Document:

Exhibit 10.5
	 

	 
		EXECUTION COPY
	 

	 
		ETHANOL MARKETING AGREEMENT 
	 

	 
		 
	 

	 
		THIS ETHANOL MARKETING AGREEMENT (the
		“Agreement”) is made and entered into as of the
		25th day of September, 2006 (the “Effective Date”), by and between CARGILL, INCORPORATED
		(“Cargill”) and Buffalo Lake Energy, LLC
		(“Producer”), collectively referred to hereinafter as
		“Parties” or individually as a “Party”.
		
	 

	 
		 
	 

	 
		RECITALS
	 

	 
		 
	 

	 
		WHEREAS, Cargill markets and distributes
		Ethanol (as defined below); and
	 

	 
		 
	 

	 
		WHEREAS, Producer will produce Ethanol upon
		construction and start-up of a commercial facility at Fairmont, Minnesota that
		will produce denatured fuel-grade ethanol (the “Facility”),
		which Facility is anticipated to produce approximately 115 million net gallons
		per year; and
	 

	 
		 
	 

	 
		WHEREAS, Cargill desires to market and
		distribute Producer’s Ethanol; and
	 

	 
		 
	 

	 
		WHEREAS, Cargill and Producer have executed
		that certain Master Agreement of even date herewith (the “Master Agreement”); and
	 

	 
		 
	 

	 
		NOW, THEREFORE, in consideration of the
		foregoing, the mutual promises herein contained and other good and valuable
		consideration, the receipt and sufficiency of which is hereby acknowledged, the
		Parties agree as follows.
	 

	 
		AGREEMENT
	 

	 
		 
	 

	 
		1. MARKETING. 
	 

	 
		 
	 

	 
		1.1 Exclusivity.
		Producer hereby agrees to sell to Cargill, and Cargill agrees to purchase and
		market, 100% of Producer’s production of denatured fuel-grade ethanol
		(“Ethanol”) produced at the Facility, including any
		expansion or increase in capacity at the Facility. Producer agrees that Cargill
		will be the exclusive marketer of Producer’s Ethanol and that Producer
		will not market any Ethanol during the term of this Agreement. Notwithstanding
		any other provision of this Agreement, in the event Cargill delivers to
		Producer written notice of a Force Majeure as provided in Section 3(b) of the
		Master Agreement, Producer may, upon delivery of written notice to Cargill but
		subject to the terms of the Confidentiality Agreement, market, either directly
		or indirectly, the Ethanol produced or stored at the Facility during the
		expected duration of the Force Majeure, as determined in consultation with
		Cargill. 
	 

	 
		 
	 

	 
		1.2 Marketing Objectives. Cargill and Producer shall consult regularly with
		respect to Cargill’s marketing efforts and strategies for Producer’s
		Ethanol purchased by Cargill. Once each quarter during the term of this
		Agreement, Cargill shall provide to Producer for its review and comment a
		Marketing Plan (the “Marketing
		Plan”). The Marketing Plan shall
		be f.o.b. market-driven, detailed to terminal and sales book and position to
		maintain (i.e., index versus fixed, or forward). The Marketing Plan shall not
		be binding on either Party, and Producer shall have the right to review and
		discuss the Marketing Plan with Cargill. Once each week during the term of this
		Agreement, Cargill shall provide Producer with a report (in a form to be agreed
		upon by the Parties 
	 

	 
		 
	 

	 
		 
	 

	 
 
	 
		not less than thirty (30) days prior to the
		Projected Date of First Delivery) that shall include fixed price, index price,
		total sales, and storage information relating to (a) Ethanol in the Marketing
		Pool Program (as described in Section
		9), if Producer has elected to
		participate in the Marketing Pool Program; or (b) Producer’s Ethanol, if
		Producer has elected not to participate in the Marketing Pool Program. Producer
		intends to use this weekly report to update its ethanol position sheet
		(“EPS”) and as a basis for potentially entering into
		hedging transactions with third parties. Producer shall provide its EPS to
		Cargill, and Cargill shall use the EPS as a source of sales guidance for
		selling up to a given quantity of Ethanol at certain price intervals for a
		specified delivery period. Producer agrees that it will not share any
		competitively sensitive information provided by Cargill (including without
		limitation information related to Ethanol prices, marketing plans, and ongoing
		or proposed customer negotiations) with Producer’s Affiliates, if any,
		which compete with Cargill for sales of ethanol. The EPS shall not be binding
		on either Party.
	 

	 
		 
	 

	 
		1.3 Final Authority; Long Term Sales
		Agreements. Notwithstanding anything to
		the contrary herein but without limiting the obligations of Cargill hereunder,
		Cargill shall have the authority to make final determinations with respect to
		all marketing and sales decisions and strategies, and Producer agrees to accept
		such determinations; provided,
		however, that Producer’s consent (not to be unreasonably
		withheld or delayed) shall be required prior to Cargill entering into any
		long-term sales agreement for Producer’s Ethanol. For purposes this
		Article, a “long-term sales agreement” shall be a sales agreement for
		Producer’s Ethanol with a term in excess of twelve calendar months.

	 

	 
		 
	 

	 
		 1.4 Agency Sales. In
		the event Cargill proposes to market Producer’s Ethanol to a third party
		pursuant to a long-term sales agreement, Cargill shall enter into a contract
		for the sale of such Ethanol to such third party as agent for Producer pursuant
		to which Cargill shall assume the credit risk under such third party contract
		and bear all sales, marketing, logistic services/management costs and
		collection costs after the Ethanol produced at the Facility passes across the
		Title Transfer Point.
	 

	 
		 
	 

	 
		2. MASTER AGREEMENT. The terms and conditions of the Master Agreement are
		hereby incorporated herein by reference. To the extent any provision of the
		Master Agreement conflicts with a provision contained herein, the provision
		contained herein will control. Terms capitalized but not defined in this
		Agreement shall have the meanings ascribed to them by the Master Agreement.
		
	 

	 
		 
	 

	 
		3. PRICE AND COMMISSION. 
	 

	 
		 
	 

	 
		3.1 Marketing Pool Program Price and
		Commission. For Ethanol marketed
		pursuant to the Marketing Pool Program, Cargill shall pay Producer for its
		Ethanol in accordance with the terms set forth in Exhibit A.
		Producer shall pay Cargill a commission for its Ethanol marketing as provided
		in Exhibit A. Cargill shall deduct this commission as provided in
		Exhibit A. 
	 

	 
		 
	 

	 
		3.2 Non-Marketing Pool Program Price and
		Commission. For Ethanol not marketed
		pursuant to the Marketing Pool Program, Cargill shall pay Producer for its
		Ethanol in accordance with the terms set forth in Exhibit B.
		Producer shall pay Cargill a commission for its Ethanol marketing as calculated
		in Exhibit B. Cargill shall deduct this commission as provided in
		Exhibit B.
	 

	 
	 

	 
		 
	 

	 
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		3.3 Minimum Annual Commission. In the event the Ethanol production at the Facility
		does not equal 82.5 million gallons per Contract Year (i.e., a twelve
		month period beginning on the Projected Date of First Delivery and each
		anniversary of such date), Producer will, promptly upon Cargill’s demand,
		pay to Cargill an amount equal to the deficiency volume in such Contract Year
		(i.e., 82.5 million gallons less the number of gallons actually produced during
		such Contract Year and provided to Cargill for removal), multiplied by
		Cargill’s average selling price for Producer’s Ethanol during such
		Contract Year, multiplied by 1%. 
	 

	 
		 
	 

	 
		3.4 Commission Adjustment. On the fifth (5th) anniversary of the
		Effective Date of this Agreement, upon the written request of either Party, the
		Parties shall negotiate in good faith an adjustment to the commission to take
		into account changes in market conditions, operating conditions or costs,
		including overhead costs, inflation or other factors; provided,
		however, that in the event the Parties are unable to agree to
		any such adjustments within thirty (30) days following commencement of such
		negotiations, no adjustment to the commission will be made.
	 

	 
		 
	 

	 
		4. PAYMENT AND STORAGE. 
	 

	 
		 
	 

	 
		4.1 Payment Procedures. Producer shall invoice Cargill for the Ethanol Volume
		shipped to Cargill at the Title Transfer Point within one Cargill Working Day
		of such shipment. Cargill shall pay Producer for Ethanol invoiced by Producer
		to Cargill, in accordance with the formula set forth in Exhibit A or
		Exhibit B, depending upon which formula is applicable, not later
		than ten (10) Cargill Working Days from the date Producer invoiced Cargill.
		“Cargill Working
		Day” means Monday, Tuesday,
		Wednesday, Thursday or Friday except for Cargill Holidays.
		“Cargill Holidays” are New Years Day, Presidents Day, Good Friday,
		Memorial Day, July 4th, Labor Day, Thanksgiving Day, the day after
		Thanksgiving Day, Christmas Eve Day and Christmas Day (or, with respect to
		Christmas, the Cargill Holidays may differ from actual Christmas Eve Day and
		Christmas Day if such days fall on a weekend). 
	 

	 
		 
	 

	 
		4.2 Storage Calculation. Producer acknowledges that Cargill may place its
		Ethanol in storage rather than selling it to customers due to market
		conditions. As a result, Cargill may not pay Producer in a given month for all
		of the Ethanol that Producer delivers to Cargill in such month. If Cargill
		places any Ethanol from participants in the Marketing Pool Program into storage
		in a given month (including, without limitation, Producer’s Ethanol
		production in such month pursuant to Producer’s election to participate in
		the Marketing Pool Program), a pro-rata share of Producer’s Ethanol will
		be considered to be placed in storage for purposes of calculating
		Cargill’s payment to Producer for such month. For example, assume that (a)
		participants in the Marketing Pool Program deliver 10 million gallons of
		Ethanol to Cargill in a month, (b) Cargill places 2 million gallons of such
		Ethanol into storage, and (c) Producer delivered 1 million gallons of Ethanol
		to Cargill in such month. Cargill would pay Producer for 800,000 gallons of
		Ethanol in such month and Cargill would pay Producer for the remaining 200,000
		at a later date when Cargill invoiced such Ethanol to its customers. 
	 

	 
		 
	 

	 
		4.3 Storage Approval Rights. Notwithstanding the foregoing, if, following
		consultation with Cargill in accordance with Section 1.2,
		Producer desires that the Ethanol be sold to customers rather than placed in
		storage, (a) Cargill, at its option, shall either (x) sell such Ethanol to its
		
	 

	 
		 
	 

	 
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		customers rather than placing it in storage,
		or (y) place such Ethanol in storage and pay to Producer the current fair
		market value of such Ethanol as determined by the Parties, which value shall be
		deemed to be the “Delivered Price” (for purposes of Exhibit B) for
		such Ethanol; and (b) Cargill shall, with respect to such Ethanol, be relieved
		of the obligation imposed by Section
		10.1 to maximize the Ethanol price and
		achieve the best available return to Producer. If Producer consents to such
		storage, then the cost of transportation to and from storage and the cost of
		maintaining such outside storage shall be considered Accessorial Charges and
		Producer shall be responsible for reimbursing Cargill for such Accessorial
		Charges in accordance with Section
		5. 
	 

	 
		 
	 

	 
		5. COSTS, TITLE AND RISK OF
		LOSS. Except as otherwise provided in
		this Agreement, Cargill will bear all sales, marketing, logistics
		services/management costs and collection costs after the Ethanol produced at
		the Facility passes across the inlet flange into railcars or tank trucks at the
		Facility (“Title Transfer
		Point”). Title and risk of loss to
		the Ethanol shall transfer from Producer to Cargill at the Title Transfer
		Point. Until such time, Producer shall be deemed to be in control of and in
		possession of and shall have title to and risk in the Ethanol. Cargill shall
		also assume responsibility for payment of Accessorial Charges (as defined in
		Exhibit A or Exhibit
		B, depending on which pricing formula
		is applicable) to third parties; provided,
		however, that Producer agrees that, except as specified in the
		next succeeding sentence, Cargill shall deduct and setoff the Accessorial
		Charges from and against payments due to Producer by Cargill. In the event any
		specific Accessorial Charge (as evidenced in writing) exceeds $150,000, Cargill
		may demand, in writing, that Producer reimburse Cargill for such Accessorial
		Charge, in which case Producer shall reimburse Cargill as aforesaid within two
		(2) Cargill Working Days of receipt of Cargill’s demand. 
	 

	 
		 
	 

	 
		6. LOGISTICS AND TRANSPORTATION; FACILITY
		STORAGE. 
	 

	 
		 
	 

	 
		6.1 Logistics and Transportation. Cargill shall perform certain logistics functions for
		Producer relating to its Ethanol, including the arranging of rail and truck
		freight, bills of lading, and scheduling pick-up appointments, provided that
		Producer shall be a party to, or a third party beneficiary of, each rail or
		truck transportation agreement. Transportation by truck may be provided at
		Cargill’s discretion. Cargill shall determine the method of transporting
		the Ethanol to third parties. Notwithstanding anything to the contrary herein,
		Producer shall be solely responsible for any damage to any trucks, railcars, or
		equipment caused by its acts or omissions. Further, Producer agrees that it
		shall be solely responsible for furnishing a minimum of 275 tank railcars to
		service the Facility and transport Ethanol via rail to third parties, including
		all costs and expenses incident thereto. Producer shall use the following
		product description for Department of Transportation Hazardous Materials
		shipments: “Alcohols, n.o.s., (Ethanol, gasoline) 3, UN1987, PGII”.
		Producer shall provide such information on each bill of lading. Each bill of
		lading will also state that the Ethanol contains an approved corrosion
		inhibitor. Producer shall maintain the truck and railcar loading facilities in
		safe operating condition in accordance with normal industry standards and will
		visually inspect all trucks and railcars to ensure: (a) their cleanliness so as
		to avoid adulteration and contamination; (b) that such trucks and railcars are
		properly sealed and contain all necessary safety devices and placards; and (c)
		that such trucks and railcars are in a condition suitable for loading and
		transporting the Ethanol under applicable law.
	 

	 
		 
	 

	 
		6.2 Facility Storage. Producer shall at all times provide storage at the
		Facility for Ethanol, in an amount not less than 3 million gallons at any one
		time, at no cost to Cargill. Cargill 
	 

	 
		 
	 

	 
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		shall schedule for removal by truck or
		railcar the actual quantity of Ethanol produced by Producer less the amount of
		Ethanol that Cargill requests Producer to store at the Facility. Due to limited
		storage at the Facility, and subject to the terms and conditions of the railcar
		exchange agreement to be entered into between the Parties, Cargill shall use
		commercially reasonable efforts to arrange transportation and deliveries of
		Ethanol so that excess inventories do not limit Ethanol production at the
		Facility.
	 

	 
		 
	 

	 
		7. QUALITY. 
	 

	 
		 
	 

	 
		7.1 Ethanol Specifications. Producer covenants that at all times during the term
		of this Agreement it shall produce Ethanol that meets the specifications
		(“Specifications”) set forth in Exhibit C, as
		amended by Cargill from time to time based upon market requirements and upon
		reasonable notice to Producer. Cargill shall have the right (but not the
		obligation) to test each shipment of Ethanol to ascertain that the
		Specifications are being met under the testing procedures set forth in
		Exhibit D. Prior to the shipment of Ethanol to Cargill, Producer
		shall fax or send by e-mail transmission a certificate of analysis to Cargill
		for each shipment of Ethanol to a designated Cargill employee. 
	 

	 
		 
	 

	 
		7.2 Settlement
		of Specification Claims. In the event
		the Ethanol does not meet the Specifications when delivered to the Title
		Transfer Point, Cargill may, in its sole discretion, (a) reject such Ethanol
		and require Producer to promptly replace such non-conforming Ethanol with
		Ethanol that complies with the Specifications; or (b) accept the Ethanol for
		marketing and adjust the price based on market demand, to reflect the inferior
		quality. If Cargill rejects any non-conforming Ethanol, Cargill will use
		commercially reasonable efforts to assist Producer in identifying a use or
		market for the non-conforming Ethanol, which may include sale of the
		non-conforming Ethanol in industrial markets or reprocessing in the
		Facility.
	 

	 
		 
	 

	 
		7.3 Samples,
		Preservation, and Claims. Producer
		shall take original, sealed and numbered samples of all Ethanol prior to
		loading at the Title Transfer Point. Cargill shall be entitled to witness the
		taking of samples. Producer will label these samples to indicate date of
		delivery and the truck or railcar number. Producer will retain these samples
		for six (6) months or such longer period as may be required by applicable law,
		and shall send one sample to Cargill immediately upon Cargill’s request.
		
	 

	 
		 
	 

	 
		7.4 Denaturants.
		Producer shall use natural gasoline denaturant (or other denaturant source
		mutually agreed upon by the Parties) that meets the specifications set forth in
		Exhibit E.
	 

	 
		 
	 

	 
		7.5 Corrosion Inhibitor. Producer shall use Innospec Specialty Chemicals DCI-11
		Corrosion Inhibitor at the supplier’s recommended treatment rate.
	 

	 
		 
	 

	 
		 7.6 Quarterly Testing Requirements. Producer shall participate in the Magellan Midstream
		Partners Pipeline Quarterly Recertification Program administered by Magellan
		Midstream Partners Laboratory Services (or its successor) at its sole cost and
		expense. Producer will report the results of the program to Cargill on a
		quarterly basis. 
	 

	 
		 
	 

	 
		 7.7 Customer Claims.
		If any customer makes a claim against Cargill as a result of Producer’s
		Ethanol failing to meet the Specifications, Producer shall indemnify Cargill
		against any 
	 

	 
		 
	 

	 
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		damages or losses that it incurs as a result
		of such claim; provided, that Producer shall not be required to indemnify
		Cargill for such claims to the extent (i) the Ethanol conformed in all respects
		with the Specifications at the Title Transfer Point; (ii) the railcar or truck
		used to transport the Ethanol from the Facility was in a clean and sanitary
		condition, compliant with all applicable laws and regulations and suitable for
		the loading and transportation of Ethanol; and (iii) the seals on the railcar
		or truck used to transport the Ethanol from the Facility were in good working
		order and were properly sealed prior to leaving the Facility. Producer’s
		liability for such claims shall not be subject to the limitations set forth in
		Section 8 of the Master Agreement.
	 

	 
		 
	 

	 
		8. QUANTITY. 
	 

	 
		 
	 

	 
		8.1 Purchase of Ethanol. Subject to the terms and conditions of this Agreement,
		Cargill shall purchase from Producer all of the Ethanol produced at the
		Facility. In the event that Producer increases the capacity of the Facility
		pursuant to the installation of new or additional equipment, upon reasonable
		notice to Cargill, such additional volume shall be added to this Agreement and
		purchased by Cargill pursuant to the terms of this Agreement. On the first
		Cargill Working Day of each month (commencing on the month during which the
		Projected Date of First Delivery is to occur) Producer shall notify Cargill of
		its scheduled production, determined by Producer in good faith on a monthly
		basis, for the upcoming three (3) month period (the amount scheduled for each
		month in such production schedule notice being called the “Scheduled Monthly Production”). Once the Scheduled Monthly Production has been
		established for a month, Producer may increase but may not reduce the Scheduled
		Monthly Production for such month in a subsequent production schedule notice
		unless the reduction will not cause or result in a breach by Cargill of sales
		commitments it has made with respect to the month or Cargill otherwise approves
		such reduction. Producer shall notify Cargill of anticipated production
		downtime or disruption in Ethanol availability at least three (3) months in
		advance of such outage. 
	 

	 
		 
	 

	 
		8.2 Date of First Delivery. Producer shall notify Cargill, in writing, at least
		thirty (30) days prior to the date it expects to make first delivery of Ethanol
		to Cargill (the “Projected Date of
		First Delivery”). Additionally,
		Producer shall provide a best estimate of production on a daily basis for the
		six (6) month period following the date of first delivery. For the avoidance of
		doubt, Cargill shall not be obligated to enter into sales agreements for
		Ethanol or arrange for any rail or truck freight until Producer has provided
		Cargill with written notice of the Projected Date of First Delivery.
	 

	 
		 
	 

	 
		8.3 Failure to Produce/Deliver. In the event Producer fails to produce Ethanol in
		accordance with the Scheduled Monthly Production for a month for reasons other
		than an event of Force Majeure (as defined in Section 3 of the Master
		Agreement) affecting Producer or a default by Cargill, and as a result Cargill
		is required to purchase ethanol from third parties to meet previous Ethanol
		sale commitments that are based upon the Scheduled Monthly Production for the
		month, Cargill may charge Producer, and Producer shall promptly pay to Cargill,
		an amount equal to the deficiency volume multiplied by the positive difference
		(if any) between the per gallon price of replacement ethanol and the price per
		gallon that Cargill would have paid to Producer for such Ethanol under this
		Agreement, plus Cargill’s commission on the deficiency volume, as set
		forth in Exhibit A or
		Exhibit B, as applicable. 
	 

	 
		 
	 

	 
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		8.4 Quantity Measurement. The quantity of Ethanol delivered to Cargill shall be
		established by outbound meter tickets obtained by Producer and expressed in net
		temperature-corrected gallons in accordance with standards commonly used within
		the industry in the United States of America. The meter tickets shall be
		obtained from meters which are certified as of the time of loading and which
		comply with all applicable laws, rules, and regulations. The outbound meter
		tickets shall be determinative in absence of manifest error (greater than 0.5%
		variation) of the quantity of Ethanol for which Cargill is obligated to pay. In
		the event of manifest error, the Parties will try to resolve such dispute on a
		commercial level. If the Parties cannot resolve the dispute in such manner, the
		Parties will resolve the dispute in accordance with Section 6 of the Master
		Agreement. At Cargill’s request, Producer shall provide Cargill with
		documentation of the Facility’s Ethanol Production.
	 

	 
		8.5 Cargill Force Majeure Event Indemnity. Producer agrees to indemnify and hold harmless
		Cargill, its Affiliates and their respective officers, directors, employees,
		agents, shareholders and representatives with respect to any claim by the
		intended purchaser of Producer’s Ethanol for a breach of Cargill’s
		delivery obligations arising in connection with Cargill’s exercise of its
		force majeure rights upon the occurrence of an event of Force Majeure affecting
		Producer, provided that
		Producer shall not be required to so indemnify if, and only if, Cargill (a)
		failed to issue it standard form sales contract to such intended purchaser
		containing the force majeure provisions described in Exhibit F hereto
		(as such force majeure provisions may be amended from time to time by Cargill
		with the consent of Producer, such consent not to be unreasonably withheld,
		delayed or conditioned); and (b) did not otherwise have a negotiated supply
		agreement with such intended purchaser containing force majeure provisions
		reasonably acceptable to Producer. At Cargill’s option, Producer shall be
		required at its expense to defend Cargill with counsel reasonably acceptable to
		Cargill in connection with any such third-party claim to the extent the
		indemnity contained in this Section
		8.5 applies. 
	 

	 
		 
	 

	 
		9. MARKETING POOL
		PROGRAM. 
	 

	 
		 
	 

	 
		9.1 Marketing Pool Program Ethanol. Cargill currently markets ethanol for third parties
		pursuant to an arrangement whereby ethanol produced by Cargill and such third
		parties are placed into a common marketing pool and all parties participating
		in the pool receive the same Net Price for ethanol (the “Marketing Pool Program”). Producer’s Ethanol shall be placed in the
		Marketing Pool Program unless Producer provides Cargill with notice that it has
		elected to not participate in the Marketing Pool Program, as further described
		in Section 9.2. Cargill shall use reasonable commercial efforts to
		keep Producer apprised of third party entrances in, and withdrawals from, the
		Marketing Pool Program.
	 

	 
		 
	 

	 
		9.2 Marketing Pool Opt Out. Producer may discontinue participation in the
		Marketing Pool Program by giving written notice to Cargill to that effect at
		least six (6) months prior to the beginning of the Contract Year
		(i.e., a twelve month period beginning on the Projected Date
		of First Delivery and each anniversary of such date); provided,
		however, to the extent that Cargill has made contractual
		commitments for the sale of Ethanol based upon Producer’s participation in
		the Marketing Pool Program, Producer shall continue to participate in the
		Marketing Pool Program for not less that eighteen (18) months after the date of
		delivery of its notice to discontinue participation to the extent necessary to
		fulfill Producer’s pro rata share of such contractual commitments made by
		Cargill to third parties. 
	 

	 
		 
	 

	 
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		10. MARKETING EFFICIENCIES. 
	 

	 
		 
	 

	 
		10.1 Standard of Care. Cargill agrees to market Producer’s Ethanol using
		the same standards it uses to market its own Ethanol production and the Ethanol
		production of third parties for whom Cargill provides ethanol marketing
		services to (a) maximize the Ethanol price and minimize freight and other costs
		relevant to Ethanol sales and (b) achieve the best available return to Producer
		(and where Producer has opted into the Marketing Pool Program, the other
		participants in the Marketing Pool Program, including Cargill in its capacity
		as an Ethanol producer), subject to relevant market conditions; provided,
		however, that Cargill shall not be obligated to hedge indexed
		sales of Ethanol for Producer. Producer acknowledges that Cargill will use its
		reasonable judgment in making decisions related to the quantity and price of
		Ethanol marketed under this Agreement, in light of varying freight and other
		costs, and the fact that Cargill may sell and market Ethanol on its own account
		and/or on the account of third parties into the same markets where Cargill
		sells Producer’s Ethanol. 
	 

	 
		 
	 

	 
		10.2 Conflict of Interest. In light of the inherent uncertainties associated with
		marketing ethanol in the relevant markets, Producer waives any claim of
		conflict of interest against Cargill for failure to use commercially reasonable
		efforts to maximize the Ethanol price, minimize freight and other costs
		relevant to Ethanol sales, or to achieve the best available return to Producer
		to the extent such claims relate to any such conflict of interest or alleged
		preference to third parties for whom Cargill provides ethanol marketing
		services; provided,
		however, that Producer does not waive its right to terminate
		this Agreement for any such conflict of interest that directly results in
		material quantifiable pecuniary loss to Producer. If Cargill disputes the
		existence or impact of the conflict of interest, Producer and Cargill shall
		follow the dispute resolution procedures set forth in Section 6 of the Master
		Agreement in order to determine whether Producer may terminate this Agreement,
		and Cargill and Producer shall continue to perform their obligations under this
		Agreement in good faith during the pendency of such dispute resolution
		proceedings. 
	 

	 
		 
	 

	 
		10.3 Purchase by Cargill. Cargill and Producer may, from time to time, mutually
		agree that Cargill will purchase certain quantities of Producer’s Ethanol
		for Cargill’s account by paying to Producer the current fair market value
		of such Ethanol as determined by the Parties, which value shall be deemed to be
		the “Delivered Price” (for purposes of Exhibit B) for
		such Ethanol. Cargill shall, with respect to such Ethanol, be relieved of the
		obligation imposed by Section
		10.1 to maximize the Ethanol price and
		achieve the best available return to Producer. 
	 

	 
		 
	 

	 
		11. TERM. The term of this Agreement is ten (10) years, commencing
		as of the Effective Date.
	 

	 
		 
	 

	 
		12. EVENTS OF DEFAULT. 
	 

	 
		12.1 Cargill Event of Default. The following shall constitute events of default on
		the part of Cargill (each, a “Cargill Event of Default”) under this Agreement: 
	 

	 
			
				
				   
				

			 	
				
				  a)
				

			 	
				
				  Cargill fails on three (3) separate
				  occasions within any twelve (12) month period to purchase Ethanol in accordance
				  with Section 1.1 under circumstances where such breach or failure is not
				  excused by this Agreement, including by a Force 
				

			 

 

	 
		 
	 

	 
		8
	 

	 
 
	 
		Majeure condition; provided,
		however, that any such breach or failure shall not constitute a
		triggering occurrence hereunder unless such breach or failure causes Producer
		to shut down or suspend operations at the Facility due to excess quantities of
		Ethanol at the Facility, and Producer has provided Cargill with written notice
		of each such breach or failure; 
	 

	 
			
				
				   
				

			 	
				
				  b)
				

			 	
				
				  Cargill fails to pay any amount that
				  is due to Producer under this Agreement that is not excused by this Agreement,
				  and (i) Producer provides written notice to Cargill of such failure, and (ii)
				  Cargill fails to pay to Producer such past-due amount (plus amounts payable
				  pursuant to Section
				  12.3(a)(i), if any) within seven (7)
				  days of Cargill’s receipt of such confirmation.
				

			 

 

	 
			
				
				   
				

			 	
				
				  c)
				

			 	
				
				  willful misconduct by Cargill in the
				  performance of its obligations hereunder and Producer provides Cargill with
				  written notice of such incident where (i) such willful misconduct has a
				  Material Adverse Effect on Producer or the Facility; and (ii) such willful
				  misconduct is done under the direction of or otherwise sanctioned by an officer
				  of Cargill within the Cargill Corn Milling North America Business Unit;
				  or
				

			 

 

	 
			
				
				   
				

			 	
				
				  d)
				

			 	
				
				  Cargill files a voluntary petition
				  in bankruptcy, has filed against it an involuntary petition in bankruptcy,
				  makes an assignment for the benefit of creditors, has a trustee or receiver
				  appointed for any or all of its assets, is insolvent or fails or is unable to
				  pay its debts generally when due, in each case where such petition, appointment
				  or insolvency is not dismissed, discharged or remedied, as applicable, within
				  sixty (60) days.
				

			 

 

	 
		12.2 Producer Event of Default. The following shall constitute events of default on
		the part of Producer (each, a “Producer Event of Default”) under this Agreement: 
	 

	 
			
				
				   
				

			 	
				
				  a)
				

			 	
				
				  Producer fails to pay any amount
				  that is due to Cargill under this Agreement that is not excused by this
				  Agreement, and (i) Cargill provides written notice to Producer of such failure,
				  and (ii) Producer fails to pay to Cargill such past-due amount (plus amounts
				  payable pursuant to Section
				  12.3(a)(i), if any) within seven (7)
				  days;
				

			 

 

	 
			
				
				   
				

			 	
				
				  b)
				

			 	
				
				  willful misconduct by Producer in
				  the performance of its obligations hereunder and Cargill provides Producer with
				  written notice of such incident where (i) such willful misconduct has a
				  Material Adverse Effect on Cargill; and (ii) such willful misconduct is done
				  under the direction of or otherwise sanctioned by an officer of Producer;
				  or
				

			 

 

	 
			
				
				   
				

			 	
				
				  c)
				

			 	
				
				  Producer files a voluntary petition
				  in bankruptcy, has filed against it an involuntary petition in bankruptcy,
				  makes an assignment for the benefit of creditors, has a trustee or receiver
				  appointed for any or all of its assets, is insolvent or fails or is unable to
				  pay its debts generally when due, in each case where such petition, appointment
				  or insolvency is not dismissed, discharged or remedied, as applicable, within
				  sixty (60) days. 
				

			 

 

	 
		 
	 

	 
		9
	 

	 
 
	 
		12.3 Remedies and Procedures.
	 

	 
		a) Remedies for Breach Not Constituting an Event of
		Default. In the event that either Party
		breaches or fails to perform any commitment or obligation contained herein,
		under circumstances where such breach or failure does not constitute a Cargill
		Event of Default or a Producer Event of Default (each, as the context requires,
		an “Event of
		Default”), and such breach or
		failure is not excused by this Agreement, including by a Force Majeure
		condition, the other Party (the “Non-Defaulting Party”) may exercise any remedy or right specified in
		the Master Agreement or this Agreement in connection with such breach or
		failure. In addition, and without limiting the foregoing:
	 

	 
		i) in the event either Party fails to pay
		any amounts due to the other Party when due, the Non-Defaulting Party shall be
		entitled to charge and receive interest accrued on the unpaid amount from the
		date it was due until the date actually paid at the Default Rate;
	 

	 
		ii) if a Party breaches or fails to perform
		in any material respect any of its commitments or agreements contained in this
		Agreement, the defaulting Party shall be liable to the Non-Defaulting Party for
		Damages arising out of or resulting from such breach as provided in Section 8
		of the Master Agreement (subject to the Non-Defaulting Party’s duty to
		mitigate its Damages); provided,
		however, in the event of a material breach by Cargill hereunder
		of its obligation to purchase or market Ethanol, the measure for Damages
		arising from such breach shall include the loss of revenues suffered by
		Producer as a result of such breach, so long as (A) the Damages payable under
		this proviso in connection with each such breach, on a per occurrence basis,
		exceed Ten Thousand Dollars ($10,000) and (B) such Damages payable exclude
		Damages to the extent arising out of breaches by third parties under the rail
		and truck transportation agreements referred to in Section 6.1. For
		the avoidance of doubt, the amount of revenues lost shall be calculated by
		reference to the average price of Ethanol from the Facility sold by Cargill to
		its customers for the 7-day period ending on the date of the breach; and

	 

	 
		iii) if a Party breaches or fails to perform
		in any material respect any of its commitments or agreements contained in any
		Principal Document, and such breach or failure is of a continuing nature, the
		Non-Defaulting Party may (A) request the defaulting Party, as a condition of
		continuing its performance under this Agreement, to provide adequate assurance
		of performance of the defaulting Party’s obligations under this Agreement;
		and/or (B) seek injunctive relief. 
	 

	 
		 
	 

	 
		b) Remedies for Events of Default. Upon the occurrence of an Event of Default that has
		not been waived by the Non-Defaulting Party, the Non-Defaulting Party shall
		have all of the following rights and remedies in addition to the rights and
		remedies specified in Section
		12.3(a) above, which may be exercised
		in such order or combination as such Non-Defaulting Party may determine: (i)
		terminate this Agreement, or (ii) subject to the limitations set forth in
		Section 8(c) of the Master Agreement (relating to consequential damages),
		pursue any other remedies available at law or in equity.
	 

	 
		 
	 

	 
		10
	 

	 
 
	 
		[Signature page follows]
	 

	 
		 
	 

	 
		11
	 

	 
 
	 
		IN WITNESS WHEREOF, each of the Parties
		hereto has caused this Ethanol Marketing Agreement to be executed by its
		respective duly authorized representative as of the day and year first above
		written.
	 

	 
		 
	 

	 
			CARGILL,
				INCORPORATED		BUFFALO LAKE ENERGY,
				LLC
	 

				
				  By:
				

			 	
				
				  /s/ Brian E. Silvey
				

			 	
				
				   
				

			 	 

				
				  By:
				

			 	
				
				  /s/ Scott H. Pearce
				

			 
	
				
				   
				

			 	
				
				

				
 	
				
				   
				

			 	
				
				   
				

			 	
				
				

				
 
	
				
				  Name:
				

			 	
				
				  Brian E. Silvey
				

			 	
				
				   
				

			 	
				
				  Name:
				

			 	
				
				  Scott H. Pearce
				

			 
	
				
				   
				

			 	
				
				

				
 	
				
				   
				

			 	
				
				   
				

			 	
				
				

				
 
	
				
				  Title:
				

			 	
				
				  Vice President
				

			 	
				
				   
				

			 	
				
				  Title:
				

			 	
				
				  Authorized
				  Representative
				

			 
	
				
				   
				

			 	
				
				

				
 	
				
				   
				

			 	
				
				   
				

			 	
				
				

				
 

 

	 
		 
	 

	 
		 
	 

	 
 
	 
		EXHIBIT A
	 

	 
		Pricing Formula – Marketing Pool
		Program Ethanol
	 

	 
		 
	 

	 
		The pricing terms for Cargill’s
		marketing of Producer’s Ethanol are as follows:
	 

	 
		 
	 

	 
		Net Price = Average Delivered Price less
		Average Accessorial Charges less Average Freight Costs
	 

	 
		 
	 

	 
		Gross Proceeds = Net Price multiplied by
		Ethanol Volume
	 

	 
		 
	 

	 
		Cargill Commission = 1% of Gross
		Proceeds
	 

	 
		 
	 

	 
		Payment to Producer = Gross Proceeds less
		Cargill Commission 
	 

	 
		 
	 

	 
		The Parties acknowledge that Cargill will
		pay Producer for its Ethanol within ten (10) Cargill Working Days from the date
		that Producer invoices Cargill for such Ethanol, despite the fact that the
		calculation of the Average Delivered Price, Average Accessorial Charges, and
		Average Freight Costs is performed by Cargill on a monthly basis. The Parties
		agree that, notwithstanding anything else in the Agreement to the contrary, the
		payment by Cargill to Producer of the invoice price within ten (10) Cargill
		Working Days is a provisional price. At the end of each month, Cargill will
		calculate the Average Delivered Price, Average Accessorial Charges, and Average
		Freight Costs in order to arrive at the final Marketing Pool Program price for
		such month. If the final Marketing Pool Program price for such month is greater
		than the provisional price paid by Cargill to Producer, Cargill will remit the
		difference to Producer. If the final Marketing Pool Program price for such
		month is less than the provisional price paid by Cargill to Producer, Producer
		will promptly remit the difference to Cargill, or Cargill will offset the total
		amount against other amounts due to Producer from Cargill. 
	 

	 
		 
	 

	 
		Definitions:
	 

	 
		 
	 

	 
		Accessorial Charges: Charges imposed by third parties for the movement and
		storage of Ethanol produced by Cargill, Producer, or Marketing Pool Program
		participants including, without limitation, taxes, storage charges, switching
		charges, and weighing charges. Demurrage charges and detention charges incurred
		on loaded railcars shall be for Cargill’s account, except to the extent
		such charges are caused by the act or omission of Producer, in which case such
		charges shall be for Producer’s account.
	 

	 
		 
	 

	 
		Average Accessorial
		Charges: Accessorial Charges in a given
		month divided by the number of gallons of Ethanol that Cargill shipped from all
		Marketing Pool Program participants (including, without limitation, Cargill and
		Producer) in such month as evidenced by Cargill’s bills of lading for such
		shipments. 
	 

	 
		 
	 

	 
		Average Delivered Price: Total sales dollars (based on delivered price)
		invoiced by Cargill for Ethanol in the Marketing Pool Program in a given month
		divided by the number of gallons of Ethanol sold from the Marketing Pool
		Program in such month. Delivered price and number of gallons will be determined
		from Cargill invoices to customers in such month.
	 

	 
		 
	 

	 
 
	 
		Average Freight Costs: Total out-of-pocket freight costs incurred by Cargill
		to transport Marketing Pool Program Ethanol shipped by Cargill in a given month
		divided by the total volume of Marketing Pool Program Ethanol shipped in such
		month.
	 

	 
		 
	 

	 
		Ethanol Volume: Volume of Ethanol shipped by Producer to Cargill in a
		month multiplied by the volume of Ethanol sold by Cargill in such month as
		evidenced by invoiced sales from Ethanol produced by Marketing Pool Program
		participants, divided by the volume of Ethanol shipped to Cargill by
		participants in the Marketing Pool Program in such month.
	 

	 
		 
	 

	 
		-14-
	 

	 
 
	 
		EXHIBIT B
	 

	 
		Pricing Formula – Non-Marketing Pool
		Program Ethanol
	 

	 
		The pricing terms for Cargill’s
		marketing of Producer’s Ethanol are as follows:
	 

	 
		Net Price = Delivered Price less Accessorial
		Charges less Freight Costs 
	 

	 
		Gross Proceeds = Net Price multiplied by
		Ethanol Volume
	 

	 
		Cargill Commission = 1% of Gross
		Proceeds
	 

	 
		Payment to Producer = Gross Proceeds less
		Cargill Commission
	 

	 
		The Parties acknowledge that Cargill will
		pay Producer for its Ethanol within ten (10) Cargill Working Days from the date
		that Producer invoices Cargill for such Ethanol, despite the fact that actual
		Accessorial Charges and Freight Costs may not be determined during such
		timeframe. Accordingly, Cargill will pay Producer based on the actual Delivered
		Price less estimated Accessorial Charges and Freight Costs. Once the actual
		Accessorial Charges and Freight Costs for each shipment are known, Cargill will
		true-up the difference with Producer based on the actual, as opposed to the
		estimated, amounts. If the actual Accessorial Charges and Freight Costs are
		less than the estimated Accessorial Charges and Freight Costs, Cargill will
		remit the difference to Producer. If the actual Accessorial Charges and Freight
		Costs are greater than the estimated Accessorial Charges and Freight Costs,
		Producer will remit the difference to Cargill, or Cargill will offset the total
		amount against other monies due to Producer from Cargill.
	 

	 
		Definitions:
	 

	 
		Accessorial Charges: Charges imposed by third parties for the movement and
		storage of Producer’s Ethanol, including without limitation taxes, storage
		charges, switching charges, and weighing charges. Demurrage charges and
		detention charges incurred on loaded railcars shall be for Cargill’s
		account, except to the extent such charges are caused by the act or omission of
		Producer, in which case such charges shall be for Producer’s
		account.
	 

	 
		Delivered Price: Sales dollars invoiced by Cargill for Producer’s
		Ethanol, as evidenced by Cargill’s invoices to its own customers.
	 

	 
		Freight Costs: Out-of-pocket freight costs incurred by Cargill to
		transport Producer’s Ethanol.
	 

	 
		Ethanol Volume: Volume of Ethanol shipped from Producer’s
		Facility to Cargill (other than Ethanol put in storage pursuant to Section
		5.3). 
	 

	 
		 
	 

	 
		 
	 

	 
		-15-
	 

	 
 
	 
		EXHIBIT C
	 

	 
		 
	 

	 
		Specifications
	 

	 
		 
	 

	 
			
				
				  Quality Parameter
				

			 	
				
				   
				

			 	
				
				  Specification
				

			 	
				
				   
				

			 	
				
				  ASTM Test Method
				

			 	
				
				   
				

			 	
				
				  Testing Frequency
				

			 
	
				
				

				
 	
				
				   
				

			 	
				
				

				
 	
				
				   
				

			 	
				
				

				
 	
				
				   
				

			 	
				
				

				
 
	
				
				  Methanol, volume %, maximum
				

			 	
				
				   
				

			 	
				
				  0.5
				

			 	
				
				   
				

			 	
				
				  D5501
				

			 	
				
				   
				

			 	
				
				  Every Lot
				

			 
	
				
				  Ethanol, volume %, minimum
				

			 	
				
				   
				

			 	
				
				  92.7
				

			 	
				
				   
				

			 	
				
				  D5501
				

			 	
				
				   
				

			 	
				
				  Every Lot
				

			 
	
				
				  Denaturant, vol %
				

			 	
				
				   
				

			 	
				
				  1.96-4.76
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				  Every Lot
				

			 
	
				
				  Water, weight %, maximum
				

			 	
				
				   
				

			 	
				
				  0.820
				

			 	
				
				   
				

			 	
				
				  E203
				

			 	
				
				   
				

			 	
				
				  Every Lot
				

			 
	
				
				  Acidity (as acetic acid), weight %,
				  maximum
				

			 	
				
				   
				

			 	
				
				  0.0070
				

			 	
				
				   
				

			 	
				
				  D1613
				

			 	
				
				   
				

			 	
				
				  Every Lot
				

			 
	
				
				  Inorganic Chloride contact, mass ppm
				  (mg/L), maximum
				

			 	
				
				   
				

			 	
				
				  40(32)
				

			 	
				
				   
				

			 	
				
				  D512, modified
				

			 	
				
				   
				

			 	
				
				  Quarterly
				

			 
	
				
				  Copper content, mg/kg (mg/L),
				  maximum
				

			 	
				
				   
				

			 	
				
				  0.10 (0.08)
				

			 	
				
				   
				

			 	
				
				  D1688
				

			 	
				
				   
				

			 	
				
				  Quarterly
				

			 
	
				
				  Solvent Washed Gum, mg/100mL,
				  maximum
				

			 	
				
				   
				

			 	
				
				  5.0
				

			 	
				
				   
				

			 	
				
				  D381
				

			 	
				
				   
				

			 	
				
				  Quarterly
				

			 
	
				
				  pHe
				

			 	
				
				   
				

			 	
				
				  6.5 - 9.0
				

			 	
				
				   
				

			 	
				
				  D6423
				

			 	
				
				   
				

			 	
				
				  Every Lot
				

			 
	
				
				  Specific Gravity
				

			 	
				
				   
				

			 	
				
				  0.78393-0.79718
				

			 	
				
				   
				

			 	
				
				  ASTM D4052
				

			 	
				
				   
				

			 	
				
				  Every Lot
				

			 
	
				
				  API Gravity
				

			 	
				
				   
				

			 	
				
				  46.0 – 49.0
				

			 	
				
				   
				

			 	
				
				  Converted from Specific
				  Gravity
				

			 	
				
				   
				

			 	
				
				  Every Lot
				

			 
	
				
				  Sulfur, ppm, max
				

			 	
				
				   
				

			 	
				
				  10
				

			 	
				
				   
				

			 	
				
				  D5453
				

			 	
				
				   
				

			 	
				
				  Every Lot
				

			 
	
				
				  Benzene, volume %, maximum
				

			 	
				
				   
				

			 	
				
				  0.06
				

			 	
				
				   
				

			 	
				
				  D5580 (test denaturant)
				

			 	
				
				   
				

			 	
				
				  Quarterly
				

			 
	
				
				  Olefins, volume %, maximum
				

			 	
				
				   
				

			 	
				
				  0.5
				

			 	
				
				   
				

			 	
				
				  D6550 (test denaturant)
				

			 	
				
				   
				

			 	
				
				  Quarterly
				

			 
	
				
				  Aromatic Hydrocarbons, volume %,
				  maximum
				

			 	
				
				   
				

			 	
				
				  1.7
				

			 	
				
				   
				

			 	
				
				  D5580 (test denaturant)
				

			 	
				
				   
				

			 	
				
				  Quarterly
				

			 
	
				
				  Appearance
				

			 	
				
				   
				

			 	
				
				  Visibly free of suspended or
				  precipitated contaminants (clear and bright)
				

			 	
				
				   
				

			 	
				
				  Visual Inspection
				

			 	
				
				   
				

			 	
				
				  Every Lot
				

			 

 

	 
		 
	 

	 
		BP requires that all Ethanol meet a minimum
		Saybolt color of 25. The appropriate test method is ASTM D156 Test Method for
		Saybolt Color of Petroleum Products. If Producer’s Ethanol is sold to BP,
		Producer shall demonstrate compliance with this specification prior to
		shipment.
	 

	 
		 
	 

	 
		All Ethanol produced by Producer shall
		contain a natural gasoline denaturant (or other denaturant source mutually
		agreed upon by the Parties) at a concentration of 1.96% volume minimum, 4.76%
		volume maximum.
	 

	 
		 
	 

	 
		All Ethanol produced by Producer shall
		contain a corrosion inhibitor added at a treat rate of up to 30 PTBE.
	 

	 
		 
	 

	 
		All Ethanol shall be visually free of
		sediment and suspended matter, and shall be clear and bright at the ambient
		temperature or 21°C (70°F), whichever is higher.
	 

	 
		 
	 

	 
		Benzene, Olefins and Aromatic Hydrocarbons
		concentrations are determined by testing the denaturant and multiplying the
		results by the percentage of denaturant added. 
	 

	 
		 
	 

	 
		-16-
	 

	 
 
	 
		Other requirements per (a) ASTM D4806,
		including without limitation the requirement that the Ethanol be free of any
		adulterant or contaminant that may render the Ethanol unacceptable for its
		commonly used applications, and (b) the Code of the State of California and
		regulations promulgated thereunder.
	 

	 
	 

	 
		 
	 

	 
		-17-
	 

	 
 
	 
		EXHIBIT D
	 

	 
		Testing Procedures
	 

	 
		 
	 

	 
		Cargill Testing
		Procedures: Every sample of Ethanol taken by Cargill for testing shall be split, with each portion tested at different laboratories or
		tested at the same laboratories by identical testing equipment by different
		personnel. The results of both tests shall be utilized in determining quality.
		In the event both tests are indicative of inferior quality according to the
		foregoing specifications, the provision of Section 7 of this Agreement may be
		invoked.
	 

	 
		 
	 

	 
		Quality Parameters Tested Every Batch Lot by
		Producer
	 

	 
		 
	 

	 
			
				
				  ASTM Test Number
				

			 	
				
				   
				

			 	
				
				  Test Method Name
				

			 
	
				
				

				
 	
				
				   
				

			 	
				
				

				
 
	
				
				  D1613
				

			 	
				
				   
				

			 	
				
				  Test Method for Acidity in Volatile
				  Solvents and Chemical Intermediates Used in Paint, Varnish, Lacquer and Related
				  Products 
				

			 
	
				
				  D4052 
				

			 	
				
				   
				

			 	
				
				  Test Method for Density and Relative
				  Density of Liquids by Digital Density Meter 
				

			 
	
				
				  D5501
				

			 	
				
				   
				

			 	
				
				  Test Method for the Determination of
				  Ethanol, Denatured Fuel Ethanol and Fuel Ethanol (Ed75-Ed85)
				

			 
	
				
				  D6423
				

			 	
				
				   
				

			 	
				
				  Test Method for the Determination of
				  pHe of Ethanol, Denatured Fuel Ethanol and Fuel Ethanol (Ed75-Ed85) 
				

			 
	
				
				  E203
				

			 	
				
				   
				

			 	
				
				  Test Method for Water Using
				  Volumetric Karl Fischer Titration 
				

			 

 

	 
		Quality Parameters Tested and Reported
		Quarterly by Producer
	 

	 
		 
	 

	 
			
				
				  ASTM Test Number
				

			 	
				
				   
				

			 	
				
				  Test Method Name
				

			 
	
				
				

				
 	
				
				   
				

			 	
				
				

				
 
	
				
				  D381
				

			 	
				
				   
				

			 	
				
				  Test Method for Gum Content in Fuels
				  by Jet Evaporation
				

			 
	
				
				  D512
				

			 	
				
				   
				

			 	
				
				  Test Methods for Chloride Ion in
				  Water (modified)
				

			 
	
				
				  D1688
				

			 	
				
				   
				

			 	
				
				  Test Methods for Copper in
				  Water
				

			 
	
				
				  D5453
				

			 	
				
				   
				

			 	
				
				  Test Method for Total Sulfur in
				  Light Hydrocarbons, Motor Fuels and Oils by Ultraviolet Fluorescence
				

			 

 

	 
		 
	 

	 
		 
	 

	 
		-18-
	 

	 
 
	 
		EXHIBIT E
	 

	 
		 
	 

	 
		Natural Gasoline Denaturant
		Specifications
	 

	 
		 
	 

	 
			
				
				  Parameter
				

			 	
				
				   
				

			 	
				
				  Specification
				

			 	
				
				   
				

			 	
				
				  Test Method
				

			 
	
				
				

				
 	
				
				   
				

			 	
				
				

				
 	
				
				   
				

			 	
				
				

				
 
	
				
				  RVP
				

			 	
				
				   
				

			 	
				
				  less than 14.0
				

			 	
				
				   
				

			 	
				
				  ASTM D323
				

			 
	
				
				  Total Sulfur
				

			 	
				
				   
				

			 	
				
				  Less than 50.0 ppm
				

			 	
				
				   
				

			 	
				
				  ASTM D5453
				

			 
	
				
				  Benzene 
				

			 	
				
				   
				

			 	
				
				  1.1 % vol max
				

			 	
				
				   
				

			 	
				
				  ASTM D5580
				

			 
	
				
				  Total Aromatics
				

			 	
				
				   
				

			 	
				
				  35 % vol max (including
				  benzene)
				

			 	
				
				   
				

			 	
				
				  ASTM D5580
				

			 
	
				
				  Olefins
				

			 	
				
				   
				

			 	
				
				  10 % vol max
				

			 	
				
				   
				

			 	
				
				  ASTM D6550
				

			 
	
				
				  Distillation End Point
				

			 	
				
				   
				

			 	
				
				  437oF (225 C) max
				

			 	
				
				   
				

			 	
				
				  ASTM D86
				

			 
	
				
				  Additives
				

			 	
				
				   
				

			 	
				
				  None allowed
				

			 	
				
				   
				

			 	
				
				   
				

			 

 

	 
		 
	 

	 
		The above specifications parameters must be
		tested and reported on a Certificate of Analysis for each lot of product
		received and a copy must accompany each load. All rail cars must be sealed to
		ensure product quality. The Certification of Analysis results for natural
		gasoline denaturant shall be used to calculate benzene, aromatics and olefins
		content in the finished fuel grade ethanol for reporting on Certificates of
		Analysis for California delivery.
	 

	 
		 
	 

	 
		-19-
	 

	 
 
	 
		EXHIBIT F
	 

	 
		 
	 

	 
		Cargill Sales Contract Force Majeure
		Provision
	 

	 
		Neither seller nor buyer shall be deemed in
		default of any terms or conditions of this contract for any delay in
		performance or for nonperformance if the delay or nonperformance is caused by
		(a) compliance with or changes in applicable law, bad weather, war, fire, civil
		commotion, acts of terrorism, riots, strikes, lockouts, labor disputes, acts of
		God, electrical shortage, or releases of hazardous materials, (b) the
		disruption, breakdown or unavailability of production, transportation or
		storage facilities, any machinery or equipment or other unusual or
		extraordinary breakdowns or the failure to obtain production, transportation or
		storage on reasonable terms, (c) the failure by any party with whom seller has
		contracted for the purchase of ethanol, or (d) any other cause, whether or not
		of the same class or kind described in (a) through (c) hereof, beyond the
		reasonable control of such party (each, a “Force Majeure Event”). In
		the event of a delay in performance or nonperformance, the delaying or
		non-performing party shall immediately notify the other party in writing
		specifying the cause of delay or nonperformance and the estimated time of
		performance.
	 

	 
		If a Force Majeure Event occurs, then the
		delaying or non-performing party, without liability for failure to comply with
		the terms of this contract, may discontinue or curtail the amount of ethanol
		which it tenders or accepts; provided that delaying or non-performing party
		shall immediately give notice of that fact to the other party and shall
		likewise give a second notice upon elimination or cessation of the Force
		Majeure Event.
	 

	 
		In the event that delay in performance or a
		nonperformance due to a Force Majeure Event continues or will continue for more
		than fifteen (15) consecutive days, the other party shall have the right to
		terminate this contract upon ten (10) days’ written notice to the delaying
		or non-performing party. If, because of a Force Majeure Event, there is a
		shortage of seller’s supply of ethanol sold hereunder such that seller is
		unable to meet its requirements for its own use and for the sale to customers
		of all kinds (including buyer), seller may allocate its supply in good faith
		according to its discretion. Under no circumstance shall seller be required to
		acquire ethanol to replace supplies that are unavailable due to a Force Majeure
		Event, and should seller acquire additional ethanol, seller shall not be
		required to allocate any such ethanol to buyer.
	 

	 
		-20-Exhibit 10.6
	 

	 
		EXECUTION COPY
	 

	 
		ETHANOL MARKETING AGREEMENT 
	 

	 
		THIS ETHANOL MARKETING AGREEMENT (the
		“Agreement”) is made and entered into as of the
		25th day of September, 2006 (the “Effective Date”), by and between CARGILL, INCORPORATED
		(“Cargill”) and Pioneer Trail Energy, LLC
		(“Producer”), collectively referred to hereinafter as
		“Parties” or individually as a “Party”.
		
	 

	 
		RECITALS
	 

	 
		WHEREAS, Cargill markets and distributes
		Ethanol (as defined below); and
	 

	 
		WHEREAS, Producer will produce Ethanol upon
		construction and start-up of a commercial facility at Wood River, Nebraska that
		will produce denatured fuel-grade ethanol (the “Facility”),
		which Facility is anticipated to produce approximately 115 million net gallons
		per year; and 
	 

	 
		WHEREAS, Cargill desires to market and
		distribute Producer’s Ethanol; and
	 

	 
		WHEREAS, Cargill and Producer have executed
		that certain Master Agreement of even date herewith (the “Master Agreement”); and
	 

	 
		NOW, THEREFORE, in consideration of the
		foregoing, the mutual promises herein contained and other good and valuable
		consideration, the receipt and sufficiency of which is hereby acknowledged, the
		Parties agree as follows.
	 

	 
		AGREEMENT
	 

	 
		1. MARKETING. 
	 

	 
		1.1 Exclusivity.
		Producer hereby agrees to sell to Cargill, and Cargill agrees to purchase and
		market, 100% of Producer’s production of denatured fuel-grade ethanol
		(“Ethanol”) produced at the Facility, including any expansion
		or increase in capacity at the Facility. Producer agrees that Cargill will be
		the exclusive marketer of Producer’s Ethanol and that Producer will not
		market any Ethanol during the term of this Agreement. Notwithstanding any other
		provision of this Agreement, in the event Cargill delivers to Producer written
		notice of a Force Majeure as provided in Section 3(b) of the Master Agreement,
		Producer may, upon delivery of written notice to Cargill but subject to the
		terms of the Confidentiality Agreement, market, either directly or indirectly,
		the Ethanol produced or stored at the Facility during the expected duration of
		the Force Majeure, as determined in consultation with Cargill. 
	 

	 
		1.2 Marketing Objectives. Cargill and Producer shall consult regularly with
		respect to Cargill’s marketing efforts and strategies for Producer’s
		Ethanol purchased by Cargill. Once each quarter during the term of this
		Agreement, Cargill shall provide to Producer for its review and comment a
		Marketing Plan (the “Marketing
		Plan”). The Marketing Plan shall
		be f.o.b. market-driven, detailed to terminal and sales book and position to
		maintain (i.e., index versus fixed, or forward). The Marketing Plan shall not
		be binding on either Party, and Producer shall have the right to review and
		discuss the Marketing Plan with Cargill. Once each week during the term of this
		Agreement, Cargill shall provide Producer with a report (in a form to be agreed
		upon by the Parties
	 

	 
		 
	 

	 
 

	 
		not less than thirty (30) days prior to the
		Projected Date of First Delivery) that shall include fixed price, index price,
		total sales, and storage information relating to (a) Ethanol in the Marketing
		Pool Program (as described in Section
		9), if Producer has elected to
		participate in the Marketing Pool Program; or (b) Producer’s Ethanol, if
		Producer has elected not to participate in the Marketing Pool Program. Producer
		intends to use this weekly report to update its ethanol position sheet
		(“EPS”) and as a basis for potentially entering into
		hedging transactions with third parties. Producer shall provide its EPS to
		Cargill, and Cargill shall use the EPS as a source of sales guidance for
		selling up to a given quantity of Ethanol at certain price intervals for a
		specified delivery period. Producer agrees that it will not share any
		competitively sensitive information provided by Cargill (including without
		limitation information related to Ethanol prices, marketing plans, and ongoing
		or proposed customer negotiations) with Producer’s Affiliates, if any,
		which compete with Cargill for sales of ethanol. The EPS shall not be binding
		on either Party.
	 

	 
		1.3 Final Authority; Long Term Sales
		Agreements. Notwithstanding anything to
		the contrary herein but without limiting the obligations of Cargill hereunder,
		Cargill shall have the authority to make final determinations with respect to
		all marketing and sales decisions and strategies, and Producer agrees to accept
		such determinations; provided,
		however, that Producer’s consent (not to be unreasonably
		withheld or delayed) shall be required prior to Cargill entering into any
		long-term sales agreement for Producer’s Ethanol. For purposes this
		Article, a “long-term sales agreement” shall be a sales agreement for
		Producer’s Ethanol with a term in excess of twelve calendar months.

	 

	 
		 1.4 Agency Sales. In
		the event Cargill proposes to market Producer’s Ethanol to a third party
		pursuant to a long-term sales agreement, Cargill shall enter into a contract
		for the sale of such Ethanol to such third party as agent for Producer pursuant
		to which Cargill shall assume the credit risk under such third party contract
		and bear all sales, marketing, logistic services/management costs and
		collection costs after the Ethanol produced at the Facility passes across the
		Title Transfer Point.
	 

	 
		2. MASTER AGREEMENT. The terms and conditions of the Master Agreement are
		hereby incorporated herein by reference. To the extent any provision of the
		Master Agreement conflicts with a provision contained herein, the provision
		contained herein will control. Terms capitalized but not defined in this
		Agreement shall have the meanings ascribed to them by the Master Agreement.
		
	 

	 
		3. PRICE AND COMMISSION. 
	 

	 
		3.1 Marketing Pool Program Price and
		Commission. For Ethanol marketed
		pursuant to the Marketing Pool Program, Cargill shall pay Producer for its
		Ethanol in accordance with the terms set forth in Exhibit A.
		Producer shall pay Cargill a commission for its Ethanol marketing as provided
		in Exhibit A. Cargill shall deduct this commission as provided in
		Exhibit A. 
	 

	 
		3.2 Non-Marketing Pool Program Price and
		Commission. For Ethanol not marketed
		pursuant to the Marketing Pool Program, Cargill shall pay Producer for its
		Ethanol in accordance with the terms set forth in Exhibit B.
		Producer shall pay Cargill a commission for its Ethanol marketing as calculated
		in Exhibit B. Cargill shall deduct this commission as provided in
		Exhibit B.
	 

	 
		 
	 

	 
		2
	 

	 
 

	 
		3.3 Minimum Annual Commission. In the event the Ethanol production at the Facility
		does not equal 82.5 million gallons per Contract Year (i.e., a twelve
		month period beginning on the Projected Date of First Delivery and each
		anniversary of such date), Producer will, promptly upon Cargill’s demand,
		pay to Cargill an amount equal to the deficiency volume in such Contract Year
		(i.e., 82.5 million gallons less the number of gallons actually produced during
		such Contract Year and provided to Cargill for removal), multiplied by
		Cargill’s average selling price for Producer’s Ethanol during such
		Contract Year, multiplied by 1%. 
	 

	 
		3.4 Commission Adjustment. On the fifth (5th) anniversary of the
		Effective Date of this Agreement, upon the written request of either Party, the
		Parties shall negotiate in good faith an adjustment to the commission to take
		into account changes in market conditions, operating conditions or costs,
		including overhead costs, inflation or other factors; provided,
		however, that in the event the Parties are unable to agree to
		any such adjustments within thirty (30) days following commencement of such
		negotiations, no adjustment to the commission will be made.
	 

	 
		4. PAYMENT AND STORAGE. 
	 

	 
		4.1 Payment Procedures. Producer shall invoice Cargill for the Ethanol Volume
		shipped to Cargill at the Title Transfer Point within one Cargill Working Day
		of such shipment. Cargill shall pay Producer for Ethanol invoiced by Producer
		to Cargill, in accordance with the formula set forth in Exhibit A or
		Exhibit B, depending upon which formula is applicable, not later
		than ten (10) Cargill Working Days from the date Producer invoiced Cargill.
		“Cargill Working
		Day” means Monday, Tuesday,
		Wednesday, Thursday or Friday except for Cargill Holidays.
		“Cargill Holidays” are New Years Day, Presidents Day, Good Friday,
		Memorial Day, July 4th, Labor Day, Thanksgiving Day, the day after
		Thanksgiving Day, Christmas Eve Day and Christmas Day (or, with respect to
		Christmas, the Cargill Holidays may differ from actual Christmas Eve Day and
		Christmas Day if such days fall on a weekend). 
	 

	 
		4.2 Storage Calculation. Producer acknowledges that Cargill may place its
		Ethanol in storage rather than selling it to customers due to market
		conditions. As a result, Cargill may not pay Producer in a given month for all
		of the Ethanol that Producer delivers to Cargill in such month. If Cargill
		places any Ethanol from participants in the Marketing Pool Program into storage
		in a given month (including, without limitation, Producer’s Ethanol
		production in such month pursuant to Producer’s election to participate in
		the Marketing Pool Program), a pro-rata share of Producer’s Ethanol will
		be considered to be placed in storage for purposes of calculating
		Cargill’s payment to Producer for such month. For example, assume that (a)
		participants in the Marketing Pool Program deliver 10 million gallons of
		Ethanol to Cargill in a month, (b) Cargill places 2 million gallons of such
		Ethanol into storage, and (c) Producer delivered 1 million gallons of Ethanol
		to Cargill in such month. Cargill would pay Producer for 800,000 gallons of
		Ethanol in such month and Cargill would pay Producer for the remaining 200,000
		at a later date when Cargill invoiced such Ethanol to its customers. 
	 

	 
		4.3 Storage Approval Rights. Notwithstanding the foregoing, if, following
		consultation with Cargill in accordance with Section 1.2,
		Producer desires that the Ethanol be sold to customers rather than placed in
		storage, (a) Cargill, at its option, shall either (x) sell such Ethanol to
		its
	 

	 
		 
	 

	 
		3
	 

	 
 

	 
		customers rather than placing it in storage,
		or (y) place such Ethanol in storage and pay to Producer the current fair
		market value of such Ethanol as determined by the Parties, which value shall be
		deemed to be the “Delivered Price” (for purposes of Exhibit B) for
		such Ethanol; and (b) Cargill shall, with respect to such Ethanol, be relieved
		of the obligation imposed by Section
		10.1 to maximize the Ethanol price and
		achieve the best available return to Producer. If Producer consents to such
		storage, then the cost of transportation to and from storage and the cost of
		maintaining such outside storage shall be considered Accessorial Charges and
		Producer shall be responsible for reimbursing Cargill for such Accessorial
		Charges in accordance with Section
		5. 
	 

	 
		5. COSTS, TITLE AND RISK OF LOSS.
		Except as otherwise provided in this
		Agreement, Cargill will bear all sales, marketing, logistics
		services/management costs and collection costs after the Ethanol produced at
		the Facility passes across the inlet flange into railcars or tank trucks at the
		Facility (“Title Transfer
		Point”). Title and risk of loss to
		the Ethanol shall transfer from Producer to Cargill at the Title Transfer
		Point. Until such time, Producer shall be deemed to be in control of and in
		possession of and shall have title to and risk in the Ethanol. Cargill shall
		also assume responsibility for payment of Accessorial Charges (as defined in
		Exhibit A or Exhibit
		B, depending on which pricing formula
		is applicable) to third parties; provided,
		however, that Producer agrees that, except as specified in the
		next succeeding sentence, Cargill shall deduct and setoff the Accessorial
		Charges from and against payments due to Producer by Cargill. In the event any
		specific Accessorial Charge (as evidenced in writing) exceeds $150,000, Cargill
		may demand, in writing, that Producer reimburse Cargill for such Accessorial
		Charge, in which case Producer shall reimburse Cargill as aforesaid within two
		(2) Cargill Working Days of receipt of Cargill’s demand. 
	 

	 
		6. LOGISTICS AND TRANSPORTATION; FACILITY
		STORAGE. 
	 

	 
		6.1 Logistics and Transportation. Cargill shall perform certain logistics functions for
		Producer relating to its Ethanol, including the arranging of rail and truck
		freight, bills of lading, and scheduling pick-up appointments, provided that
		Producer shall be a party to, or a third party beneficiary of, each rail or
		truck transportation agreement. Transportation by truck may be provided at
		Cargill’s discretion. Cargill shall determine the method of transporting
		the Ethanol to third parties. Notwithstanding anything to the contrary herein,
		Producer shall be solely responsible for any damage to any trucks, railcars, or
		equipment caused by its acts or omissions. Further, Producer agrees that it
		shall be solely responsible for furnishing a minimum of 275 tank railcars to
		service the Facility and transport Ethanol via rail to third parties, including
		all costs and expenses incident thereto. Producer shall use the following
		product description for Department of Transportation Hazardous Materials
		shipments: “Alcohols, n.o.s., (Ethanol, gasoline) 3, UN1987, PGII”.
		Producer shall provide such information on each bill of lading. Each bill of
		lading will also state that the Ethanol contains an approved corrosion
		inhibitor. Producer shall maintain the truck and railcar loading facilities in
		safe operating condition in accordance with normal industry standards and will
		visually inspect all trucks and railcars to ensure: (a) their cleanliness so as
		to avoid adulteration and contamination; (b) that such trucks and railcars are
		properly sealed and contain all necessary safety devices and placards; and (c)
		that such trucks and railcars are in a condition suitable for loading and
		transporting the Ethanol under applicable law.
	 

	 
		6.2 Facility Storage. Producer shall at all times provide storage at the
		Facility for Ethanol, in an amount not less than 3 million gallons at any one
		time, at no cost to Cargill. Cargill
	 

	 
		 
	 

	 
		4
	 

	 
 

	 
		shall schedule for removal by truck or
		railcar the actual quantity of Ethanol produced by Producer less the amount of
		Ethanol that Cargill requests Producer to store at the Facility. Due to limited
		storage at the Facility, and subject to the terms and conditions of the railcar
		exchange agreement to be entered into between the Parties, Cargill shall use
		commercially reasonable efforts to arrange transportation and deliveries of
		Ethanol so that excess inventories do not limit Ethanol production at the
		Facility.
	 

	 
		7. QUALITY. 
	 

	 
		7.1 Ethanol Specifications. Producer covenants that at all times during the term
		of this Agreement it shall produce Ethanol that meets the specifications
		(“Specifications”) set forth in Exhibit C, as
		amended by Cargill from time to time based upon market requirements and upon
		reasonable notice to Producer. Cargill shall have the right (but not the
		obligation) to test each shipment of Ethanol to ascertain that the
		Specifications are being met under the testing procedures set forth in
		Exhibit D. Prior to the shipment of Ethanol to Cargill, Producer
		shall fax or send by e-mail transmission a certificate of analysis to Cargill
		for each shipment of Ethanol to a designated Cargill employee. 
	 

	 
		7.2 Settlement
		of Specification Claims. In the event
		the Ethanol does not meet the Specifications when delivered to the Title
		Transfer Point, Cargill may, in its sole discretion, (a) reject such Ethanol
		and require Producer to promptly replace such non-conforming Ethanol with
		Ethanol that complies with the Specifications; or (b) accept the Ethanol for
		marketing and adjust the price based on market demand, to reflect the inferior
		quality. If Cargill rejects any non-conforming Ethanol, Cargill will use
		commercially reasonable efforts to assist Producer in identifying a use or
		market for the non-conforming Ethanol, which may include sale of the
		non-conforming Ethanol in industrial markets or reprocessing in the
		Facility.
	 

	 
		7.3 Samples, Preservation, and Claims. Producer shall take original, sealed and numbered
		samples of all Ethanol prior to loading at the Title Transfer Point. Cargill
		shall be entitled to witness the taking of samples. Producer will label these
		samples to indicate date of delivery and the truck or railcar number. Producer
		will retain these samples for six (6) months or such longer period as may be
		required by applicable law, and shall send one sample to Cargill immediately
		upon Cargill’s request. 
	 

	 
		7.4 Denaturants.
		Producer shall use natural gasoline denaturant (or other denaturant source
		mutually agreed upon by the Parties) that meets the specifications set forth in
		Exhibit E.
	 

	 
		7.5 Corrosion Inhibitor. Producer shall use Innospec Specialty Chemicals DCI-11
		Corrosion Inhibitor at the supplier’s recommended treatment rate.
	 

	 
		7.6 Quarterly Testing Requirements. Producer shall participate in the Magellan Midstream
		Partners Pipeline Quarterly Recertification Program administered by Magellan
		Midstream Partners Laboratory Services (or its successor) at its sole cost and
		expense. Producer will report the results of the program to Cargill on a
		quarterly basis. 
	 

	 
		7.7 Customer Claims.
		If any customer makes a claim against Cargill as a result of Producer’s
		Ethanol failing to meet the Specifications, Producer shall indemnify Cargill
		against any
	 

	 
		 
	 

	 
		5
	 

	 
 

	 
		damages or losses that it incurs as a result
		of such claim; provided, that Producer shall not be required to indemnify
		Cargill for such claims to the extent (i) the Ethanol conformed in all respects
		with the Specifications at the Title Transfer Point; (ii) the railcar or truck
		used to transport the Ethanol from the Facility was in a clean and sanitary
		condition, compliant with all applicable laws and regulations and suitable for
		the loading and transportation of Ethanol; and (iii) the seals on the railcar
		or truck used to transport the Ethanol from the Facility were in good working
		order and were properly sealed prior to leaving the Facility. Producer’s
		liability for such claims shall not be subject to the limitations set forth in
		Section 8 of the Master Agreement.
	 

	 
		8. QUANTITY. 
	 

	 
		8.1 Purchase of Ethanol. Subject to the terms and conditions of this Agreement,
		Cargill shall purchase from Producer all of the Ethanol produced at the
		Facility. In the event that Producer increases the capacity of the Facility
		pursuant to the installation of new or additional equipment, upon reasonable
		notice to Cargill, such additional volume shall be added to this Agreement and
		purchased by Cargill pursuant to the terms of this Agreement. On the first
		Cargill Working Day of each month (commencing on the month during which the
		Projected Date of First Delivery is to occur) Producer shall notify Cargill of
		its scheduled production, determined by Producer in good faith on a monthly
		basis, for the upcoming three (3) month period (the amount scheduled for each
		month in such production schedule notice being called the “Scheduled Monthly Production”). Once the Scheduled Monthly Production has been
		established for a month, Producer may increase but may not reduce the Scheduled
		Monthly Production for such month in a subsequent production schedule notice
		unless the reduction will not cause or result in a breach by Cargill of sales
		commitments it has made with respect to the month or Cargill otherwise approves
		such reduction. Producer shall notify Cargill of anticipated production
		downtime or disruption in Ethanol availability at least three (3) months in
		advance of such outage. 
	 

	 
		8.2 Date of First Delivery. Producer shall notify Cargill, in writing, at least
		thirty (30) days prior to the date it expects to make first delivery of Ethanol
		to Cargill (the “Projected Date of
		First Delivery”). Additionally,
		Producer shall provide a best estimate of production on a daily basis for the
		six (6) month period following the date of first delivery. For the avoidance of
		doubt, Cargill shall not be obligated to enter into sales agreements for
		Ethanol or arrange for any rail or truck freight until Producer has provided
		Cargill with written notice of the Projected Date of First Delivery.
	 

	 
		8.3 Failure to Produce/Deliver. In the event Producer fails to produce Ethanol in
		accordance with the Scheduled Monthly Production for a month for reasons other
		than an event of Force Majeure (as defined in Section 3 of the Master
		Agreement) affecting Producer or a default by Cargill, and as a result Cargill
		is required to purchase ethanol from third parties to meet previous Ethanol
		sale commitments that are based upon the Scheduled Monthly Production for the
		month, Cargill may charge Producer, and Producer shall promptly pay to Cargill,
		an amount equal to the deficiency volume multiplied by the positive difference
		(if any) between the per gallon price of replacement ethanol and the price per
		gallon that Cargill would have paid to Producer for such Ethanol under this
		Agreement, plus Cargill’s commission on the deficiency volume, as set
		forth in Exhibit A or
		Exhibit B, as applicable. 
	 

	 
		 
	 

	 
		6
	 

	 
 

	 
		8.4 Quantity Measurement. The quantity of Ethanol delivered to Cargill shall be
		established by outbound meter tickets obtained by Producer and expressed in net
		temperature-corrected gallons in accordance with standards commonly used within
		the industry in the United States of America. The meter tickets shall be
		obtained from meters which are certified as of the time of loading and which
		comply with all applicable laws, rules, and regulations. The outbound meter
		tickets shall be determinative in absence of manifest error (greater than 0.5%
		variation) of the quantity of Ethanol for which Cargill is obligated to pay. In
		the event of manifest error, the Parties will try to resolve such dispute on a
		commercial level. If the Parties cannot resolve the dispute in such manner, the
		Parties will resolve the dispute in accordance with Section 6 of the Master
		Agreement. At Cargill’s request, Producer shall provide Cargill with
		documentation of the Facility’s Ethanol Production.
	 

	 
		8.5 Cargill Force Majeure Event Indemnity. Producer agrees to indemnify and hold harmless
		Cargill, its Affiliates and their respective officers, directors, employees,
		agents, shareholders and representatives with respect to any claim by the
		intended purchaser of Producer’s Ethanol for a breach of Cargill’s
		delivery obligations arising in connection with Cargill’s exercise of its
		force majeure rights upon the occurrence of an event of Force Majeure affecting
		Producer, provided that
		Producer shall not be required to so indemnify if, and only if, Cargill (a)
		failed to issue it standard form sales contract to such intended purchaser
		containing the force majeure provisions described in Exhibit F hereto
		(as such force majeure provisions may be amended from time to time by Cargill
		with the consent of Producer, such consent not to be unreasonably withheld,
		delayed or conditioned); and (b) did not otherwise have a negotiated supply
		agreement with such intended purchaser containing force majeure provisions
		reasonably acceptable to Producer. At Cargill’s option, Producer shall be
		required at its expense to defend Cargill with counsel reasonably acceptable to
		Cargill in connection with any such third-party claim to the extent the
		indemnity contained in this Section
		8.5 applies. 
	 

	 
		9. MARKETING POOL PROGRAM. 
	 

	 
		9.1 Marketing Pool Program Ethanol. Cargill currently markets ethanol for third parties
		pursuant to an arrangement whereby ethanol produced by Cargill and such third
		parties are placed into a common marketing pool and all parties participating
		in the pool receive the same Net Price for ethanol (the “Marketing Pool Program”). Producer’s Ethanol shall be placed in the
		Marketing Pool Program unless Producer provides Cargill with notice that it has
		elected to not participate in the Marketing Pool Program, as further described
		in Section 9.2. Cargill shall use reasonable commercial efforts to
		keep Producer apprised of third party entrances in, and withdrawals from, the
		Marketing Pool Program.
	 

	 
		9.2 Marketing Pool Opt Out. Producer may discontinue participation in the
		Marketing Pool Program by giving written notice to Cargill to that effect at
		least six (6) months prior to the beginning of the Contract Year
		(i.e., a twelve month period beginning on the Projected Date
		of First Delivery and each anniversary of such date); provided,
		however, to the extent that Cargill has made contractual
		commitments for the sale of Ethanol based upon Producer’s participation in
		the Marketing Pool Program, Producer shall continue to participate in the
		Marketing Pool Program for not less that eighteen (18) months after the date of
		delivery of its notice to discontinue participation to the extent necessary to
		fulfill Producer’s pro rata share of such contractual commitments made by
		Cargill to third parties. 
	 

	 
		 
	 

	 
		7
	 

	 
 

	 
		10. MARKETING EFFICIENCIES. 
	 

	 
		10.1 Standard of Care. Cargill agrees to market Producer’s Ethanol using
		the same standards it uses to market its own Ethanol production and the Ethanol
		production of third parties for whom Cargill provides ethanol marketing
		services to (a) maximize the Ethanol price and minimize freight and other costs
		relevant to Ethanol sales and (b) achieve the best available return to Producer
		(and where Producer has opted into the Marketing Pool Program, the other
		participants in the Marketing Pool Program, including Cargill in its capacity
		as an Ethanol producer), subject to relevant market conditions; provided,
		however, that Cargill shall not be obligated to hedge indexed
		sales of Ethanol for Producer. Producer acknowledges that Cargill will use its
		reasonable judgment in making decisions related to the quantity and price of
		Ethanol marketed under this Agreement, in light of varying freight and other
		costs, and the fact that Cargill may sell and market Ethanol on its own account
		and/or on the account of third parties into the same markets where Cargill
		sells Producer’s Ethanol. 
	 

	 
		10.2 Conflict of Interest. In light of the inherent uncertainties associated with
		marketing ethanol in the relevant markets, Producer waives any claim of
		conflict of interest against Cargill for failure to use commercially reasonable
		efforts to maximize the Ethanol price, minimize freight and other costs
		relevant to Ethanol sales, or to achieve the best available return to Producer
		to the extent such claims relate to any such conflict of interest or alleged
		preference to third parties for whom Cargill provides ethanol marketing
		services; provided,
		however, that Producer does not waive its right to terminate
		this Agreement for any such conflict of interest that directly results in
		material quantifiable pecuniary loss to Producer. If Cargill disputes the
		existence or impact of the conflict of interest, Producer and Cargill shall
		follow the dispute resolution procedures set forth in Section 6 of the Master
		Agreement in order to determine whether Producer may terminate this Agreement,
		and Cargill and Producer shall continue to perform their obligations under this
		Agreement in good faith during the pendency of such dispute resolution
		proceedings. 
	 

	 
		10.3 Purchase by Cargill. Cargill and Producer may, from time to time, mutually
		agree that Cargill will purchase certain quantities of Producer’s Ethanol
		for Cargill’s account by paying to Producer the current fair market value
		of such Ethanol as determined by the Parties, which value shall be deemed to be
		the “Delivered Price” (for purposes of Exhibit B) for
		such Ethanol. Cargill shall, with respect to such Ethanol, be relieved of the
		obligation imposed by Section
		10.1 to maximize the Ethanol price and
		achieve the best available return to Producer. 
	 

	 
		11. TERM. The term of this Agreement is ten (10) years, commencing
		as of the Effective Date.
	 

	 
		12. EVENTS OF DEFAULT. 
	 

	 
		12.1 Cargill Event of Default. The following shall constitute events of default on
		the part of Cargill (each, a “Cargill Event of Default”) under this Agreement: 
	 

	 
			
				
				   
				

			 	
				
				  a)
				

			 	
				
				  Cargill fails on three (3) separate
				  occasions within any twelve (12) month period to purchase Ethanol in accordance
				  with Section 1.1 under circumstances where such breach or failure is not
				  excused by this Agreement, including by a Force 
				

			 

 

	 
		 
	 

	 
		8
	 

	 
 

	 
		Majeure condition; provided,
		however, that any such breach or failure shall not constitute a
		triggering occurrence hereunder unless such breach or failure causes Producer
		to shut down or suspend operations at the Facility due to excess quantities of
		Ethanol at the Facility, and Producer has provided Cargill with written notice
		of each such breach or failure; 
	 

	 
			
				
				   
				

			 	
				
				  b)
				

			 	
				
				  Cargill fails to pay any amount that
				  is due to Producer under this Agreement that is not excused by this Agreement,
				  and (i) Producer provides written notice to Cargill of such failure, and (ii)
				  Cargill fails to pay to Producer such past-due amount (plus amounts payable
				  pursuant to Section
				  12.3(a)(i), if any) within seven (7)
				  days of Cargill’s receipt of such confirmation.
				

			 

 

	 
			
				
				   
				

			 	
				
				  c)
				

			 	
				
				  willful misconduct by Cargill in the
				  performance of its obligations hereunder and Producer provides Cargill with
				  written notice of such incident where (i) such willful misconduct has a
				  Material Adverse Effect on Producer or the Facility; and (ii) such willful
				  misconduct is done under the direction of or otherwise sanctioned by an officer
				  of Cargill within the Cargill Corn Milling North America Business Unit;
				  or
				

			 

 

	 
			
				
				   
				

			 	
				
				  d)
				

			 	
				
				  Cargill files a voluntary petition
				  in bankruptcy, has filed against it an involuntary petition in bankruptcy,
				  makes an assignment for the benefit of creditors, has a trustee or receiver
				  appointed for any or all of its assets, is insolvent or fails or is unable to
				  pay its debts generally when due, in each case where such petition, appointment
				  or insolvency is not dismissed, discharged or remedied, as applicable, within
				  sixty (60) days.
				

			 

 

	 
		12.2 Producer Event of Default. The following shall constitute events of default on
		the part of Producer (each, a “Producer Event of Default”) under this Agreement: 
	 

	 
			
				
				   
				

			 	
				
				  a)
				

			 	
				
				  Producer fails to pay any amount
				  that is due to Cargill under this Agreement that is not excused by this
				  Agreement, and (i) Cargill provides written notice to Producer of such failure,
				  and (ii) Producer fails to pay to Cargill such past-due amount (plus amounts
				  payable pursuant to Section
				  12.3(a)(i), if any) within seven (7)
				  days;
				

			 

 

	 
			
				
				   
				

			 	
				
				  b)
				

			 	
				
				  willful misconduct by Producer in
				  the performance of its obligations hereunder and Cargill provides Producer with
				  written notice of such incident where (i) such willful misconduct has a
				  Material Adverse Effect on Cargill; and (ii) such willful misconduct is done
				  under the direction of or otherwise sanctioned by an officer of Producer;
				  or
				

			 

 

	 
			
				
				   
				

			 	
				
				  c)
				

			 	
				
				  Producer files a voluntary petition
				  in bankruptcy, has filed against it an involuntary petition in bankruptcy,
				  makes an assignment for the benefit of creditors, has a trustee or receiver
				  appointed for any or all of its assets, is insolvent or fails or is unable to
				  pay its debts generally when due, in each case where such petition, appointment
				  or insolvency is not dismissed, discharged or remedied, as applicable, within
				  sixty (60) days. 
				

			 

 

	 
		 
	 

	 
		9
	 

	 
 

	 
		12.3 Remedies and Procedures. 
	 

	 
		a) Remedies for Breach Not Constituting an Event of
		Default. In the event that either Party
		breaches or fails to perform any commitment or obligation contained herein,
		under circumstances where such breach or failure does not constitute a Cargill
		Event of Default or a Producer Event of Default (each, as the context requires,
		an “Event of
		Default”), and such breach or
		failure is not excused by this Agreement, including by a Force Majeure
		condition, the other Party (the “Non-Defaulting Party”) may exercise any remedy or right specified in
		the Master Agreement or this Agreement in connection with such breach or
		failure. In addition, and without limiting the foregoing:
	 

	 
		i) in the event either Party fails to pay
		any amounts due to the other Party when due, the Non-Defaulting Party shall be
		entitled to charge and receive interest accrued on the unpaid amount from the
		date it was due until the date actually paid at the Default Rate;
	 

	 
		ii) if a Party breaches or fails to perform
		in any material respect any of its commitments or agreements contained in this
		Agreement, the defaulting Party shall be liable to the Non-Defaulting Party for
		Damages arising out of or resulting from such breach as provided in Section 8
		of the Master Agreement (subject to the Non-Defaulting Party’s duty to
		mitigate its Damages); provided,
		however, in the event of a material breach by Cargill hereunder
		of its obligation to purchase or market Ethanol, the measure for Damages
		arising from such breach shall include the loss of revenues suffered by
		Producer as a result of such breach, so long as (A) the Damages payable under
		this proviso in connection with each such breach, on a per occurrence basis,
		exceed Ten Thousand Dollars ($10,000) and (B) such Damages payable exclude
		Damages to the extent arising out of breaches by third parties under the rail
		and truck transportation agreements referred to in Section 6.1. For
		the avoidance of doubt, the amount of revenues lost shall be calculated by
		reference to the average price of Ethanol from the Facility sold by Cargill to
		its customers for the 7-day period ending on the date of the breach; and

	 

	 
		iii) if a Party breaches or fails to perform
		in any material respect any of its commitments or agreements contained in any
		Principal Document, and such breach or failure is of a continuing nature, the
		Non-Defaulting Party may (A) request the defaulting Party, as a condition of
		continuing its performance under this Agreement, to provide adequate assurance
		of performance of the defaulting Party’s obligations under this Agreement;
		and/or (B) seek injunctive relief. 
	 

	 
		b) Remedies for Events of Default. Upon the occurrence of an Event of Default that has
		not been waived by the Non-Defaulting Party, the Non-Defaulting Party shall
		have all of the following rights and remedies in addition to the rights and
		remedies specified in Section
		12.3(a) above, which may be exercised
		in such order or combination as such Non-Defaulting Party may determine: (i)
		terminate this Agreement, or (ii) subject to the limitations set forth in
		Section 8(c) of the Master Agreement (relating to consequential damages),
		pursue any other remedies available at law or in equity.
	 

	 
		 
	 

	 
		10
	 

	 
 

	 
		[Signature page follows]
	 

	 
		 
	 

	 
		11
	 

	 
 

	 
		IN WITNESS WHEREOF, each of the Parties
		hereto has caused this Ethanol Marketing Agreement to be executed by its
		respective duly authorized representative as of the day and year first above
		written.
	 

	 
		 
	 

	 
			
				
				  CARGILL, INCORPORATED
				

			 	
				
				   
				

			 	
				
				  PIONEER TRAIL ENERGY,
				  LLC
				

			 
	
				
				  
 By: 
				

			 	
				
				  /s/ Brian E. Silvey
				

			 	
				
				   
				

			 	
				
				  By: 
				

			 	
				
				  /s/ Scott H. Pearce
				

			 
	
				
				   
				

			 	
				
				

				
 	
				
				   
				

			 	
				
				   
				

			 	
				
				

				
 
	
				
				  Name:
				

			 	
				
				  Brian E. Silvey
				

			 	
				
				   
				

			 	
				
				  Name:
				

			 	
				
				  Scott H. Pearce
				

			 
	
				
				   
				

			 	
				
				

				
 	
				
				   
				

			 	
				
				   
				

			 	
				
				

				
 
	
				
				  Title:
				

			 	
				
				  Vice President
				

			 	
				
				   
				

			 	
				
				  Title:
				

			 	
				
				  Authorized
				  Representative
				

			 
	
				
				   
				

			 	
				
				

				
 	
				
				   
				

			 	
				
				   
				

			 	
				
				

				
 

 

	 
		 
	 

	 
		 
	 

	 
 

	 
		EXHIBIT A
	 

	 
		Pricing Formula – Marketing Pool
		Program Ethanol
	 

	 
		The pricing terms for Cargill’s
		marketing of Producer’s Ethanol are as follows:
	 

	 
		Net Price = Average Delivered Price less
		Average Accessorial Charges less Average Freight Costs
	 

	 
		Gross Proceeds = Net Price multiplied by
		Ethanol Volume
	 

	 
		Cargill Commission = 1% of Gross
		Proceeds
	 

	 
		Payment to Producer = Gross Proceeds less
		Cargill Commission 
	 

	 
		The Parties acknowledge that Cargill will
		pay Producer for its Ethanol within ten (10) Cargill Working Days from the date
		that Producer invoices Cargill for such Ethanol, despite the fact that the
		calculation of the Average Delivered Price, Average Accessorial Charges, and
		Average Freight Costs is performed by Cargill on a monthly basis. The Parties
		agree that, notwithstanding anything else in the Agreement to the contrary, the
		payment by Cargill to Producer of the invoice price within ten (10) Cargill
		Working Days is a provisional price. At the end of each month, Cargill will
		calculate the Average Delivered Price, Average Accessorial Charges, and Average
		Freight Costs in order to arrive at the final Marketing Pool Program price for
		such month. If the final Marketing Pool Program price for such month is greater
		than the provisional price paid by Cargill to Producer, Cargill will remit the
		difference to Producer. If the final Marketing Pool Program price for such
		month is less than the provisional price paid by Cargill to Producer, Producer
		will promptly remit the difference to Cargill, or Cargill will offset the total
		amount against other amounts due to Producer from Cargill. 
	 

	 
		Definitions:
	 

	 
		Accessorial Charges: Charges imposed by third parties for the movement and
		storage of Ethanol produced by Cargill, Producer, or Marketing Pool Program
		participants including, without limitation, taxes, storage charges, switching
		charges, and weighing charges. Demurrage charges and detention charges incurred
		on loaded railcars shall be for Cargill’s account, except to the extent
		such charges are caused by the act or omission of Producer, in which case such
		charges shall be for Producer’s account.
	 

	 
		Average Accessorial
		Charges: Accessorial Charges in a given
		month divided by the number of gallons of Ethanol that Cargill shipped from all
		Marketing Pool Program participants (including, without limitation, Cargill and
		Producer) in such month as evidenced by Cargill’s bills of lading for such
		shipments. 
	 

	 
		Average Delivered Price: Total sales dollars (based on delivered price)
		invoiced by Cargill for Ethanol in the Marketing Pool Program in a given month
		divided by the number of gallons of Ethanol sold from the Marketing Pool
		Program in such month. Delivered price and number of gallons will be determined
		from Cargill invoices to customers in such month.
	 

	 
		 
	 

	 
		 
	 

	 
 

	 
		Average Freight Costs: Total out-of-pocket freight costs incurred by Cargill
		to transport Marketing Pool Program Ethanol shipped by Cargill in a given month
		divided by the total volume of Marketing Pool Program Ethanol shipped in such
		month.
	 

	 
		Ethanol Volume: Volume of Ethanol shipped by Producer to Cargill in a
		month multiplied by the volume of Ethanol sold by Cargill in such month as
		evidenced by invoiced sales from Ethanol produced by Marketing Pool Program
		participants, divided by the volume of Ethanol shipped to Cargill by
		participants in the Marketing Pool Program in such month.
	 

	 
		 
	 

	 
		-14-
	 

	 
 

	 
		EXHIBIT B
	 

	 
		Pricing Formula – Non-Marketing Pool
		Program Ethanol
	 

	 
		The pricing terms for Cargill’s
		marketing of Producer’s Ethanol are as follows:
	 

	 
		Net Price = Delivered Price less Accessorial
		Charges less Freight Costs 
	 

	 
		Gross Proceeds = Net Price multiplied by
		Ethanol Volume
	 

	 
		Cargill Commission = 1% of Gross
		Proceeds
	 

	 
		Payment to Producer = Gross Proceeds less
		Cargill Commission
	 

	 
		The Parties acknowledge that Cargill will
		pay Producer for its Ethanol within ten (10) Cargill Working Days from the date
		that Producer invoices Cargill for such Ethanol, despite the fact that actual
		Accessorial Charges and Freight Costs may not be determined during such
		timeframe. Accordingly, Cargill will pay Producer based on the actual Delivered
		Price less estimated Accessorial Charges and Freight Costs. Once the actual
		Accessorial Charges and Freight Costs for each shipment are known, Cargill will
		true-up the difference with Producer based on the actual, as opposed to the
		estimated, amounts. If the actual Accessorial Charges and Freight Costs are
		less than the estimated Accessorial Charges and Freight Costs, Cargill will
		remit the difference to Producer. If the actual Accessorial Charges and Freight
		Costs are greater than the estimated Accessorial Charges and Freight Costs,
		Producer will remit the difference to Cargill, or Cargill will offset the total
		amount against other monies due to Producer from Cargill.
	 

	 
		Definitions:
	 

	 
		Accessorial Charges: Charges imposed by third parties for the movement and
		storage of Producer’s Ethanol, including without limitation taxes, storage
		charges, switching charges, and weighing charges. Demurrage charges and
		detention charges incurred on loaded railcars shall be for Cargill’s
		account, except to the extent such charges are caused by the act or omission of
		Producer, in which case such charges shall be for Producer’s
		account.
	 

	 
		Delivered Price: Sales dollars invoiced by Cargill for Producer’s
		Ethanol, as evidenced by Cargill’s invoices to its own customers.
	 

	 
		Freight Costs: Out-of-pocket freight costs incurred by Cargill to
		transport Producer’s Ethanol.
	 

	 
		Ethanol Volume: Volume of Ethanol shipped from Producer’s
		Facility to Cargill (other than Ethanol put in storage pursuant to Section
		5.3). 
	 

	 
		 
	 

	 
		-15-
	 

	 
 

	 
		EXHIBIT C
	 

	 
		Specifications
	 

	 
		 
	 

	 
			
				
				  Quality Parameter
				

			 	
				
				   
				

			 	
				
				  Specification
				

			 	
				
				   
				

			 	
				
				  ASTM Test Method
				

			 	
				
				   
				

			 	
				
				  Testing Frequency
				

			 
	
				
				

				
 	
				
				   
				

			 	
				
				

				
 	
				
				   
				

			 	
				
				

				
 	
				
				   
				

			 	
				
				

				
 
	
				
				  Methanol, volume %, maximum
				

			 	
				
				   
				

			 	
				
				  0.5
				

			 	
				
				   
				

			 	
				
				  D5501
				

			 	
				
				   
				

			 	
				
				  Every Lot
				

			 
	
				
				  Ethanol, volume %, minimum
				

			 	
				
				   
				

			 	
				
				  92.7
				

			 	
				
				   
				

			 	
				
				  D5501
				

			 	
				
				   
				

			 	
				
				  Every Lot
				

			 
	
				
				  Denaturant, vol %
				

			 	
				
				   
				

			 	
				
				  1.96-4.76
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				  Every Lot
				

			 
	
				
				  Water, weight %, maximum
				

			 	
				
				   
				

			 	
				
				  0.820
				

			 	
				
				   
				

			 	
				
				  E203
				

			 	
				
				   
				

			 	
				
				  Every Lot
				

			 
	
				
				  Acidity (as acetic acid), weight %,
				  maximum
				

			 	
				
				   
				

			 	
				
				  0.0070
				

			 	
				
				   
				

			 	
				
				  D1613
				

			 	
				
				   
				

			 	
				
				  Every Lot
				

			 
	
				
				  Inorganic Chloride contact, mass ppm
				  (mg/L), maximum
				

			 	
				
				   
				

			 	
				
				  40(32)
				

			 	
				
				   
				

			 	
				
				  D512, modified
				

			 	
				
				   
				

			 	
				
				  Quarterly
				

			 
	
				
				  Copper content, mg/kg (mg/L),
				  maximum
				

			 	
				
				   
				

			 	
				
				  0.10 (0.08)
				

			 	
				
				   
				

			 	
				
				  D1688
				

			 	
				
				   
				

			 	
				
				  Quarterly
				

			 
	
				
				  Solvent Washed Gum, mg/100mL,
				  maximum
				

			 	
				
				   
				

			 	
				
				  5.0
				

			 	
				
				   
				

			 	
				
				  D381
				

			 	
				
				   
				

			 	
				
				  Quarterly
				

			 
	
				
				  pHe
				

			 	
				
				   
				

			 	
				
				  6.5 - 9.0
				

			 	
				
				   
				

			 	
				
				  D6423
				

			 	
				
				   
				

			 	
				
				  Every Lot
				

			 
	
				
				  Specific Gravity
				

			 	
				
				   
				

			 	
				
				  0.78393-0.79718
				

			 	
				
				   
				

			 	
				
				  ASTM D4052
				

			 	
				
				   
				

			 	
				
				  Every Lot
				

			 
	
				
				  API Gravity
				

			 	
				
				   
				

			 	
				
				  46.0 – 49.0
				

			 	
				
				   
				

			 	
				
				  Converted from Specific
				  Gravity
				

			 	
				
				   
				

			 	
				
				  Every Lot
				

			 
	
				
				  Sulfur, ppm, max
				

			 	
				
				   
				

			 	
				
				  10
				

			 	
				
				   
				

			 	
				
				  D5453
				

			 	
				
				   
				

			 	
				
				  Every Lot
				

			 
	
				
				  Benzene, volume %, maximum
				

			 	
				
				   
				

			 	
				
				  0.06
				

			 	
				
				   
				

			 	
				
				  D5580 (test denaturant)
				

			 	
				
				   
				

			 	
				
				  Quarterly
				

			 
	
				
				  Olefins, volume %, maximum
				

			 	
				
				   
				

			 	
				
				  0.5
				

			 	
				
				   
				

			 	
				
				  D6550 (test denaturant)
				

			 	
				
				   
				

			 	
				
				  Quarterly
				

			 
	
				
				  Aromatic Hydrocarbons, volume %,
				  maximum
				

			 	
				
				   
				

			 	
				
				  1.7
				

			 	
				
				   
				

			 	
				
				  D5580 (test denaturant)
				

			 	
				
				   
				

			 	
				
				  Quarterly
				

			 
	
				
				  Appearance
				

			 	
				
				   
				

			 	
				
				  Visibly free of suspended or
				  precipitated contaminants (clear and bright)
				

			 	
				
				   
				

			 	
				
				  Visual Inspection
				

			 	
				
				   
				

			 	
				
				  Every Lot
				

			 

 

	 
		BP requires that all Ethanol meet a minimum
		Saybolt color of 25. The appropriate test method is ASTM D156 Test Method for
		Saybolt Color of Petroleum Products. If Producer’s Ethanol is sold to BP,
		Producer shall demonstrate compliance with this specification prior to
		shipment.
	 

	 
		All Ethanol produced by Producer shall
		contain a natural gasoline denaturant (or other denaturant source mutually
		agreed upon by the Parties) at a concentration of 1.96% volume minimum, 4.76%
		volume maximum.
	 

	 
		All Ethanol produced by Producer shall
		contain a corrosion inhibitor added at a treat rate of up to 30 PTBE.
	 

	 
		All Ethanol shall be visually free of
		sediment and suspended matter, and shall be clear and bright at the ambient
		temperature or 21°C (70°F), whichever is higher.
	 

	 
		Benzene, Olefins and Aromatic Hydrocarbons
		concentrations are determined by testing the denaturant and multiplying the
		results by the percentage of denaturant added. 
	 

	 
		 
	 

	 
		-16-
	 

	 
 

	 
		Other requirements per (a) ASTM D4806,
		including without limitation the requirement that the Ethanol be free of any
		adulterant or contaminant that may render the Ethanol unacceptable for its
		commonly used applications, and (b) the Code of the State of California and
		regulations promulgated thereunder.
	 

	 
		 
	 

	 
		-17-
	 

	 
 

	 
		EXHIBIT D
	 

	 
		Testing Procedures
	 

	 
		Cargill Testing
		Procedures: Every sample of Ethanol
		taken by Cargill for testing shall be split, with each portion tested at
		different laboratories or tested at the same laboratories by identical testing
		equipment by different personnel. The results of both tests shall be utilized
		in determining quality. In the event both tests are indicative of inferior
		quality according to the foregoing specifications, the provision of Section 7
		of this Agreement may be invoked.
	 

	 
		Quality Parameters Tested Every Batch Lot by
		Producer
	 

	 
		 
	 

	 
			
				
				  ASTM Test Number
				

			 	
				
				   
				

			 	
				
				  Test Method Name
				

			 
	
				
				

				
 	
				
				   
				

			 	
				
				

				
 
	
				
				  D1613
				

			 	
				
				   
				

			 	
				
				  Test Method for Acidity in Volatile
				  Solvents and Chemical Intermediates Used in Paint, Varnish, Lacquer and Related
				  Products
				

			 
	
				
				  D4052
				

			 	
				
				   
				

			 	
				
				  Test Method for Density and Relative
				  Density of Liquids by Digital Density Meter
				

			 
	
				
				  D5501
				

			 	
				
				   
				

			 	
				
				  Test Method for the Determination of
				  Ethanol, Denatured Fuel Ethanol and Fuel Ethanol (Ed75-Ed85)
				

			 
	
				
				  D6423
				

			 	
				
				   
				

			 	
				
				  Test Method for the Determination of
				  pHe of Ethanol, Denatured Fuel Ethanol and Fuel Ethanol (Ed75-Ed85)
				

			 
	
				
				  E203
				

			 	
				
				   
				

			 	
				
				  Test Method for Water Using
				  Volumetric Karl Fischer Titration
				

			 

 

	 
		Quality Parameters Tested and Reported
		Quarterly by Producer
	 

	 
		 
	 

	 
			
				
				  ASTM Test Number
				

			 	
				
				   
				

			 	
				
				  Test Method Name
				

			 
	
				
				

				
 	
				
				   
				

			 	
				
				

				
 
	
				
				  D381
				

			 	
				
				   
				

			 	
				
				  Test Method for Gum Content in Fuels
				  by Jet Evaporation
				

			 
	
				
				  D512
				

			 	
				
				   
				

			 	
				
				  Test Methods for Chloride Ion in
				  Water (modified)
				

			 
	
				
				  D1688
				

			 	
				
				   
				

			 	
				
				  Test Methods for Copper in
				  Water
				

			 
	
				
				  D5453
				

			 	
				
				   
				

			 	
				
				  Test Method for Total Sulfur in
				  Light Hydrocarbons, Motor Fuels and Oils by Ultraviolet Fluorescence
				

			 

 

	 
		 
	 

	 
		-18-
	 

	 
 

	 
		EXHIBIT E
	 

	 
		Natural Gasoline Denaturant
		Specifications
	 

	 
		 
	 

	 
			
				
				  Parameter
				

			 	
				
				   
				

			 	
				
				  Specification
				

			 	
				
				   
				

			 	
				
				  Test Method
				

			 
	
				
				

				
 	
				
				   
				

			 	
				
				

				
 	
				
				   
				

			 	
				
				

				
 
	
				
				  RVP
				

			 	
				
				   
				

			 	
				
				  less than 14.0
				

			 	
				
				   
				

			 	
				
				  ASTM D323
				

			 
	
				
				  Total Sulfur
				

			 	
				
				   
				

			 	
				
				  Less than 50.0 ppm
				

			 	
				
				   
				

			 	
				
				  ASTM D5453
				

			 
	
				
				  Benzene
				

			 	
				
				   
				

			 	
				
				  1.1 % vol max
				

			 	
				
				   
				

			 	
				
				  ASTM D5580
				

			 
	
				
				  Total Aromatics
				

			 	
				
				   
				

			 	
				
				  35 % vol max (including
				  benzene)
				

			 	
				
				   
				

			 	
				
				  ASTM D5580
				

			 
	
				
				  Olefins
				

			 	
				
				   
				

			 	
				
				  10 % vol max
				

			 	
				
				   
				

			 	
				
				  ASTM D6550
				

			 
	
				
				  Distillation End Point
				

			 	
				
				   
				

			 	
				
				  437oF (225 C) max
				

			 	
				
				   
				

			 	
				
				  ASTM D86
				

			 
	
				
				  Additives
				

			 	
				
				   
				

			 	
				
				  None allowed
				

			 	
				
				   
				

			 	
				
				   
				

			 

 

	 
		The above specifications parameters must be
		tested and reported on a Certificate of Analysis for each lot of product
		received and a copy must accompany each load. All rail cars must be sealed to
		ensure product quality. The Certification of Analysis results for natural
		gasoline denaturant shall be used to calculate benzene, aromatics and olefins
		content in the finished fuel grade ethanol for reporting on Certificates of
		Analysis for California delivery.
	 

	 
		 
	 

	 
		-19-
	 

	 
 

	 
		EXHIBIT F
	 

	 
		Cargill Sales Contract Force Majeure
		Provision
	 

	 
		Neither seller nor buyer shall be deemed in
		default of any terms or conditions of this contract for any delay in
		performance or for nonperformance if the delay or nonperformance is caused by
		(a) compliance with or changes in applicable law, bad weather, war, fire, civil
		commotion, acts of terrorism, riots, strikes, lockouts, labor disputes, acts of
		God, electrical shortage, or releases of hazardous materials, (b) the
		disruption, breakdown or unavailability of production, transportation or
		storage facilities, any machinery or equipment or other unusual or
		extraordinary breakdowns or the failure to obtain production, transportation or
		storage on reasonable terms, (c) the failure by any party with whom seller has
		contracted for the purchase of ethanol, or (d) any other cause, whether or not
		of the same class or kind described in (a) through (c) hereof, beyond the
		reasonable control of such party (each, a “Force Majeure Event”). In
		the event of a delay in performance or nonperformance, the delaying or
		non-performing party shall immediately notify the other party in writing
		specifying the cause of delay or nonperformance and the estimated time of
		performance.
	 

	 
		If a Force Majeure Event occurs, then the
		delaying or non-performing party, without liability for failure to comply with
		the terms of this contract, may discontinue or curtail the amount of ethanol
		which it tenders or accepts; provided that delaying or non-performing party
		shall immediately give notice of that fact to the other party and shall
		likewise give a second notice upon elimination or cessation of the Force
		Majeure Event.
	 

	 
		In the event that delay in performance or a
		nonperformance due to a Force Majeure Event continues or will continue for more
		than fifteen (15) consecutive days, the other party shall have the right to
		terminate this contract upon ten (10) days’ written notice to the delaying
		or non-performing party. If, because of a Force Majeure Event, there is a
		shortage of seller’s supply of ethanol sold hereunder such that seller is
		unable to meet its requirements for its own use and for the sale to customers
		of all kinds (including buyer), seller may allocate its supply in good faith
		according to its discretion. Under no circumstance shall seller be required to
		acquire ethanol to replace supplies that are unavailable due to a Force Majeure
		Event, and should seller acquire additional ethanol, seller shall not be
		required to allocate any such ethanol to buyer.
	 

	 
		 
	 

	 
		-20-

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