Document:

exv10w1

 

Exhibit 10.1

BIO-DIESEL
MARKETING AGREEMENT — 11/03/2006

     THIS BIO-DIESEL MARKETING AGREEMENT (the “Agreement”) is entered into by and among Eco-Energy,
Inc. (hereinafter “Eco”) a Tennessee Corporation with its main office located at 730 Cool Springs
Blvd, Suite 130, Franklin, Tennessee 37067, and Northwest Iowa Renewable Energy, LLC, (hereinafter
“NORTHWEST IOWA RENEWABLE ENERGY”)an Iowa limited liability company, with its main office located
at 221 Reed St., Akron, IA 51001.

RECITALS:

     WHEREAS, NORTHWEST IOWA RENEWABLE ENERGY, who is developing a bio-diesel plant facility
producing approximately 60 million gallons per year of bio-diesel located in Akron, Iowa (the
“Plant”), desires to establish an output-marketing contract.

     WHEREAS, Eco is a reseller in bio-diesel and is experienced in the marketing and
transportation of such bio-diesel, and is willing to agree to purchase the entire bio-diesel output
of the Plant.

NOW, THEREFORE, IT IS AGREED AS FOLLOWS BETWEEN THE PARTIES:

	1.	 	Eco Services. Eco shall, during the term hereof, purchase and take delivery of the
Plant’s entire output of bio-diesel and shall provide certain transportation services to
NORTHWEST IOWA RENEWABLE ENERGY (the “Eco Program”). The Eco services to be provided are set
forth in Sections 2 and 3 and the exhibits attached hereto which are referred to therein.
	 
	2.	 	Eco Take or Pay Bio-diesel Purchases. Subject to the provisions of this Agreement,
NORTHWEST IOWA RENEWABLE ENERGY agrees to sell to Eco, and Eco agrees to purchase from
NORTHWEST IOWA RENEWABLE ENERGY 100% of the production of the Plant’s bio-diesel during the
term of this Agreement.

	 	(a)	 	Eco agrees to pay NORTHWEST IOWA RENEWABLE ENERGY for all
bio-diesel shipped by Eco from the Plant, a price equal to the F.O.B. Plant
Price. For purposes of this provision, the “F.O.B. Plant Price” shall mean the
actual purchase price of bio-diesel charged by NORTHWEST IOWA RENEWABLE ENERGY,
less the fees set forth in Section 6 and transportation costs payable by
NORTHWEST IOWA RENEWABLE ENERGY pursuant to Section 5.
	 
	 	(b)	 	On a daily basis, Weekends and Holidays excluded, NORTHWEST IOWA
RENEWABLE ENERGY shall provide Eco with certified meter or weight certificates
for the previous day’s shipments of bio-diesel. Eco shall pay NORTHWEST IOWA
RENEWABLE ENERGY the F.O.B. Plant Price defined in paragraph 2(a) above, for all
properly documented shipments. Eco shall deliver to NORTHWEST IOWA RENEWABLE
ENERGY payment for such shipments on the following Friday of each one week
shipment period (Sunday through Saturday); provided Eco has received proper
documentation of such shipments by Sunday 12:00 noon. Eco agrees to maintain
accurate purchase records (BOL documentation and purchase confirmation only) and
to provide such records to NORTHWEST IOWA RENEWABLE ENERGY upon request.
	 
	 	(c)	 	Eco agrees to use its best efforts to achieve the highest price
of bio-diesel available under prevailing market conditions as judged in good
faith by Eco and agrees to communicate to NORTHWEST IOWA RENEWABLE ENERGY the
terms and conditions of bio-diesel sales as set forth in Section 7.
	 
	 	(d)	 	Notwithstanding the foregoing, Eco shall not contract for the
sale of bio-diesel to its customers more than one hundred eighty (180) days in
advance, unless NORTHWEST IOWA RENEWABLE ENERGY explicitly approves the price
and terms of any such contract and provides notice of such approval to Eco.
Upon notice of termination, Eco shall not contract for the sale of bio-diesel to
its customers more than ninety (90) days in

 

 

	 	 	 	advance, unless NORTHWEST IOWA RENEWABLE ENERGY explicitly approves the price
and terms of any such contract and provides notice of such approval to Eco.
Eco will advise NORTHWEST IOWA RENEWABLE ENERGY weekly and update NORTHWEST
IOWA RENEWABLE ENERGY monthly on all outstanding contractual obligations, and
the terms thereof.

	 	3.	 	Delivery and Title.

	 	(a)	 	Delivery and receipt of volumes of bio-diesel hereunder shall
take place at the loading flange between the Plant, or otherwise
wherever the bio-diesel has been stored, and the rail cars or trucks (the
“Delivery Point”). Eco and its agents shall be given access to the Plant in a
manner and at all times reasonably necessary and convenient for Eco to take
delivery as provided herein. Eco shall schedule the loading and shipping of all
bio-diesel purchased hereunder, whether shipped by truck or rail. All labor
and equipment necessary to load or unload trucks or rail cars shall be supplied
by NORTHWEST IOWA RENEWABLE ENERGY without charge to Eco. The parties agree to
handle the bio-diesel in a good and workmanlike manner in accordance with the
other’s reasonable requirements and in accordance with normal industry practice.
	 
	 	(b)	 	NORTHWEST IOWA RENEWABLE ENERGY shall provide storage space for
not less than ten (10) full days of production of bio-diesel, based on normal
operating capacity. Eco warrants and agrees to remove bio-diesel before the
aforementioned storage limits are exceeded. NORTHWEST IOWA RENEWABLE ENERGY
shall inform Eco daily of inventory status by 8:30 am CDT.
	 
	 	(c)	 	Eco shall give to NORTHWEST IOWA RENEWABLE ENERGY a schedule of
quantities of bio-diesel to be removed by truck and rail respectively with
sufficient advance notice reasonably to allow NORTHWEST IOWA RENEWABLE ENERGY to
provide the required services described herein. NORTHWEST IOWA RENEWABLE ENERGY
shall provide the labor, equipment and facilities necessary to meet Eco’s
loading schedule.
	 
	 	(d)	 	Eco shall provide loading orders as necessary to permit NORTHWEST
IOWA RENEWABLE ENERGY to maintain its usual production schedule, provided,
however, that Eco shall not be responsible for failure to schedule removal of
bio-diesel unless NORTHWEST IOWA RENEWABLE ENERGY shall have provided to Eco
production schedules as follows: At least five (5) days prior to the beginning
of each calendar month during the term hereof, NORTHWEST IOWA RENEWABLE ENERGY
shall provide to Eco a tentative schedule for production in the next calendar
month. On Friday of each week, NORTHWEST IOWA RENEWABLE ENERGY shall provide to
Eco a schedule for actual production for the following production week (Monday
through Sunday).
	 
	 	(e)	 	Title and risk of loss shall pass to Eco at the point in time
when loading the bio-diesel into trucks or rail cars has been completed and
delivery to Eco of the bill of lading for each such shipment. Title and risk of
loss or damage shall only pass from NORTHWEST IOWA RENEWABLE ENERGY to Eco upon
such delivery. Until such time, NORTHWEST IOWA RENEWABLE ENERGY shall be deemed
to be in control of and in possession of and shall have title to and risk of
loss in the bio-diesel.

	 	4.	 	Quantity and Weights; Quality.

	 	(a)	 	The total production amount of bio-diesel shall be determined by
NORTHWEST IOWA RENEWABLE ENERGY’s production schedule. NORTHWEST IOWA RENEWABLE
ENERGY makes no warranty or representation as to the exact quantities or timing
of bio-diesel to be produced pursuant to this Agreement.

 

 

	 	(b)	 	The quantity of bio-diesel delivered to Eco from the Plant shall
be established by meter or weight certificates, obtained from meters or scales
at the Plant, which shall be maintained by NORTHWEST IOWA RENEWABLE ENERGY as
required by applicable laws, rules and regulations. The outbound meter or
weight certificates shall be determinative of the quantity of the bio-diesel for
which Eco is obligated to pay pursuant to Section 2 above.
	 
	 	(c)	 	Bio-diesel to be produced pursuant to this Agreement by NORTHWEST
IOWA RENEWABLE ENERGY shall meet or exceed all specifications ASTM D6751 fuel
bio-diesel as well as any changes in fuel bio-diesel industry standards that
might occur after the execution of this agreement.

	 	5.	 	Eco Transportation Services. Eco agrees to diligently pursue, secure and maintain
all necessary agreements to transport the bio-diesel from the Delivery Point. Eco shall be
solely responsible for the arrangement of transportation and covenants to use its best efforts
to obtain the best commercially reasonable prices in respect of transportation such that
NORTHWEST IOWA RENEWABLE ENERGY achieves the highest net price possible after payment for
costs in accordance with this Section 5.

	 	(a)	 	Eco, in consultation with NORTHWEST IOWA RENEWABLE ENERGY, shall
be responsible for estimating the number of rail car leases required to handle
the transportation of the bio-diesel. All rail cars for bio-diesel shall be the
largest allowable tank cars as determined by Eco. With respect to bio-diesel,
all such cars shall meet all applicable Department of Transportation and Federal
Railroad Administration specifications for shipping bio-diesel. All rail
freight charges shall be the responsibility of NORTHWEST IOWA RENEWABLE ENERGY
and shall be billed directly to NORTHWEST IOWA RENEWABLE ENERGY. NORTHWEST IOWA
RENEWABLE ENERGY shall invoice Eco for such rail freight and provide a copy of
the actual railroad invoice; provided, however that if tank cars for bio-diesel
are not loaded to full visible capacity, NORTHWEST IOWA RENEWABLE ENERGY shall
pay in full the portion of freight charges allocable to the unused capacity of
the car. Such invoiced amounts shall be paid by Eco to NORTHWEST IOWA RENEWABLE
ENERGY the Friday following receipt of such invoice by Eco.
	 
	 	(b)	 	Eco shall negotiate the terms of and execute such rail car leases
and rates on behalf of NORTHWEST IOWA RENEWABLE ENERGY; provided, however, that
any and all rail car leases executed by Eco shall be in substantially the same
form as a standard rail car lease for current industry standards in the
bio-diesel production industry. All rail leases shall be placed in the sole
name of Eco. Upon the termination of this Agreement pursuant to Section 14, any
and all existing rail car leases for the transport of bio-diesel which are or
will remain outstanding following the termination date shall be assigned to
NORTHWEST IOWA RENEWABLE ENERGY, who will assume and be obligated to the terms
and conditions of said leases. NORTHWEST IOWA RENEWABLE ENERGY shall reimburse
Eco for any reasonable expenses incurred by Eco associated with such rail car
leases.
	 
	 	(c)	 	Eco shall negotiate, in consultation with NORTHWEST IOWA
RENEWABLE ENERGY, the terms of rail freight contracts and rates on behalf of
NORTHWEST IOWA RENEWABLE ENERGY. The rail freight contracts shall be placed in
the sole name of NORTHWEST IOWA RENEWABLE ENERGY.
	 
	 	(d)	 	Eco shall order and supply trucks as scheduled for truck
shipments. All truck freight charges shall be the responsibility of Eco and
shall be billed directly to Eco.

	 	6.	 	Fees. NORTHWEST IOWA RENEWABLE ENERGY shall pay a fee for services of Eco and
materials provided hereunder of 1.0% of the net purchase price per net gallon of bio-diesel
purchased by Eco during the term of the contract (the “Marketing Fee”). The Marketing Fee
shall be payable monthly on actual gallons shipped from the

 

 

	 	 	 	prior month as evidenced by meter or weight certificates provided to Eco by NORTHWEST IOWA
RENEWABLE ENERGY. NORTHWEST IOWA RENEWABLE ENERGY shall pay or cause to be paid all valid
levies, assessments, duties, rates and taxes (together “Taxes”) on all bio-diesel accrued or
incurred prior to delivery and Eco shall pay or cause to be paid all Taxes after delivery
hereunder. NORTHWEST IOWA RENEWABLE ENERGY shall pay all unavoidable costs such as
government tariffs or assessment fees, import/export handling fees, assessments, inspection
fees, or any other that has been approved by the appropriate member of the board of
directors. Payment from NORTHWEST IOWA RENEWABLE ENERGY for the foregoing fees shall be
subtracted from Eco’s first weekly wire payment of the following month for bio-diesel
purchases.

	 	7.	 	NORTHWEST IOWA RENEWABLE ENERGY, LLC Representative. NORTHWEST IOWA RENEWABLE ENERGY
shall designate one or more persons who shall be authorized and directed to receive services
hereunder and to make all merchandising, purchasing and sales decisions for NORTHWEST IOWA
RENEWABLE ENERGY. Each purchase order will be presented to the NORTHWEST IOWA RENEWABLE
ENERGY representative by Eco for verbal or written approval. Upon such approval and
purchase, a written confirmation of the purchase contract will be submitted to NORTHWEST IOWA
RENEWABLE ENERGY by Eco, encompassing the details of such purchase. All directions,
transactions and authorizations given by such representative to Eco shall be binding upon
NORTHWEST IOWA RENEWABLE ENERGY. Eco shall be entitled to rely on the authorization of such
representatives until it receives written notification from NORTHWEST IOWA RENEWABLE ENERGY
that such authorization has been revoked. The terms of such purchase orders shall be
consistent with the provisions of this Agreement and may include, but shall not necessarily be
limited to, price, volume, delivery schedule, and shipping instructions.

	 	8.	 	Eco Limitations.

	 	(a)	 	Eco assumes no responsibility for the completion or performance
of any contracts between NORTHWEST IOWA RENEWABLE ENERGY and any third party
customer or suppliers of NORTHWEST IOWA RENEWABLE ENERGY, and NORTHWEST IOWA
RENEWABLE ENERGY agrees they shall not bring any action or make any claim
against Eco based on any act, omission or claim of any such third party
customers or suppliers.. Eco shall be responsible for all its customer billing
and account servicing, including, but not limited to, the collection of amounts
owed Eco by its customers, Eco shall bear all costs associated with such billing
and collection activities, and Eco shall assume all losses due to failure of its
customers to pay their account. Eco reserves the right to refuse business to
anyone due to credit and market risk.
	 
	 	(b)	 	Except as provided in Section 13, NORTHWEST IOWA RENEWABLE ENERGY
is responsible to cover all non-deliveries of any product that is contracted
between Eco and NORTHWEST IOWA RENEWABLE ENERGY in a timely manner in order to
stay within the time parameters of the contract. Eco will assist in procuring
product from other suppliers to cover these non-deliveries.
	 
	 	(c)	 	If any party terminates this agreement for any reason, both
parties will be responsible to complete any existing contracts.

	 	9.	 	Separability and Non-liability. The services, contracts and relationships between
NORTHWEST IOWA RENEWABLE ENERGY and Eco are independent and separable.
	 
	 	10.	 	Confidentiality Agreement. The parties agree, to the extent permitted by law, to
preserve and protect the confidentiality of the Agreement. Both parties recognize that federal
or state law may require the filing of the Agreement with, or the furnishing of information
to, governmental authorities or regulatory agencies. Both parties further recognize the need,
from time to time, for the submission of the Agreement to affiliates, consultants, or
contractors performing work on, or related to, the subject matter of the Agreement. Buyer and
Seller agree to allow the submission of the Agreement to affiliates, consultants, or
contractors if such affiliates, consultants, or contractors agree to protect the
confidentiality of the Agreement. In the event either party is of the opinion that

 

 

	 	 	 	applicable law requires it to file the Agreement with, or to disclose information related to
the Agreement (other than information required by laws and regulations in effect as of the
date hereof to be furnished in periodic reports to governmental authorities) to, any judicial
body, governmental authority or regulatory agency, that party shall so notify the other party
in writing prior to the disclosure or filing of the Agreement.
	 
	 	11.	 	Public Disclosure. Any public announcements concerning the transaction contemplated
by this letter shall be approved in advance by Eco and NORTHWEST IOWA RENEWABLE ENERGY, except
for disclosures required by law, in which case the disclosing party shall provide a copy of
the disclosure to the other party prior to its public release.
	 
	 	12.	 	Solicitation. NORTHWEST IOWA RENEWABLE ENERGY agrees not to contact or interfere
with, solicit, disrupt or attempt to disrupt relationships, contractual or otherwise, between
Eco and any of its’ customers, employees or vendors.
	 
	 	13.	 	Force Majeure. Neither NORTHWEST IOWA RENEWABLE ENERGY nor Eco will be liable to the
other for any failure or delay in the performance of any obligation under this Agreement due
to events beyond its reasonable control, including, but not limited to, fire, storm, flood,
earthquake, explosion, act of the public enemy or terrorism, riots, civil disorders, public
emergency, sabotage, strikes, lockouts, labor disputes, labor shortages, war, stoppages or
slowdowns initiated by labor, transportation embargoes, acts of God, or acts or regulations or
priorities of the federal, state or local government or branches or agencies thereof.
	 
	 	14.	 	Terms and Termination.

	 	(a)	 	The initial term of this Agreement shall commence on the first
day of bio-diesel production and shall continue for three (3) years. This
contract will automatically renew for an additional term of three (3) years
unless NORTHWEST IOWA RENEWABLE ENERGY gives written notice at least three (3)
months prior to the end of the initial term.
	 
	 	(b)	 	This agreement may be terminated by NORTHWEST IOWA RENEWABLE
ENERGY as to Eco in the event of material breach of any of the material terms
hereof by Eco, by written notice specifying the breach, which notice shall be
effective fifteen (15) days after it is given unless the receiving party cures
the breach within such time. This agreement may be terminated by Eco as to
NORTHWEST IOWA RENEWABLE ENERGY in the event of material breach of any of the
material terms hereof by NORTHWEST IOWA RENEWABLE ENERGY, by written notice
specifying the breach, which notice shall be effective fifteen (15) days after
it is given unless the receiving party cures the breach within such time. Any
material breach by NORTHWEST IOWA RENEWABLE ENERGY as to Eco or by Eco as to
NORTHWEST IOWA RENEWABLE ENERGY that cannot be resolved within 15 days, both
parties may mutually agree in writing to the length of time needed to resolve
the material breach.
	 
	 	(c)	 	This Agreement may also be terminated between either party by the
mutual consent of both parties on such terms as the parties may agree.
	 
	 	(d)	 	In addition to any other method of terminating this Agreement,
Eco may unilaterally terminate this Agreement at any time if such termination
shall be required by any regulatory authority, and such termination shall be
effective on the 30th day following the giving of notice of intent
to terminate; provided, however, that if such termination is
required due to Eco’s wrongful or illegal acts, such termination shall
constitute an event of material breach of this Agreement.
	 
	 	(e)	 	In addition to any other rights and remedies the Parties may
have, either Party hereto may terminate this Agreement effective immediately
upon delivery of written notice to the other party, if the other party (i) is
unable to pay its debts as they mature or admits in writing its inability to
pay its debts as they mature, (ii) makes a general assignment for the benefit
of its creditors, (iii) files a voluntary petition for bankruptcy, or (iv)
applies for the

 

 

	 	 	 	appointment of a receiver or trustee for all or substantially all of its
assets or permits the appointment of any such receiver or trustee who is not
discharged within a period of sixty (60) days after such appointment.

	 	15.	 	Licenses, Bonds, and Insurance. Each party represents that it now has and will
maintain in full force and effect during the term of this Agreement, at its sole cost, all
necessary state and federal licenses, bonds and insurance in accordance with applicable state
or federal laws and regulations.

	 	(a)	 	During the entire term of this Agreement, NORTHWEST IOWA
RENEWABLE ENERGY will purchase and maintain insurance coverage which is
standard for a company of its type and size which is engaged in the business of
producing and selling bio-diesel. Eco shall be named as an additional insured
on all such policies, as its interest appears. All such policies shall contain
provisions to the effect that in the event of payment of any loss or damage the
insurers will have no rights of recovery against any of the insureds or
additional insureds thereunder.
	 
	 	(b)	 	Also during the term of this Agreement, Eco shall purchase and
maintain commercial general liability insurance, with liability limits of not
less than $2,000,000 with an umbrella policy of $5,000,000 which shall be
endorsed to require at least thirty (30) days notice to NORTHWEST IOWA
RENEWABLE ENERGY prior to the effective date of any termination or cancellation
of coverage. NORTHWEST IOWA RENEWABLE ENERGY shall be named as an additional
insured on all such policies and Eco shall provide a certificate of insurance
to NORTHWEST IOWA RENEWABLE ENERGY to establish the coverage maintained by the
commencement date of this Agreement.

	 	16.	 	Limitation of Liability. EACH PARTY UNDERSTANDS THAT NO OTHER PARTY MAKES ANY
GUARANTEE, EXPRESS OR IMPLIED, TO ANY OTHER OF PROFIT, OR OF ANY PARTICULAR ECONOMIC RESULTS
FROM TRANSACTIONS HEREUNDER. IN NO EVENT SHALL ANY PARTY BE LIABLE FOR SPECIAL, COLLATERAL,
INCIDENTAL, OR CONSEQUENTIAL DAMAGES FOR ANY ACT OR OMISSION COMING WITHIN THE SCOPE OF THIS
AGREEMENT, OR FOR BREACH OF ANY OF THE PROVISIONS OF THIS AGREEMENT, EVEN IF IT HAS BEEN
ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. SUCH EXCLUDED DAMAGES INCLUDE, BUT ARE NOT LIMITED
TO, LOSS OF GOOD WILL, LOSS OF PROFITS, LOSS OF USE AND INTERRUPTION OF BUSINESS. EXCEPT AS
SPECIFICALLY STATED IN THIS AGREEMENT, THE PARTIES MAKE NO WARRANTIES OR REPRESENTATIONS,
EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION, ANY WARRANTIES OF MERCHANTABILITY OR FITNESS
FOR A PARTICULAR PURPOSE.
	 
	 	17.	 	Disclaimer. NORTHWEST IOWA RENEWABLE ENERGY understands and agrees that Eco makes
no warranty respecting legal or regulatory requirements and risks. NORTHWEST IOWA RENEWABLE
ENERGY shall obtain such legal and regulatory advice from third parties as it may deem
necessary respecting the applicability of legal and regulatory requirements applicable to
NORTHWEST IOWA RENEWABLE ENERGY business.
	 
	 	18.	 	Indemnity. The Parties agree that they shall absolve, release and refrain from
seeking remedies against each other and their officers, agents, employees, subcontractors and
insurers for any and all losses, claims, damages, costs, suits and liabilities for damage,
deterioration of quality, shrinkage in quantity, loss of grade or loss of Bio-diesel resulting
from the inherent nature of transfer operations and the inherent nature of Bio-diesel provided
that this in no way shall relieve the parties for their own negligence, willful misconduct or
theft. Each party to this contract shall indemnify, defend and hold the other harmless from
claims, demands and causes of action asserted against the other by any person (including
without limitation employees of either party) for personal injury or death, or for loss of or
damage to property resulting from the willful or negligent acts or omissions of the
indemnifying party. Where personal injury, death or loss of or damage to property is the
result of the joint negligence or misconduct or the Parties hereto, the Parties expressly
agree to indemnify each other in proportion to their respective share of such joint negligence
or misconduct.

 

 

	 	19.	 	Nature of Relationship. Eco is an independent contractor providing services to
NORTHWEST IOWA RENEWABLE ENERGY. No employment relationship, partnership or joint venture is
intended, nor shall any such relationship be deemed created hereby. Each party shall be solely
and exclusively responsible for its own expenses and costs of performance.
	 
	 	20.	 	Notices. Any notices permitted or required hereunder shall be in writing, signed by
an officer duly authorized of the party giving such notice, and shall either be hand
delivered or mailed. If mailed, notice shall be sent by certified, first class, return
receipt requested, mail to the address shown above, or any other address subsequently
specified by notice from one party to the other.
	 
	 	21.	 	Compliance With Governmental Controls. To the extent applicable, the parties agree to
comply with all laws, ordinances, rules, codes, regulations and lawful orders of any federal,
state or local government authority applicable to the performance of the Agreement, including,
without limitation, those pertaining to the environment, safety, health, social security, old
age pension, wage hour laws, unemployment compensation, non-discrimination on the basis of
race, religion, color, sex or national origin and affirmative action.
	 
	 	22.	 	New Or Changed Regulations. The parties enter the Agreement in reliance upon the
laws, rules, regulations, interpretations, decrees, agreements, and concessions of, and
arrangements (hereafter called “Regulations”) with governments or governmental
instrumentalities in effect on the date of the Agreement with respect to or directly or
indirectly affecting the bio-diesel to be delivered, including without limitation, production,
gathering, manufacturing, transportation, sale and delivery thereof insofar as said
Regulations affect NORTHWEST IOWA RENEWABLE ENERGY and Eco and its customers. In the event
that at any time subsequent to the date of the Agreement, any of said Regulations are changed
or new Regulations are promulgated whether by law, decree, interpretation or regulation, or by
response to the insistence or request of any governmental authority or person purporting to
act therefore, and the effect of such changed or new Regulation (a) is or will not be covered
by any other provisions of the Agreement, or (b) has or will have an adverse economic effect
upon the parties to this Agreement or the suppliers or customers of said parties, the parties
shall have the option to request renegotiation of the prices and other pertinent terms
provided for in the Agreement and their respective effective dates. Said option may be
exercised by the parties at any time after such changed or new Regulation is promulgated by
giving notice of the exercise of its option to renegotiate prior to the time of delivery of
bio-diesel or any part thereof. Such notice shall contain the new prices and terms desired by
agreement of Eco and NORTHWEST IOWA RENEWABLE ENERGY. If the parties do not agree upon new
prices and terms satisfactory to both parties within ten (10) days after such notice is given,
both Eco and NORTHWEST IOWA RENEWABLE ENERGY shall have the right to terminate the Agreement
at the end of said ten (10) day period.
	 
	 	23.	 	General.

	 	(a)	 	This agreement is the entire understanding of the parties
concerning the subject matter hereof, and it may be modified only in writing
signed by the parties.
	 
	 	(b)	 	If any provision or provisions of this agreement shall be held
to be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
	 
	 	(c)	 	No party shall be liable for any failure to perform any or all
of the provisions of this agreement if and to the extent that performance has
been delayed or prevented by reason of any cause beyond the reasonable control
of such party. The expression “cause beyond the reasonable control” shall be
deemed to include, but not be limited to: acts, regulations, laws, or
restraints imposed by any governmental body; wars, hostilities, sabotage,
riots, or commotions; acts of God; or fires, frost, storms, or lightning.
	 
	 	(d)	 	This agreement is not intended to, and does not, create or
give rise to any fiduciary duty on the part of any party to any other.

 

 

	 	(e)	 	No action, regardless of its nature or form, arising from or in
relation to this Agreement may be brought by either party more than two (2)
years after the cause of action has arisen, or, in the case of an action for
nonpayment, more than two (2) years from the date the last payment was due.
	 
	 	(f)	 	This agreement is governed by and shall be construed under
the laws of the State of Iowa. Venue for any action arising from or in
relation to this agreement shall be in Akron, Iowa. The Parties waive any
defense they might otherwise have to venue.
	 
	 	(g)	 	This agreement shall be binding upon and inure to the benefit
of the parties and their respective successors and permitted assigns. This
Agreement shall not be assignable by either party, without the express
written consent of the other party except in connection with the sale,
merger, exchange or acquisition of all or substantially all of the assets or
stock of ECO and ECO may assign its rights and duties under this Agreement
all to the other party.
	 
	 	(h)	 	This agreement shall be binding upon NORTHWEST IOWA RENEWABLE
ENERGY and this above referenced plant in the event that the name, NORTHWEST
IOWA RENEWABLE ENERGY is later changed to any name in the alternative. A change
in name does not void, nor make this contract voidable.

DATED AND
EXECUTED AS OF THIS 7th DAY OF NOVEMBER, 2006

Northwest Iowa Renewable Energy, LLC

	 	 	 	 	 
	BY:

	 	/s/ John E. Lucken
 

Chairman of the Board of Directors
	 	 
	 
	 	 	 	 
	Eco-Energy, Inc.	 	 
	 
	 	 	 	 
	BY:

	 	/s/ Jaime D. Dachelet
 

Chief Administrative Officerexv10w2

 

Exhibit 10.2

[Bar Code]

Document 2006 3456

Book 2006 Page 3456 Pages 9

Date 7/26/2006 Time 8:00 AM

Rec Amt $47.00

	 	 	 
	ENTERED FOR TAXATION
	 	 
	TRANSFER BOOK
	 	 
	 
	 	 
	BOOK  13  PAGE  221
	 	 
	DATE July 27 2006
	 	 
	/s/ K. Kae Meyer
	 	 
	PLYMOUTH COUNTY AUDITOR

	 	 

 

Prepared by: Marten A. “Mat” Trotzig, P.O. Box 336, LeMars, Iowa 51031, Telephone No.
712-546-8873

OPTION AGREEMENT FOR PURCHASE OF REAL ESTATE

     THIS AGREEMENT is entered into between Northwest Iowa Renewable Energy, L.L.C. (“Optionee”)
and Higman Sand and Gravel, Inc. (“Option-giver”) as it pertains to the following-described real
property situated in Plymouth County, Iowa, viz:

The North Half (N 1/2) of the Northwest Quarter (NW 1/4) of Section Thirteen (13),
Township Ninety-two (92) North, Range Forty-nine (49) West of the 5th
P.M., Plymouth County, Iowa, exclusive of railroad right-of-way and highway
right-of-way.

     1. CONSIDERATION: The consideration for the initial term of this Option is the sum of
One Thousand Dollars ($1,000.00) paid upon the execution of this Option Agreement. If the Option
is renewed as set forth below, an additional One Thousand Dollars ($1,000.00) shall be paid by
Optionee to Option-giver. It is understood that if Optionee exercises the option, any monies paid
for this option or renewal of this option will be applied to the purchase price. If Optionee fails
to renew the option as set forth below, the One Thousand Dollars ($1,000.00) shall be
nonrefundable. If the option is renewed for an additional year and the Option is not

 

2

exercised
during this renewal term then all monies paid for this Option shall be nonrefundable.

     2. TERM OF OPTION: The initial term of this Option shall run from July 1, 2006 to
June 30, 2007. Optionee may extend this Option for an additional year by giving thirty (30) days
written notice prior to the termination of the initial option term and by simultaneously paying an
additional One Thousand Dollars ($1,000.00) as set forth above. Closing on said option shall
occur within sixty (60) days after notice of the intent to exercise. Any intent to exercise shall
be done in writing and sent by ordinary mail first class mail to the Option-giver at its address
set forth below.

     3. OPTION PRICE: If Optionee elects to exercise this option, the price shall be the
sum of Ten Thousand Dollars ($10,000.00) per acre times the gross number of acres purchased payable
in cash, or exchange for shares of membership interest in Northwest Iowa Renewable Energy, L.L.C.,
or combination of cash and shares at discretion of Option-giver. Optionee may purchase all or a
portion of the above-described property at its discretion.

     4. CONTINGENT TERMS: If Optionee elects to exercise this option, the purchase
agreement shall further be contingent upon Optionee obtaining rights from both the Iowa Department
of Transportation and the South Dakota Railroad to cross their ground and for necessary access
permits being granted. It shall also be contingent upon obtaining the necessary zoning approval
from any affected municipalities as determined by Iowa law.

 

3

     5. TERMINATION OF FARM LEASE: Option-giver agrees to send a Lease Termination Notice
to the current farm tenant of the above-described property not later than August 15, 2006 by
certified mail, return receipt requested, with a copy of said Termination Notice being sent to
Optionee. It is further agreed that the Option-giver will not enter into a new farm lease
affecting the above-described property without the express written consent of the Optionee during
the life of this Option Agreement, or any renewals of this Option Agreement.

     6. OTHER MISCELLANEOUS TERMS: If Optionee exercises its Option, the parties agree to
sign a written purchase agreement using the general terms of the Iowa Bar Short Form Real Estate
Contract, No. 143, a copy of which is attached hereto. If Optionee exercises this Option, Optionee
shall be responsible for the expense of any survey and expenses to obtain the necessary approval by
Plymouth County Planning and Zoning Commission and/or Plymouth County Board of Supervisors or any
other municipality as required by Iowa law. The Option-giver shall be responsible for the cost of
preparation of the Abstract of Title, deed preparation, and any expenses associated with providing
clear title to the property. Option-giver shall also cooperate and sign any documents that are
necessary prior to the exercise of the option to verify if the necessary zoning of the property can
be obtained from the Plymouth County Planning and Zoning Commission and the Plymouth County Board
of Supervisors or any other municipality as required by Iowa law that will allow the construction
of a bio-diesel energy plant or associated bio-diesel mixing station. Further, Option-giver shall
grant to Optionee (including its officers and directors) or any

 

4

of Optionee’s representatives, agents or employees the right to enter the above-described property
to examine and inspect the same, and to conduct any appropriate tests so that Optionee can
determine whether or not to exercise this option. In the event of any damages to crops, Optionee
shall reimburse the Option-giver or tenant the actual amount of damages incurred.

     Dated this 21st  day of July, 2006.

	 	 	 	 	 	 	 	 	 
	NORTHWEST IOWA RENEWABLE
ENERGY, L.L.C.	 	 	 	HIGMAN SAND AND GRAVEL, INC.
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ John E. Lucken
	 	 	 	By:
	 	/s/ Justin Higman
	 

	 	 
	 	 	 	 	 	 
	 

	 	John E. Lucken
	 	 	 	 	 	Justin Higman, President
	 

	 	Chairman of the Board of Directors
	 	 	 	 	 	16485 Hwy. 12
	 

	 	221 Reed St.
	 	 	 	 	 	Akron, IA 51001
	 

	 	P.O. Box 366	 	 	 	 	 	 
	 

	 	Akron, IA 51001	 	 	 	 	 	 

 

5

	 	 	 	 	 
	STATE OF IOWA

	)	 	 	 
	 

	) ss:	 

	COUNTY OF PLYMOUTH

	)	 	 	 

     On this  21st  day of July, 2006, before me, the undersigned, a Notary
Public in and for the State of Iowa, personally appeared John E. Lucken, Chairman of the Board of
Directors of Northwest Iowa Renewable Energy, L.L.C., to me known to be the identical person named
in and who executed the foregoing instrument, and acknowledged that he executed the same as the
voluntary act and deed of Northwest Iowa Renewable Energy, L.L.C.

	 	 	 	 	 	 	 
	 

	 	 	 	/s/ Karen A. Wardrip	 	 
	 

	 	 	 	 	 	 
	 

	 	KAREN A. WARDRIP
	 	Notary Public in and for	 	 
	(SEAL)

	 	Commision Number 717624
	 	Plymouth County, State of Iowa.
	 	 
	 

	 	MY COMMISSION EXPIRES	 	 	 	 
	 

	 	            7/29/08	 	 	 	 

	 	 	 	 	 
	STATE OF IOWA

	)	 	 	 
	 

	) ss:	 

	COUNTY OF PLYMOUTH

	)	 	 	 

     On this  21st  day of July, 2006, before me, the undersigned, a Notary
Public in and for the State of Iowa, personally appeared Justin Higman, President of Higman Sand
and Gravel, Inc., to me known to be the identical person named in and who executed the foregoing
instrument, and acknowledged that he executed the same as his voluntary act and deed.

	 	 	 	 	 	 	 
	 

	 	 	 	/s/ Jo Ann Decker	 	 
	 

	 	 	 	 	 	 
	 

	 	JO ANN DECKER
	 	Notary Public in and for	 	 
	(SEAL)

	 	Notarial Seal — IOWA
	 	Plymouth County, State of Iowa.
	 	 
	 

	 	Commission No. 728624	 	 	 	 
	 

	 	My Commission Expires 5/24/07	 	 	 	 

 

REAL ESTATE CONTRACT

(SHORT FORM)

THE IOWA STATE BAR ASSOCIATION

Official Form No. 143

Recorder’s Cover Sheet

Preparer Information: (name, address and phone number)

Taxpayer Information: (name and complete address)

Return Document To: (name and complete address)

Grantors:

Grantees:

Legal Description: See Page 2

     Document or instrument number of previously recorded documents:

 

***attnyname*** ISBA # ***attnybarnumber***

REAL ESTATE CONTRACT (SHORT FORM)

     IT IS AGREED between
                                                            
                                        

                                                                     
            

 

 

(“Sellers”); and

 

 

 

(“Buyers”).

     Sellers agree to sell and Buyers agree to buy real estate in                                          County, Iowa, described as:

with any easements and appurtenant servient estates, but subject to the following:

a. any zoning and other ordinances;

b. any covenants of record;

c. any easements of record for public utilities, roads and highways; and

d. (consider: liens; mineral rights; other easements; interest of others.)

 

(the “Real Estate”), upon the following terms:

1.
PRICE. The total purchase price for the Real Estate is
                                        
Dollars
($              ) of which                                        
Dollars ($                     ) has
been paid. Buyers shall pay the balance to Sellers at                                         or as directed by Sellers, as follows:

 

2. INTEREST. Buyers shall pay interest from                     on the unpaid balance, at the rate of                      percent per
annum, payable                                         . Buyers shall also pay interest at the rate of                     percent per annum on all delinquent
amounts and any sum reasonably advanced by Sellers to protect their interest in this contract,
computed from the date of the delinquency or advance.

3. REAL ESTATE TAXES. Sellers shall pay

 

 

 

any unpaid real estate taxes payable in prior years. Buyers shall pay all subsequent real estate
taxes. Any proration of real estate taxes on the Real Estate shall be based upon such taxes for the
year currently payable unless the parties state otherwise.

4. SPECIAL ASSESSMENTS. Sellers shall pay all special assessments which are a lien on the Real
Estate as of the date of this contract or                     . All other special assessments shall be paid by Buyers.

5. POSSESSION CLOSING. Sellers shall give Buyers possession of the Real Estate on                     , provided
Buyers are not in default under this contract. Closing shall be on                     .

6. INSURANCE. Sellers shall maintain existing insurance upon the Real Estate until the date of
possession. Buyers shall accept insurance proceeds instead of Sellers replacing or repairing
damaged improvements. After possession and until full payment of the purchase price, Buyers shall
keep the improvements on the Real Estate insured against loss by fire, tornado, and extended
coverage for a sum not less than 80 percent of full insurable value payable to the Sellers and
Buyers as their interests may appear. Buyers shall provide Sellers with evidence of such insurance.

7. ABSTRACT AND TITLE. Sellers, at their expense, shall promptly obtain an abstract of title to
the Real Estate continued through the date of this contract                     and deliver it to Buyers for
examination. It shall show merchantable title in Sellers in or conformity with this contract, Iowa
law and the Title Standards of the Iowa State Bar Association. The abstract shall become the
property of the Buyers when the purchase price is paid in full, however, Buyers reserve the right
to occasionally use the abstract prior to full payment of the purchase price. Sellers shall pay the
costs of any additional abstracting and title work due to any act or omission of Sellers, including
transfers by or the death of Sellers or their assignees.

8. FIXTURES. All property that integrally belongs to or is part of the Real Estate, whether
attached or detached, such as light fixtures, shades, rods, blinds, awnings, windows, storm doors,
screens, plumbing fixtures, water heaters, water softeners, automatic heating equipment, air
conditioning equipment, wall to wall carpeting, built-in items and electrical service cable,
outside television towers and antenna, fencing, gates and landscaping shall be considered a part of
Real Estate and included in the sale except: (consider: rental items.)

 

9. CARE OF PROPERTY. Buyers shall take good care of the property; shall keep the buildings and
other improvements now or later placed on the Real Estate in good and reasonable repair and shall
not injure, destroy or remove the property during the term of this contract. Buyers shall not make
any material alteration to the Real Estate without the written consent of the Sellers.

10. DEED. Upon payment of purchase price, Sellers shall convey the Real Estate to Buyers or their
assignees, by                     deed, free and clear of all liens, restrictions, and encumbrances except as provided
herein. Any general warranties of title shall extend only to the date of this contract, with
special warranties as to acts of Sellers continuing up to time of delivery of the deed.

11. REMEDIES OF THE PARTIES. a. If Buyers (a) fail to make the payments aforesaid, or any part
thereof, as same become due; or (b) fail to pay the taxes or special assessments or charges, or any
part thereof, levied upon said property, or assessed against it, by any taxing body before any of
such items become delinquent; or (c) fail to keep the property insured; or (d) fail to keep it in
reasonable repair as herein required; or (e) fail to perform any of the agreements as herein made
or required; then Sellers, in addition to any and all other legal and equitable remedies which they
may have, at their option, may proceed to forfeit and cancel this contract as provided by law
(Chapter 656 Code of Iowa). Upon completion of such forfeiture Buyers shall have no right of
reclamation or compensation for money paid, or improvements made; but such payments and/or
improvements if any shall be retained and kept by Sellers as compensation for the use of said
property, and/or as liquidated damages for breach of this contract; and

 

upon completion of such forfeiture, if the Buyers, or any other person or persons shall be in
possession of said real estate or any part thereof, such party or parties in possession shall at
once peacefully remove therefrom, or failing to do so may be treated as tenants holding over,
unlawfully after the expiration of lease, and may accordingly be ousted and removed as such as
provided by law.

     b. If Buyers fail to timely perform this contract, Sellers, at their option, may elect to
declare the entire balance immediately due and payable after such notice, if any, as may be
required by Chapter 654, The Code. Thereafter this contract may be foreclosed in equity and the
court may appoint a receiver to take immediate possession of the property and of the revenues and
income accruing therefrom and to rent or cultivate the same as the receiver may deem best for the
interest of all parties concerned, and such receiver shall be liable to account to Buyers only for
the net profits, after application of rents, issues and profits from the costs and expenses of the
receivership and foreclosure and upon the contract obligation.

It is agreed that if this contract covers less than ten (10) acres of land, and in the event of the
foreclosure of this contract and sale of the property by sheriff’s sale in such foreclosure
proceedings, the time of one year for redemption from said sale provided by the statutes of the
State of Iowa shall be reduced to six (6) months provided the Sellers, in such action file an
election to waive any deficiency judgment against Buyers which may arise out of the foreclosure
proceedings; all to be consistent with the provisions of Chapter 628 of the Iowa Code. If the
redemption period is so reduced, for the first three (3) months after sale such right of redemption
shall be exclusive to the Buyers, and the time periods in Sections 628.5, 628.15 and 628.16 of the
Iowa Code shall be reduced to four (4) months.

It is further agreed that the period of redemption after a foreclosure of this contract shall be
reduced to sixty (60) days if all of the three following contingencies develop: (1) The real estate
is less than ten (10) acres in size; (2) the Court finds affirmatively that the said real estate
has been abandoned by the owners and those persons personally liable under this contract at the
time of such foreclosure; and (3) Sellers in such action file an election to waive any deficiency
judgment against Buyers or their successor in interest in such action. If the redemption period is
so reduced, Buyers or their successors in interest or the owner shall have the exclusive right to
redeem for the first thirty (30) days after such sale, and the time provided for redemption by
creditors as provided in Sections 628.5, 628.15 and 628.16 of the Iowa Code shall be reduced to
forty (40) days. Entry of appearance by pleading or docket entry by or on behalf of Buyers shall be
presumption that the property is not abandoned. Any such redemption period shall be consistent with
all of the provisions of Chapter 628 of the Iowa Code. This paragraph shall not be construed to
limit or otherwise affect any other redemption provisions contained in Chapter 628 of the Iowa
Code. Upon completion of such forfeiture Buyers shall have no right of reclamation or compensation
for money paid, or improvements made; but such payments and for improvements if any shall be
retained and kept by Sellers as compensation for the use of said property, and/or as liquidated
damages for breach of this contract; and upon completion of such forfeiture, if Buyers, or any
other person or persons shall be in possession of said real estate or any part thereof, such party
or parties in possession shall at once peacefully remove therefrom, or failing to do so may be
treated as tenants holding over, unlawfully after the expiration of a lease, and may accordingly be
ousted and removed as such as provided by law.

     c. If Sellers fail to timely perform their obligations under this contract, Buyers shall have
the right to terminate this contract and have all payments made returned to them.

     d. Buyers and Sellers are also entitled to utilize any and all other remedies or actions at
law or in equity available to them.

     e. In any action or proceeding relating to this contract the successful party shall be
entitled to receive reasonable attorney’s fees and costs as permitted by law.

12. JOINT TENANCY IN PROCEEDS AND IN REAL ESTATE. If Sellers, immediately preceding this
contract, hold title to the Real Estate in joint tenancy with full right of survivorship, and the
joint tenancy is not later destroyed by operation of law or by acts of Sellers, then the proceeds
of this sale, and any continuing or recaptured rights of Sellers in the Real Estate, shall belong
to Sellers as joint tenants with full right of survivorship and not as tenants in common; and
Buyers, in the event of the death of either Seller, agree to pay any balance of the price due
Sellers under this contract to the surviving Seller and to accept a deed from the surviving Seller
consistent with paragraph 10.

 

13. JOINDER BY SELLER’S SPOUSE. Seller’s spouse, if not a titleholder immediately preceding
acceptance of this offer, executes this contract only for the purpose of relinquishing all rights
of dower, homestead and distributive shares or in compliance with Section 561.13 of the Iowa Code
and agrees to execute the deed for this purpose.

14. TIME IS OF THE ESSENCE. Time is of the essence in this contract.

15. PERSONAL PROPERTY. If this contract includes the sale of any personal property, Buyers grant
the Sellers a security interest in the personal property and Buyers shall execute the necessary
financing statements and deliver them to Sellers.

16. CONSTRUCTION. Words and phrases in this contract shall be construed as in the singular or
plural number, and as masculine, feminine or neuter gender, according to the context.

17. RELEASE OF RIGHTS. Each of the Buyers hereby relinquishes all rights of dower, homestead and
distributive share in and to the property and waives all rights of exemption as to any of the
property.

I UNDERSTAND THAT HOMESTEAD PROPERTY IS IN MANY CASES PROTECTED FROM THE CLAIMS OF CREDITORS AND
EXEMPT FROM JUDICIAL SALE; AND THAT BY SIGNING THIS CONTRACT, I VOLUNTARILY GIVE UP MY RIGHT TO
THIS PROTECTION FOR THIS PROPERTY WITH RESPECT TO CLAIMS BASED UPON THIS CONTRACT.

	 	 	 
	Dated:                     ,                    

	 	                                                            
	 

	 	BUYERS
	 
	 	 
	Dated:                     ,                    

	 	                                                            
	 

	 	BUYERS

18. ADDITIONAL PROVISIONS.

Dated:                     ,___________

	 	 	 
	 

	 	 
	 
	 	 
	 

	 	 
	SELLERS

	 	BUYERS

STATE OF
                                                            ,
COUNTY OF                                                                                                                                

This instrument was acknowledged before me on
                                                                                                            
by
                                   

 

 

.

                                             

                    , Notary Public

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