December
      7, 2007

    


    Southern
      Iowa BioEnergy 

    115
      S.
      Linden Street

    Lamoni,
      IA 50140

    Attn:
      William T. Higdon

    


    Subject:
      Interim Agreement - SIBE Bio Diesel Plant in Osceola, Iowa 

    


    Dear
      Mr.
      Higdon:

    


    Thank
      you
      again the opportunity to continue working with you on this project, Bill. As
      you
      know, Ball
      Industrial Services takes very seriously the confidence you’ve shown in us as
your
      Engineering,
      Procurement,
      Construction (EPC)
      Contractor. As such we will be providing services to construct a 40 MGPY
      Biodiesel facility; coordinating all design, construction and commissioning
      services.

    


    The
      intent of this Interim Agreement is to establish a base line from which we
      will
      execute a definitive agreement unless sooner terminated. The Interim
      Agreement
      shall
      remain in place until the later of (a) the date the definitive agreement is
      executed, or (b) August 1, 2008.

    


    Team
      Approach

    


    As
      the
      EPC Contractor for your project, Ball Industrial Services will act as the prime
      contractor to SIBE and will directly manage other key prime contractors. Ball
      Industrial Services will utilize existing SIBE relationships with key subs
      for
      the project.

    


    Ball
      Industrial Services

    


    The
      services to be provided by Ball in connection with the Facility shall include,
      but are not limited to, the following:

    


    
      	 	
              a)

            	
              Preparation
                of a proposed Guaranteed Maximum Price Agreement (GMAX Agreement)
                for the
                design, construction and start-up of the Facility, including a preliminary
                schedule.

            


      	 	 	 


    

    
      	 	
              b)

            	
              Design,
                construct and startup the Facility in accordance with the GMAX
                Agreement.

            


    

    
      	 	 	 


      	 	
              c)

            	
              All
                other items agreed to in the GMAX
                Agreement.

            


    

    


    Ball
      will
      not limit its assistance to the service specifically enumerated above, but
      will
      extend its services and assistance as reasonably required and requested by
      the
      Company to provide for the successful implementation of the plan of financing
      and the design, construction and startup of the Facility. (Please refer to
      Appendices A, B, C, D for more details.)

     

    6601
      Westown Parkway - Suite 240 - West Des Moines, IA 50266

    Ph:
      515.276.8788 Fax: 515.221.1840

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    We
      will
      provide project coordination for building design, civil engineering, trade
      procurement for site, concrete, erection, carpentry and design as required
      for
      the project.

    


    In
      addition, Ball will be responsible for all coordination of technology providers,
      contracts, cash management, and schedule performance. As the controlling
      contractor, we are responsible for OSHA activities, documentation and
      implementation to ensure a safe worksite.

    


    In
      order
      to ensure communication with the SIBE, LLC Board regarding critical issues
      on
      budget and schedule, Ball Industrial Services shall supply monthly a progress
      report for use by the board and financing partners.

    


    All
      subcontracts and licenses to be entered by Ball Industrial Services and Safer
      shall be subject to prior review and approval by SIBE.

    


    Ball
      Industrial and Safer shall use commercially reasonable efforts to obtain and
      provide to SIBE as soon as reasonably practicable the proposed forms of any
      licenses, sublicenses or similar agreements relating to technology to be
      provided by third parties, and shall reasonably cooperate with SIBE in
      negotiating such agreements to provide SIBE with such rights and protections
      as SIBE deems necessary or appropriate in connection with such underlying
      technology.

    


    SAFER
      Energy LLC

    


    SAFER
      will be the technology provider for this project. They will provide the process
      design, process license, detailed engineering, fabrication of all process and
      utility components (including process vessels, piping, boilers, chillers,
      cooling towers, etc); and, site assembly of all modules for
      the
      plant &
      process. 

    


    SIBE
      will
      contract directly with Ball Industrial Services and SAFER for their respective
      scopes of supply. 

    


    For
      Project and Construction Management purposes; SAFER will report to Ball
      Industrial Services similar to a conventional Ball Industrial subcontractor.
      

    


    Ball
      Industrial
      will be
responsible
      for the
      site
      work, foundations, buildings, roads, rail, fire detection & suppression and
      utility connections to SAFER’s modules. Ball Industrial will also be responsible
      for the feedstock and biodiesel storage tanks. 

    


    The
      details of the respective Ball Industrial and SAFER scopes will be worked out
      during contract preparation. 

    


    Scope
      & Budget

    


    Ball
      Industrial Services will be acting as the EPC contractor for this project
and
      as
      such will be responsible
      for integrating SAFER into the overall project schedule, budget and cash flow.
      We will work with SAFER, and our subcontractor base to establish a base line
      scope and price to produce a 40 MG PY facility. It is imperative that we
accurately
      forecast
      all
      factors affecting the
      cost
      and
      timing of project completion. We are in a very dynamic marketplace and the
      currently strong demands on market
      resources
      can produce unforeseen
      costs and
      delays.

    


    Schedule

    


    Ball
      Industrial Services estimates a sixteen to eighteen month construction cycle.
      The schedule will commence when long lead time equipment has been placed on
      order. 

     

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

     

    Key
      Elements to Proposed Schedule:

    


    SIBE
      has
      the responsibility to obtain all required permits. Ball Industrial Services
      will
      work with SIBE to obtain all appropriate permits. The time for this activity
      may
      be a critical path item for the schedule and may require schedule adjustments
      based upon the critical timeline to procure.

    


    SAFER
      has
      the responsibility to design and fabricate all process material and equipment
      and most ancillary equipment. 

    


    Ball
      Industrial Services has the overall Project & Construction Management
      responsibilities as well as site, foundations, buildings, roads and rail
      responsibilities. Ball Industrial Services will provide monthly schedule and
      budget updates to SIBE.

    


    Contract:

    


    Although
      SAFER will contract directly with SIBE for their scope of supply, Ball
      Industrial will manage that contract on behalf of SIBE. Ball Industrial Services
      proposes a cost plus fee Guaranteed Maximum Price contract for Ball Industrial’s
      scope of the project. Except as otherwise directed by SIBE, all subcontracts
      shall be competitively bid as part of the Ball Industrial Services package.
      All
      contracts shall be reviewed prior to execution with SIBE. All costs shall be
      made available for review by the SIBE team at anytime.

    


    Interim
      Agreement:

    


    Ball
      Industrial Services and SIBE have executed this interim agreement to cover
      project management, engineering and equipment procurement costs associated
      with
      the project. The Target Price for the Project will be prepared within 8 weeks
      of
      execution and funding of this Interim Agreement.

    


    EPC
      Agreement:

    


    It
      is the
      intention of Ball Industrial Services and SIBE to execute a prime contract
      with
      a Guaranteed Maximum Price ("GMAX")
      for EPC
      and Project & Construction Management services. The rights and obligations
      of the parties with respect to the Facility will be set forth in the GMAX
      agreement to be executed by the parties (the "GMAX
      Agreement").
      The
      completion of the GMAX Agreement is subject to and contingent upon the parties
      reaching agreement on the terms and conditions thereof. After this interim
      agreement is executed by the Company and returned to Ball industrial
      Services
      together with the down payment, the parties will enter into good faith
      negotiations for the preparation of the GMAX Agreement. Either party may
      terminate such negotiations at any time and for any reason. If this interim
      agreement is terminated by SIBE, Ball Industrial Services will refund the down
      payment paid less expenses incurred and fee earned by Ball Industrial Services
      as a result of this interim agreement. If this interim agreement is terminated
      by Ball Industrial Services, Ball Industrial Services will refund the down
      payment paid by SIBE.

    


    Ball
      Industrial GMAX pricing shall include GMAX pricing for Ball Industrial Services
      and all subs and primes plus an agreed to project contingency. GMAX pricing
      will
      be established by the time the Project Design and Development documents are
      80%
      complete.

    


    Fees

    


    Project
      Fee: Ball Industrial Services proposes a 10% cost of work fee on all
      subcontracts under Ball Industrial Services EPC agreement. Ball Industrial
      Services proposes a 5% cost of work fee for prime contracts managed by Ball
      Industrial Services.

     

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

     

    Shared
      Savings: Ball Industrial Services proposes a 60/40 split on all savings
      generalized by the prime contractors below the GMAX price. 60% for SIBE and
      40%
      Ball Industrial Services which will be shared pro rate with the prime
      subs.

    


    Schedule
      Bonus: Prior to the GMAX Agreement being finalized, Ball Industrial Services
      proposes developing a schedule incentive plan with SIBE. If the performance
      guarantee is achieved on or before the expiration of the eighteenth month,
      this
      incentive shall be shared pro rata with each key subcontractor to ensure
      performance. In the event the parties agree to such a schedule incentive plan,
      Ball Industrial Services will also agree to pay liquidated damages in an
      identical amount for each day after eighteen months that the project is not
      complete.

    


    General
      Liability

    


    General
      Liability fee of .60% of the cost of work shall be applied to the Ball
      Industrial Services contract.

    


    Payment
      Terms: 

    


    Initial
      Down Payment:

    


    Upon
      execution of this interim agreement SIBE will provide a series of initial down
      payments to start project design. Ball Industrial Services will require a
      payment of $750,000 for preconstruction engineering, design, deposits and other
      initial project expenses. Ball Industrial Services will provide SIBE with a
      weekly accounting of any such payments and deposits.

    


    Subcontractor
      Retention:

    


    Ball
      Industrial Services reserves the right to contract or change subcontractors
      to
      deliver the project as required to meet the project timelines, subject to SIBE’s
      prior written consent, which shall not be unreasonably withheld.

    


    Ball
      Industrial Services

    


    Any
      remaining contractors Ball Industrial is managing but whose agreement is direct
      with SIBE shall invoice bimonthly for work completed. SIBE shall pay all
      invoices in Net 15 days after receipt of invoices. Ball Industrial Services
      shall prepare an estimated draw schedule which will be reviewed and agreed
      to by
      Ball Industrial Services and SIBE.

    


    Equipment
      Down Payments

    


    There
      will be several long lead items involved with the SIBE project. They shall,
      from
      time to time, require deposits or non-refundable deposits to secure production
      slots. If such deposits are approved by SIBE, SIBE shall direct wire such
      payments directly to the contractor vendors. Ball Industrial Services shall
      track and report monthly all such deposits so SIBE can maintain accurate records
      of non-refundable deposits.

    


    Warranties
      

    


    Mechanical
      & Process:

     

    SAFER
      will provide mechanical and process performance warranties in addition to a
      one
      year warranty covering workmanship and materials for SAFER supplied equipment
      and work. These will be developed prior to execution of the GMAX
      Agreement. 

    


    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    

    


    Workmanship:

     

    Ball
      Industrial Services will provide a one year warranty agreement for workmanship
      and materials. 

    


    SIBE
      Responsibilities

     

    
      	 	
              ·

            	
              Payment
                of all prime contracts as well as associated licensing and performance
                requirements.

            


    

    
      	 	 	 


      	 	
              ·

            	
              All
                site costs associated with ground acquisition and due
                diligence

            


      	 	 	 


    

    
      	 	
              ·

            	
              All
                costs associated with debt financing

            


      	 	 	 


    

    
      	 	
              ·

            	
              Obtaining
                state, city, or county incentives for the
                project

            


      	 	 	 


    

    
      	 	
              ·

            	
              Application,
                securing and payment of all applicable licensing and permits related
                to
                the project.

            


    

    


    This
      is
      an approved understanding and agreement between Ball Industrial Services and
      Southern Iowa Bio Energy, LLC,

     

    
      	Ball
              Industrial
              Services, LLC	 	 	Southern
              Iowa Bio
              Energy, LLC
	 	 	 	 
	 	 	 	 
	/s/
              Rick
              Ball	 	 	/s/
              William T.
              Higdon
	
              
Rick
              Ball	 	 	
              

              William
                T. Higdon

            
	
              President

            	 	 	
              President

            
	Date:	 	 	Date:
              12-19-07


    

     

    Attachments:

    


    Appendix
      A:   Engineer/Contractor
      Responsibilities

    Appendix
      B:   Owner’s
      Responsibilities

    Appendix
      C:   Ownership
      of Documents

    Appendix
      D:   Feedstock
      Risk Assessment

    


    
      
        
        

      

      
        -5-

        
          

        

      

      
        
        

      

    

     

    Appendix
      A:
      Engineer/Contractor Responsibilities

    


    Engineering
      services shall be performed under the direct supervision of Ball Industrial.
      

    


    The
      following Engineering Services shall be provided:

     

    
      
        	
                Project
                  costing developed

              
	
                Project
                  Cash Flow Projection for the project (with definition of payment
                  terms)

              
	
                Utility
                  Requirements definition to Owner

              
	
                Site
                  Lay-out Plan development (with utilities, rail, roads, and building
                  orientations) with Owner representatives input. (This does NOT
                  include
                  Civil Engineering for final design)

              
	
                Process
                  Area Lay-out. (equipment location and orientation by level in the
                  structure)

              
	
                Process
                  Engineering Package development. (Material and Energy Balance,
                  process
                  flow sheets, index flow sheets)(utility consumption rates
                  defined)

              
	
                Process
                  wastewater and air emissions information transferred to Owner’s
                  Environmental Engineer.

              
	
                Design
                  detail development of Process Structure and foundations.
                  

              
	
                Project
                  Milestone Schedule (detailed) and full Project Scope definition
                  document.

              
	
                Development
                  of detailed Piping and Instrumentation Diagrams
                  (P&ID)

              
	
                Design/Build
                  Construction Contract Developed. (GMAX format)

              
	
                Identification
                  of Long Lead Time Equipment and Procurement Plan for SAFER provided
                  equipment.

              
	
                Definition
                  of electrical requirements and electrical design
                  details.

              
	
                Definition
                  of ISBL and OSBL tank farm sizing recommendations to
                  Owner.

              
	
                Definition
                  of fire prevention and detection equipment and installation
                  requirements.

              
	
                Development
                  of control logic documents (functional descriptions), control code
                  and
                  control graphics for process equipment.

              
	
                Design
                  details of instrumentation input and output requirements. (loop
                  drawings)
                  

              
	
                Definition
                  of insulation requirements for piping and equipment.

              
	
                Completion
                  of a HAZOP review of process with owner’s representatives in
                  attendance

              
	
                Specification
                  of all SAFER provided instruments, piping, valves, pumps and fittings.
                  

              
	
                Definition
                  of painting requirements for piping and
                  equipment.

              


      

    

     

    Project
      Schedule The
      developed schedule shall show the activities of the Owner and the
      Engineer/Contractor necessary to meet the Owner’s completion requirements with
      ownership designation on individual tasks.

    


    Target
      Pricing Ball
      Industrial will work with the Owner to develop the Target Price for the defined
      scope of work. This will occur within 8 weeks of execution and funding of this
      Interim Agreement. 

    


    
      
        
        

      

      
        -6-

        
          

        

      

      
        
        

      

    

     

    Appendix
      B: Owner’s
      Responsibilities

    


    The
      Owner
      shall provide to Ball Industrial all relevant information for the Project,
      including the Owner’s Program and intentions, which is an initial description of
      the Owner’s objectives, including budgetary and time criteria, space
      requirements and relationships, flexibility and expandability requirements,
      special equipment and systems, and site requirements.

    


    The
      Owner
      shall review and timely approve schedules, estimates, schematic design documents
      and other documents that are provided under this Agreement.

    


    If
      the
      Owner elects not to proceed with the Project, the Owner shall have no further
      obligation to Ball Industrial other than the payment of compensation as set
      forth in this Agreement.

    


    The
      Owner
      shall provide Ball Industrial all known information regarding site and the
      site
      attributes that are needed to complete the project scope.

    


    
      
        
        

      

      
        -7-

        
          

        

      

      
        
        

      

    


    Appendix
      C: Ownership
      of Documents

    


    All
      documents, work papers, plans, designs, and related work product generated
      or
      produced pursuant to this Interim Agreement shall remain the property of Ball
      Industrial and its subcontractors prior to handing-over of the completed plant
      to the Owner, subject, however, to a non-assignable license to the Owner to
      complete the proposed plant in Osceola, Iowa and to use such materials in
      connection with such plant, provided that the Owner has paid all amounts owing
      to such parties. This includes notes, photos, memorandums, drawings generated
      as
      part of the scope of this Interim Agreement. 

    


    
      
        
        

      

      
        -8-

        
          

        

      

      
        
        

      

    


    Appendix
      D: Feedstock
      Risk Assessment

    


    If,
      during the completion of work outlined in this agreement, the feedstock plan
      for
      the facility dictates other than soy or palm oil to be used, a Feedstock Risk
      Assessment activity will be completed as soon as possible under the direction
      of
      Ball Industrial / SAFER. This assessment will be completed as an expense to
      the
      Owner. This step is being dictated due to the influx of potential feedstock
      for
      Biodiesel production that may highly variable in quality.

    


    The
      Owner
      will be asked to provide liquid samples of all feedstock types planned other
      than soybean or palm oil. These samples must be considered representative and
      “typical” of the supply that will eventually be resourced to supply the
      operating Biodiesel facility.

    


    Ball
      Industrial / SAFER will engage a third party testing laboratory to analyze
      these
      materials in detail. Properties such as wax content, free fatty acid content,
      phosphorous content, sulfur content, moisture level, unsaponifiables and other
      impurities will be measured.

    


    Ball
      Industrial / SAFER will coordinate a review session of the test results with
      the
      Owner and the Owner’s representative. 

    


    The
      test
      results will be reviewed and if concerns are raised regarding the viability
      of
      any feedstock to successfully produce in-specification Biodiesel using the
      SAFER
      BioDiesel process, any of several next steps may be completed. For
      example:

    


    
      	 	
              
                
                  
                    
                      
                        ·

                      

                    

                  

                

              

            	
              Additional
                testing

            


    

    
      	 	
              
                ·

              

            	
              Repeat
                testing

            


    

    
      	 	
              
                ·

              

            	
              Pilot
                scale testing to produce Biodiesel for analysis and
                review

            


    

    
      	 	
              
                ·

              

            	
              Same
                or additional testing by another
                lab

            


    

    


    These
      additional steps will be made at Owner’s expense. Additionally, technical
      adjustments may be possible to the processing steps and/or conditions of
      processing to mitigate the concerns and should be considered.

    


    If
      concerns persist regarding the feedstock’s viability, Ball Industrial / SAFER
      will discuss options such as removal of the feedstock from consideration in
      the
      supply of materials and from the project scope or in a worst case, cancellation
      of the project.

    


    If
      no
      concerns exist, the work outlined under this agreement will continue as per
      planned content and schedule.

     

    
      
        
        

      

      
        -9-