Document:

Toll Agreement

 Exhibit 10.40 
 Confidential Treatment Requested. Confidential portions of this document have been redacted 
 and have been separately filed with the Commission. 
 TOLL AGREEMENT

 THIS TOLL AGREEMENT (this “Agreement”) IS MADE AND ENTERED INTO EFFECTIVE September 25 , 2009, BY AND BETWEEN REG
HOUSTON , LLC (“REGH”) AND ED&F MAN BIOFUELS, INC. (“MBF”) (together the “PARTIES”). 
 WHEREAS, MBF is in the
business of trading Feedstock (as defined below) and Biodiesel; 
 WHEREAS, REGH will be in the business of manufacturing and blending Biodiesel
from Feedstock at its biodiesel facility located in Seabrook, TX (the “REGH Facility”); and 
 WHEREAS, MBF wishes to engage REGH to
process certain of MBF’s Feedstock into Biodiesel, and REGH desires to accept that engagement, according to the terms and conditions of this Agreement. 
 NOW, THEREFORE, the Parties agree as follows: 
  

			
	1. LBC TERMINAL:	  	LBC Terminal shall mean the LBC Houston, LP (“LBC”) terminal located in Seabrook, TX. The LBC Terminal is accessible by barge, rail, and tank truck.
		
	2. FEEDSTOCK:	  	Feedstock shall mean Tallow that conforms to the specifications per “Attachment A” or RBD Soybean Oil that conforms to the specifications per Attachment A or
D or such other feedstock to be agreed to between REGH and MBF.
		
		  	Except for RBD Soy Bean Oil or Tallow that REGH is required to procure pursuant to this section, MBF shall be responsible for procurement and delivery of Feedstock to REGH at the
LBC Terminal, in accordance with this Agreement. REGH will not be responsible for payment for the Feedstock and the Feedstock will remain the property of MBF, unless ownership is transferred to REGH pursuant to the provisions of Section 16(d)
hereafter. Such Feedstock will be processed by REGH into Biodiesel in accordance with this Agreement. Such Feedstock, and the Biodiesel that results from the manufacturing process, will remain the property of MBF at all times. Upon the request of
MBF, REGH will assist MBF in the procurement of RBD Soy Bean Oil or Tallow, and will procure RBD Soy Bean Oil or Tallow on behalf of MBF when instructed to do so by MBF. REGH will provide assistance to MBF with soybean oil basis hedging, and if
requested by MBF, will promptly execute basis hedge trades on behalf of and in the name of MBF upon receipt of written instructions from MBF

  
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		  	(MBF to provide any funds required with respect to such trades). REGH will also provide information and advice on the soybean oil basis and soybean oil market expediently to MBF
when requested.
		
	3. CONTRACTUAL YIELD:	  	REGH will be obligated to deliver to MBF *** gallon of Biodiesel (the “Contractual Yield”) for every *** pounds of Tallow delivered by MBF to REGH (whether or not procured
with the assistance of REGH) and REGH will be obligated to deliver to MBF *** gallon of Biodiesel (the “Contractual Yield”) for every *** pounds of RBD Soy Bean Oil delivered by MBF to REGH (whether or not procured with the assistance of
REGH) . Such Contractual Yield shall be the sole allowance to REGH for loss of product for any reason, including, without limitation, production inefficiencies, line losses, clingage, evaporation, or accumulation.
		
	4. BIODIESEL:	  	Biodiesel shall mean B100 Biodiesel that meets or exceeds the Product Specifications contained in Section 5 hereof and that was produced using Feedstock of the same type, mixture,
and specifications as the Feedstock provided by MBF for use in the production thereof.
		
	5. PRODUCT SPECIFICATION:	  	REGH represents and warrants that all the Biodiesel delivered to MBF will comply, at the time of delivery at the Biodiesel Delivery Point, with the Standard EN 14214 in force at the
time of delivery subject to the following additions and amendments : water maximum of 350ppm, Monoglycerides 0.5 mass % Max, CFPP maximum of 12 degrees Celsius for TME, and Monoglycerides 0.5 mass % Max ,CFPP maximum of minus 3 degrees Celsius,
iodine maximum 135 and cetane minimum 47 for SME, FOB specification. No additives will be combined with or added to the Biodiesel unless requested by MBF. If MBF requests that no oxidative stabilizer be added, the oxidative stability requirements of
the EN14214 and ASTM D6751 specifications in force at time of delivery will be waived, provided however that REGH shall make reasonable best efforts to meet the EN14214 and ASTM D6751 oxidative stability requirements to the extent possible without
the addition of any additives. REGH also represents and warrants that all Biodiesel delivered to MBF will comply, at the time of delivery at the Biodiesel Delivery Point, with the ASTM biodiesel standards in force at the time of delivery including
winter cold soak requirements (with the exception of oxidative stability if MBF request that no oxidative stabilizer be added). If MBF requests the addition of oxidative stabilizer to the Biodiesel, REGH will add such oxidative stabilizer at
REGH’s expense, and in the

  

  
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		  	case of oxidative stabilizer being added Biodiesel will meet EN14214 specifications for oxidative stability. Should MBF request the use of an oxidative stabilizer not normally used
by REG, MBF will bear the cost of said oxidative stabilizer.
		
	6. BIODIESEL CONTRACTED AND TERM OF AGREEMENT:	  	The Biodiesel to be produced by REGH pursuant to this Agreement shall be produced on the dates and in the quantities specified on Schedule 1. The period commencing with the
Production Commencement Date specified on Schedule 1 (attached hereto) and ending on the date on which MBF has accepted delivery of the entire Biodiesel Volume specified on Schedule 1 will be the “Initial Production Period,” with
the possibility of additional volumes of Biodiesel to be produced in one or more renewal production periods thereafter. The period commencing with the Production Commencement Date specified on Schedule 1 with respect to a Renewal Production
Period and ending on the date on which MBF has accepted delivery of the entire Biodiesel Volume specified on Schedule 1 for such Renewal Production Period will be the “Renewal Production Period.”
		
		  	MBF will deliver to REGH the Feedstock that MBF wishes for REGH to process into Biodiesel, and REGH will produce from such Feedstock, an amount of Biodiesel at least equal to the
Contractual Yield, but shall not be obligated to exceed the Biodiesel Volume listed on Schedule 1. MBF will deliver its Feedstock to the Feedstock Delivery Point in such quantities and at such times as is necessary for REGH to have a Feedstock
inventory at least equal to *** gallons by the Production Commencement Date specified on Schedule 1 and maintain an inventory of Feedstock at least equal to *** gallons until such time that MBF has delivered sufficient Feedstock for REGH to produce
the total volume of Biodiesel specified on Schedule 1 for the Contract Month in question (the “Required Feedstock Inventory”). REGH will produce from the Feedstock Biodiesel (in accordance with the Contractual Yield and meeting the Product
Specifications contained in Sections 4 and 5 hereof) and make such Biodiesel available to MBF for pick up at the Biodiesel Delivery Point in the quantities and on the Biodiesel Delivery Dates specified on Schedule 1 hereto. MBF will accept delivery
of the Biodiesel at the Biodiesel Delivery Point within ten (10) days of the later of (i) the date on which REGH makes such Biodiesel available to MBF for pickup, or (ii) the Biodiesel Delivery Date specified on Schedule 1 (as amended
by the provisions of this Section 6).

  

  
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		  	REGH will provide notice to MBF of the daily ending inventory of Feedstock in their possession or control.
		
		  	MBF’s failure to establish or maintain the Required Feedstock Inventory shall not be a breach of this Agreement. In the event that MBF fails to deliver sufficient Feedstock to
establish and maintain the minimum *** gallons of Required Feedstock Inventory, REGH will nevertheless use its commercially reasonable best efforts to meet the Biodiesel Delivery Dates. If despite such efforts, REGH is unable to meet the original
delivery dates due to MBF’s failure to provide the agreed quantities of Feedstock, then at REGH’s option (and except as limited by the next sentence) all Biodiesel Delivery Dates occurring after the first date on which the Feedstock
inventories dropped below the required levels will be delayed by one day for each day that the Feedstock inventories are below the required levels, and Schedule 1 shall be deemed to have been amended accordingly. (If a particular day
constitutes a Low Inventory Day as defined hereafter, all Biodiesel Delivery Dates will be delayed by one day under the terms of the following paragraph, and REGH shall have no right to additionally delay the Biodiesel Delivery Dates by the
provisions of this paragraph.)
		
		  	In the event that MBF fails to deliver sufficient Feedstock to establish and maintain a minimum of *** gallons of Feedstock in inventories, REGH may choose not to run the REGH
Facility, and for every day after the first date on which the Feedstock inventories dropped below *** gallons (a “Low Inventory Day”) and continuing until a minimum of *** gallons of Feedstock inventories is maintained for a full day, all
Biodiesel Delivery Dates will be delayed by one day for each day that the Feedstock inventories are below *** Schedule 1 shall be deemed to have been amended accordingly, and (except as stated in the following sentence) MBF shall pay to REGH
(“Daily Toll Fee”) for each such Low Inventory Day. No Daily Toll Fees shall be assessed until after the Production Commencement Date. REGH *** will in any event use its commercially reasonable best efforts to meet the Biodiesel Delivery
Dates. The Parties hereby agree that Required Feedstock Inventory requirements will be waived for the Month of August 2009 only.
		
		  	If during the term of a production period MBF determines that it will not continue delivering Feedstock for processing hereunder, the parties agree to mutually determine the new
quantity of Biodiesel which shall be delivered from the amount of Feedstock which MBF has or will deliver for processing (based upon the Contractual Yield) , and negotiate in good faith a new schedule
for

  

  
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		  	delivery of the Biodiesel (which shall not extend beyond the end of the production period (as it may have been modified by Section 6). Such modified quantity under this paragraph
shall not however be used for purposes of computing the Payment Difference as defined hereafter at Section 16(c)(i), which shall continue to be based upon the metric tons of Biodiesel required to be delivered during the production period in
accordance with Schedule 1 as originally agreed upon by the parties.
		
		  	The Toll Fee with respect to the Biodiesel contracted for delivery shall be as specified in Section 14.
		
		  	At least sixty days prior to the intended Production Commencement Date for any subsequent Renewal Production Period, the Parties shall negotiate in good faith the Biodiesel Volume
to be produced during such Renewal Production Period, the Production Commencement Date for such Renewal Production Period, the Biodiesel Delivery Dates and associated quantities for such Renewal Production Period, the Base Toll Fee for such Renewal
Production Period, and the Final Toll Date for such Renewal Production Period. Upon agreement of the parties, such information shall be included on Schedule 1 and shall become a part of this Agreement. By way of illustration, the Parties will agree
on or before August 10, 2008, on the Biodiesel Volume, Production Commencement Date, Biodiesel Delivery Dates, and the Base Toll Fee with respect to Biodiesel to be produced by REGH for MBF for the Renewal Production Period having a Production
Commencement Date of October 9, 2008. If the Parties do not agree on the Biodiesel Volume, Production Commencement Date, Biodiesel Delivery Dates, and Base Toll Fee terms for any subsequent production period prior to sixty days before the
intended Production Commencement Date for any subsequent Renewal Production Period, this Agreement shall terminate following the delivery of all Biodiesel produced during the last production period for which such items were timely agreed. Upon
termination of this Agreement all Feedstock and Biodiesel of MBF shall be returned to MBF.
		
	7. UTILITIES & CHEMICALS:	  	REGH shall purchase and provide at its sole cost and expense all utilities, chemicals and other consumable property used in the production process, including but not limited to
methanol and sodium methylate (collectively, the “Chemicals”) and all machinery, equipment, or any other non-consumable property utilized in the production process
(“Machinery”).

  
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	8. GLYCERIN:	  	MBF and REGH acknowledge that REGH is subject to a certain Master Glycerin Purchasing Agreement dated July 3, 2007 originally made between U.S. Biodiesel Group, LLC and Westway
Feed Products, Inc. (“Glycerin Agreement”) and that under the Glycerin Agreement, Westway Feed Products, Inc. has agreed to purchase and REGH is required to sell all of the Glycerin, as that term is defined in the Glycerin Agreement, that
REGH produces at its facility. However, the parties acknowledge that this Toll Contract extension of the 10th December 2008 will be governed by the subsequent REG Toll glycerin agreement between Westway Feed Products, Inc and REGH; the terms of
which are outlined below:
		
		  	Westway Feed Products will remove up to *** percent of the crude glycerine from the REGH facility at a base payment of ***. If there are higher value markets, identified by either
party, REGH will sell to the higher returning market, Westway and REGH agree to co-market the crude glycerine produced by REGH. For co-marketed crude glycerine REGH will receive a base payment *** of and a *** share between REGH and Westway
Feed Products of the revenue above this base payment for glycerine sold outside for non-Animal Feed applications. If REGH sells the product, REGH will invoice directly to the REGH customer. If Westway Feed Products sells the product to
non-Animal Feed customers, then Westway will invoice directly to the customer. REGH and Westway Feed Products will collaborate closely on the logistics and supply chain planning so as to smoothly manage the contract fulfillment of all glycerin
contract commitments. All glycerin volume allocation must be mutually approved by both parties.
		
	9. FEEDSTOCK DELIVERY POINT:	  	The Feedstock Delivery Point shall be the entry flange going into the raw material tanks at the LBC Terminal. MBF shall arrange for delivery of Feedstock to the LBC terminal
(meeting Attachment A specifications) and REGH shall coordinate with LBC the delivery of Feedstock to the raw materials storage tank(s) during the applicable Feedstock delivery period. MBF shall be deemed to have delivered the Feedstock to the
Feedstock Delivery Point upon notification by the Feedstock carrier that the Feedstock has arrived and is ready for discharge. REGH will reimburse MBF for any demurrage resulting from REGH’s lack of readiness to receive the Feedstock during the
agreed Feedstock delivery period. At MBF’s request, two (2) samples of Feedstock containing one (1) liter each will be gathered and delivered to MBF from each tank

 

  
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		  	car, tank truck, barge or other delivery vessel, or at the Feedstock Delivery Point, prior to loading into the raw material storage tanks at the REGH facility. Any and all sampling
costs charged by the LBC Terminal (as set out on Attachment B hereto) shall be paid by MBF. After delivery, quality is the responsibility of REGH. MBF in no way will be responsible for contamination or product degradation beyond the Feedstock
Delivery Point.
		
	10. BIODIESEL DELIVERY POINT:	  	The Biodiesel Delivery Point shall be the flange at loadport at the LBC Terminal. Attachment B outlines applicable LBC Terminal loading procedures for product lifting, charges and
hours of operation.
		
	11. TITLE AND RISK OF LOSS:	  	 a)      Risk of loss (but not title, which shall remain with MBF at all times) of Feedstock shall
pass from MBF to REGH at the Feedstock Delivery Point. MBF shall be deemed to own, be in exclusive possession and control of, and be responsible for any damages or injury caused by or to, Feedstock delivered hereunder up to the point of delivery at
the Feedstock Delivery Point. REGH shall be deemed to be in exclusive possession and control of, and be responsible for any damages or injury caused by or to, the Feedstock upon and following receipt of the Feedstock at the Feedstock Delivery
Point.

		
		  	 b)      Risk of loss (but not title, which shall remain with MBF at all times) of Biodiesel shall
pass from REGH to MBF at the Biodiesel Delivery Point. REGH shall be deemed to be in exclusive possession and control of, and be responsible for any damages or injury caused by or to, Biodiesel from the Feedstock Delivery Point until delivery at the
Biodiesel Delivery Point. MBF shall be deemed to be in exclusive possession and control of, and be responsible for any damages or injury caused by or to, Biodiesel upon receipt of the Biodiesel at the Biodiesel Delivery Point, except to the extent
that such damages or injury are caused by REGH’s negligence, intentional misconduct, or breach of this Agreement.

		
	12. SECURITY INTEREST:	  	To evidence MBF’s ownership of the Feedstock and the Biodiesel produced therefrom, REGH hereby irrevocably authorizes MBF at any time and from time to time to file protective
financing statements in any Uniform Commercial Code jurisdiction, which

  
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		  	may include, without limitation, any initial financing statements and amendments thereto that (a) describe the Feedstock and the Biodiesel, that is the subject of this
Agreement, as provided herein, and (b) contain any other information required by part 5 of Article 9 of the Uniform Commercial Code of the state for the sufficiency or filing office acceptance of any financing statement or amendment, including
whether REGH is an organization, the type of organization and that the taxpayer identification number of REGH is 20-3914060. REGH agrees to furnish any such information to MBF promptly upon request. REGH also ratifies its authorization for MBF to
have filed in any Uniform Commercial Code jurisdiction any like initial financing statements or amendments thereto if filed prior to the date hereof. MBF shall have all rights and remedies under the applicable Uniform Commercial Code as a result of
any such protective filings. REGH will not purport to pledge, mortgage or create, or suffer to exist a security interest in the Feedstock and the Biodiesel that is the subject of this agreement, in favor of any third party, and REGH will inform any
lender, lessor or other third party that has or may have a lien or security interest in property of REGH, that MBF is the owner of the Feedstock and Biodiesel that is the subject of this Agreement. To the extent that MBF’s
purchase and delivery of possession of the purchased Feedstock from REGH pursuant to this Agreement is construed as a financing arrangement or consignment instead of the bailment that is intended by the parties (whether due to the
commingling of the purchased Feedstock or otherwise), REGH hereby grants to MBF a security interest in the purchased Feedstock and any product thereof, including the work in process biodiesel and finished product biodiesel derived there
from.”
		
	13. PRODUCT SEGREGATION:	  	No commingling of MBF’s Feedstock with feedstock belonging to any other person will be permitted, except that REGH shall be permitted to commingle Feedstock belonging to REGH
or REG Marketing & Logistics Group LLC with Feedstock owned by MBF so long as such Feedstocks is of the same type, and meet the same sustainability criteria and applicable specifications for Feedstock set forth in the Agreement. The Biodiesel
produced by any commingled Feedstock must in any event meet the qualifications set forth in the Agreement. No commingling of MBF’s Biodiesel with Biodiesel belonging to any other person will be permitted, except that REGH shall be permitted to
commingle Biodiesel belonging to REGH or REG Marketing & Logistics Group LLC with Biodiesel owned by MBF so long as such Biodiesel was produced from Feedstock of the same type
and

  
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		  	sustainability criteria as Feedstock provided by MBF, and such Biodiesel meets the Product Specifications set forth in the Agreement No commingling of MBF’s Feedstock or
Biodiesel with feedstock or biodiesel belonging to any other person other than REGH or REG Marketing &Logistics Group LLC will be permitted.
		
	14. TOLL FEE:	  	The Toll Fee to be paid to REGH for its processing of the Feedstock into Biodiesel shall be the Base Toll Fee as stated on Schedule 1.
		
	15. BLENDER’S CREDIT:	  	Immediately following sale of the Biodiesel to MBF, REGH will, at the request of MBF, blend the Biodiesel with petroleum diesel (supplied by REGH at its cost) to create B99.9
biodiesel at no additional charge to MBF. Any excise tax or income tax credit relating to the Biodiesel delivered to MBF will be for the account of the MBF and shall be submitted to the United States Internal Revenue Service (“IRS”) by
MBF. REGH will provide MBF with a certificate guaranteeing that the Biodiesel has been domestically produced and from 100% animal fat and any other documentation reasonably requested by MBF to facilitate the application for the Blender’s
Credit. REGH will not claim any excise tax or income tax credit relating to the Biodiesel delivered to MBF without the written consent of MBF.
		
	16. PAYMENT; INABILITY TO SUPPLY:	  	 a)      Reserved.

		
		  	 b)      Payment to REGH for Biodiesel Deliveries & Daily Toll Fees:

		
		  	 Upon delivery of Biodiesel (other than REGH Replacement Biodiesel or Third Party Replacement Biodiesel) at the Biodiesel Delivery Point, REGH shall
prepare and deliver to MBF an invoice for the Toll Fee applicable to such Biodiesel. Each invoice must show (a) the volume of Biodiesel delivered to MBF at the Biodiesel Delivery Point, (b) the Base Toll Fee applicable to such Biodiesel, and (c) any
quality differentials and other detail as agreed between the Parties. Invoices may be in either electronic or hard copy form. Upon the occurrence of a Low Inventory Day, REGH shall prepare and deliver to MBF an invoice for the Daily Toll Fee
applicable to such Low Inventory Day. Upon receipt of an invoice and all related bills of lading and, as applicable, BQ9000 and/or quality certifications from REGH, MBF shall make prompt payment
of

  
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		  	 the invoice amounts for Toll Fees and Daily Toll Fees by direct wire or electronic transfer to the designated account of REGH no later than three (3)
days from such receipt unless otherwise provided hereunder or agreed in writing by the Parties. REGH will, upon request, provide MBF with copies of paid invoices and other evidence reasonably satisfactory to MBF, to verify the amount used and cost
of any additives requested by MBF set forth on any invoice.

		
		  	 If MBF fails to pay all or any part of any invoiced amount when due, interest will accrue daily on the unpaid amount (except for any portion thereof
that is subsequently determined to be overstated) at the prime rate at WestLB AG bank plus 3.5% per annum, compounded monthly until all amounts are paid in full. The parties agree to a rebuttable presumption that the invoices delivered by HDB are
correct, if MBF does not give written notice of a dispute within 30 days of delivery of such invoice. MBF’s failure to pay any moneys due and owing under an invoice shall, subject to the default provisions of this Agreement, constitute an event
of default of this Agreement.

		
		  	 “Final Delivery Date” will mean, with respect to a particular production period, the earlier of (i) the date upon which the final lot
of the Biodiesel Volume to be delivered by REGH in such production period is ready for delivery or (ii) the date that is a number of days following the last Biodiesel Delivery Date listed on Schedule 1 (as originally stated and amended
pursuant to Section 20 due to a Force Majeure, but not amended pursuant to Section 6 hereof) equal to the number of days for which MBF is obligated to pay a Daily Toll Fee. “Paid-Up Production Date” will mean the date that is a
number of days following the Final Toll Date specified on Schedule 1 equal to the number of days in such production period for which MBF is obligated to pay a Daily Toll Fee. If MBF incurs Daily Toll Fees within a particular production period
and the Final Delivery Date occurs prior to the Paid-Up Production Date, REGH will refund to MBF, to the extent paid by MBF, or cancel and treat as satisfied any such charge to the extent due but not paid, the Daily Toll Fees for each day for which
the Final Delivery Date precedes the Paid-Up Production Date. MBF may offset any such refund due against any invoice from REGH.

		
		  	 c)      Payment Difference:

  
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		  	 At the end of the Initial Production Period and each Renewal Production Period thereafter, MBF shall pay to REGH any positive difference between (the
“Payment Difference”): (i) the applicable Toll Fee multiplied by the number of metric tons of Biodiesel required to be delivered during such production period in accordance with Schedule 1, less (ii) the product of the Toll Fee
multiplied by the sum of (A) the actual number of metric tons of Biodiesel delivered by REGH to MBF during such production period (and including any REGH Replacement Biodiesel and Third Party Replacement Biodiesel referenced herein at Section
16(d) and delivered to MBF, for which MBF has paid to REGH the applicable REGH Replacement Biodiesel Price or Third Party Replacement Biodiesel Price (as such terms are defined hereafter)), plus (B) the number of metric tons of Biodiesel
required to be delivered to MBF during such production period that REGH failed to deliver in accordance with its obligations under this Agreement.

		
		  	 REGH shall deliver to MBF a statement of payment difference (“Statement of Payment Difference”) within three days of the end of the
applicable production period. Such Payment Difference shall be paid by MBF to REGH within seven days of receipt by MBF of the Statement of Payment Difference.

		
		  	 d)      Inability to Supply:

		
		  	 REGH will provide MBF with a prior written notice of any anticipated production downtime or disruption to Biodiesel production at the REGH facility
caused by operational (minimum of three (3) calendar days’ notice) or maintenance issues (minimum of ten (10) calendar days’ notice) and provide detailed descriptions (including specifications and feedstock) of any available
amounts of Biodiesel that REGH would propose to supply in replacement of any volumes of Biodiesel that cannot be provided by the REGH facility due to a default of REGH to perform hereunder. Such proposed replacement Biodiesel that (a) meets or
exceeds the Biodiesel specifications contained in Section 5 hereof, (b) is produced using the same feedstock type or feedstock blend, (c) is produced using feedstocks meeting the same sustainability criteria as the Feedstock from with
the Biodiesel being replaced would have been produced, (d) is of like kind and quality, (e) is available at the MBF’s intended port of embarkation for the Biodiesel being replaced (or such other port that the MBF agrees to in writing
in its sole discretion and in advance, in which case the REGH will reimburse MBF for the Incremental Transportation

  
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		  	 Costs associated with such substitute port) on or before the date on which the Biodiesel that is being replaced was to be at such port of embarkation,
and (f) is offered by REGH for sale to MBF, free and clear of any liens or claims of any third party, for the price equal to the Toll Fee that MBF would have been obligated to pay hereunder for the Biodiesel being replaced (“REGH Replacement
Biodiesel Price”), shall be referred to as “REGH Replacement Biodiesel.” If all above criteria are met, MBF will accept the REGH Replacement Biodiesel, and upon delivery REGH will reimburse MBF for the Incremental Transportation Costs
and MBF shall pay to REGH the REGH Replacement Biodiesel Price. Any proposed replacement Biodiesel that is not REGH Replacement Biodiesel shall be referred to as “Third Party Replacement Biodiesel.”

		
		  	 In the event that REGH’s notice offers Third Party Replacement Biodiesel, MBF shall have the sole discretion to accept or reject such Third Party
Replacement Biodiesel. If MBF does not accept an offer of Third Party Replacement Biodiesel within three (3) business days of REGH’s notice, such offer shall be deemed rejected. If MBF accepts such offer of Third Party Replacement
Biodiesel, upon delivery REGH will reimburse MBF for the Incremental Transportation Costs and MBF shall pay to REGH a price equal to the Toll Fee that MBF would have been obligated to pay hereunder for the Biodiesel being replaced (“Third Party
Replacement Biodiesel Price”). If REGH delivers REGH Replacement Biodiesel to MBF, and/or if MBF elects to accept Third Party Replacement Biodiesel, then REGH will be deemed to have performed its obligation with respect to the volume of REGH
Replacement Biodiesel and/or the accepted volume of Third Party Replacement Biodiesel, as applicable; provided that REGH reimburses MBF for the Incremental Transportation Costs of any REGH or approved Third Party Replacement
Biodiesel.

		
		  	 If REGH delivers REGH Replacement Biodiesel to MBF, and/or if MBF elects to accept Third Party Replacement Biodiesel, then REGH will become the owner
of the Feedstock that REGH failed to process into Biodiesel, free and clear of any liens or claims of any third party, up to the volume of REGH Replacement Biodiesel delivered and/or the accepted volume of Third Party Replacement Biodiesel, as
applicable, multiplied by a factor of *** for tallow Feedstock, and multiplied by a factor of *** for soybean oil Feedstock. Title to such Feedstock will pass to REGH only upon delivery and passage of title, free and clear of any liens or claims of
any third party,

  
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		  	 to MBF of the REGH Replacement Biodiesel and/or the accepted Third Party Replacement Biodiesel, as applicable. If REGH does not offer REGH Replacement
Biodiesel and/or Third Party Replacement Biodiesel, or if MBF does not accept the Third Party Replacement Biodiesel offered, as applicable, REGH’s failure to deliver the committed Biodiesel shall, subject to the default provisions of this
Agreement, constitute a default of this Agreement.

		
		  	 For purposes of this Section, “Incremental Transportation Costs” means the excess of (a) the sum of any and all costs to transfer the
REGH Replacement Biodiesel or approved Third Party Replacement Biodiesel to MBF’s final destination and any and all costs associated with delaying or cancelling transportation arrangements previously arranged by MBF for transportation of the
Biodiesel, over (b) the sum of any and all costs that would have been incurred to transfer the Biodiesel to MBF’s final destination had REGH delivered such Biodiesel in accordance with this Agreement, as measured by the cost of the
transportation arrangements previously arranged by MBF for transportation of the Biodiesel.

		
		  	 e)      BQ-9000 Accreditation:

		
		  	 Notwithstanding anything to the contrary in the foregoing, MBF agrees that the BQ9000 quality accreditation for the REGH facility will not be required
for the first twelve (12) months of operation of the REGH facility, (with such twelve month period commencing after the date of first delivery of Feedstock by MBF to the REGH facility) to allow the REGH facility to achieve BQ9000 accreditation.
At all times prior to achieving BQ9000 accreditation, the Biodiesel processed for MBF shall meet the Product Specification as outlined above and REGH shall provide a chemical analysis confirming adherence to these specifications. MBF and REGH may
waive the BQ9000 accreditation requirement for the REGH facility if both Parties mutually agree to use a different quality certification system.

		
		  	 f)      Excess Capacity:

		
		  	 In the event that REGH determines during the Initial Production Period that the REGH Facility has the capacity to produce more Biodiesel than the
amount contained on Schedule 1, REGH will notify MBF of such additional capacity and the revisions to the Biodiesel Delivery Dates on the

  
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		  	 applicable Schedule 1 that would result from such increased production and MBF shall have the option to agree to such increased
production.

		
		  	 In the event REGH determines the REGH Facility has the capacity to produce more Biodiesel for MBF in any future Renewal Production Period than the
amount contained in Schedule 1, REGH will notify MBF of such additional capacity, and MBF shall have the option to agree to such increased production (subject to the parties negotiating in good faith and agreeing to appropriate revisions to the
Schedule 1 and other necessary terms of a such Renewal Production Option).

		
		  	 In either case, if MBF acquires additional production capacity, REGH will be compensated for such increased production at the Base Toll Fee agreed for
such production period. If MBF does not elect to acquire such additional production capacity, REGH shall be free to utilize such additional capacity as it deems appropriate, including contracting with third parties or producing for its own
account.

		
	17. TAXES:	  	The Toll Fee does not include any federal, state or municipal tax, duty, charge, levy or fee, that REGH now or hereafter may be required to pay to any governmental authority or
collect and pay over to any governmental authority, by reason of the processing of MBF’s Feedstock into Biodiesel pursuant to this Agreement (collectively “Taxes”). Any Taxes shall be invoiced by REGH to MBF as soon as reasonably
practicable, along with a detailed calculation of the tax due, and must be paid by MBF to REGH at the same time and on the same conditions as REGH is required to pay them under applicable law. As used in this Section “Taxes” shall not
include any income or franchise taxes, or similar taxes based on the income, revenue, assets or capital of REGH. MBF shall have the right to contest the imposition or amount of any Taxes through appropriate legal proceedings, which proceedings may
be brought in the name of REGH if required by applicable law.
		
	18. INSPECTION AND BIODIESEL/FEEDSTOCK QUANTITY MEASUREMENT:	  	The parties agree to a rebuttable presumption that the quality and quantity of Feedstock delivered at the Feedstock Delivery Point are as stated on the weight and quality
certificates issued upon loading of the delivery vessel, barge, or railcar at its origin. REGH may, at

  
 14 

			
		  	its sole expense, obtain independent measurement of the quantity and quality of Feedstock delivered, including by means of a third-party witness surveyor and/or lab, and may dispute
any such measurements and/or quality assertions.
		
		  	For purposes of tracking any loss of Biodiesel and for invoicing, REGH shall provide MBF the bills of lading in accordance with the measurements taken at the Biodiesel Delivery
Point. The quantity of Biodiesel delivered by REGH and accepted by MBF will be measured at the location where the Biodiesel is loaded into the transportation equipment, using standard industry practice at the time of measurement, and: (i) in
the case of delivery into rail cars, by means of the railcar’s gauging device and applicable outage tables; (ii) in the case of delivery into tank trucks, by means of metering device at REGH’s option; and (iii) in the case of
delivery into barges, pipelines or storage facilities, by gauges in officially calibrated land tanks at the LBC Terminal. REGH shall ensure that such tank gauges are calibrated per API standards. All such volumetric measurements will be corrected
for temperature to: (A) 60o F when measured in Imperial or U.S. units; and (B) 15o C when measured in metric or the Systeme Internationale units. The parties agree to a rebuttable presumption that these measurements are correct
for the purposes of this Toll Agreement. MBF may, at its sole expense, obtain independent measurement of the quantity of Biodiesel delivered, including by means of a third-party witness surveyor, and may dispute any such
measurements.
		
		  	REGH will gather two (2) samples of Biodiesel containing one (1) liter each from the final Biodiesel storage tank prior to delivery of the Biodiesel, prior to loading a
barge or other vessel, tank car or tank truck and deliver one sample to MBF and one sample to a mutually agreed independent laboratory for testing. After the sample has been drawn, no further additions of any kind will be made to such final tank
until after the Biodiesel delivery for which such sample was drawn to certify. Based upon such independent testing results, REGH will provide to MBF at the time of each delivery of Biodiesel, quality certificates certifying that the delivered
Biodiesel meets the product specifications required by this Agreement at the Biodiesel Delivery Point. All costs, including demurrage, for such independent inspection shall be borne equally by MBF and REGH, if such independent inspection confirms
that the Biodiesel meets the product specifications required by this Agreement at the Biodiesel Delivery Point; and all costs, including demurrage, for such independent inspection shall be borne exclusively by REGH, if such independent inspection
fails to confirm that the Biodiesel meets the product specifications

  
 15 

			
		  	required by this Agreement at the Biodiesel Delivery Point. Unless instructed by MBF not to do so, REGH will further draw two (2) samples of Biodiesel containing one (1) liter each
to be drawn at the Biodiesel Delivery Point and delivered to MBF at MBF’s expense (at the sampling costs stated on Attachment B). MBF may appoint, at its own expense, employ a third-party witness surveyor to witness the drawing of any samples
required to be taken pursuant to this paragraph; and, upon written notice of MBF, REGH will arrange access to the sample drawing procedure for such third-party witness surveyor.
		
	19. DEFAULT:	  	Each Party will be entitled to all damages and other rights and remedies available at law or in equity, in addition to any other remedies as may be provided in this Agreement, upon
the default or other failure to perform of the other Party; provided, however, that before terminating this Agreement the party claiming default or failure to perform shall first provide the defaulting party with written notice detailing the
circumstances of its failure to meet its obligations hereunder and an opportunity to cure such failure within ten (10) days of such notice. Notwithstanding any other provision of this Agreement to the contrary, no Party shall be liable to any other
Party for consequential, incidental, punitive, exemplary or indirect damages, lost profits or revenues, (except as a part of direct damages) or other indirect damages claimed in contract, equity, strict liability or indemnity, by statute or
otherwise.
		
	20. FORCE MAJEURE:	  	The following events, to the extent that they are unforeseen or beyond a party’s reasonable control notwithstanding the exercise of due diligence, shall constitute events of
“Force Majeure” if affecting a party’s ability to perform an obligation required under this Agreement: (i) acts of God; (ii) war, terrorism, fire, storm, flood, earthquake, or explosion; (iii) strike, lock-out, disputes
with workmen or labor shortages; (iv) transportation embargoes, failures or delays that affect a Party’s source of supply for the Feedstock or Chemicals, or delays (except failures or delays resulting from a lack of a party’s funds or
other default of obligations) in delivery or acceptance of any inventory or materials (except delays resulting from a lack of a party’s funds), including, without limitation, crude oil, natural gas, natural gasoline, supplies, raw materials,
ingredients necessary in the production of the Biodiesel. Notwithstanding anything herein to the contrary, a lack of funds or insolvency or plant start-up or production trouble does not constitute an event of Force
Majeure.

  
 16 

			
		  	If either party fails to observe or perform any of its obligations pursuant to this Agreement and such failure is a consequence of an event of Force Majeure, such failure does not
constitute a breach and the performance or observance of such obligation will be suspended during the continuation of the Force Majeure provided that the party claiming Force Majeure:
		
		  	 (a)    provides prompt written notice to the other party specifying in reasonable detail the nature of the
Force Majeure;

		
		  	 (b)    takes reasonable actions to remedy the Force Majeure as soon as is reasonably possible;
and

		
		  	 (c)    provides written notice to the other party after the Force Majeure has been remedied as soon as is
reasonably possible.

		
		  	Notwithstanding any other provision of this Agreement, a claim of Force Majeure does not under any circumstances suspend the obligation of MBF to make payment for any Product
already delivered in accordance with this Toll Agreement. If by reason of Force Majeure, REGH is unable to supply its total demand for Biodiesel among all of REGH’s other buyers, REGH will, to the extent that it has received MBF Feedstock for
which it has not delivered Biodiesel, process such Feedstock into Biodiesel and deliver such Biodiesel to MBF in preference to any other customers of REGH. REGH is not under any obligation to obtain Biodiesel from any other source. MBF is not
obligated to take any deliveries as set out in Schedule 1, included in this Toll Agreement and by this reference incorporated herein, that would otherwise have been made during the period of the Force Majeure.
		
	21. TIME IS OF THE ESSENCE; UNDER-LIFTING:	  	Time is of the essence, and all deliveries will be made in accordance with Schedule 1 (as may be modified by Section 6 herein, if applicable) during loading hours agreeable to LBC,
REGH and MBF. Unless otherwise agreed, MBF will be responsible for lifting the total Biodiesel Volume in accordance with the terms of this Agreement and will be liable for any costs incurred or direct damages, including, to the extent REGH is forced
to halt production, toll fees owed per Schedule 1, caused to REGH if the product is not lifted according to this Agreement.
		
	22. RAIL CAR DELIVERIES OF FEEDSTOCK:	  	MBF understands that REGH has the contractual right under its lease with LBC to receive four inbound rail cars per day of Feedstock and two inbound rail cars per day of Chemicals
and that any additional

  
 17 

			
		  	storage of rail cars at the LBC Terminal may require storage, switching and heating fees passed through from LBC Terminal and/or the Union Pacific Railroad and any charges incurred
by REGH as a result of MBF‘s delivery of more than four inbound railcars in one day pursuant to this Agreement shall be passed through to MBF at cost.
		
	23. BARGE OR VESSEL DELIVERIES OF FEEDSTOCK AND BARGE OR VESSEL OFF-TAKE OF BIODIESEL: 	  	MBF shall notify or cause REGH to be notified of ETA 48/24 hours prior to barge arrival at load port. In the event MBF fails to provide such notice, laytime shall start when barge
is all fast at berth.
		
		  	The LBC vessel and barge berth is approved by MBF. Attachment B hereto details the minimum requirements for the vessel and barge berths. MBF’s barges and vessels must comply
with U.S. Coast Guard (“USCG”), load port and terminal regulations in effect at the time of load.
		
		  	Laytime/Demurrage – The amount of laytime to apply to a barge or vessel is to be agreed to by the parties prior to placement of a barge at loading berth. Laytime will commence
upon a barge’s arrival at the terminal or waiting area if barge is tendered within the delivery period. If the barge or vessel is tendered prior to the delivery period, laytime will commence at 00:00 hours local time on the first day of the
delivery period or when the barge is all fast, whichever is first. If the barge or vessel is tendered after the delivery period, laytime shall commence with the barge is all-fast. In the event discharge occurs at a public terminal that provides dock
availability on a first come, first serve basis, laytime shall commence when the barge is all-fast. Demurrage shall be calculated per running hour after the expiration of agreed to laytime, and prorated for any part thereof. Demurrage and claims, if
any, shall be based on charter party rate, terms and conditions. Notwithstanding the provisions of this subparagraph c), any Laytime/Demurrage charges incurred by REGH imposed by the LBC Terminal shall be passed through at cost to MBF, unless
otherwise provided elsewhere in this Agreement.
		
		  	Wharfage charges from the port of Houston and intra-terminal transfer charges shall be passed through at cost to
MBF.

  
 18 

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

  

			
		  	Attachment B contains a detailed listing of wharfage rates and charges.
		
	24. INSURANCE AND INDEMNITY	  	REGH will not be obligated to obtain or carry any property insurance on MBF’s Feedstock or Biodiesel covering losses due to fire or other physical perils, it being expressly
understood and agreed that such property insurance on the Feedstock and Biodiesel, if any be desired by MBF, shall be so carried by MBF at its own expense. Notwithstanding any provision to the contrary, the risk of loss and responsibility for the
Feedstock and Biodiesel shall be allocated as stated in Section 11 hereof.
		
		  	REGH and MBF must each, at its own cost and expense, obtain and maintain throughout the term of the Agreement commercial general liability insurance providing, in the case of the
insurance carried by REGH, for a combined single limit of *** United States dollars *** for each occurrence or accident/***aggregate and, in the case of the insurance carried by MBF, for a combined single limit of *** United States dollars *** for
each occurrence or accident/***aggregate, each with provision in respect of coverage for bodily injury (including death at any time resulting from bodily injury) and personal injury sustained by any person or persons and for injury to, or
destruction of property (including loss of use or occupancy), and including all contractually assumed obligations covered in this Agreement, with extension of territorial limits to include operations under this Agreement. REGH will cause its
insurers to endorse the commercial general liability insurance described in this Section 24 (and any property insurance coverage purchased by REGH) to include MBF as an additional insured on all such insurance policies to the extent of the
liabilities agreed to be assumed by REGH hereunder.
		
		  	REGH will obtain and maintain workers’ compensation insurance coverage for all of its employees and require that any subcontractor engaged by REGH has workers’
compensation coverage for all of the subcontractors’s employees.
		
		  	Each party must promptly (a) provide, upon request of the other party, certificates of insurance or other documentary evidence that the insurance coverages required by this
Section 24 are in place and valid; and (b) notify the other party of any termination of any insurance policy required by this Section 24.
		
		  	Except as otherwise provided in this Agreement, REGH shall indemnify and hold MBF harmless from and against all
claims,

  
 19 

			
		  	demands, losses, fines, penalties, expenses (including reasonable attorneys fees) costs, suits, and liabilities (collectively “Claims”) caused by or resulting from
negligent or intentional wrongful acts or omissions on the part of REGH, its employees, agents, or contractors in the performance of this Agreement. Except as otherwise provided in this Agreement, MBF shall indemnify and hold REGH harmless from
and against all Claims, caused by or resulting from negligent or intentional wrongful acts or omissions on the part of MBF, its employees, agents or contractors in the performance of this Agreement. In the event that any Claim is caused in
whole or in part by the concurrent negligent or intentional wrongful acts or omissions of REGH, its employees, agents or contractors on the one hand, and MBF, its employees, agents or contractors on the other hand, then this obligation to indemnify
shall be comparative and each party shall indemnify the other to the extent that such party’s negligent or intentional wrongful acts or omissions were the cause of such Claim.
		
	25. NOTICE:	  	Any notice required or permitted to be given pursuant to this Agreement is validly given if in writing and: (i) personally delivered; (ii) sent by electronic facsimile transmission
or other means of electronic communication capable of producing a printed copy and a confirmation of delivery; or (iii) sent by prepaid registered mail or recognized overnight carrier, addressed to the applicable party at its address indicated below
or to such other address as any party may specify by notice in writing to the other. Any notice personally delivered on a business day will be deemed conclusively to have been effectively given on the date notice was delivered. Any notice given by
facsimile or other means of electronic communication will be deemed conclusively to have been given on the date specified on the confirmation of such transmission. Any notice sent by prepaid registered mail will be deemed conclusively to have been
effectively given when actually received.
		
		  	In the case of MBF:
		
		  	Paul Chatterton,
		  	ED&F Man Biofuels, Inc.
		  	Cottons Centre
		  	Hay’s Lane
		  	London
		  	SE1 2QE
		  	Fax: (0044) 207 089 8301
		
		  	With a copy to:

  
 20 

			
		  	Olivia Adams
		  	ED&F Man Biofuels, Inc.
		  	365 Canal Street, Suite 2929
		  	New Orleans, Louisiana 70130
		  	Facsimile: (504) 522 1638
		
		  	With a copy to:
		
		  	Leon J. Reymond, III, Esq.
		  	Stone Pigman Walther Wittmann L.L.C.
		  	546 Carondelet Street
		  	New Orleans, LA 70130
		  	Facsimile: (504) 581-3361
		
		  	In the case of REGH:
		
		  	Houston Biodiesel, LLC
		  	11666 Port Rd
		  	Seabrook, TX 77586
		  	Attn: Greg Fleming
		  	Facsimile: 281-474-3349
		
		  	With a copy to:
		
		  	Renewable Energy Group, Inc.
		  	416 S. Bell Ave., PO Box 888
		  	Ames, IA 50010-0888
		  	Attn: Nile Ramsbottom
		  	Facsimile: 515-239-8019
		
	26. MATERIAL SAFETY DATA SHEET:	  	MBF has provided to REGH, and by taking delivery of Feedstock in accordance with this Agreement, REGH acknowledges receipt of, MBF‘s current Material Safety Data Sheet(s)
concerning the properties of and safe handling procedures of the Feedstock. REGH represents and warrants that it is familiar with the properties of and safe handling procedures for the storage, handling, transportation and use of the Feedstock. REGH
has provided to MBF, and by taking delivery of Biodiesel in accordance with this Agreement, MBF acknowledges receipt of, REGH’s current Material Safety Data Sheet(s) concerning the properties of and safe handling procedures of the Biodiesel.
MBF represents and warrants that it is familiar with the properties of and safe handling procedures for the storage, handling, transportation

  
 21 

			
		  	and use of the Biodiesel. MBF will inform its customers of the safe-handling procedures for the Biodiesel.
		
	27. CHANGES IN BLENDER’S TAX CREDIT:	  	If any changes occur in the applicable law prior to or during this contract period that will affect the availability of the blender tax credit of $1 per gallon for Biodiesel
delivered during this contract period, then MBF may terminate this Agreement at their option without any further liability or obligation to HBD other than in respect to amounts due for liabilities that have accrued prior to the date of such
termination
		
	28. GOVERNING LAW:	  	This Toll Agreement shall be interpreted and governed in accordance with the laws of the State of Delaware, USA (excluding any conflicts of law rule or principle that would
otherwise refer construction or interpretation of this Agreement to the substantive law of another jurisdiction). The United Nations Convention on Contracts for the International Sale of Goods, or any subsequently enacted treaty or convention, will
not apply or govern this Agreement, its interpretation, or performance by the parties.
		
	29. RINS:	  	Renewable identification numbers (“RINS”) associated with the Biodiesel produced from MBF’s Feedstock will be the property of MBF. REGH will generate RINS for the
biodiesel produced from MBF’s Feedstock and will transfer said RINS to MBF within 7 working days of the lifting of the Biodiesel by MBF.
		
	30. CONFIDENTIALITY:	  	This Agreement may not be disclosed in whole or in part by either MBF or REGH to any third party without obtaining prior written consent of the other party, unless such disclosure
is required by law, is necessary to obtain regulatory approval or reporting, or for obtaining any necessary financing. MBF acknowledges and agrees that REGH may disclose the Agreement to its investors, provided that such investors are advised of its
confidential nature.
		
	31. ASSIGNMENT:	  	In all cases, neither party may assign its rights pursuant to this Agreement, without the prior written consent of the other party, which consent may not be unreasonably withheld.
Any transfer of either party’s interest in this Agreement by merger, consolidation, dissolution, or liquidation will be deemed an assignment of rights within the meaning of this Section 31. Further, unless
REGH’s

  
 22 

			
		  	stock is listed on a recognized stock exchange, any transfer or transfers of REGH’s capital stock, membership interests or partnership interests (whether of record or
beneficially) subsequent to the date of this Agreement which, in any one calendar year, amount to thirty-five percent (35%) or more of the capital stock, membership interests or partnership interests of REGH will also be deemed an assignment of
rights within the meaning of this Section 31.
		
	32. DISPUTE RESOLUTION:	  	Any controversy or claim (a “Claim”), whether based on contract, tort, statute, or other legal or equitable theory (including, but not limited to, any claim of fraud,
misrepresentation, or fraudulent inducement or any question of validity or effect of this Agreement including this Section), arising out of or related to this Agreement (including any amendments, annexations, and extensions) or any breach will be
settled by consultation between the parties. If consultation does not resolve the Claim within 30 days (unless otherwise extended by mutual agreement of the parties) after receipt of the written notice of the Claim, the Claim must be settled by
binding arbitration in accordance with the then current CPR Institute for Dispute Resolution Rules for Non-Administered Arbitration of Business Disputes and this Section. The arbitration will be governed by the United Stated Arbitration Act, 9
U.S.C. Sections 1-16, to the exclusion of any inconsistent provision of state law or provision that would produce a different result. Judgment upon the award rendered by the arbitrator may be entered by any court having jurisdiction. The arbitration
will be held in Houston, Texas. There will be one arbitrator. The arbitration will determine the Claim of the parties and render a final award in accordance with the substantive law set forth in Section 28. The arbitrator will set forth the reasons
for the award in writing. Notwithstanding the foregoing, MBF shall be entitled to enforce, perfect, protect, or maintain its ownership rights in the Feedstock and Biodiesel against any lien or competing claim of any third party, and to obtain
possession of its property, in any court of competent jurisdiction for such purpose.

  
  

[Signature Page to Follow] 

  
 23 

	
	 MBF
  
 ED&F MAN BIOFUELS, INC.

	
	By: /s/ Olivia S. Adams                      
                          
	Print Name: Olivia S. Adams                      
                  
	Title: Head of ED&F Man Biodiesel North America
	
	 REGH
  
 REG HOUSTON, LLC

	
	By: /s/ Gary
Haer                                         
               
	Print Name: Gary
Haer                                         
       
	Title: Vice President Sales and Marketing              

  
 24 

 Attachment A 

 

							
	Houston Biodiesel	  		  		  	
		  	Revised	  	5/16/2008	  	Myron Danzer
	RBD Palm Oil Specification	  		  		  	
	Parameter	  	Specification	  	Test Procedure	  	Notes
	FFA (as Palmitic)	  	0.1% max.	  		  	
	M&I	  	0.1% max.	  		  	
	I.V (Wijs)	  	50-55	  		  	
	M.Pt degrees C (AOCS Cc 3-25)	  	33-39	  		  	
	Colour (5 1/4” Lovibond cell)	  	3 Red max.	  		  	
				
	RBD Palm Olein Specification	  		  		  	
	Parameter	  	Specification	  	Test Procedure	  	Notes
	FFA (as Palmitic)	  	0.1% max.	  		  	
	M&I	  	0.1% max.	  		  	
	I.V (Wijs)	  	56 min.	  		  	
	M.Pt degrees C (AOCS Cc 3-25)	  	24 max.	  		  	
	Colour (5 1/4” Lovibond cell)	  	3 Red max.	  		  	
				
	RBD Soybean Oil	  		  		  	
	Parameter	  	Specification	  	Test Procedure	  	Notes
				
	In accordance with Rule 103 – Definitions of Grades and Quality of Soybean Oil Used for Specific Purposes	  	See Attachment D	  		  	
				
	 [        ]
  

FFA %: Typical .025, Our Spec .10 Max,
 Phos ppm:
Typical 1 Max, Our Spec 3 Max
 Moisture %: Typical .05 to .08, Our Spec .10 Max
 Soaps: Typical 0 ppm, Our Spec 5 Max
	  		  		  	
	 Iodine Value: Typical 128 to 131

Our Spec 125-139
 Appearance Clear and Free of
Foreign Material
	  		  		  	
				
	Tallow Specification	  		  		  	
	Parameter	  		  		  	
	Max 0.75% FFA	  		  		  	
	MIU max 1%	  		  		  	

  
 25 

 Attachment B 
 Marine Requirements at the LBC Terminal - Houston 
  

	1	Barge Specifications 

  

			
	Barge	  	Max
	Draft	  	12.5 feet
	Beam	  	50 feet
	Length	  	295 feet

 Barge Notes 
 Header must be located on either bow or stern 
 No mid-ship headers allowed

 Barge must be equipped with off-loading pump(s) 
 Barge header smaller than 6” will result in longer wharf times for loading/unloading 
  

	2	Ship Specifications 

  

			
	Ship	  	Max
	Draft	  	40 feet
	Beam	  	106 feet
	Length	  	625 feet

  

	3	Notes General to both Barge and Ship 

 Max pump discharge pressure not to exceed 90 psig 
  

	4	Port of Houston wharfage fee currently at $.24 per metric ton of product transferred which is the responsibility of MBF. Wharfage fee is subject to change per Port of
Houston’s discretion. 

  

	5	Marine delay charges are as follows (MBF shall be responsible for): 

  

			
	Ship	  	$525 per hour
	Barge	  	$263 per hour

 Ship and/or barge must be ready to load/unload upon arrival at LBC docks. There will be a four
(4) hour grace period per ship visit and two (2) hour grace period per barge visit. All customer testing /sampling, etc., must be completed during this grace period. 

 

	6	Hours of operation are 24 hours a day, seven days a week. 

  

	7	Sampling, excludes postage and packaging if shipped, $63.00 per sample up to 5 gallon 

  
 26 

 Attachment C – reserved. 

  
 27 

 Attachment D 
 Rule 103 c. Fully Refined Soybean Oil 
 Fully Refined Soybean Oil sold for export shall be pure
soybean oil. It shall be produced from fair average quality crude soybean oil from which essentially all of the free fatty acids and non-oil substances have been removed by refining treatments. It shall meet the following specifications: 

Analytical Requirements: 
  

	 	i.	Flavor shall be bland. 

  

	 	ii.	Color (Lovibond) Maximum 20Y/2.0R using AOCS Method Cc 13b-45 

  

	 	iii.	% FFA (% by wt.) Maximum 0.05 using AOCS Method Ca 5a-40 

  

	 	iv.	Clear and brilliant in appearance at 70-85° F 

  

	 	v.	 Cold Test – Minimum 5
 1/2 hrs. using AOCS Method Cc 11-53

  

	 	vi.	Shall contain not more than 0.10% moisture and volatile matter using AOCS Official Method Ca 2c-25. 

 

	 	vii.	The unsaponifiable content shall not exceed 1.5% when determining according to AOCS Method Ca 6a-40. 

 

	 	viii.	The peroxide value Meq/Kg shall not exceed 2.0 when determined by AOCS Method Cd 8-53. 

 

	 	ix.	Stability – AOM, Minimum is 8 hrs. 35 Meq/Kg when using AOCS Method Cd 12-57. 

 

	 	x.	Preservatives (GRAS) are permitted. 

 Chemical analysis shall be made in accordance with the methods from “official Methods and Recommended Practices of the American Oil Chemists’ Society, Chapter: Commercial Fats and Oils, Section
C.” 
 The chemical analysis to determine quality shall include the qualitative test for fish oil and marine animal oils as
prescribed by AOAC Method No. 974.20, and shall be negative. 
 Physical Requirements: 

 

	 	i.	The oil shall be clear and brilliant in appearance at 70° - 85° F. 

 

	 	ii.	The oil shall be free from settlings or foreign matter of any kind. 

  

	 	iii.	The oil shall have a clean, fresh flavor and shall be free from rancid, beany, painty, sour or other objectionable flavors or odors, as specified in U.S. Department of
Agriculture specifications A-A-20091D. 

  
 28 

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

 Schedule 1 
  

					
	Production Period	  	January 1 2010 - March 31 2010
	Biodiesel Volume	  	 2,400,000 gallons January
 2,400,000 gallons February
 2,400,000 gallons March

Total 7,200,000 U.S gallons.
 Total Biodiesel
Volume is approx; actual volume will be determined by Feedstock railcar weights converted by Contractual Yields outlined in clause 3)

	Production Commencement Date	  	January 1 2010
	Base Toll Fee per mt	  	$*** per gallon.
	Biodiesel Delivery Dates:	  	Date	  	Quantity to be Delivered US gallons)
		  		  	
			
		  	Lifting dates to be mutually agreed by Parties	  	
			
	Final Toll Date	  	March 31 2010	  	

  
 29Loan Agreement

 Exhibit 4.1 
 Loan Agreement dated October 30, 2011 between Badger Meter, Inc. and BMO Harris Bank N.A. relating to Badger Meter, Inc.’s revolving credit loan. 

BMO HARRIS BANK N.A. 
 PROMISSORY NOTE

  

																	
	Principal	 	 	Loan Date	 	Maturity	 	Loan No.	 	Call / Coll	 	Account	 	Officer	 	Initials
	$	65,000,000.00	  	 	10-30-2011	 	10-31-2012	 		 		 		 		 	

 References in the boxes above are for Lender’s use only and do not limit the applicability of this document to any
particular loan or item. Any item above containing “***” has been omitted due to text length limitations. 
  

							
	Borrower:	 	Badger Meter, Inc.	  	Lender:	 	BMO Harris Bank N.A.
		 	4545 W. Brown Deer Rd.	  		 	SE Wisconsin Region Commercial Lending
		 	Milwaukee, WI 53223-2413	  		 	770 North Water Street
		 		  		 	Milwaukee, WI 53202

  
  

 
  

					
	Principal Amount: $65,000,000.00	  		  	Date of Note: October 30, 2011

 PROMISE TO PAY. Badger Meter, Inc. (“Borrower”) promises to pay to BMO Harris Bank N.A. (“Lender”),
or order, in lawful money of the United States of America, the principal amount of Sixty Five Million & 00/100 Dollars ($65,000,000.00) or so much as may be outstanding, together with interest on the unpaid outstanding principal balance of
each advance. Interest shall be calculated from the date of each advance until repayment of each advance. 
 PAYMENT. Borrower will pay this
loan in one payment of all outstanding principal plus all accrued unpaid interest on October 31, 2012. In addition, Borrower will pay regular monthly payments of all accrued unpaid interest due as of each payment date, beginning
November 30, 2011, with all subsequent interest payments to be due on the same day of each month after that. Unless otherwise agreed or required by applicable law, payments will be applied to Accrued Interest, Principal, Late Charges, and
Escrow. Borrower will pay Lender at Lender’s address shown above or at such other place as Lender may designate in writing. 
 VARIABLE
INTEREST RATE. The interest rate on this Note is subject to change from time to time based on changes in an independent index which is the one month British Bankers Association (BBA) LIBOR and reported by a major news service selected by Lender
(such as Reuters, Bloomberg or Moneyline Telerate). If BBA LIBOR for the one month period is not provided or reported on the first day of a month because, for example, it is a weekend or holiday or for another reason, the One Month Libor Rate shall
be established as of the preceding day on which a BBA LIBOR rate is provided for the one month period and reported by the selected news service (the “Index”). The Index is not necessarily the lowest rate charged by Lender on its loans. If
the Index becomes unavailable during the term of this loan, Lender may designate a substitute index after notifying Borrower. Lender will tell Borrower the current Index rate upon Borrower’s request. The interest rate change will not occur more
often than each first day of each calendar month and will become effective without notice to the Borrower. Borrower understands that Lender may make loans based on other rates as well. The index currently is 0.239% per annum. Interest on the
unpaid principal balance of this Note will be calculated as described in the “INTEREST CALCULATION METHOD” paragraph using a rate of 1.500 percentage points over the Index, resulting in an initial rate of 1.739% per annum based on a
year of 360 days. NOTICE: Under no circumstances will the interest rate on this Note be more than the maximum rate allowed by applicable law. 

INTEREST CALCULATON METHOD. Interest on this Note is computed on a 365/360 basis; that is, by applying the ratio of the interest rate over a year of 360
days, multiplied by the outstanding principal balance, multiplied by the actual number of days the principal balance is outstanding. All interest payable under this Note is computed using this method. This calculation method results in a higher
effective interest rate than the numeric interest rate stated in this Note. 
 PREPAYMENT. Borrower may pay without penalty all or a portion of
the amount owed earlier than it is due. Early payment will not, unless agreed to by Lender in writing, relieve Borrower of Borrower’s obligation to continue to make payments of accrued unpaid interest. Rather, early payments will reduce the
principal balance due. Borrower agrees not to send Lender payments marked “paid in full”, “without recourse”, or similar language. If Borrower sends such a payment, Lender may accept it without losing any of Lender’s rights
under this Note, and Borrower will remain obligated to pay any further amount owed to Lender. All written communications concerning disputed amounts, including any check or other payment instrument that indicates that the payment constitutes
“payment in full” of the amount owed or that is tendered with other conditions or limitations or as full satisfaction of a disputed amount must be mailed or delivered to: BMO Harris Bank N.A., SE Wisconsin Region Commercial Lending, 770
North Water Street, Milwaukee, WI 53202. 
 LATE CHARGE. If a payment is not made on or before the 10th day after its due date, Borrower will be charged 5.000% of the
unpaid portion of the regularly scheduled payment. 
 INTEREST AFTER DEFAULT. Upon default, including failure to pay upon final maturity, the
interest rate on this Note shall be increased by adding a 5.000 percentage point margin (“Default Rate Margin”). The Default Rate Margin shall also apply to each succeeding interest rate change that would have applied had there been no
default. However, in no event will the interest rate exceed the maximum rate permitted by applicable law. 
 DEFAULT. Each of the following
shall constitute an event of default (“Event of Default”) under this Note: 
 Payment Default. Borrower fails to make
any payment when due under this Note. 

  
 20 

 Other Defaults. Borrower fails to comply with or to perform any other term, obligation,
covenant or condition contained in this Note or in any of the related documents or to comply with or to perform any term, obligation, covenant or condition contained in any other agreement between Lender and Borrower. 

Default in Favor of Third Parties. Borrower or any Grantor defaults under any loan, extension of credit, security agreement, purchase or
sales agreement, or any other agreement, in favor of any other creditor or person that may materially affect any of Borrower’s property or Borrower’s ability to repay this Note or perform Borrower’s obligations under this Note or any
of the related documents. 
 False Statements. Any warranty, representation or statement made or furnished to Lender by Borrower
or on Borrower’s behalf under this Note or the related documents is false or misleading in any material respect, either now or at the time made or furnished or becomes false or misleading at any time thereafter. 

Insolvency. The dissolution or termination of Borrower’s existence as a going business, the insolvency of Borrower, the appointment
of a receiver for any part of Borrower’s property, any assignment for the benefit of creditors, any type of creditor workout, or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Borrower. 

PROMISSORY NOTE 
 (Continued) 

Loan No:        Page 2 

Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self-help,
repossession or any other method, by any creditor of Borrower or by any government agency against any collateral securing the loan. This includes a garnishment of any of Borrower’s accounts, including deposit accounts, with Lender. However,
this Event of Default shall not apply if there is a good faith dispute by Borrower as to the validity or reasonableness of the claim which is the basis of the creditor or forfeiture proceeding and if Borrower gives Lender written notice of the
creditor or forfeiture proceeding and deposits with Lender monies or a surety bond for the creditor or forfeiture proceeding, in an amount determined by Lender, in its sole discretion, as being an adequate reserve or bond for the dispute.

 Events Affecting Guarantor. Any of the preceding events occurs with respect to any guarantor, endorser, surety, or
accommodation party of any of the indebtedness or any guarantor, endorser, surety, or accommodation party dies or becomes incompetent, or revokes or disputes the validity of, or liability under, any guaranty of the indebtedness evidenced by this
Note. 
 Change in Ownership. Any change in ownership of twenty-five percent (25%) or more of the common stock of Borrower.

 Adverse Change. A material adverse change occurs in Borrower’s financial condition, or Lender believes the prospect of
payment or performance of this Note is impaired. 
 Insecurity. Lender in good faith believes itself insecure. 

LENDER’S RIGHTS. Upon default, Lender may declare the entire unpaid principal balance on this Note and all accrued unpaid interest immediately due,
and then Borrower will pay that amount. 
 ATTORNEY’S FEES; EXPENSES. Lender may hire or pay someone else to help collect this Note if
Borrower does not pay. Borrower will pay Lender that amount. This includes, subject to any limits under applicable law, Lender’s attorney’s fees and Lender’s legal expenses, whether or not there is a lawsuit, including attorney’s
fees, expenses for bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunction), and appeals. If not prohibited by applicable law, Borrower also will pay any court costs, in addition to all other sums provided by
law. 
 JURY WAIVER. Lender and Borrower hereby waive the right to any jury trial in any action, proceeding, or counterclaim brought by either
Lender or Borrower against the other. 
 GOVERNING LAW. This Note will be governed by federal law applicable to Lender and, to the extent not
preempted by federal law, the laws of the State of Wisconsin without regard to its conflicts of law provisions. This Note has been accepted by Lender in the State of Wisconsin. 
 CHOICE OF VENUE. If there is a lawsuit, Borrower agrees upon Lender’s request to submit to the jurisdiction of the courts of Milwaukee County, State of Wisconsin. 

DISHONORED ITEM FEE. Borrower will pay a fee to Lender of $30.00 if Borrower makes a payment on Borrower’s loan and the check or preauthorized
charge with which Borrower pays is later dishonored. 
 RIGHT OF SETOFF. To the extent permitted by applicable law, Lender reserves a right of
setoff in all Borrower’s accounts with Lender (whether checking, savings, or some other account). This includes all accounts Borrower holds jointly with someone else and all accounts Borrower may open in the future. However, this does not
include any IRA or Keogh accounts, or any trust accounts for which setoff would be prohibited by law. Borrower authorizes Lender, to the extent permitted by applicable law, to charge or setoff all sums owing on the debt against any and all such
accounts, and, at Lender’s option, to administratively freeze all such accounts to allow Lender to protect Lender’s charge and setoff rights provided in this paragraph. 
 LINE OF CREDIT. This Note evidences a revolving line of credit. Advances under this Note, as well as directions for payment from Borrower’s accounts, may be requested orally or in writing by Borrower
or by an authorized person. Lender may, but need not, require that all oral requests be confirmed in writing. Borrower agrees to be liable for all sums either: (A) advanced in accordance with the instructions of an authorized person, or
(B) credited to any of Borrower’s accounts with Lender. The unpaid principal balance owing on this Note at any time may be evidenced by endorsements on this Note or by Lender’s internal records, including daily computer print-outs.
Lender will have no obligation to advance funds under this Note if: (A) Borrower or any guarantor is in default under the terms of this Note or any agreement 

  
 21 

 
that Borrower or any guarantor has with Lender, including any agreement made in connection with the signing of this Note; (B) Borrower or any guarantor ceases doing business or is insolvent;
(C) any guarantor seeks, claims or otherwise attempts to limit, modify or revoke such guarantor’s guarantee of this Note or any other loan with Lender; (D) Borrower has applied funds provided pursuant to this Note for purposes other
than those authorized by Lender; or (E) Lender in good faith believes itself insecure. 
 SUCCESSOR INTERESTS. The terms of this Note shall
be binding upon Borrower, and upon Borrower’s heirs, personal representatives, successors and assigns, and shall inure to the benefit of Lender and its successors and assigns. 
 GENERAL PROVISIONS. This Note benefits Lender and its successors and assigns, and binds Borrower and Borrower’s heirs, successors, assigns, and representatives. If any part of this Note cannot be
enforced, this fact will not affect the rest of the Note. Lender may delay or forgo enforcing any of its rights or remedies under this Note without losing them. Borrower and any other person who signs, guarantees or endorses this Note, to the extent
allowed by law, waive presentment, demand for payment, and notice of dishonor. Upon any change in the terms of this Note, and unless otherwise expressly stated in writing, no party who signs this Note, whether as maker, guarantor, accommodation
maker or endorser, shall be released from liability. All such parties agree that Lender may renew or extend (repeatedly and for any length of time) this loan or release any party or guarantor or collateral; or impair, fail to realize upon or perfect
Lender’s security interest in the collateral; and take any other action deemed necessary by Lender without the consent of or notice to anyone. All such parties also agree that Lender may modify this loan without the consent of or notice to
anyone other than the party with whom the modification is made. The obligations under this Note are joint and several. 
 PROMISSORY NOTE

 (Continued) 

Loan No:        Page 3 

PRIOR TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS NOTE, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS. BORROWER
AGREES TO THE TERMS OF THE NOTE. 
 BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS PROMISSORY NOTE. 

BORROWER: 
  

			
	BADGER METER, INC.
		
	By:	 	 /s/ Richard A. Meeusen

		 	Chairman, President and CEO
		
	By:	 	 /s/ Richard E. Johnson

		 	Senior Vice President – Finance, Chief Financial Officer and Treasurer

  
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