Document:

exv4w5

Exhibit 4.5

PIPER JAFFRAY COMPANIES

AMENDED AND RESTATED

2003 ANNUAL AND LONG-TERM INCENTIVE PLAN

(as amended and restated effective May 7, 2009)

SECTION 1. Purpose

     The purpose of the Plan is to promote the interests of the Company and its stockholders by
giving the Company a competitive advantage in attracting, retaining and motivating employees,
officers, consultants and Directors capable of assuring the future success of the Company, to offer
such persons incentives that are directly linked to the profitability of the Company’s businesses
and increases in stockholder value, and to afford such persons an opportunity to acquire a
proprietary interest in the Company.

SECTION 2. Definitions

     As used in the Plan, the following terms shall have the meanings set forth below.

     (a) “Affiliate” means any entity in which the Company has, directly or indirectly
through one or more intermediaries, a controlling interest or which has, directly or indirectly
through one or more intermediaries, a controlling interest in the Company, within the meaning of
Treasury Regulation § 1.409A-1(b)(5)(iii)(E).

     (b) “Award” means any Stock Option, Stock Appreciation Right, Restricted Stock,
Restricted Stock Unit, Performance Award, Dividend Equivalent, Other Stock Grant, Other Stock-Based
Award or Tax Offset Bonus granted under the Plan.

     (c) “Award Agreement” means any written agreement, contract or other instrument or
document evidencing any Award granted under the Plan. Each Award Agreement shall be subject to the
applicable terms and conditions of the Plan and any other terms and conditions (not inconsistent
with the Plan) determined by the Committee.

     (d) “Board” means the Board of Directors of the Company.

     (e) “Code” means the Internal Revenue Code of 1986, as amended from time to time, and
any regulations promulgated thereunder.

     (f) “Change in Control” has the meaning set forth in Section 7.

     (g) “Committee” means a committee of Directors designated by the Board to administer
the Plan, which initially shall be the Compensation Committee of the Board. The Committee shall be
comprised of not less than such number of Directors as shall be required to permit Awards granted under the Plan to qualify under Rule 16b-3 and Section
162(m) of the Code, and each member of the Committee shall be an Outside Director.

     (h) “Company” means Piper Jaffray Companies, a Delaware corporation.

     (i) “Covered Employee” means a Participant designated prior to the grant of Restricted
Stock, Restricted Stock Units or Performance Awards by the Committee who is or

 

 

may be a “covered employee” within the meaning of Section 162(m)(3) of the Code in the year in which any such Award
is expected to be taxable to such Participant.

     (j) “Director” means a member of the Board, including any Outside Director.

     (k) “Dividend Equivalent” means any right granted under Section 6(e) of the Plan.

     (l) “Effective Date” has the meaning set forth in Section 11 of the Plan.

     (m) “Eligible Individual” means any employee, officer, Director or consultant
providing services to the Company or any Affiliate, and prospective employees and consultants who
have accepted offers of employment or consultancy from the Company or any Affiliate, whom the
Committee determines to be an Eligible Individual.

     (n) “Exchange Act” means the Securities Exchange Act of 1934, as amended from time to
time.

     (o) “Exercise Price” has the meaning set forth in Section 6(a) of the Plan.

     (p) “Fair Market Value” means, with respect to any property (including, without
limitation, any Shares or other securities), the fair market value of such property determined by
such methods or procedures as shall be established from time to time by the Committee in good faith
and in a manner consistent with Code Section 409A. Notwithstanding the foregoing and except as
otherwise provided by the Committee, the Fair Market Value of a Share as of a given date shall be
the closing sales price for one Share on the New York Stock Exchange or such other established
securities market as may at the time be the principal market for the Shares, or if the Shares were
not traded on such national securities market or exchange on such date, then on the next preceding
date on which the Shares are traded, all as reported by such source as the Committee may select.

     (q) “Non-Qualified Stock Option” means any Stock Option that is not designated as, or
is not intended to qualify as, an “incentive stock option” within the meaning of Section 422 of the
Code.

     (r) “Outside Director” means any Director who qualifies as an “outside director”
within the meaning of Section 162(m) of the Code, as a “non-employee director” within the meaning
of Rule 16b-3 and as an “independent director” pursuant to the requirements of the New York Stock
Exchange.

     (s) “Participant” means an Eligible Individual designated to be granted an Award under
the Plan.

     (t) “Performance Award” means any right granted under Section 6(d) of the Plan.

     (u) “Performance Goals” means the performance goals established by the Committee in
connection with the grant of an Award. In the case of Qualified Performance-Based Awards, (i) such
goals shall be based on the attainment of specified levels of one or more of the following measures
with respect to the Company or such subsidiary, division or department of the Company for or within
which the Participant performances services: revenue growth; earnings before interest, taxes,
depreciation, and amortization; earnings before interest and taxes;

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operating income; pre- or after- tax income; earnings per share; cash flow; cash flow per share; return on equity; return on
tangible equity; return on invested capital; return on assets; economic value added (or an
equivalent metric); share price performance; total shareholder return; improvement in or attainment
of expense levels; improvement in or attainment of working capital levels and (ii) such Performance
Goals shall be set by the Committee within the time period prescribed by Section 162(m) of the Code
and related regulations. Such Performance Goals also may be based upon the attaining of specified
levels of Company performance under one or more of the measures described above relative to the
performance of other companies.

     (v) “Plan” means this Piper Jaffray Companies Amended and Restated 2003 Annual and
Long-Term Incentive Plan, as set forth herein and as hereinafter amended from time to time.

     (w) “Qualified Performance-Based Award” means an Award of Restricted Stock, Restricted
Stock Units or Performance Awards designated as such by the Committee at the time of grant, based
upon a determination that (i) the recipient is or may be a Covered Employee in the year in which
the Company would expect to be able to claim a tax deduction with respect to such Restricted Stock
or Performance Awards and (ii) the Committee wishes such Award to qualify for the Section 162(m)
Exemption.

     (x) “Restricted Stock” means any Share granted under Section 6(c) of the Plan.

     (y) “Restricted Stock Unit” means any unit granted under Section 6(c) of the Plan
evidencing the right to receive a Share (or a cash payment equal to the Fair Market Value of a
Share) at some future date.

     (z) “Rule 16b-3” means Rule 16b-3, as promulgated by the Securities and Exchange
Commission under Section 16(b) of the Exchange Act, as amended from time to time.

     (aa) “Section 162(m) Exemption” means the exemption from the limitation on
deductibility imposed by Section 162(m) of the Code that is set forth in Section 162(m)(4)(C) of
the Code.

     (bb) “Share” or “Shares” means a share or shares of common stock, par value
$.01 per share, of the Company.

     (cc) “Stock Appreciation Right” means any right granted under Section 6(b) of the
Plan.

     (dd) “Stock Option” means a Non-Qualified Stock Option granted under Section 6(a) of
the Plan.

SECTION 3. Administration

     (a) Power and Authority of the Committee. The Plan shall be administered by the
Committee. Subject to the terms of the Plan and to applicable law, the Committee shall have full
power and authority to:

     (i) designate Participants;

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     (ii) determine whether and to what extent any type (or types) of Award is to be granted
hereunder;

     (iii) determine the number of Shares to be covered by (or the method by which payments
or other rights are to be determined in connection with) each Award;

     (iv) determine the terms and conditions of any Award or Award Agreement;

     (v) subject to Section 9 hereof, amend the terms and conditions of any Award or Award
Agreement and accelerate the vesting and/or exercisability of any Stock Option or waive any
restrictions relating to any Award; provided, however, that (A) except for
adjustments pursuant to Section 4(c) of the Plan, in no event may any Stock Option granted
under this Plan be (x) amended to decrease the Exercise Price thereof, (y) cancelled in
conjunction with the grant of any new Stock Option with a lower Exercise Price, or (z)
otherwise subject to any action that would be treated, for accounting purposes, as a
“repricing” of such Stock Option, unless such amendment, cancellation, or action is approved
by the stockholders of the Company to the extent required by applicable law and stock
exchange rules and (B) the Committee may not adjust upwards the amount payable to a Covered
Employee with respect to a Qualified Performance-Based Award or waive or alter the
Performance Goals associated therewith in a manner that would violate Section 162(m) of the
Code.

     (vi) determine whether, to what extent and under what circumstances the exercise price
of Awards may be paid in cash, Shares, other securities, other Awards or other property, or
canceled, forfeited or suspended;

     (vii) determine whether, to what extent and under what circumstances cash, Shares,
other securities, other Awards, other property and other amounts payable with respect to an
Award under the Plan shall be deferred either automatically or at the election of the holder
thereof or the Committee;

     (viii) interpret and administer the Plan and any instrument or agreement, including an
Award Agreement, relating to the Plan;

     (ix) adopt, alter, suspend, waive or repeal such rules, guidelines and practices and
appoint such agents as it shall deem advisable or appropriate for the proper administration
of the Plan; and

     (x) make any other determination and take any other action that the Committee deems
necessary or desirable for the administration of the Plan.

Unless otherwise expressly provided in the Plan, all designations, determinations, interpretations
and other decisions under or with respect to the Plan or any Award or Award Agreement shall be
within the sole discretion of the Committee, may be made at any time and shall be final, conclusive
and binding upon all persons, including without limitation, the Company, its Affiliates,
subsidiaries, shareholders, Eligible Individuals and any holder or beneficiary of any Award.

     (b) Action by the Committee; Delegation. Except to the extent prohibited by
applicable law or the applicable rules of a stock exchange, the Committee may delegate all or

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any part of its duties and powers under the Plan to one or more persons, including Directors or a
committee of Directors, subject to such terms, conditions and limitations as the Committee may
establish in its sole discretion; provided, however, that the Committee shall not
delegate its powers and duties under the Plan (i) with regard to officers or directors of the
Company or any Affiliate who are subject to Section 16 of the Exchange Act or (ii) in a manner that
would cause an Award designated as a Qualified Performance-Based Award not to qualify for, or to
cease to qualify for, the Section 162(m) Exemption; and provided, further, that any
such delegation may be revoked by the Committee at any time.

     (c) Power and Authority of the Board. Notwithstanding anything to the contrary
contained herein, except to the extent that the grant or exercise of such authority would cause any
Award or transaction to become subject to (or lose an exemption under) the short-swing profit
recovery provisions of Section 16 of the Exchange Act or cause an Award designated as a Qualified
Performance-Based Award not to qualify for, or to cease to qualify for, the Section 162(m)
Exemption, the Board may, at any time and from time to time, without any further action of the
Committee, exercise the powers and duties of the Committee under the Plan. To the extent that any permitted action taken by the Board conflicts with action taken by the Committee, the Board
action shall control.

SECTION 4. Shares Available for Awards

     (a) Shares Available. Subject to adjustment as provided in Section 4(c) of the Plan,
the aggregate number of Shares that may be issued under the Plan shall be 7,000,000. Shares that
may be issued under the Plan may be authorized but unissued Shares or Shares re-acquired and held
in treasury.

     (b) Accounting for Awards. For purposes of this Section 4, if an Award entitles the
holder thereof to receive or purchase Shares, the number of Shares covered by such Award or to
which such Award relates shall be counted on the date of grant of such Award against the aggregate
number of Shares available for granting Awards under the Plan. Any Shares that are used by a
Participant as full or partial payment to the Company of the purchase price relating to an Award,
including in connection with the satisfaction of tax obligations relating to an Award, shall again
be available for granting Awards under the Plan. In addition, if any Shares covered by an Award or
to which an Award relates are not purchased or are forfeited, or if an Award otherwise terminates
without delivery of any Shares, then the number of Shares counted against the aggregate number of
Shares available under the Plan with respect to such Award, to the extent of any such forfeiture or
termination, shall again be available for granting Awards under the Plan.

     (c) Adjustments. In the event of any change in corporate capitalization (including,
but not limited to, a change in the number of Shares outstanding), such as a stock split or a
corporate transaction, such as any merger, consolidation, separation, including a spin-off, or
other distribution of stock or property of the Company (including any extraordinary cash or stock
dividend), any reorganization (whether or not such reorganization comes within the definition of
such term in Section 368 of the Code) or any partial or complete liquidation of the Company, the
Committee or Board shall make such substitution or adjustments in the aggregate number and kind of
shares reserved for issuance under the Plan, and the maximum limitation upon Stock Options and
Stock Appreciation Rights and other Awards to be granted to any Participant, in the number, kind
and Exercise Price of shares subject to outstanding Stock Options and Stock Appreciation Rights, in
the number and kind of shares subject to other

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outstanding Awards granted under the Plan and/or such other equitable substitution or adjustments as it may determine to be appropriate in its sole
discretion (including, without limitation, the provision of an amount in cash in consideration for
any such Awards); provided, however, that the number of shares subject to any Award
shall always be a whole number. Without limiting the generality of the foregoing, in connection
with any Disaffiliation of a subsidiary of the Company, the Committee shall have the authority to
arrange for the assumption or replacement of Awards with new awards based on shares of the affected
subsidiary or by an affiliate of an entity that controls the subsidiary following the
Disaffiliation. For purposes hereof, “Disaffiliation” of a subsidiary shall mean the subsidiary’s
ceasing to be a subsidiary of the Company for any reason (including, without limitation, as a result of a public offering, spin-off, sale or other distribution or transfer
by the Company of the stock of the subsidiary). Notwithstanding the foregoing, to the extent that
any Award is otherwise considered to be deferred compensation under Section 409A of the Code, any
adjustment to such Award will comply with Section 409A of the Code (including current and future
guidance issued by the Department of Treasury and or the Internal Revenue Service).

     (d) Award Limitations. No more than 250,000 shares of Common Stock may be subject to
Qualified Performance-Based Awards granted to any Eligible Individual in any fiscal year of the
Company.

SECTION 5. Eligibility

     Any Eligible Individual shall be eligible to be designated a Participant. In determining
which Eligible Individuals shall receive an Award and the terms of any Award, the Committee may
take into account the nature of the services rendered by the respective Eligible Individuals, their
present and potential contributions to the success of the Company or such other factors as the
Committee, in its discretion, shall deem relevant.

SECTION 6. Awards

     (a) Stock Options. The Committee is hereby authorized to grant Stock Options (which
may only be Non-Qualified Stock Options) to Eligible Individuals with the following terms and
conditions and with such additional terms and conditions not inconsistent with the provisions of
the Plan as the Committee shall determine:

     (i) Exercise Price. The purchase price per Share purchasable under a Stock
Option (the “Exercise Price”) shall be determined by the Committee;
provided, however, that such Exercise Price shall not be less than 100% of
the Fair Market Value of a Share on the date of grant of such Stock Option.

     (ii) Option Term. The term of each Stock Option shall be fixed by the
Committee at the time of grant, but in no event shall be more than 10 years from the date of
grant.

     (iii) Time and Method of Exercise. The Committee shall determine the time or
times at which a Stock Option may be exercised in whole or in part and the method or methods
by which, and the form or forms (including, without limitation, cash, Shares, other
securities, other Awards or other property, or any combination thereof, having a Fair Market
Value on the exercise date equal to the applicable Exercise Price) in which,

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payment of the Exercise Price with respect thereto may be made or deemed to have been made.

     (b) Stock Appreciation Rights. The Committee is hereby authorized to grant Stock
Appreciation Rights to Eligible Individuals subject to the terms of the Plan. Each Stock Appreciation Right granted under the Plan shall confer on the holder upon exercise the
right to receive, as determined by the Committee, cash or a number of Shares whose Fair Market
Value is equal to the excess of (A) the Fair Market Value of one Share on the date of exercise (or,
if the Committee shall so determine in accordance with the requirements of Code Section 409A, at
any time during a specified period not more than 30 days before or after the date of exercise) over
(B) the grant price of the Stock Appreciation Right as determined by the Committee, which grant
price shall not be less than 100% of the Fair Market Value of one Share on the date of grant of the
Stock Appreciation Right. Subject to the terms of the Plan, the grant price, term, methods of
exercise, dates of exercise, methods of settlement and any other terms and conditions (including
conditions or restrictions on the exercise thereof) of any Stock Appreciation Right shall be as
determined by the Committee, provided that in no event shall the term of a Stock
Appreciation Right be longer than ten years.

     (c) Restricted Stock and Restricted Stock Units. The Committee is hereby authorized
to grant Restricted Stock and Restricted Stock Units to Eligible Individuals with the following
terms and conditions and with such additional terms and conditions not inconsistent with the
provisions of the Plan as the Committee shall determine:

     (i) Restrictions. Shares of Restricted Stock and Restricted Stock Units shall
be subject to such restrictions as the Committee may impose (including, without limitation,
limitation on transfer, forfeiture conditions, limitation on the right to vote a Share of
Restricted Stock or the right to receive any dividend or other right or property with
respect thereto), which restrictions may lapse separately or in combination at such time or
times, in such installments or otherwise as the Committee may deem appropriate. The grant
or vesting of Restricted Stock and Restricted Stock Units may be performance-based or
time-based or both. Restricted Stock and Restricted Stock Units may be Qualified
Performance-Based Awards, in which event the grant or vesting, as applicable, of such
Restricted Stock or Restricted Stock Units shall be conditioned upon the attainment of
Performance Goals.

     (ii) Stock Certificates; Delivery of Shares.

     (A) Any Restricted Stock granted under the Plan shall be evidenced in such
manner as the Committee may deem appropriate, including book-entry registration or
issuance of one or more stock certificates. Any certificate issued in respect of
shares of Restricted Stock shall be registered in the name of such Participant and
shall bear an appropriate legend referring to the applicable Award Agreement and
possible forfeiture of such shares of Restricted Stock. The Committee may require
that the certificates evidencing such shares be held in custody by the Company until
the restrictions thereon shall have lapsed and that, as a condition of any Award of
Restricted Stock, the Participant shall have delivered a stock power, endorsed in blank, relating to the Shares covered by
such Award.

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     (B) In the case of Restricted Stock Units, no Shares or other property shall be
issued at the time such Awards are granted. Upon the lapse or waiver of
restrictions and the restricted period relating to Restricted Stock Units (or at
such later time as may be determined by the Committee), Shares or other cash or
property shall be issued to the holder of the Restricted Stock Units and evidenced
in such manner as the Committee may deem appropriate, including book-entry
registration or issuance of one or more stock certificates.

     (iii) Forfeiture. Except as otherwise determined by the Committee, upon a
Participant’s termination of employment (as determined under criteria established by the
Committee) during the applicable restriction period, all applicable Shares of Restricted
Stock and Restricted Stock Units at such time subject to restriction shall be forfeited and
reacquired by the Company; provided, however, that the Committee may, when
it finds that a waiver would be in the best interest of the Company, waive in whole or in
part any or all remaining restrictions with respect to Shares of Restricted Stock or
Restricted Stock Units.

     (d) Performance Awards. The Committee is hereby authorized to grant Performance
Awards to Eligible Individuals subject to the terms of the Plan. A Performance Award granted under
the Plan (i) may be denominated or payable in cash, Shares (including, without limitation,
Restricted Stock and Restricted Stock Units), other securities, other Awards or other property and
(ii) shall confer on the holder thereof the right to receive payments, in whole or in part, upon
the achievement of such performance goals during such performance periods as the Committee shall
establish. Subject to the terms of the Plan, the performance goals to be achieved during any
performance period, the length of any performance period, the amount of any Performance Award
granted, the amount of any payment or transfer to be made pursuant to any Performance Award and any
other terms and conditions of any Performance Award shall be determined by the Committee. The
Committee may, prior to or at the time of the grant, designate Performance Awards as Qualified
Performance-Based Awards, in which event it shall condition the settlement thereof upon the
attainment of Performance Goals. Performance Awards denominated in cash that are payable to any
individual Participant with respect to any calendar year will be limited to a maximum of
$7,500,000.

     (e) Dividend Equivalents. The Committee is hereby authorized to grant Dividend
Equivalents to Eligible Individuals under which the Participant shall be entitled to receive
payments (in cash, Shares, other securities, other Awards or other property as determined in the
discretion of the Committee) equivalent in value to the amount of cash dividends paid by the
Company to holders of Shares with respect to a number of Shares determined by the Committee.
Subject to the terms of the Plan, such Dividend Equivalents may have such terms and conditions as
the Committee shall determine, but no right to a Dividend Equivalent shall be contingent, directly or indirectly, upon the
exercise of a Stock Option or Stock Appreciation Right.

     (f) Other Stock Grants. The Committee is hereby authorized, subject to the terms of
the Plan, to grant to Eligible Individuals Shares without restrictions thereon as are deemed by the
Committee to be consistent with the purpose of the Plan.

     (g) Other Stock-Based Awards. The Committee is hereby authorized to grant to Eligible
Individuals, subject to the terms of the Plan, such other Awards that are denominated or payable
in, valued in whole or in part by reference to, or otherwise based on or related to,

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Shares (including, without limitation, securities convertible into Shares), as are deemed by the Committee
to be consistent with the purpose of the Plan. Shares or other securities delivered pursuant to a
purchase right granted under this Section 6(g) shall be purchased for such consideration, which may
be paid by such method or methods and in such form or forms (including, without limitation, cash,
Shares, other securities, other Awards or other property or any combination thereof), as the
Committee shall determine, the value of which consideration, as established by the Committee, shall
not be less than 100% of the Fair Market Value of such Shares or other securities as of the date
such purchase right is granted.

     (h) Tax Offset Bonus. The Committee may grant to a Participant, at the time of
granting an Award or at any time thereafter, the right to receive a cash payment in an amount
specified by the Committee, to be paid at such time or times (if ever) as the Award results in
compensation income to the Participant, for the purpose of assisting the Participant to pay the
resulting taxes, all as determined by the Committee and on such other terms and conditions as the
Committee shall determine (a “Tax Offset Bonus”). Payment of a Tax Offset Bonus shall be
made no later than the end of the Participant’s taxable year next following the taxable year in
which the Participant remits the resulting taxes.

     (i) General.

     (i) Consideration for Awards. Awards may be granted for no cash consideration
or for any cash or other consideration as determined by the Committee and required by
applicable law.

     (ii) Awards May Be Granted Separately or Together. Awards may, in the
discretion of the Committee, be granted either alone or in addition to, in tandem with or in
substitution for any other Award or any award granted under any plan of the Company or any
Affiliate. Awards granted in addition to or in tandem with other Awards or in addition to
or in tandem with awards granted under any such other plan of the Company or any Affiliate
may be granted either at the same time as or at a different time from the grant of such
other Awards or awards.

     (iii) Forms of Payment Under Awards. Subject to the terms of the Plan,
payments or transfers to be made by the Company or an Affiliate upon the grant, exercise or settlement of an Award may be made in such form or forms as the Committee
shall determine (including cash, Shares, other securities, other Awards or other property or
any combination thereof); provided, however, that such payments or transfers
shall not be in the form of promissory notes. Such payments or transfers may be made in a
single payment or transfer, in installments or on a deferred basis, in each case in
accordance with rules and procedures established by the Committee. Such rules and
procedures may include, without limitation, provisions for the payment or crediting of
reasonable interest on installment or deferred payments or the grant or crediting of
Dividend Equivalents with respect to installment or deferred payments.

     (iv) Limits on Transfer of Awards. No Award (other than Other Stock Grants)
and no right under any such Award shall be transferable by a Participant otherwise than by
will or by the laws of descent and distribution and the Company shall not be required to
recognize any attempted assignment of such rights by any Participant; provided,
however, that, if so determined by the Committee, a Participant may, in the manner
established by the Committee, designate a beneficiary or

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beneficiaries to exercise the rights of the Participant and receive any property distributable with respect to any Award
upon the death of the Participant; and provided, further, that, if so
determined by the Committee, a Participant may transfer a Non-Qualified Stock Option to any
Family Member (as such term is defined in the General Instructions to Form S-8 (or successor
to such Instructions or such Form)) at any time that such Participant holds such Stock
Option, whether directly or indirectly or by means of a trust or partnership or otherwise,
provided that the Participant may not receive any consideration for such transfer,
the Family Member may not make any subsequent transfers other than by will or by the laws of
descent and distribution and the Company receives written notice of such transfer. Except
as otherwise determined by the Committee, each Award or right under any such Award shall be
exercisable during the Participant’s lifetime only by the Participant or, if permissible
under applicable law, by the Participant’s guardian or legal representative. Except as
otherwise determined by the Committee, no Award or right under any such Award may be
pledged, alienated, attached or otherwise encumbered, and any purported pledge, alienation,
attachment or other encumbrance thereof shall be void and unenforceable against the Company
or any Affiliate.

     (v) Term of Awards. Subject to Section 6(a)(ii) of the Plan, the term of each
Award shall be for such period as may be determined by the Committee.

     (vi) Restrictions. All Shares or other securities delivered under the Plan
pursuant to any Award or the exercise thereof shall be subject to such stop transfer orders
and other restrictions as the Committee may deem advisable under the Plan, applicable
federal or state securities laws and regulatory requirements, and the Committee may direct
appropriate stop transfer orders and cause other legends to be placed on the certificates for such Shares or other securities to reflect
such restrictions.

SECTION 7. Change in Control

     (a) Impact of Event. Notwithstanding any other provision of the Plan to the contrary,
unless otherwise provided by the Committee in any Award Agreement, in the event of a Change in
Control:

     (i) Any Stock Options and Stock Appreciation Rights outstanding as of the date of such Change
in Control, and which are not then exercisable and vested, shall become fully exercisable and
vested.

     (ii) The restrictions applicable to any Restricted Stock and Restricted Stock Units shall
lapse, and such Restricted Stock and Restricted Stock Units shall become free of all restrictions
and become fully vested.

     (iii) All Performance Awards shall be considered to be earned and payable in full, and any
restriction shall lapse and such Performance Awards shall be settled in cash or Shares, as
determined by the Committee, as promptly as is practicable.

     (iv) All restrictions on other Awards shall lapse and such Awards shall become free of all
restrictions and become fully vested.

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     (b) Definition of Change in Control. For purposes of the Plan, and unless otherwise
provided in an applicable Award Agreement, a “Change in Control” shall mean the happening of any of
the following events:

     (i) An acquisition by any individual, entity or group (within the meaning of Section 13(d)(3)
or 14(d)(2) of the Exchange Act) (a “Person”) of beneficial ownership (within the meaning
of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of either (1) the then outstanding
shares of common stock of the Company (the “Outstanding Company Common Stock”) or (2) the
combined voting power of the then outstanding voting securities of the Company entitled to vote
generally in the election of directors (the “Outstanding Company Voting Securities”);
excluding, however, the following: (1) Any acquisition directly from the Company, other than an
acquisition by virtue of the exercise of a conversion privilege unless the security being so
converted was itself acquired directly from the Company, (2) Any acquisition by the Company, (3)
Any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the
Company or any entity controlled by the Company, or (4) Any acquisition pursuant to a transaction
which complies with clauses (1), (2) and (3) of subsection (iii) of this Section 7(b); or

     (ii) A change in the composition of the Board such that the individuals who, as of the
Effective Date, constitute the Board (such Board shall be hereinafter referred to as the
“Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, for purposes of this Section 7(b), that any individual who
becomes a member of the Board subsequent to the Effective Date, whose election, or nomination for
election by the Company’s shareholders, was approved by a vote of at least a majority of those
individuals who are members of the Board and who were also members of the Incumbent Board (or
deemed to be such pursuant to this proviso) shall be considered as though such individual were a
member of the Incumbent Board; but, provided, further, that any such individual
whose initial assumption of office occurs as a result of an actual or threatened election contest
with respect to the election or removal of directors or other actual or threatened solicitation of
proxies or consents by or on behalf of a Person other than the Board shall not be so considered as
a member of the Incumbent Board; or

     (iii) Consummation of a reorganization, merger or consolidation or sale or other disposition
of all or substantially all of the assets of the Company (“Corporate Transaction”);
excluding, however, such a Corporate Transaction pursuant to which (1) all or substantially all of
the individuals and entities who are the beneficial owners, respectively, of the Outstanding
Company Common Stock and Outstanding Company Voting Securities immediately prior to such Corporate
Transaction will beneficially own, directly or indirectly, more than 50% of, respectively, the
outstanding shares of common stock, and the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of directors, as the case may be, of the
corporation resulting from such Corporate Transaction (including, without limitation, a corporation
which as a result of such transaction owns the Company or all or substantially all of the Company’s
assets either directly or through one or more subsidiaries) in substantially the same proportions
as their ownership, immediately prior to such Corporate Transaction, of the Outstanding Company
Common Stock and Outstanding Company Voting Securities, as the case may be, (2) no Person (other
than the Company, any employee benefit plan (or related trust) of the Company or such corporation
resulting from such Corporate Transaction) will beneficially own, directly or indirectly, 20% or
more of, respectively, the outstanding shares of common stock of the corporation resulting from
such Corporate

11

 

Transaction or the combined voting power of the outstanding voting securities of
such corporation entitled to vote generally in the election of directors except to the extent that
such ownership existed prior to the Corporate Transaction, and (3) individuals who were members of
the Incumbent Board will constitute at least a majority of the members of the board of directors of
the corporation resulting from such Corporate Transaction; or

     (iv) The approval by the shareholders of the Company of a complete liquidation or dissolution
of the Company.

SECTION 8. Income Tax Withholding

     No later than the date as of which an amount first becomes includible in the gross income of a
Participant for federal or foreign income tax purposes with respect to any Award under the Plan,
the Participant shall pay to the Company, or make arrangements satisfactory to the Company
regarding the payment of, any federal, state, local or foreign taxes of any kind required by law to be withheld with respect to such amount. The obligations
of the Company under the Plan shall be conditional on such payment or arrangements, and the Company
and its Affiliates shall, to the extent permitted by law, be entitled to take such action and
establish such procedures as it deems appropriate to withhold or collect all applicable payroll,
withholding, income or other taxes from such Participant, including without limitation withholding
applicable tax from Participant’s cash compensation paid by the Company or an Affiliate. In order
to assist a Participant in paying all or a portion of the federal, state, local and foreign taxes
to be withheld or collected upon exercise or receipt of (or the lapse of restrictions relating to)
an Award, the Committee, in its discretion and subject to such additional terms and conditions as
it may adopt, may permit the Participant to satisfy such tax obligation by (i) electing to have the
Company withhold a portion of the Shares or other property otherwise to be delivered upon exercise
or receipt of (or the lapse of restrictions relating to) such Award with a Fair Market Value equal
to the amount of such taxes or (ii) delivering to the Company Shares or other property other than
Shares issuable upon exercise or receipt of (or the lapse of restrictions relating to) such Award
with a Fair Market Value equal to the amount of such taxes, provided that, in either case,
not more than the legally required minimum withholding may be settled with Shares. Any such
election must be made on or before the date that the amount of tax to be withheld is determined.

SECTION 9. Amendment and Termination

     (a) Amendments to the Plan. The Board may amend, alter, suspend, discontinue or
terminate the Plan at any time; provided, however, that, notwithstanding any other
provision of the Plan or any Award Agreement, without the approval of the stockholders of the
Company, no amendment, alteration, suspension, discontinuation or termination shall be made that,
absent such approval:

     (i) requires stockholder approval under the rules or regulations of the New York Stock
Exchange, any other securities exchange or the National Association of Securities Dealers,
Inc. that are applicable to the Company; or

     (ii) increases the number of Shares authorized under the Plan as specified in Section
4(a) of the Plan.

12

 

     (b) Amendments to Awards. The Committee may waive any conditions of or rights of the
Company under any outstanding Award, prospectively or retroactively. Except as otherwise provided
herein or in an Award Agreement, the Committee may not amend, alter, suspend, discontinue or
terminate any outstanding Award, prospectively or retroactively, if such action would adversely
affect the rights of the holder of such Award, without the consent of the Participant or holder or
beneficiary thereof or such amendment would cause a Qualified Performance-Based Award to cease to
qualify for the Section 162(m) Exemption. The Committee may unilaterally amend any Award, and it
will be conclusively presumed that such action will not adversely affect the rights of the holder
of such Award, if such amendment is determined by the Committee to be necessary to cause the Award to be exempt from the application of, or to comply with, Code
Section 409A.

     (c) Correction of Defects, Omissions and Inconsistencies. The Committee may correct
any defect, supply any omission or reconcile any inconsistency in the Plan or any Award in the
manner and to the extent it shall deem desirable to carry the Plan into effect.

SECTION 10. General Provisions

     (a) No Rights to Awards. No Eligible Individual or other person shall have any claim
to be granted any Award under the Plan, and there is no obligation for uniformity of treatment of
Eligible Individuals or holders or beneficiaries of Awards under the Plan. The terms and
conditions of Awards need not be the same with respect to any Participant or with respect to
different Participants.

     (b) Award Agreements. No Participant will have rights under an Award granted to such
Participant unless and until an Award Agreement shall have been duly executed on behalf of the
Company and, if requested by the Company, signed by the Participant. In the event that any
provision of an Award Agreement conflicts with or is inconsistent in any respect with the terms of
the Plan as set forth herein or subsequently amended, the terms of the Plan shall control.

     (c) No Rights of Stockholders. Except with respect to Shares of Restricted Stock as
to which the Participant has been granted the right to vote, neither a Participant nor the
Participant’s legal representative shall be, or have any of the rights and privileges of, a
stockholder of the Company with respect to any Shares issuable to such Participant upon the
exercise or payment of any Award, in whole or in part, unless and until such Shares have been
issued in the name of such Participant or such Participant’s legal representative without
restrictions thereto.

     (d) No Limit on Other Compensation Plans or Arrangements. Nothing contained in the
Plan shall prevent the Company or any Affiliate from adopting or continuing in effect other or
additional compensation arrangements, and such arrangements may be either generally applicable or
applicable only in specific cases.

     (e) No Right to Employment. The Plan shall not constitute a contract of employment,
and adoption of the Plan or the grant of an Award shall not be construed as giving a Participant
the right to be retained as an employee of the Company or an Affiliate, or a non-employee Director
to be retained as a Director, nor shall it affect in any way the right of the Company or an
Affiliate to terminate such employment at any time, with or without cause. In addition, the
Company or an Affiliate may at any time dismiss a Participant from

13

 

employment free from any liability or any claim under the Plan or any Award, unless otherwise expressly provided in the Plan
or in any Award Agreement.

     (f) Governing Law. The Plan and all Awards granted and actions taken thereunder shall
be governed by and construed in accordance with the laws of the State of Delaware, without
reference to principles of conflict of laws thereof.

     (g) Severability. If any provision of the Plan or any Award is or becomes or is
deemed to be invalid, illegal or unenforceable in any jurisdiction or would disqualify the Plan or
any Award under any law deemed applicable by the Committee, such provision shall be construed or
deemed amended to conform to applicable laws, or if it cannot be so construed or deemed amended
without, in the determination of the Committee, materially altering the purpose or intent of the
Plan or the Award, such provision shall be stricken as to such jurisdiction or Award, and the
remainder of the Plan or any such Award shall remain in full force and effect.

     (h) Application to Participants Outside the United States. In the event an Award is
granted to a Participant who is employed or providing services outside the United States and who is
not compensated from a payroll maintained in the United States, the Committee may, in its sole
discretion, modify the provisions of the Plan as they pertain to such individual to comply with
applicable foreign law.

     (i) No Trust or Fund Created. Neither the Plan nor any Award shall create or be
construed to create a trust or separate fund of any kind or a fiduciary relationship between the
Company or any Affiliate and an Eligible Individual or any other person. To the extent that any
person acquires a right to receive payments from the Company or any Affiliate pursuant to an Award,
such right shall be no greater than the right of any unsecured general creditor of the Company or
any Affiliate.

     (j) Other Benefits. No compensation or benefit awarded to or realized by any
Participant under the Plan shall be included for the purpose of computing such Participant’s
compensation under any compensation-based retirement, disability, or similar plan of the Company
unless required by law or otherwise provided by such other plan.

     (k) No Fractional Shares. No fractional Shares shall be issued or delivered pursuant
to the Plan or any Award, and the Committee shall determine whether cash shall be paid in lieu of
any fractional Shares or whether such fractional Shares or any rights thereto shall be canceled,
terminated or otherwise eliminated.

     (l) Headings. Headings are given to the Sections and subsections of the Plan solely
as a convenience to facilitate reference. Such headings shall not be deemed in any way material or
relevant to the construction or interpretation of the Plan or any provision thereof.

     (m) Section 16 Compliance; Section 162(m) Administration. The Plan is intended to
comply in all respects with Rule 16b-3 or any successor provision, as in effect from time to time,
and in all events the Plan shall be construed in accordance with the requirements of Rule 16b-3.
If any Plan provision does not comply with Rule 16b-3 as hereafter amended or interpreted, the provision shall be deemed inoperative. The Board, in
its absolute discretion, may bifurcate the Plan so as to restrict, limit or condition the use of
any provision of the Plan with respect to persons who are officers or directors subject to Section
16 of the Exchange Act

14

 

without so restricting, limiting or conditioning the Plan with respect to
other Eligible Individuals. The Company intends that all Stock Options and Stock Appreciation
Rights granted under the Plan to individuals who are or who the Committee believes will be Covered
Employees will constitute “qualified performance-based compensation” within the meaning of Section
162(m) of the Code.

     (n) Conditions Precedent to Issuance of Shares. Shares shall not be issued pursuant
to the exercise or payment of the Exercise Price or purchase price relating to an Award unless such
exercise or payment and the issuance and delivery of such Shares pursuant thereto shall comply with
all relevant provisions of law, including, without limitation, the Securities Act of 1933, as
amended from time to time, the Exchange Act, the rules and regulations promulgated thereunder, the
requirements of any applicable stock exchange and the Delaware General Corporation Law. As a
condition to the exercise or payment of the Exercise Price or purchase price relating to such
Award, the Company may require that the person exercising or paying the Exercise Price or purchase
price represent and warrant that the Shares are being purchased only for investment and without any
present intention to sell or distribute such Shares if, in the opinion of counsel for the Company,
such a representation and warranty is required by law.

     (o) Conformance to Section 409A of the Code. To the extent that any Award constitutes
a deferral of compensation subject to Section 409A of the Code, the following provisions shall
apply notwithstanding any other provision of the Plan:

     (i) If such Award provides for a change in the time or form of payment of such Award upon a
Change in Control of the Company, no Change in Control shall be deemed to have occurred upon an
event described in Section 7(b) of the Plan unless such event would also constitute a change in
ownership or effective control of, or a change in the ownership of a substantial portion of the
assets of, the Company under Section 409A of the Code.

     (ii) If any amount is payable under such Award upon a termination of employment or other
service, a termination of employment or other service will be deemed to have occurred only at such
time as the Participant has experienced a “separation from service” as such term is defined for
purposes of Code Section 409A.

     (iii) If any amount shall be payable with respect to any such Award as a result of a
Participant’s “separation from service” at such time as the Participant is a “specified employee,”
then no payment shall be made, except as permitted under Code Section 409A, prior to the first day
of the seventh (7th) calendar month beginning after the Participant’s separation from service (or
the date of his or her earlier death). The Company may adopt a “specified employee identification
policy” which specifies the identification date, the effective date of any change in the key
employee group, compensation definition and other variables that are relevant in identifying
specified employees, and which may include an alternative method of identifying specified employees
consistent with the regulations under Code Section 409A. In the absence of any such policy or
policy provision, for purposes of the above, the “identification date” is each December 31st, and
an employee who satisfies the above conditions will be considered to be a “specified employee” from
April 1st following the identification date to March 31st of the following year, and the
compensation and other variables, and special rules for corporate events and special rules relating
to nonresident aliens, that is necessary in identifying specified employees will be determined and
applied in accordance with the defaults specified in the regulations under Code Section 409A. Any
Specified Employee Identification

15

 

Policy will apply uniformly to all nonqualified deferred
compensation plans subject to Code Section 409A that are maintained by the Company or an Affiliate.

     To the extent the Committee elects to exercise its discretion to permit or require a Participant to
defer receipt of cash or Shares that would otherwise be due to him or her under the Plan upon the
vesting or settlement of any Award, such deferral shall occur in accordance with a written plan,
rules or procedures adopted for that purpose by the Committee. Any such plan, rules or procedures
shall comply with the requirements of Code Section 409A, including those with respect to the time
when a deferral election may be made, the period of the deferral and the events that would result
in the payment of the deferred amount.

SECTION 11. Effective Date of Plan

     Upon its adoption by the Board, the Plan shall be submitted for approval by the stockholders
of the Company and shall be effective as of the date of such approval (the “Effective
Date”).

SECTION 12. Term of the Plan

     The Plan will terminate on the tenth anniversary of the Effective Date or any earlier date of
discontinuation or termination established pursuant to Section 9 of the Plan. However, unless
otherwise expressly provided in the Plan or in an applicable Award Agreement, any Award theretofore
granted may extend beyond such date, and the authority of the Committee provided for hereunder with
respect to the Plan and any Awards, and the authority of the Board to amend the Plan, shall extend
beyond the termination of the Plan.

16exv10w3

Exhibit 10.3

NOTE: CERTAIN PORTIONS OF THIS AGREEMENT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION UNDER RULE 24b-2. THESE OMISSIONS ARE
IN SECTION 6.3 OF THE AGREEMENT AND ARE INDICATED BY THE FOLLOWING MARKING: [*****]

ETHANOL PRODUCT OFF-TAKE AGREEMENT

BY AND AMONG 

SIOUXLAND ETHANOL, LLC AND 

GAVILON, LLC

     This Ethanol Product Off-Take Agreement (the “Agreement”) is made effective as of this
1st day of May, 2009 (the “Effective Date”), by and among Siouxland Ethanol,
LLC, a Nebraska limited liability company (“Producer”), and Gavilon, LLC, a Delaware
limited liability company (“Gavilon”).

RECITALS

	 	(a)	 	Producer will produce Ethanol (also referred to herein as the
“Product”) at its facility located in Jackson, Nebraska (the “Plant”),
with a current name plate capacity of approximately 50 million gallons (the “Name
Plate Capacity”) of Ethanol per Contract Year;
	 
	 	(b)	 	Gavilon is in the business of purchasing Product and marketing and reselling
such Product to third-parties; and
	 
	 	(c)	 	Producer desires to deliver and sell to Gavilon, and Gavilon desires to
purchase and take from Producer, the Product output of the Plant specified herein and
Gavilon desires to provide certain related services to Producer on the terms and
subject to the conditions contained in this Agreement.

AGREEMENT

     NOW THEREFORE, in consideration of the above Recitals, which are incorporated herein and made
a part hereof, and the mutual promises and covenants set forth herein, and intending to be legally
bound, Gavilon and Producer mutually agree as follows:

Article 1

DEFINITIONS

     1.1 “Acceptance Deadline” has the meaning provided for in Section 6.2.1.

     1.2 “Agreement” means this Ethanol Product Off-Take Agreement and any exhibits or
schedules attached hereto as the same may be amended from time to time.

     1.3 “Bankruptcy” has the meaning provided for in Section 13.1.6.

     1.4 “Bid“ has the meaning provided for in Section 6.2.1.

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     1.5 “Business Day or Business Days” means the hours from 8:00 a.m. to 5:00 p.m.
Central Time excluding Saturdays, Sundays, and scheduled holidays observed by the Chicago Board of
Trade, Chicago, Illinois, USA.

     1.6 “Central Time” means the local time in Omaha, Nebraska at any relevant time,
taking into account daylight savings time, if applicable.

     1.7 “Confidential Information” has the meaning provided for in Section 10.1.

     1.8 “Confirmation” has the meaning provided for in Section 6.2.2.

     1.9 “Confirmed Order” means a Bid that has been accepted by Producer as provided in
Section 6.2.2.

     1.10 “Confirmed Price” has the meaning provided for in Section 6.2.2.

     1.11 “Contract Year” means a period of twelve (12) consecutive months with the first
Contract Year to begin on the Effective Date.

     1.12 “Cross Default” has the meaning provided for in Section 13.4.

     1.13 “Gavilon Service Fee” has the meaning provided for in Section 6.3.

     1.14 “Damages” has the meaning provided for in Section 12.1.

     1.15 “Delivery” means the Product has crossed the point between the Terminal output
apparatus and the intake apparatus of the respective Transport Carrier.

     1.16 “Delivery Point” means the point that the Product is loaded into Transport
Carriers at the Producer’s Plant.

     1.17 “Delivery Schedule” has the meaning provided for in Section 5.3.

     1.18 “Demurrage” means all costs, damages, penalties and charges resulting from any
delay in loading and/or unloading of Product shipments, including, without limitation, any delay
related to any Transport Carrier, as applicable: (i) being incapable of timely loading any shipment
of Product due to mechanical failure or for other reasons, or (ii) delivering any shipment of
Product to an incorrect Delivery Point.

     1.19 “Designated Logistics Individual” has the meaning provided for in Section 5.2.

     1.20 “Designated Pricing Individual” has the meaning provided for in Section 6.1.

     1.21 “DOT” means the United States Department of Transportation.

     1.22 “Effective Date” has the meaning provided in the introductory paragraph.

     1.23 “Ethanol” means the product meeting the Specifications set forth in Exhibit
“A” attached hereto and incorporated herein by this reference.

     1.24 “Event of Default” has the meaning provided for in Section 13.1.

     1.25 “Force Majeure” has the meaning provided for in Section 11.2.

2

 

     1.26 “Forward Market Services” has the meaning provided for in Section 9.1.

     1.27 “Governing Body” means the American Arbitration Association.

     1.28 “Governing Body Arbitration Rules” means the commercial arbitration rules of the
Governing Body.

     1.29 “Initial Term” has the meaning provided for in Section 2.1.

     1.30 “Invoice” has the meaning provided for in Section 6.6.1.

     1.31 “Invoice Date” has the meaning provided for in Section 6.6.1.

     1.32 “Logistics” means activities related to or connected with either (i)
transporting, storing and otherwise handling Product after Delivery to Gavilon hereunder, or (ii)
delivery of Transport Carriers to the Delivery Point for Product loading.

     1.33 “Nonconforming Product” has the meaning provided for in Section 4.4.

     1.34 “Party” shall mean either Producer or Gavilon, as the context requires, and
“Parties” shall mean both Producer and Gavilon.

     1.35  “Plant” has the meaning provided for in the Recitals.

     1.36 “Product” has the meaning provided for in the Recitals.

     1.37 “Production Forecast” has the meaning provided in Section 4.1.1.

     1.38 “Purchase Price” has the meaning provided for in Section 6.2.2(a).

     1.39  “Renewal Term” has the meaning provided for in Section 2.2.

     1.40 “Specifications” has the meaning provided in Section 4.3.

     1.41 “Storage Costs” means direct or indirect costs incurred by Gavilon or charged by
a third-party for storing Nonconforming Product together with insurance and all other charges
incurred to third- parties in connection with such storage, without markup by Gavilon.

     1.42 “Superior Terms” has the meaning provided for in Section 6.2.2(c).

     1.43 “Taxes” has the meaning provided for in Section 6.4.

     1.44  “Term” has the meaning provided for in Section 2.2.

     1.45 “Terminal” means the site and facilities of the applicable terminal operator
serving the operations of the respective Plant.

     1.46 “Transaction Document” means any and all other agreements entered into between
the Parties concerning the subject matter of this Agreement.

     1.47 “Transport Carrier” means railcars or trucks.

3

 

Article 2

TERM

     2.1 Initial Term. Unless terminated earlier according to its terms, this Agreement
shall be in effect for one (1) year beginning on the Effective Date (the “Initial Term”).

     2.2 Renewal Term. The Initial Term may be extended for up to three (3) additional one
(1) year periods (each, a “Renewal Term”) upon mutual written consent of the Parties
executed at least sixty (60) days prior to the end of the Initial Term or any Renewal Term (or
shorter period to which the Parties may mutually agree in a writing executed by the Parties).
Collectively, the Initial Term and any Renewal Term are referred to herein as the “Term”.
The expiration of this Agreement shall have no effect on the obligations of the parties hereto with
respect to any Confirmed Orders entered into prior to the end of such Term.

Article 3

PRODUCT PURCHASE

     3.1 Sale/Purchase. During each Contract Year during the Term of this Agreement,
Gavilon shall be obligated to make, and Producer shall be obligated to consider, in the manner
described in Article 6 hereof, bids for the purchase of 100% of the Product produced at Plant;
currently a maximum of 60 million gallons in any Contract Year; provided, however, that Producer,
in its sole discretion, may retain up to 600,000 gallons of Product per calendar month to be
marketed by Producer outside of this Agreement (hereinafter the “Retained Product”).
Retained Product, if any, shall be exempt from the foregoing obligations of Gavilon and Producer.
Producer hereby represents and warrants that it has no obligation or commitment to any third party
with respect to the delivery or sale of any Product, except for remaining obligations to its
previous marketer which are set forth in Schedule 3.1 hereto and any obligations relating
to Retained Product.

     3.2 Producer will be responsible to purchase and blend denaturant at the accepted compliance
rate in accordance with governmental agency guidelines and the terms of this Agreement. Producer
is responsible for the procurement of feedstock, and other necessary items required to produce
Product. Producer is responsible for the sales of products produced by Producer other then
Product, and Producer is not obligated to report on its positions on these items to Gavilon.
Producer may from time to time, subject to the terms of this Agreement, engage with Gavilon to
review Producer’s cost of production to determine if it is reasonable to make sales of Product to
capture profits or limit losses.

Article 4

PRODUCT QUANTITY AND QUALITY

     4.1 Production Forecasts. For Product sales and purchase planning purposes, Producer
shall provide to Gavilon, in form and substance acceptable to Gavilon:

	 	4.1.1	 	A weekly Product production output forecast for the Plant for a rolling 60 day
period (the “Production Forecast”) which shall be the best estimate by Producer
of the Plant’s Product production for the respective forecast period. Producer shall
have the right to adjust the information in any prior Production Forecast in

4

 

	 	 	 	its sole and absolute discretion in connection with the delivery of any new weekly
Production Forecasts, but shall use commercially reasonable efforts to advise
Gavilon of any anticipated revision to prior Production Forecast information as soon
as practicable;
	 
	 	4.1.2	 	On or before the first day of each calendar month during the Term, monthly
written updates in writing or electronically concerning operations of the Plant and
activities that relate to the output of Product;
	 
	 	4.1.3	 	On or prior to 8:30 a.m. Central Time of each-day of operation, the estimated
daily Product inventory balances of the Plant, Product production status and Product
shipment information in writing or electronically;
	 
	 	4.1.4	 	Promptly after the Effective Date, and at least forty five (45) days prior to
the beginning of each Calendar Year during the Term, written notice of any then-
scheduled Plant shutdowns;
	 
	 	4.1.5	 	Prompt written notice, within twenty four (24) hours, of any event that has
resulted or could reasonably be expected to result in an unscheduled Plant shut down,
suspension or significant decrease in the Plant’s production of Product that was not
reported or anticipated in the Production Forecasts provided for herein; and
	 
	 	4.1.6	 	Immediately upon request, such other information reasonably requested by
Gavilon.

     4.2 Quantity. The quantity of each Delivery of Product to Gavilon shall be established by
origin weight or origin metered volume prior to shipment and certified by Producer as of the time
of such weighing or metering. Producer shall measure either the weight or the volume of the
shipments on scales or metering equipment calibrated at least once yearly beginning on the
Effective Date during the Term of this Agreement in accordance with the USDA Grain Inspection,
Packers & Stockyard’s Administration’s applicable standards and which provide both gross and net
60° Fahrenheit temperature compensated gallons. In the event that the scale or metering equipment
at the Plant is deemed faulty or inoperable, then the quantity of Product shall be established by a
replacement scale or replacement metering system(s) which is/are certified as of the time of such
weighing or metering and which comply with the terms and conditions of this Agreement and all
applicable laws, rules and regulations.

     4.3 Quality. Unless otherwise agreed by Gavilon in writing, Producer represents and
warrants that the Product produced at the Plant and delivered to Gavilon (i) shall be free and
clear of all liens and encumbrances, (ii) shall comply in all material respects with any applicable
federal, state, and local laws, regulations and requirements governing quality, naming, and
labeling of Product, and (iii) shall conform to the specifications set forth in Exhibit “A”
attached hereto (the “Specifications”). The Specifications shall be deemed modified upon
mutual agreement or, without any further action by either of the Parties hereto, from time to time
to conform with legally mandated standards currently in existence or as modified or amended.

	 	4.3.1	 	Producer shall provide to Gavilon, on or prior to Delivery of any Product to
Gavilon, a certificate representing an analysis of the Product to be sold to Gavilon,
certifying and evidencing to the reasonable satisfaction of Gavilon that such Product
(i) is free and clear of all liens and encumbrances, (ii) complies in

5

 

	 	 	 	all material respects with any applicable federal, state, and local laws,
regulations and requirements governing quality, naming, and labeling of Product, and
(iii) conforms to the Specifications. Producer, at its sole cost and expense, shall
provide or cause to be provided all testing and related test equipment, which shall
be calibrated at least once every six (6) months during the Term of this Agreement,
at or in the vicinity of the Plant to determine, to Gavilon’s satisfaction, that the
Product is compliant with the Specifications. Gavilon or Gavilon’s representative
shall have the right to perform, at any time and at Gavilon’s sole expense, tests to
determine whether or not the Product is in compliance with the Specifications. If
the Product so tested does not conform to the Specifications, Producer shall
reimburse Gavilon its actual costs in conducting such tests.
	 
	 	4.3.2	 	If Producer knows or reasonably suspects that any of the Product produced at
the Plant are adulterated or misbranded, or do not conform to any warranty or
Specification, Producer shall promptly notify Gavilon to such effect so that such
Product can be tested before entering interstate commerce. If Gavilon knows or
reasonably suspects that any of the Products produced by Producer at the Plant are
adulterated, misbranded or non-conforming to the Specifications, then Gavilon may
obtain independent laboratory tests of the Product in question. If such Product is
tested and found to comply with all warranties and the Specifications made by Producer
herein, then Gavilon shall be responsible for all applicable testing costs; and if the
Product is found not to conform with such warranties and the Specifications, Producer
shall be responsible for all applicable testing costs.
	 
	 	4.3.3	 	Gavilon’s payment for the Product, whether or not in conformance with this
Agreement or any applicable Confirmation, does not constitute a waiver by Gavilon of
Gavilon’s rights in the event the Product does not comply with the terms of this
Agreement.
	 
	 	4.3.4	 	Sampling of Product will be by certification of the storage tank from which
the Product is being transferred from into the Transport Carrier. If Product is loaded
onto a number of railcars in sequence then samples will be collected from the first car
loaded and then every 5th car loaded as well as the final car loaded. A
sample will be gathered from each truck that is loaded. Samples will be retained by
Producer for sixty (60) days after invoice date.
	 
	 	4.3.5	 	If requested by Gavilon, Producer shall provide all information to Gavilon
pursuant to this Section 4.2 in electronic form.

     4.4 Nonconforming Product. In the event the Product delivered to Gavilon is determined
to be nonconforming to the Specifications or otherwise nonconforming in any material respect to any
other representation or warranty made by Producer herein (the “Nonconforming Product”),
Gavilon shall notify Producer of Gavilon’s rejection of such Nonconforming Product in writing
within two (2) Business Days of determining that such Product is a Nonconforming Product. Gavilon
shall provide a copy of the certified laboratory report(s) evidencing the nonconformity. Producer
will then direct Gavilon to either (i) sell the Nonconforming Product at a discounted price, or
(ii) return the Nonconforming Product to Producer, each at Producer’s sole cost and expense.
Producer shall replace the Nonconforming Product with an acceptable type and/or quality of Product
within two (2) Business Days of receipt of written notice that the delivered Product is
nonconforming. In the event Producer is

6

 

unable to replace the Nonconforming Product within said two (2) day period, Gavilon shall have
the option in Gavilon’s sole, absolute and unreviewable discretion to return the Nonconforming
Product, withhold payment therefor and purchase replacement Product. Producer will be responsible
for the difference in cost between the higher cost replacement Product and the cost of Producer’s
Product which is the subject of a Confirmed Order, and the costs of returning or disposing of any
such Nonconforming Product. Such costs may include, without limitation, reasonably incurred Storage
Costs or costs reasonably incurred by Gavilon to return such Nonconforming Product to Producer. If
such Nonconforming Product is sold by Gavilon at a discount, the Purchase Price payable by Gavilon
may be reasonably adjusted by Gavilon by the amount of such discount and payment shall be made
according to this Agreement.

Article 5

DELIVERY, SCHEDULING AND LOGISTICS

     5.1 Delivery. Delivery of Product hereunder shall take place at the Delivery Point for
Product and in accordance with the applicable Confirmation.

     5.2 Designated Logistics Individual. At all times during the Term, Producer shall
designate (and may re-designate from time to time) in writing to Gavilon, a qualified, full-time,
individual for daily operational and Logistics issues who shall interact directly with Gavilon
relating to such matters and shall have full, binding authority on behalf of Producer for all
operational and Logistics matters with respect to the transactions contemplated herein (the
“Designated Logistics Individual”). Producer may also designate a substitute Designated
Logistics Individual who will interact with Gavilon if the primary Designated Logistics Individual
is unavailable.

     5.3 Delivery Schedule. The Parties shall jointly develop a delivery schedule (the
“Delivery Schedule”), the format of which will be mutually agreed upon by the Parties,
which will serve as the formal planning tool for Logistics purposes for each calendar quarter and
each month of the calendar quarter. The initial draft of each Delivery Schedule shall be submitted
by Producer to Gavilon no later than ten (10) Business Days prior to the end of each calendar
quarter. The Delivery Schedule shall pertain to the second calendar quarter following the calendar
quarter in which the Delivery Schedule is submitted to Gavilon and shall reflect Product delivery
requirements (e.g., the Delivery Schedule submitted prior to the end of the quarter ending December
31 will cover the quarter beginning April 1 and ending June 30). The initial draft of the Delivery
Schedule shall reflect a three (3) month daily forecast and shall include:

	 	5.3.1	 	Submission date;
	 
	 	5.3.2	 	Production plan with estimated production quantities of Product;
	 
	 	5.3.3	 	Estimated start-of-quarter inventory of Product by and in gallons;
	 
	 	5.3.4	 	Comments regarding operations, scheduled shutdowns, and other comments
relating to market, Logistics, and inventory management; and
	 
	 	5.3.5	 	Should any changes from the Delivery Schedule be anticipated for the
subsequent three (3) calendar quarters, Producer shall communicate such changes in
writing together with the above information. Such changes could

7

 

	 	 	 	include: production rates per month, quantities of Product to be produced and a list
of special operational and delivery considerations.

     5.4 Gavilon’s Covenants. Gavilon shall be responsible for the coordination and
management of Logistics which arise after Delivery and for delivery of Transport Carriers to the
Delivery Point for Product loading, except as otherwise stated herein, Gavilon covenants and agrees
to:

	 	5.4.1	 	Secure and maintain all necessary agreements, licenses, documents and
contracts related to the transport of the Product from the Delivery Point;
	 
	 	5.4.2	 	Establish, monitor and communicate Logistics-related data to Producer as
reasonable to ensure the shipment of Product in accordance with the applicable Delivery
Schedule;
	 
	 	5.4.3	 	Provide Producer with estimated annual Product requirements and delivery
schedules to assist Producer in preparing the Delivery Schedule;
	 
	 	5.4.4	 	Secure and supply to Producer in connection with Delivery of Products
hereunder all Transport Carriers and advise Producer on tracking Transport Carriers and
applicable respective estimated times of arrival therefore in an effort to reduce
Demurrage and other costs; and
	 
	 	5.4.5	 	Schedule the loading and shipping of all outbound Product purchased hereunder
and shipped by Transport Carrier.
	 
	 	5.4.6	 	Upon execution by Producer of nondisclosure agreement acceptable to Gavilon in
its sole discretion, provide Producer with copies of its (on in the case of
consolidated financial statements, its parent’s) quarterly and audited annual financial
statements during the Term.
	 
	 	5.4.7	 	Comply in all material respects with all applicable federal, state, and local
laws, regulations and requirements regarding the shipment of Product from the Plant
including, but not limited to, all DOT requirements relating to the shipment of
hazardous materials or otherwise applicable to the shipment of the Product (e.g. proper
paperwork, rail cars meeting DOT requirements, etc.);

     5.5 Producer’s Covenants. Producer shall be responsible for the coordination and
management of transporting, storing and otherwise handling Product up through completion of
Delivery of the Product to Gavilon and, except as otherwise stated herein, Producer covenants and
agrees to:

	 	5.5.1	 	Comply in all material respects with all applicable federal, state, and local
laws, regulations and requirements regarding the labeling and shipment of Product
applicable to Producer in connection with Delivery of Product at the Plant including,
but not limited to, all DOT requirements relating to the labeling and shipment of
hazardous materials or otherwise applicable to the labeling and shipment of the Product
(e.g. proper paperwork, rail cars meeting DOT requirements, etc.);

8

 

	 	5.5.2	 	Provide to Gavilon and Gavilon’s representatives access to the Plant in a
manner and at all times reasonably necessary and convenient for Gavilon to take
Delivery of the Product;
	 
	 	5.5.3	 	Provide all labor, facilities and equipment necessary to load the Transport
Carriers and consummate Delivery of the Product at no charge to Gavilon;
	 
	 	5.5.4	 	Handle the Product in a good and workmanlike manner in accordance with
Gavilon’s requirements, all governmental regulations and in accordance with normal
industry practice;
	 
	 	5.5.5	 	Maintain all loading facilities at the respective Terminal and Delivery Point
in a safe operating condition in accordance with normal industry standards;
	 
	 	5.5.6	 	Prior to Delivery, inspect all applicable Transport Carriers in accordance
with industry standards to ensure that the same are free of debris and foreign material
that are prohibited under applicable laws or industry standards, free of odor and
visually ascertainable contamination, and free of leaks from the Transport Carrier
valves, and immediately notify Gavilon upon the discovery of or suspicion of the
presence of such items to allow the Parties to coordinate the removal of such
contaminants or arrange for substitute transportation equipment;
	 
	 	5.5.7	 	Use commercially reasonable efforts to load all Transport Carriers to full
capacity at the Delivery Point. In the event that a Transport Carrier is not loaded to
full capacity due to Producer’s failure to use such commercially reasonable efforts,
Producer shall pay that portion of freight charges allocable to the unused capacity of
the applicable Transport Carrier and shall notify Gavilon within one (1) Business Day
of the occurrence of such partial load;
	 
	 	5.5.8	 	Provide, at Producer’s sole cost and expense, storage capacity for a minimum
of three (3) calendar days production of Product at the Plant, in accordance with
industry standard and all applicable state and federal regulations;
	 
	 	5.5.9	 	Provide Gavilon with such accounting, financial and other information
including but not limited to, copies of its quarterly and audited annual financial
statements of Producer as may be requested in order for Gavilon to monitor and assess
Producer’s credit status during the Term.
	 
	 	5.6	 	Notification of Problems with Delivery.
	 
	 	5.6.1	 	Gavilon shall inform Producer of any problem regarding any Delivery or
shipment of Product within one (1) Business Day by facsimile or email, and telephone,
after Gavilon becomes aware of any such problem. An example of such problem(s)
includes, but is not limited to, a difference in the quantity of the Delivery of
Product from that quantity set out in the applicable Confirmation.
	 
	 	5.6.2	 	Producer shall inform Gavilon of any problem regarding any Delivery or
shipment of Product within one (1) Business Day by facsimile or email, and telephone,
after Producer becomes aware of any such problem. An example of such problem(s)
includes, but is not limited to, Product having a different quantity than originally
set out in the Confirmation.

9

 

Article 6

PRICING AND PAYMENTS

     6.1 Designated Pricing Individual. At all times during the Term, Producer shall
designate (and may re-designate from time to time) in writing to Gavilon a qualified, full-time
individual to interact directly with Gavilon for all pricing and payment matters who shall have
full, binding authority on behalf of Producer for all pricing, billing, and payment matters with
respect to the transactions contemplated herein (the “Designated Pricing Individual”).
Producer may also designate a substitute Designated Pricing Individual who will interact with
Gavilon if the primary Designated Pricing Individual is unavailable. The Designated Logistics
Individual and the Designated Pricing Individual may be the same individual.

	 	6.2	 	Bidding and Confirmation Process. 
	 
	 	6.2.1	 	All bids for the purchase of Product made by Gavilon pursuant to Section 3.1
(each a “Bid”) shall be delivered by telephone (which shall be confirmed by
telecopy), telecopy or e-mail to Producer’s Designated Pricing Individual and shall
include in the Bid the quantity of Product, shipment period and the bid price for such
Product. Any Bid delivered to Producer by 11:00 a.m. Central Time shall remain open
for acceptance by Producer until 5:00 p.m. Central Time on the day Gavilon provides the
Bid to Producer and Bids delivered during the remainder of the day shall remain open
for acceptance by Producer until 5:00 p.m. Central Time on the following day (either of
such times being the “Acceptance Deadline”) at which time such Bid shall
automatically expire as rejected and no longer be of any effect. Prior to Producer’s
acceptance of the Bid, Gavilon reserves the right in Gavilon’s sole, absolute and
unreviewable discretion, to modify or withdraw a Bid and communicate in writing or
electronically, such modification or withdrawal to Producer.
	 
	 	6.2.2	 	Not later than the Acceptance Deadline for a particular Bid, Producer shall
either (i) accept such Bid, (ii) reject such Bid or (iii) accept such Bid on Superior
Terms as described in clause (c) below. In the event Producer fails to accept or
reject a Bid prior to the applicable Acceptance Deadline, such Bid shall be deemed
rejected.

	 	(a)	 	If a Bid is accepted by Producer, Gavilon shall
deliver to the Designated Pricing Individual by telecopy or e-mail, a
written Confirmation of Purchase and Sale Transaction substantially in
the form attached hereto as Exhibit “B” (the
“Confirmation”) not later than one Business Day after
acceptance of the Bid. The Confirmation shall include the type and
quantity of Product to be purchased by Gavilon and the firm purchase
price for such Product (the “Confirmed Price”). The Confirmed
Price less the Gavilon Service Fees (as defined below) is referred to
herein as the “Purchase Price” payable by Gavilon for the
Product.
	 
	 	(b)	 	If a Bid is rejected by Producer, the Product
which was the subject of such Bid shall be retained by Producer and
Gavilon shall continue to bid for such Product pursuant to its
obligations under

10

 

	 	 	 	Section 3.1 here unless Producer notifies Gavilon that it intends to
treat all or any portion of such Product as Retained Product.
	 
	 	(c)	 	If Producer obtains a bona fide bid from an
unaffiliated party for any or all of the Product for which Gavilon has
submitted a Bid which reflects a higher net price to Producer for such
Product (“Superior Terms”), Producer shall, subject to approval
by Gavilon in its reasonable discretion, be allowed to accept such
Superior Terms on behalf of Gavilon with respect to such Product in
which case, Gavilon’s Bid will be deemed to be modified to reflect such
Superior Terms and Producer shall be deemed to have accepted such Bid
as so modified. In such event, Gavilon shall deliver a Confirmation in
the manner described in clause (a) but with a Confirmed Price and
Purchase Price reflecting such Superior Terms. If Gavilon does not
approve acceptance on its behalf of bid reflecting Superior Terms, then
Producer shall be allowed to accept such Superior Terms on Producer’s
own behalf and sell the Product that was the subject of Gavilon’s
original Bid to such other party on such Superior Terms without the
payment of any Gavilon Service Fee.

	 	6.2.3	 	In the event that any Product purchased by Gavilon hereunder is re-sold to
third parties that do not require RINS to be attached to such Product, such RINS will
remain the property of Producer.

     6.3 Gavilon Service Fees. In consideration for Gavilon’s agreement to purchase Product
hereunder, and other obligations contained herein, Gavilon shall deduct from the Confirmed Price
for all Product sold to Gavilon under this Agreement (including Product sold on Superior Terms), a
service fee equal to [*****]% of the Confirmed Price [*****************] (the “Gavilon Service
Fee”).

     6.4 Taxes. Producer shall pay or cause to be paid all valid levies, assessments,
duties, rates and taxes (together “Taxes”) on Product sold to Gavilon hereunder that arise
prior to, or at the time and as a result of, the sale of such Product to Gavilon. Gavilon shall pay
or cause to be paid all Taxes, including fuel or excise Taxes, on Product that arise after the sale
of Product by Producer to Gavilon hereunder. Any and all state or federal tax, production,
investor, or U.S. excise credits, any and all emissions credits, other government incentives or
credits or benefits relating to the production of Product or the sale thereof to Gavilon, shall
inure solely to the benefit of Producer.

     6.5 Railcar Leasing. 

	 	6.5.1	 	In the event Purchaser maintains a dedicated fleet of railcars for use as
Transport Carriers for Delivery of Product from Producer, Producer shall be responsible
for Gavilon’s net leasing cost (including in-service freight and mileage-equalization
costs) for such dedicated railcars without markup or premium as determined by the
contract terms of the applicable lease agreements. Gavilon shall be invoiced Producer
on a monthly basis for such costs. Gavilon shall not deduct such leasing costs or any
other costs of transporting product from the Confirmed Price for any Product.

11

 

	 	6.5.2	 	At the beginning of each Contract Year during the Term, Producer’s Designated
Logistics Individual and Gavilon shall agree on the number of railcars, if any, that
Gavilon shall designate as being dedicated to use as Transport Carriers for the
Producer for such Contract Year and shall meet periodically throughout the Contract
Year as necessary to make adjustments thereto as may be necessary to allow Gavilon, as
nearly as practical, to recover its net cost of maintaining such dedicated railcar
fleet.
	 
	 	6.5.3	 	If this Agreement is terminated by Producer pursuant to Section 13.6, Producer
shall be responsible for any lease costs that Gavilon will incur (and entitled to
Gavilon’s rights to leased railcars) through the end of the Initial Term or
then-current Renewal Term.
	 
	 	6.6	 	Billing and Payment.
	 
	 	6.6.1	 	Invoice. Within one Business Day of Delivery of Product to Gavilon
(each an “Invoice Date”), Producer will provide an invoice to Gavilon, in
writing or electronically, setting forth the amounts due from Gavilon with respect to
such Delivery of Product (the “Invoice”).
	 
	 	6.6.2	 	Payment Due. Gavilon shall issue payment to Producer by electronic or
wire transfer within seven (7) Business Days after Delivery of the Product referenced
on the applicable Invoice.

Article 7

REPRESENTATIONS AND WARRANTIES

     7.1 Representations, Warranties and Covenants. Producer and Gavilon each represent,
warrant and covenant to the other that:

	 	7.1.1	 	Such Party is duly organized, validly existing, and in good standing under the
laws of the state of its formation, has registered as a foreign entity in those
jurisdictions where such registration is required, and has the power and authority to
own and operate its properties and to carry on its business as now being conducted;
	 
	 	7.1.2	 	Such Party is duly authorized to execute and deliver this Agreement and any
Confirmations, perform the covenants contained herein and therein, to consummate the
transactions contemplated hereby, and to execute, deliver and perform all documents and
instruments to be executed and delivered by such Party pursuant hereto, and all
required action in respect to the foregoing has been taken by such Party;
	 
	 	7.1.3	 	When executed and delivered, this Agreement, any Confirmations, and all of the
documents and instruments described herein and therein, will constitute valid and
binding obligations of the Parties thereto, enforceable against the Parties, in
accordance with their respective terms;
	 
	 	7.1.4	 	The execution and delivery of this Agreement and any Confirmations, and the
performance of or compliance with the terms and provisions of this Agreement

12

 

	 	 	 	and any Confirmations will not conflict with, or result in a breach of, a default
under, or accelerate any agreement, lease, license, undertaking or any other
instrument or obligation of any kind or character to which such Party is a party or
by which such Party or the Product may be bound, and will not constitute a default
thereunder or result in the declaration or imposition of any lien, charge or
encumbrance of any nature whatsoever upon any of the Product;
	 
	 	7.1.5	 	Except as set forth in 15.2, it (i) has not assigned, transferred, created or
permitted to exist any lien or other encumbrance on, or otherwise disposed of, or
purported to assign, transfer, create or permit to exist any lien or other encumbrance
on, or otherwise dispose of any of its rights to any amounts that may be owed to it
under this Agreement to any third-party, and (ii) covenants that, so long as this
Agreement is in effect, it will not assign, transfer, create or permit to exist any
lien or other encumbrance on, or otherwise dispose of or purport to assign, transfer,
create or permit to exist any lien or other encumbrance on, or otherwise dispose of any
of its rights to any amounts that may be owed to it under this Agreement, to any
third-party;
	 
	 	7.1.6	 	It is not relying upon any representations of the other Party, other than
those expressly set forth in this Agreement or any Confirmation issued pursuant
thereto; and
	 
	 	7.1.7	 	It has entered into this Agreement with a full understanding of the material
terms and risks of the same, and it is capable of assuming those risks.

Article 8

POSSESSION AND TITLE

     8.1 Title; Risk of Loss. The Product shall be sold by Producer FOB the Delivery Point
and, as a result, title to, possession of, and risk of loss of or damage to the Product meeting the
Specifications and delivered according to this Agreement shall transfer from Producer to Gavilon at
Delivery of the Product. Until such time, Producer shall be deemed to be in control of and in
possession of and shall have title to and risk of loss of and in the Product. Notwithstanding
anything herein to the contrary, in the case of Product rejected as Nonconforming and returned to
Producer pursuant to Section 4.3 by Gavilon, the title and risk of loss to such Product shall pass
to Producer promptly upon the written notice of rejection thereof by Gavilon provided to, and
received by, Producer; provided, that Gavilon shall take all steps reasonably necessary to return
possession of such Nonconforming Product to Producer or its designated agents as soon as
practicable.

     8.2 Responsibility for Product. Gavilon shall have no responsibility or liability with
respect to any Product delivered under this Agreement until Delivery. Without prejudice to
Gavilon’s right to reject Nonconforming Product as set forth in Section 4.3 and without affecting
Producer’s liability for the Delivery of Nonconforming Product, Producer shall have no
responsibility or liability with respect to the Product after Delivery or on account of anything
which may be done or happen to arise with respect to such Product after such Delivery except as
otherwise expressly provided for herein.

13

 

Article 9

FORWARD MARKET SERVICES

     9.1 Services. During the Term and for no additional cost to the Producer, Gavilon will
(i) review Product positions and current market conditions relating to purchases of Product, (ii)
subject to the terms of this Agreement, provide basis quotes, index quotes and price quotes for
nearby and forward markets on an as needed and requested by Producer basis if available in the
market, and (iii) provide Producer with daily mark-to-market position reporting for all fixed price
and open positions for the activities at the Plant, each for the purpose of supporting Producer’s
risk management policies (the “Forward Market Services”).

     9.2 No Liability. Gavilon and Producer acknowledge that Product markets are volatile
and subject to events over which neither Gavilon nor Producer have any control. Producer
acknowledges that (i) any provision of Forward Market Services by Gavilon is provided as a courtesy
to Producer at no charge and is for informational purposes only and (ii) any decisions concerning
Producer’s risk management strategies and the implementation of such strategies by it, are and will
be made solely by Producer and are the sole responsibility of Producer. Gavilon is not responsible
for any losses, liabilities, costs, or expenses incurred by Producer or entitled to any gains of
Producer, resulting from any Forward Market Services supplied by Gavilon. IN NO EVENT SHALL GAVILON
OR PRODUCER BE LIABLE TO THE OTHER PARTY FOR ANY DAMAGES OF ANY NATURE, INCLUDING BUT NOT LIMITED
TO, INDIRECT, CONSEQUENTIAL, PUNITIVE, OR SPECIAL DAMAGES, LOSS OF BUSINESS EXPECTATIONS OR PROFITS
OR BUSINESS INTERRUPTIONS, ARISING IN ANY WAY OUT OF THE PROVISION OF THE FORWARD MARKET SERVICES.

Article 10

CONFIDENTIALITY

     10.1 Confidential Information. For purposes of this Agreement, the term
“Confidential Information” shall mean any information which is disclosed by one Party to
the other pursuant to this Agreement and which is oral, written, graphic, machine readable or other
tangible form, whether or not marked or identified as confidential or proprietary. Confidential
Information shall not include any information which is (a) already known to the recipient, (b)
already in the public domain, (c) lawfully disclosed to it by a third party, or (d) legally
required to be disclosed by the recipient. Any information provided to Gavilon pursuant to Section
5.5.9 hereof that has not been specifically included in reports filed by Producer under the
Securities Exchange Act of 1934 or otherwise publicly disclosed by the Producer shall be
Confidential Information.

     10.2 Producer Nondisclosure. Producer acknowledges that, by reason of this Agreement,
it may become privy to Confidential Information belonging to Gavilon. With the exception of its
investors, legal advisors, financial advisors, accountants and/or lenders, their agents,
representatives, or employees (hereinafter “Producer’s Parties”), Producer shall not,
without the prior written consent of Gavilon, and except as otherwise required by law, disclose to
any third parties or use for Producer’s own benefit any Gavilon Confidential Information, except
for the intended use pursuant to this Agreement. Producer shall inform any of Producer’s Parties
and any consented-to third parties to whom Producer intends to disclose Confidential Information of
the confidential nature of such Confidential Information and shall ensure that such persons are
bound by confidentiality obligations similar to those set forth herein. The

14

 

confidentiality obligations hereunder shall survive any expiration or termination of this
Agreement and any Transaction Document for a period of two (2) years. Notwithstanding the
foregoing, Producer may disclose the provisions of this Agreement to Producer’s Parties provided
such parties have agreed in writing to be bound by the confidentiality obligations of this Article
10.

     10.3 Gavilon Nondisclosure. Gavilon acknowledges that, by reason of this Agreement, it
may become privy to Confidential Information belonging to Producer and that Producer is a public
company with securities registered under Section 12 of the Securities and Exchange Act. Gavilon
shall not, without the prior written consent of Producer, disclose to any third parties any such
Confidential Information or use or allow others to use such information in connection with the
purchase or sale of any securities of Producer. The confidentiality obligations hereunder shall
survive any expiration or termination of this Agreement for a period of two (2) years.

     10.4 Term of Confidentiality Agreement. The Parties hereby agree that the term of any
Confidentiality Agreement by and between the Parties, or by the Producer for the benefit of
Gavilon, is hereby extended, and shall remain the binding obligation of Producer until the later of
(i) the expiration of such Confidentiality Agreement in accordance with its terms, or (ii) two (2)
years following the expiration of the Term of this Agreement, and further agree that the provisions
of this Article 10 shall supersede over any conflicting provisions contained in such
Confidentiality Agreement(s).

Article 11

FORCE MAJEURE

     11.1 Force Majeure. In the event either Party hereto is rendered unable by reason of
Force Majeure to carry out its obligations under this Agreement, upon such Party giving written
notice of such Force Majeure to the other Party as soon as possible after the occurrence of the
cause relied on, the obligations of the Party giving such notice, so far as they are affected by
Force Majeure, shall (except as otherwise provided in Article 13) be suspended during the
continuance of any inability so caused, but for no longer period, and such cause shall, so far as
reasonably possible, be remedied with all reasonable dispatch.

     11.2 Definition of Force Majeure. The term “Force Majeure”, as used in this
Agreement, shall mean any cause not reasonably within the control of the Party claiming suspension
and which, by the exercise of commercially reasonable efforts, such Party is unable to prevent or
overcome. Such term shall include, but not be limited to: acts of God, acts of the public enemy
(including-terrorism)wars, blockades, insurrections, riots, epidemics, landslides, lightning,
earthquakes, fires, floods, storms, washouts or other inclement weather resulting in a delay of the
movement, loading or off-loading of Transport Carriers, or the inability of Producer or Gavilon to
sell or resell the Product due to governmental action or embargo, all of which shall be beyond the
reasonable control of the Party claiming Force Majeure. In no event shall Force Majeure include any
economic or commercial changes or events affecting the purchase, sale, transport or production of
Product, except to the extent that such economic or commercial changes or events result from any of
the foregoing Force Majeure causes.

     11.3 Sale of Product Upon Gavilon Claim of Force Majeure. If Gavilon is the Party
claiming Force Majeure, Producer may, upon written notice to Gavilon, sell the Product to third-

15

 

parties during the duration of the Force Majeure event, but only to the extent of Gavilon’s
inability to perform or Gavilon’s delay in performance of this Agreement.

Article 12

INDEMNITY AND LIMITATIONS ON LIABILITY

     12.1 Indemnification by Producer. Except as may be otherwise provided in this
Agreement, and subject to the limitations in Section 12.3 herein, Producer shall indemnify, defend
and hold harmless Gavilon, its affiliates and their respective officers, directors, employees,
agents, members, managers, shareholders and representatives from and against any and all claims,
liabilities, actions, losses, damages, fines, penalties, costs and expenses (including reasonable
attorneys fees) (collectively “Damages”) actually suffered by Gavilon resulting from or arising in
connection with claims (x) for personal injury or tangible or real property damage, or (y) by third
parties, in either case to the extent arising out of (a) any negligence or willful misconduct of
Producer or any of its officers, directors, employees, agents, representatives and contractors
hereunder; or (b) any material breach of this Agreement or any Transaction Document by Producer.

     12.2 Indemnification by Gavilon. Except as may be otherwise provided in this
Agreement, Gavilon shall indemnify, defend and hold harmless Producer, its affiliates and their
respective officers, directors, employees, agents, members, managers, shareholders and
representatives from and against any and all Damages actually suffered by Producer resulting from
or arising in connection with claims (x) for personal injury or tangible or real property damages,
or (y) by third parties, in either case to the extent arising out of (a) any negligence or willful
misconduct of Gavilon or any of its officers, directors, employees, agents, representatives and
contractors hereunder; or (b) any material breach of this Agreement by Gavilon.

     12.3 Limitation of Liability. IN NO EVENT SHALL PRODUCER OR GAVILON BE LIABLE TO THE
OTHER PARTY FOR ANY INDIRECT, CONSEQUENTIAL, PUNITIVE, OR SPECIAL DAMAGES, LOSS OF BUSINESS
EXPECTATIONS OR PROFITS OR BUSINESS INTERRUPTIONS ARISING IN ANY WAY OUT OF THIS AGREEMENT, ANY OF
THE TRANSACTION DOCUMENTS, OR ANY BREACH OF THIS AGREEMENT OR ANY OF THE TRANSACTION DOCUMENTS.

Article 13

DEFAULT AND TERMINATION 

     13.1 Event of Default. An “Event of Default” shall mean, in addition to the
other matters described in this Article 13, with respect to a Party, the occurrence of any of the
following events:

	 	13.1.1	 	The failure to make, when due, any payment required pursuant to this Agreement or any
Transaction Document;
	 
	 	13.1.2	 	Any representation or warranty made by such Party herein or any Transaction Document
is false or misleading in any material respect when made or when deemed made;

16

 

	 	13.1.3	 	The failure to perform any material covenant, condition, or obligation set forth in
this Agreement or any Transaction Document;
	 
	 	13.1.4	 	The failure of Producer to satisfy the creditworthiness/collateral requirements,
including the obligation to enter into letters of credit or provide margin, pursuant to
this Agreement or any Transaction Document;
	 
	 	13.1.5	 	Either Party directly or indirectly, including by operation of law, transfers,
assigns, sells, or disposes of all or substantially all of its assets or any rights or
obligations under this Agreement, without the prior written consent of the other Party,
which shall not be unreasonably withheld, except to the extent such transfer,
assignment, sale or disposition is otherwise specifically permitted by clause (iii) of
Section 15.2 of this Agreement;
	 
	 	13.1.6	 	Any Party herein shall become insolvent, or shall suffer or consent to or apply for
the appointment of a receiver, trustee, custodian or liquidator of itself or any of its
property, or shall generally fail to pay its debts as they become due, or shall make a
general assignment for the benefit of creditors; any Party hereunder shall file a
voluntary petition in bankruptcy, or seek reorganization, in order to effect a plan or
other arrangement with creditors or any other relief under the Bankruptcy Code, Title
11 of the United States Code, as amended or recodified from time to time, or under any
state or federal law granting relief to debtors (collectively “Bankruptcy”).

     13.2 Right to Cure. If an Event of Default, other than under clause 13.1.6, is not
cured within fifteen (15) days (or two (2) Business Days with respect to clause 13.1.1 or clause
13.1.4) after receipt of a notice thereof from the non- defaulting Party, the non-defaulting Party
may, at any time after the applicable cure period, terminate this Agreement by written notice. No
cure period shall apply to clause 13.1.6 and Producer or Gavilon may immediately terminate the
Agreement upon such an Event of Default. In addition, upon the occurrence of any of the above
Events of Default by a Party, the other Party may immediately suspend further performance under
this Agreement or any Transaction Document, with or without giving notice of such default or notice
of termination.

     13.3 Non-Waiver of Future Default. No waiver by either Party of any Event of Default
by the other Party in the performance of any of the provisions of this Agreement or any Transaction
Document will operate or be construed as a waiver of any other or future default or defaults,
whether of a like or of a different character.

     13.4 Cross Default. The occurrence and continuance of an Event of Default under this
Agreement, or any Transaction Document, now existing or entered into hereafter, shall constitute,
at the election of the non-defaulting Party, in its sole, absolute and unreviewable discretion, an
Event of Default under this Agreement or any such Transaction Document, or combination of such
agreements (together the “Cross Default”). A waiver of a Cross Default by the
non-defaulting Party pursuant to this Section 13.4 shall not operate or be construed as a waiver of
any other Event of Default or Cross Default.

     13.5 Termination by Mutual Agreement. This Agreement may be terminated upon mutual
written agreement between the Parties.

17

 

     13.6 Termination By Either Party. Either Party may for any reason terminate this
Agreement by providing written notice thereof to the other Party at least ninety (90) days prior to
termination.

     13.7 Termination for Force Majeure. In the event that Force Majeure shall continue for
a period of seventy-five (75) days from the date the Party claiming relief due to Force Majeure
gives the other Party notice thereof, the Party not claiming such relief shall have the right to
terminate this Agreement by furnishing written notice to the Party claiming Force Majeure relief,
with termination effective upon the expiration date of such ninety (90) day period. Upon such
termination, each Party shall be relieved from its respective obligations, except for obligations
for payment of monetary sums which arose prior to the event of Force Majeure and obligations
pursuant to Article 10 and Section 13.8 herein.

     13.8 Rights and Obligations on Termination or Default. Upon termination of, or default
under, this Agreement, whether contained in this Article 13 or otherwise contained in this
Agreement:

	 	13.8.1	 	Any rights of Gavilon or Producer to outstanding Confirmed Orders and payments
existing or accrued through termination of this Agreement shall remain in effect and,
unless otherwise specified herein, all payments and monetary obligations of the
respective Parties required pursuant to this Agreement and any Transaction Document
shall be made pursuant to this Agreement.
	 
	 	13.8.2	 	In addition to other remedies available, if Producer defaults in Producer’s
obligation to deliver Product under Confirmed Orders, then Gavilon may, but shall not
be obligated to, “cover” by purchasing Product from third parties. Producer shall pay
to Gavilon the amount, if any, by which (i) the cost of such third-party Product,
including all reasonable costs and expenses associated with the purchase of Product
from third parties, plus a Gavilon Service Fee for such amounts of Product purchased,
exceeds (ii) the Confirmed Price of Product. Payments due and owing under this Section
13.8.2 shall be made pursuant to this Agreement.
	 
	 	13.8.3	 	In addition to other remedies available, if Gavilon defaults in Gavilon’s obligation
to purchase Product under Confirmed Orders, Producer may, but shall not be obligated
to, “cover” by selling its Product to third parties. Gavilon shall pay to Producer the
amount, if any, by which (i) the Confirmed Price of such Product, less the related
Gavilon Service Fee, plus other reasonable costs and expenses associated with
Producer’s sale of Product to third parties, exceeds (ii) the net price to such third
party. Payments due and owing under this Section 13.8.3 shall be made pursuant to this
Agreement.

     13.9 Cumulative Rights and Remedies. The rights and remedies under this Article 13 are
cumulative and not exclusive. Upon an Event of Default, the non-defaulting Party shall additionally
have such other and further rights as may be provided at law or in equity, including all rights of
set-off as contained in this Agreement, and such rights may be exercised in such order and
combination as the non-defaulting Party may determine. More specifically, upon an Event of Default
the non-defaulting Party may at its election setoff (i) any or all amounts which are owed to it by
the defaulting Party, whether under this Agreement (including, without limitation, Sections 6.4 and
13.8) or otherwise and whether or not then due, against (ii) any or all

18

 

amounts which it owes to the defaulting Party, whether under this Agreement or otherwise and
whether or not then due.

Article 14

INSURANCE

     14.1 Insurance Requirements. Producer and Gavilon shall be required to purchase,
maintain and provide proof (via Certificate of Insurance) of the insurance set forth on Exhibit
“C”.

Article 15

MISCELLANEOUS

     15.1 No Press Releases or Public Announcements. Except as otherwise mandated by
applicable law (which in the case of disclosures required under federal securities law shall be
made in the sole discretion of the disclosing Party), no Party may issue, or otherwise permit to be
issued, any press release or other public announcement relating to the subject matter or existence
of this Agreement without the prior written approval of the other Party, which approval may be
withheld in such Party’s sole discretion. Additionally, the Parties acknowledge that a
Confidentiality Agreement, as describe in Section 10.4 above, may have been entered into between
the Parties relating to the transactions contemplated herein. For purposes hereof, the Parties
agree and acknowledge that the mere existence of this Agreement shall be deemed confidential
information, without regard to whether such a Confidentiality Agreement has been entered into, and
shall not be disclosed, except as otherwise specifically permitted hereunder, without the prior
written consent of Gavilon or Producer, which consent shall not be unreasonably withheld.

     15.2 Assignment. Neither Party may assign any of its rights or obligations under this
Agreement without the prior written consent of the other Party, not to be unreasonably withheld. A
change in fifty percent (50%) or more in the ownership of Producer or Gavilon shall be construed to
be an assignment for purposes of this Section; provided, however, either Party may, without the
need for consent from the other: (i) transfer, sell, pledge, encumber or assign this Agreement
including the revenues or proceeds hereof, in connection with any financing or other financial
arrangements; (ii) transfer or assign this Agreement to an affiliate as long as the affiliate is at
least as creditworthy as the assigning Party; or (iii) transfer or assign this Agreement to an
entity succeeding to all or substantially all of the assets or operations of the assigning Party by
way of merger, reorganization or otherwise; provided, further, that no such assignment shall in any
way relieve the assigning Party from liability for full performance hereunder or result in a change
in any rights or obligations of the other Party under this Agreement. In the event that the Plant
is sold by Producer, Gavilon shall have the right to terminate this Agreement and the Transaction
Documents on one hundred eighty (180) days prior written notice to Producer. Producer shall
require its lenders and any other transferee or assignee under clause (i) above to execute the
Consent attached as Exhibit “D”.

     15.3 Records. Producer and Gavilon will each establish and maintain at all times, true
and accurate books, records and accounts relating to their own transactions under this Agreement in
accordance with generally accepted accounting principles applied consistently from year to year in
accordance with good industry practices.

19

 

     15.4 Audit of Records. During normal business hours, each Party or its designated
auditor has the right to inspect or audit the books, records and accounts of the other relating
solely to the transactions in this Agreement, provided the right to inspect or audit shall be
limited to two (2) calendar years following the completion of any delivery of Product.

     15.5 Dispute Resolution.

	 	15.5.1	 	Dispute Notice. The Parties shall make a diligent, good faith attempt to
resolve all disputes before either Party commences arbitration with respect to the
subject matter of any dispute. If the representatives of the Parties are unable to
resolve a dispute within forty five (45) days after either Party gives written notice
to the other of a dispute, either Party may, by sending a dispute notice to the other
Party, submit the dispute to binding arbitration in accordance with the Governing Body
Arbitration Rules, except as such Governing Body Arbitration Rules may be modified by
this Agreement.
	 
	 	15.5.2	 	Appointment of Arbitrators. A sole arbitrator shall be appointed pursuant to
the Governing Body Arbitration Rules.
	 
	 	15.5.3	 	Location. The site of the arbitration shall be determined by the Governing
Body, unless otherwise agreed by the Parties.
	 
	 	15.5.4	 	Diligence; Remedies. The Parties shall diligently and expeditiously proceed
with arbitration. The arbitrators shall decide the dispute by majority of the
arbitrators. The arbitrators shall be instructed to render a written decision within
forty five (45) days after the conclusion of the hearing or the filing of such briefs
as may be authorized by the arbitrators, subject to any reasonable delay due to
unforeseen circumstances. Except to the extent the Parties’ remedies may be limited by
the terms of this Agreement, the arbitrators shall be empowered to award any remedy
available under the laws of the State of Nebraska including, but not limited to,
monetary damages and specific performance. The arbitrators shall not have the power to
amend or add to this Agreement. The award of the arbitrators shall be in writing with
reasons for such award and signed by the arbitrators. Any award rendered shall be final
and binding. Judgment rendered by the arbitrators may be entered in any court having
jurisdiction thereof.
	 
	 	15.5.5	 	Waiver of Appellate Review; Enforcement. The Parties hereby waive any rights
to appeal or to the review of such award by any court or tribunal. The Parties further
undertake to carry out without delay the provisions of any arbitral award or decision,
and each agrees that any such award or decision may be enforced by any competent
tribunal.
	 
	 	15.5.6	 	Costs of Arbitration. The costs of such arbitration shall be determined by
and allocated between the Parties by the arbitral tribunal in its award.
	 
	 	15.5.7	 	Independent Agreement. This Section 15.5 constitutes an independent contract
between the Parties to, pursuant to the Governing Body Arbitration Rules (except as
said Governing Body Arbitration Rules are modified by the express terms of this
Agreement), arbitrate all disputes between the Parties related to this Agreement,
including, without limitation, disputes regarding the formation of

20

 

	 	 	 	contract(s) and whether either Party is entitled to quasi- contractual or quantum
merit recovery from the other Party.
	 
	 	15.5.8	 	Continuation of Performance. Unless otherwise agreed in writing or as set
forth in Article 13, the Parties shall each continue to perform their respective
obligations hereunder during any proceeding by the Parties in accordance with this
Section 15.5.

     15.6 Inurement. This Agreement will inure to the benefit of and be binding upon the
respective successors and permitted assigns of the Parties, and Producer shall cause the same to be
assumed by and to be binding upon any successor owner or operator of the Plant.

     15.7 Forward Contract/Forward Contract Merchants. The Parties agree that each of them
is a forward contract merchant as set forth in 11 U.S.C. Section 101(25). The Parties also agree
that this Agreement and the Transaction Documents are all forward contracts as defined in 11 U.S.C.
Section 101(25). The payments and transfers described herein shall constitute “Settlement
Payments” or margin as set forth in 11 U.S.C. Sections 101 51A and 38.

     15.8 Entire Agreement. This Agreement together with the agreements referred to herein
as executed pursuant hereto, including the Transaction Documents and any confidentiality or
nondisclosure agreements previously executed by the Parties in connection herewith, constitutes the
entire Agreement between the Parties with respect to the subject matter contained herein and any
and all previous agreements, written or oral, express or implied, between the Parties or on their
behalf relating to the matters contained herein shall be given no effect.

     15.9 Amendments. There will be no modification of the terms and provisions hereof
except by the mutual agreement in writing signed by the Parties. Any attempt to so modify this
Agreement in the absence of such writing signed by the Parties shall be considered void and of no
effect.

     15.10 Governing Law. The Agreement will be interpreted, construed and enforced in
accordance with the procedural, substantive and other laws of the State of Nebraska without giving
effect to principles and provisions thereof relating to conflict or choice of law and the Parties
submit to the exclusive jurisdiction of the Federal and State Courts located in the State of
Nebraska.

     15.11 Compliance with Laws. This Agreement and the respective obligations of the
Parties hereunder are subject to present and future valid laws and valid orders, rules and
regulations of duly constituted authorities having jurisdiction.

     15.12 Furnishing of Information and Further Action. The Parties will, upon request,
provide such additional information and take or obtain such further action as may be reasonably
required to allow the Parties to efficiently and effectively carry out their respective obligations
hereunder and to determine and enforce individual or collective rights under this Agreement,
including but not limited to the execution of a contract for arbitration with the Governing Body.

     15.13 Faithful Performance and Good Faith. The Parties shall faithfully perform and
discharge their respective obligations in this Agreement and endeavor in good faith to negotiate
and settle all matters arising during the performance of this Agreement which are not specifically
provided for herein.

21

 

     15.14 Relationship. The relationship of Gavilon and Producer established by this
Agreement is that of independent contractors, and nothing contained in this Agreement shall be
construed to give either Party the power to unilaterally direct and control the day-to-day
activities of the other or to be considered an agent of the other; to constitute the Parties as
partners, joint ventures, co-owners or otherwise; or to allow either Party to create or assume any
obligation on behalf of the other Party for any purpose whatsoever. Except as otherwise provided
herein, nothing contained in this Agreement shall be construed as conferring any right or benefit
on a person not a Party to this Agreement.

     15.15 Notice Addresses. Except as specifically otherwise provided herein, any notice
or other written matter required or permitted to be given hereunder by one Party to the other Party
pursuant to the terms and conditions of this Agreement, shall be deemed to be sufficiently given if
delivered by hand or sent by certified mail, nationally recognized delivery service or by fax, and
addressed as follows:

	 	 	 	 	 
	 

	 	If to Gavilon:
	 	Gavilon, LLC
	 

	 	 	 	Eleven ConAgra Drive
	 

	 	 	 	Omaha, NE 68102-5011
	 

	 	 	 	Attn: Director — Renewable Fuels
	 

	 	 	 	Fax: (402) 595-7804
	 

	 	 	 	Phone: (402) 595-5300
	 
	 	 	 	 
	 

	 	With a copy to:
	 	Gavilon, LLC
	 

	 	 	 	Eleven ConAgra Drive, STE 11-160
	 

	 	 	 	Omaha, NE 68102
	 

	 	 	 	Fax: (402) 978-5585
	 

	 	 	 	Attn: Legal Department
	 
	 	 	 	 
	 

	 	If to Producer:
	 	Siouxland Ethanol, LLC
	 

	 	 	 	1501 Knox Blvd.
	 

	 	 	 	Jackson, NE 68743
	 

	 	 	 	Fax: (402) 632-2677
	 

	 	 	 	Phone: (402) 632-2676
	 
	 	 	 	 
	 

	 	With a copy to:
	 	Steven P. Amen
	 

	 	 	 	Kutak Rock LLP
	 

	 	 	 	1650 Farnam Street
	 

	 	 	 	Omaha, NE 68102
	 

	 	 	 	Fax: (402) 346-1148

Where this Agreement indicates that notice or information may be provided electronically or by
email, such notice or information shall be deemed provided if sent to the email address, of such
Party indicated above and shall be effective as of the date sent if sent prior to 5:00 p.m. Central
Time on a Business Day, otherwise effective as of the next Business Day. Either Party may give
notice to the other Party (in the manner herein provided) of a change in its address for notice.
Any notice or other written matter shall be deemed to have been given and received: if delivered by
hand, certified mail or delivery service on the date of delivery or the date delivery is refused;
and, if sent by fax before or during normal business hours, on the Business Day of the sending of
the notice and the machine-generated evidence of receipt or if after normal business hours, on the
Business Day following the sending of the notice and the machine generated evidence of receipt.

22

 

     15.16 Costs to be Borne by Each Party. Producer and Gavilon shall each pay their own
costs and expenses incurred in the negotiation, preparation and execution of this Agreement and of
all documents referred to herein.

     15.17 Counterparts. This Agreement may be executed in any number of counterparts with
the same effect as if Producer and Gavilon had signed the same document and all counterparts will
be construed together and constituted as one and the same instrument. Each counterpart signature
may be executed and delivered to the other Party by facsimile machine or electronic transfer, and
the signature as so transmitted shall be as binding upon the executing Party as its original
signature, without the necessity of the recipient Party to establish original execution or the
existence of such original signature or the document to which affixed, all of which shall be deemed
waived.

     15.18 Severability. Any provision of this Agreement which is or becomes prohibited or
unenforceable in any jurisdiction shall not invalidate or impair the remaining provisions of this
Agreement, and the remaining terms of this Agreement shall be amended so as to most closely conform
to the original intent of the Agreement without the offending provision, and as so amended shall
continue in full force and effect.

     15.19 Headings. The article and section headings used herein are for convenience and
are not for interpretation.

     15.20 Waiver. No delay or omission in the exercise of any right, power or remedy
hereunder shall impair such right, power or remedy or be construed to be a waiver of any default or
acquiescence therein.

     15.21 Interpretation. This Agreement shall not be interpreted against the Party
drafting or causing the drafting of this Agreement. All Parties hereto have participated in the
preparation of this Agreement. In the event of an inconsistency between or among the following
documents entered into by the Parties, the following order of precedent shall govern:

	 	15.21.1	 	This Agreement; and
	 
	 	15.21.2	 	Confirmation, confirmation of purchase and sale transaction, or other document used
for the purposes of a Confirmation, including but not limited to, any general terms
contained therein.

     15.22 Incorporation of Exhibits/Schedules. The exhibits and schedules attached hereto
form an integral part of this Agreement and are hereby incorporated herein by reference.

23

 

     IN WITNESS WHEREOF the Parties have executed this Agreement by their respective proper signing
officers as of the Effective Date.

	 	 	 	 	 
	 	GAVILON, LLC, a Delaware limited liability company

 	 
	 	By:  	/s/ Dennis Stieren
 	 
	 	Its: Vice President Trade Operations 	 
	 	 	 	 
	 
	 	SIOUXLAND ETHANOL, LLC, a Nebraska limited 

liability company

 	 
	 	By:  	/s/ Charles Hofland
 	 
	 	Its: President 	 
	 	 	 	 
	 

24

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