ETHANOL MARKETING CONTRACT
THIS
AGREEMENT is entered into by and among Eco-Energy, Inc. (hereinafter “Eco”) a
Tennessee Corporation with its main office located at 000 Xxxx Xxxxxxx Xxxx,
Xxxxx 000, Xxxxxxxx, Xxxxxxxxx 00000, and Show-Me Ethanol, Xxx 00 Xxxx,
Xxxxxxxx, XX 00000.
RECITALS:
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A.
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SHOW-ME,
who is developing an ethanol facilities in Missouri producing a minimum
of
50 million gallons per year of denatured ethanol at its
site.
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B.
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Eco
is a reseller in ethanol and is experienced in the marketing and
transportation of such ethanol, and is willing to agree to purchase
the
entire ethanol output of the plant.
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NOW,
THEREFORE, IT IS AGREED AS FOLLOWS BETWEEN THE PARTIES:
| 1. |
Eco
Services.
Eco
shall, during the term hereof, purchase the entire output of ethanol
and
to provide certain transportation services to SHOW-ME (the “Eco Program”).
The Eco services to be provided are set forth in Sections 2 and 3 and
the
exhibits attached hereto which are referred to
therein.
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| 2. |
Eco
Take or Pay Ethanol Purchases.
SHOW-ME
agrees to sell to Eco, and Eco agrees to purchase from SHOW-ME 100%
of the
production of ethanol during the term of the contract. Each potential
Eco
purchase will be presented to the SHOW-ME representative by Eco for
verbal
approval. Upon such verbal approval and purchase, a confirmation of
the
purchase contract will be submitted to SHOW-ME by Eco, encompassing
the
details of each purchase.
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| 3. |
Eco
Transportation Services.
Eco agrees to provide the transportation services set forth in Exhibit
B.
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| 4. |
Fees.
SHOW-ME shall pay a fee for services of Eco and materials provided
hereunder of 1% per net gallon of ethanol purchased by Eco during the
term
of the contract. Such fees shall be payable monthly on actual gallons
shipped from the prior month. Payment from SHOW-ME shall be subtracted
from Eco’s first weekly wire payment of the following month for ethanol
purchases.
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| 5. |
SHOW-ME
Representative.
SHOW-ME shall designate one or more persons who shall be authorized
and
directed to receive services hereunder and to make all merchandising,
purchasing and sales decisions for SHOW-ME. All directions, transactions
and authorizations given by such representative to Eco shall be binding
upon SHOW-ME. Eco shall be entitled to rely on the authorization of
such
persons until it receives written notification from SHOW-ME that such
authorization has been revoked. The terms of such purchase orders shall
be
consistent with the provision of Exhibit A and may include, but shall
not
necessarily be limited to, price, volume, delivery schedule, and shipping
instructions.
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| 6. |
Swaps
and Exchanges.
Eco shall provide 50% of entitled swaps and exchanges to SHOW-ME.
Entitlement is defined by the additional profits created during swaps
and
exchanges, which occur prior to delivery, The value of these swaps
and
exchanges shall be expressed in the form of a net differential.
Documentation of all swaps and exchanges will be made in the form of
a
quarterly report. This report shall be generated and payment submitted
to
SHOW-ME by the final business day of the month following the end of
the
calendar quarter.
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| 7. |
Eco
Limitations.
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| (a) |
Eco
assumes no responsibility for the completion or performance of any
contracts between SHOW-ME and SHOW-ME’s customers and suppliers, and
SHOW-ME agrees they shall not bring any action or make any claim against
Eco based on any act, omission or claim of any of SHOW-ME’s customers or
suppliers.
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| (b) |
SHOW-ME
is responsible to cover all non-deliveries of any product that is
contracted between Eco and SHOW-ME in a timely manner in order to stay
within the time parameters of the contract. Eco will assist in procuring
product from other suppliers to cover these
non-deliveries.
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| (c) |
If
any party terminates this agreement for any reason, both parties will
be
responsible to complete any existing
contracts.
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| 8. |
Separability
and Non-liability.
The services, contracts and relationships between SHOW-ME and Eco are
independent and separable.
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| 9. |
Confidentiality
Agreement.
The parties agree, to the extent permitted by law, to preserve and
protect
the confidentiality of the Agreement. Both parties recognize that federal
or state law may require the filing of the Agreement with, or the
furnishing of information to, governmental authorities or regulatory
agencies. Both parties further recognize the need, from time to time,
for
the submission of the Agreement to affiliates, consultants, or contractors
performing work on, or related to, the subject matter of the Agreement.
Buyer and Seller agree to allow the submission of the Agreement to
affiliates, consultants, or contractors if such affiliates, consultants,
or contractors agree to protect the confidentiality of the Agreement.
In
the event either party is of the opinion that applicable law requires
it
to file the Agreement with, or to disclose information related to the
Agreement (other than information required by laws and regulations
in
effect as of the date hereof to be furnished in periodic reports to
governmental authorities) to, any judicial body, governmental authority
or
regulatory agency, that party shall so notify the other party in writing
prior to the disclosure or filing of the
Agreement.
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| 10. |
Public
Disclosure.
Any public announcements concerning the transaction contemplated by
this
letter shall be approved in advance by Eco and SHOW-ME except for
disclosures required by law, in which case the disclosing party shall
provide a copy of the disclosure to the other party prior to its public
release.
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| 11. |
Solicitation.
SHOW-ME agrees not to contact or interfere with, solicit, disrupt or
attempt to disrupt relationships, contractual or otherwise, between
Eco
and any of its customers, employees or
vendors.
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| 12. |
Terms
and Termination.
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| (a) |
The
initial term of this Agreement shall commence on the first clay of
ethanol
production and shall continue for five years. This contract will
automatically renew for an additional term of one year unless SHOW-ME
gives written notice at least four (4) months prior to the end of the
initial term.
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| (b) |
This
agreement may be terminated by SHOW-ME as to Eco in the event of material
breach of any of the material terms hereof by such other party, by
written
notice specifying the breach, which notice shall be effective fifteen
(15)
days after it is given unless the receiving party cures the breach
within
such time. This agreement may be terminated by Eco as to SHOW-ME in
the
event of material breach of any of the material terms hereof by SHOW-ME
by
written notice specifying the breach, which notice shall be effective
fifteen (15) days after it is given unless the receiving party cures
the
breach within such time. Any material breach by SHOW-ME as to Eco or
by
Eco as to SHOW-ME that cannot be resolved within 15 days, both parties
may
mutually agree in writing to the length of time needed to resolve the
material breach.
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| (c) |
This
Agreement may also be terminated between either party by the mutual
consent of both parties on such terms as the parties may
agree.
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2
| (d) |
In
addition to any other method of terminating this Agreement, Eco may
unilaterally terminate this Agreement at any time if such termination
shall be required by any regulatory authority, and such termination
shall
be effective on the 30th
day following the giving of notice of intent to
terminate.
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| 13. |
Licenses,
Bonds, Insurance.
Each party represents that it now has and will maintain in full force
and
effect during the term of this Agreement, at its sole cost, all necessary
state and federal licenses, bonds and insurance in accordance with
applicable state or federal laws and
regulations.
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| 14. |
Limitation
of Liability.
EACH PARTY UNDERSTANDS THAT NO OTHER PARTY MAKES ANY GUARANTEE, EXPRESS
OR
IMPLIED, TO ANY OTHER OF PROFIT, OR OF ANY PARTICULAR ECONOMIC RESULTS
FROM TRANSACTIONS HEREUNDER. IN NO EVENT SHALL ANY PARTY BE LIABLE
FOR
SPECIAL, COLLATERAL, INCIDENTAL, OR CONSEQUENTIAL DAMAGES FOR ANY ACT
OR
OMISSION COMING WITHIN THE SCOPE OF THIS AGREEMENT, OR FOR BREACH OF
ANY
OF THE PROSHOW-MES OF THIS AGREEMENT, EVEN IF IT HAS BEEN ADVISED OF
THE
POSSIBILITY OF SUCH DAMAGES. SUCH EXCLUDED DAMAGES INCLUDE, BUT ARE
NOT
LIMITED TO, LOSS OF GOOD WILL, LOSS OF PROFITS, LOSS OF USE AND
INTERRUPTION OF BUSINESS.
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| 15. |
Disclaimer.
SHOW-ME understands and agrees that Eco makes no warranty respecting
legal
or regulatory requirements and risks. SHOW-ME shall obtain such legal
and
regulatory advice from third parties as it may deem necessary respecting
the applicability of legal and regulatory requirements applicable to
SHOW-ME business.
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| 16. |
Indemnity.
The Parties agree that they shall absolve, release and refrain from
seeking remedies against each other and their officers, agents, employees,
subcontractors and insurers for any and all losses, claims, damages,
costs, suits and liabilities for damage, deterioration of quality,
shrinkage in quantity, loss of grade or loss of Ethanol resulting from
the
inherent nature of transfer operations and the inherent nature of Ethanol
provided that this in no way shall relieve the parties for their own
negligence, willful misconduct or theft. Each party to this contract
shall
indemnify, defend and hold the other harmless from claims, demands
and
causes of action asserted against the other by any person (including
without limitation employees of either party) for personal injury or
death, or for loss of or damage to property resulting from the willful
or
negligent acts or omissions of the indemnifying party, Where personal
injury, death or loss of or damage to property is the result of the
joint
negligence or misconduct or the Parties hereto, the Parties expressly
agree to indemnify each other in proportion to their respective share
of
such joint negligence or misconduct.
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| 17. |
Nature
of Relationship.
Eco is an independent contractor providing services to SHOW-ME. No
employment relationship, partnership or joint venture is intended,
nor
shall any such relationship be deemed created hereby. Each party shall
be
solely and exclusively responsible for its own expenses and costs of
performance,
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| 18. |
Notices.
Any notices permitted or required hereunder shall be in writing, signed
by
an officer duly authorized of the party giving such notice, and shall
either be hand delivered or mailed. If mailed, notice shall be sent
by
certified, first class, return receipt requested, mail to the address
shown above, or any other address subsequently specified by notice
from
one party to the other.
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| 19. |
Compliance
With Governmental Controls.
To
the extent applicable, the parties agree to comply with all laws,
ordinances, rules, codes, regulations and lawful orders of any federal,
state or local government authority applicable to the performance of
the
Agreement, including, without limitation, those pertaining to the
environment, safety, health, social security, old age pension, wage
hour
laws, unemployment compensation, non-discrimination on the basis of
race,
religion, color, sex or national origin and affirmative
action.
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| 20. |
New
Or Changed Regulations.
The parties enter the Agreement in reliance upon the laws, rules,
regulations, interpretations, decrees, agreements, and concessions
of, and
arrangements (hereafter called “Regulations”) with governments or
governmental instrumentalities in effect on the date of the Agreement
with
respect to or directly or indirectly affecting the ethanol to be
delivered, including without limitation, production, gathering,
manufacturing, transportation, sale and delivery thereof insofar as
said
Regulations affect Eco and their customers. In the event that at any
time
subsequent to the date of the Agreement, any of said Regulations are
changed or new Regulations are promulgated whether by law, decree,
interpretation or regulation, or by response to the insistence or request
of any governmental authority or person purporting to act therefore,
and
the effect of such changed or new Regulation (a) is or will not be
covered
by any other provision of the Agreement, or (b) has or will have an
adverse economic effect upon the parties to this Agreement or the
suppliers or customers of said parties, the parties shall have the
option
to request renegotiation of the prices and other pertinent terms provided
for in the Agreement and their respective effective dates. Said option
may
be exercised by Eco at any time after such changed or new Regulation
is
promulgated by giving notice of the exercise of its option to renegotiate
prior to the time of delivery of ethanol or any part thereof. Such
notice
shall contain the new prices and terms desired by agreement of Eco
and
SHOW-ME. If the parties do not agree upon new prices and terms
satisfactory to both parties within ten (10) days after such notice
is
given, Eco shall have the right to terminate the Agreement at the end
of
said ten (10) day period.
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3
| 21. |
General.
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| (a) |
This
agreement is the entire understanding of the parties concerning the
subject matter hereof, and it may be modified only in writing signed
by
the parties.
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| (b) |
If
any provision or provision of this agreement shall be held to be invalid,
illegal or unenforceable, the validity, legality and enforceability
of the
remaining provision shall not in any way be affected or impaired
thereby.
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| (c) |
No
party shall be liable for any failure to perform any or all of the
provision of this agreement if and to the extent that performance has
been
delayed or prevented by reason of any cause beyond the reasonable control
of such party. The expression “cause beyond the reasonable control” shall
be deemed to include, but not be limited to: acts, regulations, laws,
or
restraints imposed by any governmental body; wars, hostilities, sabotage,
riots, or commotions; acts of God; or fires, frost, storms, or
lightning.
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| (d) |
This
agreement is not intended to, and does not, create or give rise to
any
fiduciary duty on the part of any party to any
other.
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| (e) |
No
action, regardless of its nature or form, arising from or in relation
to
this Agreement may be brought by either party more than two (2) years
after the cause of action has arisen, or, in the case of an action
for
nonpayment, more than two (2) years from the date the last payment
was
due. Venue for any action arising from or in relation to this agreement
shall be in Richmond, MO.
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| (f) |
This
agreement is governed by and shall be construed under the laws of the
State of Missouri.
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| (g) |
This
Agreement shall be binding upon and inure to the benefit of the parties
and their respective successors and permitted assigns. ECO or SHOW-ME
may
assign its rights and duties under this Agreement in connection with
the
sale, merger, exchange or acquisition of all or substantially all of
the
assets or stock. Either party may assign its rights and duties under
this
Agreement to another company controlling, or controlled by, or under
common control without having to obtain the express written consent
of the
other party. SHOW-ME shall also have the option to cancel this contract
should they sell the company to a third party entity. All specific
contracts will be completed regardless of
ownership.
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| (h) |
This
agreement shall be binding upon SHOW-ME and this above referenced plant
in
the event that the name, SHOW-ME is later changed to any name in the
alternative. A change in name does not void, nor make this contract
voidable.
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4
DATED
AND
EXECUTED AS OF THIS 4th DAY OF MAY, 2007
SHOW-ME
ETHANOL
BY:____________________________
ECO-ENERGY,
INC.
BY:____________________________
5
EXHIBIT
A
Ethanol
Eco
shall
purchase 100% of the production of ethanol of SHOW-ME’s plant on the following
terms:
| 1. |
Eco
will pay Friday of each week for the shipments made by Friday of the
previous week upon receipt of Invoice, Xxxx of Lading, Return Xxxx
of
Lading, and Certificate of Analysis. All paperwork for the previous
week’s
shipments must be received by 12:00 noon
Sunday.
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| 2. |
SHOW-ME
is responsible for any and all of their local, state and federal tax
liabilities.
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| 3. |
Eco
will provide scheduling and marketing for ethanol
produced.
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| 4. |
Eco
will be responsible for receivables risk on
ethanol.
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| 5. |
Eco
reserves the right to refuse business to anyone due to credit and market
risk.
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| 6. |
SHOW-ME
shall meet or exceed all specifications for E-grade denatured fuel
ethanol
as well as any changes in fuel ethanol industry standards that might
occur
after the execution of this agreement. (EXHIBIT
C)
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| 7. |
SHOW-ME
will keep Eco informed on production forecasts, as well as daily plant
inventory balances.
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| 8. |
On
all truck and rail shipments title and risk of loss of the ethanol
will
pass at the loading flange between the plant and the truck or railcar.
Unless otherwise specified Eco is purchasing all ethanol on a FOB plant
basis.
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| 9. |
SHOW-ME
will provide a minimum of 10 days storage on the SHOW-ME
site.
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| 10. |
SHOW-ME
must have meters that measure both gross and net 60 degrees Fahrenheit
temperature corrected gallons.
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| 11. |
Eco
shall deduct all unavoidable costs such as government tariffs or
assessment fees, sales taxes, import/export handling fees, assessments,
inspection fees, or any other that has been approved by the appropriate
member of the board of directors.
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6
EXHIBIT
B
Eco
Transportation Services
| 1. |
Eco
and SHOW-ME will mutually agree to the number of railcars needed. The
lease costs for the railcars are a pass through charge to the ethanol
facility. Eco will assist SHOW-ME in securing rail cars for their Missouri
plant.
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| 2. |
Upon
SHOW-ME’s receipt of invoice from Eco the amount of the invoice will be
subtracted from Eco’s next Friday payment to SHOW-ME for Ethanol purchases
unless otherwise communicated by SHOW-ME that the amount of the invoice
will be remitted by wire transfer within five (5) business days from
invoice date.
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| 3. |
Eco
will negotiate rail rates in conjunction with
SHOW-ME.
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| 4. |
All
rail contracts will be in the name of SHOW-ME or any name later chosen
in
the alternative.
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| 5. |
SHOW-ME
will invoice Eco for rail freight along with a copy of the actual railroad
invoice. (This amount will be paid the following Friday upon receipt
of
invoice.)
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| 6. |
Eco
will purchase all truck and railcar gallons on an FOB plant
basis.
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| 7. |
Eco
will supply trucks.
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7
