Exhibit 10.7


 


NON-COMPETITION AGREEMENT


 


 


THIS NON-COMPETITION AGREEMENT (this “Agreement”),
dated as of August 1, 2006, is entered into by (i) West Central Cooperative, an
Iowa cooperative association, REG, LLC (f/k/a Renewable Energy Group, LLC), an
Iowa limited liability company, and InterWest, L.C., an Iowa limited liability
company (the “Stockholders” or singularly, a “Stockholder”), and
(ii) Renewable Energy Group, Inc., a Delaware corporation (the “Company”).


 


RECITALS


 


WHEREAS, the Company has been recently created and
organized in connection with a proposed transaction (the “Proposed Transaction”) pursuant to which
(i) the Stockholders on the date hereof will each contribute assets to the
capital of the Company in exchange for Common Stock and (ii) NGP Energy
Technology Partners, L.P., a Delaware limited partnership, and Natural Gas
Partners VIII, L.P., a Delaware limited partnership (collectively, “NGP”),
on the date hereof will purchase Series A Senior Convertible Preferred Stock as
provided in that certain Stock Purchase Agreement dated August 1, 2006 by and
among the Company, the Stockholders and NGP (the “Stock Purchase Agreement”);
and


 


WHEREAS, the execution and delivery of this Agreement
by the parties is a condition to the consummation of the transactions
contemplated by the Proposed Transaction.


 


AGREEMENT


 


NOW, THEREFORE, for good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties to
this Agreement, intending to be legally bound, hereby agree as follows:


 


1.                                       Covenant
Not To Compete.


 


a.                                       Each
Stockholder acknowledges the valuable consideration of the agreements set forth
in the Stock Purchase Agreement and recognizes such Stockholder’s possession of
confidential information regarding the Company and the production, gathering,
transporting, marketing, treating or processing of biodiesel or by-products of
the production thereof or the ownership, lease, acquisition, construction or
operation of biodiesel facilities (the “Biodiesel Business”) and acknowledges
and recognizes the highly competitive nature of the Biodiesel Business. Accordingly,
in consideration of the agreements among the parties set forth in this
Agreement and the Stock Purchase Agreement, each Stockholder agrees that, until
such Stockholder no longer owns any Common Stock or other equity interest in
the Company, the Stockholder will not, for any reason whatsoever, either
individually or through one or more of its Affiliates, directly or indirectly
(i) engage or participate in any manner, other than through the Company, in the
Biodiesel Business, (ii) divert, take away or solicit, or attempt to divert,
take away or solicit any Biodiesel Business of the Company, (iii) solicit any
employee or agent of the Company for the purpose of inducing or otherwise
encouraging such employee or agent to terminate his or her employment or
relationship with the Company, or (iv) assist others in engaging in any of the
foregoing actions described in clauses (i), (ii) or (iii) above. For 


 


 





















 


the purposes of
this Agreement, “Affiliates” shall be defined as in the Stock Purchase
Agreement.


 


b.                                      It
is the desire and intent of the parties hereto that the provisions of this Section
1 shall be enforced to the fullest extent permissible under the laws and
public policies applied in each jurisdiction in which enforcement is sought. Accordingly,
although the Stockholder considers the restrictions contained in this Section
1 to be reasonable for the purposes of preserving the business of the
Company and proprietary rights of the Company, if any particular provision of
this Section 1 shall be adjudicated to be invalid or unenforceable, such
provision shall be deemed amended to delete therefrom the portion thus
adjudicated to be invalid or unenforceable, such deletion to apply only with
respect to the operation of such provision in the particular jurisdiction in
which such adjudication is made. It is expressly understood and agreed that,
although each Stockholder considers the restrictions contained in this Section
1 to be reasonable, if a final determination is made by a court of
competent jurisdiction that the time or territory or any other restriction
contained in this Section 1 is unenforceable against a Stockholder, the
provisions of this Section 1 shall be deemed amended to apply as to such
maximum time and territory and to such maximum extent as such court may
judicially determine or indicate to be enforceable.


 


c.                                       The
parties acknowledge that damages at law would be an inadequate remedy for the
breach or threatened breach by the Stockholder of any provision of this Section
1, and agree in the event of such breach or threatened breach that the
Company may obtain temporary and permanent injunctive relief (any requirements
for posting of bond for injunction are hereby expressly waived) restraining the
Stockholder from such breach, and, to the extent permissible under applicable
statutes and rules of procedure, a temporary injunction may be granted
immediately upon the commencement of any such suit. Nothing contained in this
Agreement shall be construed as prohibiting the Company from pursuing other
remedies available at law or equity for such breach or threatened breach of
this Section 1.


 


d.                                      Except
as provided above in Sections 1(a), (b) and (c), the
Stockholder, in its individual capacity or otherwise, and its principals and
Affiliates, shall be free to engage and conduct or participate in any business
or activity whatsoever without any accountability or obligation whatsoever to
the Company.


 


2.                                       Entire
Agreement; Amendments. This Agreement constitutes the complete, final and
exclusive statement of the agreement among the parties hereto pertaining to the
subject matter hereof and supersedes all prior agreements, understandings,
negotiations and discussions, whether oral or written, of the parties hereto. No
amendment, supplement, modification, rescission or waiver of this Agreement
shall be binding unless executed in writing by the parties hereto.


 


3.                                       Assignment.
This Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns.


 

















 


 


4.                                       Choice
of Law. This Agreement shall be construed, interpreted and the rights of
the parties hereto determined in accordance with the laws of the State of
Delaware, without regard to principles of conflicts of law.


 


5.                                       Captions.
All section titles or captions contained in this Agreement are for convenience
only and shall not be deemed as part of this Agreement.


 


6.                                       Waiver.
The failure of a party to insist on the strict performance of any provision
contained herein or to exercise any right, power or remedy upon a breach hereof
shall not constitute a waiver of any provision contained herein or limit the
party’s right thereafter to enforce any provision or exercise any right, except
as to that right, power, provision or remedy specifically waived in writing,
signed by the party against whom such waiver is sought.


 


7.                                       Counterparts.
This remedy may be executed in multiple counterparts, each of which shall be
considered as one and the same Agreement.


 


[Signature Page Follows]


 


 

















 


IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the day and year first above written.


 


	
   

  	
  REG, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ NILE
  RAMSBOTTOM

  
	
   

  	
  Name:

  	
               Nile Ramsbottom

  
	
                                                  

  	
  Title:

  	
                 President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  INTERWEST, L.C.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ NILE
  RAMSBOTTOM

  
	
   

  	
  Name:

  	
               Nile Ramsbottom

  
	
                                                  

  	
  Title:

  	
                 President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  WEST CENTRAL COOPERATIVE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ JEFFREY
  STROBURG

  
	
   

  	
  Name:

  	
               Jeffrey Stroburg

  
	
   

  	
  Title:

  	
                 CEO

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  RENEWABLE ENERGY GROUP, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ JEFFREY
  STROBURG

  
	
   

  	
  Name:

  	
               Jeffrey Stroburg

  
	
   

  	
  Title:

  	
                 CEO