), that is of tangible or intangible
value to E ENERGY and is not generally known by or available to the competitors of E ENERGY,
including, but not limited to, (a) future business plans, licensing strategies, and advertising
campaigns; (b) information regarding agreements with employees, customers and vendors; (c) the
terms and conditions hereof, (d) any data or information defined herein as a Trade Secret, but
which is not a “trade secret” under applicable law; (e) designs, processes, formulas, plans,
devices, or material (whether or not patented or patentable) directly or indirectly useful in any
aspect of the business of E ENERGY; (f) any customer of supplier lists of E ENERGY including
special terms with suppliers or customers or any other information relative to any past, present or
prospective customers: (g) any confidential, proprietary, or secret development or research work of
E ENERGY; (h) any strategic or other business, marketing, or sales plans of E ENERGY; (i) the
content of all manuals, memoranda, production statements, sales records, business methods, systems
and forms, production records, billing rates, cost rates, employee salaries and work histories,
mailing lists, processes, inventions, formulas, job production and cost records; (j) any other
confidential or proprietary information or secret aspects of the business of E ENERGY: (2)”Trade
Secrets” shall mean all information, designs, processes, procedures, formulas or improvements that
are valuable and secret (in the sense that such is not generally known to competitors of E ENERGY)
and which fall within the definition of a “trade secret” under applicable law. For purposes of this
Agreement; (3)” Non-Competition Period” shall mean the term of this Agreement and the twenty-four
(24)

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month period following any expiration or termination of this Agreement; (4) “Competitive Business”
shall mean any business engaged in the production, marketing or sale of ethanol or other bio-fuels
or otherwise conducts the Business of E ENERGY.

     b. Employee hereby covenants and agrees that, as to Confidential
Information, at all times during the Non-Competition Period, and as to Trade Secrets, for such
time as the same shall constitute a ‘trade secret” under applicable law, Employee will not, other
than as necessary or appropriate in connection with his provision of services to E ENERGY hereunder
or in the conduct of the business of E ENERGY, either directly or indirectly, use, distribute, sell
license, transfer, assign, disclose, appropriate or otherwise communicate any trade secrets or
confidential information to any person or entity nor shall employee make use of any such trade
secrets or confidential information for his own purposes in a competitive business or for the
benefit of any other person or entity engaged in a competitive business.

     c. Employee shall immediately notify E ENERGY of any intended or
unintended, unauthorized disclosure or use of any Trade Secrets or Confidential Information by
Employee or any other person or entity of which Employee becomes aware. Employee shall cooperate
fully with E ENERGY in the procurement of any protection of E ENERGY’S rights to or in any of the
Trade Secrets of Confidential Information.

Employee acknowledges that the above described confidential information and trade secrets
constitute unique and valuable assets of E ENERGY and represent a substantial investment of time
and expense by E ENERGY and that any disclosure or other use of such confidential information or
trade secrets other than for the sole benefit of E ENERGY would be wrongful and would cause
irreparable harm to E ENERGY. During the term of Employee’s employment with E ENERGY, Employee
shall refrain from any acts or omissions that would reduce the value of such confidential
information or trade secrets. The foregoing obligations of confidentiality shall not apply to any
knowledge or information that (i) is now or subsequently becomes generally publicly known in the
form in which it was obtained from E ENERGY, other than as a direct or indirect result of the
breach of this Agreement by Employee, (ii) is independently made available to Employee in good
faith by a third party who has not violated a confidential relationship with E ENERGY, or
(iii) is required to be disclosed by legal process.

6. Ventures. If during the term of Employee’s employment with E ENERGY, Employee is engaged
in or associated with the planning or implementing of any project, program or venture involving E
ENERGY and a third party or parties, all rights in such project, program or venture shall belong to
E ENERGY. Except as approved in writing by the Board of Directors, Employee shall not be entitled
to any interest in any such project, program, or venture or to any commission, finder’s fee or
other compensation in connection therewith, other than the compensation to be paid to Employee by E
ENERGY as provided herein. Employee shall have no interest, direct or indirect, in any customer or
supplier that conducts business with E ENERGY, unless such interest has been disclosed

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in writing to and approved by the Board of Directors before such customer or supplier seeks to do
business with E ENERGY.

7. Intellectual Property Rights. Employee agrees that any and all work product, property,
data, documentation, concepts, plans, techniques, inventions, improvements, discoveries, formulas,
processes, copyrightable material, know-how and trade secret information relating to the Business
of E ENERGY which have been invented, discovered, conceived developed, created, or learned by
Employee in connection with (i) the performance of his services hereunder or (ii) the use of E
ENERGY’S resources (collectively, “Work Product”) will be at once fully disclosed by Employee to E
ENERGY shall be deemed to be “work made for hire” (as defined in the Copyright Act. 17 U.S.C.A.
§ 101 et seq., as amended’) and will be the sole and absolute property of E ENERGY.
Employee hereby unconditionally and irrevocably transfers and assigns to E ENERGY all rights, title
and interest Employee currently has or in the future may have, by operation of law or otherwise, in
or to any Work Product, including without limitation, all patents, copyrights, trademarks, service
marks and other intellectual property rights. Employee agrees to execute and deliver to E ENERGY
any transfers, assignments, documents or other instruments which E ENERGY may deem necessary or
appropriate to vest complete title and ownership of arty Work Product, and all rights therein,
exclusively in E ENERGY.

8. Covenant not to Compete. The parties recognize that Employee will be entrusted with all
aspects of the Business of E ENERGY in his role as Chief Financial Officer, and that the following
restrictions are reasonable based upon the extensive trust placed in Employee in his position with
E ENERGY. During the Non-competition Period, Employee shall not, in exchange for any financial
consideration or benefit, directly or indirectly, by or for himself or through others as
his affiliates or agents:

     a. Own, manage, operate, or control;

     b. Participate in the ownership, management, operation or control of; or

     c. Be engaged, for compensation or otherwise, as a director, officer,
partner, or consultant for, or be employed in a managerial capacity by any Competitive
Business; provided that Employee may own up to one percent (1%) of any Person whose shares
are fisted on a national stock exchange or traded in the over-the-counter market.

The geographical area in which the foregoing prohibition shall apply shall be limited to that area
which is within a 200 mile radius of E ENERGY’S facilities in Gage County, Nebraska (the
“Restricted Territory”).

9. Covenant Not To Solicit. Employee further agrees during the Non-competition Period that
he shall not, directly or indirectly, either for himself or any other person, firm or corporation,
without E ENERGY’S prior written consent:

     a. solicit, raid, entice, induce or contact any person or entity that is an employee
or that has a contractual or business relationship with, or is employed by,

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E ENERGY (a “Restricted Person”) to provide similar services or enter into similar
arrangements with any Competitive Business in the Restricted Territory or solicit, entice, divert,
appropriate., contact or request any Restricted Person to curtail or cancel its business with E ENERGY; or

     b. solicit, recruit or attempt to solicit or hire away any employee, consultant,
contractor or other personnel of E ENERGY or solicit or induce any such Person to terminate or
otherwise diminish in any respect his, her or its relationship with E ENERGY or employ, engage or
seek to employ or engage any Person who within the twelve (12) months prior to such employment or
engagement had been an employee of E ENERGY.

10. Enforcement. The necessity of protection against competition from Employee and
the nature and scope of such protection has been carefully considered by the parties hereto. The
parties agree and acknowledge that the duration, scope and geographic areas applicable to the
covenants not to compete and not to solicit described in this Agreement are fair, reasonable and
necessary, that adequate compensation (in the form of Employees continued employment by E ENERGY
under the terms of this Agreement) has been received by Employee for such obligations, and that
these obligations (including specifically the obligations of Employee under Sections 9 and 10 of
this Agreement, which the parties expressly agree survive the termination of this Agreement) do not
prevent Employee from earning a livelihood, however, any court determines that any of the
restrictions imposed on Employee under this Agreement are not completely enforceable because they
are not reasonable, the parties hereby give the court the right and power to interpret, alter,
amend, or modify any or all of the terms contained herein to include as much of the scope, time
period and geographic area as will render such restrictions reasonable and enforceable.

Employee agrees that in the event of a breach or violation or attempted breach or violation of any
or all of the Sections 9 and 10 above, said provisions wilt cause irreparable harm to E ENERGY and
for that reason Employee further agrees that E ENERGY shall be entitled as a matter of right, to
both temporary and permanent injunctive relief from any court of competent jurisdiction, restraining further violation of such
covenants by the Employee, his employer, employees, partners, or agents. Employee further agrees to pay E ENERGY’S reasonable costs and expenses, including reasonable attorney fees, if E
ENERGY brings an action and substantially prevails for breach of this Agreement by Employee. E ENERGY agrees to pay Employee’s reasonable costs and expenses, including reasonable attorney fees,
if E ENERGY brings an action for breach of this Agreement by Employee, and Employee substantially
prevails.

11. Acknowledgments. Employee hereby acknowledges and agrees that during the Term (i)
Employee will frequently be exposed to certain Trade Secrets and Confidential Information; (ii)
Employee’s responsibilities on behalf of E ENERGY will extend throughout the United States (and to
all geographical areas of the Restricted Territory); (iii) Employee may, either personally or
through E ENERGY employees, be overseeing, developing, acquiring and negotiating on behalf of E
ENERGY for expansion of E ENERGY’S business and facilities and will have knowledge of all such
additions and

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expansions of E ENERGY’S facilities; (iv) Employee will, either personally or through E ENERGY
employees, have responsibility in recruiting and retaining employees and Restricted Persons on
behalf of E ENERGY, which will generate goodwill for E ENERGY with respect to such employees and
Restricted Persons; and (v) any breach of Section 6, 7 or 9 on Employee’s part, or any breach of
Section 9 or on Employee’s part in the Restricted Territory for a reasonable period thereafter,
would necessarily involve Employee’s use of E ENERGY’S Trade Secrets and Confidential Information
and would unfairly threaten E ENERGY’S legitimate business interests, including its substantial
investment in the proprietary aspects of its business and its associated goodwill. Moreover,
Employee acknowledges that, in the event of the termination of this Agreement, Employee would have
sufficient skills to find alternative, commensurate work in his field of expertise that would not
involve a violation of any of the provisions of Section 9 or 10. Therefore, Employee acknowledges
and agrees that the covenants set forth in Sections 6 through 10 are necessary to protect E
ENERGY’S legitimate business interests and are reasonable in their scope, duration and geographic
breadth in light of E ENERGY’S need to protect such interests.

12. Governing Law, This Agreement shall be construed, interpreted and enforced in
accordance with the laws of the State of Nebraska.

13. Counter parts. This Agreement may be executed in one or more counterparts, all of
which, taken together, shall be deemed one and the same Agreement.

14. Further Acts. The parties hereto agree to perform such other acts that may be required
to carry out the terms of this Agreement.

15. Notices. Any and all notices, designations, offers, acceptances, or any other
communication provided for herein shall be given in writing by registered or certified mail,
postage prepaid, which shall be addressed, in the case of Employee, to his last known address on
the payroll records of E ENERGY, and, in the case of E ENERGY to:

E ENERGY Adams LLC

510 Main Street

P.O. Box 49

Adams, Nebraska 68301

16. Binding Effect. This Agreement shall he binding upon the heirs, successors, legal
representatives and assigns of the parties hereto, all of whom., regardless of the number of
intervening transfers, shall be bound in the same manner as the parties hereto.

17. Assignment; Benefit. This Agreement shall not be assigned by any party hereto except
upon the written consent of the other party (except as to any assignment of this Agreement by E
ENERGY to a successor of E ENERGY which conducts E ENERGY’S ethanol production and management
business activities, for which the consent of the Employee shall not be required). Nothing in this
Agreement, express or implied~ is intended to confer upon any other person any rights or remedies
under or by reason of this Agreement.

8

 

18. Legal Fees. In the event either party to this Agreement sues the other party alleging a
violation of any term of this Agreement, the prevailing party shall be entitled to reimbursement
from the non-prevailing party of the actual attorneys’ fees and costs incurred in such suit.

19. Severability. Any term or provision of this Agreement which is invalid or unenforceable
in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity
or unenforceability without rendered invalid or unenforceable the remaining terms and provisions of
this Agreement, or affecting the validity or unenforceability of any of the terms of this Agreement
in any other jurisdiction.

20. Captions. The captions herein are inserted for the convenience of reference only and
shall be ignored in the construction or interpretation hereof.

21. Entire Agreement. This Agreement, together with the exhibits, contains the entire
agreement of the parties relating to the subject matter of this Agreement and supersedes all prior
agreements and understandings with respect to such subject matter, and the parties hereto have made
no agreements, representations and warranties relating to the subject matter of this Agreement that
are not set forth herein.

22. Amendment. This Agreement sets forth the entire understanding of the parties and may
not be amended, altered or modified except by written agreement between the parties.

23. Waiver. Any waiver of any of the terms and/or conditions of this Agreement by any party
shall not be construed to be a general waiver of such terms and/or conditions, with or without
notice to the other parties.

24. Receipt and Understanding. By signing this Agreement, Employee acknowledges that
Employee has read all of this Agreement, has asked whatever questions he deems appropriate,
understands this Agreement in full and has received a copy of this Agreement.

     IN WITNESS WHEREOF; each party hereto has executed this Agreement effective as of the date
first above written.

	 	 	 	 	 	 	 
	E ENERGY ADAMS, LLC:

	 	 	EMPLOYEE:	 	 
	 

	 	 	 	 	 	 
	/s/ Jack L. Alderman

	 	 	/s/ Larry Brees	 	 
	 

	 	 	 	 	 
	Jack L. Alderman

	 	 	Larry Brees	 	 
	Chief Executive Officer

	 	 	Chief Financial Officer	 	 
	Date:

	3-19-07
	 	Date:
	3-19-07
	 

	 
	 	 	 	 

9

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