Document:

EXHIBIT 10.2.1

 

EXTENSION OF OPTION

 

This EXTENSION
OF OPTION given this 28 day of June, 2007, by DAVID L. SCULLY TRUST #4, David
L. Scully, Peter D. Scully and John B. Snyder, Jr., Co-Trustees (hereinafter
referred to as “Owner”) to ILLINI BIO-ENERGY, LLC (hereinafter referred to as “Purchaser”).

 

WHEREAS,
pursuant to an Option Agreement dated June 29, 2005 Owner granted to Purchaser
an option to the Property described in said Option Agreement, which consists of
approximately 220 acres, more or less, located in Logan County, Illinois (a
copy of such Option Agreement is attached hereto as Exhibit A
and referred to hereinafter as “Option”); and

 

WHEREAS,
said Option expires June 29, 2007 and Owner and Purchaser desire to extend
the expiration of said Option through September 27, 2007 under the same
terms as the Option, except as such terms are modified hereafter.

 

NOW,
THEREFORE, Owner and Purchaser hereby agree to the foregoing recitals and
further agree as follows:

 

1.                                       Owner
and Purchaser agree that the Option Period shall be extended through September 27,
2007 and that except as modified herein, the terms of the Option shall continue
to be binding upon Owner and Purchaser until September 27, 2007.

 

2.                                       In
consideration for Owner granting the foregoing extension of the Option Period
to Purchaser, Purchaser shall pay to Owner, by wire transfer, the following
payments (“Extension Payments”):

 

a.                                       On
June 29, 2007, the sum of $18,500.00, of which $2,500.00 shall be applied
toward the purchase price if Purchaser elects to exercise its right to purchase
the

 

1

 

property under the Option,
and $16,000.00 shall be non-refundable and shall not be applied toward the
purchase price; and

 

b.                                      If
Purchaser has not closed on the purchase of the property on or before August 1,
2007, on August 1, 2007 the additional sum of $16,000.00, which shall be
non-refundable and shall not be applied toward the purchase price; and

 

c.                                       If
Purchaser has not closed on the purchase of the property on or before September 1,
2007, on September 1, 2007 the additional sum of $16,000.00, which shall
be non-refundable and shall not be applied toward the purchase price.

 

3.                                       This
Extension of Option, along with the Option Agreement, as modified herein, is the
entire agreement of the parties with respect to its subject matter, and all
prior representations and negotiations are expressly disclaimed. This Agreement
may be amended only by a writing signed by all the parties.

 

4.                                       All
capitalized terms in this Extension of Option, if not defined herein, shall
have the same meaning as defined in the Option.

 

5.                                       This
Extension of Option may be executed in several counterparts, each of which
shall be an original, but all of which shall constitute one and the same instrument.

 

6.                                       This
Extension of Option shall be governed by and construed in all respects in
accordance with the laws of the State of Illinois.

 

IN
WITNESS WHEREOF, the parties hereto have executed this Extension of Option on
the date first hereinbefore mentioned.

 

2

 

	
  OWNER:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  DAVID L. SCULLY
  TRUST #4

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ David L. Scully

  	
   

  	
   

  
	
   

  	
  David L. Scully, Co-trustee

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Peter D. Scully

  	
   

  	
   

  
	
   

  	
  Peter D. Scully, Co-trustee

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ John B. Snyder, Jr.

  	
   

  	
   

  
	
   

  	
  John B. Snyder, Jr., Co-trustee

  	
   

  	
   

  

 

3

 

	
  PURCHASER:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  ILLINI
  BIO-ENERGY, LLC

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Ernest D. Moody

  	
   

  
	
   

  	
  Ernest D. Moody, Chairman

  	
   

  

 

4EXHIBIT 10.3.1

 

AMENDMENT
NUMBER ONE

to

LETTER OF
INTENT (“LOI”)

DATED AUGUST 24,
2006

by and
between

FAGEN, INC.
(“FAGEN”)

and

ILLINI
BIO-ENERGY, LLC (“OWNER”)

 

This Amendment Number One is entered
into this 14th day of February, 2007, by and between Fagen, Inc., a
Minnesota Corporation (“Fagen”) and Illini Bio-Energy, LLC, an Illinois Limited
Liability Company (“Owner”).

 

Anything to the contrary contained in the LOI between the parties
hereto, and in consideration of the mutual promises, covenants, and conditions
contained in the LOI and contained herein, and for other good valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto covenant and agree that the terms and conditions of this
Amendment Number One shall prevail.

 

The parties hereto agree as follows:

 

1.                                       In
paragraph 1(a) of the LOI, the parenthetical shall be deleted (“steam
driven dryer system, RTO, and package boilers”) so that it is amended and
replaced as follows:

 

(a)                                  Fagen
agrees to provide Owner with those services as described in this Letter of
Intent which are necessary for Owner to develop a detailed description of a one
hundred (100) million gallons per year (“MGY”) natural gas-fired dry
grind ethanol production facility located in central Illinois (the “Plant”)
and to establish a price for which Fagen would provide design, engineering,
procurement of equipment and construction services for the Plant. The
description of the Plant will be sufficiently detailed to permit an analysis of
the Owner’s lump-sum cost to develop the Plant and to develop an economic pro
forma sufficient to determine if the Plant can be financed.

 

2.                                       Paragraph 2(a) of
the LOI shall be deleted in its entirety because coal will not be used as an
alternative steam energy source. Therefore, Paragraph 2 shall be amended and
replaced as follows.

 

2.                                       Contract
Price. Owner shall pay Fagen One Hundred Thirteen Million Four Hundred
Sixteen Thousand Five Hundred Seventy-six Dollars ($113,416,576.00) (the “Contract
Price”) as full consideration to Fagen for full and complete performance of
the services described in the Design-Build Agreement and all costs incurred in
connection therewith.

 

(a)                                  The
Contract Price shall not include any costs related to union labor or prevailing
wage requirements. If any action by Owner, a change in Applicable Law, or a

 

 

Governmental Authority (as those terms are
defined in the Design-Build Agreement) acting pursuant to a change in
Applicable Law, shall require Fagen to employ union labor or compensate labor
at prevailing wages, the Contract Price shall be adjusted upwards to include
any increased costs associated with such labor or wages. Such adjustment shall
include, but not be limited to, increased labor, subcontractor, and material
and equipment costs resulting from any union or prevailing wage requirement;
provided, however, that if an option is made available to either employ union
labor, or to compensate labor at prevailing wages, such option shall be at
Fagen’s sole discretion and that if such option is executed by Owner without
Fagen’s agreement, Fagen shall have the right to terminate this Letter of
Intent or the Design-Build Agreement, as applicable, and receive compensation
pursuant to Paragraph 4(c) hereof or the terms of the Design-Build Agreement,
whichever is applicable.

 

(b)                                 If
the Construction Cost Index published by Engineering News-Record Magazine (“CCI”)
for the month in which a Notice to Proceed is given to Fagen is greater than
7695.40 (April 2006), the Contract Price shall be adjusted to reflect such
increase.

 

The other provisions of the LOI shall remain unchanged and in full
force and effect.

 

IN WITNESS WHEREOF, the parties hereto have executed this Amendment
Number One on the date set forth above.

 

	
  FAGEN, INC.

  	
  ILLINI BIO-ENERGY, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
  By

  	
  /s/ Ron
  Fagen

  	
   

  	
  By

  	
   

  	
  /s/ Ernest
  D. Moody

  	
   

  
	
   

  	
   

  	
   

  
	
  Title

  	
  CEO &
  Pres

  	
   

  	
  Title

  	
   

  	
  Chairman

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  Feb 15, 2007EXHIBIT 10.3.2

 

AMENDMENT NUMBER TWO

to

LETTER OF INTENT (“LOI”)

DATED AUGUST 24, 2006

And

AMENDMENT NUMBER ONE

DATED FEBRUARY 14, 2007 (“AMENDMENT NUMBER
ONE”)

by and between

FAGEN, INC. (“FAGEN”)

and

ILLINI BIO-ENERGY, LLC (“OWNER”)

 

This Amendment Number Two is entered
into this 13th day of June, 2007, by and between Fagen, Inc., a Minnesota
Corporation (“Fagen”) and Illini Bio-Energy, LLC, an Illinois Limited Liability
Company (“Owner”).

 

In consideration of the mutual promises, covenants, and conditions
contained in the LOI, Amendment Number One, and herein, and for other good
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto covenant and agree that this Amendment Number
Two shall amend the LOI and Amendment Number One and that the terms and
conditions of this Amendment Number Two shall supersede and replace the terms
of the LOI and Amendment Number One as follows:

 

The parties hereto agree as follows:

 

1.             Paragraph 2 of the
LOI shall be deleted in its entirety and replaced as follows.

 

2.             Contract Price. Subject
to the terms and conditions set forth herein, Owner shall pay Fagen One Hundred
Twenty Million Dollars ($120,000,000.00) (the “Contract Price”) as full
consideration to Fagen for full and complete performance of the services
described in the Design-Build Agreement and all costs incurred in connection
therewith. Such price shall be fixed until December 31, 2007.

 

(a)           The Contract Price
shall not include any costs related to union labor or prevailing wage
requirements. If any action by Owner, a change in Applicable Law, or a
Governmental Authority (as those terms are defined in the Design-Build
Agreement) acting pursuant to a change in Applicable Law, shall require Fagen
to employ union labor or compensate labor at prevailing wages, the Contract
Price shall be adjusted upwards to include any increased costs associated with
such labor or wages. Such adjustment shall include, but not be limited to,
increased labor, subcontractor, and material and equipment costs resulting from
any union or prevailing wage requirement; provided, however, that if an option
is made available to either employ union labor, or to compensate labor at
prevailing wages, such option shall be at Fagen’s sole discretion and that if
such option is executed by Owner without Fagen’s agreement, Fagen shall have
the right to

 

1

 

terminate this Letter of Intent or the
Design-Build Agreement, as applicable, and receive compensation pursuant to
Paragraph 4(c) of the LOI or the terms of the Design-Build Agreement, whichever
is applicable.

 

(b)           If the Construction
Cost Index published by Engineering News-Record Magazine (“CCI”) for the
month in which a Notice to Proceed is given to Fagen is greater than 7938.58 (June
2007), the Contract Price shall be adjusted to reflect such increase, but only in
the event that a valid Notice to Proceed is not accepted prior to January 1,
2008. If Fagen accepts a valid Notice to Proceed prior to January 1, 2008,
there shall be no CCI increase to the Contract Price.

 

(c)           In addition, commencing
on January 1, 2008, and the first of each calendar month thereafter, the Contract
Price shall be increased by 1% per calendar month until Notice to Proceed is
accepted.

 

(d)           If a valid Notice to
Proceed is not accepted by December 31, 2008, Fagen shall have the right, at
its sole discretion, to terminate this Letter of Intent or the Design-Build
Agreement, as applicable, and receive compensation pursuant to Paragraph 4(c) of
the LOI or the terms of the Design-Build Agreement, whichever is applicable.

 

2.             Paragraph 9 of the
LOI is amended and replaced as follows:

 

9.             Legal Effect. Although this Letter
of Intent does not contain all matters upon which agreement must be reached in
order for the Transaction to be consummated, Fagen and Owner wish to set forth,
prior to the execution of the Transaction Documents, their mutual agreement as
to the material terms and conditions of the Transaction. Each Party agrees to
negotiate in good faith towards entering into the written, definitive and
legally binding Transaction Documents containing, among other terms and
conditions, those terms and conditions set forth in this Letter of Intent
including, without limitation, those

 

//Remainder
of page intentionally left blank.//

 

2

 

terms set forth in Paragraphs 2 and 3 hereof.
Notwithstanding the foregoing, the provisions of this Paragraph and of
Paragraphs 1, 2, 4, 6, 7, 8, 11, 12, 14, 17, and 18 hereof are agreed to be
legally binding obligations of the Parties upon the execution and acceptance of
this Letter of Intent.

 

The other provisions of the LOI shall remain unchanged and in full
force and effect.

 

IN WITNESS WHEREOF, the parties hereto have executed this Amendment
Number Two on the date set forth above.

 

	
  FAGEN, INC.

  	
   

  	
  ILLINI BIO-ENERGY, LLC

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By

  	
  Jennifer A.
  Johnson

  	
   

  	
  By

  	
  Ernest D.
  Moody

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title

  	
  CFO

  	
   

  	
  Title

  	
  Chairman

  	
   

  
								

 

3

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