Document:

First Amendment to Transition Services Agreement, dated as of October 7, 2006

 Exhibit 10.4 
 FIRST AMENDMENT 
 TO 
 TRANSITION SERVICES AGREEMENT 
 This First Amendment to Transition Services
Agreement (this “Amendment”) is made effective as of October 7, 2006, between Panda Energy Management, LP (“PEM”), a Delaware limited partnership, and Panda Ethanol
Management, LLC (the “Company”), a Delaware limited liability company. PEM and the Company are hereinafter sometimes referred to individually as a “Party” and jointly as the
“Parties.” 
 R E C I T A L S 
 The Company and PEM entered into that certain Transition Services Agreement dated as of June 7, 2006 (the “Agreement”) and
the parties thereto now desire to amend the Agreement to revise Schedule 1 thereto as set forth herein. 
 Capitalized terms used
but not otherwise defined herein have the meanings given to such terms in the Agreement. 
 A G R E E M E N T 
 In consideration of the promises, covenants, and conditions set forth herein, and for other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto hereby agree as follows: 
 1. Amendment to Section 1 of the Agreement. The last paragraph
of Section 1 of the Agreement is hereby amended and restated in its entirety to read as follows: 
 “Unless otherwise
specifically provided on Schedule 1 hereof, PEM may provide or coordinate provision of each PEM Service for the period or term specified on each applicable Schedule 1 hereto; provided, however, that notwithstanding the
term as specified on the applicable Schedule 1, the Company and PEM may mutually agree in writing to extend the term applicable to the PEM Services, and provided, further, that the Company may, at its option, upon no less than
thirty (30) days prior written notice to PEM (or such other period as the Parties may mutually agree in writing), terminate all or any specific category of such PEM Services prior to the expiration of the term specified in the applicable
Schedule 1.” 
 2. Amendment of Schedule 1.1. The “Term” Section of Schedule 1.1 is hereby amended and restated in its
entirety to read as follows: 
 “TERM: The Tax Administration Services shall be provided for an initial term
commencing on the date of this Agreement and terminating on March 30, 2007. The initial term shall be subject to extension, upon written notice from the Company to PEM.” 
 3. Amendment of Schedule 1.2. The “Term” Section of Schedule 1.2 is hereby amended and restated in its entirety to read as follows: 
 “TERM: The Human Resources Administration/Government Reporting Services shall be provided for an initial term commencing on the
date of this Agreement and terminating on March 30, 2007. The initial term shall be subject to extension, upon written notice from the Company to PEM.” 

 4. Amendment of Schedule 1.3. The “Term” Section of Schedule 1.3 is hereby amended and restated
in its entirety to read as follows: 
 “TERM: The Accounting Services shall be provided for an initial term
commencing on the date of this Agreement and terminating on March 30, 2007. The initial term shall be subject to extension, upon written notice from the Company to PEM.” 
 5. Amendment of Schedule 1.4. The “Term” Section of Schedule 1.4 is hereby amended and restated in its entirety to read as follows: 
 “TERM: The Employee Health and Safety Related Services shall be provided for an initial term commencing on the date of this
Agreement and terminating on March 30, 2007. The initial term shall be subject to extension, upon written notice from the Company to PEM.” 
 6.
Amendment of Schedule 1.5. The “Term” Section of Schedule 1.5 is hereby amended and restated in its entirety to read as follows: 
 “TERM: The Financial Services, including Cash Management and Insurance Services, shall be provided for an initial term commencing on the date of this Agreement and terminating on
March 30, 2007. The initial term shall be subject to extension, upon written notice from the Company to PEM.” 
 7. Amendment of Schedule
1.6. The “Term” Section of Schedule 1.6 is hereby amended and restated in its entirety to read as follows: 
 “TERM: The General Corporate Services shall be provided for an initial term commencing on the date of this Agreement and terminating on March 30, 2007. The initial term shall be subject to extension, upon
written notice from the Company to PEM.” 
 8. Amendment of Schedule 1.7. The “Term” Section of Schedule 1.7 is hereby amended
and restated in its entirety to read as follows: 
 “TERM: The Legal Services shall be provided for an initial term
commencing on the date of this Agreement and terminating on March 30, 2007. The initial term shall be subject to extension, upon written notice from the Company to PEM.” 
 9. Amendment of Schedule 1.8. The “Term” Section of Schedule 1.8 is hereby amended and restated in its entirety to read as follows: 
 “TERM: The Development and Facilities Services shall be provided for an initial term commencing on the date of this Agreement
and terminating on March 30, 2007. The initial term shall be subject to extension, upon written notice from the Company to PEM.” 
 10.
Amendment of Schedule 1.9. The “Term” Section of Schedule 1.9 is hereby amended and restated in its entirety to read as follows: 
 “TERM: The Corporate Communications Services shall be provided for an initial term commencing on the date of this Agreement and terminating on March 30, 2007. The initial term shall be
subject to extension, upon written notice from the Company to PEM.” 
  

 -2- 

 11. Amendment of Schedule 1.10. The “Term” Section of Schedule 1.10 is hereby amended and
restated in its entirety to read as follows: 
 “TERM: The Corporate Travel and Panda Air Services shall be
provided for an initial term commencing on the date of this Agreement and terminating on March 30, 2007. The initial term shall be subject to extension, upon written notice from the Company to PEM.” 
  

	12.	Deletion of Schedule 1.11. Schedule 1.11 is hereby deleted in its entirety. 

 13. Amendment of Schedule 2. Schedule 2 is hereby amended and restated in its entirety to read as is provided in Exhibit A, attached hereto. 
 14. The parties hereby confirm that, except to the extent specifically amended hereby, the provisions of the Agreement shall remain unmodified and the Agreement as so
amended is hereby confirmed as being in full force and effect. 
 15. This Amendment may be executed in any number of counterparts, each of shall be an
original, and all of which together shall constitute one instrument. 
 16. This Amendment and the Agreement as amended hereby shall be binding upon and
shall inure to the benefit of the parties to the Amendment and the Agreement and their respective successors. 
 * * * * * 
  

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 IN WITNESS WHEREOF, the parties have executed this Amendment on the day, month and year first set forth
above. 
  

			
	PANDA ENERGY MANAGEMENT, LP
		
	By:	 	PEMC, Inc., its General Partner
		
		 	 /s/ ROBERT W. CARTER

	Name:	 	Robert W. Carter
	Title:	 	Chairman, Chief Executive Officer
	
	PANDA ETHANOL MANAGEMENT, LLC
		
	By:	 	 /s/ TODD W. CARTER

	Name:	 	 Todd W. Carter

	Title:	 	 President & CEO

  

 -4-Letter Agreement for Reimbursement dated June 7, 2006

 Exhibit 10.5 
 June 7, 2006 
 Panda Energy International, Inc. 
 4100 Spring Valley, Suite 1001 
 Dallas, Texas 75201 
  

	Re:	Reimbursement Regarding Development of Ethanol Production Facilities 

 Ladies and Gentlemen: 
 Reference is hereby made to that certain Securities Purchase Agreement, dated as of
the date hereof, by and among Panda Ethanol, Inc., a Delaware corporation (“Panda Ethanol”), and certain purchasers of Panda Ethanol securities referenced therein (the “Purchase Agreement”).
Capitalized terms used herein and not otherwise defined shall have the meanings set forth in the Purchase Agreement (and the Disclosure Schedules thereto). 
 The purpose of this letter agreement is to reflect the understandings between Panda Ethanol and Panda Energy International, Inc., a Texas corporation (“PEII”), relating to past and ongoing
financial support provided by PEII to Panda Ethanol in connection with its development of multiple ethanol production facilities. Reference is also made to that certain Transition Services Agreement dated as of the date hereof (the
“TSA”), relating to certain payments to be made to or from Panda Ethanol after the date hereof. Panda Ethanol and PEII desire to formalize certain verbal agreements herein prior to the execution and delivery of the Purchase
Agreement in order to provide written evidence to the Purchasers of these understandings and agreements going forward. This agreement is intended to set forth the entire agreement of the parties hereto with respect to the subject matter hereof.

 Specifically, in consideration of the past financial support provided by PEII as its parent entity, Panda Ethanol hereby agrees as
follows: 
 (i) Panda Ethanol shall reimburse PEII for the reasonable and customary direct and indirect costs and expenses
incurred by PEII or its affiliates for the performance of services in connection with (A) the negotiation, execution and delivery of the Transaction Documents and the Merger Agreement and (B) ethanol project development activities up to
the date of execution of the definitive agreements relating to the Senior Secured Project Debt and Subordinated Project Debt, less PEII’s current equity commitment to Panda Ethanol of $13.0 million. Panda Ethanol currently anticipates
such net amount (the “PEII Reimbursement”) to be approximately $9.5 million, subject to final audit of Panda Ethanol. The PEII Reimbursement shall be paid to PEII from time to time upon entering into definitive agreements
relating to project debt or other appropriate financial arrangements for each respective ethanol project (including the Senior Secured Project Debt and Subordinated Project Debt) in the applicable amounts allocable to each such project. Any costs or
expenses incurred by PEII or any of its affiliates regarding Panda Hereford or other projects 

 June 7, 2006 
 Page 2

  

 
owned by Panda Ethanol after execution of the definitive agreements relating to the Senior Secured Project Debt and Subordinated Project Debt shall be
reimbursable pursuant to the TSA; it being understood that no other reimbursement of PEII or any of its affiliates shall be made by Panda Ethanol or any of its Subsidiaries, except as may be contemplated pursuant to Section 4.14 of the Purchase
Agreement. 
 (ii) Panda Ethanol shall pay to PEII a development fee (the “Development Fee”) in the amount of $3.5
million upon entering into definitive agreements relating to the Senior Secured Project Debt and Subordinated Project Debt. 
 It is
understood and agreed that the Purchasers under the Purchase Agreement have entered into the Purchase Agreement in reliance upon the terms of this letter agreement and no revisions or amendments to this letter agreement (written or oral) or any
departures from this letter agreement with respect to the subject matter hereof may be made by PEII and/or Panda Ethanol without the written consent of Purchasers holding in excess of a majority of the Shares. The agreement set forth in the
foregoing sentence shall be subject to the Purchasers holding at least four percent (4%) of the then outstanding Panda Ethanol equity securities. 
 Please sign and date this letter in the space provided below to confirm the understandings of the parties as set forth above, and return a signed copy to the undersigned. 
  

			
	Very truly yours,
	
	PANDA ETHANOL, INC.
		
	By:	 	/S/ MICHAEL TRENTEL
	Name:	 	Michael Trentel
	Title:	 	Chief Financial Officer

  

			
	Acknowledged and Agreed:
	PANDA ENERGY INTERNATIONAL, INC.
		
	 By:
	 	/s/ MICHAEL TRENTEL
	 Name:
	 	Michael Trentel
	 Title:
	 	Chief Financial Officer

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