EXHIBIT 10.1
ETHANOL MARKETING AGREEMENT
This Ethanol Marketing Agreement ("Agreement") is made and entered into as of
the 14th day of October 2002 by and between VeraSun Energy Corporation, a South
Dakota corporation ("VERASUN") and Xxxxxxxx Ethanol Services, Inc., a Delaware
Corporation DBA Xxxxxxxx Bio-Energy ("WES").
In consideration of the mutual terms and conditions contained herein, the
Parties agree as follows:
1. Terms and Termination
A. The term of this Agreement shall commence on the first day of ethanol
sales and continue for a primary term of two (2) years and thereafter,
renewing for consecutive two (2) year terms, unless terminated by
either party with at least six (6) months prior written notice without
cause.
B. In addition, this Agreement may be terminated under the circumstances
set out below.
(1) Termination for Intentional Misconduct. If either party engages
in intentional misconduct reasonably likely to result in
significant adverse consequences to the other party, the party
harmed or likely to be harmed by the intentional misconduct may
terminate this Agreement immediately, upon written notice to the
party engaging in the intentional misconduct.
(2) Termination for Uncured Breach. If one of the parties breaches
the terms of this Agreement, the other party may give the
breaching party a notice in writing which specifically sets out
the nature and extent of the breach, and the steps that must be
taken to cure the breach. After receiving the written notice, the
breaching party will then have thirty (30) days to cure the
breach, if the breach does not involve a failure to make any
payments which are required by this Agreement.
If breach involves lack of payment beyond the established
delinquency period, as specified in this Agreement, VERASUN may
terminate this Agreement immediately and without prior written
notice.
(3) Change of Control. Based on a change of majority interest in WES,
VERASUN shall have six (6) months to terminate this agreement
following the receipt of written notice regarding such change of
ownership. WES must notify VERASUN of said event in writing
within two (2) weeks of event. VERASUN may terminate agreement
with (30) days written notice within said six (6) month period.
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(4) Termination by Mutual Written Agreement. This Agreement may also
be terminated upon any terms and under any condition, which are
mutually agreed upon in writing by WES and VERASUN.
(5) Termination by Bankruptcy, Etc. This Agreement may also be
terminated immediately and without prior notice by a party as a
result of the other party's bankruptcy, assignment for the
benefit of creditors, admission in writing of its inability to
pay debts generally, or its liquidation, insolvency or
dissolution.
2. Quantity and Quality
A. VERASUN shall sell to WES the total output of fuel grade ethanol
("Ethanol") produced at the VERASUN Aurora, South Dakota, facility
("Plant"), currently anticipated to be one hundred (100) million
gallons per year. Ethanol shall be delivered FOB the Plant, and title
shall pass as the Ethanol is loaded into transport vessels.
B. Such Ethanol shall meet or exceed all industry standards, including
but not limited to ASTM D.4806 specifications and Xxxxxxxx Pipeline
Company specifications for E-Grade Denatured Fuel Ethanol.
3. WES shall:
A. Purchase all of the Ethanol produced by VERASUN, at the price outlined
in Section 5;
B. Remit payment to VERASUN for the Ethanol as provided in Section 5; and
C. Schedule all loads with VERASUN.
D. Extend any alliance volume buying power of discounting to VERASUN.
E. Extend railcar freight rates negotiated by WES to VERASUN.
F. Participate with VERASUN in a monthly sales strategy call.
4. VERASUN shall:
A. Provide to WES quarterly production forecasts, monthly updates, daily
plant inventory balances and shipment information;
B. Provide to WES specifications and certificates of analysis of the
Ethanol produced;
C. Provide for a minimum of eight days storage on the VERASUN premises;
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E. Have meters that provide both gross and net 60 degrees Fahrenheit
temperature compensated gallons; and
F. Establish and participate in monthly sales strategy meetings with WES.
5. Pricing and Commission
A. Sale Price. The price VERASUN shall receive for its Ethanol shall be
based upon the actual market price received by WES for the sale of the
Ethanol as set forth below.
B. Costs. WES shall deduct all direct costs incurred by WES relating
exclusively to marketing the Ethanol purchased from VERASUN,
including, but not limited to, terminal lease charges, throughput
charges, terminal shrinkage costs (not to exceed .5%), freight
charges, tariffs, costs of leasing railcars and trucks, government
taxes and assessments, inspection fees, and other similar costs. These
costs shall be passed directly to VERASUN without WES markup. WES
shall not deduct any general or administrative costs incurred in
marketing the Ethanol. WES shall use commercially reasonable efforts
to contain costs so as to maximize the net price payable to VERASUN
for its Ethanol. In the event that VERASUN presents WES with
alternatives that will reduce such costs, WES shall implement the
alternatives where commercially reasonable.
C. Net Price. Net price is defined as sales price referred in Section
5(A) less direct costs referred in Section 5(B) ("Net Price"). WES
shall use commercially reasonable efforts to maximize the Net Price,
commensurate with prevailing market conditions.
D. Establishing Minimum Net Price. VERASUN and WES agree to participate
in monthly sales strategy meetings at which time VERASUN will
establish a monthly minimum net price target. WES agrees to make best
effort to meet or exceed minimum net price targets. If net price
targets are not attainable:
(1) WES must obtain written authorization from VERASUN prior to
selling below net price target;
(2) At VERASUN's request and expense, WES agrees to place VERASUN's
ethanol in storage until pricing condition can be met
E. Commission. WES shall be paid a commission equal to (**) percent (**)
of the Net Price, as defined in Section 5(C). The total commission
shall not exceed (**) for the first (**) gallons produced on an annual
basis. If annual production exceeds (**) gallons, VeraSun agrees to
pay (**) percent (**) for all ethanol sold over (**) gallons per year.
G. Contract Authorization. WES must obtain written authorization from
VERASUN for all contract sales:
1) This confidential information has been omitted pursuant to a request for
confidential treatment.
2) The material has been filed separately with the SEC.
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(1) Equal to or greater than one (1) million gallons;
(2) Where contract length is equal to or greater than six (6) months.
H. Payment. For all quantities of ethanol purchased by WES from VERASUN
during a one-week period beginning on Monday and ending on the
following Sunday, WES shall pay the Net Price referred to in Section
5(C) less commissions referred to in Section 5(D), to VERASUN by ACH
or wire no later than ten (10) business days following the end of said
one-week period. WES shall pay interest on any delinquent payments at
the rate of nine percent (9%) per annum, for the duration of the
delinquency. In addition, WES shall reimburse VERASUN for any attorney
fees or other costs incurred by VERASUN in collecting delinquent
amounts owed by WES hereunder. WES is considered in breach of this
Agreement if the delinquency period extends beyond thirty (30) days.
I. Supporting Records. WES shall keep a permanent, accurate set of books
and records in accordance with generally accepting accounting
principals with respect to all sales of Ethanol hereunder and all
costs and commissions associated therewith, and shall make such books
and records available to VERASUN at WES's office at any time by
appointment during normal business hours upon at least three (3)
business days prior written notice. In addition, WES shall provide
VERASUN by e-mail or fax with supporting documentation regarding the
calculation of the net sale price with each weekly payment for
Ethanol.
6. Indemnity: WES shall indemnify, defend, and hold VERASUN and its
affiliates, subsidiaries, parents, directors, officers, employees,
customers, contractors, subcontractors and agents harmless from and against
any and all claims, losses, awards, judgments, settlements, fines,
penalties, liabilities, damages, costs or expenses (including reasonable
Attorney's fees) alleged or incurred on account of any injury to or death
of persons or damages to property or any other claim to the extent caused
by or arising out of the negligence or willful misconduct of WES, its
officers, employees, customers, contractors, subcontractors or agents.
VERASUN shall indemnify, defend, and hold WES and its affiliates,
subsidiaries, parents, directors, officers, employees, and agents harmless
from and against any and all claims, losses, awards, judgments,
settlements, fines, penalties, liabilities, damages, costs or expenses
(including reasonable Attorney's fees) alleged or incurred on account of
any injury to or death of persons or damages to property or any other claim
to the extent caused by or arising out of the negligence or willful
misconduct of VERASUN, its officers, employees, customers, agents, or
contractors. VERASUN shall indemnify and hold WES and its affiliates,
subsidiaries, parents, directors, officers, employees, customers and agents
harmless from and against any and all claims, losses, awards, judgments,
settlements, fines, penalties, liabilities, damages, costs or expenses
(including reasonable Attorney's fees) from any defects in the Ethanol
caused by VERASUN.
7. Independent Contractor: It is expressly understood that the relationship of
WES to VERASUN is that of an independent contractor and nothing contained
herein shall be construed to create any partnership, agency, or
employer/employee relationship. WES may freely choose the customers from
whom business shall be solicited and the time and place for solicitation,
except as otherwise provided in this Agreement.
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8. Notices: Any notices required to be given under this Agreement shall be in
writing and shall be deemed given upon personal delivery to the party to be
notified; on the third day after deposit with the United States Postal
Service, by registered or certified mail, postage prepaid; or upon
confirmation if sent by telex, facsimile machine or other means of
telecommunication that transmits or produces a written record of the
message so sent. Notices shall be sent addressed as follows:
VERASUN: VERASUN Energy Corporation
000 00xx Xxxxxx
Xxxxx # 000
Xxxxxxxxx, XX 00000
Attn: Xxxxxx Xxxxxx, CEO
Telephone: 000-000-0000
Fax: 000-000-0000
WES: Xxxxxxxx Bio-Energy
P. O. Xxx 00
Xxxxx, XX 00000
Attn: Xxxxxx Xxxxxx
Telephone: 000-000-0000
Fax: 000-000-0000
9. Insurance: The Parties shall maintain, at all times while this Agreement is
in effect, and each at its own sole cost and expense, comprehensive general
liability insurance with a combined single limit for bodily injury and
property damage of not less than $1,000,000 for any one occurrence. Each
party shall promptly after execution of this Agreement furnish the other
party a Certificate of Insurance evidencing the foregoing insurance
coverage, and containing a clause specifying that no reduction,
cancellation or expiration of the policies shall become effective until
thirty (30) days from the date written notice is provided to the other
Party. The insurance requirements set forth herein are minimum coverage
requirements and are not to be constructed in any way as a limitation on
liability under this Agreement.
10. Entire Agreement: This Agreement contains the entire agreement between the
Parties and supersedes all previous agreements, either oral or written,
between the Parties. No modifications hereof shall be valid unless made in
writing and signed by both Parties.
11. Waiver: The failure of either Party to enforce any of its rights hereunder
on any particular occasion shall not constitute a waiver of such rights on
any subsequent occasion.
12. Assignment: This Agreement may not be assigned by either party without the
prior written consent of the other party, which consent shall not be
unreasonably withheld.
13. Headings: Any paragraph headings are used for convenience only and are not
intended and shall not be used in interpreting any provisions of this
Agreement.
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14. No Third Party Beneficiary: Except as otherwise provided herein, nothing
contained in this Agreement shall be considered or construed as conferring
any right or benefit on a person not a party to this Agreement and neither
this Agreement nor the performance hereunder shall be deemed to have
created a joint venture or partnership between the Parties.
15. Governing Law: This Agreement shall be governed by the laws of the State of
Illinois, without regard to the conflict of laws provisions thereof.
In WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
duly executed as of the date first written above.
XXXXXXXX BIO-ENERGY VERASUN ENERGY CORPORATION
By: /s/ Xxxxxx X. Xxxxxx By: /s/ Xxxxxx Xxxxxx
--------------------------------- ------------------------------------
Xxxxxx X. Xxxxxx, President Xxxxxx Xxxxxx, CEO
Date: 10/11/02 Date: 10/15/02
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EXHIBIT "A"
1. Commercial Objective: To the extent commercially feasible as determined in
AREI's good faith judgment in accordance with the provisions of this
Exhibit "A", AREI will not disadvantage the Pooled Net Price to be paid
VERASUN under the Agreement, as a result of its Purchase/Resale Program.
2. Defined Terms
"Alliance Partners" - shall mean the group of ethanol producers that have
agreed to exclusively commit substantially all of their ethanol production
to AREI for purposes of AREI marketing their ethanol.
"Purchase/Resale Program" - shall mean the program administrated by AREI,
independent of VERASUN or other Alliance Partners, whereby AREI purchases
ethanol from non-Alliance Partners for the purpose of selling to customers,
independent of the Pooled Market Alliance Volume.
"Contract Segment" - shall mean the type of ethanol contract used in
selling ethanol. Contracts are segmented into the following categories:
Fixed Contracts - whereby a buyer agrees to purchase a volume of
ethanol from AREI at a particular time, over a period of time, for a
fixed price;
Spot - whereby a buyer agrees to buy a volume of ethanol from AREI at
a specific time, or over a period of time, for a price that varies
over the term of the contract and is based on a mutually agreed upon
market index;
Gas Plus - whereby a buyer agrees to buy a volume of ethanol from AREI
at a particular time, or over a period of time, for a price that is
determined by the sum of: a gasoline market index (e.g. NYMEX, CARB),
plus a fixed amount. The gas plus segment is further segmented by the
gasoline market index used in determining the price.
3. Business Rules
The following describes the business rules AREI will follow and the
methodology AREI will employ to measure its performance against the
commercial objective set forth above with contracts beginning effective
October 1, 2003.
A. To the extent commercially feasible, AREI will attempt to maintain its
total mix of Alliance Partner sales contracts, as follows:
Target % of
Total Gallons
Contract Segment Low Sold High
---------------- --- ------------- ----
Fixed Price 20% 33% 45%
Gas Plus 20% 33% 45%
Spot 20% 33% 45%
B. Prior to entering into a contract for the sale of ethanol of a
Contract Segment type specified in 3.A. above originating from the
Purchase/Resale Program (a "New Resale Contract") AREI will compare
the average netback price (on a cents per gallon basis) being realized
from the sale of that portion of the Pooled Market Alliance Volumes
being sold under then existing contracts of the same Contract Segment
(with such average netback price to be calculated on the same basis as
the Net Pooled Price, except limited to the specific Contract Segment
type at issue) (herein the "Alliance Contract Segment Net Pooled
Price") against the average net back price (on a cents per gallon
basis before purchase/resale margin) being realized from the sale of
that portion of the quantities of ethanol being purchased under the
Purchase/Resale Program and being sold under then existing contracts
of the same Contract Segment under the Purchase/Resale Program (with
such average netback price to be calculated on a basis similar to that
used in calculating the Net Pooled Price except using Purchase/Resale
Program volumes rather than Pooled Market Alliance Volumes). Where a
New Resale Contract will be a Gas Plus Contract Segment type, only
contracts having the same gasoline index will be used in making the
above comparison. Whenever possible and to the extent commercially
feasible, AREI will only enter into a New Resale Contract of a
particular Contract Segment type when the then existing
Purchase/Resale Contract Segment Net Pooled Price before
purchase/resale margin (after including such New Resale Contract) will
be less than or equal to the then existing Alliance Contract Segment
Net Pooled Price, both as determined on the basis of then existing
contracts of the same Contract Segment type.
C. AREI may still enter into Purchase/Resale Program contracts for good
commercial reasons.
4. Reporting
AREI will monitor the activities set forth in 3. above and report monthly
by Contract Segment to VERASUN on:
- Alliance Ethanol Average Market Price
- Breakdown of Pooled Costs
- Pooled Net Price
- Pooled Market Alliance Volumes
- Average Purchase/Resale Market Price
- Breakdown of Purchase/Resale Costs
- Average Purchase/Resale Net Price Before Margin
- Purchase/Resale Volume
- Differences by Contract Segment of Alliance Ethanol Average Market
Price and Pooled Net Price compared to Average Purchase/Resale Market
Price and Average Purchase/Resale Net Price
5. Revisions
- AREI shall have the right to amend or eliminate this Exhibit "A" (a
"Contract Change") subject to the following:
A. Any such Contract Change shall require VERASUN's written consent, with
such consent not to be unreasonably withheld. For purposes of the
foregoing, VERASUN shall not withhold its consent to any amendment to
this Exhibit "A" as long as such amendment will not have, in VERASUN's
reasonable judgment, an adverse economic effect on VERASUN under the
Agreement.
B. VERASUN shall have thirty (30) days from receipt of AREI's written
notice of a proposed Contract Change to notify AREI in writing of
whether or not VERASUN consents to such Contract Change. If VERASUN
notifies AREI in writing within such thirty (30) day period of its
consent to such Contract Change or fails to provide written notice to
AREI within such thirty (30) day period of its non-consent to such
Contract Change then such Contract Change shall be effective as of the
date set forth in AREI's written notice; provided, however, if such
Contract Change will not have an adverse economic effect on VERASUN
under the Agreement it shall also be effective as of the date set
forth in AREI's written notice, whether or not such consent is given
by VERASUN.
C. Subject to B. above, if VERASUN provides written notice of its
non-consent to the Contract Change within thirty (30) days of its
receipt of AREI's written notice of such Contract Change, then the
Contract Change shall not be effective.
AVENTINE RENEWABLE ENERGY INC.
0000 Xxxxx 0xx Xxxxxx
Xxxxx, Xxxxxxxx 00000
309.347.9200
xxx.xxxxxxxxxxx.xxx
Xxxxxx X. Xxxxxx
President & CEO
000.000.0000
000.000.0000 fax
xxx.xxxxxx@xxxxxxxxxxx.xxx
December 8, 2003
VeraSun Energy Corporation
000 00xx Xxxxxx
Xxxxx # 000
Xxxxxxxxx, XX 00000
Attn: Xxx Xxxxxx, CEO
Re: Amendment of Ethanol Marketing Agreement
Dear Don:
AREI and VeraSun Energy Corporation ("VERASUN") hereby amend that Ethanol
Marketing Agreement dated on or about October 14, 2002 (the "Agreement") in
order to modify the method of calculating the price paid by AREI to VERASUN for
VeraSun's fuel grade ethanol produced at VeraSun's Aurora, SD facility
("Ethanol"). Subsections 2(C) is added and subsections 5 (A), (B), (C), (D),
(E), (G), (H) and (I) of the Agreement are deleted and replaced with the
following language:
2.C. Ethanol produced at the Plant and marketed by VERASUN, directly or
indirectly, to the E-85 fuel market is excluded from this Agreement.
5.A. Sales Price. The sale price VERASUN shall receive for its Ethanol
shall be the Pooled Net Price, as defined below.
"Pooled Net Price" shall mean the net sales price per gallon
calculated by subtracting the Pooled Costs on a per gallon basis from the
Alliance Ethanol Average Market Price.
"Alliance Ethanol Average Market Price" shall mean the monthly average
price received by AREI for Pooled Market Alliance Volumes sold during such
month on a per gallon basis.
qc: Xxxx Xxxxxxx
Xxxx Xxxxxxx
Xxxxx Xxxxxxxx
Xxxx Xxxxxx
"Pooled Market Alliance Volumes" shall mean, with respect to any given
period, aggregate fuel grade ethanol volumes purchased by AREI from all
sellers who have agreed to receive the Pooled Net Price and aggregate fuel
grade ethanol volumes produced by AREI during such period.
"Pooled Costs" shall mean, with respect to any given period, all
direct costs incurred by AREI in handling Pooled Market Alliance Volumes
during such period, including by not limited to terminal lease charges,
throughput charges, terminal shrinkage costs, freight charges, tariffs,
costs of leasing railcars and trucks, government taxes and assessments,
insurance, inspection fees, inventory carrying costs, purchased ethanol
cost incurred due to lost production and other such costs, but excluding
direct costs incurred in marketing such ethanol. AREI shall use
commercially reasonable efforts to contain Pooled Costs so as to maximize
the ultimate net price payable to VERASUN for its Ethanol.
5.B. Commission. AREI shall deduct from the Pooled Net Price a commission
equal to (**) percent (**) of the Pooled Net Price. The total commission
shall not exceed (**) for the first (**) gallons produced on an annual
basis. If the annual production exceeds (**) gallons, VERASUN agrees to pay
(**) percent (**) for all ethanol sold over (**) gallons per year.
5.C. Payment. For all quantities of ethanol purchased by AREI from VERASUN
during a one-week period beginning on Monday and ending on the following
Sunday, AREI shall pay the estimated Pooled Net Price referred to in
Section 5.A. less commissions referred to in Section 5.B., to VERASUN by
ACH or wire no later than ten (10) business days following the end of said
one-week period. If at calendar month's end, the actual Pooled Net Price
exceeds the estimated Pooled Net Price, AREI shall pay VERASUN on or before
the 15th day of the following calendar month an amount equal to the product
of (x) the difference between the actual and estimated Pooled Net Price
less commissions and (y) the aggregate quantity of Ethanol purchased during
the prior calendar month. If the actual Pooled Net Price is less than the
estimated Pooled Net Price, AREI shall withhold and set off from future
payments to VERASUN an amount equal to the product of (x) the difference
between the actual and estimated Pooled Net Price less commissions and (y)
the aggregate quantity of Ethanol purchased during such month. AREI shall
pay interest on any delinquent payments at the rate of nine percent (9 %)
per annum, for the duration of the delinquency. In addition, AREI shall
reimburse VERASUN for any attorney fees or other cost incurred by VERASUN
in collecting delinquent amounts owed by AREI hereunder. AREI is considered
in breach of this Agreement if the delinquency period extends beyond thirty
(30) days.
5.D Intentionally Omitted.
5.E Intentionally Omitted
5.G Intentionally Omitted
1) This confidential information has been omitted pursuant to a request for
confidential treatment.
2) The material has been filed separately with the SEC.
5.H. Intentionally Omitted
5.I. Supporting Records. AREI shall keep a set of accurate and complete
books and records in accordance with generally accepting accounting
principles with respect to all ethanol purchased and sold by AREI,
including ethanol sold under AREI's Purchase and Resale business, and all
costs and commissions associated therewith, and shall make such books and
records reasonably available to mutually agreeable independent outside
accounting representatives at AREI's office at any time by appointment
during normal business hours upon at least five (5) business days prior
written notice; provided, however, there shall be no more than two such
review of AREI's books and records in any twelve (12) month period and
prior to such review the independent outside accounting representatives
shall execute a mutually agreeable confidentiality agreement with AREI.
AREI agrees to pay fifty percent (50%) of the expenses of such independent
outside accounting representatives in conducting such review, provided that
AREI's share of such expenses shall not exceed $15,000. All other costs and
expenses of such review are the sole responsibility of VeraSun. In
addition, AREI shall provide VERASUN, by e-mail or fax, a monthly report
regarding Pooled Market Alliance Volumes, Alliance Ethanol Average Market
Price, and a breakdown of Pooled Costs in sufficient detail to arrive at
calculated Pooled Net Price.
In addition to the foregoing, set forth on Exhibit "A" attached hereto and
incorporated herein by reference, are the business rules and related obligations
AREI agrees to follow in managing its Purchase/Resale Program (as defined in
Exhibit "A") in conjunction with the Agreement.
Except as provided above, all other terms of Agreement shall remain unaltered
and in full force and effect.
Please indicate your agreement with the modifications to the Agreement set
forth in this letter amendment by an authorized signature for VERASUN below.
Sincerely,
/s/ Xxxxxx X. Xxxxxx
----------------------------------------
Xxxxxx X. Xxxxxx
Aventine Renewable Energy, Inc.
ACCEPTED AND AGREED this 8th day of
December 2003.
VERASUN Energy Corporation
By: /s/ Xxxxxx X. Xxxxxx
---------------------------------
Name: Xxxxxx X. Xxxxxx
Title: CEO
February 22, 2005
VeraSun Energy Corporation
0 XxxxXxx Xxxxx
Xxxxxx, Xxxxx Xxxxxx 00000
Attention: Xxxxx Xxxxxxxx, President & CFO
RE: Amendment of Ethanol Marketing Agreement
Dear Don:
Aventine Renewable Energy, Inc. ("AREI") and VeraSun Energy Corporation
("VERASUN") are parties to that certain Ethanol Marketing Agreement dated
October 14, 2002, as amended by that certain letter amendment dated December 8,
2003 (the "Agreement"). AREI and VERASUN have discussed certain amendments to
the Agreement as hereinafter set forth. This letter agreement is intended to
memorialize such discussions.
Accordingly, for and in consideration of the mutual covenants contained
herein, AREI and VERASUN hereby agree as follows:
1. Subsection 1.A. of the Agreement is deleted in its entirety and the
following new subsection 1.A. is inserted in lieu thereof:
"1.A. The term of this Agreement shall commence on the first day of
ethanol sales and continue for a primary term ending on March 31, 2007
and thereafter, renewing for consecutive two (2) year terms, unless
terminated by either party at the end of the primary term or any
subsequent two (2) year anniversary thereof with at least six (6)
months prior written notice."
2. Subsection 5.B. Commission of the Agreement is deleted in its entirety
and the following new subsection 5.B. is inserted in lieu thereof:
"5.B. Commission. AREI shall deduct from the Pooled Net Price a
commission equal to (**) percent (**) of the Pooled Net Price. The total
commission shall not exceed (**) for the first (**) gallons of ethanol
produced and sold to AREI during each twelve (12) calendar month period
commencing on December 1st of each calendar year (the "12 Month Period")
under this Agreement and under that certain Ethanol Marketing Agreement
between AREI and VeraSun Fort Dodge, LLC, dated February 21, 2005 (the
"Other Agreement"). If the total gallons of ethanol produced and sold to
AREI during any 12 Month Period under this Agreement
1) This confidential information has been omitted pursuant to a request for
confidential treatment.
2) The material has been filed separately with the SEC.
and the Other Agreement exceeds (**) gallons, the commission of (**)
percent (**) shall be reduced to (**) percent (**) for all gallons of
ethanol in excess of (**) gallons produced and sold to AREI during such 12
Month Period under this Agreement and the Other Agreement."
3. Subsection 5.D. of the Agreement which currently states "Intentionally
Omitted" is deleted in its entirety and the following new subsection 5.D. is
inserted in lieu thereof:
"5.D. Quarterly Meetings. VERASUN and AREI agree to hold quarterly
meetings (by telephone or in person) to formulate a market outlook and
perspective for the purpose of establishing pricing parameters and sales
strategy for a given period (the "Guidelines"). For any period to which
such Guidelines are agreed upon and apply, AREI agrees to use its
commercially reasonable efforts to execute deals consistent with these
guidelines and when possible AREI will solicit feedback from VERASUN before
executing deals outside such Guidelines. AREI will, to the extent it deems
it necessary or appropriate, utilize VERASUN to participate on customers
calls."
4. Subsection 3.A. the chart in Exhibit "A" is deleted in its entirety and
the following new chart in subsection 3.A. is inserted in lieu thereof:
Target % of
Total Gallons
Contract Segment Low Sold High
---------------- --- ------------- ----
Fixed Price 20% 33% 55%
Gas Plus 20% 33% 45%
Spot 20% 33% 45%
5. Except as provided above, all other terms of the Agreement shall remain
unaltered and in full force and effect.
Please indicate your agreement with the modifications to the Agreement set
forth in this letter amendment by an authorized signature for VERASUN in the
space provided below.
Sincerely,
By: /s/ Xxxxxx X. Xxxxxx
------------------------------------
Xxxxxx X. Xxxxxx, President & CEO
VeraSun Energy Corporation
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------------
Xxxxx X. Xxxxxxxx, President & CFO
Accepted and Agreed to
this 11th day of March, 2005
1) This confidential information has been omitted pursuant to a request for
confidential treatment.
2) The material has been filed separately with the SEC.
