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EXHIBIT 10.1    
  

ETHANOL PURCHASE AND SALE AGREEMENT

BETWEEN

BADGER STATE ETHANOL, LLC

AND

MUREX, N.A., LTD.  

    This Agreement is made effective as of August 8, 2001, by and between Badger State Ethanol, LLC a Wisconsin limited liability company having its offices
in Monroe, Wisconsin ("Seller"), and Murex, N.A., Ltd., a Texas limited partnership with its principal offices of business in Dallas, Texas ("Buyer"). 

RECITALS:  

    WHEREAS, Seller intends to build an ethanol production facility at Monroe, Wisconsin, which will
be owned and operated by Seller. 

    WHEREAS, Seller has agreed to sell to Buyer, and Buyer has agreed to buy from Seller all (100%) of the Ethanol to be
produced from the Monroe, Wisconsin facility on the terms and conditions in this Agreement. 

    NOW THEREFORE this Agreement, in consideration of the promises and mutual covenants and conditions contained herein,
Seller and Buyer agree as follows: 

ARTICLE 1  

 DEFINITIONS AND INTERPRETATION  

    1.1  Applicability.  The definitions in this Article apply to this Agreement. Any word,
phrase or expression that is not defined in this Agreement and that has a generally accepted meaning in the custom and usage in the ethanol industry in the United States shall have that meaning in
this Agreement. 

    1.2  "Assignment of Contract"  means an assignment of contract related to this Agreement executed by
Seller for the benefit of certain of its Funders. 

    1.3  "ASTM D.-4806"  shall be defined on Schedule A. 

    1.4  "Buyer"  means Murex, N.A., Ltd., a Texas limited partnership, with the address of 15411
Knoll Trail, Suite 260, Dallas, Texas 75248. 

    1.5  "Commission"  means [***]. 

[***]  Material
has been ommitted pursuant to a request for confidential treatment and such material has been filed separately with the Securities
and Exchange Commission. 

    1.6  "Date of First Delivery"  means the date when Ethanol produced at the Plant is available for
Delivery to Buyer under this Agreement. 

    1.7  "Delivery"  means the transfer of Ethanol from Seller to the transportation vehicle contracted by
Buyer at the Delivery Point. 

    1.8  "Delivery Point"  means the loading of Ethanol at the outlet flange transferring the Ethanol into
rail cars or trucks. 

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    1.9  "Dollars".  All references to "dollars" in this Agreement shall be references to amounts expressed
in United States currency. All calculations of monetary sums to be hereunder shall be made in US currency. 

    1.10  "Effective Date"  means the date written above that this Agreement is effective. 

    1.11  "Ethanol"  means the clear odorless liquid produced for use as a motor fuel additive made from
fermented grain being approximately 200 proof alcohol produced by Seller at the Plant. 

    1.12  "Force Majeure"  has the meaning given in this Section 14.2. 

    1.13  "Forward Contracted Gallons"  means any gallons of Ethanol produced from the Plant for which Buyer
has agreed to resell to third parties pursuant to binding forward delivery contracts; provided, however, that Buyer may not forward contract more than a maximum of thirty percent (30%) (which equals
12 million gallons per year or 1 million gallons per month) of the annual nameplate production of the Plant without Seller's prior written consent which consent may be withheld in
Seller's sole discretion; provided further that Buyer will provide Seller with advance notice and copies of all forward contracts relating to all Forward Contracted Gallons. 

    1.14  "Funder"  means any one of the entities providing debt or equity funding to Seller and identified
to Buyer. As used herein, Funder shall not include common trade creditors of any party. 

    1.15  "Funder Representative"  is the representative of one or more Funders. 

    1.16  "Gallon"  means one U.S. gallon of ethanol @ 60 degrees F. 

    1.17  "Initial Term"  has the meaning given in Section 3.1. 

    1.18  "Plant"  means the Ethanol production plant to be constructed by. Seller for the production of
approximately 40 million Gallons per annum and to be located at Monroe, Wisconsin. 

    1.19  "Prime Commercial Lending Rate"  means the rate of interest most recently published from time to
time in the Money Rate Table of the Wall Street Journal as the prime annual rate of interest. 

    1.20  "Purchase Price"  has the meaning given in Section 7.1. 

    1.21  "Renewal Term"  has the meaning given in Section 3.1. 

    1.22  "Resale Costs"  means all costs and charges incurred by Buyer in handling Gallons received from the
Plant (including the cost of any Gallons properly obtained by Buyer pursuant to Section 7.3 herein), without mark-up by Buyer, and without charge for Buyer's administrative costs. 

    1.23  "Sale Price"  has the meaning given in Section 7.1. 

    1.24  "Schedule"  means Schedule A attached to this Agreement, as it may be amended and revised
from time to time, shall constitute part of, and shall be included in, this Agreement. 

    1.25  "Seller"  means Badger State Ethanol, LLC, a Wisconsin limited liability company, with the address
of P.O. Box 317, Monroe, Wisconsin 53566.

    1.26  "Taxes"  has the meaning given in Section 7.2. 

    1.27  "Total Annual Plant Production"  means the entire production of Ethanol from the Plant, within a
12-month period, which production is estimated but not warranted to be approximately 40 million Gallons of Ethanol in each 12-month period; provided that for the
12-month period beginning on the Date of First Delivery, such production may be less. 

    1.28  "Transportation Costs"  means costs charged by a third party for transportation from Plant to a
buyer's point of delivery together with insurance and all other costs and charges incurred to third 

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parties other than Resale Costs in connection with such transportation, without mark-up by Buyer, and without charge for Buyer's administrative costs. 

ARTICLE 2  

 DATE OF FIRST DELIVERY NOTICE  

    2.1  Notice Dates.  Seller shall provide Buyer notice one hundred eighty (180) days prior to the
projected Date of First Delivery of Seller's best estimate of the range of potential dates for Date of First Delivery covering a forty-five (45) day period. Ninety (90) days
prior to the anticipated Date of First Delivery, Seller shall provide Buyer with a best estimate of a projected Date of First Delivery covering a range of thirty (30) days.
Forty-five (45) days prior to the projected Date of First Delivery, Seller shall provide Buyer with a best estimate of a projected Date of First Delivery covering a range of seven
(7) days. Seller and Buyer agree that Seller shall not incur any liability for any failure of the Date of First Delivery to occur on the projected date in the notices as estimated by Seller in
good faith. 

    2.2  Production Estimates.  With each notification in Section 2.1, Seller shall provide a best
estimate of the amount of Ethanol production on a daily basis for the six (6) month period following the estimated Date of First Delivery to Buyer. After the Date of First Delivery, Seller
shall provide monthly notices to Buyer, by the 20th of each month, estimating the daily production for the next six (6) month period beginning the first month following the date of the last
estimate. Seller shall promptly notify Buyer of any adjustments to the Ethanol production schedule that has been most recently given to Seller. 

ARTICLE 3  

 TERM; TERMINATION  

    3.1  Initial Term; Renewal.  The initial term of the Agreement shall be for a seven (7) year
period beginning on the Date of First Delivery (the "Initial Term"). The Initial Term shall be followed by renewal terms (the "Renewal Terms") of one (1) year that renew automatically unless
notice is given by either party at least ninety (90) days prior to any renewal anniversary date. 

    3.2  Effective During Initial Term.  Subject to the conditions of this Agreement, this Agreement shall be
effective for the Initial Term and shall continue after the Initial Term as provided in Section 3.1. 

    3.3  Termination During Initial Term.  This Agreement may not be terminated during the Initial Term
unless pursuant to the provisions of Sections 3.4, 3.5, 7.1(b), 8.1, 14.8 or 18.1 and shall otherwise continue after the Initial Term unless (i) terminated pursuant to Sections 3.4,  3.5, 7.1(b)
, 8.1, 14.8 or 18.1, or (ii) not renewed pursuant to Section 3.1. 

    3.4  Termination By Seller Due To Buyer Insolvency.  If Buyer becomes insolvent or suffers the filing of
a petition of bankruptcy, executes an assignment for the benefit of creditors, or becomes the subject of any insolvency proceeding of any nature, then, in addition to any other rights and remedies
Seller may have, Seller shall have the right to immediately terminate this Agreement by written notice. 

    3.5  Termination By Buyer Due to Seller Insolvency.  Notwithstanding Article 13 relating to
Funder's Rights, in the event that Seller (i) becomes insolvent or suffers the filing of a petition of bankruptcy, executes an assignment for the benefit of creditors, or becomes the subject of
any insolvency proceeding of any nature; and (ii) fails to deliver Ethanol as prescribed in this Agreement, then, in addition to any other rights and remedies it may have, Buyer, after
providing the Funders thirty (30) days to reestablish Delivery of Ethanol, shall have the right to immediately terminate this 

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Agreement by written notice, if the Funders fail to reestablish Delivery of Ethanol at projected levels or levels mutually agreed to by Buyer and the Funders. 

ARTICLE 4  

 PURCHASE AND DELIVERY OBLIGATIONS  

    4.1  Purchase of Ethanol Production.  Subject to the provisions of this Agreement, Seller shall sell and
make available for Delivery and Buyer shall purchase and take Delivery in accordance with Section 5.1 one hundred percent (100%) of the Ethanol produced by the Plant on a daily basis. 

    4.2  Access To Delivery Point.  Buyer shall be given reasonable access to the Delivery Point(s) at the
Plant during normal business hours upon reasonable prior notice; provided that Buyer's access shall be without disruption to Seller's business operations at the Plant. Buyer will provide Seller with
delivery schedules and, at the sole cost of Buyer, make arrangements for transportation of the Ethanol. Seller shall handle and supervise the loading and Delivery of Ethanol, prepare Delivery
documentation and generally be responsible for all matters ancillary to such activities. All equipment necessary to load rail cars or trucks at the Delivery Point shall be supplied by Seller without
charge to Buyer. 

    4.3  Purchase Exclusivity.  Buyer is obligated, and shall have the exclusive right, to purchase from
Seller all Ethanol produced at the Plant. If Buyer does not purchase and take Delivery of said Ethanol and Buyer does not resell the Ethanol, Buyer shall purchase the Ethanol for its own account. When
Buyer's purchase is for its own account based on the conditions above such sales shall be at agreed upon prices that approximates current spot market prices. The sole exception to this is those cases
where, if prior to its giving consent Seller identifies a similar sale that will return a higher net price to Seller than that offered by Buyer, the Ethanol shall be sold as directed by Seller. For
purchases of Ethanol by Buyer for its own account Buyer will be responsible for all storage and other charges after the purchase and Buyer will be entitled to all proceeds obtained from the resale of
the Ethanol. 

ARTICLE 5  

 QUANTITY  

    5.1  Uniform Weekly Deliveries.  Seller shall deliver the Ethanol and Buyer shall take Delivery of
Ethanol at the Delivery Point(s) at uniform weekly rates, as nearly as practicable such that the Ethanol delivered in any one month shall approximately equal one twelfth (1/12th) of Seller's estimated
annual Ethanol production. Buyer shall be obligated to take Delivery of, and to pay for in accordance with Article 4, all quantities of Ethanol tendered for Delivery by Seller. 

    5.2  Quantity Measurement.  The quantity of Ethanol Delivered to Buyer by Seller from the Plant shall be
established by outbound meter tickets 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 the
absence of manifest error (greater than 0.5% variation) of the quantity of Ethanol for which Buyer is obligated to pay pursuant to Section 10.1. 

ARTICLE 6  

 QUALITY  

    6.1  Specification Requirement.  Seller shall deliver Ethanol to Buyer under this Agreement that meets
the specifications set forth in "Schedule A". If any government entity requires a change in the specifications set forth in Schedule A, Buyer shall notify Seller of the change in
specifications. Seller 

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and Buyer agree to change specifications of Ethanol in this Agreement within a reasonable time as agreed to by Buyer and Seller, accordingly, subject to Article 14. 

    6.2  Insurance.  Seller shall arrange and maintain a minimum of US$5,000,000 product and commercial
general liability insurance and cause Buyer to be designated as loss payee or additional insured as their interests may appear, with waiver of subrogation by the insurer against Buyer. Seller shall
further arrange and maintain employer's liability insurance meeting all statutory requirements. In each case Seller shall provide to Buyer a copy of the certificate(s) of insurance evidencing the
existence of the required insurance. 

    6.3  Responsibility For Off-Specification Ethanol.  If the Ethanol Delivered by Seller does
not meet the specifications set forth in Schedule "A" when Delivered by Seller to the transportation vehicles and quality claims arise as a result thereof, such quality claims will be administered by
Buyer with consent of Seller. Such claims shall be solely for Seller's account and Buyer shall not be responsible in any manner whatsoever for such claims. 

    6.4  Maintenance of Samples.  Seller agrees to maintain original sealed numbered samples of all Ethanol
after Delivery into transportation vehicles before it leaves the Delivery Point premises. Seller will label these samples to indicate date of shipment and the truck or rail car number will be
included. Seller will retain these samples for three (3) months and shall send one such sample to Buyer immediately upon Buyer's request. 

ARTICLE 7  

 PRICE  

    7.1  Determination of Price.  

    (a) For
all sales of Ethanol by Buyer, where Buyer has agreed to sell Ethanol to third party customers, Buyer agrees to pay to Seller for each Gallon of Ethanol
delivered to Buyer, determined in accordance with Section 5.2, a Purchase Price equal to the actual sale price invoiced by Buyer for such Ethanol re-sold by Buyer to such third
party customers for the most recent week less: (i) all Resale Costs; (ii) Taxes (as defined in Section 7.2) paid by Buyer; and
(iii) [***]. 

[***]  Material
has been ommitted pursuant to a request for confidential treatment and such material has been filed separately with the Securities and Exchange
Commission. 

    (b) Buyer
covenants to use its best efforts to obtain for Seller the highest Purchase Price then available for Ethanol sales taking into consideration the reduction of
all Resale Costs incurred by Buyer for such Ethanol. Buyer shall in no circumstances be obligated to sell Ethanol to any buyer whose creditworthiness is unacceptable to Buyer, provided that if Buyer
determines that there are no buyers willing to purchase Ethanol of creditworthiness acceptable to Buyer, then Buyer shall purchase such Ethanol for its own account. Seller agrees that its remedies for
Buyer's breach of its obligation in this paragraph (b) shall include without limitation, the right to specific performance and the right, following a decision of arbitrator(s) that such breach
has occurred, to terminate this Agreement. 

    7.2  Payment of Taxes.  Seller shall pay or cause to be paid all valid levies, assessments, duties, rates
and taxes tax credits (together "Taxes") assessed on Ethanol prior to the Delivery of the assessed Ethanol at the Delivery Point. Buyer shall pay or cause to be paid all Taxes imposed on the Ethanol
or sale of Ethanol after the Delivery of the Ethanol at the Delivery Point. If any Taxes are imposed, the Purchase Price shall be reduced by the amount of such Taxes actually paid by Buyer, provided
however, if taxes are assessed on a transfer made by Buyer prior to transfer and sale to a third party end-user of the
Ethanol, the Purchase Price shall not be reduced by the Taxes assessed on such prior transfer made by Buyer. 

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    7.3  Inability to Produce.  In the event Seller's Plant is unable to produce sufficient Ethanol
quantities to meet Buyer's sales commitments for Forward Contracted Gallons, which sales commitments shall have been previously disclosed in writing to Seller, and such inability to produce is not the
result of scheduled Plant shutdowns or Force Majeure, then in such case Buyer may purchase or arrange for the purchase of such shortfall from other sources. The cost of such Ethanol shortfall supplied
by Buyer or purchased from such third parties shall be deducted (or credited in the case of a cost savings) from the weekly payment described in Section 7.1. Buyer will provide Seller written
substantiation of such costs reasonably satisfactory to Seller as soon as practicable. 

ARTICLE 8  

 TRANSPORTATION AND INSURANCE CHARGES  

    8.1  Transportation of Ethanol; Termination For Breach.  Buyer agrees to diligently pursue, secure and
maintain all necessary agreements to receive and transport the Ethanol from the Delivery Point. Buyer shall be solely responsible for the arrangement of transportation. Buyer covenants to use its best
efforts to obtain the best commercially reasonable prices after considering the price of transportation such that Seller achieves the highest net price possible after payment for Transportation Costs.
Seller agrees that its only remedy for Buyer's breach of its obligation in the preceding sentence shall be to terminate this Agreement following a decision of arbitrator(s) that such breach has
occurred. 

    8.2  Rail Shipment.  If the Ethanol is being transported by rail, the cost of rail transportation will
include, but not be limited to, all tank car lease agreements, freight from Delivery Point to destination, accessorial charges and excess empty mileage charges. 

ARTICLE 9  

 STORAGE  

    9.1  Storage Capacity.  Seller shall at all times provide storage at the Plant for Ethanol, in an amount
not to exceed ten (10) days of the Seller's estimated Ethanol product on, which is estimated to be 1.5 million gallons. 

    9.2  "Off-Site Storage Option.  Buyer and Seller agree that when market conditions for the
marketing and sale of the Ethanol are depressed (as reasonably and mutually determined by Buyer and Seller) such that the use of interim, off-site storage of a portion of the Ethanol may
be economically advantageous for the Seller to obtain the highest possible Purchase Price for its Ethanol, then in such case a mutually agreed upon quantity of the Ethanol will be shipped to interim
storage at a mutually agreed upon off-site storage location. Buyer will purchase and take Delivery of such Ethanol at a mutually agreed upon market price FOB Seller's Plant whereupon title
and risk of loss of such Ethanol will be transferred to Buyer. Seller will be responsible for Taxes (described as Seller's responsibility in Section 7.2) and all Resale Costs incurred by Buyer
in handling such Ethanol during such interim storage period, which costs will be deducted from the weekly payment described in Section 7.1. Upon sale of such Ethanol to a third party, the
profit or loss will be shared equally between Buyer and Seller and calculated as follows: 

PS=
[Pt—(Pm—D—T] /2 

"PS" means the profit share (positive or negative), expressed in cents per gallon.

"Pt" means Buyer's weighted average selling price for ethanol volumes resold by Buyer from such off-site interim storage
terminal location for such week in cents per gallon.

"Pm" means the initial price of the Ethanol, FOB Seller's Plant, agreed to between Buyer and Seller which Buyer has actually paid to
Seller, expressed in cents per gal on.

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"D" means all Resale Costs incurred by Buyer in handling such Ethanol during such interim storage period, expressed in cents per
gallon.

"T" means Taxes described in Section 7.2, expressed in cents per gallon.

    The
profit sharing payment amount will be paid by Buyer (or deducted in the case of a loss) with the weekly payment described in Section 7.1. 

ARTICLE 10  

 PAYMENTS  

    10.1  Purchase Price.  Buyer shall pay to Seller the net Purchase Price for each Gallon of Ethanol
Delivered under this Agreement as provided in Section 7.1(a) by direct wire transfer or electronic transfer to Seller's designated bank account. The direct wire transfer or electronic transfer
to Seller's designated bank account ("Payment") shall be made on the 23rd day after the Friday of the week in which Seller issues the bill of lading for such Gallons sold and delivered during said
week. At the time of each Payment Buyer shall forward a statement to Seller setting forth in reasonable detail all third party buyer purchase terms including without limitation, the quantity of
Ethanol sold, the purchase prices, and all Resale Costs and commissions directly relating 10 such third party sale and purchase terms, and the quantity and price of Ethanol purchased by Buyer for its
own account (if any). 

    10.2  Interest.  Subject to Article 14, if any party to this Agreement fails to pay all or any
portion of the amount owing by that party when due, such unpaid amount will bear interest at a rate equal to one per cent (1%) per annum above the Prime Commercial Lending Rate as reported in the Wall
Street Journal calculated daily from the date such amount is due hereunder until the date it is actually paid. Upon failure of a party to pay the unpaid amount including interest thereon within ten
(10) days after the due date set out in this Agreement, the party to whom sums are due may upon giving seven (7) days' notice suspend in whole or in part its delivery or acceptance of
Ethanol (as the case may be) hereunder until such outstanding amount has been paid in full. 

    10.3  Audits.  Any payment made pursuant to this Article will not preclude a party from subsequently
auditing the accounts of the other on a once per year basis at the end of a calendar year or at any time upon the occurrence of a default by such other party hereunder, as permitted in this Agreement. 

ARTICLE 11  

 TITLE AND RISK OF LOSS  

    11.1  Transfer of Title.  Delivery occurs when the Ethanol is transferred to the transportation vehicle
contracted by Buyer to take Delivery at the Delivery Point or upon transfer into storage under Section 9.2. Title and risk of loss or damage shall only pass from Seller to Buyer upon Delivery.
Until Delivery occurs, Seller shall be deemed to be in control of and in possession of and shall have title to and risk of loss of the Ethanol. 

    11.2  Liability Allocation.  Buyer will have no responsibility or liability with respect to any Ethanol
deliverable under this Agreement until it is Delivered to Buyer as described in Section 1 1.1. Except to the extent caused by Seller's negligence or as provided in Section 6.3, Seller
will have no responsibility or liability with respect to such Ethanol after its Delivery to Buyer, as the case may be, as described in Section 11 .1 or on account of anything which may be done
or happen to arise with respect to such Ethanol after such Delivery, unless as a result of matters affecting the Ethanol prior to such Delivery. 

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ARTICLE 12  

 REPRESENTATIONS, COVENANTS AND WARRANTIES  

    12.1  Seller's Representations, Warranties and Covenants.  Seller represents and warrants to Buyer, as of
the Effective Date hereof and covenants to Buyer at all times during the term of this Agreement, as follows and acknowledges that Buyer is relying upon such representations, warranties and covenants
in connection with the purchase of Ethanol under this Agreement: 

    (a) Seller
has title to all Ethanol delivered hereunder, it has the right to sell the same to Buyer, and the Ethanol is free from any liens or encumbrances; PROVIDED  THAT EXCEPT AS PROVIDED IN THIS SECTION 12.1(a). AND AS PROVIDED IN
ARTICLE 6 WITH RESPECT TO THE QUALITY OF ETHANOL TO BE DELIVERED, THERE ARE NO WARRANTIES EXPRESS OR
IMPLIED, INCLUDING WITHOUT LIMITATION, WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, AND SELLER HEREBY DISCLAIMS ALL WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE.

    (b) Seller
covenants that it shall procure and maintain in force all licenses, consents and approvals required for its operation of the Plant and manufacture and sale
to Buyer of the Ethanol under this Agreement and shall be solely responsible for and indemnify Buyer against any costs, liabilities or fines arising out of Seller's failure to comply with any
applicable requirements of such licenses, consents and approvals. 

    (c) Seller
covenants that it will maintain accurate and complete production and delivery records in a prudent and businesslike manner in accordance with sound
commercial practices in respect of Ethanol produced by Seller at the Plant. 

    (d) Seller
covenants that it will promptly notify Buyer of any actual or anticipated production downtime or disruption to Ethanol availability. 

    (e) Seller
is a U.S. entity for purposes of state and federal income and excise taxes. 

    12.2  Buyer's Representations, Warranties and Covenants.  Buyer represents and warrants to Seller, as of
the Effective Date hereof and covenants to Seller at all times during the term of this Agreement, as follows and acknowledges that Seller is relying upon such representations, warranties and covenants
in connection with the sale of Ethanol under this Agreement. 

    (a) Buyer
covenants that it will maintain or cause to be maintained accurate and complete records in a prudent and businesslike manner in accordance with sound
commercial practices, of the selling prices described in Article 7 and the associated transportation and other costs in respect of Ethanol purch2sed by Buyer from Seller. 

    (b) Buyer
has not incurred and is not responsible to pay any commission or any finder's fee in respect of any of the transactions contemplated herein which commissions
or finder's fees could in any manner be or become the responsibility of Seller. 

    (c) Buyer
is a U.S. entity for purposes of state and federal income and excise taxes. 

    (d) Buyer
covenants that it will provide to the Funders as soon as available each year a copy of Buyer's audited financial statements. 

    (e) Buyer
covenants that it shall procure and maintain in force all licenses, consents and approvals required for its purchase from Seller and resale of Ethanol
hereunder and all its other obligations under this Agreement except for those licenses for which Seller is responsible under Section 12.1 (b), and small be solely responsible for and indemnify
Seller against any costs, liabilities or fines arising out of Buyer's failure to comply with try applicable requirements of such licenses, comments and approvals. 

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ARTICLE 13  

 RIGHTS OF FUNDERS  

    13.1  Funders Rights.  Notwithstanding anything to the contrary in this Agreement, a Funder shall be
entitled to the rights and protections in this Article 13. 

    13.2  Notice of Default.  Buyer shall deliver written notice of any Seller Event of Default to the Funder
Representative(s). 

    13.3  Funders Rights to Cure.  If Seller defaults in the observance or performance of any covenant of
this Agreement beyond any applicable cure or grace period referred to herein, Buyer shall send written notice of such default to the Funder Representative(s) at such addresses as the Funders have
designated by notice to Buyer. Thereupon a Funder shall have an additional sixty (60) days within which to cure or remove such default, except that if such default cannot with diligence be
cured within such sixty (60) day period, the Funder shall have a reasonable time thereafter to effect a cure, provided that the Funder proceeds promptly to cure the same and thereafter
prosecutes the curing of such default with diligence. 

    13.4  Acceptance of Funders Performance.  Buyer shall accept performance by a Funder of any covenant,
agreement or obligation of Seller contained in this Agreement with the same effect as though performed by Seller. 

    13.5  Funders Consent to Termination.  Buyer shall not accept a termination of this Agreement from Seller
unless such termination is consented to in writing by the Funder Representative(s). 

    13.6  Funders Right to New Agreement.  If this Agreement is terminated for any reason and such
termination is not consented to in writing by the Funder Representative(s), or in the event of the rejection or disaffirmance of this Agreement pursuant to bankruptcy law or other law affecting
creditor's rights, Buyer shall enter into a new agreement to purchase Ethanol with the Funder or any party designated by a Funder, not less than ten (10) nor more than thirty (30) days
after the request of a Funder referred to below, for the remainder of the Initial Term and any unexercised renewal thereof pursuant to this Agreement, effective as of the date of such termination,
rejection or disaffirmance, upon all the terms and provisions contained in this Agreement, provided, that such Funder makes a written request to Buyer for such new agreement within ninety
(90) days after the effective date of such termination, rejection or disaffirmance, as the case may be, and such written request is accompanied by a copy of the new agreement, prepared at
Funder's expense, duly executed and acknowledged by the Funder, or the party designated by the Funder to be the Ethanol provider thereunder, and the Funder cures all defaults under this Agreement
which can be cured by the Funder or its agent. If the Funder, or the party so designated by the Funder, shall have entered into a new agreement with Buyer pursuant to this Article, then any default
under this Agreement which, because the default is personal to Seller hereunder (such as bankruptcy), cannot reasonably be cured by such new Ethanol provider, shall be deemed cured. The provisions of
this Article shall survive the termination, rejection or disaffirmance of this Agreement, and shall continue in full effect thereafter to the same extent as if this Article were a separate and
independent contract made by Buyer, Seller and the Funder. 

    13.7  Cumulative Rights.  The rights and remedies afforded under this Article 13 are cumulative
and not exclusive. 

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       13.8  Modification Requires Funders Consent.  This Agreement shall not be modified without the prior
written consent of the Funder and any modification without such consent shall be void and of no effect. 

    13.9  Funders Not Liable For Covenants.  Except where otherwise indicated the provisions of this
Article 13, Sections 13.1 to 13.9, are for the benefit of the Funder. Neither a Funder, nor any other holder or owner of the indebtedness secured by a loan agreement shall be liable upon the
covenants, agreements or obligations of Seller contained in this Agreement, unless and until a Funder or such holder or owner becomes the owner of the Plant. 

ARTICLE 14  

 FORCE MAJEURE  

    14.1  Force Majeure.  Subject to the other provisions of this Section, if either party is unable by
reason of Force Majeure, as hereinafter described, to perform in whole or in part any obligation or covenant set forth hereunder, the obligations of both parties under this Agreement will be suspended
or curtailed to the extent necessary for the period such Force Majeure condition continues. Where the Agreement is suspended or curtailed to the extent necessary the amount of time the Force Majeure
is in effect will be added on to the Initial Term. 

    14.2  Definition.  For the purposes of this Agreement, Force Majeure will include any event or
circumstance arising or occurring beyond the reasonable control of Seller or Buyer, including without limiting the generality of the foregoing: 

    (a) Any
acts of God, including, but without restricting the generality thereof, lightning, earthquakes, storms, epidemics, landslides, floods, fires, explosions or
washouts. 

    (b) Any
strikes, lockouts or other industrial disturbances. 

    (c) Any
acts of the enemies of the state, sabotage, wars, blockades, insurrections, riots, civil disturbances, arrests or restraints. 

    (d) Any
freezing, explosions, craterings, breakage of equipment, forced maintenance shutdown, inability to obtain materials or equipment. 

    (e) Any
orders of any court or government authority, which physically limit the production, transportation or sale of Ethanol or alter the specifications of Ethanol
from that described in Schedule "A". 

    (f)  Any
acts or omissions (including failure to take Ethanol) of a transporter or carrier of Ethanol, which are caused by any event or occurrence of the nature
described in this Section. 

    (g) Any
other reasonable causes, whether of the kind herein enumerated or otherwise not within the reasonable control of the party claiming suspension and which, by the
exercise of due diligence, such party could not have prevented or is unable to overcome. 

    14.3  Labor Disputes.  Notwithstanding anything to the contrary in this Article expressed or implied, the
settlement of strikes, lockouts and other industrial disturbances will be entirely within the discretion of the party involved therein and such party may make settlement thereof at such time and on
such terms and conditions as it may deem advisable and no delay in making such settlement will deprive such party of the benefit of Section 14.1. 

    14.4  Sales during Force Majeure.  During the period when Buyer declares Force Majeure, Seller shall have
the right to sell and Deliver Ethanol to third parties on any terms and conditions Seller determines in its sole discretion. 

10

 

    14.5  Exclusions.  Force Majeure shall not include failure caused by lack of funds or lack of market for
Ethanol deliverable hereunder by Seller to Buyer. 

    14.6  Claiming Relief.  A party claiming relief under this Article will not be entitled to the benefit of
the provisions of Section 14.1 hereof unless, as soon as reasonably possible after the happening of the occurrence relied upon as soon as possible after determining that the occurrence was in
the nature of Force Majeure and would affect the claiming party's ability to observe or perform any of its covenants or obligations hereunder, the party claiming suspension gives to the other party
notice to the effect that such party is unable, by reason of Force Majeure, to perform the particular covenants or obligations. 

    14.7  Notice.  The party claiming suspension will give notice as soon as reasonably possible when the
Force Majeure condition has been or will be remedied to the effect that the same has been remedied and that such party has resumed, or is then in a position to resume, the performance of the suspended
covenants or obligations. 

    14.8  Termination for Force Majeure.  In the event that Force Majeure shall continue for a period of
twelve (12) months from the date the party claiming relief under this Article gives the other party notice, either party hereto shall have the right to terminate this Agreement by furnishing
written notice to the other, with termination effective upon the expiration date of such twelve (12) month period. Upon such termination, each party shall be relieved from its respective
obligations, except for obligations for payment of monetary sums which arose prior to the event of Force Majeure. 

ARTICLE 15  

 LIMITATION OF LIABILITY  

    15.1  Limitation Of Liability.  In no event shall Buyer or Seller be liable to any party for any
indirect, consequential, punitive or special damages, loss of business expectations, business interruptions or any damage to third parties arising in any way out of this Agreement or any breach
thereof. 

ARTICLE 16  

 AUDIT RIGHTS  

    16.1  Records.  Seller and Buyer will establish and maintain at all times, true and accurate books,
records and accounts in accordance with generally accepted accounting principles applied consistently from year to year consistent with good industry practices, distinguishable from all other books
and records, in respect of all transactions undertaken by such party pursuant to this Agreement. 

    16.2  Audit.  

    (a) During
normal business hours, each party shall have the right to audit such books, records and accounts of the other party once per year at the end of the calendar
year or at any time upon the occurrence of a default by such other party; provided such right to audit shall be limited to two calendar years following the completion of any sale or other transaction
associated with the Agreement. 

    (b) Subject
to paragraph (a) of this Section, through to the expiration of one (1) year following the expiration or termination of this Agreement, each
party shall have the right to have a third party auditor, who will be a member of a national U.S. chartered accounting firm, audit on such party's behalf the relevant accounts, books and records of
the other party to the extent necessary in order to verify the accuracy of any statement, charge, computation or demand made under or pursuant to any of the provisions of this Agreement. 

11

 

    (c) If any error is discovered in any statement rendered hereunder, such error will be adjusted within seven (7) days from the date of discovery, but no
adjustment will be made for any error discovered more than one year after delivery and receipt of such statements. 

    (d) If
a material difference from a statement rendered under this Agreement by any party is discovered by any audit, the party which rendered such statement will pay
the costs of such audit. If no such material difference appeal;, the party requesting the audit of such statement will pay such costs. 

ARTICLE 17  

 NOTICES  

    17.1  Notices.  

    (a) Except
as herein otherwise provided, each notice, request, demand., statement, report and bill which must or may be given pursuant hereto will be in writing and may
be mailed by prepaid first class mail (or equivalent), delivered by hand or sent by telecopier to the address or number indicated below: 

	(1)
	if
to Seller:

Badger State Ethanol, LLC

P.O. Box 317

Monroe, WI 53566

Attention: General Manager

Fax number: 608-329-3866

	(2)
	if
to Buyer:

Murex, N.A., Ltd.

15441 Knoll Trail, Suite 260

Dallas, TX 75248

Attention: Robert C. Wright

Fax number: 972-960-2135 

    (b) Copies
shall be provided to such other person or address as shall be indicated by written notice in the case of a notice of default of termination. 

    (c) Any
notices to Seller relating to the matters in Article 13 shall also be provided to Funders or Funders Representatives of which Buyer has been notified. 

    (d) The
date of receipt of each such notice, demand or other communication will be the date of delivery thereof if hand delivered, or, if given by mail as provided
herein, will be deemed conclusively to be the 5th clear day after the same is so mailed, except in the event of disruption of the postal service in which event the notice, demand or other
communication will be deemed to be receive I only when actually received and, if sent by telecopier, be deemed to have been given or received on the first business day after it was so sent. Either
party hereto may at any time and from time to time notify the other party in writing as to the change of address and the new address to which notice will be given to it thereafter until further
changed. 

ARTICLE 18  

 ADDITIONAL PROVISIONS  

    18.1  Default.  Subject to Article 14, if either party defaults in the performance of any term,
covenant or condition under this Agreement, the other party may provide written notice to the 

12

 

defaulting party stating the nature of the default. If such default is not remedied within sixty (60) days after receipt of such notice (or, in the case of payment defaults, ten
(10) days) the non-defaulting party shall have the remedies available under applicable law and, upon the expiration of such cure period, without limiting the foregoing, the
nondefaulting party may, on not less than thirty (30) days (or, in the case of payment defaults, ten (10) days) written notice terminate this Agreement provided such default has not been
rectified within such period. Notwithstanding any other provision of this Agreement, neither Seller nor Buyer may offset payments owing to them under this Agreement against payments owing by them.
This Section shall not limit the ability of the parties to terminate this Agreement pursuant to other provisions of this Agreement to the extent permitted by such provisions. Further, if a party
defaults any material provision of this Agreement, unless and until such party cures such default in accordance with this Agreement, such defaulting party shall not be entitled to the benefits
accorded it under this Agreement, and the non-defaulting party's obligations shall be suspended, during the pendency of such material default. 

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

    18.3  Assignment.  Neither party may assign this Agreement or any of its rights hereunder without the
prior written consent of the other, which consent may not be unreasonably withheld or delayed. A change in composition of Buyer or Seller will not be construed to be an assignment for the purposes of
this Section. Notwithstanding the foregoing, as security for its obligations to Funders providing financing to Seller, the Seller may (with prior written notice to Buyer) assign its interest in this
Agreement to such Funders from time to time, and Buyer consents to such assignment by its execution of this Agreement. Buyer further agrees to execute such consents or acknowledgements to such
assignment as Seller requests from time to time. 

    18.4  Documents.  Each party to this Agreement shall perform any and all acts and execute and deliver any
and all documents as may be necessary and proper under the circumstances in order to accomplish the intents and purposes of this Agreement and to carry out its provisions. 

    18.5  Time.  Time is of the essence with respect to the performance of each of the covenants and
agreements herein set forth. 

    18.6  Arbitration.  If any dispute arises out of or in connection with this Agreement, the obligations
arising under it or the interpretation of its terms, the matter shall be referred- to arbitration according to the following terms: 

    (a) Either
Seller or Buyer may initiate arbitration by giving written notice requesting arbitration to the other. 

    (b) The
parties shall select a single arbitrator by mutual agreement, but if they fail to select an arbitrator within ten (10) calendar days of the receipt of
notice of arbitration, then each party shall within seven (7) business days thereafter, appoint their respective arbitrator and the two (2) arbitrators thus chosen shall together, within
seven (7) business days of their appointment, select a third arbitrator and that three member panel shall arbitrate the dispute. In the event that the two arbitrators shall fail within seven
(7) business days of their appointment to select a third arbitrator, then upon written request of either party, the third arbitrator shall be appointed by the American Arbitration Association.
If a party shall fail to appoint an arbitrator as required the arbitrator appointed by the other party shall be the sole arbitrator. 

    (c) Within
fifteen (15) business days of the appointment of the arbitrator or panel, as the case may be, each party shall state in wanting its position
concerning the dispute, supported by the reasons therefore, and deliver its position to the arbitrator(s) and the other party. If either party fails to submit its position in a timely manner, the
position submitted by the other party shall be 

13

 

deemed correct, and the arbitration shall be deemed concluded. The parties shall then have ten (10) calendar days to respond to the position of the other party and deliver that response to the
arbitrator(s). The arbitrator(s) shall, within thirty (30) calendar days thereafter, meet to consider the documents presented in order to make a determination by majority on the issues in
dispute. Within fifteen (15) business days of the end of their meeting the arbitrator(s) shall present their award. The arbitrator(s) may award a party the right to terminate this Agreement if
termination is a remedy specified herein for the claim which is the subject of the arbitration. Any hearings requiring the attendance or participation of Seller or Buyer shall take place in Madison,
Wisconsin. 

    (d) Each
party in such arbitration shall bear one-half each of the expenses of the arbitrator(s), including their fees and costs, but each party shall bear
their own expenses, including attorney's fees. 

    18.7  Inurement.  This Agreement will inure to the benefit of and be binding upon the respective
successors and permitted assigns of the parties. 

    18.8  Entire Agreement.  This Agreement together with the Assignment of Contract and together with
Buyer's acknowledgment and consent to such assignment to the financing sources constitutes the entire Agreement between the parties with respect to the subject matter contained herein and any and all
previous agreements, written or oral, express or implied, between the parties or on their behalf relating to the matters contained herein are hereby terminated and canceled. 

    18.9  Modification.  There will be no modification of the term and provisions hereof except by the mutual
agreement in writing signed by the parties. 

    18.10  Governing Law.  The Agreement will be interpreted, construed and enforced in accordance with the
procedural, substantive and other laws of the State of Wisconsin without giving effect to principles and provisions thereof relating to conflict or choice of law even though one or more of the parties
is now or may do business in ~r become a resident of a different state. 

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

    18.12  Severability.  If any provisions of this Agreement shall be held to be invalid or unenforceable,
such invalidity or unenforceability shall attach only to such provision and shall not in any manner affect or render invalid or enforceable any other provision of this Agreement or render the
provision unenforceable in any other jurisdiction. 

    18.13  Headings.  The division of this Agreement into Articles, Sections, Subsections and Paragraphs or
any other divisions and the inclusion of the various headings, is for convenience of reference only and shall not affect the interpretation or construction of this Agreement. 

    18.14  Furnishing of Information.  The parties will, upon request, provide such additional information as
may be reasonably required to allow the parties to efficiently and effectively carry out their respective obligations hereunder and to determine and enforce individual or collective rights under this
Agreement. 

    18.15  Cumulative Remedies.  Unless otherwise specifically provided herein, the rights, powers, and
remedies of each of the parties provided herein are cumulative and the exercise of any right, power or remedy hereunder do not affect any other right, power or remedy that may be available to either
party hereunder or otherwise at law or in equity. 

    18.16  Faithful Performance.  The parties shall faithfully perform and discharge their respective
obligations in this Agreement and endeavor in good faith to negotiate and settle all matters arising during the performance of this Agreement not specifically provided for. 

14

 

    18.17  No Partnership.  This Agreement shall not create or be construed to create in any respect a
partnership between the parties. 

    18.18  Costs Borne By Each Party.  Each of the parties to this Agreement shall pay its own costs and
expenses incurred in the negotiation preparation and execution of this Agreement and of all documents referred to in it and in carrying out the transactions contemplated by this Agreement. 

    18.19  Counterparts.  This Agreement may be executed in any number of counterparts with the same effect
as if all parties to this Agreement had signed the same document and all counterparts will be construed together and constituted one and the same instrument. 

[The
rest of this page is intentionally left blank.] 

15

 

    IN WITNESS WHEREOF the parties have executed this Agreement by their respective proper signing officers as of the date first above written. 

	 	 	BADGER STATE ETHANOL, LLC
	

 	
 	

 	

 
	 	 	By:	/s/ Gary L. Kramer

	 	 	Its:	President

	

 	
 	
MUREX, N.A., LTD.
	

 	
 	

 	

 
	 	 	By:	/s/ Robert C. Wright

	 	 	Its:	President

16

  

 
 

SCHEDULE A
  
    PRODUCT SPECIFICATIONS    
  

    ASTM No. 4806 Specifications as attached to this Schedule A, adjusted for (i) water 0.8%; and (ii) by weight maximum. 

	

Designation: D4806-99	
 	

An American National Standard

Standard
Specification for

Denatured Fuel Ethanol for Blending with Gasolines for Use

As Automotive Spark-Ignition Engine Fuel1 

This standard is issued under the fixed designation D 4806; the number immediately following the designation indicates the year of
original adoption or, in the case of revision, the year of last revision. A number in parentheses indicates the year of last reapproval. A superscript epsilon ( ) indicates an editorial
change since the last revision or reapproval.

1  This specification is under the jurisdiction of ASTM Committee D-2 on Petroleum Products and Lubricants and is the direct
responsibility of Subcommittee DP2.A on Gasoline and Oxygenated Fuels. 

Current
edition approved Dec. 10, 1999. Published January 2000. Originally published as D 4806-88. Last previous edition D 4806-98. 

1

 

1.  Scope  

    1.1
This specification covers nominally anhydrous denatured fuel ethanol intended to be blended with unleaded or leaded gasolines at 1 to 10 volume % for use as a spark-ignition
automotive engine fuel. The significance of this specification is shown in Appendix X1. 

    1.2
The values stated in SI units are to be regarded as the standard. The values given in parentheses are for information only. 

2.  Referenced Documents  

    2.1
ASTM Standards:

86
Test Method for Distillation of Petroleum Products2

D 381 Test Method for Existent Gum in Fuels by Jet Eaporation2

D 512 Test Methods for Chloride Ion in Water3

D 891 Test Methods for Specific Gravity, Apparent, of Liquid Industrial Chemicals4

D 1152 Specification for Methanol (Methyl Alcohol)5

D 1193 Specification for Reagent Water3

D 1613 Test Method for Acidity in Volatile Solvents and Chemical Intermediates Used in Paint, Varnish, Lacquer, and Related Products5

D 1688 Test Methods for Copper in Water3

D 3505 Test Methods for Density or Relative Density of Pure Liquid Chemicals5

D 4052 Test Method for Density and Relative Density of Liquids by Digital Density Meter6

D 4057 Practice for Manual Sampling of Petroleum and Petroleum Products6

D 4814 Specification for Automotive Spark-Ignition Engine Fuel7

D 5501 Test Method for the Determination of Ethanol Content of Denatured Fuel Ethanol by Gas Chromatography7

D 6423 Test Method for Determination of pHe of Ethanol, Denatured Fuel Ethanol, and Fuel Ethanol (Ed75-Ed85)8

E 203 Test Method for Water Using Karl Fischer Reagent4

E 300 Practice for Sampling Industrial Chemicals4

E 1064 Test Method for Water in Organic Liquids by Coulometric Karl Fischer Titration4 

    2.2
Other Standards: 

United
States Code of Federal Regulations, Title 27, Parts 20 and 219

United States Federal Specification O-E-760b Ethyl Alcohol (Ethanol): Denatured Alcohol: and Proprietary Solvent10 

3.  Terminology  

    3.1
Definitions: 

    3.1.1
ethanol, n—ethyl alcohol, the chemical compound
C2H5OH. 

    3.1.2
gasoline, n—a volatile mixture of liquid hydrocarbons, generally
containing small amounts of additives, suitable for use as a fuel in spark-ignition, internal combustion engines. 

    3.1.3
gasoline-ethanol blend, n—a fuel consisting primarily of gasoline along with a substantial amount (more than 0.35
mass % oxygen) of denatured fuel ethanol. 

    3.1.4
oxygenate, n—an oxygen-containing ashless, organic compound, such as an alcohol or ether, which may be used as a fuel
or fuel supplement. 

2

 

    3.2
Definitions of Terms Specific to This Standard:

    3.2.1
denaturants—natural gasoline, gasoline components, unleaded gasoline, or toxic or noxious materials added to fuel
ethanol to make it unsuitable for beverage use but not unsuitable for automotive use. 

    3.2.2  denatured fuel ethanol—fuel ethanol made unfit for beverage use by the addition of denaturants. 

    3.2.3
fuel ethanol—ethanol with impurities common to its production (including water but excluding denaturants). 

    3.2.4
impurities—in commercially produced fuel ethanol compounds other than ethanol or denaturants present such as methanol
and fusel oil (for example, amyl and isomyl alcohols). 

    3.2.5  pHe—a measure of the acid strength of alcohol fuels. 

4.  Performance Requirements  

    4.1
Denatured fuel Ethanol—When fuel ethanol is denatured as specified in Section 5, it shall conform to the
following requirements at the time of blending with a gasoline. 

	2
	Annual
Book of ASTM Standards, Vol. 05.01. 
	3
	Annual
Book of ASTM Standards, Vol. 11.01. 
	4
	Annual
Book of ASTM Standards, Vol. 15.05. 
	5
	Annual
Book of ASTM Standards, Vol. 06.04. 
	6
	Annual
Book of ASTM Standards, Vol. 05.02. 
	7
	Annual
Book of ASTM Standards, Vol. 05.03. 
	8
	Annual
Book of ASTM Standards, Vol. 05.04. 
	9
	Order
as Code of Federal Regulations Title 27 Parts 200-End: from Superintendent of Documents, U.S. Government Printing Office, Washington, DC 20402 
	10
	Order
from Superintendent of Documents, U.S. Government Printing Office, Washington, DC 20402 

	Ethanol, volume $, min	 	92.1
	Methanol, volume $, max	 	0.5
	Solvent-washed gum, Mg/100 ml. Max	 	5.0
	Water content, volume %, max	 	1 (Note1)
	Denaturant content, volume $, min	 	1.96
	Volume %, max	 	4.76
	Inorganic Chloride content, mass	 	40 (32)
	Ppm (mg/L), max	 	 
	Copper content, mg/kg, max	 	0.1
	Acidity (as ascetic acid CH3COOH), Mass % (mg/L), max	 	0.007 (56) (Note 3)
	PHe	 	6.5 to 9.0
	Appearance	 	Visibly free of suspended or precipitated contaminants (clear and bright)

3

 

    Note 1—In
some cases, a lower water content may be necessary to avoid phase separation of a gasoline-ethanol blend at very low temperatures. This reduced water
content, measured at the time of delivery, shall be agreed upon between the supplier and purchaser. 

    Note 2—If
denatured fuel ethanol is prepared by the addition of denaturants to undernatured fuel ethanol after it has been produced rather than during the
dehydration process, the 15.56/15.56°C (60/60°F) specific gravity in air of the undenatured fuel ethanol shall be in the range from 0.7937-0.7977. 

    Note 3—Denatured
fuel ethanol may contain additives such as corrosion inhibitors and detergents that may affect the titratable acidity (acidity as acetic acid) of
the finished fuel ethanol. Although the base fuel ethanol may meet the acidity specification, the effect of these additives may produce an apparent high titratable acidity of the finished product.
Contact the ethanol supplier if there is a question regarding the titratable acidtity of your denatured fuel ethanol to verity that the base ethanol meets the acidity requirements of 4.1. 

    4.2  Other Properties—Limits more restrictive than those specified above, or the specification of additional properties such
as color, may be agreed upon between the supplier and the purchaser. 

5.  Denaturants  

    5.1
The only denaturants used for fuel ethanol shall be natural gasoline, gasoline components, or unleaded gasoline at a minimum concentration of two parts by volume per 100 parts of
volume of fuel ethanol, as defined by Formula CDA 20 of the Bureau of Alcohol, Tobacco, and Firearms (BATF) of the U.S. Treasury Department. This specification prohibits the use of hydrocarbons with
an end boiling point higher than 225°C (437°F) as determined by Test Method D 86, although they may be permitted by BATF regulations. Some kerosines, for instance, promote
piston scuff in automotive engines. The denaturants permitted by this specification may be included as part of the 10 volume % denatured fuel ethanol blended with a gasoline if they do not exceed five
parts by volume per 100 parts by volume of fuel ethanol. This is permitted in the United States by law. Any part of these denaturants that are present at concentrations higher than five parts by
volume per 100 parts by volume of fuel ethanol are considered as part of the base gasoline. 

    Note 4—BATF
regulations concerning the preparation, use, and handling of denatured ethanols are published in the United States Code of Federal Regulations, Title
27, Parts 20 and 21. Part 20 contains primarily legal and administrative information, and Part 21 contains technical information on denaturants and denatured ethanols. 

    5.2
Prohibited Denaturants—Although this specification permits only hydrocarbons in the gasoline boiling range to be used
as denaturants, specific mention must be made of some materials that have extremely adverse effects on fuel stability, automotive engines and fuel systems. These materials shall not be used as
denaturants for fuel ethanol under any circumstances. They are as follows: methanol which does not meet Specification D 1152, pyrroles, turpentine, ketones and tars (high-molecular weight
pyrolysis products of fossil or nonfossil vegetable matter). While any significant amount of methanol will lower the water tolerance and increase the vapor pressure of a gasoline-ethanol blend, these
effects become more serious when methanol is present at more than 2.5 parts by volume per 100 parts by volume of fuel ethanol. Also, methanol which does not meet Specification D 1152 frequently
contains impurities such as turpentine and tars. Similarly, ketone denaturants tend to degrade fuel stability or increase the tendency of a gasoline-ethanol blend to corrode metals and attack
elastomers. These effects become
more serious if the concentration of a ketone such as 4-methyl pentanone (methyl isobutyl ketone) exceeds one part by volume per 100 parts by volume of fuel ethanol. There is no
information available on the effects of denaturants other than those mentioned above, but unless a denaturant, such as a higher aliphatic alcohol or ether, is known to have no adverse effect on a
gasoline-ethanol blend or on automotive engines or fuel systems, it shall not be used. 

4

 

6.  Sampling  

    6.1
Samples may be obtained by an appropriate procedure of Practice D 4057 or Practice E 300, except that water displacement (in section on Sampling for Specific Tests in D 4057) must
not be used. Where practical, fuel ethanol should be sampled in glass containers. If samples must be collected in metal containers, do not use soldered metal containers although they are specified in
the Sampling Equipment section in Practice E 300. This is because the soldering flux in the containers may contaminate the sample. 

    6.2
Sample Size—A minimum of about 2 L or 1 U.S. qt is recommended. If specific gravity is to be determined by a hydromater
method, additional volume may be required. This depends on the size of the hydrometer. 

    6.3
Lot Size—A lot shall normally consist of the amount contained in a tanker compartment or other bulk container in which
it is delivered. If this definition does not apply, the definition of a lot must be agreed upon between the supplier and purchaser. 

    Note 5—See
Sections 5, 6, and 7 of Practice E 300 for a detailed discussion of the statistics of sampling. 

7.  Test Methods  

    7.1
The scope of some of the test methods specified in 7.2 to 7.10 do not include denatured fuel ethanol. The precisions of those test methods may differ from the reported precisions
when testing denatured fuel ethanol. 

    7.2  Water Content—Test Methods E 203 or E 1064. 

    7.3
Solvent-Washed Gum Content—Test Method D 381, air jet apparatus. 

    7.4
Acidity—Test Method D 1613. 

    7.5
pHe—Test Method D 6423. 

    7.6
Appearance—The product shall be visibly free of suspended or precipitated contaminants (clear and bright). This shall
be determined at indoor ambient temperature unless otherwise agreed upon between the supplier and the purchaser. 

    7.7
Specific Gravity—Test Method D 891, Procedure B or Test Method D 4052. For Test Method D 891, Procedure B (hydrometer,
no formal precision statement is available, but practical experience indicates that precision is no better than 0.0005. Test Method D 891 Proecdure C (pycnometer), with an interlaboratory precision
(reproducibility) of 0.0002, should b used as a referee method. 

    7.8  Inorganic Chloride Content—Modification of Test Method D 512, Procedure C. 

    7.8.1
The modification of Test Method D 512, Procedure C consists of using 5 mL of sample diluted with 20 mL of water in place of the 25 mL sample specified in the standard procedure.
The water shall meet Specification D 1193, Type II. The volume of the sample prepared by this modification will be slightly larger than 25 mL. To allow for the dilution factor, report the chloride ion
present in the fuel ethanol sample as the chloride ion present in the diluted sample multiplied by five. 

    7.8.2
The precision of this modified method has not been determined, but for the actual amount of chloride ion found in the diluted sample, it is expected to be similar to the
precision of Test Method D 512, Procedure C. 

5

 

    7.9
Copper Content—Modification of Test Method D 1688, Procedure D. 

    7.9.1
The modification of Test Method D 1688, Procedure D (atomic absorption) consists of mixing reagent grade ethanol (which may be denatured according to the U.S. Bureau of Alcohol,
Tobacco, and Firearms (BATF) of the U.S. Treasury Department Formula 3A or 30) in place of water s the solvent or diluent for the preparation of reagents and standard solutions.  However, this must not be done to prepare
the stock copper solution described in 38.1 of Test Method D 1688. Because a violent reaction may occur
between the acid and the ethanol, use water, as specified, in the acid solution part of the procedure to prepare the stock copper solution. Use ethanol for the rinse and final dilution only. 

    7.9.2
The precision of this modified method has not been determined but it is expected to be similar to the precision of Test Method D 1688, Procedure D. 

    7.10
Ethanol Content—Test Method D 5501. 

8.  Keywords  

    8.1
acidity, automotive spark-ignition engine fuel; base gasoline; chloride ion content; copper content; corrosion inhibitors; denaturants; denatured fuel ethanol; ethanol; ethanol
content; ethanol purity; fuel; fuel ethanol; gasoline; gasoline-ethanol blend; impurities; oxygenate; solvent-washed gum; water content. 

6

  

 
 

APPENDIX    
    
    (Nonmandatory Information)    
    
    X1. SIGNIFICANCE OF SPECIFIED PROPERTIES    
  

X1.1 Denatured Fuel Alcohol  

    X1.1.1 Water Content—Karl Fischer analysis is generally the only consistently reliable procedure
for the determination of water in denatured ethanol. Test Method E 203 describes the modifications required to run the test in the presence of alcohols. Specific gravity methods such as Test Methods D
891 and D 3505, are generally suitable for the reasons given in X1.2.1. Blends of fuel ethanol and gasoline have a limited solvency for water. This solvency will vary with the ethanol content, the
temperature of the blend, and the aromatic content of the base gasoline. A fuel made by blending volume % fuel ethanol with a gasoline containing 14 volume % aromatics and 0.6 mass % dissolved water
(about 0.5 volume %), will separate into a lower alcohol-rich aqueous phase and an upper hydrocarbon phase if cooled to about 7°C (45°F). As normal spark -ignition
engines will not run on the aqueous phase material, such a separation is likely to cause serious operating problems. Because some degree of water contamination is practically unavoidable in transport
and handling, and because gasoline-ethanol blends are hygroscopic, the water content of the denatured fuel ethanol must be limited when it is blended with gasoline to reduce the risk of phase
separation. 

    X1.1.2.
Solvent-Washed Gum Content: 

    X1.1.2.1
The test for solvent-washed gum content measures the amount of residue after evaporation of the fuel and following a heptane wash. The heptane wash removes the
heptane-soluble, nonvolatile material such as additives, carrier oils used with additives, and diesel fuels. Solvent-washed gum consists of fuel-insoluble gum and fuel-soluble
gum. The fuel-insoluble portion can clog fuel filters. Both can be deposited on surfaces when the fuel evaporates. 

    X1.1.2.2
Solvent-washed gum can contribute to deposits on the surfaces of carburetors, fuel injectors, and intake manifolds, ports, valves, and value guides. The impact of
solvent-washed gum from pure alcohols such as ethanol on malfunctions of modern engines is not known. The test method is used essentially to detect the presence of high boiling, heptane-insoluble
impurities. 

    X1.1.2.3
Because the precision statements for Test Method D 381 were developed using only data on hydrocarbons, they may not be applicable to denatured fuel ethanol. 

    X1.1.3
Chloride Ion Content—Low concentrations of chloride ions are corrosive to many metals. 

    X1.1.4
Copper Content—Copper is a very active catalyst for the low-temperate oxidation of hydrocarbons.
Experimental work has shown that copper concentrations higher than 0.012 mass ppm in commercial gasolines may significantly increase the rate of gum formation. 

    X1.1.5
Acidity—Very dilute aqueous solutions of low-molecular weight organic acids such as acetic
(CH3 COOH) are highly corrosive to many metals. It is therefore necessary to keep such acids at a very low level. 

    X1.1.6
pHe—When the pHe of ethanol used as a fuel for automotive spark ignition engines is below 6.5, fuel pumps can
malfunction as a result of film forming between the brushes and commutator, fuel injectors can fail from corrosive wear, and excessive engine cylinder wear can occur. When the pHe is above 9.0, fuel
pump plastic parts can fail. The adverse effects are less when ethanol is used 10 volume % in a blend with gasoline. 

    X1.1.7
Appearance—Turbidity or evidence of precipitation normally indicates major contamination. 

    X1.1.8
Ethanol Purity—The presence of even small quantities of some organic oxygen compounds other than ethanol may
adversely affect the properties of fuel ethanol-gasoline blends. 

7

 

    X1.2 Undenatured Ethanol:

    X1.2.1
Specific Gravity—The density of a water-ethanol mixture is primarily a function of its water content. Normal U.S.
industry practice and Federal regulations call for the use of the 15.56/15.56°C (60/60°F) specific gravity in air as the control method for water content of undenatured
ethanol. Because the addition of denaturants will normally affect specific gravity, specific gravity methods are generally non-suitable for determining the water content of denatured
ethanols. 

    The American Society for Testing and Materials takes no position respecting the variety of any patent rights asserted in connection with any item mentioned in
this standard. Users of this standard are expressly advised that determination of the validity of any such patent rights, and the risk of infringement of such rights, are entirely their own
responsibility.

    This standard is subject to revision at any time by the responsible technical committee and must be reviewed every five years and if not revised, either
reapproved or withdrawn. Your comments are invited either for revision of this standard or for additional standards and should be addressed to ASTM Headquarters. Your comments will receive careful
consideration at a meeting of the responsible technical committee, which you may attend. If you feel that your comments have not received a fair hearing, you should make your views known to the ASTM
Committee on Standards, at the address shown below.

    This standard is copyrighted by ASTM, 100 Barr Harbor Drive, P.O. Box C700, West Conshohocken, PA 19428-2959, United States. Individual
reprints (single or multiple copies) of this standard may be obtained by contacting ASTM at the above address or at 610/832-9585 (telephone). 610/832-9555 (fax) or
service@astm.org (e-mail); or through the ASTM web site (www.astm.org).

8

QuickLinks

EXHIBIT 10.1

SCHEDULE A PRODUCT SPECIFICATIONS

APPENDIX (Nonmandatory Information) X1. SIGNIFICANCE OF SPECIFIED PROPERTIESPrepared by MERRILL CORPORATION

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EXHIBIT 10.2    
  

PURCHASE AND SALE AGREEMENT  

 (DDGs)  

    THIS AGREEMENT, made and entered into as of August 8, 2001, by and between Badger State Ethanol, LLC, a Wisconsin limited liability company ("Seller"),
and 1CM Marketing, Inc., a Kansas corporation ("Buyer"). 

WITNESSETH  

    WHEREAS, Seller desires to sell and Buyer desires to purchase the Wet Distiller's Grains with Solubles, and Dried Distiller's Grains with Solubles (hereinafter
the "Products") output of the ethanol production Plant which Seller owns in Monroe, Wisconsin (hereinafter called the "Plant") and 

    WHEREAS,
Seller and Buyer wish to agree in advance of such sale and purchase to the price formula, payment, delivery and other terms thereof in consideration of the mutually promised
performance of the other, 

    NOW,
THEREFORE, in consideration of the promises and the mutual covenants and conditions herein contained, and for other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged by both parties, it is hereby agreed: 

    1.  PURCHASE AND SALE.  Seller agrees to sell to Buyer its entire bulk feed grade Products output from
the Plant, and Buyer agrees to purchase from Seller the entire bulk feed grade Products output from the Plant, subject to all the terms and conditions set forth in this Agreement. 

    2.  TERM.  The initial term of this Agreement shall be for three (3) years commencing on the date
of the first delivery of Products under this Agreement. Thereafter, this Agreement shall be automatically renewed for successive one year terms unless either party gives written notice to the other
party of it's election not to renew not later than ninety (90) days prior to the expiration of the then current term. 

    3.  DELIVERY AND TITLE.  

    A.  The
place of delivery for all Products sold pursuant to this Agreement shall be FOB Plant. Buyer and Buyer's agents shall be given access to the Plant in a manner
and at all times reasonably necessary and convenient for Buyer to take delivery as provided herein. Buyer shall schedule the loading, and shipping of all outbound Products purchased hereunder which is
shipped by truck or rail, but all labor and equipment necessary to load trucks or rail cars shall be supplied by Seller without charge to Buyer. Seller agrees to handle the Products in a good and
workmanlike manner in accordance with Buyer's reasonable requirements and in accordance with normal industry practice. Seller shall maintain the truck/rail loading facilities in safe operating
condition in accordance with normal industry standards. 

    B.  Seller
further warrants that storage space for not less than 10 days production of Products (herein, the "Storage Capacity"), based on normal operating
capacity, shall be reserved for Buyer's use at the Plant and shall be continuously available for storage of Products purchased by Buyer hereunder at no charge to Buyer. Buyer warrants and agrees to
remove Products before the Storage Capacity limits are exceeded, and Buyer shall be responsible for Seller's actual costs and damages resulting from Buyer's failure to do so. Seller shall be
responsible at all times for the quality and condition of the quantity for any Products stored up to the Storage Capacity at the Plant. Buyer shall be responsible for the quantity, quality and
condition of any Products once title 

1

 

to the Products passes to Buyer or for any Products not stored at the Plant or, unless Seller agrees otherwise in writing, for any Products in excess of the Storage Capacity at the Plant. 

    C.  Buyer
shall give to Seller a schedule of quantities of Products to be removed by truck and rail respectively with sufficient advance notice reasonably to allow
Seller to provide the required transportation services. Seller shall provide the labor, equipment and facilities necessary to meet Buyer's loading schedule and, except for any consequential or
indirect damages, shall be responsible for Buyer's actual costs or damages resulting from Seller's failure to do so. Buyer shall order and supply trucks as scheduled for truck shipments. All freight
charges shall be the responsibility of Buyer and at Seller's option, shall either be paid by Seller and promptly reimbursed by Buyer, or shall be billed to and paid directly by Buyer. Demurrage
charges will be for the account of the Buyer if Buyer fails to provide railcars in accordance with all production schedules provided by Seller. Demurrage charges will be for the account of the Seller
if Seller fails to load railcars in accordance with said schedules. 

    D.  Subject
to Section 1, Buyer shall provide loading orders as necessary to permit Seller to maintain Seller's usual production schedule, provided, however,
that Buyer shall not be responsible for failure to schedule removal of Products unless Seller shall have provided to Buyer production schedules as follows: Five (5) days prior to the beginning
of each calendar month during the term hereof, Seller shall provide to Buyer a tentative schedule for production in the next calendar month. On Wednesday of each week during any term hereof, Seller
shall provide to Buyer a schedule for actual production during the next production week (Monday through Sunday). Seller shall inform Buyer daily, of inventory and production status by 8:30 am. CDT.
For purposes of this paragraph, notification will be sufficient if made by facsimile or email as follows: 

If
to Buyer, to the attention of 1CM Marketing, Inc., Randy Ives, Facsimile number 316/796-0944; and randyi@icminc.com; and 

If
to Seller, to the attention of General Manager, Facsimile number 608/329-3866; and                [insert email when
known]; 

or
to such other representatives of Buyer and Seller as they may designate to the other in writing. 

    E.  Title,
risk of loss and full shipping responsibility shall pass to Buyer upon loading the Products into trucks or rail cars at the Plant, as the case may be, and
delivering via facsimile or email to Buyer the bill of lading for each such shipment (Seller will promptly mail to Buyer by first class mail the original bills of lading). 

    F.  None
of the Products shall be sold more than 180 days in advance by Buyer unless Seller explicitly approves in writing the price and terms of any such
contract. Buyer will advise weekly and update Seller monthly on all outstanding contractual obligations, and the terms thereof. The aforementioned method of notification (facsimile or email) shall be
deemed sufficient for this purpose. Any forward sales contracts approved by the Seller shall be the responsibility of the Seller, and the Seller shall have the full benefit or burden of those
contracts, subject however to Buyer's continued performance of its obligations hereunder which are required to fulfill such contracts. 

    4.  PRICE AND PAYMENT.  

    A.  Buyer
agrees to pay Seller for all Products removed by Buyer from the "Plant," a price equal to [***]. Buyer agrees to use
commercially reasonable efforts to achieve the highest resale price available under prevailing market conditions in the reasonable judgment of Buyer and Seller. After one (1) year, Buyer will
submit to Seller a report for the twelve (12) months just ended showing the statistical correlation of weekly commodity prices of key commodities to the price of 

2

 

the Products. Provided a strong correlation exists between an index or commodity and the price of the Products, Seller will consider an incentive pricing program pursuant to which the parties would
agree to negotiate a mutually acceptable pricing and compensation formula using then relevant factors for the industry. 

[***]  Material
has been ommitted pursuant to a request for confidential treatment and such material has been filed separately with the Securities
and Exchange Commission. 

    B.  On
a daily basis, Weekends and Holidays excluded, Seller shall provide Buyer with certified weight certificates for the previous day's shipments. Buyer shall pay
Seller the full price, determined pursuant to paragraph 4A above, for all properly documented shipments. Payment for such shipments shall occur so that payment is received on or by the
following Thursday of each shipment week (Monday through Sunday). Buyer agrees to maintain accurate sales records and to provide such records to Seller upon request. Seller shall have the option to
audit Buyer's sale invoices at any time during normal business hours and during the term of this Agreement. 

    5.  OUANTITY AND WEIGHTS.  

    A.  It
is understood that said output of the Products shall be determined by Seller's production schedule and that no warranty or representation has been made by Seller
as to the exact quantities of Products to be sold pursuant to this Agreement. At the effective date of this Agreement, the output estimated by Seller to be sold to the Buyer is approximately eleven
thousand (11,000) tons of Dried Distillers Grains per month from the Plant. 

    B.  The
quantity of Products delivered to Buyer from the Plant shall be established by weight certificates obtained from scales which are certified as of the time of
weighing and which comply with all applicable laws, rules and regulations. In the case of rail shipments, the first official railroad weights will govern establishment of said quantities. The outbound
weight certificates shall be determinative of the quantity of Products for which Buyer is obligated to pay pursuant to Section 4. 

    C.  All
rail cars loaded at the Plant shall be grain hopper cars. Seller agrees that such cars shall be loaded to full visible capacity at the Plant. If not loaded to
full visible capacity and such failure to load to full visible capacity is caused solely by either Seller or Buyer, then the party causing such failure to
load shall pay in full the portion of freight charges allocable to the unused capacity of the car; otherwise Buyer and Seller shall share equally in such costs. It is agreed and understood that all
railcars, when loaded to full visible capacity, shall be defined as having a "light weight". 

    6.  OUALITY.  

    A.  Seller
understands that Buyer intends to sell the Products purchased from Seller as a primary animal feed ingredient and that said Products are subject to minimum
quality standards outlined in Exhibit A for such use. Seller agrees and warrants that the Products produced at the Plant and delivered to Buyer shall meet the minimum quality standards outlined
in Exhibit A. 

    B.  Seller
warrants that all Products sold to Buyer hereunder shall, at the time of delivery to Buyer, conform to the minimum quality standards outlined in
Exhibit A. Said minimum quality standards are subject to change at the discretion of Seller upon reasonable notice which shall be deemed to be 30 days of written notification to Buyer.
Buyer shall have ten (10) days from the receipt of Product sample to test the Products and determine their conformity in all material respects to the minimum quality standards in
Exhibit A. For any Products failing to meet such standards, Buyer may reject such Product and shall notify Seller immediately by telephone (with facsimile or email confirmation) of the basis
for such rejection. 

3

 

    C.  Seller warrants that at the time of loading the Products will not be adulterated or misbranded within the meaning of the Federal Food, Drug and Cosmetic Act and
that each shipment may lawfully be introduced into interstate commerce under said Act. Payment of invoice does not waive Buyer's rights if goods do not comply with terms or specification of this
Agreement. Unless otherwise agreed between the parties to this Agreement, and in addition to other remedies permitted by law, the Buyer may, without obligation to pay, reject either before or after
delivery, any of the Products which are found by Buyer to fail in a material way to conform to this Agreement. Should any of the Products be seized or condemned by any federal or state department or
agency for any reason except noncompliance by Buyer with applicable federal or state requirements, such seizure or condemnation shall operate as a rejection by Buyer of the goods seized or condemned
and Buyer shall not be obligated to offer any defense in connection with the seizure or condemnation. However, Buyer agrees to cooperate with Seller in connection with the defense of any quality or
other Product claims, or any claims involving seizure or condemnation. Buyer shall be fully responsible for, and shall indemnify Seller against any liability for claims arising from any failure to
deliver Products to Buyer's purchasers, except to the extent that delivery under those contracts fails due solely to Seller's fault. When rejection occurs before or after delivery, at its option,
Buyer may: 

    (1) Dispose
of the rejected goods after first offering Seller a reasonable opportunity of examining and taking possession thereof, if the condition of the goods
reasonably appears to Buyer to permit such delay in making disposition; or 

    (2) Dispose
of the rejected goods in any manner directed by Seller which Buyer can accomplish without violation of applicable laws, rules, regulations or property
rights; or 

    (3) If
Buyer has no available means of disposal of rejected goods and Seller fails to direct Buyer to dispose of them as provided herein, Buyer may return the rejected
goods to Seller, upon which event Buyer's obligations with respect to said rejected goods shall be deemed fulfilled. Title and risk of loss shall revert back to Seller promptly upon proper rejection
by Buyer hereunder. 

    (4) Seller
shall reimburse Buyer for all costs reasonably incurred by Buyer in storing, transporting, returning and disposing of the rejected goods. Buyer shall have no
obligation to pay Seller for rejected goods and may deduct reasonable costs and expenses to be reimbursed by Seller from amounts otherwise owed by Buyer to Seller. 

    (5) If
Seller produces Products which comply with the warranty in Section C above but which do not meet applicable industry standards, Buyer agrees to purchase
such Products for resale but makes no representation or warranty as to the price at which such Product can be sold. If the Product deviates so severely from industry standard as to be unsaleable in
Buyer's reasonable judgment, then it shall be disposed of in the manner provided for rejected goods in Section C above. 

    D.  If
Seller knows or reasonably suspects that any Products produced at the Plant are adulterated, misbranded, or do not meet the minimum quality standards set forth
in Exhibit A, Seller shall promptly so notify Buyer so that such Product can he tested before entering interstate commerce. If Buyer knows or reasonably suspects that any Products produced by
Seller at the Plant are adulterated, misbranded or outside of minimum quality standards set forth in Exhibit A, then Buyer may obtain independent laboratory tests of the affected Products. If
such Products are tested and found to comply with all warranties made by Seller herein, then Buyer shall pay all testing costs and if the Products are found not to comply with such warranties, Seller
shall pay all testing costs. 

4

 

    7.  RETENTION OF SAMPLES.  Seller will take an origin sample of the Products from each truck or rail car
before it leaves the Plant using standard sampling methodology. Seller will label these samples to indicate the date of shipment that the truck, rail car, or pickup number involved. Seller will also
retain the samples and labeling information for not less than 30 days. At a minimum, a composite analysis on
all Products shall be sent once a month to Buyer. It is understood that said analysis is a composite and may or may not be indicative of the current analysis. 

    8.  INSURANCE.  

    A.  Seller
warrants to Buyer that all Seller's employees engaged in the removal of Products from the Plant shall be covered as required by law by worker's compensation
and unemployment compensation insurance. 

    B.  Seller
agrees to maintain throughout every term of this Agreement comprehensive general liability insurance, including Product Liability coverage, with combined
single limits of not less than $2,000,000. Seller's policies of comprehensive general liability insurance shall be endorsed to require at least thirty (30) days advance notice to Buyer prior to
the effective date of any decrease in or cancellation of coverage. Seller shall cause Buyer to be named as an additional insured on Seller's insurance policy and shall provide a certificate of
insurance to Buyer to establish the coverage maintained by Seller by the start of the contract term. 

    C.  Buyer
agrees to carry such insurance on it's vehicles and personnel operating on Seller's property as Seller reasonably deems appropriate. The parties acknowledge
that Buyer may elect to self insure its vehicles. Upon request, Buyer shall provide insurance to Seller to establish the coverage maintained by Buyer. 

    D.  Each
of the parties hereto shall obtain from its respective insurers a Waiver of subrogation provision in all insurance policies required pursuant to item C,
waiving any subrogation rights against the other party. 

    9.  REPRESENTATIONS AND WARRANTIES.  

    A.  Seller
represents and warrants that all Products delivered to Buyer shall not be adulterated or misbranded, except that Buyer assumes all responsibility for
labeling and tagging the feed products in accordance with applicable law, and assuming that Seller's Products meet the specifications set forth in Exhibit A as amended from time to time within
the meaning of the Federal Food, Drug and Cosmetic Act and may lawfully be introduced into interstate commerce pursuant to the provisions of the Act. Seller further warrants that the Products shall
fully comply with any applicable state laws governing quality, naming and labeling of "Product." Payment of invoice shall not constitute a waiver by Buyer of Buyer's rights as to goods which do not
comply with this Agreement or with applicable laws and regulations. 

    B.  Seller
represents and warrants that Products delivered to Buyer shall be free and clear of liens and encumbrances at the time of delivery to Buyer when title to the
Products passes to Buyer. 

    C.  Other
than the representations and warranties set forth in Sections 9A and 9B above, Seller makes no representation or warranty regarding the Products to be sold to
Buyer hereunder. ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO, ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE ARE HEREBY DISCLAIMED. 

    10.  NGFA TRADE RULES TO APPLY.  Except as otherwise expressly provided in writing, all Product sales
hereunder shall be governed by and subject to the National Grain and Feed Association's Trade Rules applicable on the date of Product sale transaction, and said Trade Rules, to the extent applicable
hereto, are hereby incorporated herein by reference. (Copies of the NGFA Trade and  

5

 

 Arbitration Rules are available by contacting the National Grain and Feed Association, 120] New York Ave., N. W., Suite 830, Washington, DC 20005.)

    11.  EVENTS OF DEFAULT.  The occurrence of any of the following shall be an event of default under this
Agreement: 

    A.  The
failure of either party to make payment to the other when due; 

    B.  A
default by either party in the performance of the covenants, conditions and agreements imposed upon that party by this Agreement; or 

    C.  If
either party shall become insolvent, or make a general assignment for the benefit of creditors or to an agent authorized to liquidate any substantial amount of
its assets, or be adjudicated bankrupt, or file a petition in bankruptcy, or apply to a court for the appointment of a receiver for any of its assets or properties with or without consent, and
such bankruptcy or receiver shall not be discharged within ninety (90) days following such filing or appointment. 

    12.  REMEDIES; ARBITRATION.  

    A.  Upon
the occurrence of an Event of Default, the parties hereto shall have all remedies available under applicable law with respect to an Event of Default by the
other party. Without limiting the foregoing, the parties shall have the following remedies whether in addition to or as one of the remedies otherwise available to them: (1) to declare all
amounts owed immediately due and payable; and (2) to immediately terminate this Agreement effective upon receipt by the party in default of the notice of termination, provided, however Buyer
shall be allowed 3 calendar days from the date of receipt of notice of default for nonpayment to cure any nonpayment. 

    B.  Notwithstanding
anything in this Agreement to the contrary, upon notice by either party to the other after the occurrence of a specifically identified Event of
Default under Section 1 lB above, the parties hereto agree that the sole remedy for resolution of such Event of Default under Section 1 lB shall be through arbitration proceedings before
the NGFA under NOFA Arbitration Rules. If Seller is not a member of the NGFA, Seller shall designate a similar arbitration service, but the NGFA rules shall still apply. The decision and award
determined through the arbitration shall be final and binding upon Buyer and Seller. Judgment upon the arbitration award may be entered and enforced in any Court having jurisdiction thereof. 

    13.  FORCE MAJEURE.  Neither Seller nor Buyer will be liable to the other for any failure or delay in the
performance of any obligation under this Agreement due to events beyond its reasonable control, including, but not limited to, fire, storm, flood, earthquake, explosion, act of the public enemy,
riots, civil disorders, sabotage, strikes, lockouts, labor disputes, labor shortages, war, stoppages or slowdowns initiated by labor, transportation embargoes, failure or shortage of materials, acts
of God, or acts or regulations or priorities of the federal, state or local government or branches or agencies thereof 

    14.  INDEMNIFICATION.  

    A.  Seller
shall indemnify, defend and hold Buyer and its officers, directors, employees and agents harmless from any and all losses, liabilities, damages, expenses
(including reasonable attorneys' fees), costs, claims, and demands, that Buyer or its officers, directors, employees or agents may suffer, sustain or become subject to, or as a result of(i) any
misrepresentation or breach of warranty, covenant or agreement of Seller contained herein or (ii) the Seller's negligence or willful misconduct. 

    B.  Buyer
shall indemnify, defend and hold Seller and its officers, directors, managers, employees and agents harmless, from any and all losses, liabilities, damages,
expenses (including reasonable attorneys' fees), costs, claims, demands, that Seller or its officers, directors, managers, 

6

 

employees or agents may suffer, sustain or become subject to, or as a result of(i) any misrepresentation or breach of warranty, covenant or agreement of Buyer contained herein or
(ii) the Buyer's negligence or willful misconduct. 

    C.  Where
such personal injury, death or loss of or damage to property is the result of negligence on the part of both Seller and Buyer, each party's duty of
indemnification shall be in proportion to the percentage of that party's negligence or faults. 

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

    16.  MISCELLANEOUS.  

    A.  This
writing is intended by the parties as a final expression of their agreement and a complete and exclusive statement of the terms thereof. 

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

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

    D.  No
representations, understandings or agreements have been made or relied upon in the making of this Agreement other than as specifically set forth herein. 

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

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

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

    H.  The
respective rights, obligations and liabilities of the parties under this Agreement are not assignable or delegable without the prior written consent of the
other party. However, either party may, without the consent of the other party, mortgage, pledge, assign as collateral, or otherwise encumber its rights under this Agreement or its assets located on
at the Plant to secure any obligations of such party to any lender or other funding source, and in connection therewith, upon the request of the other party hereto from time to time, Seller or Buyer,
as the case may be, will provide one or more estoppel certificates in form and substance reasonably satisfactory to the requesting party. 

7

 

    I.  Except as otherwise required to the contrary in this Agreement, notices shall be deemed to have been given to the party to whom it is addressed, forty-eight
(48) hours after it is deposited in certified U.S. mail, postage prepaid, return receipt required, addressed as follows: 

	 	 	Buyer:	 	1CM Marketing, Inc.

P.O. Box 397

310 North First

Colwich, Kansas 67030

Attn.: Randy Ives

Phone: (316) 796-0940

Fax: (316) 796-0944
	

 	
 	

Seller:	
 	

Badger State Ethanol, LLC

Attn: General Manager

P.O. Box 317

2443 Bethel Road

Monroe, Wisconsin 53566

Phone: (608) 329-3900

Fax: (608) 329-3866

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

	 	 	ICM MARKETING, INC.
	

 	
 	
By:	

/s/ RANDY IVES   

	 	 	Title:	President
	 	 	 	 
	 	 	 	 
	 	 	 	 
	

 	
 	
BADGER STATE ETHANOL, LLC
	

 	
 	
By:	

/s/ GARY L. KRAMER   

	 	 	Title:	President

8

   EXHIBIT A  

    Minimum Quality standards by product and plant: 

	Plant
	 	Component
	 	Minimum
	 	Maximum
	 
	Monroe DDGS	 	Protein	 	28	%	—	 
	 	 	Fat	 	8.5	%	—	 
	 	 	Fiber	 	—	 	15	%
	 	 	Ash	 	—	 	5	%

	
Plant
	
 	

Component
	
 	

Minimum
	
 	

Maximum
	
 
	Monroe WDG	 	Protein	 	10.5	%	—	 
	 	 	Fat	 	3	%	—	 
	 	 	Fiber	 	—	 	5	%
	 	 	Ash	 	—	 	2.5	%

    Minimum
quality standards for all Products shall also he deemed to be "cool and sweet, and with Aflatoxin levels less than 20 ppb maximum. 

A–1

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EXHIBIT 10.2

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