Exhibit 10.1

 

HEADS OF AGREEMENT

 

This Heads of Agreement (HOA) sets out the principal terms upon which the
parties being (Parties) Transocean Group Holdings Pty Ltd or its nominee
(Transocean) and South Dakota Soy Processors, LLC (SDSP) have incorporated High
Plains Biofuels (HPB) with a view to jointly undertake the development and
construction of a biodiesel plant (Plant) on the land owned and occupied by SDSP
in South Dakota (Land).

 

The Parties agree as follows:

 

1.

 

Incorporation of High Plains Biofuels, Inc. (HPB)

 

The parties have Incorporated a Delaware company HPB. Each own 50% of the shares
of HPB.

 

 

 

 

 

2.

 

SDSP Obligations

 

It is proposed that SDSP’s obligations in relation to the HPB will be to:

(a)                                  provide the site upon which the Plant will
be developed and constructed (being the Land as referred above);

 

(b)                                 put forward a proposal for project
management services in relation to the Plant on commercially acceptable terms to
the HPB and any financiers;

 

(c)                                  provide the ongoing daily administration/
management of the Plant:

 

(d)                                 prepare operating budgets for the Plant
development, construction and operation;

 

e)                                      provide the soy processing and crushing
facility for processing of all soy feed stock required in relation to Plant
operations; and

 

(f)                                    source one or more strategic partners to
provide feed stock to the Plant.

 

In return for the above, SDSP will be entitled to normal arm’s length commercial
fees — taking into account the fact that SDSP will be a major shareholder in
HPB.

 

 

 

 

 

3.

 

Transocean Obligations

 

It is proposed that Transocean’s obligations in relation to HPB will be to:

(a)                                  raise any necessary seed capital funding;

 

(b)                                 provide strategic and corporate advice in

 

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relation to the development of the Plant, capital raisings to finance the
development of the Plant and the future listing of HPB on a recognized stock
exchange:

 

(c)                                  completion of initial due diligence
required in associated with an investment memorandum;

 

(d)                                 act as lead manager and coordinator for all
debt and equity funding required by HFB to complete the development and
construction of the Plant;

 

(e)                                  provide strategic and corporate advice and
assistance in relation to the development of any patentable processes and or
intellectual property protection; and

 

(f)                                    provide strategic and corporate
assistance in the development of bio diesel and off take distribution strategies
and arrangements.

 

In return for the above, Transocean will be entitled to normal arm’s length
commercial fees — taking into account the fact that Transocean will be a major
shareholder in HPB.

 

 

 

 

 

4.

 

Joint Contributions

 

In addition to the obligations set out in clauses 2 and 3, the parties agree
that they will jointly use their best endeavours to:

(a)                                  prepare an investment memorandum for the
purposes of securing debt/equity funding for HPB;

 

(b)                                 source and secure technology rights in
relation to the design, construct and operation of the Plant;

 

(c)                                  source an off-take agreement for all
biodiesel produced from the Plant;

 

(d)                                 source construction and management services
with respect to the design and construction of the Plant;

 

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(e)                                  Any other agreed matters that are integral
to the development, construction and operations of the Plant.

 

 

 

 

 

5.

 

Stockholders Agreement

 

The parties agree to enter into a Stockholders Agreement to govern their
relationship in respect of HPB and the design, construction and operation of the
Plant. The material terms of the Stockholders Agreement will be as follows:

(a)                                  each of Transocean and SDSP own 50% of the
fully diluted issued shares of common stock in HPB;

 

(b)                                 each of Transocean and SDSP may nominate up
to 4 directors to the board of directors of HPB;

 

(c)                                  each of Transocean and SDSP will have 50%
of the voting rights at each meeting of shareholders and meeting of directors of
HPB;

 

(d)                                 the parties will consider jointly developing
other biodiesel plants; and

 

(e)                                  other terms and conditions that are
customary in stockholders agreements.

 

 

 

 

 

6.

 

Formal Agreement

 

As soon as practicable after the date of this HOA, the parties agree to
negotiate in good faith the terms and conditions of a formal Stockholders
Agreement to more fully document the intentions of the parties as set out in
this HOA.

 

 

 

 

 

7.

 

Governing Law

 

This HOA and the formal Stockholders Agreement will be governed by the laws of
the jurisdiction in which HPB is incorporated and the parties agree to submit to
the non exclusive jurisdiction of the courts of that place.

 

 

 

 

 

8.

 

Entire Agreement

 

This HOA supersedes all previous agreements about its subject matter and
embodies the current entire agreement between the parties.

 

 

 

 

 

9.

 

Further Assurances

 

Each party must do all things necessary to give full effect to the terms of this
HOA and the transactions

 

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contemplated by this HOA.

 

 

 

 

 

10.

 

Counterparts

 

This HOA may be executed in any number of counterparts (including by way of
facsimile) each of which shall be deemed for all purposes to be an original and
all such counterparts taken together shall be deemed to constitute one and the
same instrument.

 

 

 

 

 

11.

 

Confidentiality

 

The parties acknowledge and agree that the terms of the HOA shall remain
confidential as between them and neither of them will use or disclose these
terms to any other person other than their respective advisors or as required by
law.

 

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Executed as an agreement

 

EXECUTED BY

 

TRANSOCEAN GROUP HOLDINGS PTY LTD

 

by its duly authorized representative:

 

EXECUTED BY

 

SOUTH DAKOTA SOYBEAN PROCESSORS, LLC

 

by its duly authorized representative:

 

 

 

 

/s/ James Henderson

 

James Henderson

 

 

 

 

 

April 28, 2006

 

 

 

 

 

 

 

/s/ Paul Wessel

 

Witness

 

Paul Wessel

 

 

 

April 28, 2006

 

 

 

 

 

EXECUTED BY

SOUTH DAKOTA SOYBEAN PROCESSORS, LLC

by its duly authorized representative:

 

 

 

 

/s/ Rodney Christianson

 

Rodney Christianson

 

 

 

 

 

 

 

April 28, 2006

 

 

 

 

 

 

 

 

 

 

 

/s/ Thomas J. Kersting

 

Witness

 

Tom J. Kersting

 

 

 

 

 

April 28, 2006

 

 

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