Ann: MBT Enters Into Offtake and Placement Agreem, page-5

re: Ann: MBT Enters Into Offtake and Placemen... Loks v. good to me. GL to long termers.

Sydney - Friday - December 11: (RWE Aust Business News) - Mission
NewEnergy (ASX:MBT) has a binding five-year biodiesel supply agreement
with Valero Marketing and Supply.
The agreement further provides a subsidiary of Valero the right
to purchase up to 25 per cent of Mission at 45c a share.
Under the terms of the supply agreement, Mission will supply
Valero with up to 200,000 tonnes of biodiesel per year.
Valero has the right to double that amount to 400,000 tonnes per
year and to extend the term by an additional five years.
The agreement represents gross revenue potential to Mission of
over $US3.5 billion based on prevailing market prices, maximum
volume and contract life.
Over the course of the contract, Mission will supply Valero with
biodiesel produced from its captive Jatropha feedstock.
Jatropha is an inedible perennial oil seed plant that has been
shown to grow on marginal soil without displacing agricultural land used
for food supply, making it an ecologically responsible source of fuel
oil.
Subject to favourable economics, as Mission's available stock of
Jatropha matures to scale Mission will supply Valero with palm oil based
biodiesel.
Under the terms of the equity deal, Mission will issue Valero two
tranches of warrants to purchase common stock.
The first tranche of 81.41mn warrants will expire on August 31
2010 and if fully exercised will provide Mission with $36.6 million.
The second tranche will be issued to allow Valero to maintain
its tranche-one equity stake of 25pc based on the conversion of any of
the other outstanding Mission convertible securities.
Tranche two warrants are exercisable at a 20pc discount to the
20-day volume weighted average price (VWAP) prior to the date of exercise
and are capped at a maximum of 68.58m expiring September 30 2012.
The transactions with Valero are subject to Mission shareholder
approval.
In order to meet its funding needs given the size and scope of
the supply agreement with Valero, and to satisfy its other commercial
objectives Mission is considering various financing options.
The first product shipment is expected to occur during the second
quarter of calendar year 2010.