Exhibit 10.3

SECOND SUPPLEMENT

TO THE MASTER LOAN AGREEMENT

(REVOLVING LINE OF CREDIT LOAN)

THIS SECOND SUPPLEMENT TO THE MASTER LOAN AGREEMENT (this “Second Supplement”),
dated as of March 8, 2010, is between AGSTAR FINANCIAL SERVICES, PCA (the
“Lender”) and REG NEWTON, LLC, an Iowa limited liability company (the
“Borrower”), and supplements and incorporates all of the provisions of that
certain Master Loan Agreement, dated as of even date herewith, between the
Lender and the Borrower (as the same may be amended, modified, supplemented,
extended or restated from time to time, the “MLA”).

1. Definitions. As used in this Second Supplement, the following terms shall
have the following meanings. Capitalized terms used and not otherwise defined in
this Second Supplement shall have the meanings attributed to such terms in the
MLA. Terms not defined in either this Second Supplement or the MLA shall have
the meanings attributed to such terms in the Uniform Commercial Code, as enacted
in the State of Minnesota and as amended from time to time.

“Acceleration Date” has the meaning specified in section 15 of this Second
Supplement.

“Accounts” means all of the Borrower’s “Accounts”, as such term is defined in
the UCC, including, without limitation, the aggregate unpaid obligations of
customers and other account debtors to Borrower arising out of the sale or lease
of goods or rendition of services by Borrower on an open account or deferred
payment basis.

“Availability Date” shall have the meaning specified in Section 5 of this Second
Supplement.

“Borrowing Base” means, at any time, the lesser of: (a) $1,800,000.00; or
(b) the sum of: (i) 50% of Borrower’s Eligible Accounts Receivable; plus
(ii) 50% of Borrower’s Eligible Inventory.

“Borrowing Base Certificate” means the certificate in the form of Exhibit A
attached hereto properly completed and duly executed by an authorized officer of
the Borrower.

“Eligible Accounts Receivable” means all unpaid Accounts, net of any credits,
except the following shall not in any event be deemed Eligible Accounts
Receivable:

(a) That portion of Accounts unpaid 30 days or more after the invoice date:

(b) That portion of Accounts that is disputed or subject to a claim of offset or
a contra account;

(c) That portion of Accounts not yet earned by the final delivery of goods or
rendition of services, as applicable, by any Borrower to the customer;

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(d) Accounts owed by any unit of government, whether foreign or domestic; except
that Accounts due as a result of blender’s or producer’s tax credit or other
credit from a government unit will be deemed Eligible Accounts Receivable;

(e) Accounts owed by an account debtor located outside the United States;

(f) Accounts owed by an account debtor that is insolvent, the subject of
bankruptcy proceedings or has gone out of business;

(g) Accounts owed by a member, Guarantor, Affiliate, officer or employee of any
Borrower. Notwithstanding the foregoing and subject to all other exclusions
listed in the Eligible Accounts Receivable definition, (i) Accounts owed to
Borrower by REG Marketing & Logistics Group, LLC (“REG Marketing”) arising out
of the production and/or sale of biodiesel, glycerin and fatty acids produced by
Borrower at its bio-diesel production facility in Newton, Iowa, and sold to REG
Marketing pursuant to that certain Contract Manufacturing Agreement dated of
even date herewith, by and between REG Marketing and Borrower, and (ii) Accounts
related to transactions as approved by Lender and listed on Schedule 5.02(k) of
the MLA, will be deemed to be Eligible Accounts Receivable;

(h) Accounts not subject to a duly perfected security interest in the Lender’s
favor or which are subject to any lien, security interest or claim in favor of
any Person other than the Lender, including, without limitation, any payment or
performance bond;

(i) That portion of Accounts that has been restructured, extended, amended or
modified;

(j) That portion of Accounts that constitutes advertising, finance charges,
service charges or sales or excise taxes; and

(k) Accounts, or portions thereof, otherwise deemed ineligible by the Lender, in
its sole discretion, exercised reasonably.

“Eligible Inventory” means all inventory held for ultimate sale or lease, or
which has been or will be supplied under contracts of service, or which are raw
materials, work in process, or materials used or consumed in the Borrower’s
business and that has been specifically identified and accepted by the Lender,
excluding all of the following inventory:

 

  (a) Covered by documents of title, instruments, or chattel paper when these
documents, instruments and paper are not owned and held by the Borrower or are
subject to competing claims, liens or encumbrances.

 

  (b) Intended to be sold outside of the ordinary course of business.

 

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  (c) Consigned, sold or leased to others or on consignment or lease from others
or subject to a bailment.

 

  (d) Subject to a competing claim, lien or encumbrance.

 

  (e) Paid for in advance with progress payments or any other sums to the
Borrower in anticipation of the sale and delivery of inventory.

 

  (f) Obsolete or unusable in the ordinary course of business.

 

  (g) Inventory of work in progress.

 

  (h) Inventory held or stored at locations not disclosed in Schedule 4.01(k) of
the MLA or otherwise disclosed in writing to the Lender and approved by the
Lender, in its sole discretion.

 

  (i) Inventory that the Lender, in its reasonable discretion, disqualifies as
Eligible Inventory.

“Maximum Rate” shall have the meaning specified in Section 7 of this Second
Supplement.

“Monthly Payment Date” means the first (1st) day of each calendar month.

“Outstanding Credit” means, at any time of determination, the aggregate amount
of Advances then outstanding under this Second Supplement and the Revolving Line
of Credit Note.

“Outstanding Revolving Advance” means the total Outstanding Credit under this
Second Supplement and the Revolving Line of Credit Note.

“Request for Advance” shall have the meaning specified in Section 6(a) of this
Second Supplement.

“Revolving Advance” means an advance under this Second Supplement and the
Revolving Line of Credit Note.

“Revolving Line of Credit Loan” shall have the meaning specified in Section 2 of
this Second Supplement.

“Revolving Line of Credit Collateral” means (a) Accounts and (b) all inventory
held for ultimate sale or lease, or which has been or will be supplied under
contracts of service, or which are raw materials, work in process, or materials
used or consumed in the Borrower’s business and that has been specifically
identified and accepted by the Lender.

“Revolving Line of Credit Commitment” shall have the meaning specified in
Section 2 of this Second Supplement.

 

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“Revolving Line of Credit Loan Maturity Date” shall mean March 7, 2011.

“Revolving Line of Credit Loan Termination Date” shall have the meaning
specified in Section 2 of this Second Supplement.

“Unused Commitment Fee” shall have the meaning specified in Section 6(d) of this
Second Supplement.

2. Revolving Line of Credit Commitment. On the terms and conditions set forth in
the MLA and this Second Supplement, Lender agrees to make one or more advances
(collectively, the “Revolving Line of Credit Loan”) to the Borrower, during the
period beginning on the Availability Date and ending on the Business Day
immediately preceding the Revolving Line of Credit Loan Maturity Date (the
“Revolving Line of Credit Loan Termination Date”), in an aggregate principal
amount outstanding at any one time not to exceed $2,350,000.00 (the “Revolving
Line of Credit Commitment”) provided, however, that at no time shall the
Outstanding Revolving Advances exceed the unpaid principal balance of the
Acquisition Advance plus the Borrowing Base. The Revolving Line of Credit
Commitment shall expire at 12:00 noon Central time on the Revolving Line of
Credit Loan Maturity Date. Under the Revolving Line of Credit Commitment amounts
borrowed and repaid or prepaid, other than amounts attributable to the
Acquisition Advance, may be re-borrowed at any time prior to and including the
Revolving Line of Credit Loan Termination Date.

3. Purpose. The purposes for which advances under the Revolving Line of Credit
Loan may be used are for general corporate and operating purposes of the
Borrower and its subsidiaries, including, without limitation, payment of the CIE
Loan and closing costs and fees associated with the Revolving Line of Credit
Loan. The Borrower agrees that the proceeds of the Revolving Line of Credit Loan
are to be used only for the purposes set forth in this Section 3.

4. Repayment of the Revolving Line of Credit Loan. The Borrower will pay accrued
interest on the Revolving Line of Credit Loan on the first (1st) day of each
month, commencing on the first (1st) Monthly Payment Date following the date on
which the first Advance is made on the Revolving Line of Credit Loan, and
continuing on each Monthly Payment Date thereafter until the Revolving Line of
Credit Loan Maturity Date. On the Revolving Line of Credit Loan Maturity Date,
the amount of the then unpaid principal balance of the Revolving Line of Credit
Loan and any and all other amounts due and owing hereunder or under any other
Loan Document relating to the Revolving Line of Credit Loan will be due and
payable. If any Monthly Payment Date is not a Business Day, then the principal
installment then due shall be paid on the next Business Day and shall continue
to accrue interest until paid. In addition to the regularly scheduled payments
set forth above, the Borrower shall make all Excess Cash Flow Payments and Debt
Service Reserve Account Payments as described in the MLA.

5. Availability. Subject to the provisions of the MLA and this Second
Supplement, during the period commencing on the date on which all conditions
precedent to the initial advance under the Revolving Line of Credit Loan are
satisfied (the “Availability Date”) and ending on the Revolving Line of Credit
Loan Termination Date, advances under the Revolving Line of Credit Loan will be
made as provided in this Second Supplement.

 

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6. Making the Advances.

(a) Revolving Advances. Each Revolving Advance shall be made, on notice from the
Borrower (a “Request for Advance”) to the Lender delivered before 12:00 Noon
(Minneapolis, Minnesota time) on a Business Day which is at least three
(3) Business Days prior to the date of such Revolving Advance specifying the
amount of such Revolving Advance, provided that, no Revolving Advance shall be
made while an Event of Default exists or if the interest rate for such LIBOR
Rate Loan would exceed the Maximum Rate. Any Request for Advance applicable to a
Revolving Advance received after 12:00 Noon (Minneapolis, Minnesota time) shall
be deemed to have been received and be effective on the next Business Day. The
amount so requested from the Lender shall, subject to the terms and conditions
of this Second Supplement, be made available to the Borrower by: (i) depositing
the same, in same day funds, in an account of the Borrower; (ii) wire
transferring such funds to a Person or Persons designated by the Borrower in
writing; or (iii) payment pursuant to Section 6(f) of this Second Supplement.

(b) Requests for Advances Irrevocable. Each Request for Advance shall be
irrevocable and binding on the Borrower and the Borrower shall indemnify the
Lender against any loss or expense it may incur as a result of any failure to
borrow any Advance after a Request for Advance (including any failure resulting
from the failure to fulfill on or before the date specified for such Advance the
applicable conditions set forth in this Second Supplement and the MLA),
including, without limitation, any loss or expense incurred by reason of the
liquidation or reemployment of deposits or other funds acquired by the Lender to
fund such Advance when such Advance, as a result of such failure, is not made on
such date.

(c) Minimum Amounts. Each Revolving Advance shall be in a minimum amount equal
to $50,000.00.

(d) Unused Commitment Fee. In addition to fees payable on the Effective Date,
Borrower agrees to pay to the Lender an Unused Commitment Fee on the average
daily unused portion of such Lender’s commitment under the Revolving Line of
Credit Loan from the Availability Date until the Revolving Line of Credit Loan
Maturity Date at the rate of 0.50% per annum, payable in arrears in quarterly
installments payable on the first (1st) day of each third month after the
Availability Date.

(e) Conditions Precedent to All Advances. The Lender’s obligation to make each
Advance under the Revolving Line of Credit Note shall be subject to the terms,
conditions and covenants set forth in the MLA and this Second Supplement,
including, without limitation, the following further conditions precedent:

(i) Representations and Warranties. The representations and warranties set forth
in the MLA and this Second Supplement are true and correct in all material
respects as of the date of the request for any Advance, except as disclosed in
writing to the Lender, to the same extent and with the same effect as if made at
and as of the date thereof except as disclosed in writing to the Lender;

 

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(ii) No Defaults. The Borrower is not in default under the terms of the MLA, the
Related Documents or any other Material Contracts to which the Borrower is a
party and which relates to the operation of the Borrower’s business;

(iii) Government Action. No license, permit, permission or authority materially
necessary for the operation of the Plant has been revoked or challenged by or
before any Governmental Authority;

(iv) Marketing Agreements. The Borrower has executed marketing agreements for
all biodiesel, glycerin and all other by products to be produced at the Plant
and provided Lender with collateral assignments of all such agreements in form
and content which is satisfactory to Lender and its counsel and acknowledged by
the non-Borrower party to all such agreements; and

(v) Borrowing Base Certificate. The Borrower has provided the Borrowing Base
Certificate as required by Section 13 of this Second Supplement.

(vi) Other Agreements. In the event that any Inventory is commingled with
inventory owned by any Affiliate of the Borrower or any other Person, the Lender
shall have received an intercreditor agreement in form and substance acceptable
to the Lender in its sole discretion.

(f) Borrower hereby requests that Lender advance the Acquisition Advance and
authorizes Lender to make the Acquisition Advance on the Availability Date and
to apply the funds thereby advanced to the payment of the CIE Loan.

7. Interest Rate. Subject to the provisions of the MLA and Section 8 and 10 of
this Second Supplement, the Revolving Line of Credit Loan shall bear interest at
a rate equal to the Applicable Rate plus 300 basis points. The computation of
interest, amortization, maturity and other terms and conditions of the Revolving
Line of Credit Loan shall be as provided in the Revolving Line of Credit Note,
provided, however, in no event shall the applicable rate exceed the maximum
nonusurious interest rate, if any, that at any time, or from time to time, may
be contracted for, taken, reserved, charged, or received under applicable state
or federal laws (the “Maximum Rate”).

8. Default Interest. In addition to the rights and remedies set forth in the
MLA: (i) if the Borrower fails to make any payment to Lender when due, then at
Lender’s option in each instance, such obligation or payment shall bear interest
from the date due to the date paid at the applicable Default Rate; (ii) upon the
occurrence and during the continuance of an Event of Default beyond any
applicable cure period, if any, at Lender’s option in each instance, the unpaid
balances of the Revolving Line of Credit Loan shall bear interest from the date
of the Event of Default or such later date as Lender shall elect the applicable
Default Rate; (iii) after the maturity of the Revolving Line of Credit Loan,
whether by reason of acceleration or otherwise, the unpaid principal balance of
the Revolving Line of Credit Loan (including without limitation, principal,
interest, fees and expenses) shall automatically bear interest at the applicable
Default Rate.

 

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Interest payable at the Default Rate shall be payable from time to time on
demand or, if not sooner demanded, on the last day of each calendar month.

9. Late Charge. If any payment of principal or interest due under this Second
Supplement or the Revolving Line of Credit Note is not paid within ten (10) days
of the due date thereof, the Borrower shall pay, in addition to such amount, a
late charge equal to five percent (5%) of the amount of such payment.

10. Changes in Law Rendering Certain LIBOR Rate Loans Unlawful. In the event
that any change in any applicable law (including the adoption of any new
applicable law) or any change in the interpretation of any applicable law by any
judicial, governmental or other regulatory body charged with the interpretation,
implementation or administration thereof, should make it (or in the good-faith
judgment of the Lender should raise a substantial question as to whether it is)
unlawful for the Lender to make, maintain or fund LIBOR Rate Loans, then:
(a) the Lender shall promptly notify each of the other parties hereto; and
(b) the obligation of the Lender to make LIBOR rate loans of such type shall,
upon the effectiveness of such event, be suspended for the duration of such
unlawfulness. During the period of any suspension, Lender shall make loans to
Borrower that are deemed lawful and that as closely as possible reflect the
terms of the MLA.

11. Maximum Amount Limitation. Anything in this MLA, this Second Supplement, or
the other Loan Documents to the contrary notwithstanding, Borrower shall not be
required to pay unearned interest on the Revolving Line of Credit Note or any of
the Loan Obligations, or ever be required to pay interest on the Revolving Line
of Credit Note or any of the Loan Obligations at a rate in excess of the Maximum
Rate, if any. If the effective rate of interest which would otherwise be payable
under the MLA, this Second Supplement, the Revolving Line of Credit Note, or any
of the other Loan Documents would exceed the Maximum Rate, if any, then the rate
of interest which would otherwise be contracted for, charged, or received under
the MLA, this Second Supplement, the Revolving Line of Credit Note, or any of
the other Loan Documents shall be reduced to the Maximum Rate, if any. If any
unearned interest or discount or property that is deemed to constitute interest
(including, without limitation, to the extent that any of the fees payable by
Borrower for the Loan Obligations to the Lender under the MLA, this Second
Supplement, the Revolving Line of Credit Note, or any of the other Loan
Documents are deemed to constitute interest) is contracted for, charged, or
received in excess of the Maximum Rate, if any, then such interest in excess of
the Maximum Rate shall be deemed a mistake and canceled, shall not be collected
or collectible, and if paid nonetheless, shall, at the option of the holder of
the Revolving Line of Credit Note, be either refunded to the Borrower, or
credited on the principal of the Revolving Line of Credit Note. It is further
agreed that, without limitation of the foregoing and to the extent permitted by
applicable law, all calculations of the rate of interest or discount contracted
for, charged or received by the Lender under the Revolving Line of Credit Note,
or under any of the Loan Documents, that are made for the purpose of determining
whether such rate exceeds the Maximum Rate applicable to the Lender, if any,
shall be made, to the extent permitted by applicable laws (now or hereafter
enacted), by amortizing, prorating and spreading during the period of the full
terms of the Advances evidenced by the Revolving Line of Credit Note, and any
renewals thereof all interest at any time contracted for, charged or received by
Lender in connection therewith. This

 

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section shall control every other provision of all agreements among the parties
to the MLA pertaining to the transactions contemplated by or contained in the
Loan Documents, and the terms of this Section shall be deemed to be incorporated
in every Loan Document and communication related thereto.

12. Mandatory Prepayments or Collateralization. The Borrower shall, within five
(5) days following the earlier of the delivery of each Borrowing Base
Certificate hereof or the day upon which such Borrowing Base Certificate was
due, either (i) prepay the Advances in the amount, if any, by which the
Outstanding Credit less the unpaid principal balance of the Acquisition Advance
on the date of prepayment under this Section exceeds the Borrowing Base at such
time, together with accrued interest to the date of such prepayment on the
amount prepaid, or (ii) pledge and assign to the Lender additional collateral
acceptable to the Lender, in the Lender’s sole discretion, and deliver all
documentation that the Lender, in its sole discretion, may require in connection
with such pledge and assignment and the perfection of a first-priority security
interest in such additional collateral, so that the Borrowing Base plus the
value assigned by the Lender, in its sole discretion, to such additional
collateral plus the unpaid principal balance of the Acquisition advance equals
or exceeds the Outstanding Credit.

13. Reporting Requirements. In addition to the reporting requirements under
Section 5.01(c) in the MLA, the Borrower shall:

(a) at all times while there is an outstanding balance under the Revolving Line
of Credit Loan, furnish to the Lender as soon as available and in any event
within 5 days after the end of each calendar week (or at such other times or
with such greater frequency as is requested by the Lender), a duly completed
Borrowing Base Certificate, setting forth the Borrowing Base as of the last day
of such week calculated based upon collateral value criteria and advance rates
which do not exceed those set forth in the Borrowing Base Certificate, and
including such other information, representation and warranties contemplated
therein, certified by the appropriate authorized officer of the Borrower, and

(b) provide to Lender within 45 days after each June 30th and December 31st a
written audit of Eligible Inventory and Eligible Equipment performed by an
independent third party auditor reasonably acceptable to Lender.

14. Security. The Borrower’s obligations hereunder and, to the extent related
thereto, the MLA, shall be secured as provided in the MLA.

15. Proceeds of Collateral. Notwithstanding the provisions of Section 2.09(d) of
the MLA, to the extent that Lender seeks to enforce its rights under the
Section 1.b. of the Corporate Guaranty of the Revolving Line of Credit Loan
against Renewable Energy Group, Inc., the proceeds from the sale or other
liquidation of Revolving Line of Credit Collateral received by the Lender within
60 days after the Lender accelerates the due date of the unpaid principal
balance of the Revolving Line of Credit Loan (the “Acceleration Date”) shall be
applied first to the payment of Lender’s fees and expenses, then to Lender’s
attorneys fees and other expenses related to Lender’s realization on such
Collateral, then to the payment of accrued interest on the Revolving Line of
Credit Loan, then to the payment of the outstanding principal of the

 

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Revolving Line of Credit Loan and then to the payment of the other Loan
Obligations in such amounts and such order as provided in Section 2.09(d) of the
MLA. The Lender shall be entitled to apply any proceeds from the sale of the
Revolving Line of Credit Collateral that are received by the Lender more than 60
days after the Acceleration Date as provided in Section 2.09(d) of the MLA. To
the extent that the Lender has taken possession of some or all of the Revolving
Line of Credit Collateral, the Lender agrees to make a commercially reasonable
effort to liquidate such collateral within 60 days after the Acceleration Date.

16. Execution in Counterparts. This Second Supplement may be executed in any
number of counterparts and on telecopy counterparts, each of which when so
executed shall be deemed to be an original and all of which when taken together
shall constitute but one and the same agreement.

{SIGNATURE PAGE IMMEDIATELY FOLLOWS}

 

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SIGNATURE PAGE TO

SECOND SUPPLEMENT

TO

MASTER LOAN AGREEMENT

BY AND BETWEEN

REG NEWTON, LLC

AND

AGSTAR FINANCIAL SERVICES, PCA

DATED: MARCH 8, 2010

IN WITNESS WHEREOF, the parties have caused this Second Supplement to the Master
Loan Agreement to be executed by their duly authorized officers as of the date
shown above.

 

REG NEWTON, LLC

an Iowa limited liability company

By:  

/s/ Daniel J. Oh

Name: Daniel J. Oh Title: President AGSTAR FINANCIAL SERVICES, PCA By:  

/s/ Mark Schmidt

Name: Mark Schmidt Its: Vice President

 

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