Exhibit 10.1

 

FIRST AMENDED AND RESTATED CONSTRUCTION LOAN AGREEMENT

 

This FIRST AMENDED AND RESTATED CONSTRUCTION LOAN AGREEMENT (the “AGREEMENT”) is
dated as of the 18th day of June, 2009, and is by and between DAKOTA ETHANOL,
L.L.C., a South Dakota limited liability company (“BORROWER”) and FIRST NATIONAL
BANK OF OMAHA (“BANK”), a national banking association established at Omaha,
Nebraska.

 

WHEREAS, the BORROWER requested the BANK to lend to BORROWER up to the sum of
Twenty Six Million, Six Hundred Thousand ($26,600,000.00) Dollars (the
“CONSTRUCTION LOAN”), for the purpose of partially funding the cost of
construction for an ethanol plant (the “PROJECT’) on premises owned by BORROWER,
and described on Exhibit “A” attached hereto andy by this reference made a part
hereof (the “PROPERTY”) and providing permanent financing for the PROJECT.  BANK
and BORROWER entered into a Construction Loan Agreement dated as of
September 25, 2000, as well as numerous amendments thereto (the “ORIGINAL CREDIT
FACILITIES”).  The parties now desire to renew, restate and amend such ORIGINAL
CREDIT FACILITIES in their entirety.

 

WHEREAS, pursuant to the terms of this AGREEMENT, the parties desire that (i),
the ORIGINAL CREDIT FACILITIES shall be replaced by credit facilities as
described in Section II of this AGREEMENT; (ii) all loans and other obligations
of BORROWER outstanding as of this date under the ORIGINAL CREDIT FACILITIES
shall be deemed to be loans and obligations outstanding under this AGREEMENT,
and (iii) all other provisions of this AGREEMENT not in effect, shall become
effective;

 

WHEREAS, the parties agree as follows:

 

SECTION 1 Definitions.

 

1.1                                 “ASSIGNMENT OF CONSTRUCTION CONTRACT” means
the assignment of the agreement between the BORROWER and Broin and
Associates, Inc. (the “GENERAL CONTRACTOR”) for design and construction of the
PROJECT (the “DESIGN/BUILD CONTRACT”) in accordance with PLANS therein
described, by which the BORROWER assigns, as additional security for repayment
of the OBLIGATIONS, the BORROWER’s interest in the DESIGN/BUILD CONTRACT in a
form acceptable to the BANK.

 

1.2                                 “ASSIGNMENT OF RENTS” means the assignment
of rents and leases as to the PROPERTY between BORROWER as assignor and the BANK
as assignee as security for payment of the CONSTRUCTION NOTE in a form
acceptable to the BANK.

 

1.3                                 “BANKING DAY” means a day on which the BANK
is open for substantially all of its business.

 

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1.4                                 “CLOSING” shall mean the date on which the
BANK receives this AGREEMENT, executed by the BORROWER, together with the NOTES
of BORROWER.

 

1.5                                 intentionally left blank

 

1.6                                 intentionally left blank

 

1.7                                 “CONSTRUCTION NOTE” means the promissory
note of the BORROWER which evidenced borrowings under the CONSTRUCTION LOAN of
up to a maximum amount of Twenty Six Million Six Hundred Thousand
($26,600,000.00) Dollars.

 

1.8                                 “DEBT SERVICE” means the sum of a) interest
expense attributable to all BORROWER’s loans and b) scheduled principal payments
on all INDEBTEDNESS due within one year.

 

1.9                                 “DRAW REQUEST” means forms acceptable to the
BANK to be submitted to the BANK when a disbursement is requested under the
CONSTRUCTION NOTE.

 

1.10                           “EVENT OF DEFAULT” has the meaning provided for
in Section 7 of this AGREEMENT.

 

1.11                           “EXCESS CASH FLOW” means net income plus interest
expense, extraordinary loss, depreciation and amortization, less scheduled
payments on the OBLIGATIONS and approved INDEBTEDNESS other than the
OBLIGATIONS, capital expenditures, and any extraordinary gain.

 

1.12                           “GAAP” means generally accepted accounting
principles, applied on a basis consistent with the accounting principles applied
in the preparation of the annual financial statements of the BORROWER referred
to in the Financial Condition Section of this AGREEMENT. All accounting terms
not otherwise defined in this AGREEMENT have the meaning assigned to them in
accordance with GAAP.

 

1.13                           “INDEBTEDNESS” means all indebtedness for
borrowed money including long term debt, and capital leases.

 

1.14                           “INDEPENDENT INSPECTOR” means the firm which will
was retained by BANK, at BORROWER’s cost, to conduct on site inspections of the
work-in-progress on the PROJECT, and to issue periodic reports to BANK as to the
progress of construction and adherence to the PLANS.

 

1.15                           “LOAN DOCUMENTS” means this AGREEMENT, any
amendments to this AGREEMENT, any NOTES, and each document referred to in
Section 4 of this AGREEMENT.

 

1.16                           “LOAN TERMINATION DATE” means the earliest to
occur of the following:  (i) as to TERM NOTE 2 and TERM NOTE 5, September 1,
2011; as to the REVOLVING NOTE, May 17, 2010 (ii) the date the OBLIGATIONS are
accelerated pursuant to this AGREEMENT, and (iii) the date BANK receives
(a) notice in writing from BORROWER of BORROWER’s election to terminate this
AGREEMENT and (b) indefeasible payment in full of the OBLIGATIONS.

 

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1.17                         intentionally left blank xxx

 

1.18                         “MARKETING CONTRACT” means that written contract
between BORROWER and RPMG, Inc. by which the latter agreed to provide marketing
services as to BORROWER’s products.

 

1.19                         “MORTGAGE” means the Mortgage between the BORROWER
as mortgagor and the BANK as mortgagee, creating a first lien on the PROPERTY
and a security interest in all of the personal property located thereon as
security for payment of the OBLIGATIONS in a form acceptable to the BANK.

 

1.20                         “NET WORTH” means total assets less total
liabilities and less the following types of assets: (1) leasehold improvements;
(2) receivables and other investments in or amounts due from any member,
employee or other person or entity related to or affiliated with the BORROWER;
(3) goodwill, patents, copyrights, mailing lists, trade names, trademarks,
servicing rights, organizational and franchise costs, bond underwriting costs
and other like assets properly classified as intangible, and (4) treasury stock
or treasury membership units.

 

1.21                         “OBLIGATIONS” means the obligation of the BORROWER:

 

(A)                              To pay the principal of, and interest on, the
CONSTRUCTION NOTE together with each other NOTE in favor of BANK, all in
accordance with the terms thereof and to satisfy all of its other liabilities to
the BANK, whether hereunder or otherwise, whether now existing or hereafter
incurred, matured or unmatured, direct or contingent, joint or several,
including any extensions, modifications, renewals thereof, and substitutions
therefor and including, but not limited to, any obligations under letter of
credit agreements;

 

(B)                                To repay to the BANK all amounts advanced by
the BANK hereunder or otherwise on behalf of the BORROWER, including, but
without limitation, advances for principal or interest payments to prior secured
parties, mortgagees, or licensers, or taxes, levies, insurance, rent, or repairs
to, or maintenance or storage of, any of the real or personal property securing
BORROWER’s payment and performance of this AGREEMENT; and

 

(C)                                To reimburse the BANK, on demand, for all of
the BANK’s expenses and costs, including the reasonable fees and expenses of its
counsel, in connection with the preparation, administration, amendment,
modification, or enforcement of this AGREEMENT and the documents required
hereunder, including, without limitation, any proceeding brought or threatened,
to enforce payment of any of the OBLIGATIONS referred to in the foregoing
Paragraphs (A) and (B).

 

1.22                         “OPERATING CASH FLOW” means operating revenue
(excluding extra-ordinary revenues or income not derived from the ordinary
course of business) less all direct operating expenses other than interest
expense (other than interest on accounts payable), depreciation and other
similar non-cash charges, interest, and income taxes.

 

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1.23                         “PERMIT” or “PERMITS” means any permit, and all
permits, required under any environmental law or regulation required to
construct and operate the facility on the PROPERTY after completion of the
PROJECT at its operational capacity, including without limitation the following:

 

(a)                                  an Air Emissions Permit, which PERMIT will
allow the BORROWER to operate the facility on the PROPERTY after construction of
the PROJECT at maximum capacity.

 

(b)                                 All permits required in connection with the
construction and operation of all above ground storage tanks included in the
PLANS for the facility on the PROPERTY after construction of the PROJECT.

 

(c)                                  A National Pollution Discharge Elimination
System Construction Permit for any storm water that is discharged from the
facility on the PROPERTY during construction and after construction of the
PROJECT.

 

1.24                         “PLANS” means the plans and specifications prepared
by the GENERAL CONTRACTOR for the PROJECT and identified to this AGREEMENT by
the GENERAL CONTRACTOR, the BORROWER and the BANK.

 

1.25                         “PROJECT” means the design and construction of an
ethanol plant, together with all necessary and appropriate fixtures, equipment,
attachments, and accessories, as described in the PLANS, to be constructed on
the PROPERTY.

 

1.26                         “SECURITY AGREEMENT” means the SECURITY AGREEMENT
between the BORROWER and the BANK, creating a first security interest in all
BORROWER’s assets, including all personal property and General Intangibles,
securing the OBLIGATIONS in a form acceptable to the BANK.

 

1.27                         “SUBCONTRACTOR” means any person who agrees with
the GENERAL CONTRACTOR to perform any work or supply any of the materials or
equipment necessary to complete the PROJECT.

 

1.28                         “WORKING CAPITAL” means current assets (less
investments in or other amounts due from any member, employee or any person or
entity related to or affiliated with the BORROWER and prepayments) less current
liabilities (less any portion of such current liabilities that constitute debt
that is expressly subordinated to the BANK in a writing acceptable to the BANK)
plus the amount available to BORROWER for drawing under TERM NOTE 5.

 

1.29                         “REVOLVING NOTE” means that promissory note of
BORROWER to BANK evidencing the revolving credit facility described in
Section 2.2 of this AGREEMENT, its renewals, modifications and extensions.

 

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1.30                         “BORROWING BASE” means the lesser of:

 

A.                                   $4,000,000.00, less the amount of any
Letters of Credit issued and outstanding on BORROWER’s account, or

 

B.                                     The aggregate of (i) 75% of BORROWER’s
Inventory of corn or milo, at current value on the date reported, plus (ii)  75%
of BORROWER’s Finished Goods - Distiller’s Grains Inventory, at current value on
the date reported, plus (iii) 75% of BORROWER’s Finished Goods-Ethanol
Inventory, valued at the lower of cost or market on the date reported, plus
(iv) 75% of the amount of BORROWER’s Ethanol or Distiller’s Grains Accounts aged
thirty days or less, and (v) 75% of the amount of BORROWER’s current State or
Federal Incentives Accounts Receivable aged less than 120 days, excluding any
Accounts reasonably deemed ineligible by BANK.

 

SECTION 2 Amount and Terms of the LOANS.

 

2.1                               TERM NOTES.  The BORROWER has previously
delivered to BANK two term promissory notes, referred to herein as TERM NOTE 2,
and TERM NOTE 5 (collectively called “TERM NOTES”).  Interest shall accrue as
set forth in the TERM NOTES.  Payment of principal and interest on TERM NOTE 2
shall be as specified in TERM NOTE 2.  On the first day of each calendar
quarter, commencing July 1, 2009, BORROWER shall pay interest to BANK on TERM
NOTE 5,. All unpaid principal and accrued interest shall be due and payable on
LOAN TERMINATION DATE, if not sooner paid.

 

2.2                               REVOLVING LOAN.  BANK agrees to lend
$4,000,000.00 to BORROWER pursuant to this facility.  BANK will credit proceeds
of this revolving loan (“REVOLVING LOAN”) to BORROWER’s deposit account with the
BANK, bearing number 22673981.

 

2.2.1                        Subject to the terms hereof, the BANK will lend the
BORROWER, from time to time until the LOAN TERMINATION DATE such sums in
integral multiples of $10,000.00 as the BORROWER may request by reasonable same
day notice to the BANK, received by the BANK not later than 11:00 A.M. of such
day, but which shall not exceed in the aggregate principal amount at any one
time outstanding, $4,000,000.00 (the “LOAN COMMITMENT”).  The BORROWER may
borrow, repay without penalty or premium and reborrow hereunder, from the date
of this AGREEMENT until the LOAN TERMINATION DATE, either the full amount of the
LOAN COMMITMENT or any lesser sum which is $10,000.00 or an integral multiple
thereof.  It is the intention of the parties that the outstanding balance of the
REVOLVING LOAN shall not exceed the BORROWING BASE, and if at any time said
balance exceeds the BORROWING BASE, BORROWER shall forthwith pay BANK sufficient
funds to reduce the balance of the REVOLVING LOAN until it is in compliance with
this requirement.

 

2.3                               THE REVOLVING NOTE.  The LOAN COMMITMENT shall
be evidenced by a REVOLVING NOTE.  Principal and interest shall be payable
according to the repayment schedule

 

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and interest rate accrual as described in the REVOLVING NOTE.  The balance will
be due and payable on LOAN TERMINATION DATE.

 

2.4                               Payments.  All principal, interest and fees
due under this AGREEMENT, the REVOLVING NOTE, the TERM NOTES and the LOAN
DOCUMENTS shall be paid in immediately available funds and no later than the
payment due date set forth in the monthly statement mailed to the BORROWER by
the BANK.  Should a payment come due on a day other than a BANKING DAY, then the
payment shall be made no later than the next BANKING DAY and interest shall
continue to accrue during the extended period.

 

2.5                               Fees.  BORROWER agrees to pay BANK unused
commitment fees equal to 50 basis points of the unused portion of the REVOLVING
LOAN, and equal to 50 basis points of the unused portion of TERM LOAN 5, with
such fees payable quarterly in arrears.

 

2.6                               Incentive Pricing.  The interest rates
applicable to TERM NOTE 5 and the REVOLVING LOAN are subject to adjustment as
set forth in the NOTES.

 

SECTION 3 intentionally left blank

 

SECTION 4 Conditions of Lending.

 

4.1                               Conditions Precedent to the Initial
Disbursement.  BORROWER previously provided the following documents to BANK:

 

4.1.1                        The CONSTRUCTION NOTE, duly executed on behalf of
the BORROWER.

 

4.1.2                        The MORTGAGE duly executed on behalf of the
BORROWER.

 

4.1.3                        The ASSIGNMENT OF RENTS, duly executed on behalf of
the BORROWER.

 

4.1.4                        The SECURITY AGREEMENT, duly executed on behalf of
the BORROWER.

 

4.1.5                        A financing statement or statements sufficient when
filed to perfect the security interests granted under the MORTGAGE, the
ASSIGNMENT OF RENTS, the SECURITY AGREEMENT, and the ASSIGNMENT OF CONSTRUCTION
CONTRACT, to the extent such security interests are capable of being perfected
by filing.

 

4.1.6                        A copy of the PLANS, certified by the GENERAL
CONTRACTOR and the BORROWER.

 

4.1.7                        The Assignment of the DESIGN/BUILD CONTRACT, duly
executed by the BORROWER and consented to by the GENERAL CONTRACTOR and a copy
of the DESIGN/BUILD CONTRACT.

 

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4.1.8                        A Total Project Cost Statement on the PROJECT duly
executed by the BORROWER and the GENERAL CONTRACTOR, setting forth the
anticipated total cost of the PROJECT’s completion.

 

4.1.9                        An ALTA (American Land Title Association) Survey of
the PROPERTY, prepared at the BORROWER’s expense, currently certified by a
licensed, registered surveyor and incorporating the legal description of the
PROPERTY, showing the location of all points and lines referred to in the legal
description, the location of any existing improvements, the proposed location of
the PROJECT (including parking) as being within the exterior boundaries of the
PROPERTY and in compliance with all applicable building set-back requirements,
and the location of all utilities and the location of all easements and
encroachments onto or from the PROPERTY that are visible on the PROPERTY, known
to the surveyor preparing the survey or of record, identifying easements of
record by recording data, and currently certified by the surveyor that there are
no such easements or encroachments upon the PROPERTY except as shown on the
survey.

 

4.1.14                  An as built appraisal to the BANK based upon the PLANS
to be performed by Herman Natwick & Co., which shows the as-completed value of
the PROPERTY and PROJECT acceptable to BANK.

 

4.1.15                  A title binder, issued by Dakota Homestead Title
Insurance Corporation (the “Title Company”), at the BORROWER’s expense,
constituting a commitment by the Title Company to issue a mortgagee’s title
policy in favor of the BANK as mortgagee under the MORTGAGE, that will be free
from all standard exceptions, including mechanics’ liens and all other
exceptions not previously approved by the BANK and includes a plat endorsement
and that will insure the MORTGAGE to be a valid first lien on the PROPERTY.

 

4.1.16                  A soil report on the PROPERTY certified by a registered
engineer including structural design recommendations in form and substance
satisfactory to the BANK.

 

4.1.17                  A Phase I Environmental Report of the PROPERTY in form
and content satisfactory to the BANK.

 

4.1.18                  Copies of all PERMITS from the applicable county or any
other state or local agency from whom a construction permit is required and such
other licenses and permits, as may be required to construct and operate the
facility on the PROPERTY after completion of the PROJECT.

 

4.1.19                  Copies of all environmental permits and other PERMITS as
my be required to construct and operate the facility on the PROPERTY at maximum
capacity after completion of the PROJECT.

 

4.1.20                  Copies of documents from the appropriate state, federal,
city or county authority having jurisdiction over the PROPERTY and the PROJECT
that provide to the reasonable

 

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satisfaction of the BANK that the PROJECT when constructed in accordance with
the PLANS will comply in all respects with all applicable ordinances, zoning,
subdivision, platting, environmental and land use requirements, without special
variance or exception, and such other evidence as the BANK shall reasonably
request to establish that the PROJECT and the contemplated use thereof are
permitted by and comply with all applicable use or other restrictions and
requirements in prior conveyances, zoning ordinances, environmental laws and
regulations, water shed district regulations and all other applicable laws or
regulations, and governmental authorities having jurisdiction over the PROJECT. 
BORROWER is not required to obtain advance confirmation from any governmental
body that the PROJECT will comply with such ordinances, regulations and
requirements.

 

4.1.22                  Copies of the policy of property/casualty insurance and
comprehensive general liability insurance and a certificate of the worker’s
compensation insurance required under Section 6.3 of this AGREEMENT, with all
such insurance in full force and effect and approved by the BANK, and naming
BANK as additional named insured, together with appropriate flood insurance, if
the PROPERTY is in a flood hazard area.  BORROWER is not required to obtain
worker’s compensation insurance until required by South Dakota law.

 

4.1.23                  A signed opinion of counsel for the BORROWER, addressed
to the BANK, opining that: 1) the BORROWER is duly organized and in good
standing in its state of organization; 2) the BORROWER is qualified in each
state in which it does business and is legally required to be qualified; 3) the
BORROWER has the power to execute and deliver the LOAN DOCUMENTS and to borrow
money and perform in accordance with the terms of the LOAN DOCUMENTS; 4) all
actions and consents necessary to the validity of the LOAN DOCUMENTS have been
obtained; 5) the LOAN DOCUMENTS have been duly signed and are the valid and
binding obligation of the BORROWER and enforceable in accordance with their
terms; and 6) to the best of counsel’s knowledge, the LOAN DOCUMENTS and the
transactions contemplated thereunder do not conflict with any provision of the
operating agreement of BORROWER or any agreement binding upon the BORROWER or
its properties.

 

4.1.24                  A Certificate of Authority executed by such person or
persons authorized by the BORROWER’s organizational documents and/or agreements
to do so, certifying the incumbency and signatures of the managers or other
persons authorized to execute the LOAN DOCUMENTS, and authorizing the execution
of the LOAN DOCUMENTS and performance in accordance with their terms.

 

4.1.25                  A recently certified copy of the BORROWER’s operating
agreement, and any amendments, if applicable.

 

4.1.26                  A recently certified copy of the BORROWER’s Articles of
Organization and any amendments, if applicable.

 

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4.1.27                  A certificate of good standing from the office of the
South Dakota Secretary of State on the BORROWER.

 

4.1.28                  A Flood Hazard Determination Form for the PROPERTY,
confirming whether or not the parcel is in a flood hazard area and whether or
not flood insurance must be obtained.

 

4.1.29 If requested by the BANK at any time, a copy of the payment and
performance bond relating to the performance of any SUBCONTRACTOR on the
PROJECT.

 

4.1.30 Proof of injection of equity capital into BORROWER of no less than
$2,000,000.00 by Broin Enterprises, Inc., and no less than $14,700,000.00 by
Lake Area Corn Processors Cooperative.

 

4.1.31                  intentionally left blank

 

4.1.32                  A copy of the MARKETING CONTRACT, together with an
assignment in favor of BANK in form satisfactory to BANK.

 

4.2                               intentionally left blank

 

4.3                               intentionally left blank

 

SECTION 5 Representations and Warranties.

 

To induce the BANK to enter into this AGREEMENT, the BORROWER, makes the
following representations and warranties and agrees that each request for a
disbursement under this AGREEMENT constitutes a reaffirmation of these
representations and warranties.

 

5.1                               Existence and Power.  The BORROWER is a
limited liability company duly formed and in good standing under the laws of the
State of South Dakota. The BORROWER has all requisite power and authority to own
the PROPERTY and construct the PROJECT, and to execute and deliver, and to
perform all of its obligations under the LOAN DOCUMENTS.

 

5.2                               Authorization of Borrowing; No Conflict as to
Law or Other Agreements.  The execution, delivery and performance by the
BORROWER of the LOAN DOCUMENTS and the borrowings from time to time hereunder
have been duly authorized by all necessary actions of the BORROWER and do and
will not (a) require any consent or approval, or authorization, by any
governmental department, commission, board, bureau, agency or instrumentality,
domestic or foreign, (b) violate any provision of any law, rule or regulation or
of any order, writ, injunction or decree presently in effect having
applicability to the BORROWER, or of the operating agreement of the BORROWER,
(c) result in a breach of or constitute a default under any indenture or loan or
credit agreement or any other agreement, lease or instrument to which the
BORROWER is a party or by which it or its properties may be bound or affected,
or (d) result in, or require, the creation or imposition of any mortgage, deed
of trust, pledge, lien, security interest or other charge or encumbrance of any
nature

 

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to or with any other creditor of the BORROWER upon or with respect to any of the
properties now owned or hereafter acquired by the BORROWER.

 

5.3                               Legal Agreements.  The LOAN DOCUMENTS
constitute the legal, valid and binding obligations of the BORROWER enforceable
against the BORROWER in accordance with their respective terms.

 

5.4                               License and Permits.  The BORROWER has all
necessary licenses and PERMITS required for construction and operation of the
PROJECT.

 

5.5                               Construction of the PROJECT.  The PROJECT was
constructed strictly in accordance with the PLANS; was constructed entirely on
the PROPERTY; and does not encroach upon or overhang any easement or
right-of-way on land not constituting part of the PROPERTY, except for the rail
spur line which is in part located upon the rail line property owned by the
State of South Dakota. The PROJECT, both during construction and at the time of
completion, and the contemplated use thereof, did not and will not violate any
applicable zoning or use statute, ordinance, building code, rule or regulation,
or any covenant or agreement of record. The BORROWER agrees that it will furnish
from time to time such satisfactory evidence with respect thereto as may be
required by the BANK.

 

5.6                               Title to the PROPERTY.  The BORROWER has good
and marketable fee simple title to the PROPERTY.

 

5.7                               Financial Condition.  The BORROWER has
furnished to the BANK the annual financial statement of the BORROWER as of
December 31, 2008.  This financial statement fairly presents the financial
condition of the BORROWER on the date thereof and the results of its operations
for the period then ended, and was prepared in accordance with GAAP. There has
been no material adverse change in the operations, properties or condition
(financial or otherwise) of the BORROWER since the date of the financial
statement referred to above and no additional borrowings have been made by the
BORROWER other than the borrowing contemplated hereby or approved by the BANK.
The above-referenced financial statement or any certificate or statement
furnished to the BANK by or on behalf of the BORROWER in connection with the
transactions contemplated hereby, and the representations and warranties in this
AGREEMENT, do not contain any untrue statements of a material fact or omit to
state a material fact necessary in order to make the statements contained
therein or herein not misleading. To the best of the knowledge of the BORROWER,
there is no fact which materially adversely affects or in the future (so far as
the BORROWER can now foresee) may materially adversely affect the operation or
prospects or condition (financial or other) of the BORROWER or its properties or
assets, which has not been set forth herein or in a certificate or statement
furnished to the BANK by the BORROWER.

 

5.8                               Litigation.  There are no actions, suits or
proceedings pending or, to the knowledge of the BORROWER, threatened against or
affecting the BORROWER or the properties of the BORROWER before any court or
governmental department, commission, board, bureau, agency or instrumentality,
domestic or foreign, which, if determined adversely to the BORROWER, would

 

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have a material adverse effect on the financial condition, properties, or
operations of the BORROWER.

 

5.9                                 Taxes.  The BORROWER has paid or caused to
be paid to the proper authorities when due all federal, state and local taxes,
including taxes on the PROPERTY, required to be paid or withheld by it. The
BORROWER has filed all federal, state and local tax returns which to the
knowledge of the members of the BORROWER are required to be filed, and the
BORROWER has paid or caused to be paid to the respective taxing authorities all
taxes as shown on said returns or on any assessment received by it to the extent
such taxes have become due.

 

5.10                           No Default.  There is no event which is, or with
notice or the lapse of time would be, an EVENT OF DEFAULT under this AGREEMENT.

 

5.11                           intentionally left blank

 

5.12                           ERISA.  The BORROWER is in compliance in all
material respects with the Employee Retirement Income Security Act of 1974, as
amended, and has received no notice to the contrary from the Internal Revenue
Service, the Department of Labor, the Pension Benefit Guaranty Corporation or
any other governmental entity or notice of any claims or pending claims under
ERISA.

 

5.13                           Environmental Matters.  1) The BORROWER is in
compliance in all material respects with all health and environmental laws
applicable to the BORROWER and its operations and knows of no conditions or
circumstances that could interfere with such compliance in the future; 2) the
BORROWER has obtained all PERMITS, environmental permits and approvals required
by law for the operation of its business; and 3) the BORROWER has not identified
any “recognized environmental conditions,” as that term is defined by the
American Society for Testing and Materials in its standards for environmental
due diligence, which could subject the BORROWER to enforcement action if brought
to the attention of appropriate governmental authorities.

 

5.14                           Necessary Utilities, Etc.  BORROWER has made
suitable arrangements so that the PROJECT has all necessary electrical, gas,
water, and sewer facilities in place for the proper construction and operation
of its ethanol plant.  BORROWER has made adequate provision for all storage
facilities, equipment and product supplies, including corn, as specified by its
engineers for the maximum output and operation of the plant.

 

SECTION 6 Additional Covenants of the BORROWER.

 

6.1                                 Financial Information and Reporting.  Except
as otherwise stated in this AGREEMENT, all financial information provided to the
BANK shall be compiled using GAAP consistently applied.  During the time period
that any amounts are outstanding under this AGREEMENT or the LOAN DOCUMENTS,
unless the BANK shall otherwise agree in writing:

 

11

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6.1.1                        Annual Financial Statements. Provide the BANK
within 120 days of the BORROWER’s fiscal year end, the BORROWER’s consolidated,
annual financial statements. The statements must be audited with an unqualified
opinion by a certified public accountant acceptable to the BANK, and must be
accompanied by a certificate of such accountants stating whether, in conducting
their audit, they have become aware of any event of default under this
AGREEMENT, or of any event which would, after the lapse of time or the giving of
notice, or both, constitute an event of default under this AGREEMENT, specifying
the nature and duration of the default.  Such audit statement shall be
accompanied by the accountants’ calculations of BORROWER’s compliance with the
covenants contained in Section 6.2 of this AGREEMENT as of the said fiscal year
end.

 

6.1.2                        The BORROWER will furnish to the BANK within
thirty-(30) days after the end of each calendar month, consolidated financial
statements of the BORROWER for such period and year to date all in reasonable
detail, except for the absence of financial footnotes.  Such financial
statements shall be accompanied by a calculation of BORROWER’s compliance with
covenants contained in Section 6.2 of this AGREEMENT, certified by a manager of
BORROWER.

 

6.1.3                        For each full calendar quarter, BORROWER will
deliver to BANK, within thirty-(30) days of each calendar quarter end, a
certificate in a form reasonably acceptable to BANK that has been signed by an
officer or manager of BORROWER, which: 1) certifies that the statements required
by section 6.1.1 and 6.1.2 have been accurately prepared in accordance with GAAP
applied consistently (except for the absence of financial footnotes to the
statements furnished under Section 6.1.2); 2) certifies that the officer or
manager has no knowledge of any EVENT OF DEFAULT under this AGREEMENT or the
LOAN DOCUMENTS, or of any event which would, after the lapse of time or the
giving of notice, or both, constitute an event of default under this AGREEMENT
or the LOAN DOCUMENTS.

 

6.1.4                        BORROWER shall authorize all federal, state and
municipal authorities to furnish reports of examinations, records and other
information relating to the condition and affairs of the BORROWER and its
ethanol plant, and any information from reports, returns, files and records by
such authorities regarding BORROWER upon request to the BANK.

 

6.1.5                        The BORROWER will give the BANK prompt written
notice of any violation as to any environmental matter by the BORROWER and, of
the commencement of any judicial or administrative proceeding relating to
health, safety or environmental matters (i) in which an adverse determination or
result could result in the revocation of or have a material adverse effect on
any operating permits, air emission permits, water discharge permits, hazardous
waste permits or other PERMITS held by the BORROWER which are material to the
operations of the BORROWER, and (ii) which will or threatens to impose a
material liability on the BORROWER to any person or party or which will require
a material expenditure by the BORROWER to cure any alleged problem or violation.

 

12

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6.1.6                        The BORROWER will give immediate notice to the BANK
of (i) any litigation or proceeding in which it is a party if an adverse
decision therein would require it to pay more than $100,000.00 or deliver assets
the value of which exceeds such sum (whether or not the claim is considered to
be covered by insurance); and (ii) the institution of any other suit or
proceeding involving it that might materially and adversely affect its
operations, financial condition, property, or business prospects.  BORROWER
shall immediately notify BANK of the existence of any EVENT OF DEFAULT

 

6.1.7                        The BORROWER will provide the BANK with such other
information as it may reasonably request.

 

6.1.8                        BORROWER shall provide weekly borrowing base
certificates in a form reasonably acceptable to BANK, calculating advance rates
under the REVOLVING LOAN pursuant to the BORROWING BASE.

 

6.1.9                        The BORROWER shall provide to BANK each month its
six month future cash flow projections, including a quarterly forward looking
debt service coverage projection and operating metrics with anticipated cash
flow requirements for such period.

 

6.1.10                  The BORROWER shall provide to BANK hedging statements
showing all hedging activity of BORROWER.  On request of BANK, BORROWER will
also provide sensitivity analysis regarding BORROWER’s financial futures
positions.

 

6.1.11                  The BORROWER has developed and delivered to BANK
BORROWER’s corn procurement and forward pricing strategy and plan, providing a
minimization of BORROWER’s speculative positions in a form acceptable to BANK. 
Such plan and strategy shall be maintained to BANK’s satisfaction that will
maintain sufficient liquidity to manage potential market price volatility. 
BORROWER will adhere to such plan and strategy, implementing the same in its
ongoing business operations.

 

6.2                               Financial Covenants.  At all times that any
amounts are outstanding under the any NOTE, this AGREEMENT or the LOAN
DOCUMENTS, unless the BANK shall otherwise agree in writing, the BORROWER agrees
to comply with the financial covenants described below, which shall be
calculated using GAAP consistently applied, except as they may be otherwise
modified by the capitalized definitions:

 

6.2.1                        The BORROWER shall maintain a DEBT SERVICES
COVERAGE RATIO of no less than 1.25 : 1.0, for all periods following COMPLETION
DATE.   This covenant shall be measured at a quarterly basis each calendar
quarter, beginning June 30, 2009, but measured on a trailing four quarters basis
at the end of the full calendar year, commencing December 31, 2009 and
continuously thereafter.  For purposes of this covenant, to determine such
ratio, OPERATING CASH FLOW shall be compared to DEBT SERVICE.

 

13

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6.2.2                      The BORROWER shall maintain WORKING CAPITAL of at
least $1,000,000.00 at all times after COMPLETION DATE.

 

6.2.3                      The BORROWER shall maintain a NET WORTH of not less
than (i) $20,000,000.00 at all times.

 

6.2.4                      The BORROWER shall determine, at each fiscal year
end, the amount of its EXCESS CASH FLOW for said fiscal year, and within ninety
days following such fiscal year end the borrowing availability commitment of
TERM NOTE 5 shall be reduced by seventy-five percent (75%) of such sum (“the
REDUCTION AMOUNT”). The BORROWER shall pay to BANK such amount as is required to
reduce the amount of outstanding principal on TERM NOTE 5 to such reduced
commitment amount.  After TERM NOTE 5 is repaid, BORROWER shall pay BANK the
REDUCTION AMOUNT and BANK shall hold such payments as additional collateral for
repayment of TERM NOTE  2.  Such annual payment shall not release BORROWER from
making any payment of principal or interest otherwise required by this
AGREEMENT.

 

6.2.5                      The BORROWER shall maintain a debt ratio measured at
the end of each calendar month of no more than 1.50 : 1.0, for all periods
following COMPLETION DATE.  For purposes of this covenant, to determine such
ratio, INDEBTEDNESS shall be compared to NET WORTH.

 

6.3                               Affirmative Covenants.  During the time period
that any amounts are outstanding under any NOTE or this AGREEMENT or the LOAN
DOCUMENTS, unless the BANK shall otherwise agree in writing the BORROWER shall:

 

6.3.1                      intentionally left blank

 

6.3.2                      intentionally left blank

 

6.3.3                      intentionally left blank

 

6.3.4                      Provide and maintain at all times and, from time to
time at the request of the BANK, furnish the BANK with proof of payment of
premiums on:

 

(i)                                     Comprehensive general liability
insurance (including operations, contingent liability, operations of
subcontractors, complete operations, removal of contaminated soil and other
environmental coverage and contractual liability insurance) with limits
reasonably acceptable to BANK;

 

(ii)                                  Worker’s compensation insurance, with
statutory coverage.

 

The policies of insurance required pursuant to clause (i) above shall be in form
and content satisfactory to the BANK and shall be placed with financially sound
and

 

14

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reputable insurers. The policy of insurance referred to in clause (i) above
shall contain an agreement of the insurer to give not less than thirty (30)
days’ advance written notice to the BANK in the event of cancellation of such
policy or change affecting the coverage thereunder. Acceptance of insurance
policies referred to in clause (i) above shall not bar the BANK from requiring
additional insurance which it reasonably deems necessary.

 

6.3.5                        Purchase and maintain hazard insurance (including
fire, extended coverage vandalism and malicious mischief) on the PROPERTY and
all assets in which BANK has a security interest with limits acceptable to the
BANK. BANK shall be named as additional named insured.

 

6.3.6                        Maintain accurate and complete books, accounts and
records pertaining to the PROPERTY and the PROJECT and its ongoing and
continuing operations in form and substance satisfactory to the BANK. The
BORROWER will permit the BANK, acting by and through its officers and employees,
to examine upon reasonable notice all books, records, contracts, plans,
drawings, PERMITS, bills and statements of account pertaining to the PROJECT and
to inspect upon reasonable notice all books and records pertaining to its
operations and to make extracts therefrom and copies thereof.

 

6.3.7                        Cause to be paid to the proper authorities when due
all federal, state and local taxes, including taxes on the PROPERTY, required to
be paid or withheld by it except those which the BORROWER is contesting in good
faith and with respect to which adequate reserves have been set aside.

 

6.3.8                        Allow the BANK to conduct such inspections of the
PROJECT and BORROWER’s real and personal property subject to the BANK’s security
interest as the BANK may deem necessary for the protection of the BANK’s
interest. Any such inspections shall be made and any certificates issued are
solely for the benefit and protection of the BANK, and the BORROWER shall not be
entitled to rely thereon.

 

6.3.9                        Make all repairs, renewals or replacements
necessary to keep its plant, properties and equipment in good working condition.

 

6.3.10                  Comply in all material respects with all laws applicable
to its form of organization, business, and the ownership of its property.

 

6.3.11                  Maintain and preserve all PERMITS, licenses, rights,
privileges, charters and franchises that it now owns.

 

6.3.12                  Observe and comply with all laws, rules, regulations and
orders of any government or government agency relating to health, safety,
pollution, hazardous materials or other environmental matters to the extent
non-compliance could result in a material liability or otherwise have a material
adverse effect on the BORROWER.

 

15

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6.3.13                On or before July 31, 2009, BORROWER will obtain no less
than $2,000,000.00 of additional capital, either by contributions from existing
members of BORROWER or by issuing subordinated debt in form acceptable to BANK.

 

6.3.14                  intentionally left blank

 

6.3.15                  BORROWER will maintain all its banking depository
relationships at BANK, including money market accounts.

 

6.4                               Negative Covenants.  During the time period
that any amounts are outstanding under the any NOTE or this AGREEMENT or the
LOAN DOCUMENTS, unless the BANK shall otherwise agree in writing the BORROWER
shall not:

 

6.4.1                        Permit any security interest or mortgage or lien on
the PROPERTY or PROJECT or other real or personal property BORROWER owns now or
in the future, or assign any interest that it may have in any assets or
subordinate any rights that it may have in any assets now or in the future,
except: (i) liens, assignments, or subordinations in favor of the BANK;
(ii) liens, assignments, or subordinations outstanding on the date of this
AGREEMENT and disclosed in advance to the BANK in writing and approved by the
BANK; (iii) liens for taxes or assessments or other governmental charges not
delinquent or which the BORROWER is contesting in good faith; (iv) liens which
secure purchase money indebtedness allowed under this AGREEMENT; (v) liens that
are imposed by law for obligations for labor or materials not overdue for more
than 120 days, such as mechanics’, materialmen’s, carriers’, landlords’, and
warehousemen’s liens, or liens, pledges, or deposits under workers’
compensation, unemployment insurance, Social Security, or similar legislation.

 

6.4.2                        intentionally left blank

 

6.4.3                        Incorporate in the PROJECT any materials, fixtures
or property which are subject to the claims of any other person, whether
pursuant to conditional sales contract, security agreement, lease, mortgage or
otherwise.

 

6.4.4                        Lease, sell, transfer, convey, assign, or otherwise
transfer all or any part of the interest of the BORROWER in its assets out of
the ordinary course of business.

 

6.4.5                        Permit or suffer any material change in its
management personnel or management structure or any change, direct or indirect,
in its capital ownership.

 

6.4.6                        Engage in any line of business materially different
from that presently engaged in by the BORROWER.

 

6.4.7                        Change its legal form of organization.

 

16

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6.4.8                        Make any material changes in its accounting
procedures for tax or other purposes.

 

6.4.9                        Incur any indebtedness except: (1) debt arising
under this or another agreement with the BANK; (ii) trade credit incurred in the
ordinary course of business; and (iii) indebtedness in existence on the date of
this AGREEMENT and disclosed in advance to the BANK in writing.

 

6.4.10                  Consolidate, or merge or pool or syndicate or otherwise
combine with any other entity, or give any preferential treatment, make any
advance, directly or indirectly, by way of loan, gift, bonus, or otherwise, to
any company directly or indirectly controlling or affiliated with or controlled
by BORROWER, or any other company, or to any partner or employee of BORROWER, or
of any such company.

 

6.4.11                  Make, or commit to make, capital expenditures (including
the total amount of any capital leases) in an aggregate amount exceeding
$500,000.00 in any single fiscal year.

 

6.4.12                  Make or pay, in any fiscal year, distributions to
members or shareholders of the           BORROWER except as may be agreed to in
writing, in advance, by BANK.

 

6.4.13                  Assume, guarantee, endorse or otherwise becoming
contingently liable for any obligations of any other person, except for those
guaranties outstanding at the time of execution of this AGREEMENT and disclosed
to the BANK in writing.

 

6.4.14                  Make sales to or purchases from any affiliate of the
BORROWER or extend credit or make payments for services rendered by any
affiliate of the BORROWER, except under the MARKETING CONTRACT, unless such
sales or purchases are made or such services are rendered in the ordinary course
of business and on terms and conditions at least as favorable to the BORROWER as
the terms and conditions which would apply in a similar transaction with a
person or party not an affiliate of the BORROWER.

 

SECTION 7 EVENTS OF DEFAULT, Rights and Remedies.

 

7.1                               EVENTS OF DEFAULT. Each of the following shall
be an EVENT OF DEFAULT and give the BANK the right to exercise its remedies
under this AGREEMENT:

 

7.1.1                        The BORROWER shall fail to pay when due any
OBLIGATIONS or any other installment of principal or interest or fee payable to
BANK.

 

7.1.2                        The BORROWER shall fail to observe or perform any
other obligation to be observed or performed by it hereunder or under any of the
LOAN DOCUMENTS.

 

7.1.3                        The BORROWER shall fail to pay any INDEBTEDNESS due
any third persons, and such failure shall continue beyond any applicable grace
period, or the BORROWER shall suffer to exist any other default under any
agreement binding the BORROWER.

 

17

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7.1.4                        Any financial statement, representation, warranty,
or certificate made or furnished by or with respect to the BORROWER to the BANK
in connection with this AGREEMENT, or as an inducement to the BANK to enter into
this AGREEMENT, or in any separate statement or document to be delivered to the
BANK hereunder, shall be materially false, incorrect, or incomplete when made.

 

7.1.5                        The BORROWER shall admit its inability to pay its
debts as they mature or shall make an assignment for the benefit of itself or
any of its creditors.

 

7.1.6                        Proceedings in bankruptcy, or for reorganization of
the BORROWER, or for the readjustment of debt under the Bankruptcy Code, as
amended, or any part thereof, or under any other laws, whether state or federal,
for the relief of debtors, now or hereafter existing, shall be commenced against
or by the BORROWER and, except with respect to any such proceedings instituted
by the BORROWER, shall not be discharged within thirty (30) days of their
commencement.

 

7.1.7                        A receiver or trustee shall be appointed for the
BORROWER or for any substantial part of its respective assets, or any
proceedings shall be instituted for the dissolution or the full or partial
liquidation of the BORROWER, and except with respect to any such appointments
requested or instituted by the BORROWER, such receiver or trustee shall not be
discharged within thirty (30) days of his appointment, and except with respect
to any such proceedings instituted by the BORROWER, such proceedings shall not
be discharged within thirty (30) days of their commencement, or the BORROWER
shall discontinue business or materially change the nature of its business, or
the property securing the OBLIGATIONS becomes, in the reasonable judgment of the
BANK, insufficient in value to satisfy the OBLIGATIONS, or the BANK otherwise
reasonably finds itself insecure as to the prompt and punctual payment and
discharge of the OBLIGATIONS.

 

7.1.8                        The BORROWER shall suffer final judgments for
payment of money aggregating in excess of $100,000.00 which are not covered,
without reservation, by insurance or shall not discharge the same within a
period of thirty (30) days unless, pending further proceedings, execution has
not been commenced or, if commenced, has been effectively stayed.

 

7.1.9                        A judgment creditor of the BORROWER shall obtain
possession of any of the BORROWER’s assets by any means, including (without
implied limitation) levy, distraint, replevin, or self-help.

 

7.1.10                  intentionally left blank

 

7.1.11                  intentionally left blank

 

18

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7.1.12                  The BORROWER’s ethanol plant is materially damaged or
destroyed by fire or other casualty and the loss, in the reasonable judgment of
the BANK, is not adequately covered by insurance actually collected or in the
process of collection.

 

7.1.13                  intentionally left blank

 

7.1.14                  RPMG, Inc. or its permitted assignee shall cease to be
the marketing agent of BORROWER as to sale of its products, and BORROWER has not
within thirty (30) days following termination of the MARKETING CONTRACT hired a
replacement marketing agent to the BANK’s satisfaction, which BANK approval will
not be unreasonably withheld.

 

7.2                               Rights and Remedies.  Upon the occurrence of
an EVENT OF DEFAULT and at any time thereafter, the BANK may refrain from making
any further disbursements hereunder (but the BANK may make disbursements after
the occurrence of such an EVENT OF DEFAULT without thereby waiving its rights
and remedies hereunder), and upon the occurrence of an EVENT OF DEFAULT or at
any time thereafter, the BANK may exercise any or all of the following rights
and remedies:

 

7.2.1                        The BANK may declare the all LOANS to be
terminated, whereupon the same shall forthwith terminate.

 

7.2.2                        The BANK may declare the entire unpaid principal
amount of each NOTE then outstanding, all interest accrued and unpaid thereon,
and all other amounts payable under this AGREEMENT to be forthwith due and
payable, whereupon each NOTE and all OBLIGATIONS, all accrued interest and all
such amounts shall become and be forthwith due and payable, without presentment,
demand, protest or further notice of any kind, all of which are hereby expressly
waived by the BORROWER.

 

7.2.3                        The BANK may exercise and enforce its rights and
remedies under any or all of the LOAN DOCUMENTS.

 

7.2.4                        The BANK may enter upon the PROPERTY and take
possession thereof.

 

7.2.5                        The BANK may exercise any other rights and remedies
available to it by law or agreement.

 

SECTION 8 Miscellaneous.

 

8.1                               Inspections.  BORROWER hereby consents to
inspections of BORROWER’s assets at any reasonable time by BANK or its
representatives.

 

8.2                               Indemnification by the BORROWER.  The BORROWER
shall bear all loss, expense (including attorneys’ fees) and damage in
connection with, and agrees to indemnify and hold harmless the BANK, its agents,
servants and employees from, all claims, demands and judgments made or recovered
against the BANK, its agents, servants and employees, because of bodily
injuries,

 

19

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including death at any time resulting therefrom, and/or because of damages to
property (including loss of use) from any cause whatsoever, arising out of,
incidental to, or in connection with the construction of the PROJECT, whether or
not due to any act of omission or commission, including negligence of the
BORROWER or of its employees, servants or agents, and whether or not due to any
act of omission or commission of the BANK, its employees, servants or agents. 
The BORROWER’s liability hereunder shall not be limited to the extent of
insurance carried by or provided by the BORROWER or subject to any exclusions
from coverage in any insurance policy. The obligations of the BORROWER under
this Section shall survive the payment of the OBLIGATIONS.

 

8.3           No Waiver; Cumulative Remedies.  No failure or delay on the part
of the BANK in exercising any right, power or remedy under the LOAN DOCUMENTS
shall operate as a waiver thereof; nor shall any single or partial exercise of
any such right, power or remedy preclude any other or further exercise thereof
or the exercise of any other right, power or remedy under the LOAN DOCUMENTS.
The remedies provided in the LOAN DOCUMENTS are cumulative and not exclusive of
any remedies provided by law.

 

8.4           Amendments, Etc.  No amendment, modification, termination or
waiver of any provision of any of the LOAN DOCUMENTS or consent to any departure
by the BORROWER therefrom shall be effective unless the same shall be in writing
and signed by the BANK, and then such waiver or consent shall be effective only
in the specific instance and for the specific purpose for which given. No notice
to or demand on the BORROWER in any case shall entitle the BORROWER to any other
or further notice or demand in similar or other circumstances.

 

8.7           Addresses for Notices, Etc.  Except as otherwise expressly
provided herein, all notices, requests, demands and other communications
provided for under the LOAN DOCUMENTS shall be in writing and mailed or
delivered to the applicable party at its address indicated below:

 

If to the BORROWER:

DAKOTA ETHANOL, L.L.C.

 

c/o Lake Area Corn Processors Cooperative

 

P.O. Box 100

 

Wentworth, South Dakota 57075

 

Attention: Brian Woldt

 

 

with a copy to:

Doug Hajek

 

Davenport, Evan, Hurwitz & Smith LLP

 

206 West 14th Street

 

P.O. Box 1030

 

Sioux Falls, South Dakota 57101-1030

 

 

If to the BANK:

First National Bank of Omaha

 

One First National Center

 

1620 Dodge Street STOP 1050

 

20

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Omaha, Nebraska 68197-1050

 

Attention: Andrew Wong

 

 

with a copy to:

Richard D. Myers

 

McGill, Gotsdiner, Workman & Lepp, P.C.

 

#500, 11404 W. Dodge Rd.

 

Omaha, Nebraska 68154

 

or, as to each party, at such other address as shall be designated by such party
in a written notice to the other party complying as to delivery with the terms
of this Section. All such notices, requests, demands and other communications
shall, when mailed, be effective when deposited in the mails, addressed as
aforesaid, except that notices or requests to the BANK pursuant to any of the
provisions hereunder shall not be effective until received by the BANK.

 

8.8           Time of Essence.  Time is of the essence in the performance of
this AGREEMENT.

 

8.9           Execution in Counterparts.  The LOAN DOCUMENTS may be executed in
any number of counterparts, each of which when so executed and delivered shall
be deemed to be an original and all of which counterparts of each instrument or
agreement, taken together, shall constitute but one and the same instrument.

 

8.10         Binding Effect, Assignment.  The LOAN DOCUMENTS shall be binding
upon and inure to the benefit of the BORROWER and the BANK and their respective
successors and assigns, except that the BORROWER shall not have the right to
assign its rights thereunder or any interest therein without the prior written
consent of the BANK.

 

8.11         Governing Law.  The LOAN DOCUMENTS shall be governed by, and
construed in accordance with, the laws of the State of Nebraska except for the
MORTGAGE and ASSIGNMENT OF RENTS which shall be governed by and construed in
accordance with the laws of the State of South Dakota.

 

8.12         Severability of Provisions.  Any provision of this AGREEMENT which
is prohibited or unenforceable shall be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions
hereof.

 

8.13         Headings.  Section headings in this AGREEMENT are included herein
for convenience of reference only and shall not constitute a part of this
AGREEMENT for any other purpose.

 

8.14         Integration.  This AGREEMENT supersedes, replaces and terminates
any prior oral offers, negotiations, understandings or agreements and any
commitment letters or similar writings relating to any of the matters
contemplated herein.

 

21

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8.15         Participations.  Notwithstanding any other provision of this
AGREEMENT, the BORROWER understands that the BANK may enter into participation
agreements with other lenders whereby the BANK will allocate a certain
percentage of the CONSTRUCTION LOAN to them. The BORROWER specifically permits
and authorizes the BANK to exchange financial information about the BORROWER
with actual or potential participants. The BORROWER acknowledges that, for the
convenience of all parties, this AGREEMENT is being entered into with the BANK
only and that its obligations under this AGREEMENT are undertaken for the
benefit of, and as an inducement to, each of the Participating Lenders as well
as the BANK, and the BORROWER hereby grants to each of the Participating Lenders
to the extent of its participation in the CONSTRUCTION LOAN, the right to set
off deposit accounts maintained by the BORROWER with such BANK.  The BORROWER
understands that the terms of such participation agreements with any of the
participants will limit the BANK’s rights to amend, waive or modify the terms
and conditions of this AGREEMENT without the express written consent of all or a
designated percentage of such participants.

 

22

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IN WITNESS WHEREOF, the parties hereto have caused this AGREEMENT to be executed
by their respective officers or managers thereunto duly authorized, as of the
date first above written.

 

Dakota Ethanol, L.L.C.

 

First National Bank of Omaha

 

 

 

 

 

 

 

 

 

 

By:

/s/ Brian Woldt

 

By:

/s/ Andrew Wong

 

Brian Woldt

 

 

Andrew Wong

 

Chairman of the Board of Managers

 

 

Commercial Loan Officer

 

23

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NOTARY ACKNOWLEDGEMENT

 

STATE OF SOUTH DAKOTA

)

 

) ss.

COUNTY OF LAKE

)

 

On this 18 day of June, 2009, before me, the undersigned, a Notary Public,
personally appeared Brian Woldt, Chairman of the Board of Managers of Dakota
Ethanol, L.L.C., who executed the foregoing instrument, and acknowledged that he
executed the same as his voluntary act and deed.

 

 

 

/s/ Alan E. May

 

Notary Public

 

 

 

[Notarial Seal]

 

24

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NOTARY ACKNOWLEDGEMENT

 

STATE OF NE

)

 

) ss.

COUNTY OF Douglas

)

 

On this 26 day of June, 2009, before me, the undersigned, a Notary Public,
personally appeared Andrew Wong, the Commercial Loan Officer of First National
Bank of Omaha, on behalf of said entity, who executed the foregoing instrument,
and acknowledged that he executed the same as his voluntary act and deed.

 

 

 

/s/ Jacqueline K. Sims

 

Notary Public

 

 

 

[Notarial Seal]

 

25

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EXHIBIT A

 

DAKOTA ETHANOL, L.L.C.

Real Estate Description

 

West Half of the Northeast Quarter (W ½ NE ¼ ) except Tract A of the Water Tower
Addition thereof, and except Railroad Right of Way thereof, Section Twenty-one
(21), Township One Hundred Six (106) North, Range Fifty-one (51) West of the
Fifth P,M. in Lake County, South Dakota, and except Lot H-1 thereof, and except
Lot E-1 thereof.

 

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