Exhibit 10.13
ETHANOL AGREEMENT
THIS ETHANOL AGREEMENT (this "Agreement"), made and entered into this 12th
day of November, 2004, by and among East Kansas Agri-Energy, LLC, a Kansas
limited liability company ("EKAE"), and United Bio Energy Fuels, LLC, a Kansas
limited liability company ("UBEF").
W I T N E S S E T H :
WHEREAS, EKAE intends to construct and own an ethanol plant, located near
Garnett, Kansas (the "Plant");
WHEREAS, EKAE desires to sell and UBEF desires to buy all the fuel grade
ethanol ("Ethanol") produced at the 35 MGY dry grind ethanol plant located near
Garnett, Kansas ("Plant");
WHEREAS, the parties desire to purchase and sell the Ethanol, and receive
and provide such services, in accordance with the fees, price formula, payment,
delivery and other terms set forth in this Agreement.
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. FEES. During the term of this Agreement, EKAE shall pay UBEF a fee of
One Cent ($.01) for each gallon of Ethanol produced at the Plant and shipped by
UBEF (the "Marketing Fee").
2. TERM. The initial term of this Agreement shall be for five (5) years.
The parties shall execute a memorandum setting forth the actual date of
commencement of the term, which shall be approximately 6 months before
substantial completion of the Plant. Unless earlier terminated in accordance
with this Agreement, this Agreement shall be automatically renewed for
successive one (1) year terms thereafter unless either party gives written
notice to the other party of its election not to renew, not later than ninety
(90) days prior to the expiration of the then current term.
3. PRICE AND PAYMENT.
A. PRICE.
UBEF agrees to pay EKAE for all Ethanol shipped by UBEF from the
Plant, a price equal to the F.O.B. Plant Price. For purposes of this provision,
the "F.O.B. Plant Price" shall mean the actual sales price of the Ethanol
charged by UBEF to its customers, less the Marketing Fee and all reasonable
expenses incurred by UBEF in connection with the sale and delivery of the
Ethanol to its customers, including, but not limited to, all freight costs.
Revenues realized from exchanges made on behalf of EKAE will be paid to EKAE.
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B. PAYMENT.
On a daily basis, Weekends and Holidays excluded, EKAE shall
provide UBEF with certified meter or weight certificates for the previous day's
shipments of Ethanol. UBEF shall pay EKAE the F.O.B. Plant Price defined in
paragraph 3.A above, for all properly documented shipments. UBEF shall deliver
to EKAE payment for such shipments on or before the second following Friday of
each one week shipment period (Sunday through Saturday). UBEF agrees to maintain
accurate sales and expense records and to provide such records to EKAE upon
request. EKAE shall have the right to inspect, copy and/or audit UBEF's sales
invoices and expense records at any time during normal business hours at the
corporate office of UBEF. If any such inspection or audit shall reveal a
deficiency in a payment due to EKAE, UBEF shall immediately pay EKAE the amount
of the deficiency together with interest from the date that such payment should
have been made at the prime rate in effect on the date of the underpayment as
reported in the Wall Street Journal. The expense of any such inspection or audit
shall be borne by EKAE unless a material deficiency in payment is revealed,
then, in such case, the reasonable expense of such inspection or audit shall be
borne by UBEF.
C. BEST EFFORTS. UBEF agrees to use its best efforts to achieve the
highest price of Ethanol available under prevailing market conditions as judged
in good faith by UBEF and agrees to communicate to EKAE the terms and conditions
of ethanol sales.
D. COLLECTION. UBEF shall be responsible for all customer billing
and account servicing, including, but not limited to, the collection of amounts
owed UBEF by its customers, UBEF shall bear all costs associated with such
billing and collection activities, and UBEF shall assume all losses due to
failure of its customers to pay their account.
E. FUTURE SALES BY UBEF. UBEF shall not contract for the sale of
Ethanol to its customers more than one hundred eighty (180) days in advance,
unless EKAE explicitly approves the price and terms of any such contract and
provides notice of such approval to UBEF. Upon notice of termination, UBEF shall
not contract for the sale of Ethanol to its customers more than ninety (90) days
in advance, unless EKAE explicitly approves the price and terms of any such
contract and provides notice of such approval to UBEF. UBEF will advise EKAE
weekly and update EKAE monthly on all outstanding contractual obligations, and
the terms thereof.
4. FEES AND EXPENSES. Unless otherwise specifically provided for herein,
and to the extent not already included in the price of the Ethanol, EKAE shall
be responsible for any and all fees and expenses, including but not limited to
fees assessed by any State or other regulatory agency, incurred or assessed on
any Ethanol, whether for licensing, dues, branding, packaging, inspecting, or
otherwise. EKAE shall, as a result of its responsibility for such expenses,
retain all rights to any name, branding, and packaging of the Ethanol upon
termination of this Agreement.
5. DELIVERY AND TITLE.
A. PLACE. The place of delivery for all Ethanol purchased by UBEF
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pursuant to this Agreement shall be F.O.B. Plant. UBEF and its agents shall be
given access to the Plant in a manner and at all times reasonably necessary and
convenient for UBEF to take delivery as provided herein. UBEF shall schedule the
loading and shipping of all Ethanol purchased hereunder, whether shipped by
truck or rail. All labor and equipment necessary to load or unload trucks or
rail cars shall be supplied by EKAE without charge to UBEF. The parties agree to
handle the Ethanol in a good and workmanlike manner in accordance with the
other's reasonable requirements and in accordance with normal industry practice.
EKAE shall maintain the truck/rail loading facilities in safe operating
condition in accordance with normal industry standards.
B. STORAGE.
EKAE shall provide storage space for not less than seven (7) full
days of production of Ethanol, based on normal operating capacity.
C. REMOVAL. UBEF warrants and agrees to remove Ethanol before the
aforementioned storage limits are exceeded. EKAE shall be responsible at all
times for the quantity, quality and condition of any Ethanol in storage at the
Plant.
D. LOADING AND UNLOADING SCHEDULE.
UBEF shall give to EKAE a schedule of quantities of Ethanol to be
removed by truck and rail respectively with sufficient advance notice reasonably
to allow EKAE to provide the required services described herein. EKAE shall
provide the labor, equipment and facilities necessary to meet UBEF's loading
schedule and EKAE shall be responsible for UBEF's actual costs or damages
resulting from EKAE's failure to do so.
UBEF shall order and supply trucks as scheduled for truck
shipments. All freight charges shall be the responsibility of UBEF and shall be
billed directly to UBEF.
E. PRODUCTION SCHEDULE.
1. UBEF shall provide loading orders as necessary to permit
EKAE to maintain its usual production schedule, provided, however, that UBEF
shall not be responsible for failure to schedule removal of Ethanol unless EKAE
shall have provided to UBEF production schedules as follows: At least five (5)
days prior to the beginning of each calendar month during the term hereof, EKAE
shall provide to UBEF a tentative schedule for production in the next calendar
month. On Wednesday of each week, EKAE shall provide to UBEF a schedule for
actual production for the followmg production week (Monday through Sunday). EKAE
shall inform UBEF daily of inventory and production status by 8:30 a.m. CDT.
2. NOTICE. For purposes of this paragraph S.E, notification
will be sufficient if made by facsimile or electronically as follows:
If to UBEF to the attention of Xxxxx Xxxxxxx,
Facsimile number 000-000-0000,
Email address: xxxxx.xxxxxxx@xxxxxxxxxxxxxxx.xxx
and
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If to EKAE, to the attention of ___________, Facsimile number
________________, Email address: , or
to such other representatives of UBEF and EKAE as they may designate
to the other in writing.
F. TITLE. Title and risk of loss shall pass to UBEF at the point in
time when loading the Ethanol into trucks or rail cars has been completed and
delivery to UBEF of the xxxx of lading for each such shipment.
G. RAIL CAR LEASES. UBEF shall be responsible for estimating the
number of rail car leases required to handle the transportation of the Ethanol
and for negotiating the terms of and executing such rail car leases; provided,
however, that any and all rail car leases executed by UBEF shall be in
substantially the same form as a standard rail car lease previously approved by
EKAE for this purpose. Upon the termination of this Agreement, any and all
existing rail car leases for the transport of Ethanol will be assigned to EKAE,
who will assume and be obligated to the terms and conditions of said leases.
EKAE shall reimburse UBEF for any reasonable expenses incurred by UBEF
associated with such rail car leases, to the extent such expenses are not
already accounted for in the price of the Ethanol.
H. RAIL CONTRACTS. UBEF shall negotiate, in consultation with EKAE,
the terms of rail contracts and rates on behalf of EKAE. The rail contracts
shall be placed in the sole name of EKAE.
6. QUANTITY AND WEIGHTS.
A. PRODUCTION AMOUNT. EKAE represents and warrants that it will sell
to UBEI and UBEI represents and warrants that it will purchase from EKAE all
Ethanol produced at the Plant. However, it is understood that total production
amount of Ethanol shall be determined by EKAE's production schedule and that no
warranty or representation has been made by EKAE as to the exact quantities or
timing of Ethanol to be produced pursuant to this Agreement.
B. ESTIMATE. The estimated production of Ethanol at the Plant by
EKAE, to be sold to UBEF, is approximately 35 million (35,000,000) gallons of
Ethanol per year on a ratable production schedule per month, and EKAE shall use
its best efforts to produce such amount of Ethanol.
X. XXXXXX.
The quantity of Ethanol delivered to UBEF from the Plant shall
be established by meter or weight certificates, obtained from meters or scales
at the Plant, which shall be maintained by EKAE as required by applicable laws,
rules and regulations. The outbound meter or weight certificates shall be
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determinative of the quantity of the Ethanol for which UBEF is obligated to pay
pursuant to paragraph 3 above, and such quantity shall be measured using net 60
degree Fahrenheit compensated gallons.
D. RAIL CARS.
All rail cars for Ethanol shall be the largest allowable tank
cars as determined by UBEF. With respect to Ethanol, all such cars shall meet
all applicable Department of Transportation and Federal Railroad Administration
specifications for shipping ethanol. EKAE agrees that such tank cars for Ethanol
shall be loaded to full visible capacity at the Plant. If not loaded to full
visible capacity, EKAE shall pay in full the portion of freight charges
allocable to the unused capacity of the car.
7. QUALITY.
A. STANDARDS. EKAE understands that UBEF intends to sell the Ethanol
purchased from EKAE as a gasoline blending component and that the same is
subject to minimum quality standards for such use. EKAE warrants that the
Ethanol produced by the Plant and delivered to UBEF shall conform to the minimum
quality standards outlined in EXHIBIT A or EXHIBIT B (ETHANOL FOR CALIFORNIA) as
may be applicable, attached hereto, as each may be amended from time to time.
Notwithstanding anything in this Agreement to the contrary, EKAE provides no
warranty greater than those received from ICM, Inc. pursuant to the Design-Build
Contract dated August 9, 2004.
B. COMPLIANCE. Unless otherwise agreed between the parties to this
Agreement, and in addition to other remedies permitted by law, UBEF may, without
obligation to pay, reject any of the Ethanol before loading for the failure of
the Ethanol to comply with the representations and warranties in this paragraph.
Actual loading of Ethanol shall not waive UBEF's rights to reject Ethanol on the
grounds of noncompliance with the representations and warranties in this
Agreement unless UBEF had actual knowledge of such noncompliance prior to
loading. Should any of the Ethanol be seized or condemned by any federal or
state department or agency for any reason, except noncompliance by UBEF with
applicable federal or state requirements, such seizure or condemnation shall
operate as a rejection by UBEF of the Ethanol seized or condemned and UBEF shall
not be obligated to offer any defense in connection with the seizure or
condemnation. However, UBEF agrees to cooperate with EKAE in connection with the
defense of any quality or other product claims, or any claims involving
governmental seizure or condemnation. UBEF shall be fully responsible for, and
shall indemnify EKAE against any liability for, or claims arising from, any
failure by UBEF to deliver Ethanol to its customers, except to the extent that
delivery fails due to the fault of EKAE. When rejection occurs pursuant to this
paragraph, at its option, UBEF may:
(1) Dispose of the rejected Ethanol after first offering EKAE a
reasonable opportunity of examining and taking possession thereof, if the
condition of the Ethanol reasonably appears to UBEF to permit such delay in
making disposition; or
(2) Dispose of the rejected Ethanol in any manner directed by
EKAE which UBEF can accomplish without violation of applicable laws, rules,
regulations or property rights; or
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(3) If any of the Ethanol is seized or condemned by any federal
or state department or agency or if UBEF has no available means of disposal of
rejected Ethanol and EKAE fails to direct UBEF to dispose of it as provided
herein, UBEF may return the rejected Ethanol to EKAE, upon which event UBEF's
obligations with respect to said rejected Ethanol shall be deemed fulfilled.
Title and risk of loss shall pass to EKAE promptly upon such seizure or
condemnation or rejection by UBEF.
(4) EKAE shall reimburse UBEF for all costs reasonably incurred
by UBEF in storing, transporting, returning and disposing of the rejected
Ethanol. UBEF shall have no obligation to pay EKAE for rejected Ethanol and may
deduct reasonable costs and expenses to be reimbursed by EKAE from amounts
otherwise owed by UBEF to EKAE.
C. PRODUCT TESTING. If EKAE knows or reasonably suspects that any
Ethanol produced by the Plant is adulterated or misbranded, or, are outside of
minimum quality standards set forth in EXHIBIT A or EXHIBIT B, EKAE shall
promptly so notify UBEF so that such Ethanol can be independently tested before
entering interstate commerce. If UBEF knows or reasonably suspects that any
Ethanol produced by the Plant is adulterated or misbranded, or, is outside of
minimum quality standards set forth in EXHIBIT A or EXHIBIT B, then UBEF may
obtain independent laboratory tests of the affected Ethanol. If such Ethanol is
independently tested and found to comply with all warranties made by EKAE
herein, then UBEF shall pay all testing costs, and if the Ethanol is found not
to comply with such warranties, EKAE shall pay all testing costs.
D. CHANGES IN STANDARDS. Upon written notice to UBEF, said minimum
quality standards are subject to change at the discretion of EKAE. Sufficient
notice of any such change shall be deemed to be given to UBEF if EKAE gives
written notification to UBEF at least thirty (30) days prior to such change.
Such changes must be in conformance to generally acceptable industry standards.
8. RETENTION OF SAMPLES. EKAE will take an origin sample of the Ethanol
from each truck or rail car before each shipment leaves the Plant, using
industry standard sampling methodology. EKAE will label these samples to
indicate the date of shipment of the truck, rail car, or pickup number involved.
EKAE shall also retain the samples and labeling information for no less than six
(6) months after shipment of the Ethanol.
9. INSURANCE.
A. POLICIES. EKAE warrants to UBEF that all EKAE's employees engaged
in the removal of Ethanol from the Plant shall be covered as required by law by
worker's compensation and unemployment compensation insurance.
B. COVERAGES. During the term of this Agreement, EKAE shall purchase
and maintain such insurance in such amounts as it may reasonably determine. UBEF
shall be named as an additional insured on all such policies. All such policies
shall contain provisions to the effect that in the event of payment of any loss
or damage the insurers will have no rights of recovery against any of the
insureds or additional insureds thereunder. EKAE waives all rights against UBEF
and its employees and agents for all losses and damages caused by, arising out
of or resulting from any of the perils or causes of loss covered by such
policies and any other
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property insurance applicable to the Plant. Also during the term of this
Agreement, UBEF shall purchase and maintain commercial general liability
insurance, with combined single limits of not less than $2,000,000 which shall
be endorsed to require at least thirty (30) days notice to EKAE prior to the
effective date of any termination or cancellation of coverage. EKAE shall be
named as an additional insured on all such policies and UBEF shall provide a
certificate of insurance to EKAE to establish the coverage maintained by the
commencement date of this Agreement.
C. UBEF VEHICLES. UBEF agrees to carry such insurance on its
vehicles and personnel operating on EKAE's property as UBEF reasonably deems
appropriate or as required by law. The parties acknowledge that UBEF may elect
to self insure its vehicles. UBEF shall provide a certificate of insurance to
EKAE to establish the coverage maintained by UBEF.
D. CONSEQUENTIAL DAMAGES. EACH PARTY TO THIS AGREEMENT UNDERSTANDS
THAT NO OTHER PARTY MAKES ANY GUARANTEE, EXPRESS OR IMPLIED, TO ANY OTHER OF
PROFIT, OR OF ANY PARTICULAR ECONOMIC RESULTS FROM TRANSACTIONS CONTEMPLATED BY
THIS AGREEMENT. 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 PROVISIONS 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.
E. OTHER CLAIMS. Except as provided in paragraph 9.D above, nothing
herein shall be construed as a waiver by either party against the other party of
claims, causes of action or other rights which either party may have or
hereafter acquire against the other party for damage or injury to its agents,
employees, invitees, property, equipment or inventory, or third party claims
against the other party for damage or injury to other persons or the property of
others.
10. REPRESENTATIONS AND WARRANTIES.
A. Each party represents and warrants that it is an entity in good
standing under the laws that it is organized and has all the requisite power and
authority to carry on its business as it has been and to own, lease, and operate
the properties and assets used in connection therewith.
B. In addition to the representations and warranties herein
regarding the quality of Ethanol, EKAE represents and warrants that the Ethanol
delivered to UBEF shall be free and clear of liens and encumbrances.
Notwithstanding the foregoing, UBEF acknowledges that EKAE's senior lender has a
security interest in all of the assets of EKAE subject to EKAE's ability to make
sales in the ordinary course of business.
C. Each individual executing this Agreement in a representative
capacity, by his or her execution hereof, represents and warrants that such
person is fully authorized to do so on behalf of the respective party hereto,
and that no further action or consent on the part of the party for whom such
signatory is acting is required for the effectiveness and enforceability of
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this Agreement against such party, following such execution.
D. Each party warrants that it is now in material compliance, and
during the entire term of this Agreement will remain in material compliance,
with all applicable federal, state, local, and foreign laws, ordinances, orders,
rules, and regulations ("Laws"). The definition of Laws set out above includes,
but is not limited to, the Toxic Substances Control Act ("TOSCA"), and all other
laws related to the protection of the environment ("Environmental Laws").
E. Each party now has, or will obtain, and will have at all times
during the term of this Agreement, all of the licenses and permits necessary to
perform its obligations under this Agreement.
F. UBEF warrants that, to the best of its knowledge, all of the
Ethanol produced by its other customers and sold by UBEF will be of merchantable
quality, and will be fit for its intended purpose. All such Ethanol must meet
all applicable ASTM Standards, must meet the standards established by the
Xxxxxxxx Pipeline test and must meet ethanol standards established by all other
standard industry tests.
G. NO ADDITIONAL WARRANTY. EXCEPT AS SPECIFICALLY STATED IN THIS
AGREEMENT, THE PARTIES MAKE NO WARRANTIES OR REPRESENTATIONS, EXPRESS OR
IMPLIED, INCLUDING WITHOUT LIMITATION, ANY WARRANTIES OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE.
11. TERMINATION.
A. FOR CAUSE. Either party may terminate this Agreement without
liability for cause by providing thirty (30) days prior written notice to the
other party. For purposes of this paragraph, "cause" shall include, but not be
limited to, the happening of an event of default discussed in paragraph 12
below, or any other material breach of any provision of this Agreement, or
material violation of any applicable law, regulation or ruling.
B. WITHOUT CAUSE. Either party may terminate this Agreement without
cause by providing at least ninety (90) days prior written notice to the other
party. If EKAE terminates this Agreement without cause during the initial term,
then EKAE shall pay to UBEF, within thirty (30) days of termination, an amount
equal to the product of the following: the average monthly production of Ethanol
for the three (3) months prior to the termination date (if Ethanol has been
produced for less than three months prior to the termination date, then the
average monthly production of Ethanol for the number of months of such
production) multiplied by the Marketing Fee.
12. EVENTS OF DEFAULT. The occurrence of any of the following shall be an
event of default under this Agreement: (1) failure of either party to make
payment to the other when due, if such nonpayment has not been cured within five
(5) days of written notice thereof; (2) default by either party in the
performance of any material covenant, condition or agreement imposed upon that
party by this Agreement, if such nonperformance has not been cured within
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five (5) days of written notice thereof, unless such obligation cannot be
reasonably performed within such five (5) day period, then within a reasonable
time; or (3) 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 and such petition is not dismissed within ninety (90)
days following the date of filing, or apply to a court for the appointment of a
receiver for any of its assets or properties with or without consent, and such
receiver shall not be discharged within sixty (60) days following appointment.
13. REMEDIES. Upon the happening of an event of default under
paragraph 12, the parties hereto shall have all remedies available under
applicable law with respect to an event of default by the other party, including
but not limited to the recovery of reasonable attorneys' fees and other costs
and expenses. 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 terminate this Agreement within thirty (30) days following the giving
of notice of default and opportunity to cure. Notwithstanding any other
provision of this Agreement, UBEF may offset against amounts otherwise owed to
EKAE the price of any Ethanol which fails to conform to any requirements of this
Agreement.
14. OPEN CONTRACTS. Upon the termination of this Agreement, for whatever
reason, EKAE shall assume and be responsible for delivering any remaining
quantities of Ethanol required to be delivered by UBEF to its customers pursuant
to UBEF's contracts with the same, provided such contracts are to be delivered
by UBEF from the Plant. Prior to the termination of this Agreement, UBEF shall
provide EKAE with a listing of all such contracts and the quantities of Ethanol
to be delivered pursuant to the same to assist EKAE in completing deliveries
under these open contracts. EKAE agrees to assist UBEF in the collection of
amounts owed to UBEF from those customers receiving deliveries of Ethanol from
UBEF prior to the termination of this Agreement.
15. FORCE MAJEURE. Neither EKAE nor UBEF 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 or terrorism,
riots, civil disorders, public emergency, 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.
16. INDEMNIFICATION.
A. BY EKAE. Except as otherwise provided in this Agreement, EKAE
shall indemnify, defend and hold UBEF and its officers, directors, employees and
agents harmless, from any and all losses, liabilities, damages, expenses
(including reasonable attorneys' fees), costs, claims, demands, that UBEF 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 EKAE contained herein or (ii) EKAE's negligence or willful
misconduct.
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B. BY UBEF. Except as otherwise provided in this Agreement, UBEF
shall indemnify, defend and hold EKAE and its officers, directors, employees and
agents harmless, from any and all losses, liabilities, damages, expenses
(including reasonable attorneys' fees), costs, claims, demands, that EKAE 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 UBEF contained herein or (ii) UBEF's negligence or willful
misconduct.
C. Where such personal injury or death is the result of negligence
on the part of both EKAE and UBEF, each party's duty of indemnification shall be
in proportion to the percentage of that party's negligence or faults.
17. WAIVER AND RELEASE OF CLAIMS FOR ACTS AND OMISSIONS OF AFFILIATES.
UBEF hereby acknowledges that EKAE is entering into separate service agreements
with certain affiliates of UBEF (i.e., United Bio Energy Ingredients, LLC,
United Bio Energy Management, LLC, and United Bio Energy Ingredients, LLC), and
that the services provided by one or more of those affiliates to EKAE under such
agreements may include acting on behalf of EKAE and/or performing certain duties
or obligations of EKAE under the terms and provisions of this Agreement. In the
event an act or omission of one or more of those affiliates in the performance
of services pursuant to such agreements results in a breach of this Agreement by
EKAE, UBEF hereby agrees to waive and release EKAE from any and all claims that
UBEF may have against EKAE as a result of such breach.
18. RELATIONSHIP OF PARTIES. This Agreement creates no relationship other
than those of seller and buyer 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.
19. CONFIDENTIALITY. The parties agree to execute a Confidentiality and
Nondisclosure Agreement. Such Agreement shall remain in full force and effect
and shall apply and govern all disclosure and use of confidential information
hereunder, in accordance with the terms of such Agreement.
20. MISCELLANEOUS.
A. This Agreement, together with any attachments or other information
which is expressly incorporated herein and made an integral part of this
Agreement, is the complete understanding of the parties to this Agreement with
respect to the subject matter of this Agreement, and no other representations or
agreements shall be binding upon the parties, or shall be effective to
interpret, change or restrict the provisions of this Agreement.
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
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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. This Agreement may be executed in multiple counterparts, all of
which shall constitute but one and the same instrument. Facsimile signatures
shall be deemed as originals as between the parties.
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 control or affect the meaning or construction of any
provisions of this Agreement.
G. This Agreement shall be construed and performed in accordance
with the laws of the State of Kansas.
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, which shall not be unreasonably withheld.
I. Time shall be of the essence in the performance of this
Agreement.
J. This Agreement shall be binding upon, and shall inure to the
benefit of the parties hereto and their respective successors and assigns.
21. NOTICES. Unless a different method of notice is provided herein,
notice 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 requested, addressed as follows:
EKAE: East Kansas Agri-Energy, LLC
Attn: Xxxx Xxxxxx
210 1/2 East (4)th Avenue, XX Xxx 000
Xxxxxxx, Xxxxxx 00000
UBEI: United Bio Energy Fuels, LLC
Attn: Xxxx Xxxxxx
0000 Xxxxx Xxxxx Xxxx
Xxxxxxx, Xxxxxx 00000
Either party may change the address for notices hereunder by giving notice
change to the other party in the manner above provided.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed the
day and year first above written.
East Kansas Agri-Energy, LLC
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/s/ Xxxx Xxxxxx
--------------------------------
By: Xxxx Xxxxxx
Title: Chairman
United Bio Energy Fuels, LLC
/s/ Xxxx Xxxxxx
--------------------------------
By: Xxxx Xxxxxx
Title: President
In consideration of EKAE entering into this Agreement and other valuable
consideration, the undersigned, being the sole owner of UBEF, hereby
unconditionally guaranties the full and prompt performance by UBEF of all of its
duties and obligations under the terms and provisions of this Agreement.
Dated this 12th day of NOVEMBER, 2004.
United Bio Energy, LLC, a Kansas limited liability
company
By: /s/ Xxxx Xxxxxx
------------------------------
Title: President
---------------------------
12
EXHIBIT A
ASTM D4806-99 SPECIFICATION:
CATEGORY EXPECTED RESULT ASTM TEST METHOD
----------------------------------------------------------------------------------------------------
Ethanol, volume percent, 92.1 D 5501
minimum
----------------------------------------------------------------------------------------------------
Methanol, volume percent, 0.5 D 1152
maximum
----------------------------------------------------------------------------------------------------
Solvent-washed gum, mg/100 5.0 D 381
ml, maximum
----------------------------------------------------------------------------------------------------
Water content, volume .80 E 203 or E 1064
percent, maximum
----------------------------------------------------------------------------------------------------
Denaturant content, volume 1.96 minimum D 86
percent, minimum and 4.76 maximum
maximum.
The only denaturants shall be
low sulfur natural gasoline, gasoline
components, or unleaded gasoline.
----------------------------------------------------------------------------------------------------
Inorganic Chloride content, 40 D 512
mass PPM (mg/L), maximum
----------------------------------------------------------------------------------------------------
Copper content, mg/kg, 0.1 D 1688
maximum
----------------------------------------------------------------------------------------------------
Acidity (as acetic acid), mass 0.007 D 1613
percent (mg/L), maximum
----------------------------------------------------------------------------------------------------
PHE Percent 6.5 - 9.0 D 6423
----------------------------------------------------------------------------------------------------
Appearance Visibly free of suspended or
precipitated contaminants
(clear and bright)
----------------------------------------------------------------------------------------------------
00
XXXXXXX X
XXXXX XX XXXXXXXXXX SPECIFICATION FOR E-100 FUEL ETHANOL:
CATEGORY EXPECTED RESULT ASTM TEST METHOD
----------------------------------------------------------------------------------------------------
Ethanol, volume percent, 92.1 D 5501
minimum
----------------------------------------------------------------------------------------------------
Methanol, volume percent, 0.5 D 1152
maximum
----------------------------------------------------------------------------------------------------
Solvent-washed gum, mg/100 5.0 D 381, air jet apparatus
ml, maximum
----------------------------------------------------------------------------------------------------
Water content, volume 1.00 E 203 or E 1064
percent, maximum
----------------------------------------------------------------------------------------------------
Denaturant content, volume 1.96 minimum D 86
percent, minimum and 4.76 maximum
maximum
The only denaturants shall be
low sulfur natural gasoline,
gasoline components, or
unleaded gasoline.
----------------------------------------------------------------------------------------------------
Inorganic Chloride content, 40 D 512. Procedure C
mass PPM (mg/L), maximum
----------------------------------------------------------------------------------------------------
Copper content, mg/kg, 0.1 D 1688. Test method A.
maximum
----------------------------------------------------------------------------------------------------
Acidity (as acetic acid), mass 0.007 D 1613
percent (mg/L), maximum
----------------------------------------------------------------------------------------------------
PHE Percent 6.5 - 9.0 D 6423
----------------------------------------------------------------------------------------------------
Sulfur content, PPM, 10
maximum
----------------------------------------------------------------------------------------------------
Benzene content, volume 0.06
percent, maximum
----------------------------------------------------------------------------------------------------
Olefins content, volume 0.5
percent, maximum
----------------------------------------------------------------------------------------------------
Aromatic hydrocarbon 1.7
content, volume percent,
maximum
----------------------------------------------------------------------------------------------------
Appearance Visibly free of suspended or
precipitated contaminants
(clear and bright)
----------------------------------------------------------------------------------------------------
14
