Document:

exv10w1

 

Exhibit 10.1

Agreement for Phase I Services

and

Statement of Intent

between

Southern Iowa Bio-Energy, LLC

and

Renewable Energy Group, LLC

WHEREAS, Southern Iowa Bio-Energy, LLC (“SIBE”) has made a commitment to
develop a Biodiesel Plant and is diligently developing a business plan that will
move this project forward, and will be able to select the vendor to complete the
business plan that will move this project forward, and

WHEREAS, Renewable Energy Group, LLC (“REG”) was formed to provide turn-key
engineering and construction (design-build) services for biodiesel facilities,

WHEREAS, REG has met with SIBE to discuss ways in which the two companies can work
together cooperatively to support the development of a biodiesel plant in Decatur
County, Iowa.

NOW THEREFORE, IT IS AGREED by and between SIBE and REG as follows:

	1.	 	In recognition of REG’s expertise and technical assistance capabilities, SIBE
will retain REG to assist in developing and finalizing a business plan,
including assistance in development of the following:

	 	A.	 	Preliminary engineering design services including:

	 	•	 	Site plan — discuss and evaluate potential sites as to
infrastructure availability:

	 	1.	 	Rail service and access to national rail networks.
	 
	 	2.	 	Utility requirements (gas,
electric, water, sewer, etc.). Roads and access to
interstate highways.
	 
	 	4.	 	Storm water runoff and drainage requirements.
	 
	 	5.	 	Site grading,
subsurface conditions, and availability of
suitable soils.
	 
	 	6.	 	Other infrastructure issues
that become important to this project.

	 	•	 	Process flow diagrams

	 	1.	 	Generic flow diagram
illustrating the REG continuous transesterification
process.
	 
	 	2.	 	Generic flow diagrams illustrating
the REG pretreatment processes for high phosphorous
(soybean oil) and high FFA (animal fat) feedstocks.

	 	•	 	Floor plan illustrating a typical REG biodiesel
process building.

			
	 
	 	406 First Street

PO Box 68

Ralston, IA 51459

(712) 667-3390

Fax (712) 667-3306
	Page 1 of 5
	 	www.renewable-energy-group.com

 

 

	 	•	 	Elevation illustrating a typical REG biodiesel process building.
	 
	 	•	 	Project timetable with milestones addressing permits, fund-
raising, engineering construction and start-up/commissioning.
	 
	 	•	 	Turnkey capital cost estimate (plus or minus 10%)
	 
	 	•	 	Permitting requirements including a “permitting
matrix that will address permits affecting this project.

	 	B.	 	Technology and description

	 	•	 	A general discussion explaining the REG continuous
transesterification and pre-treatment processes.
	 
	 	•	 	What raw materials are necessary to make biodiesel.
	 
	 	•	 	How to change raw material inputs into biodiesel.
	 
	 	•	 	What equipment is necessary to perform this task.
	 
	 	•	 	Flow diagram
	 
	 	•	 	Visuals of the plant
	 
	 	•	 	Plant layout from input storage to final load out.

	 	C.	 	Staffing requirements

	 	•	 	What Skill sets are required to make the operation a success?

	 	1.	 	Managerial
	 
	 	2.	 	Financial
	 
	 	3.	 	Mechanical
	 
	 	4.	 	Operational

	 	•	 	Where to find these skilled individuals.

	 	D.	 	Market analysis including competitor analysis

	 	•	 	Who is buying the biodiesel
	 
	 	•	 	Where to sell the co-products (glycerin, fatty acids)

	 	E.	 	Marketing strategies & support

	 	•	 	Where the biodiesel industry is going into the future.
	 
	 	•	 	How West Central views the future of product marketing.
	 
	 	•	 	Distribution techniques

	 	F.	 	Customer analysis and discussion of front-loading sales for plant

	 	•	 	Partnering with West Central to sell biodiesel into an
established marketplace.
	 
	 	•	 	Develop new large scale uses in new areas

	 	1.	 	Home heating
	 
	 	2.	 	Underground mining
	 
	 	3.	 	other

			
	 
	 	406 First Street
	 
	 	PO Box 68

Ralston, IA 51459

(712) 667-3390

Fax (712) 667-3306
	Page 2 of 5
	 	www.renewable-energy-group.com

 

 

	 	G.	 	Discussion of raw material inputs and costing

	 	•	 	Materials specification
	 
	 	•	 	Vendor selection
	 
	 	•	 	Transportation
	 
	 	•	 	Receiving and on site storage
	 
	 	•	 	Aggregate purchasing

	 	H.	 	Assistance in developing capital requirements (construction, working capital, etc.)

	 	•	 	Construction
	 
	 	•	 	Working capital
	 
	 	•	 	Escrow

	 	I.	 	Detailing of state and federal incentives to assist plant

	 	•	 	Federal programs to assist in construction
	 
	 	•	 	Federal excise tax credit
	 
	 	•	 	State incentives
	 
	 	•	 	State and Federal mandates

	 	J.	 	Discussion of risk

	 	•	 	Finances
	 
	 	•	 	Raw material supplies
	 
	 	•	 	Site locations
	 
	 	•	 	Marketing
	 
	 	•	 	Unreliability of government subsidies
	 
	 	•	 	Environmental
	 
	 	•	 	Inexperience
	 
	 	•	 	Quality issues

	 	K.	 	Review of financial data and projections

	 	•	 	Current assets and liabilities
	 
	 	•	 	Future return on investment
	 
	 	•	 	Discussion with lenders

	 	L.	 	Assistance in development of organizational structure for new venture

	 	•	 	Cooperative
	 
	 	•	 	Limited Liability Corporation
	 
	 	•	 	Corporation

	 	M.	 	Assistance in the presentation of the completed plan to
potential investors and lenders.

	2.	 	Note: these customary fees for services of a REG Phase 1 Agreement are
hereby waived:
	 
	 	 	In consideration of REG’s agreement to provide the foregoing services, SIBE
agrees to pay the sum of $50,000.00 to REG upon signature of this
agreement. If SIRE proceeds with the construction of a biodiesel facility
with REG as stated in paragraph 5, REG agrees that the foregoing $50,000.00
payment shall be credited against the cost of such facilities. If, for any
reason, SIBE does not build a biodiesel facility, REG shall retain the
$50,000.00 payment for services rendered in aiding in the development of a
business plan. If REG fails through no fault of SIBE to provide the
services outlined above, REG shall refund any unearned portion of such
payment to SIBE. Travel and subcontractor expenses that are incurred in
order to complete this Agreement will be treated as reimbursable expenses
and billed separately.

			
	 
	 	406 First Street
	 
	 	PO Box 68

Ralston, IA 51459

(712) 667-3390

Fax (712) 667-3306
	Page 3 of 5
	 	www.renewable-energy-group.com

 

 

	3.	 	While REG agrees to work with SIBE in the development of information for a
business plan as set out above, by the very nature of the project being discussed
such work at times involves “predicting” the future, including with respect to
costs of construction, production expenses, marketing prices, factors which may
depend upon the passage, existence, or repeal of governmental programs, the
existence as well as location and strength of competition, and the possible
emergence of new and as of yet unknown competition. As a result of these and
other factors, REG cannot guarantee the achievement of any projected level of
business, income, or return on investment.

	4.	 	The foregoing sets out the agreement with respect to Phase 1 Services to be
provided by REG to SSE. Phase 2 of the project would be preparation of general
drawings, permitting, development of contract documents, and determination of
final contract price. Phase 3 of the project would be final design and
construction. If the outcome of Phase justifies the continuation to Phases 2 and
3, it is SIBE’s intent that the services to be rendered under Phases 2 and 3 be
awarded to REG, the parties agreeing in good faith to negotiate, agree to and
execute definitive agreements and contracts relating to the engineering and
construction of a biodiesel facility. If the biodiesel facility is constructed,
it is furthermore SIBE’s intent to enter into a Management and Operations
Services Agreement with West Central Cooperative.

	5.	 	It is understood that any and all designs, plans, specifications, processes and
other engineering or technical information or data which are delivered to SIBE in
connection with this agreement (“Confidential Information”) are confidential
and proprietary to REG and shall at all times remain the sole and exclusive
property of REG. SIBE shall not directly or indirectly be permitted, nor shall
SIBE permit any other party, to use, transfer, assign, disclose, divulge or
publish any such Confidential Information to any third party for any reason or
purpose whatsoever without the prior written consent of REG. SIBE may
disseminate Confidential Information to such of its employees, agents and
representatives (“Consultants”) as may need to know to aid SIBE in analyzing for
the purposes as set out above, but not until such Consultants are aware of these
provisions with respect to confidentiality, the need to prevent further
dissemination of Confidential Information, and at the request of REG have signed
a written agreement to such effect. All such Confidential Information shall be
returned to REG at its request. This agreement shall not be construed to convey
any rights in REG’s intellectual properties, including intellectual properties
included in or related to the Confidential Information.
SIBE may acquire only such rights in these intellectual properties as may be
conveyed under the terms of further construction agreements entered into between
the parties, if any.

			
	 
	 	406 First Street
	 
	 	PO Box 68

Ralston, IA 51459

(712) 667-3390

Fax (712) 667-3306
	Page 4 of 5
	 	www.renewable-energy-group.com

 

 

     Entered into as of the 2nd day of March, 2005.

	 	 	 	 	 
	CUSTOMER:

	 	 	 	DESIGN-BUILD SERVICES PROVIDER:
	 
	 	 	 	 
	SOUTHERN IOWA BIOENERGY, LLC

	 	 	 	RENEWABLE ENERGY GROUP, LLC
	 
	 	 	 	 
	By /s/ William T. Higdon

	 	 	 	By /s/Myron Danzer
	 

	 	 	 	 
	 
	 	 	 	 
	Print Name William T. Higdon

	 	 	 	Print Name Myron Danzer
	 
	 	 	 	 
	Print Title President

	 	 	 	Print Title Sales Production Mngr.

			
	 
	 	406 First Street
	 
	 	PO Box 68

Ralston, IA 51459

(712) 667-3390

Fax (712) 667-3306
	Page 5 of 5
	 	www.renewable-energy-group.comexv10w2

 

Exhibit 10.2

REG

Agreement for Phase 2 Services

and

Statement of intent

between

Southern Iowa BioEnergy, LLC

and

Renewable energy Group, LLC

WHEREAS, Southern Iowa BioEnergy, LLC (SIBE) has made a commitment to develop
a Biodiesel Plant and is diligently developing a business plan
that will move this project forward, and

WHEREAS, Renewable Energy Group, LLC (“REG’) was formed to provide turn-key
engineering and construction (design-build) services for biodiesel facilities,

NOW THEREFORE, IT IS AGREED by and between SIBE and REG as follows:

	 	1.	 	In recognition of REG’s expertise and technical assistance
capabilities, SIBE will retain REG to complete Phase 2 services,
including the following:

	 	A.	 	The design development documents which further define the concepts
developed in Phase I. The scope of Phase 2 includes design work necessary to
fix the size and character of the project, establish dimensional
relationships, define electrical and mechanical systems and requirements,
establish infrastructure and utility requirements, and identify and define
other essential elements of the project. This
includes but is not necessarily limited to:

	 	 	 	 	 
	Activity	Approx. Completion Date
	•

	 	Site plans including roads and rail spurs
	 	9/30/05
	 
	 	 	 	 
	•

	 	Process flow diagrams (PFDs)
	 	9/30/05
	 
	 	 	 	 
	•

	 	Site grading and drainage plans
	 	10/14/05
	 
	 	 	 	 
	•

	 	Process & instrumentation diagrams (PIDs)
	 	10/28/05
	 
	 	 	 	 
	•

	 	General arrangement (GA) drawings
	 	10/28/05
	 
	 	 	 	 
	•

	 	Mechanical design schematics
	 	11/4/05
	 
	 	 	 	 
	•

	 	Electrical design schematics
	 	11/4/05
	 
	 	 	 	 
	•

	 	3-D color rendering
	 	11/4/05
	 
	 	 	 	 
	•

	 	Technical specifications
	 	11/18/05

CONFIDENTIAL

Page 1 of 3

 

 

REG

	 	 	 	 	 
	B.

	 	The Design-Build Construction Agreement.
	 	11/18/05
	 
	 	 	 	 
	C.

	 	The Design-Build construction schedule.
	 	11/18/05
	 
	 	 	 	 
	 

	 	The schedule shall show the interrelationship of activities
in order to meet SIBE desired project completion date.	 	 
	 
	 	 	 	 
	D.

	 	The final Contract Price.
	 	11/25/05
	 
	 	 	 	 
	E.

	 	Assistance with permitting.
	 	As required
	 
	 	 	 	 
	F.

	 	Cash flow projections.
	 	11/25/05
	 
	 	 	 	 
	G.

	 	 Assist in the presentation of the completed plan to
potential investors and lenders.
	 	As required

	2.	 	In consideration of REG’s agreement to provide the foregoing services,
SIBE agrees to pay the sum of $150,000, in two installments: 1)
1/3  upon
signing this Agreement, and the remaining balance due upon completion by REG
of the services called for in this Agreement. If SIBE proceeds ahead with the
construction of a biodiesel facility, and contracts with REG to perform the
engineering and construction of such facility, REG agrees that the foregoing
$150,000 payment shall be credited against the cost of such facilities. If,
for any reason, SIBE does not contract to build a biodiesel facility with REG,
REG shall retain the $150,000 payment for Phase 2 services rendered.
Reasonable and necessary travel and subcontractor expenses that are incurred
in order to complete this Agreement will be treated as reimbursable expenses
and billed separately at cost plus a markup of five percent (5%). REG shall
provide reasonable documentation to SIBE verifying such reimbursable expenses.

	3.	 	The foregoing sets out the agreement with respect to Phase 2 Services to
be provided by REG to SIBE. Phase 3 of the project would be final design and
construction. It is SIBE’s intent that the services to be rendered under Phase
2 be awarded to REG, the parties agreeing in good faith to negotiate, and
attempt to agree to and execute definitive agreements and contacts relating to
the engineering and construction of a biodiesel facility. If the biodiesel
facility is constructed, it is furthermore, SIBE agrees in good faith to
negotiate and attempt to enter into a Management and Operations Services
Agreement with West Central Cooperative.

	4.	 	It is further understood than any and all designs, plans, specifications,
processes and other engineering or technical information or data which are
delivered to SIBE in connection with this Agreement (“Confidential
Information”) are confidential and proprietary to REG and shall at all times
remain the sole and exclusive property of REG. SIBE shall not directly or
indirectly be permitted, nor shall SIBE permit any other party, to use,
transfer, assign, disclose, divulge or publish any such Confidential
Information to any third party for any reason or purpose whatsoever without
the prior written consent of REG. SIBE may disseminate Confidential
Information to such of its employees, agents, consultants and

CONFIDENTIAL

Page 2 of 3

 

 

REG

	 	 	representatives
(“Consultants”) as may need to know to aid
SIBE in analyzing for the purposes as set out above, but not until such
Consultants are ware of these provisions with respect to confidentiality,
the need to prevent further dissemination of Confidential information shall be
returned to REG at its request.
	 
	5.	 	The standard of care for all services performed hereunder shall be the care
and skill ordinarily used by members of the design profession practicing under
similar conditions at the same time and locality of the project. Notwithstanding
the preceding sentence, if the parties agree upon specific performance standards
for-any aspect of the services hereunder, the services shall be performed to
achieve such standards.
	 
	6.	 	If REG becomes financially insolvent, or is unable to or fails to timely
complete the project and services hereunder, then SIBE, in addition to any other
rights and remedies available under the law, shall have the right to engage a
third party to complete the project and services hereunder.

This agreement shall not be construed to convey any rights in REG’s intellection
properties, including intellectual properties included in or related to the Confidential
Information. SIBE may acquire only such rights in these intellectual properties as may
be conveyed under the terms of further construction agreements entered into between the
parties, if any.

Entered
into as of the   7th   day of
  September  , 2005.

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	CUSTOMER:	 	 	 	     DESIGN-BUILD SERVICES PROVIDER:
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	SOUTHERN IOWA
BIOENERGY, LLC	 	 	 	     RENEWABLE
ENERGY GROUP, LLC
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	By

	 	 /s/ William T. Higdon	 	 	 	By	 	/s/ Nile D. Ramsbottom	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Print Name	 	William T. Higdon	 	 	 	 	Print Name	 	Nile D. Ramsbottom	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Print Title	 	President	 	 	 	 	Print Title	 	President	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

CONFIDENTIAL

Page 3 of 3

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