Document:

EXHIBIT 10.5.1 – 
 	
            First Amendment to Management and Operational Services Agreement 
 

 

 

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 1st day of December, 2007 (the “Effective Date”), by and between Renewable Energy Group, Inc., a corporation organized and existing under the laws of the state of Delaware, with offices at Ames, Iowa (“REG”), and East Fork Biodiesel, LLC, a limited liability company, organized and existing under the laws of the state of Iowa, with offices at 105 North Hall Street, Algona, Iowa 50511 (“East Fork Biodiesel”).

 

WHEREAS, REG and East Fork Biodiesel entered into that certain Management and Operational Services Agreement dated as of September 26, 2006 (the “Agreement”), with respect to certain management and operation of a biodiesel production facility being built for East Fork Biodiesel in Algona, Iowa; and

 

WHEREAS, the parties have agreed to amend the Agreement as provided in this First Amendment to provide for an interim period prior to the initial period of production as defined in 3.A.(i) of the Agreement.

 

NOW, THEREFORE, in consideration of the foregoing recitals and for other good and valuable consideration, receipt of which is acknowledged, the parties agree as follows:

 

	
            1.
 	
            Amendment. The Agreement is amended by adding a new Subparagraph 3.D. to the Agreement as follows:
 

 

	
             
 	
            D.
 	
            Reimbursement of Costs. During the period of time from the Effective Date until the initial period of production (the “Interim Period”), East Fork Biodiesel shall reimburse REG for all employee compensation and employee benefits associated with the positions of General Manager and Operations Manager (collectively referred to as the “Cost of Services”). The Cost of Services paid or incurred by REG shall be based on the wages, payroll taxes, government mandated costs, including workers’ compensation, benefit costs, and any other expense allocated by REG on a per employee basis and applicable to the General Manager and Operations Manager, which REG paid to or incurred during the Interim Period. REG shall send a monthly invoice to East Fork Biodiesel evidencing such Cost of Services, and such invoice shall be
payable by East Fork Biodiesel by the tenth (10th) of the month following the month for which such Cost of Services were paid or incurred by REG.
 

 

	
            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 and East Fork Biodiesel have executed this First Amendment this 30th day of November, 2007.

 

	
            RENEWABLE ENERGY GROUP, INC.
 	
            EAST FORK BIODIESEL, LLC
 

	
            
 
 	
            
 
 

 

 

 

 

2EXHIBIT 10.6.1 – 
 	
            Change Order between Renewable Energy Group, Inc. and East Fork Biodiesel, LLC
 

 

 

 

RENEWABLE ENERGY GROUP, INC. CHANGE ORDER

 

	
            OWNER:
 	
            East Fork Biodiesel, LLC
 

 

	
            CONTRACTOR:
 	
            REG Construction Services, LLC.
 

 

	
            PROJECT:
 	
            60 MGPY Biodiesel Facility
 

 

	
            CONTRACT DATE:
 	
            October 10, 2006
 

 

	
            CHANGE ORDER NO:
 	
            4
 	
            CHANGE ORDER DATE:  
 	
            November 12,2007
 

 

By: Renewable Energy Group, LLC

 

For the following changes in the Work:

 

This change order recognizes the abbreviate start up plan as defined by the owner. The plant will be operated for a limited duration to prove the mechanical integrity and performance requirements of the Work/Project as originally detailed in paragraph 3.6.6 of the Standard Form Design-Build Agreement agreement dated Oct. 10, 2006. Upon completion of the initial trial, REG personnel will use reasonable efforts to secure the plant for an extend shutdown period pending East Fork Biodiesel’s decision to commence full time operations. Extraordinary maintenance cost not covered by manufacturer’s warranty and due to winter freeze damage shall be divided as an equal share (50/50) between East Fork Biodiesel, LLC and REG Construction Services, LLC. Upon later commencement of full operations, REG will train permanent personnel and assist in the start up.

Due to the short operating period, It is agreed that the Process Guarantee shall be deemed met when the facility accumulates three consecutive 24 hour periods, producing 181,818 gallons or more of biodiesel per 24 our period.

 

The Owner is advised that there is no additional cost in the Work performed by the Contractor under 

the terms of this Change Order and according to the terms of the Agreement. The amount paid by the 

Owner shall be full compensation for all Work requested and for all effects of this document in the 

Work.

 

PROJECT COST ADJUSTMENTS

	
             
 	
            Original Project Amount ($)
 	
            $57,238,000.00
 

	
             
 	
            Amount of Previous Change Orders
 	
            $1,390,095.00
 

	
             
 	
            This Change Order No.  
 	
            4
 	
            $0.00
 

	
             
 	
            New Project Amount ($)
 	
            $58,628,095.00
 

 

COMPLETION DATE ADJUSTMENT

There is no adjustment in completion date.

 

	
             
 	
            Original Completion Date
 	
            December 12,2007
 

	
             
 	
            Previous Time Change Adjustments
 	
            0  
 	
            Days
 

	
             
 	
            This Time Change No.
 	
            0  
 	
            Days
 

	
             
 	
            New Completion Date
 	
            December 12,2007
 

 

The said Contract as hereby amended shall remain in full force and effect.

 

Change Order No. 4 – page 1

 

PO Box 128 | 406 First Street | Ralston, IA 51459 | 712-667-3500 | 668-REG-8685

www.renewable-energy-group.com

 

 

 

 

 

IN WITNESS WHEREOF the said parties have caused this agreement to be executed as 

 

	
            REG Construction Services, LLC
 	
            East Fork Biodiesel. LLC
 

	
            CONTRACTOR
 	
            OWNER
 

 

	
            406 First Street – PO Box 128
 	
            Algona, IA
 

	
            ADDRESS
 	
            ADDRESS
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Change Oreder No.4 – page 2

 

 

PO Box 128 | 406 First Street | Ralston, IA 51459 | 712-667-3500 | 668-REG-8685

www.renewable-energy-group.comEXHIBIT 10.12 – Written Description of Compensation Arrangement with Kenneth M. Clark

 

 

East Fork Biodiesel, LLC (“Company”) has had an unwritten, month-to-month consulting arrangement with a consulting company, KMC Consultants LTD (“KMC Consultants”), owned by our Chief Executive Officer, President and Director, Kenneth M. Clark.  Under the arrangement, since October 1, 2005, Mr. Clark has served as a non-employee consultant, in various capacities and performing various management and administrative services (including pre-incorporation services) in the absence of or as additional support for the Company’s general and project management personnel.  Mr. Clark’s service as chief executive officer is on a month-to-month basis.  

 

On February 19, 2007, the Company’s Board of Directors authorized payment to KMC Consultants of a cash bonus for general management, administrative, oversight and other related services to the Company by Mr. Clark. The bonus was approximately $6,000 per month for the period January 2006 through February 2007, excluding any  time off and the month of July 2006. 

 

On February 19, 2007, the Company's Board of Directors also authorized payment, on a month-to-month
basis, to KMC Consultants for management and coordination services performed by Mr. Clark, including, if
necessary, services as an interim general manager (or anyone else designated by the Board of Directors
to perform some or all of these services):

 

	
             
 	
            •
 	
            full-time basis at the rate of $3,000 per month for full-time service; or

 

	
             
 	
            •
 	
            at a prorated hourly rate of approximately $18 per hour for part-time service.EXHIBIT 10.13 – Consulting Agreement 

	
   

  	
   

  
	
  

  	
  3891 Taylor Avenue 
Breda, Iowa 51436

  Phone: 712-673-4491 • Fax: 712-673-6636

  Mobile: 712-830-8381

  Email:
  venner@win-4-u.net • www.agvisions.biz

  
	
  

  	
  

  

AG VISIONS ENTERPRISES, LLC. —
EAST FORKS BIODIESEL, LLC 
CONSULTING AGREEMENT

          THIS
CONSULTING AGREEMENT (the “Agreement”) is made effective as of the 25th
day of March, 2006 (the “Effective Date”) by and between Ag Visions
Enterprises, LLC, of Breda, Iowa, an Iowa Limited Liability Company (Ag Visions Enterprises)
and East Fork Biodiesel, LLC, of Algona, Iowa (“Client”).

WHEREAS, Client intends to
develop, finance and construct a biodiesel plant in or near Kossuth County,
Iowa (the “Project”); and

WHEREAS, Ag Visions Enterprises,
an Iowa Limited Liability Company owned by Jim and Becky Venner, has a background in developing
renewable fuels projects and is willing to provide services to Client based on
this background.

NOW, THEREFORE, in consideration of the
mutual promises and agreements contained herein, Client hereby engages Ag
Visions Enterprises, and Ag Visions Enterprises hereby accepts engagement, upon
the terms and conditions
hereinafter set forth.

	
   

  	
   

  	
   

  
	
   

  	
  1.

  	
  Term. Ag Visions Enterprises engagement with Client
  shall commence as of the Effective Date and may be terminated at any time by either party
  upon thirty (30) days prior written notice of the party’s intent to terminate this Agreement. Upon termination,
  neither Client nor Ag Visions Enterprises shall have any further rights or
  obligations under the terms of this Agreement other than delivery of payments for services to which Ag Visions
  Enterprises may be entitled through the
  date of termination. Should Ag Visions Enterprises fail to perform its duties
  as required herein, or exceed its
  authority as a representative of Client, in Client’s sole discretion, then Client may immediately terminate this agreement
  for cause by providing written notice by certified mail or personal service to Ag Visions Enterprises,
  Attention: Jim Venner, 3891 Taylor Avenue, Breda, IA 51436. Such termination
  for cause shall take effect immediately upon receipt of such notice.

  
	
   

  	
   

  	
   

  
	
   

  	
  2.

  	
   Services. Ag Visions Enterprises shall serve as the
  Client’s Project Consultant and shall perform the following duties incident
  to that service subject to Client’s approval:

  

	
   

  	
   

  	
   

  
	
   

  	
   

  	
            a.
  Research
  and Prepare Request For Proposal (RFP) for comprehensive Feasibility Study,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
            b.
  Contact
  experienced firms with RFP and provide analysis to Client relative to acceptance of
  feasibility study offer,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
            c.
  Assist in site selection and negotiate for local and state incentive
  packages,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
            d.
  Prepare Business Plan,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
            e.
  Prepare
  financial plan and submit to selected auditor for forecast,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
            f.
  Assist
  negotiations of contracts with various service and product providers,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
            g.
  Assist
  the planning of the Client’s equity marketing effort,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
            h.
  Assist the securing of debt financing for and commencement of construction of the Project,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
            i.
  Assist the education of local lenders including, without limitation, the
  preparation of a “banker’s book” tailored to the Project; and

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
            j.
  Perform such other reasonably necessary duties as Client may request for the
  timely and successful securing of debt financing and commencement of
  construction of the Project, including without limitation, cooperating with
  the Client’s personnel similarly engaged.

  

Page 1

Ag
Visions Enterprises / East Forks Biodiesel 

3/25/2006

Combining
Traditional Values with New Ideas

	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Notwithstanding
 the forgoing, Ag Visions Enterprises shall not be asked to, or actually,
  solicit an offer to buy, or accept an offer to sell, any equity security to
  be issued by Client.

  

	
   

  	
   

  	
   

  
	
   

  	
  Subject
  to Client’s approval, Ag Visions Enterprises shall determine the manner in
  which the services are to be performed and the specific hours to be worked by
  Ag Visions Enterprises. Client will rely on Ag Visions Enterprises to work as many hours as may
  be reasonably necessary to fulfill Ag Visions Enterprises commitments under this Agreement.

  
	
   

  	
   

  	
   

  
	
   

  	
  3.     
  Employees, Members, Agents. Ag Visions
  Enterprises’ employees, members, or agents, if any, who perform services for
  Client under this Agreement shall also be bound by the terms of this Agreement.

  

 

	
   

  	
   

  	
   

  
	
   

  	
  4.

  	
  
  Remuneration. Compensation for services rendered shall be
  paid to Ag Visions Enterprises by Client under the following schedule.

  

	
   

  	
   

  
	
   

  	
  Commitment
  fee - $10,000 to be paid at signing of the contract between East Fork
  Biodiesel, LLC and Ag Visions Enterprises, LLC.

  
	
   

  	
   

  
	
   

  	
  Monthly service fee -
  $3,200 per month to be paid the last business day of the month. This will also cover normal operating expenses by Ag
  Visions.

  
	
   

  	
   

  
	
   

  	
  Business
  Plan Bonus - $25,000 upon acceptance of business plan by East Fork Biodiesel,
  LLC’s Board of
  Directors. Financials will accompany with later revisions to be made on an as
  needed basis.

  
	
   

  	
   

  
	
   

  	
  Loan
  Commitment Bonus - $40,000 upon receipt and the company’s acceptance of the
  senior loan commitment. Typically this is following a successful equity drive
  and after selection of a lead lender.

  
	
   

  	
   

  
	
   

  	
  Loan
  Closing Bonus – $40,000 at time of execution of the definitive documents
  required per the senior loan.

  
	
   

  	
   

  
	
   

  	
  Incentive
  Bonus – Additionally Client will pay a one-time bonus based upon the
  following benchmarks:

  

	
   

  	
   

  	
   

  
	
   

  	
  a.

  	
  if to
  Equity Drive start date by May 22, the bonus shall be $50,000 and $100,000 worth of
  stock.

  
	
   

  	
   

  	
   

  
	
   

  	
  b.

  	
  if to
  Equity Drive start date by June 1, , the bonus shall be $35,000 and $75,000 worth of stock.

  
	
   

  	
   

  	
   

  
	
   

  	
  c.

  	
  After
  June 2 Equity start date, the bonus shall be 50,000 worth of stock.

  

	
   

  	
   

  
	
   

  	
  Upon
  termination of this Agreement, payments hereunder shall cease; provided,
  however, that Ag Visions
  Enterprises shall be entitled to payments for periods or partial periods that
  occurred prior to the date of termination
  for which Ag Visions Enterprises has not been paid.

  
	
   

  	
   

  
	
   

  	
  5.     Expenses.
  Reasonable expenses incurred by Ag Visions Enterprises in performance of its
  duties shall be at Ag Vision’s Expense. Any expenses deemed
  extraordinary shall be reimbursed to Ag Visions by client at a rate to which the parties hereto may later agree.

  
	
   

  	
   

  
	
   

  	
  6.     Successors
  and Assigns Bound. This Agreement shall be binding upon the Client and
  Ag Visions
  Enterprises, their respective heirs, executors, administrators, successors in
  interest or assigns, including without limitation, any partnership,
  corporation or other entity into which the Client may be merged or by which it
  may be acquired (whether directly, indirectly or by operation of law), or to
  which it may
  assign its rights under this Agreement. Notwithstanding the foregoing, any
  assignment by Ag Visions Enterprises of this Agreement or of any interest herein, or
  of any money due to or to become due by reason of the terms hereof without
  the prior written consent of Client shall be void.

  

Page 2

Ag
Visions Enterprises / East Forks Biodiesel 

3/25/2006

	
   

  	
   

  
	
   

  	
  7.     Relationship
  of the Parties. The parties understand that Ag Visions Enterprises is
  an independent
  contractor with respect to Client, and not an employee of Client. Client will
  not provide fringe
  benefits, including health insurance benefits, paid vacation, or any other
  employee benefits for the benefit of Ag Visions Enterprises.

  
	
   

  	
   

  
	
   

  	
  8.     Injuries. Ag Visions
  Enterprises acknowledges Ag Visions Enterprises’ obligation to obtain appropriate insurance coverage for its own
  benefit and the benefit of Ag Visions Enterprises members, employees, and
  agents. Ag Visions Enterprises waives any rights to recover from Client for
  any injuries that Ag Visions Enterprises may sustain while performing
  services under this Agreement resulting from the
  negligence of Ag Visions Enterprises.

  
	
   

  	
   

  
	
   

  	
  9.     Return
  of Records. Upon termination of this Agreement, Ag Visions Enterprises shall
  deliver all
  records, notes, data, memoranda, models, and equipment of any nature that are
  in Ag Visions Enterprises’ possession or Ag Visions Enterprises’ control and that
  are Client’s property or relate to Client’s business.

  
	
   

  	
   

  
	
   

  	
  10.     Waiver. The waiver by the Client of its rights
  under this Agreement or the failure of the Client promptly to enforce any
  provision hereof shall not be construed as a waiver of any subsequent breach
  of the same or any other covenant, term
  or provision.

  
	
   

  	
   

  
	
   

  	
  11.     Entire
Agreement. This Agreement constitutes the entire
  Agreement between the parties hereto with
  regard to the subject matter hereof, and there are no agreements,
  understanding specific restrictions, warranties or representations relating
  to said subject matter between the parties other than those set forth herein
  or herein provided for. This Agreement terminates and replaces the prior
  agreement between the Client, and Ag Visions Enterprises. No amendment or
  modification of this Agreement shall be valid or binding unless in writing and signed by the party against whom such
  amendment or modification is to be enforced.

  

	
   

  	
   

  	
   

  
	
   

  	
  12.

  	
  Notices. Any notice required
  to be given hereunder shall be in writing and shall be deemed to be sufficiently served by either party on the
  other party if such notice is delivered personally or is sent by certified or first class mail addressed
  as follows:

  

	
   

  	
   

  	
   

  
	
   

  	
  To Ag
  Visions Enterprises, LLC:

  
	
   

  	
   

  
	
   

  	
   

  	
  Ag
  Visions Enterprises, LLC 

  Attention:
  Jim Venner 

  3891 Taylor Avenue 

  Breda, Iowa 51436

  
	
   

  	
   

  	
   

  
	
   

  	
  To
  Client:

  
	
   

  	
   

  
	
   

  	
   

  	
  East
  Forks Biodiesel, LLC 

  Ken Clark

  601 Royale Oaks Drive 

  Algona, IA 50511

  

	
   

  	
   

  	
   

  
	
   

  	
  13.

	
  Governing
  Law.
  This Agreement is entered into pursuant to and shall be governed by and in accordance with the
  laws of the State of Iowa.

  

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the Effective
Date 

	
   

  	
   

  	
   

  	
   

  	
   

  
	
  AG VISIONS ENTERPRISES, LLC

  	
   

  	
    

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  

  	
   

  	
  By:

  	
  

  
	
   

  	
      

  	
   

  	
 

  	

  
	
   

  	
  Jim Venner

  	
   

  	
    

  	
    

  
	
   

  	
  

  President

  	
   

  	
  Title 

  	
  Treas

  
	
   

  	
   

  	
   

  	
 

  	
    

  

Page 3

Ag
Visions Enterprises / East Forks Biodiesel 

3/25/2006

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