Document:

exv10w4

 

Exhibit 10.4

ASSIGNMENT OF 

MANAGEMENT AND OPERATIONAL SERVICES AGREEMENT

     This ASSIGNMENT OF MANAGEMENT AND OPERATIONAL SERVICES AGREEMENT (the “Assignment”) is made
this 26th day of September, 2006, by and between CENTRAL IOWA ENERGY, LLC, an Iowa
limited liability company (the “Company”) and F & M BANK — IOWA, a bank chartered under the laws of
the State of Iowa (the “Lender”).

RECITALS

     A. Company and Lender have entered into a Master Loan Agreement and Supplements, dated on or
about September 26, 2006 (together the “Loan Agreement”), pursuant to which Lender will extend to
Company various credit facilities for the purposes of acquiring, constructing, equipping, and
furnishing of a biodiesel production facility to be located near the city of Newton, Jasper County,
Iowa.

     B. As a condition to extending the various credit facilities to Company the Lender has
required the execution of this Assignment of Management and Operational Services Agreement by the
Company.

AGREEMENT

Accordingly, in consideration of the foregoing, the parties agree as follows:

     1. Company does hereby grant, assign, transfer and set over unto the Lender all of its right,
title and interest in and to that certain Management and Operational Services Agreement dated
August 22, 2006 as amended by that certain First Amendment to Management and Operational Services
Agreement dated on or before September 26, 2006 (the “Contract”), by and between Company and
Renewable Energy Group, Inc., a Delaware corporation, with its principal offices of business in 406
1st Street, PO Box 68, Ralston, Iowa 51459 (“REG”), providing for the management of the
Company, and acting in the name of the Company regarding the holding, acquiring, leasing,
constructing, maintaining and operating the Company’s Assets and providing for the sale of
biodiesel to REG by the Company as described in the Management Agreement, a true and correct copy
of which is attached to this Assignment as Exhibit A.

     2. Company agrees that Lender does not assume any of the obligations or duties of Company
under and with respect to the Contract unless and until Lender gives REG written notice that it has
affirmatively exercised its rights to performance under the Contract following the occurrence of an
Event of Default under the Loan Agreement. In the event that Lender does not personally undertake
to perform under the Contract, Lender has no liability whatsoever for the performance of any of
such obligations or duties. For the purpose of performing under the Contract, Lender may, in its
absolute discretion, reassign its right, title and interest in the Contract, upon notice to REG,
but without any requirement of Company’s consent.

     3. Company represents and warrants there have been no prior assignments of the Contract, that
the Contract is a valid and enforceable agreement, and that neither Company nor REG is in default
thereunder and that all covenants, conditions and agreements have been performed as required
therein, except those not due to be performed until after the date hereof.

 

 

Company agrees that no material change in the terms thereof shall be valid without the prior
written approval of Lender, which approval shall not be unreasonably withheld. Company agrees not
to assign, sell, pledge, mortgage or otherwise transfer or encumber its interest in the Contract so
long as this Assignment is in effect, except as otherwise permitted under the Loan Agreement.

     4. Company hereby irrevocably constitutes and appoints Lender as attorney-in-fact to demand,
receive and enforce Company’s rights with respect to the Contract, to make payments under the
Contract and to give appropriate receipt, releases and satisfactions for and on behalf of and in
the name of Company, at the option of Lender in the name of Lender, with the same force and effect
as Company could do if this Assignment had not been made.

     5. This Assignment shall constitute a perfected, absolute and present assignment, provided
that Lender shall have no right under this Assignment to take any actions under Paragraph 4 of this
Assignment or enforce the provisions of the Contract until an Event of Default occurs under the
Loan Agreement. Upon the occurrence of any such Event of Default, Lender may, without affecting
any of its rights or remedies against Company under any other instrument, document or agreement,
exercise its rights under this Assignment as Company’s attorney-in-fact in any manner permitted by
law.

     6. Company hereby agrees to indemnify and hold Lender harmless from and against any and all
claims, demands, liabilities, losses, lawsuits, judgments, and reasonable costs and expenses,
including without limitation reasonable attorneys’ fees, to which Lender may become exposed, or
which Lender may incur, in exercising any of its rights under this Assignment.

     7. Subject to the aforesaid limitation of further assignment by Company, this Assignment shall
be binding upon Company, its successors and assigns, and shall inure to the benefit of Lender, its
successors and assigns.

     8. This Assignment can be waived, modified, amended, terminated or discharged only explicitly
in writing signed by Lender and Company. A waiver signed by Lender shall be effective only in a
specific instance and for the specific purpose given. Mere delay or failure to act shall not
preclude the exercise or enforcement of any of Lender’s rights or remedies hereunder. All rights
and remedies of Lender shall be cumulative and shall be exercised singularly or concurrently, at
Lender’s option, and the exercise or enforcement of any one such right or remedy shall neither be a
condition to nor bar the exercise of enforcement of any other.

     9. All capitalized terms used in this Assignment, but not otherwise defined herein, shall have
the meanings as set forth in the Loan Agreement.

     IN WITNESS WHEREOF, the Company has executed this Assignment of Management and Operational
Services Agreement on the date first stated above.

	 	 	 	 	 
	 

	 	CENTRAL IOWA ENERGY, LLC,	 	 
	 

	 	an Iowa limited liability company	 	 
	 
	 	 	 	 
	 

	 	/s/ James Johnston	 	 
	 

	 	 

By James Johnston
	 	 
	 

	 	Its Chairman	 	 

 

 

EXHIBIT A

Management Agreement

by and between Company and REG

 

 

ACKNOWLEDGMENT AND CONSENT OF

ASSIGNMENT OF

MANAGEMENT AND OPERATIONAL SERVICES AGREEMENT

     In consideration of the Lender making the loan to the Company as described in the foregoing
Assignment, the undersigned (“REG”) hereby consents to the above Assignment and acknowledges and
agrees with the Lender as follows:

     1. REG has read the Assignment and this Acknowledgment and Consent and understands all of the
provisions therein and herein.

     2. REG has entered into an Management and Operational Services Agreement dated August 22, 2006
as amended by that certain First Amendment to Management and Operational Services Agreement dated
on or before September 26, 2006 with the Company, a true and correct copy of which is attached as
Exhibit A (the “Contract”), pursuant to which REG has agreed to provide for the management of the
Company and act in the name of the Company regarding the holding, acquiring, leasing, constructing,
maintaining and operating the Company’s Assets as described in the Management and Operational
Services Agreement for the Company.

     3. The Contract is in full force and effect and has not been amended or assigned and REG is
not aware of any event that has occurred or failed to occur as of the date hereof which, but for
the passage of time or the giving of notice or both, would be a default thereunder.

     4. The Assignment is a perfected, absolute and present assignment, provided that Lender has no
right under the Assignment to take any actions under Paragraph 4 of the Assignment or enforce the
provisions of the Contract until an Event of Default occurs under the Loan Agreement.

     5. Upon the occurrence of an Event of Default under the Loan Agreement, and upon receipt by
REG of a written notice from Lender that it has affirmatively exercised its right to assume the
Contract, REG shall, at the Lender’s request, continue performance for the Lender’s benefit under
the Contract in accordance with the terms thereof.

     6. Upon the occurrence of an Event of Default under the Loan Agreement and upon receipt by REG
of a written notice from Lender that it has affirmatively exercised its right to assume the
Contract, Lender may enforce the obligations of the Contract with the same force and effect as if
enforced by the Company and may perform the obligations of the Company. REG will accept such
performance in lieu of performance by the Company and in full satisfaction of the Company’s
obligations under the Contract with respect to which such performance is made by Lender.

     7. REG will give Lender prompt written notice of any default by Company under the Contract.
REG will not terminate the Contract on account of any default of Company thereunder without written
notice of such default to Lender and providing Lender thirty (30) days to cure the default.
However, nothing herein shall require Lender to cure any default of Company under the Contract.

     8. All capitalized terms used in this Acknowledgement and Consent, but not otherwise defined
herein, shall have the meanings as set forth in the Loan Agreement.

 

 

{SIGNATURE PAGE TO FOLLOW}

SIGNATURE PAGE TO

ACKNOWLEDGMENT AND CONSENT

OF

ASSIGNMENT OF MANAGEMENT AND OPERATIONAL SERVICES AGREEMENT

BY AND BETWEEN

CENTRAL IOWA ENERGY, LLC

AND

F & M BANK – IOWA

DATED: September 26, 2006

Dated: October 9th, 2006

	 	 	 	 	 
	 

	 	RENEWABLE ENERGY GROUP, INC. a	 	 
	 

	 	Delaware corporation	 	 
	 
	 	 	 	 
	 

	 	/s/ Nile D. Ramsbottom	 	 
	 

	 	 

By: Nile D. Ramsbottom
	 	 
	 

	 	Its: President	 	 

 5exv10w5

 

Exhibit 10.5

FIRST AMENDMENT TO

MANAGEMENT AND OPERATIONAL SERVICES AGREEMENT

     This First Amendment to Management and Operational Services Agreement (the “First Amendment”)
is made and entered into as of the 26th day of September, 2006 by and
between Renewable Energy Group, Inc., a corporation organized and existing under the law sof the
state of Delaware, with offices at Ralston, Iowa (“REG, Inc.”), and Central Iowa Energy, LLC, a
limited liability company organized and existing under the laws of the state of Iowa, with offices
at Newton, Iowa (“Central Iowa Energy”).

     WHEREAS, REG, Inc., and Central Iowa Energy entered into that certain Management and
Operational Services Agreement dated as of August 22, 2006 (the “Agreement”), with respect to the
management and operation of the biodiesel production facility being built for Central Iowa Energy
in Newton, Iowa; and

     WHEREAS, the parties have agreed to amend the Agreement as provided in this First Amendment.

1. Amendment. Subparagraph 5.E. of the Agreement is deleted and the following new
subparagraph 5.E. is substituted in its place:

     E. Product Sales, Payment.

	 	(i)	 	Sales of Products will be made in REG, Inc’s name. REG, Inc.
shall take title to the Product when loaded for delivery FOB the Biodiesel
Facility, unless otherwise agreed. REG, Inc. will carry Property in Transit
insurance for all Product in shipment. If while Product is in transit a claim
were to occur the proceeds from settlement would be due the title holder at
the time of the loss event.
	 
	 	(ii)	 	REG, Inc. shall remit by electronic transfer to Central Iowa
Energy by the close of business each Wednesday funds in an amount equal to the
following: (a) the amount of Product sales made during Sunday through Saturday
of the preceding week, less (b) a discount fee that reflects REG, Inc.’s cost
of capital incurred as a result of making payment for such Product sales
before collecting proceeds from ultimate customers, and less (c) any amounts
then due from Central Iowa Energy to REG pursuant to this Agreement which REG
elects to deduct. The amount of the discount fee under (b) above will be
based on REG, Inc.’s blended cost of debt and equity capital plus a working
capital use fee of 50 basis points (annual rate), and the average period of
time elapsing between the time of payment by REG, Inc. and its collection of
proceeds form ultimate customers.

 

 

	2.	 	Other Terms Unchanged. Except as expressly modified by this First Amendment, all
terms and provisions of the Agreement shall remain in full force and effect.

	3.	 	Miscellaneous. Capitalized terms not defined in the text of this First Amendment
shall have the same meaning ascribed to them in the Agreement. This First Amendment may be
executed in counterparts, each of which shall be deemed an original, but all of which together
shall constitute one and the same instrument, and may be executed and delivered by facsimile
signature, which shall be considered an original.
	 
	 	 	IN WITNESS WHEREOF, REG, Inc., and Central Iowa Energy have executed this First Amendment
as of the date first shown above.

	 	 	 	 	 	 	 	 	 
	RENEWABLE ENERGY GROUP, INC.	 	CENTRAL IOWA ENERGY, LLC	 	 
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ Daniel J. Ott
	 	By:
	 	/s/ James Johnston	 	 
	 

	 	 
	 	 	 	 	 	 
	Name:

	 	Daniel J. Ott
	 	Name:
	 	James Johnston	 	 
	Its:

	 	CFO and Executive
Vice President
	 	Its:
	 	Chairman

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