Document:

Exhibit
10.2

 

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

 

ETHANOL PURCHASE
AND SUPPLY AGREEMENT

 

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

 

RECITALS:

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

2

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

3

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

4

 

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

 

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

 

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

 

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

 

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

 

5

 

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

 

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

 

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

 

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

 

All Rail Contracts shall
be in the name of IFEP.

 

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

 

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

 

6

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

 

7

 

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

 

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

 

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

 

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

 

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

 

IFEP also agrees as
follows:

 

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

 

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

 

8

 

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

 

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

 

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

 

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

 

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

 

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

 

9

 

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

 

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

 

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

 

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

 

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

 

10

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

11

 

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

 

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

 

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

 

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

 

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

 

12

 

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

 

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

 

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

 

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

 

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

 

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

 

13

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

14

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

15

 

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

 

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

 

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

 

 

16

 

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

 

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

 

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

 

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

 

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

 

17

 

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

 

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

 

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

 

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

 

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

 

18

 

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

 

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

 

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

 

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

 

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

 

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

 

19

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

20

 

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

 

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

 

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

 

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

    

	
  IOWA FALLS
  ETHANOL PLANT, L.L.C.

  	
   

  	
  ECO-ENERGY, INC.

  
	
   

  	
   

  	
   

  	
   

  
	
  By: 

  	
  /s/ Russell
  Stidolph

  	
   

  	
  By: 

  	
  /s/ Larry
  Beckwith

  
	
  Name: 

  	
  Russell Stidolph

  	
   

  	
  Name: Larry
  Beckwith

  
	
  Title: 

  	
  Manager

  	
   

  	
  Title: President

  
	
   

  	
   

  	
  730 Cool Springs Blvd.,
  Suite 130

  
	
  Address

  	
   

  	
  Franklin, TN 37067

  
	
  21050 140th Street

  	
   

  	
  Facsimile Number:

  	
   

  
	
  Iowa Falls, IA 50126

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

21

 

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

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

Exhibit
C -              Specifications [Section
14]

 

 

EXHIBIT
A

 

ECO-ENERGY,
INC.

FIXED
ETHANOL  PURCHASE ORDER

Dated:  _____________________, 20___

 

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

 

1.             Aggregate Gallons of Ethanol:                                              _____________________
gallons

 

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

 

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

 

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

 

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

 

(d)           Other: __________________________________.

 

3.             Minimum Purchase Price for Ethanol: ____________________

 

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

 

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

 

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

 

	
   

  	
  ECO-ENERGY,
  INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
  Date:

  	
   

  
	
   

  	
  E-Mail
  Address:

  	
   

  
						

 

 

2

 

 

ACCEPTANCE
OR REJECTION

 

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

 

	
   

  	
  IOWA
  FALLS ETHANOL PLANT, L.L.C.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
  Date:

  	
   

  	
  ,
  20

  	
   

  
							

 

3

 

EXHIBIT
B

 

ECO-ENERGY,
INC.

POSTED
PRICE ETHANOL  PURCHASE ORDER

Dated:  _____________________, 20___

 

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

 

1.             Maximum Aggregate
Gallons of Ethanol:                            _____________________
gallons

 

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

 

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

 

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

 

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

 

(d)           Other: __________________________________.

 

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

 

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

 

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

 

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

 

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

 

	
   

  	
  ECO-ENERGY,
  INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
  Date:

  	
   

  
	
   

  	
  E-Mail
  Address:

  	
   

  
							

 

 

4

 

ACCEPTANCE
OR REJECTION

 

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

 

	
   

  	
  IOWA
  FALLS ETHANOL PLANT, L.L.C.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
  Date:

  	
   

  	
  ,
  20

  	
   

  
							

 

5

 

 

 

6Exhibit
10.3

 

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

 

RESTATED
DISTILLER’S GRAINS MARKETING AGREEMENT

 

 

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

 

 

W
I T N E S S E T H :

 

               
WHEREAS, HR and UBE are parties to the Distiller’s Grains Marketing Agreement,
dated November 19, 2004 (the “Agreement”) and the First Amendment to the
Distiller’s Grains Marketing Agreement, dated April 1, 2006 (the “First
Amendment” and, collectively, with the Agreement, the “Amended Agreement”),
with HR having become a party to the Amended Agreement by assignment from Iowa
Falls Ethanol Plant, L.L.C. (now known as Hawkeye Holdings, L.L.C.);

 

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

 

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

 

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

 

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

 

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

 

 

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

 

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

 

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

 

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

 

Subject to Section 11 of
this Restated Agreement, the initial term of this Restated Agreement shall be
for two (2) years, commencing on the date of the Agreement, but HR and UBE
acknowledge that the Plant will not commence production operations until at
least some time in November, 2004, and that the Plant will not reach full
production capacity until approximately thirty (30) days after the commencement
date of production operations at the Plant.  Subject again to Section 11
of this Restated Agreement, this Restated Agreement shall be automatically
renewed after the end of the initial two (2) year term for successive one (1)
year

 

2

 

terms unless either party gives written notice to the
other party of its election not to renew, for whatever reason or for no reason,
not later than ninety (90) days prior to the expiration of the initial two (2)
year term or the then current one (1) year renewal term, as the case may be.

 

2.            
PRICE AND PAYMENT.

 

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

 

1.            
Intentionally Left Blank.

 

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

 

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

 

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

 

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

 

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

 

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

 

B.           
Intentionally Left Blank.

 

C.           
PAYMENT.  On a daily basis, weekends and holidays excluded, HR
shall provide UBE with weight certificates (which certificates will be in
accordance with Section 6.C below) for the previous day’s shipments of
Distiller’s Grains, and UBE shall pay HR the F.O.B. Plant Price for all such
shipments.  The weight certificates with respect to any shipments which
are made on a weekend or a holiday will be provided to UBE on the next
succeeding business day.  Payment for all shipments shall be made by UBE
so that payment is received by HR on or before the second (2nd)
following Friday of each one week shipment period (Sunday through
Saturday).  Each payment shall be accompanied by a detail of the shipments
which are the subject of the payment and documentation supporting the amount of
the payment.  Any payment

 

 

3

 

which is not received by HR when due shall bear
interest from the date due, until paid, at the rate of ten percent (10%) per
annum.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

4

 

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

 

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

 

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

 

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

 

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

 

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

 

 

5

 

inspecting, or otherwise.  HR shall, as a result
of its responsibility for such expenses, retain all rights in and to any name,
branding, and packaging of the
Distiller’s Grains upon termination of this Restated Agreement.  UBE
shall, however, consult with HR regarding licensing, dues, branding, packaging,
inspections and other governmental or regulatory matters regarding dried
distiller’s grains and wet distiller’s grains.

 

               
5.             DELIVERY
AND TITLE.

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

 

                               
B.            STORAGE. 
HR shall provide storage space for not less than ten (10) full days combined
production of WDG and DDG (the “Storage Limit”), based on the then current
nameplate operating capacity of the Plant.  The initial nameplate
operating capacity of the Plant is 40,000,000 gallons of ethanol per year,
which is expected to produce approximately 10,715 tons of Distiller’s Grain per
month on a dry matter basis.

 

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

 

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

 

                               
E.            
LOADING SCHEDULE.  UBE shall give to HR a loading schedule of
quantities of Distiller’s Grains to be removed by truck and rail respectively
in accordance with Section 5.F below and with such sufficient advance notice so
as to reasonably allow HR to

 

 

6

 

determine that the Storage Limit will not be exceeded and
for HR to provide the services required by Section 5.A above and this Section
5.E.  Subject to the foregoing, HR shall provide the labor, equipment and
facilities necessary at the Plant to meet UBE’s loading schedule. UBE shall
order and supply trucks as scheduled for truck shipments.  All shipment,
freight and related charges shall be the responsibility of UBE and shall be
billed directly to UBE.  Demurrage charges will be for the account of UBE
if UBE fails to provide railcars in accordance with the loading schedule
provided to HR.  Subject to the first sentence in this paragraph,
demurrage charges will be for the account of HR if HR fails to load railcars in
accordance with UBE’s loading schedule.

 

F.            
PRODUCTION SCHEDULE.

 

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

 

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

 

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

 

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

 

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

 

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

 

                               
G.            RAIL
CAR LEASES.  UBE shall, in consultation with HR, determine the number
of rail car leases required to handle the transportation of the Distiller’s
Grains.  The rail car leases shall be in UBE’s name, and UBE shall
negotiate, in consultation with HR, the terms of such rail car leases, but UBE
shall not enter into any such rail car lease without HR’s prior written
approval of such lease, which approval shall not be unreasonably withheld or
delayed.  Each such rail car lease must in all events, however, be
applicable only to rail cars to be used exclusively in connection with the
Plant and must be assignable, at any time and for any reason,

 

 

7

 

to HR or its successors or assigns without the consent
of the lessor, and such rail car leases shall be deemed to be automatically
assigned to HR by UBE effective upon the termination date of this Restated
Agreement.  UBE shall in all events be and remain responsible, however,
for any and all breaches of and defaults under any rail car lease by UBE. 
HR shall reimburse UBE for any reasonable expenses incurred by UBE associated
with such rail car leases, to the extent such expenses are not already
accounted for in the price of the Distiller’s Grains.

 

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

 

6.            
QUANTITY AND WEIGHTS.

 

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

 

                               
B.            ESTIMATED
PRODUCTION.  UBE acknowledges that the estimated production of
Distiller’s Grains at the Plant is 11,250 tons of Distiller’s Grains per month
on a dry matter basis once the Plant is initially fully operational, but that
HR may (but is not required to) expand the capacity of the Plant.  If HR
determines to materially expand the capacity of the Plant, HR shall give UBE
written notice of such expansion, and of the estimated production of
Distiller’s Grains at the Plant after such expansion, at least one hundred
eighty (180) days before the estimated completion date of the construction
activities related to such expansion.

 

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

 

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

 

 

8

 

charges allocable to the
unused capacity of the car.

 

7.            
QUALITY.

 

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

 

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

 

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

 

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

 

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

 

(3)  If any of the Distiller’s Grains are
seized or condemned by any federal or state department or agency or if UBE has
no available means of disposal of rejected Distiller’s

 

9

 

Grains and HR fails to direct UBE to dispose of the
same as provided herein, UBE may return such Distiller’s Grains to HR, and upon
such return UBE’s obligations with respect to said seized, condemned or
rejected Distiller’s Grains shall be deemed fulfilled.

 

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

 

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

 

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

 

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

 

8.            
RETENTION OF SAMPLES.

 

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

 

                               
B.            ANALYSIS. 
For the first year of operation of ethanol production at the Plant, HR shall,
within two (2) days after the close of each calendar week, furnish UBE with a
composite analysis on all Distiller’s Grains produced at the Plant during such
calendar week.  Thereafter, HR
shall, within ten (10) days of the close of each calendar month, furnish UBE
with a composite analysis on all Distiller’s Grains produced at the Plant
during such month.  The composite analysis shall address the matters set
forth in Exhibit D hereto and shall be in a format

 

10

 

reasonably acceptable to UBE and HR.  The matters
set forth in Exhibit D or the then current format for the composite analysis
may be changed as may be mutually agreed in writing by and between UBE and
HR.  It is understood that each such analysis will be a composite and may
or may not be indicative of any particular DDG or WDG or the current analysis,
and that no composite is a representation or warranty by HR or otherwise a part
of this Restated Agreement.

 

 

11

 

9.            
INSURANCE.

 

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

 

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

 

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

 

D.           
CONSEQUENTIAL DAMAGES.  EACH PARTY TO THIS RESTATED AGREEMENT
UNDERSTANDS THAT NO OTHER PARTY MAKES ANY GUARANTEE, EXPRESS OR IMPLIED, TO ANY
OTHER PARTY OF PROFIT, OR OF ANY PARTICULAR ECONOMIC RESULTS FROM TRANSACTIONS
CONTEMPLATED BY THIS RESTATED AGREEMENT.  IN NO EVENT SHALL ANY PARTY BE
LIABLE TO THE OTHER PARTY FOR SPECIAL, COLLATERAL, INCIDENTAL, OR CONSEQUENTIAL
DAMAGES FOR ANY ACT OR OMISSION OF THE PARTY, OR FOR BREACH OF ANY OF THE
PROVISIONS OF THIS RESTATED AGREEMENT, EVEN IF IT HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES, SUCH EXCLUDED DAMAGES INCLUDE, BUT ARE NOT LIMITED
TO, LOSS OF GOOD WILL,

 

 

12

 

LOSS OF PROFITS, LOSS OF USE, AND INTERRUPTION OF
BUSINESS. NOTWITHSTANDING THE FOREGOING, HOWEVER, THE PARTIES DO NOT WAIVE ANY
DAMAGES OR LOSSES THAT RESULT FROM OR ARISE OUT OF A BREACH OF SECTION 19 OF
THIS RESTATED AGREEMENT OR FROM OR OUT OF ANY WILLFUL MISCONDUCT, GROSSLY
NEGLIGENT ACTS OR GROSSLY NEGLIGENT OMISSIONS.

 

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

 

10.          
REPRESENTATIONS AND WARRANTIES.

 

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

 

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

 

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

 

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

 

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

 

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

 

 

13

 

FITNESS
FOR A PARTICULAR PURPOSE, WITH RESPECT TO ALL DISTILLER’S GRAINS AND ALL OTHER
MATTERS WHATSOEVER.

 

11.          
TERMINATION.

 

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

 

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

 

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

 

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

 

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

 

12.          
EVENTS OF DEFAULT.  The occurrence of any of the following shall be
an event of default allowing for the termination of this Restated Agreement
under Section 11.A:  (1) failure of either party to make payment to the
other when due, if such nonpayment
has not been cured within five (5) days of the receipt of written notice
thereof from the nonbreaching party; (2) default by either party in the
performance of any covenant, condition or agreement imposed upon that party by
this Restated Agreement (other than a payment obligation), if such nonperformance
has not been cured within ten (10) days of the receipt of written notice
thereof from the nonbreaching party; (3) if either party shall make a general
assignment for the benefit of creditors or to an agent authorized to liquidate
any substantial amount of its assets, or be adjudicated bankrupt, or file a
petition in bankruptcy and such petition is not dismissed within

 

14

 

ninety (90) days following the date of filing, or
apply to a court for the appointment of a receiver for any of its assets or
properties with or without consent, and such receiver shall not be discharged
within ninety (90) days following appointment.

 

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

 

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

 

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

 

16.          
INDEMNIFICATION.

 

                               
A.            BY HR. 
Except as otherwise provided in this Restated Agreement, including Section 9.D, HR shall indemnify, defend and hold UBE
and its officers, directors, employees and agents harmless from any and all
losses, liabilities, damages, expenses (including reasonable attorneys’ fees),
costs, claims, and demands, that UBE or its officers, directors, employees or
agents may suffer, sustain or become subject to as a result of

 

15

 

(i) any breach of warranty, covenant or agreement of
HR contained herein or (ii) HR’s or its employees’ or agents’ gross negligence
or willful misconduct.

 

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

 

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

 

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

 

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

 

               
19.           CONFIDENTIALITY. 
The parties acknowledge that they may have access to certain confidential
information of the other party and that such information constitutes valuable,
special and unique property to such party.  The parties agree that they
will not at any time during or for a period of five (5) years after the
termination of this Restated Agreement, in any fashion, form or manner, either
directly or indirectly, divulge, disclose or communicate to any person, firm or
corporation in any manner whatsoever any such confidential information;
provided, however, that (i) HR may make disclosures and reports regarding this
Restated Agreement and the transactions contemplated hereby to the extent HR
deems necessary or appropriate or as may be required in connection with any
debt or equity financing as may from time to time be pursued or obtained by HR
or any affiliate of HR, including to any prospective or actual lenders or
investors and to actual or potential assignees or transferees of any such
lender or in connection with a foreclosure, assignment in lieu of foreclosure
or exercise of any rights or remedies by any such lender; (ii) HR and UBE may
make disclosures regarding this Restated Agreement and the transactions
contemplated thereby to their respective legal counsel and accountants; and
(iii) the reasonable use of any confidential information as part of or in connection
with the transactions contemplated by this Restated Agreement during the term
of this Restated Agreement is permitted.  For purposes of this Restated
Agreement, the term “confidential information” shall mean all information,
documentation or financial data which is proprietary or confidential in nature
and which is used by or belongs to or relates to either party which is
disclosed or made available to the other party, its agents, employees or
advisors, including but not limited to the prices charged for services
hereunder or any other information concerning the other party’s

 

 

16

 

business, manner of operation, plans, processes or
other data of any kind.  “Confidential information” shall not include, however,
any of the following information and/or types of information:  (a)
information of a party that at the time furnished to the other party is in the
public domain or later becomes part of the public domain by publication or
otherwise through no fault of the other party or its employees or agents; (b)
information of a party that was independently developed by the other party by
persons without access to or knowledge of, or any use of, the confidential
information of the party; or (c) information of a party that was obtained by
the other party on a nonconfidential basis from a source or a third party
entitled to disclose it.

 

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

 

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

 

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

 

             
20.     DISPUTE RESOLUTION.  The parties shall
attempt to settle amicably any dispute or difference of any kind whatsoever
arising out of or in connection with the validity or invalidity, construction,
execution, meaning, operation or effect or breach of this Restated Agreement
(except for any such dispute or difference involving Section 19).  If the
parties do not promptly do so, either party may, by written notice to the other
party, call for private mediation of the issue before a mediator to be agreed
upon by the parties.  The parties agree to conclude such private mediation
within thirty (30) days of the filing by a party of a request for such
mediation.  In the event of a dispute between the parties that is not
resolved by such mediation, either party may, by written notice to the other
party, call for private, binding, non-appealable arbitration of the issue
before a single arbitrator agreed upon by the parties.  In the event a
single arbitrator cannot be agreed upon within ten (10) days of the end of the
private mediation, each party shall appoint a third party arbitrator from a
list provided by the American Arbitration Association (AAA) (not a principal of
a party) and the two arbitrators thus selected by the parties shall select a
third arbitrator.  The arbitrators shall meet as expeditiously as possible
to resolve the dispute, and a majority decision of the arbitrators shall be
controlling.  While each party is free to select

 

 

17

 

an arbitrator of its own choosing from the list
provided by the AAA, either party by written notice to the other may require
that all arbitrators chosen have sufficient expertise in the subject matter of
the arbitration that they would qualify as “expert witnesses” in a judicial
proceeding.

 

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

 

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

 

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

 

               
21.           MISCELLANEOUS.

 

                               
A.            This Restated
Agreement, together with any exhibits hereto, is the complete understanding and
agreement of the parties to this Restated Agreement with respect to the subject
matter of this Restated Agreement, and no other representations or agreements
shall be binding upon the parties, or shall be effective to interpret, change
or restrict the provisions of this Restated Agreement.  This Restated
Agreement supersedes the Amended Agreement in its entirety.  HR hereby
objects to any additional, different or inconsistent terms which may be set
forth in any Accepted Purchase Order, any Purchase Order or any other document
that UBE may at any time submit to HR, and no such additional, different or
inconsistent terms shall be a part of any Accepted Purchase Order or this Restated
Agreement or shall have any force or effect whatsoever.  In the event of
any conflict or inconsistency between any terms and conditions of this Restated
Agreement and any terms or conditions of any Purchase Order or Accepted
Purchase Order, the terms and conditions of this Restated Agreement shall
govern and control to the full extent of such conflict or inconsistency.

 

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

 

 

18

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

                               
K.            The use of
the words “herein,” “hereof,” “hereunder” and other similar compounds of the
word “here” refer to this entire Restated Agreement and not to any particular
section, paragraph or provision.

 

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

 

                               
M.           Subject to
Section 20 of this Restated Agreement, HR and UBE submit to the nonexclusive
jurisdiction of any United States or Iowa court sitting in Des Moines, Iowa in
any action or proceeding arising out of or relating to this Restated
Agreement.  HR and UBE agree that all claims and counterclaims with
respect to any such action or proceeding may be heard and determined in any
such United States or Iowa court, and they each waive any objection, including,
without limitation, any objection to the laying of venue or based on the

 

 

19

 

grounds of forum non conveniens, which they may now or
hereafter have to the bringing of any action or proceeding in any such United
States or Iowa court.

 

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

 

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

 

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

 

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

 

	
   

  	
  HR:

  	
   

  	
  Hawkeye Renewables, LLC

  
	
   

  	
   

  	
   

  	
  Attention: JD Schlieman

  
	
   

  	
   

  	
   

  	
  21050 140th
  Street

  
	
   

  	
   

  	
   

  	
  Iowa Falls, Iowa 50126

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  UBE:

  	
   

  	
  United Bio Energy
  Ingredients, LLC

  
	
   

  	
   

  	
   

  	
  2868 North Ridge Road

  
	
   

  	
   

  	
   

  	
  Wichita, Kansas 67205

  
	
   

  	
   

  	
   

  	
  Attn.:
                                                       

  
	
   

  	
   

  	
   

  	
   

  

 

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

 

 

20

 

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

 

	
   

  	
  Hawkeye Renewables,
  L.L.C.

  
	
   

  	
   

  
	
   

  	
  /s/ J.D. SCHLIEMAN

  
	
   

  	
  By: J. D.
  Schlieman

  
	
   

  	
   

  
	
   

  	
  United Bio Energy
  Ingredients, LLC

  
	
   

  	
   

  
	
   

  	
  /s/ RANDY IVES

  
	
   

  	
  By: Randy Ives

  

 

	
  Exhibit A -

  	
   

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

  
	
  Exhibit B -

  	
   

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

  
	
  Exhibit C -

  	
   

  	
  Minimum Quality
  Standards [Section 7.A]

  
	
  Exhibit D -

  	
   

  	
  Composite Analysis
  Matters [Section 8.B]

  
	
  Exhibit E -

  	
   

  	
  UBE Credit Policy
  [Section 2.E]

  

 

21

EXHIBIT
A

 

UNITED
BIO ENERGY INGREDIENTS, LLC

FIXED
DISTILLER’S GRAINS PURCHASE ORDER

Dated:  _____________________, 20___

 

                United Bio Energy Ingredients,
LLC (“UBE”) hereby submits this Purchase Order for Distiller’s Grains to
Hawkeye Renewables, L.L.C. (“HR”) pursuant to that certain Restated Distiller’s
Grains Marketing Agreement between UBE and HR dated as of ___________________,
2006 (as the same may be amended, the “ Restated Agreement”).

 

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

                                                                                                                    ________________
of WDG

                                                                                                                    ________________
of modified WDG

 

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

 

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

 

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

 

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

 

(d)   Other: __________________________________.

 

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

                                                                                                                _______________
for WDG

                                                                                                                _______________for
modified WDG

 

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

 

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

 

	
   

  	
  UNITED
  BIO ENERGY INGREDIENTS, LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
  Date:

  	
   

  
					

 

 

ACCEPTANCE
OR REJECTION

 

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

 

	
   

  	
  HAWKEYE
  RENEWABLES, L.L.C.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
  Date:

  	
   

  	
  ,
  20

  	
   

  
							

 

2

 

EXHIBIT
B

 

UNITED
BIO ENERGY INGREDIENTS, LLC

POSTED
PRICE DISTILLER’S GRAINS PURCHASE ORDER

Dated:  _____________________, 20___

 

                United Bio Energy Ingredients,
LLC (“UBE”) hereby submits this Purchase Order for Distiller’s Grains to
Hawkeye Renewables, L.L.C. (“HR”) pursuant to that certain Restated Distiller’s
Grains Marketing Agreement between UBE and HR dated as of ___________________,
2006 (as the same may be amended, the “Restated Agreement”).

 

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

                                                                                                                    ________________
WDG

                                                                                                                    ________________
modified WDG

 

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

                                                                                                                                ___  Best Efforts to Sell in

                                                                                                                                        Whole or in Part

 

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

 

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

 

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

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

 

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

 

(d)   Other: __________________________________.

 

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

                                                                                                                ________________  for WDG

                                                                                                                ________________  for modified WDG

 

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

 

This Purchase Order is irrevocable as provided in the Restated
Agreement.  UBE does not, however, have a
binding obligation to purchase any Distiller’s Grains pursuant to this Purchase
Order unless and until UBE enters into an agreement with a third party for the

 

3

 

sale of the Distiller’s Grains by UBE to such third party during, and
for pick-up by UBE during, the Posted Price Sales Period.

 

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

 

	
   

  	
  UNITED
  BIO ENERGY INGREDIENTS, LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
  Date:

  	
   

  
					

 

ACCEPTANCE
OR REJECTION

 

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

 

	
   

  	
  HAWKEYE
  RENEWABLES , L.L.C.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
  Date:

  	
   

  	
  ,
  20

  	
   

  
							

 

 

4

 

EXHIBIT C

 

MINIMUM QUALITY STANDARDS

 

 

	
   

  	
   

  	
  Component

  	
   

  	
  Minimum

  	
   

  	
  Maximum

  
	
  DDG

  	
   

  	
  Protein

  	
   

  	
  26%

  	
   

  	
  N/A

  
	
   

  	
   

  	
  Fat

  	
   

  	
  7.5%

  	
   

  	
  N/A

  
	
   

  	
   

  	
  Fiber

  	
   

  	
  N/A

  	
   

  	
  15%

  
	
   

  	
   

  	
  Ash

  	
   

  	
  N/A

  	
   

  	
  5%

  
	
   

  	
   

  	
  Moisture

  	
   

  	
  10%

  	
   

  	
  13%

  

 

	
   

  	
   

  	
  Component

  	
   

  	
  Minimum

  	
   

  	
  Maximum

  
	
  WDG

  	
   

  	
  Protein

  	
   

  	
  10.5%

  	
   

  	
  N/A

  
	
   

  	
   

  	
  Fat

  	
   

  	
  3%

  	
   

  	
  N/A

  
	
   

  	
   

  	
  Fiber

  	
   

  	
  N/A

  	
   

  	
  5%

  
	
   

  	
   

  	
  Ash

  	
   

  	
  N/A

  	
   

  	
  2.5%

  
	
   

  	
   

  	
  Moisture

  	
   

  	
  60%

  	
   

  	
  N/A

  

 

	
   

  	
   

  	
  Component

  	
   

  	
  Minimum

  	
   

  	
  Maximum

  
	
  Modified WDG

  	
   

  	
  Protein

  	
   

  	
  15.0%

  	
   

  	
  N/A

  
	
   

  	
   

  	
  Fat

  	
   

  	
  4.5%

  	
   

  	
  N/A

  
	
   

  	
   

  	
  Fiber

  	
   

  	
  N/A

  	
   

  	
  9.0%

  
	
   

  	
   

  	
  Ash

  	
   

  	
  N/A

  	
   

  	
  4.0%

  
	
   

  	
   

  	
  Moisture

  	
   

  	
  50%

  	
   

  	
  55%

  

 

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

 

5

 

EXHIBIT
D

 

COMPOSITE
ANALYSIS MATTERS

 

MOISTURE, %

DRY MATTER, %

CRUDE PROTEIN, %

A.D. FIBER, %

N.D. FIBER, %

CRUDE FIBER, %

ASH, %

TOTAL DIGEST NUTRS., %

NET ENERGY, MAIN.

NET ENERGY, GAIN

NET ENERGY, LACT.

DIG. ENERGY, SWINE

MET. ENERGY, SWINE

CALCIUM, %

PHOSPHORUS, %

ACID FAT, %

 

6

 

Exhibit E

 

UBE
Credit Policy 

 

 

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

 

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

 

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

 

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

 

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

 

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

 

 

7

 

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

 

8

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