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 

  



 

















 


	
   

  	
   

  	
   

  	
   

  	
  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;

  



 

















 


	
   

  	
   

  	
   

  	
   

  	
  (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 

  



 

















 


	
   

  	
   

  	
   

  	
   

  	
  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.

  



 

















 


	
  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