Exhibit 10.2

LOAN AGREEMENT

          This Agreement is made as of April 2, 2010, by and between SOY ENERGY,
LLC, an Iowa limited liability company (the “Borrower”), and OSM-REO FF, LLC, a
Minnesota limited liability company (the “Lender”).

RECITALS

          A.          The Borrower intends to acquire a biodiesel facility
located in Mason City, Iowa along with certain other tangible and intangible
assets pursuant to the provisions of that certain Asset Purchase Agreement dated
of even date herewith by and among the Borrower and OSM-REO FF, LLC, as the
seller, the “Acquisition Agreement” (the acquisition under the Acquisition
Agreement is the “Acquisition”).

          B.          The Borrower has requested loans from the Lender for the
purpose of financing a portion of the Acquisition and expenses related thereto
and the Lender has agreed to provide such financing upon the terms and subject
to the conditions of this Agreement.

          NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration the receipt and sufficiency of which is hereby
acknowledged, the Borrower and the Lender agree as follows:

ARTICLE I
DEFINITIONS

          Section 1.01 Defined Terms. As used in this Agreement, the following
terms shall have the meanings set out respectively after each (such meanings to
be equally applicable to both the singular and plural forms of the terms
defined):

          “Acquisition” - As defined in the first recital above.

          “Acquisition Agreement” - As defined in the first recital above.

          “Acquisition Documents” – The Acquisition Agreement, the Holdback
Reserve Agreement and any other agreements, instruments or documents executed
and delivered in connection with the Acquisition.

          “Acquisition Loan” – The loan in the amount of the Commitment to be
made by the Lender pursuant to the terms of this Agreement.

          “Acquisition Note” – The Promissory Note of the Borrower, in form and
substance acceptable to Lender, evidencing the Acquisition Loan to be made
hereunder, together with any amendment thereto.

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          “Additional Improvements” – The improvements to be constructed on the
Land in accordance with the Plans and Specifications and the Construction
Contract for the purpose of allowing the Project to accept varied feedstock.

          “Additional Improvements Escrow” – An amount equal to not less than
$8,000,000 to be deposited by Borrower with Title and disbursed in accordance
with the Additional Improvements Escrow Agreement to pay Project Costs.

          “Additional Improvements Escrow Agreement” – The Additional
Improvements Escrow Agreement in form and substance acceptable to Lender among
the Borrower, the Lender and Title providing for the deposit into escrow of not
less than $8,000,000 for the purpose of funding construction of the Additional
Improvements.

          “Affiliate” – of any Person shall mean (a) any Person which, directly
or indirectly, is in control of, is controlled by, or is under common control
with such Person, or (b) any Person who is a director or officer (i) of such
Person, (ii) of any subsidiary of such Person or (iii) of any Person described
in clause (a) above. For purposes of this definition, control of a Person shall
mean the power, direct or indirect, (x) to vote 50% or more of the securities
having ordinary voting power for the election of directors of such Person, or
(y) to direct or cause the direction of the management and policies of such
Person whether by contract or otherwise.

          “Agreement” – This Loan Agreement as it may be amended, modified,
supplemented, restated or replaced from time to time.

           “Anti-Terrorism Laws” – any Laws relating to terrorism or money
laundering, including Executive Order No. 13224, the USA Patriot Act, the Laws
comprising or implementing the Bank Secrecy Act, and the Laws administered by
the United States Treasury Department’s Office of Foreign Assets Control (as any
of the foregoing Laws may from time to time be amended, renewed, extended, or
replaced).

          “Appraisal” – An appraisal of the market value of the completed
Project (a) addressed to the Lender, (b) prepared by an appraiser approved by
the Lender, and (c) conforming to all laws applicable to the Lender and
otherwise in a form satisfactory to the Lender, and (d) concluding that, upon
completion of the Additional Improvements the market value of the Project will
be not less than $12,000,000.

          “Assignment of Construction Contract” – The Assignment of Construction
Contract, in form and substance acceptable to Lender, which assigns to the
Lender, as additional security for repayment of the Note, the Borrower’s
interest in the Construction Contract, together with any amendment thereto.

          “Assignment of Project Engineer’s Contract” – The Assignment of
Project Engineer’s Contract, in form and substance acceptable to Lender, which
assigns to the Lender, as additional security for payment of the Note, the
Borrower’s interest in the Architect’s Contract and the Plans and
Specifications, together with any amendment thereto.

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          “Borrowed Money Indebtedness” - (a) the Obligations; (b) Subordinated
Loan; (c) Working Capital Loan; and (d) other Indebtedness for borrowed money,
which collectively, with all other Borrowed Money Indebtedness shall not to
exceed $16,000,000 at any time outstanding in the aggregate.

           “Blocked Person” - As defined in Section 4.24 hereof.

          “Business Day” – Any day other than Saturday or Sunday or a legal
holiday on which commercial banks are authorized or required by law to be closed
for business in Mason City, Iowa.

           “Borrower” – Soy Energy, LLC, an Iowa limited liability company.

          “CERCLA” – The Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, 42 U.S.C. § § 9601 et seq.

          “City” – The City of Mason City, Iowa.

          “Closing Date” – As defined by Section 2.02.

          “Code” – The Internal Revenue Code of 1986, as amended from time to
time and the regulations promulgated thereunder.

          “Collateral” – All property that is pledged as collateral for the
Loans pursuant to any of the Security Documents.

          “Commitment” – The commitment of the Lender hereunder to make the
Acquisition Loan in a maximum principal amount of Six Million and 00/100 Dollars
($6,000,000).

          “Commitment Termination Date” – July 21, 2010, or the date of the
termination of the Commitment pursuant to Article VII hereof, whichever date
occurs earlier.

          “Commencement Date” – The date that is 180 days after the Closing
Date.

          “Completion Date” – July 31, 2011.

          “Consent” – All filings and all licenses, permits, consents,
approvals, authorizations, qualifications and orders of Governmental Bodies and
other third parties, domestic or foreign, necessary to carry on the Borrower’s
business, including, without limitation, any Consents required under all
applicable federal, state or other applicable law.

           “Contractor” – Any person, including the General Contractor and all
Subcontractors, who shall be engaged to work on, or to furnish materials and
supplies for, the Additional Improvements.

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          “Construction Contract” – The construction contract to be executed
between the Borrower and the General Contractor, pursuant to which the General
Contractor shall be obligated to construct the Additional Improvements in
accordance with the Plans and Specifications for a fixed price or maximum cost,
not to exceed $8,000,000.

          “Debt Service Reserve” – An amount equal to not less than $150,000 to
be funded with proceeds of the Acquisition Loan, deposited with Lender and
disbursed in accordance with the Debt Service Reserve Agreement.

          “Debt Service Reserve Agreement” – The Debt Service Reserve and
Security Agreement in form and substance acceptable to Lender between Borrower
and Lender.

          “Debt to Equity Ratio” – With respect to any fiscal period, the ratio
of (i) Indebtedness to (ii) Equity.

          “Default” – An event which with notice, lapse of time, or both would
become an Event of Default.

          “Default Rate” – As defined in the Note.

          “Depository Institution” – Farmers State Bank of Marcus, Iowa, or such
other financial institution as may be approved by Lender from time to time.

          “Dollar” and the sign “$” shall mean the lawful money of the United
States of America.

          “Earnings Before Interest and Taxes” – For any period the sum of (i)
net income (or loss) of the Borrower for such period (excluding extraordinary
gains [and losses]), plus (ii) all interest expense of the Borrower for such
period, plus, (iii) all charges against income of the Borrower for such period
for federal, state and local taxes actually paid, all as determined in
accordance with GAAP.

          “EBITDA” – For any period the sum of (i) Earnings Before Interest and
Taxes for such period, plus (ii) depreciation expenses for such period, plus
(iii) amortization expenses for such period, all as determined in accordance
with GAAP.

          “Effective Date” – the “Effective Date” as defined in the Acquisition
Agreement.

          “Environmental Complaint” – As defined in Section 5.09(d) hereof.

          “Environmental Indemnity” – The Environmental Indemnification
Agreement, in form and substance acceptable to Lender, from the Borrower to the
Lender, together with any amendment thereto.

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          “Environmental Laws” – All federal, state and local environmental,
land use, zoning, health, chemical use, safety and sanitation laws, statutes,
ordinances and codes relating to the protection of the environment and/or
governing the use, storage, treatment, generation, transportation, processing,
handling, production or disposal of Hazardous Substances and the rules,
regulations, policies, guidelines, interpretations, decisions, orders and
directives of federal, state and local governmental agencies and authorities
with respect thereto.

          “Equity” - The sum of the unrestricted and unencumbered (other than to
the Lender) cash and unencumbered (other than to the Lender) readily marketable
securities of the Borrower, less overdrafts.

          “ERISA” – The Employee Retirement Income Security Act of 1974, as
amended from time to time and the rules and regulations promulgated thereunder.

          “Event of Default” – One of the events of default specified in Section
7.01 hereof.

          “Executive Order No. 13224” – The Executive Order No. 13224 on
Terrorist Financing, effective September 24, 2001, as the same has been, or
shall hereafter be, renewed, extended, amended or replaced.

          “Financing Statements” – UCC financing statements naming the Borrower
as debtor and the Lender as secured party and describing the Collateral as the
personal property and fixtures described as Collateral for the Loans in any of
the Security Documents.

          “Fixed Charge Coverage Ratio” – With respect to any fiscal period, the
ratio of (a) Borrower EBITDA to (b) payments required to be made with respect to
any Indebtedness.

          “GAAP” – Generally accepted accounting principles in the United States
of America in effect from time to time.

          “General Contractor” – Ball Industrial Services, LLC, the general
contractor hired by Borrower to complete the Additional Improvements pursuant to
the Construction Contract, or such other General Contractor approved by Lender,
provided that Lender shall not unreasonably withhold condition or delay such
approval.

          “Governmental Body” – Any nation or government, any state or other
political subdivision thereof or any entity exercising the legislative,
judicial, regulatory or administrative functions of or pertaining to a
government, including the City.

          “Hazardous Discharge” – As defined in Section 5.09(d).

          “Hazardous Substance” – Any flammable explosives, radon, radioactive
materials, asbestos, urea formaldehyde foam insulation, polychlorinated
biphenyls, petroleum and petroleum products, methane, hazardous materials,
Hazardous Wastes, hazardous or Toxic Substances or related materials as defined
in CERCLA, the Hazardous Materials Transportation Act, as amended (49 U.S.C.
Sections 1801, et seq.), RCRA or any other applicable Environmental Law and in
the regulations adopted pursuant thereto.

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          “Hazardous Wastes” - All waste materials subject to regulation under
CERCLA, RCRA or applicable state law, and any other applicable federal and state
laws now in force or hereafter enacted relating to hazardous waste disposal.

          “Holdback Reserve Agreement” – The Holdback Reserve Agreement executed
by and among the Borrower and OSM-REO FF, LLC in connection with the
Acquisition.

          “Improvements” – all improvements located or to be constructed on the
Land, including but not limited to the existing biodiesel facility and the
Additional Improvements.

          “Indebtedness” of a Person at a particular date shall mean all
obligations of such Person which in accordance with GAAP would be classified
upon a balance sheet as liabilities (except capital stock and surplus earned or
otherwise) and in any event, without limitation by reason of enumeration, shall
include all indebtedness, debt and other similar monetary obligations of such
Person whether direct or guaranteed, and all premiums, if any, due at the
required prepayment dates of such indebtedness, and all other indebtedness
secured by a Lien on assets owned by such Person, whether or not such
indebtedness actually shall have been created, assumed or incurred by such
Person. Any indebtedness of such Person resulting from the acquisition by such
Person of any assets subject to any Lien shall be deemed, for the purposes
hereof, to be the equivalent of the creation, assumption and incurring of the
indebtedness secured thereby, whether or not actually so created, assumed or
incurred.

          “Initial Loan” – The loan in the original principal amount of $77,595
deemed made by Lender to Borrower as of the Closing Date and evidenced by the
Initial Note.

          “Initial Note” – The Promissory Note to be made by the Borrower in
favor of Lender as of the Closing Date, in form and substance acceptable to
Lender, in the original principal amount of $77,595.

          “Inspecting Architect/Engineer” – The architectural or engineering
firm selected by Lender from time to time to act as the Inspecting
Architect/Engineer under this Agreement.

          “Land” – The land in Cerro Gordo County, Iowa, on which the Project is
located, which is legally described in the Mortgage.

          “Lender” – OSM-REO FF, LLC, a Minnesota limited liability company.

          “Lien” – Any mortgage, deed of trust, pledge, hypothecation,
assignment, security interest, lien (whether statutory or otherwise), charge,
claim or encumbrance, or preference, priority or other security agreement or
preferential arrangement held or asserted in respect of any asset of any kind or
nature whatsoever including, without limitation, any conditional sale or other
title retention agreement, any lease having substantially the same economic
effect as any of the foregoing, and the filing of, or agreement to give, any
financing statement under the Uniform Commercial Code or comparable law of any
jurisdiction.

          “Loans” – The Initial Loan and the Acquisition Loan.

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          “Loan Documents” – This Agreement, the Initial Note, the Acquisition
Note, the Security Documents and any other documents at any time evidencing or
securing one or both of the Loans, as amended.

          “Material Adverse Effect” A material adverse effect (a) the condition,
operations, assets, business or prospects of the applicable Person or Persons,
(b) the Borrower’s ability to pay the Obligations in accordance with the terms
thereof, (c) the value of the Collateral, or the Lender’s Liens on the
Collateral or the priority of any such Lien, or (d) the practical realization of
the benefits of the Lender’s rights and remedies under this Agreement and the
other Loan Documents.

          “Maturity Date” – As defined in the Acquisition Note.

          “Mortgage” – The Combination Mortgage, Assignment of Rents, Security
Agreement and Fixture Financing Statement, in form and substance acceptable to
Lender, from the Borrower as Mortgagor to the Lender as Mortgagee, creating a
first lien on the Project and a security interest in all of the personal
property located thereon as security for payment of the Note, together with any
amendment thereto.

          “Notes” – The Initial Note and the Acquisition Note.

          “Obligations” Any and all loans, advances, debts, liabilities,
obligations, covenants and duties owing by the Borrower to the Lender or to any
other direct or indirect subsidiary or affiliate of the Lender of any kind or
nature, present or future (including, without limitation, any interest accruing
thereon after maturity, or after the filing of any petition in bankruptcy, or
the commencement of any insolvency, reorganization or like proceeding relating
to the Borrower, whether or not a claim for post-filing or post-petition
interest is allowed in such proceeding), whether or not evidenced by any note,
guaranty or other instrument, whether arising under any agreement, instrument or
document, (including, without limitation, this Agreement and the other Loan
Documents) whether or not for the payment of money, whether arising by reason of
an extension of credit, opening a letter of credit, loan, equipment lease or
guarantee, under any interest or currency swap, future, option or other similar
agreement, or in any other manner, whether arising out of overdrafts or deposit
or other accounts or electronic funds transfers (whether through automated
clearing houses or otherwise) or out of the Lender’s non-receipt of or inability
to collect funds or otherwise not being made whole in connection with depository
transfer check or other similar arrangements, whether direct or indirect
(including those acquired by assignment or participation), absolute or
contingent, joint or several, due or to become due, now existing or hereafter
arising, contractual or tortuous, liquidated or unliquidated, regardless of how
such indebtedness or liabilities arise or by what agreement or instrument they
may be evidenced or whether evidenced by any agreement or instrument, including,
but not limited to, any and all of the Borrower’s Indebtedness and/or
liabilities under this Agreement, the other Loan Documents or under any other
agreement between the Lender and the Borrower and any amendments, extensions,
renewals or increases and all costs and expenses of the Lender incurred in the
documentation, negotiation, modification, enforcement, collection or otherwise
in connection with any of the foregoing, including but not limited to reasonable
attorneys’ fees and expenses and all obligations of the Borrower to the Lender
to perform acts or refrain from taking any action.

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          “Organizational Documents” – The following documents:

 

 

 

 

 

 

 

 

(i)

a copy of the Borrower’s Articles of Organization, duly certified as of a
current date by the Secretary of State of the State of Iowa;

 

 

 

 

 

 

 

 

(ii)

a copy of the Borrower’s Operating Agreement, duly certified as of a current
date by an officer or manager of the Borrower;

 

 

 

 

 

 

 

 

(iii)

a Certificate of Existence of the Borrower, duly issued as of a current date by
the Secretary of State of the State of Iowa; and

 

 

 

 

 

 

 

 

(iv)

a copy of the resolutions of the Borrower’s board of directors authorizing
execution, delivery and performance of the Loan Documents and the transactions
contemplated thereby, duly certified by an officer or manager of the Borrower.

          “Participant” Each Person who shall be granted the right by the Lender
to participate in the Loans and who shall have entered into a participation
agreement in form and substance satisfactory to the Lender.

          “Permitted Indebtedness” – means (a) Borrowed Money Indebtedness,
provided that (i) the Working Capital Loan shall not be deemed Permitted
Indebtedness unless subject to the Working Capital Intercreditor Agreement and
(ii) the Subordinated Loan shall not be deemed Permitted Indebtedness unless
subject to the Subordinated Intercreditor Agreement; (b) current liabilities,
other than for borrowed money, incurred in the ordinary course of business; (c)
Guarantees permitted pursuant to Section 6.10; (d) Indebtedness secured by
Permitted Liens; (e) Indebtedness incurred in respect of netting services and
overdraft protection in connection with deposit accounts; (f) Indebtedness
incurred in connection with the financing of insurance premiums in the ordinary
course of business; (g) Indebtedness in respect of taxes, assessments or
governmental charges to the extent that payment thereof shall not at the time be
required to be made.

          “Permitted Lien” – means (a) Liens in favor of the Lender; (b) Liens
in favor of the Subordinate Lender which are subordinate in all respects to any
Liens in favor of Lender; (c) Liens in favor of the Working Capital Lender,
provided that no such Liens in favor of the Working Capital Lender shall be
permitted on property which constitutes Collateral for the Loans; (d) Liens for
taxes, assessments or other governmental charges not delinquent or being
contested in good faith and by appropriate proceedings and with respect to which
proper reserves have been taken by the Borrower; provided, that the Lien shall
have no effect on the priority of the Liens in favor of the Lender or the value
of the assets in which the Lender has such a Lien and a stay of enforcement of
any such Lien shall be in effect; (e) Liens disclosed in the financial
statements referred to in Section 4.06, the existence of which the Lender has
consented to in writing; (f) deposits or pledges to secure obligations under
worker’s compensation, social security or similar laws, or under unemployment
insurance; (g) deposits or pledges to secure bids, tenders, contracts (other
than contracts for the payment of money), leases, statutory obligations, surety
and appeal bonds and other obligations of like nature arising in the ordinary
course of the Borrower’s business; (h) Liens placed upon fixed assets hereafter
acquired to secure a portion of the purchase price thereof, provided that (x)
any such lien shall not encumber any other property of the Borrower and (y) the
aggregate amount of Indebtedness secured by such Liens incurred as a result of
such purchases during any fiscal year shall not exceed the amount provided for
in Section 6.17; (i) other Liens incidental to the conduct of the Borrower’s
business or ownership of its property and assets which were not incurred in
connection with the borrowing of money or the obtaining of advances or credit,
and which do not in the aggregate materially detract from the Lender’s rights in
and to the Collateral or the value of the Borrower’s property or assets or which
do not materially impair the use thereof in the operation of the Borrower’s
business; and (j) subject to the terms of this Agreement, any Lien on property
that is not Collateral.

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          “Person” – Any individual, sole proprietorship, partnership,
corporation, business trust, joint stock company, trust, unincorporated
organization, association, limited liability company, institution, public
benefit corporation, joint venture, entity or government (whether federal,
state, county, city, municipal or otherwise, including any instrumentality,
division, agency, body or department thereof).

          “Plan” – As defined in Section 4.08 hereof.

          “Plans and Specifications” – The plans and specifications for the
Additional Improvements prepared and signed by the Project Engineer and approved
by the Lender and the Inspecting Architect/Engineer.

          “Project” – The Land and the Improvements as they may at any time
exist.

          “Project Costs” – The costs shown on the Total Project Cost Statement
prepared in connection with the Additional Improvements.

          “Project Engineer” – Ball Engineering, LLC, the engineer retained by
the Borrower to design the Plans and Specifications for the Additional
Improvements or such other Project Engineer approved by Lender, provided that
Lender shall not unreasonably withhold condition or delay such approval.

           “Project Engineer’s Contract” – The agreement between the Borrower
and the Architect as to preparation of the Plans and Specifications and
construction of the Additional Improvements.

          “RCRA” – The Resource Conservation and Recovery Act, 42 U.S.C. § §
6901 et seq., as same may be amended from time to time.

          “Repair and Replacement Plan” – The plans and specifications,
including scopes of work, time schedules and budgets, for the repairs to the
Project and the corrective actions with regard to the environmental conditions
identified in the Reports, which plans and specifications are required under the
Acquisition Agreement.

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          “Reports” shall mean the environmental reports delivered to the Lender
and identified on Schedule 4.09.

          “Security Agreement” – The Security Agreement in form and substance
acceptable to Lender between Borrower and Lender.

          “Security Documents” – The Mortgage, Security Agreement, Additional
Improvements Escrow Agreement, Debt Service Reserve Agreement, Financing
Statements, Environmental Indemnity, Assignment of Construction Contract,
Assignment of Architect’s Contract, and any other documents securing the Loans.

          “Subcontractor” – Any person who contracts with the General Contractor
to perform any of the work or supply any of the materials necessary to complete
the Additional Improvements.

          “Subcontract” – Any contract between the General Contractor and a
Subcontractor.

          “Subordinated Loan Documents” – The documents evidencing any
Subordinated Loan.

          “Subordinated Intercreditor Agreement” - An Intercreditor and
Subordination Agreement among the Lender, the Borrower and the Subordinated
Lender, in form and substance satisfactory to the Lender in its sole discretion.

          “Subordinated Loan” – Any Indebtedness of the Borrower to the
Subordinated Lender now existing or hereafter created, incurred or arising,
which is subject to the Subordinated Intercreditor Agreement, which loan may
include, without limitation, a loan from the Small Business Administration;
provided that the maximum principal amount of the Subordinated Loan shall not
exceed $4,000,000.

          “Subordinated Lender” – Any Person providing the Subordinated Loan,
which may include, without limitation, the Small Business Administration.

          “Sworn Construction Statement” – A sworn construction statement duly
executed by the Borrower and the General Contractor showing all Contractors
having contracts or subcontracts for specific portions of the work on the
Additional Improvements and the amounts due or to become due each such
Contractor, and including all so-called “hard” costs of any kind incurred and to
be incurred in constructing the Additional Improvements and fulfilling the
obligations of the General Contractor under the terms of the Construction
Contract.

          “Title” – First American Title Insurance Company.

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          “Total Project Cost Statement” – A total project cost statement duly
executed by the Borrower incorporating the Sworn Construction Statement and
setting forth all costs and expenses of any kind incurred or to be incurred by
the Borrower in connection with the completion of the Additional Improvements,
including all so-called “hard” and “soft” costs.

          “Toxic Substance” – Any material present on the Land which has been
shown to have significant adverse effect on human health or which is subject to
regulation under the Toxic Substances Control Act (TSCA), 15 U.S.C. § § 2601 et
seq., applicable state law, or any other applicable federal or state laws now in
force or hereafter enacted relating to toxic substances. “Toxic Substance”
includes but is not limited to asbestos, polychlorinated biphenyls (PCBs) and
lead-based paints.

          “USA Patriot Act” - The Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001,
Public Law 107-56, as the same has been, or shall hereafter be, renewed,
extended, amended or replaced.

          “Working Capital Documents” – The documents evidencing the Working
Capital Loan.

          “Working Capital Lender” – Any Person providing the Working Capital
Loan.

          “Working Capital Loan” – Any Indebtedness of the Borrower to the
Working Capital Lender now existing or hereafter created which is subject to the
Working Capital Intercreditor Agreement, which loans may include, without
limitation, a loan from the Small Business Administration.

          “Working Capital Intercreditor Agreement” - An Intercreditor Agreement
among the Lender, the Borrower and the Working Capital Lender, in form and
substance satisfactory to the Lender, which Intercreditor Agreement shall only
provide for the specific requirements set forth on Schedule 1.01 attached
hereto.

          Section 1.02 Certain Matters of Construction. The terms “herein”,
“hereof” and “hereunder” and other words of similar import refer to this
Agreement as a whole and not to any particular section, paragraph or
subdivision. Any pronoun used shall be deemed to cover all genders. Wherever
appropriate in the context, terms used herein in the singular also include the
plural and vice versa. All references to statutes and related regulations shall
include any amendments of same and any successor statutes and regulations.
Unless otherwise provided, all references to any instruments or agreements to
which the Lender is a party, including, without limitation, references to any of
the other Loan Documents, shall include any and all modifications or amendments
thereto and any and all extensions or renewals thereof.

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ARTICLE II

COMMITMENT TO MAKE LOANS

Section 2.01 The Loans.

                    (a)     Initial Loan. Subject to and on the Closing Date,
borrower shall execute and deliver to Lender the Initial Note, evidencing
Borrower’s obligation to repay the Initial Loan, which Initial Loan shall be
deemed fully advanced and disbursed as of Closing Date without further action on
the part of Lender. The Initial Note contains terms relating to maturity,
interest rate, payments, acceleration and other matters.

                    (b)     Acquisition Loan. The Lender agrees, on the terms
and subject to the conditions hereinafter set forth, to make the Acquisition
Loan to the Borrower on or before the Commitment Termination Date in a aggregate
principal amount of up to and including the maximum amount of the Commitment.
Lender shall have no obligation to make the Acquisition Loan after the
Commitment Termination Date. The proceeds of the Acquisition Loan shall be used
by the Borrower to pay a portion of cost the Acquisition of the Project pursuant
to the Acquisition Agreement. The obligation of the Borrower to repay the
Acquisition Loan shall be evidenced by the Acquisition Note which contains terms
relating to maturity, interest rate, payments, acceleration and other matters.
Interest shall be payable at the rate provided therein only on such portions of
the Acquisition Loan proceeds as actually have been disbursed pursuant to this
Agreement.

          Section 2.02 Single Advance. The Acquisition Loan shall be advanced in
a single advance to Borrower upon satisfaction of the conditions precedent
described in Article III of this Agreement, subject to the terms and conditions
of this Agreement. The date on which the advance is made is sometimes referred
to herein as the “Closing Date.”

          Section 2.03 Note. Against delivery to the Borrower of Six Million
Dollars ($6,000,000.00), the Borrower shall execute and deliver the Acquisition
Note to the Lender to evidence the Borrower’s obligations under the Acquisition
Loan. The Acquisition Note shall represent the Obligations of the Borrower to
pay the Lender the outstanding principal amount of the Acquisition Loan, plus
interest accrued thereon, as set forth in the Note. The Borrower irrevocably
authorizes the Lender to make or cause to be made a notation on the Lender’s
books and records, at or about the time of the Lender’s receipt of any interest
or principal payment on the Note, an appropriate notation on the books and
records reflecting such payment. The aggregate unpaid amount set forth on the
Lender’s books and records shall be prima facie evidence of the interest or
principal amount thereof owing and unpaid to the Lender, but the failure to
record, or any error in so recording any such amount shall not affect the
Obligations of the Borrower hereunder or under the Note to make payments of
principal of and interest on the Note when due.

          Section 2.04 Voluntary Prepayments. The Borrower may prepay the Loans
in whole or in part at any time, without premium or penalty.

          Section 2.05 Business Days. If the date for any payment or prepayment
hereunder falls on a day which is not a Business Day, then for all purposes of
this Agreement the payment shall be due on the preceding Business Day.

          Section 2.06 Use of Proceeds. The Borrower shall apply the proceeds of
the Loans to fund the Acquisition and other related expenses.

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          Section 2.07 Maturity Date. The Loans will terminate on the Maturity
Date unless terminated earlier pursuant to this Agreement or the terms of the
Initial Note or Acquisition Note, and all principal and interest then
outstanding under the Loans shall be due and payable on such date.

ARTICLE III

CONDITIONS TO ACQUISITION LOAN

          Section 3.01 Conditions Precedent to Acquisition Loan. The obligation
of the Lender to make the Acquisition Loan shall be subject to the condition
precedent that the Lender shall have received on or before the date of the
Acquisition Loan the following, each to be satisfactory to the Lender in form
and substance:

 

 

 

 

 

          (a)     Note. The Note duly executed by the Borrower;

 

 

 

 

 

          (b)     Additional Improvements Escrow Documents. The Additional
Improvements Escrow Agreement, duly executed by the Borrower, Title and the
Lender, including acknowledgement by Title that the Additional Improvements
Escrow has been funded;

 

 

 

 

 

          (c)     Mortgage. The Mortgage duly executed by the Borrower.

 

 

 

 

 

          (d)    Security Documents. The Security Documents, duly executed by
each party thereto (other than the Assignment of Construction Contract and the
Assignment of Project Engineer’s Contract, which shall be delivered pursuant to
Section 5.22).

 

 

 

 

 

          (e)     Appraisal. The Appraisal.

 

 

 

 

 

          (f)     Equity. Evidence satisfactory to the Lender that the Borrower
has available for use in connection with the operation of the Project not less
than $19,000,000 of Equity.

 

 

 

 

 

          (g)     ALTA Mortgagee’s Policy of Title Insurance. An extended
coverage ALTA Mortgagee’s Policy of Title Insurance issued by Title (Form 1970
or Form 1996 with the exclusion for creditors rights and arbitration
requirements deleted) and containing such endorsements as Lender may require
including ALTA Form 9 (Comprehensive), ALTA Form 6.2 (Variable Rate), Survey,
Separate Tax Parcel, Subdivision Compliance, and ALTA Form 3.1 (Zoning). Such
Policy shall be in an amount equal to the maximum amount of the Commitment, and
shall insure the Mortgage as a first lien on a good and marketable fee simple
title to the Project, subject only to such Permitted Encumbrances (as defined in
the Acquisition Agreement) and encumbrances that have not been objected to by
Borrower (or which objection has been cured by Lender or waived by Borrower)
pursuant to the terms of the Acquisition Agreement. Without limiting the
generality of the foregoing, such Policy shall insure the Lender against claims
for mechanics’ liens, rights of parties in possession and matters which would be
disclosed by a comprehensive survey of the Land.

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          (h)     Survey. A survey of the Land dated within ninety (90) days of
the date of this Agreement prepared and certified by a licensed or registered
surveyor to the Lender in accordance with Minimum Standard Detail Requirements
for ALTA/ACSM Land Title Surveys (as adopted by the ALTA and NSPS in 2005)
including Items Nos. 1, 2, 3, 4, 6, 7(a), 8, 9, 10, 11(b) and 13 of Table A
thereof and such other items as the Lender may reasonably require, acceptable to
Lender in Lender’s sole discretion, which survey shall be “spotted” to show the
proposed Additional Improvements according to the site plan prepared by the
Project Engineer. Upon completion of the Additional Improvements the survey
shall be recertified “as-built.”

 

 

 

 

 

          (i)     UCC, Judgment and Other Lien Searches. Appropriate searches
conducted in the offices required by Lender showing no tax liens, bankruptcies,
judgments or other liens affecting the Borrower or the Project, and Uniform
Commercial Code searches disclosing no security interests existing against the
Project including the equipment, fixtures and personality, except Permitted
Liens.

 

 

 

 

 

          (j)     Phase I. A Phase I Environmental Site Assessment certified
within ninety (90) days of the date of this Agreement, addressed and certified
to the Borrower and the Lender and performed by Geotechnical Services, Inc. or
such other qualified licensed engineer in strict conformance with the Standard
Practice for Environmental Site Assessment Process, ASTM Standard E1527-2005 and
a findings and conclusions section consistent with Section 11.6.1 thereof and
any additional investigations and analysis necessary for the consultant to
conclude there are no Recognized Environmental Conditions (as such term is used
in Standard E1527) associated with the Project, or such have been remediated in
accordance with applicable law, except as described in the Reports.

 

 

 

          (k)     Legal Opinion. A signed copy of a favorable opinion of counsel
to the Borrower in form and substance acceptable to Lender in Lender’s sole
discretion.

 

 

 

          (l)     Acquisition Documents. The Lender shall have received final
executed copies of the Acquisition Documents as in effect on the Closing Date.

 

 

 

          (m)    Certificates. The Lender shall have received a copy of the
Articles of Organization of the Borrower, and all amendments thereto, certified
by the Secretary of State or other appropriate official of its jurisdiction of
formation together with copies of its Operating Agreement and all agreements of
the Borrower’s members certified as accurate and complete by the Secretary of
the Borrower.

 

 

 

          (n)     Proceedings of Borrower. The Lender shall have received a copy
of the resolutions in form and substance reasonably satisfactory to the Lender,
of the Board of Directors of the Borrower authorizing the execution, delivery
and performance of this Agreement and the other Loan Documents certified by the
Secretary of the Borrower; and, such certificate shall state that the
resolutions thereby ratified have not been amended, modified, revoked or
rescinded as of the date of such certificate.

--------------------------------------------------------------------------------

 

 

 

 

          (o)      Incumbency Certificates of the Borrower. The Lender shall
have received a certificate of the Secretary of the Borrower, dated the Closing
Date, as to the incumbency and signature of the officers of the Borrower
executing this Agreement, any certificate or other documents to be delivered by
it pursuant hereto, together with evidence of the incumbency of such Secretary.

 

 

 

          (p)      Certificate of Existence. The Lender shall have received a
certificate of existence for the Borrower dated not more than thirty (30) days
prior to the Closing Date, issued by the Secretary of State or other appropriate
official of the Borrower’s jurisdiction of formation and each jurisdiction where
the conduct of the Borrower’s business activities or the ownership of its
properties necessitates qualification.

 

 

 

          (q)      Repair and Replacement Plan. The Repair and Replacement Plan
related to the corrective actions with regard to the environmental conditions
identified in the Reports, mutually acceptable to Borrower and Lender pursuant
to the terms of the Acquisition Agreement.

 

 

 

          (r)      Closing Certificate. The Lender shall have received a closing
certificate signed by the President or Chairman of the Borrower dated as of the
date hereof, stating that (i) all representations and warranties set forth in
this Agreement and the other Loan Documents are true and correct on and as of
such date, (ii) the Borrower is on such date in compliance with all the terms
and provisions set forth in this Agreement and the other Loan Documents and
(iii) on such date no Default or Event of Default has occurred or is continuing.

 

 

 

          (s)      Plans and Specifications. The Plans and Specifications,
acceptable to Lender in Lender’s sole discretion.

 

 

 

          (t)      Inspecting Architect/Engineer Report. A report of the
Inspecting Architect/Engineer approving the Plans and Specifications, the
Construction Contract and the Sworn Construction Statement, acceptable to Lender
in Lender’s sole discretion.

 

 

 

          (u)      Construction Contracts. The Construction Contract and the
Project Engineer’s Contract, acceptable to Lender in Lender’s sole discretion.

 

 

 

          (v)      Subcontracts. Copies of such Subcontracts as the Lender may
request, together with a letter from each Contractor under such Subcontracts
permitting the Lender, upon its election to complete the Additional Improvements
in accordance with the provisions of Section 7.02(d) hereof, to acquire the
interest of the Contractor under such Subcontracts.

--------------------------------------------------------------------------------

 

 

 

          (w)      Assignments. The Assignment of Construction Contract and
Assignment of Project Engineer’s Contract, duly executed by Borrower and
acknowledged by any other party to the Construction Contract or the Project
Engineer’s Contract.

 

 

 

          (x)      Contractor Guaranty. A completion guaranty duly executed by
General Contractor in favor of Lender guarantying completion of the Additional
Improvements, in form and substance acceptable to Lender.

 

 

 

          (y)      Sworn Construction Statement. The Sworn Construction
Statement.

 

 

 

          (z)      Total Project Cost Statement. The Total Project Cost
Statement.

 

 

 

          (aa)    Site Plan. The site plan prepared by the Project Engineer
showing the proposed Additional Improvements, acceptable to Lender.

 

 

 

          (bb)   Contractors. If requested by the Lender, the Lender shall be
furnished with a statement of the Borrower and of any Contractor, in form and
substance required by the Lender, setting forth the names, addresses and amounts
due or to become due as well as the amounts previously paid to every Contractor,
subcontractor, person, firm or corporation furnishing materials or performing
labor in connection with the construction of any part of the Additional
Improvements.

 

 

 

          (cc)   Marketing Agreement. An agreement between Borrower and a
biodiesel marketer pursuant to which the marketer agrees to market and sell
biodiesel produced at the Project, in form and substance acceptable to Lender.

 

 

 

          (dd)   Hedging Plan. Evidence of a risk management plan for hedging
against fluctuating commodities prices, in form and substance acceptable to
Lender.

 

 

 

          (ee)   No Default. No Default or Event of Default hereunder shall have
occurred and be continuing and all representations and warranties made by the
Borrower herein shall continue to be true and correct as of such date.

 

 

 

          (ff)    Additional Matters. Such additional documents and information
regarding the Borrower, the Borrower’s business and the Project as Lender shall
reasonably request, and which shall be in form and substance acceptable to
Lender.

          Section 3.02 No Waiver. The making of the Acquisition Loan prior to
fulfillment of any condition thereof shall not be construed as a waiver of such
condition, and the Lender reserves the right to require fulfillment of any and
all such conditions at any time before or after the date of the Acquisition
Loan.

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ARTICLE IV

REPRESENTATIONS AND WARRANTIES

          To induce the Lender to enter into this Agreement and to make Loans
hereunder, the Borrower represents and warrants to the Lender:

          Section 4.01 Formation, Standing, Etc. The Borrower is a limited
liability company duly organized and validly existing under the laws of Iowa and
has all requisite power and authority to carry on its business as now conducted,
to enter into the Loan Documents to which it is a party, to perform its
obligations under such Loan Documents, to operate the Project and to construct
the Additional Improvements. The Borrower is duly qualified and in good standing
as a foreign limited liability company in each jurisdiction in which the
character of the properties owned, leased or operated by it or the business
conducted by it makes such qualification necessary. The Borrower has delivered
to the Lender true and complete copies of its Organizational Documents and will
promptly notify the Lender of any amendment or changes thereto. The Borrower’s
organizational identification number is 320840.

          Section 4.02 Authorization and Validity. The execution, delivery and
performance by the Borrower of the Loan Documents has been duly authorized by
all necessary company action by the Borrower, and such Loan Documents constitute
the legal, valid and binding obligations of the Borrower, enforceable against
the Borrower in accordance with their respective terms, subject to limitations
as to enforceability which might result from bankruptcy, insolvency, moratorium
and other similar laws affecting creditors’ rights generally and subject to
limitations on the availability of equitable remedies.

          Section 4.03 Company Name. The Borrower has not been known by any
other company name in the past five (5) years nor has the Borrower been the
surviving company of a merger or consolidation or acquired all or substantially
all of the assets of any Person during the preceding five (5) years, except in
connection the Acquisition.

          Section 4.04 No Conflict; No Default. The execution, delivery and
performance by the Borrower of the Loan Documents to which it is a party, and
the operation of the Project and construction of the Additional Improvements,
will not (a) violate any provision of any law, statute, rule or regulation or
any order, writ, judgment, injunction, decree, determination or award of any
court, governmental agency, arbitrator or other Governmental Body presently in
effect having applicability to the Borrower, (b) violate or contravene any
provisions of the Organizational Documents, (c) result in a breach of or
constitute a default under any indenture, loan or credit agreement or any other
agreement, lease or instrument to which the Borrower is a party or by which it
or any of its properties may be bound, or (d) result in the creation of any Lien
on any asset of the Borrower except for a Permitted Lien. The Borrower is not in
default under or in violation of any such law, statute, rule or regulation,
order, writ, judgment, injunction, decree, determination or award or any such
indenture, loan or credit agreement or other agreement, lease or instrument.

--------------------------------------------------------------------------------

          Section 4.05 Government Consent; Compliance With Laws. No order,
Consent, approval, license, authorization or validation of, or filing, recording
or registration with, or exemption by, any Governmental Body is required in
connection with the execution, delivery and performance of, or the legality,
validity, binding effect or enforceability of, the Loan Documents. The use of
the Project complies with all applicable zoning and environmental ordinances,
regulations and restrictive covenants affecting the Project and all requirements
for such use have been satisfied.

Section 4.06 Financial Statements and Condition; Solvency.

          (a)      The Borrower’s financial statements, as heretofore furnished
to the Lender, have been prepared in accordance with GAAP on a consistent basis
and fairly present the financial condition of the Borrower as at such dates and
the results of their operations and changes in financial position for the
respective periods then ended. The Borrower has no obligation, contingent
liability, liability for taxes or long term lease obligation which is not
reflected in such financial statements or in the notes thereto.

          (b)      As of the date hereof, and immediately prior to and after
giving effect to the Loans hereunder and the use of the proceeds thereof, (a)
the fair value of the Borrower’s assets is greater than the amount of its
liabilities (including disputed, contingent and unliquidated liabilities) as
such value is established and liabilities evaluated as required under the
Section 548 of the United Stated Bankruptcy Code, as amended, (b) the present
fair saleable value of the Borrower’s assets is not less than the amount that
will be required to pay the probable liability on its debts as they become
absolute and matured, (c) the Borrower is able to realize upon its assets and
pay its debts and other liabilities (including disputed, contingent and
unliquidated liabilities) as they mature in the normal course of business, (d)
the Borrower does not intend to, nor believes that it will, incur debts or
liabilities beyond its ability to pay as such debts and liabilities mature, and
(e) the Borrower is not engaged in business or a transaction, and is not about
to engage in business or a transaction, for which its property would constitute
unreasonably small capital.

          Section 4.07 Litigation. There are no actions, suits or proceedings
pending or, to the knowledge of the Borrower, threatened against or affecting
the Borrower, or any of its property before any court or arbitrator, or any
governmental department, board, agency or other Governmental Body.

          Section 4.08 ERISA. (a) the Borrower does not have an employee benefit
plan as defined in Section 3(1) of ERISA, whether or not subject to ERISA
(“Plan”); (b) no assets of the Borrower constitute assets of any such plan under
ERISA regulations or rulings; (c) with respect to any such plan that the
Borrower sponsors, participates in or has fiduciary duties with respect to, the
Borrower has materially complied with all federal and state laws, plan documents
and funding requirements; (d) the Borrower does not sponsor, participate in, or
have fiduciary duties with respect to any defined benefit pension plan subject
to Title IV of ERISA or any multi-employer pension plan as defined in Section
3(37)(A) of ERISA or any plan providing medical or other welfare benefits to
retirees or other former employees (except as required by federal or state law);
and (e) the Borrower is not (and has not ever been) a member of a group of
trades or businesses (whether or not incorporated) that is treated as a single
employer under Section 414 of the Internal Revenue Code.

--------------------------------------------------------------------------------

Section 4.09 O.S.H.A. and Environmental Compliance.

                    (a)      The Borrower has duly complied with, and its
facilities, business, assets, property, leaseholds and equipment are in
compliance in all material respects with, the provisions of the Federal
Occupational Safety and Health Act, the Environmental Protection Act, RCRA and
all other Environmental Laws; there have been no outstanding citations, notices
or orders of non-compliance issued to the Borrower or relating to its business,
assets, property, leaseholds or equipment under any such laws, rules or
regulations.

                    (b)      The Borrower has been issued all federal, state and
local licenses, certificates or permits relating to all applicable Environmental
Laws that Borrower is required to have as of the date of this Agreement.

                    (c)      Except as specifically disclosed to the Lender in
the Reports as identified on Schedule 4.09(c), to Borrower’s knowledge (i) there
are no releases, spills, discharges, leaks or disposal (collectively referred to
as “Releases”) of Hazardous Substances at, upon, under or within the Land or any
premises owned or leased by the Borrower; (ii) there are no underground storage
tanks or polychlorinated biphenyls on the Land or any premises owned or leased
by the Borrower, (iii) neither the Land nor any premise owned or leased by the
Borrower has ever been used as a treatment, storage or disposal facility of
Hazardous Waste; and (iv) no Hazardous Substances are present on the Land or any
premises owned or leased by the Borrower, excepting such quantities as are
handled in accordance with all applicable manufacturer’s instructions and
governmental regulations and in proper storage containers and as are necessary
for the operation of the commercial business of the Borrower or of its tenants.

          Section 4.10 Regulation U. The Borrower is not engaged in the business
of extending credit for the purpose of purchasing or carrying margin stock (as
defined in Regulation U of the Board of Governors of the Federal Reserve System)
and no part of the proceeds of the Loans will be used to purchase or carry
margin stock or for any other purpose which would violate any of the margin
requirements of the Board of Governors of the Federal Reserve System.

          Section 4.11 Ownership of Property; Liens. Upon the closing of the
Acquisition Agreement, the Borrower will be the owner of the Land and the
Project in fee simple and of all personal property described in the Mortgage
delivered herewith, and has no knowledge of any unrecorded claims, liens, or
encumbrances against the Property or such personal property other than Permitted
Liens.

          Section 4.12 Utilities. To Borrower’s knowledge, all utility services
necessary for the proper operation of the Project for its intended purpose are
available at the Project or will be made available to the Project prior to
completion of construction of the Additional Improvements at standard utility
rates and hook-up charges, including without limitation water supply, storm and
sanitary sewer facilities, energy and communications facilities.

--------------------------------------------------------------------------------

          Section 4.13 Taxes. The Borrower’s federal tax identification number
is 20-402-6473. The Borrower has filed all federal, state and local tax returns
and other reports required to be filed and has paid or made provision for the
payment of all taxes due and payable pursuant to such returns and pursuant to
any assessments made against it or any of its property and all other taxes, fees
and other charges imposed on it or any of its property by any Governmental Body
(other than taxes, fees or charges the amount or validity of which is currently
being contested in good faith by appropriate proceedings and with respect to
which reserves in accordance with GAAP have been provided on the books of the
Borrower). No tax Liens have been filed and no material claims are being
asserted with respect to any such taxes, fees or charges. The provision for
taxes on the books of the Borrower are adequate for all years not closed by
applicable statutes, and for its current fiscal year, and the Borrower has no
knowledge of any deficiency or additional assessment in connection therewith no
provided for on its books.

          Section 4.14 Trademarks, Patents, Etc. To Borrower’s knowledge, all
patents, patent applications, trademarks, trademark applications, service marks,
service mark applications, copyrights, copyright applications, design rights,
tradenames, assumed names, trade secrets and licenses owned or utilized by the
Borrower are valid and have been duly registered or filed with the appropriate
Governmental Bodies and constitute all of the intellectual property rights which
are necessary for the operation of its business; to Borrower’s knowledge, there
is no objection to or pending challenge to the validity of any such patent,
trademark, copyright, design right, tradename, trade secret or license and the
Borrower is not aware of any grounds for any challenge. To Borrower’s knowledge,
each patent, patent application, patent license, trademark, trademark
application, trademark license, service mark, service mark application, service
mark license, design right, copyright, copyright application and copyright
license owned or held by the Borrower and all trade secrets use by the Borrower
consist of original material or property developed by such Borrower or was
lawfully acquired by such Borrower from the proper and lawful owner thereof.

          Section 4.15 Investment Company Act. The Borrower is not an
“investment company” or a company “controlled” by an investment company within
the meaning of the Investment Company Act of 1940, as amended.

          Section 4.16 Partnerships and Joint Ventures. The Borrower is not a
party to any partnership or joint venture.

          Section 4.17 Insurance. The Borrower currently maintains the insurance
coverages required to be maintained under Section 5.03 hereof. The Borrower does
not participate in any retrospective rating plan, fronting arrangement or other
self-insurance or risk assumption arrangement.

          Section 4.18 Indebtedness. The Borrower has no Indebtedness other than
Permitted Indebtedness.

          Section 4.19 Labor Matters. (a) on the date of this Agreement the
Borrower is not a party to any labor dispute and there are no strikes,
slowdowns, stoppages or walkouts relating to any labor contracts to which the
Borrower is subject; and (b) there is no unfair labor practice complaint pending
against the Borrower or, to the best knowledge of the Borrower, threatened
against the Borrower, before the National Labor Relations Board or similar
foreign entity, and no grievance or arbitration proceeding arising out of or
under any collective bargaining agreement is so pending against the Borrower or,
to the best knowledge of the Borrower, threatened against the Borrower.

--------------------------------------------------------------------------------

          Section 4.20 Agricultural Lien Matters. No processing, packaging or
other work is performed by any party with respect to inventory of the Borrower
which could give rise to a Lien in favor of such party for amounts due for the
processing, packaging or other work performed. Borrower has not received written
notice from any unpaid seller, supplier, cooperative or agent of such party’s
intent to preserve the benefits of any trust created under any statute, law or
regulation (or other mandatory provision of state or local law) that could
either (a) create or give rise to an agricultural lien (as defined in the
Uniform Commercial Code), or (b) create a Lien against, or impose a trust upon,
some portion of Borrower’s inventory (and/or the accounts receivable derived
therefrom) for the benefit of unpaid sellers, any broker acting on behalf of any
seller, or any cooperative. Borrower is not a “dealer” or a “broker” as defined
in any agricultural lien statute, and, as such, Borrower does not maintain a
license as a “dealer” or “broker” under any such statute.

          Section 4.21 Material Contracts. Except for the agreements set forth
on Schedule 4.21, attached hereto, copies of which have been delivered to
Lender, and the Acquisition Documents, there are no (a) employment agreements
covering the management of the Borrower, (b) collective bargaining agreements or
other similar labor agreements covering any employees of the Borrower, (c)
agreements for managerial, consulting or similar services to which the Borrower
is a party or by which it is bound, (d) agreements regarding the Borrower, its
assets or operations or any investment therein to which any of its equity
holders is a party or by which it is bound, (e) real estate leases, intellectual
property licenses or other lease or license agreements to which the Borrower is
a party, either as lessor or lessee, or as licensor or licensee (other than
licenses arising from the purchasing by the Borrower of “off the shelf”
products), (f) customer, distribution, marketing or supply agreements to which
the Borrower is a party, (g) third party billing arrangements to which the
Borrower is a party, or (i) any other agreements or instruments to which the
Borrower is a party, and the breach, nonperformance or cancellation of which, or
the failure of which to renew, could reasonably be expected to have a material
adverse effect on the Borrower (collectively “Material Contracts”). Promptly
upon execution of any Material Contract, Borrower shall provide Lender a copy of
such Material Contract.

          Section 4.22 Subsidiaries. The Borrower does not own any stock,
partnership interest, limited liability company interests or other equity
securities or ownership in any other business entity.

          Section 4.23 Anti-Terrorism Laws.

 

 

 

          (a)     General. Neither the Borrower nor any Affiliate of the
Borrower, is in violation of any Anti-Terrorism Law or engages in or conspires
to engage in any transaction that evades or avoids, or has the purpose of
evading or avoiding, or attempts to violate, any of the prohibitions set forth
in any Anti-Terrorism Law.

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          (b)       Executive Order No. 13224.

 

 

 

 

 

          (i) Neither the Borrower nor any Affiliate of the Borrower, or their
respective agents acting or benefiting in any capacity in connection with the
Loans or other transactions hereunder, is any of the following (each a “Blocked
Person”):

 

 

 

 

 

 

 

 

 

(x)

a Person that is listed in the annex to, or is otherwise subject to the
provisions of, the Executive Order No. 13224;

 

 

 

 

 

(xi)

a Person owned or controlled by, or acting for or on behalf of, any Person that
is listed in the annex to, or is otherwise subject to the provisions of, the
Executive Order No. 13224;

 

 

 

 

 

(xii)

a Person or entity with which the Lender is prohibited from dealing or otherwise
engaging in any transaction by any Anti-Terrorism Law;

 

 

 

 

 

(xiii)

a Person or entity that commits, threatens or conspires to commit or supports
“terrorism” as defined in the Executive Order No. 13224;

 

 

 

 

 

(xiv)

a Person or entity that is named as a “specially designated national” on the
most current list published by the U.S. Treasury Department Office of Foreign
Asset Control at its official website or any replacement website or other
replacement official publication of such list, or

 

 

 

 

(xv)

a Person or entity who is affiliated or associated with a Person or entity
listed above.

 

 

 

 

 

          (ii) The Borrower, or to the knowledge of the Borrower, none of its
agents acting in any capacity in connection with the Loans or other transactions
hereunder (i) conducts any business or engages in making or receiving any
contribution of funds, goods or services to or for the benefit of any Blocked
Person, or (ii) deals in, or otherwise engages in any transaction relating to,
any property or interests in property blocked pursuant to the Executive Order
No. 13224.

          Section 4.24 Conflicting Agreements. No provision of any mortgage,
indenture, contract, agreement, judgment, decree or order binding on the
Borrower or affecting the Collateral conflicts with, or requires any Consent
which has not already been obtained to, or would in any way prevent the
execution, delivery or performance of, the terms of this Agreement or the other
Loan Documents.

          Section 4.25 Application of Certain Laws and Regulations. Neither the
Borrower nor any Affiliate of Borrower is subject to any statute, rule or
regulation which regulates the incurrence of any Indebtedness, including without
limitation, statutes or regulations relative to common or interstate carriers or
to the sale of electricity, gas, steam, water, telephone, telegraph or other
public utility services.

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          Section 4.26 Delivery of Acquisition Documents. The Lender has
received complete copies of the Acquisition Documents (including all exhibits,
schedules and disclosure letters referred to therein or delivered pursuant
thereto, if any) and all amendments thereto, waivers relating thereto and other
side letters or agreements affecting the terms thereof. None of such documents
and agreements has been amended or supplemented, nor have any of the provisions
thereof been waived, except pursuant to a written agreement or instrument which
has heretofore been delivered to the Lender.

          Section 4.27 True and Complete Disclosure. All factual information
(taken as a whole) heretofore or contemporaneously furnished by or on behalf of
the Borrower to the Lender (including, without limitation, all information
contained in the Loan Documents) for purposes of or in connection with this
Agreement or any transactions contemplated herein is, and all other such factual
information (taken as a whole) furnished by or on behalf of the Borrower to the
Lender after the date hereof will be, true and accurate in all material respects
on the date as of which such information is dated or certified and not
incomplete by omitting to state any material fact necessary to make such
information, taken as a whole, not misleading at such time in light of the
circumstances under which such information was provided. There is no fact known
to the Borrower which materially and adversely affects the business, operations,
property, assets, nature of assets, liabilities, condition (financial or
otherwise) or prospects of the Borrower, taken as a whole, which has not been
disclosed herein or in such other documents, certificates and written statements
furnished to the Bank for use in connection with the transactions contemplated
hereby.

ARTICLE V

AFFIRMATIVE COVENANTS

          From the date of this Agreement and thereafter until all obligations
of the Borrower to the Lender have been paid in full, the Borrower will do all
of the following:

5.01 Financial Statements and Reports. Furnish to the Lender:

          (a)      As soon as available and in any event within 120 days after
the end of each fiscal year of the Borrower, the annual financial statements of
the Borrower prepared in conformity with GAAP, consisting of at least statements
of income, cash flow, changes in financial position and member equity, and a
consolidated balance sheet as at the end of such year, setting forth in each
case in comparative form corresponding figures from the previous annual
financial statements audited by independent certified public accountants of
recognized standing selected by the Borrower and reasonably acceptable to the
Lender, together with any management letters, management reports or other
supplementary comments or reports to the Borrower or its board of directors
furnished by such accountants.

          (b)      As soon as available and in any event within 30 days after
the end of each calendar month, a copy of the unaudited financial statement of
the Borrower prepared in the same manner as the financial statements referred to
in Section 5.01(a), signed by the Borrower’s chief financial officer or other
officer of similar position, consisting of at least consolidated statements of
income, cash flow, changes in financial position and member equity for the
Borrower for such month and for the period from the beginning of the current
fiscal year to the end of such month, and a consolidated balance sheet of the
Borrower as at the end of such month.

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          (c)      Immediately upon becoming aware of any Default or Event of
Default, a notice describing the nature thereof and what action the Borrower
proposes to take with respect thereto.

          (d)      Immediately upon becoming aware of the occurrence thereof,
notice of the institution of any litigation, arbitration or governmental
proceeding, or the rendering of a judgment or decision in such litigation or
proceeding, which is material to the Borrower

          (e)     Immediately upon becoming aware of the occurrence thereof,
notice of any breach or default by the Borrower or any other party under any
Material Contract.

          (f)      As soon as available and in any event within 30 days after
the end of each calendar month, a report of any and all commodities
transactions, including commodities hedging transactions engaged in by the
Borrower during such calendar month.

          (g)      Promptly upon the mailing or filing thereof, copies of all
reports (including the final form of any financial statements and reports) and
proxy statements mailed to the Borrower’s members generally, and copies of all
registration statements, periodic reports and other documents filed with the
Securities and Exchange Commission (or any successor thereto) or any national
securities exchange.

          (h)     From time to time, such other information regarding the
business, operation and financial condition of the Borrower, as the Lender may
reasonably request.

          Section 5.02 Organizational Existence. Maintain its limited liability
company existence under the laws of its jurisdiction of organization and its
qualification to transact business in each jurisdiction in which the character
of the properties owned, leased or operated by it or the business conducted by
it makes such qualification necessary.

          Section 5.03 Insurance. Maintain with financially sound and reputable
insurance companies such insurance as set forth on Exhibit A attached hereto,
and such other insurance in such amounts and against such hazards as is
customary in the case of reputable companies engaged in the same or similar
business and similarly situated or as the Lender may reasonably request from
time to time.

          Section 5.04 Payment of Taxes and Claims. File all tax returns and
reports which are required by law to be filed by it and pay before they become
delinquent all taxes, assessments and governmental charges and levies imposed
upon it or its property and all claims or demands of any kind (including,
without limitation, those of suppliers, mechanics, carriers, warehouses,
landlords and other like Persons); provided that the foregoing items need not be
paid if they are being contested in good faith by appropriate proceedings, and
as long as the Borrower’s title to its property is not materially adversely
affected, its use of such property in the ordinary course of its business is not
materially interfered with and adequate reserves with respect thereto have been
set aside on the Borrower’s books in accordance with GAAP.

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          Section 5.05 Inspection. Permit Lender or Lender’s agent to visit and
inspect any of its properties, company books and financial records, to examine
and to make copies of its books of accounts and other financial records, and to
discuss the affairs, finances and accounts of the Borrower with, and to be
advised as to the same by, its officers at such reasonable times and intervals
as Lender may designate from time to time. The inspections under this Section
5.05 shall be at the expense of Lender; provided, however, if the Borrower is in
Default, the costs of the inspections under this Section 5.05 shall be at
Borrower’s sole cost and expense.

          Section 5.06 Maintenance of Properties. Maintain its properties used
or useful in the conduct of its business in good condition, repair and working
order, and supplied with all necessary equipment, and make all necessary
repairs, renewals, replacements, betterments and improvements thereto, all as
may be necessary so that the business carried on in connection therewith may be
properly and advantageously conducted at all times.

          Section 5.07 Books and Records. Keep adequate and proper records and
books of account in which full and correct entries will be made of its dealings,
business and affairs.

          Section 5.08 Compliance. Comply with all laws, rules, regulations,
orders, writs, judgments, injunctions, decrees or awards to which it may be
subject and not be or become subject at any time to any law, regulation, or list
of any government agency (including, without limitation, the U.S. Office of
Foreign Asset Control list) that prohibits or limits Lender from making any
advance or extension of credit to the Borrower or from otherwise conducting
business with the Borrower.

          Section 5.09 Environmental Matters.

                                  (a)      The Borrower shall ensure the Land
remains in compliance with all Environmental Laws and it shall not place or
permit to be placed any Hazardous Substances on the Land except as permitted by
applicable laws or appropriate law or appropriate Governmental Bodies.

                                  (b)      Borrower shall establish and maintain
a system to assure and monitor compliance with all applicable Environmental Laws
which systems shall include periodic reviews of such compliance.

                                  (c)      The Borrower shall (i) employ in
connection with the use of the Land appropriate technology necessary to maintain
compliance with any applicable Environmental Laws and (ii) dispose of any and
all Hazardous Waste generated at the Land only at facilities and with carriers
that maintain valid permits under RCRA and any other applicable Environmental
Laws. The Borrower shall use its best efforts to obtain certificates of
disposal, such as hazardous waste manifest receipts, from all treatment,
transport, storage or disposal facilities or operators employed by the Borrower
in connection with the transport or disposal of any Hazardous Waste generated at
the Land.

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                                  (d)      In the event that the Borrower
obtains, gives or receives notice of any Release or threat of Release of a
reportable quantity of any Hazardous Substances at the Land (any such event
being hereinafter referred to as a “Hazardous Discharge”) or receives any notice
of violation, request for information or notification that it is potentially
responsible for investigation or cleanup of environmental conditions at the
Land, demand letter or complaint, order, citation, or other written notice with
regard to any Hazardous Discharge or violation of Environmental Laws affecting
the Land or any of the Borrower’s interest therein (any of the foregoing is
referred to herein as an “Environmental Complaint”) from any Person, including
any state agency responsible in whole or in part for environmental matters in
the state in which the Land is located or the United States Environmental
Protection Agency (any such Person or entity hereinafter the “Authority”), then
the Borrower shall, within five (5) Business Days, give written notice of same
to the Lender detailing facts and circumstances of which the Borrower is aware
giving rise to the Hazardous Discharge or Environmental Complaint. Such
information is to be provided to allow the Lender to protect its security
interest in the Land and the Collateral and is not intended to create nor shall
it create any obligation upon the Lender with respect thereto.

                                  (e)      The Borrower shall promptly forward
to the Lender copies of any request for information, notification or potential
liability, demand letter relating to potential responsibility with respect to
the investigation or cleanup of Hazardous Substances at any other site owned,
operated or used by the Borrower to dispose of Hazardous Substances and shall
continue to forward copies of correspondence between the Borrower and the
Authority regarding such claims to the Lender until the claim is settled. The
Borrower shall promptly forward to the Lender copies of all documents and
reports concerning a Hazardous Discharge at the Land that the Borrower is
required to file under any Environmental Laws. Such information is to be
provided solely to allow the Lender to protect the Lender’s security interest in
the Land and the Collateral.

                                  (f)      The Borrower shall respond promptly
to any Hazardous Discharge or Environmental Complaint and take all necessary
action in order to safeguard the health of any Person and to avoid subjecting
the Collateral or Land to any Lien. If the Borrower shall fail to respond
promptly to any Hazardous Discharge or Environmental Complaint or the Borrower
shall fail to comply with any of the requirements of any Environmental Laws, the
Lender may, but without the obligation to do so, for the sole purpose of
protecting Lender’s interest in Collateral: (A) give such notices or (B) enter
onto the Land (or authorize third parties to enter on the Land) and take such
actions as the Lender (or such third parties as directed by the Lender) deem
reasonably necessary or advisable, to clean up, remove, mitigate or otherwise
deal with any such Hazardous Discharge or Environmental Complaint. All
reasonable costs and expenses incurred by the Lender (or such third parties) in
the exercise of any such rights, including any sums paid in connection with any
judicial or administrative investigation or proceedings, fines and penalties,
together with interest thereon from the date expended at the Default Rate shall
be paid upon demand by the Borrower, and until paid shall be added to and become
a part of the Obligations secured by the Liens created by the terms of this
Agreement, the Security Documents or any other agreement between the Lender and
the Borrower.

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                                  (g)      Promptly upon the written request of
the Lender after a Hazardous Discharge or Environmental Complaint, the Borrower
shall provide the Lender, at the Borrower’s expense, with an environmental site
assessment or environmental audit report prepared by an environmental
engineering firm acceptable in the reasonable opinion of the Lender, to assess
with a reasonable degree of certainty the existence of a Hazardous Discharge and
the potential costs in connection with abatement, cleanup and removal of any
Hazardous Substances found on, under, at or within the Land. Any report or
investigation of such Hazardous Discharge proposed and acceptable to an
appropriate Authority that is charged to oversee the cleanup of such Hazardous
Discharge shall be acceptable to the Lender. If such estimates, individually or
in the aggregate, exceed $100,000, the Lender shall have the right to require
the Borrower to post a bond, letter of credit or other security reasonably
satisfactory to the Lender to secure payment of these costs and expenses.

                                  (h)      The Borrower shall complete all
actions set forth in the Holdback Reserve Agreement in compliance with the time
schedules and other requirements established in said such agreement, all
applicable laws and regulations, and the appropriate requirements of any
Governmental Bodies.

                                  (i)      The Borrower shall defend and
indemnify the Lender and hold the Lender and its respective employees, agents,
directors and officers harmless from and against all loss, liability, damage and
expense, claims, costs fines and penalties, including attorneys’ fees, suffered
or incurred by the Lender under or on account of any Environmental Laws,
including, without limitation, the assertion of any Lien thereunder, with
respect to any Hazardous Discharge, the presence of any Hazardous Substances
affecting the Land, whether or not the same originates or emerges from the Land
or any contiguous real estate, including any loss of value of the Land as a
result of the foregoing except to the extent such loss, liability, damage and
expense is attributable to any Hazardous Discharge resulting from actions on the
part of the Lender, provided that this indemnity shall not be applicable to the
presence of any Hazardous Substance on the Land to the extent that (1) such
Hazardous Substance is disclosed in the Reports at Closing and (2) the Borrower
takes all necessary action to clean up, remove, mitigate or otherwise deal with
any such Hazardous Substances in compliance with the requirements of this
Agreement, all applicable laws and regulations, and the requirements of
Governmental Bodies. The Borrower’s obligations under this Section 5.09 shall
arise upon the discovery of the presence of any Hazardous Substances at the
Land, whether or not any federal, state or local environmental agency has taken
or threatened any action in connection with the presence of any Hazardous
Substances. The Borrower’s obligation and the indemnifications hereunder shall
survive the termination of this Agreement.

          Section 5.10 Construction of Additional Improvements. (a) Commence
construction of the Additional Improvements on or before the Commencement Date,
(b) diligently proceed with construction of the Additional Improvements
according to the Plans and Specifications and in accordance with all applicable
laws and ordinances, (c) cause the Additional Improvements to be completed by
the Completion Date, (d) require each Contractor to comply with all rules,
regulations, ordinances and laws bearing on its conduct of work on the Project.

          Section 5.11 Accounts. Maintain all operating accounts (i.e., accounts
for depositing revenues and paying expenses) with the Depository Institution
until all amounts owing to the Lender under this Agreement, the Note and the
Security Documents have been fully repaid.

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          Section 5.12 Appraisal. Within forty-five (45) days after written
request from the Lender, provide Lender an updated appraisal of the Project, the
cost of which shall be born by Borrower if at the time of Lender’s notice there
exists any Default or Event of Default.

          Section 5.13 Intentionally Deleted.

          Section 5.14 Conduct of Business and Maintenance of Existence and
Assets. (a) Conduct continuously and operate actively its business according to
good business practices and maintain all of its properties useful or necessary
in its business in good working order and condition (reasonable wear and tear
excepted and except as may be disposed of in accordance with the terms of this
Agreement), including, without limitation, all licenses, patents, copyrights,
design rights, tradenames, trade secrets and trademarks and take all actions
necessary to enforce and protect the validity of any intellectual property right
or other right included in the Collateral; (b) keep in full force and effect its
existence and comply in all material respects with the laws and regulations
governing the conduct of its business where the failure to do so could
reasonably be expected to have a Material Adverse Effect on the Borrower; and
(c) make all such reports and pay all such franchise and other taxes and license
fees and do all such other acts and things as may be lawfully required to
maintain its rights, licenses, leases, powers and franchises under the laws of
the United States or any political subdivision thereof.

          Section 5.15 Violations. Promptly notify the Lender in writing of any
violation of any law, statute, regulation or ordinance of any Governmental Body,
or of any agency thereof, applicable to the Borrower which could reasonably be
expected to have a Material Adverse Effect on the Borrower.

          Section 5.16 Execution of Supplemental Instruments. Execute and
deliver to the Lender from time to time, upon demand, such supplemental
agreements, statements, assignments and transfers, or instructions or documents
relating to the Collateral, and such other instruments as the Lender may
request, in order that the full intent of this Agreement may be carried into
effect.

          Section 5.17 Payment of Indebtedness. Pay, discharge or otherwise
satisfy at or before maturity (subject, where applicable, to specified grace
periods and, in the case of the trade payables, to normal payment practices) all
of its obligations and liabilities of whatever nature, except when the failure
to do so could not reasonably be expected to have a Material Adverse Effect or
when the amount or validity thereof is currently being contested in good faith
by appropriate proceedings and the Borrower shall have provided for such
reserves as the Lender may reasonably deem proper and necessary, subject at all
times to any applicable subordination agreement in favor of the Lender, the
Subordinated Intercreditor Agreement, and the Working Capital Intercreditor
Agreement.

          Section 5.18 Holdback Reserve. Comply at all times with the terms and
conditions of the Holdback Reserve Agreement.

          Section 5.19 Debt Service Reserve. Maintain at all times the Debt
Service Reserve, pursuant to the Debt Service Reserve and Security Agreement and
perform all of Borrower’s obligations under the Debt Service Reserve and
Security Agreement.

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          Section 5.20 Additional Improvements Escrow. Maintain at all times the
Additional Improvements Escrow, pursuant to the terms and conditions of the
Additional Improvements Escrow Agreement and perform all of Borrower’s
obligations under the Additional Improvements Escrow Agreement.

          Section 5.21 Debt to Equity Ratio. Maintain at all times a Debt to
Equity Ratio of 1.0 to 1.0.

          Section 5.22 Additional Deliveries. The Borrower shall deliver to
Lender each of the following, on or before the earlier of (i) the date that is
ninety (90) days after the Closing Date, or (ii) the date Borrower commences
construction of the Additional Improvements:

          (a)      Permits. Copies of all building permits and such other
licenses and permits as may be required by any Governmental Body to construct
the Additional Improvements and operate the Project.

          (b)      Builder’s Risk Insurance. Copies of the policies of builder’s
risk insurance (including business interruption insurance) and comprehensive
general liability insurance and a certificate of the worker’s compensation
insurance as required under Section 5.03 of this Agreement, with all such
insurance in full force and effect.

          (c)      Repair and Replacement Plan. The Repair and Replacement Plan
related to the repair of the Project as set forth on Schedule 8.6(a) of the
Acquisition Agreement, mutually acceptable to Borrower and Lender pursuant to
the terms of the Acquisition Agreement.

ARTICLE VI

NEGATIVE COVENANTS

The Borrower agrees that, subject to the terms and conditions of this Agreement,
without the prior written consent of the Lender, it shall not:

          Section 6.01 Transfers. Voluntarily, involuntarily or by operation of
law agree to, cause, suffer or permit (i) any sale, transfer, lease, sublease or
conveyance of any interest of the Borrower, legal or equitable, in the Project;
(ii) any sale, transfer or encumbrance of any of the member interests in the
Borrower, except for sales, transfers or encumbrances when aggregated with all
other sales, transfers or encumbrances of membership interests of Borrower
during the previous three months will not result in the sale, transfer or
encumbrance of more than a majority of the outstanding membership interests of
Borrower during such three month period; or (iii) any mortgage, pledge,
encumbrance or Lien to be outstanding against the Project or any portion
thereof, or any security interest to exist therein, except for Permitted Liens.
If the Borrower breaches the foregoing covenant, the Lender may, at its
election, declare all amounts owing under this Agreement, the Note and the
Security Documents to be immediately due and payable, without notice to the
Borrower (which notice the Borrower hereby expressly waives), and upon such
declaration all such amounts shall be immediately due and payable. No transfer,
conveyance, lease, sale or other disposition shall relieve the Borrower from
personal liability for its obligations hereunder or under the Note, whether or
not the transferee assumes such obligations. The Lender may, without notice to
the Borrower, deal with any successor owner of all or any portion of the Project
in the same manner as with the Borrower, without in any way discharging the
liability of the Borrower hereunder or under the Note.

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          Section 6.02 Modifications to Material Contracts. Without the prior
written consent of the Lender, which consent shall not be unreasonably withheld,
agree or consent to any change in the terms of any Material Contract.

          Section 6.03 Liens. Not create, incur or suffer to exist any Lien,
except for Permitted Liens.

          Section 6.04 Indebtedness. Not incur, create, assume, permit or suffer
to exist, any Indebtedness except Permitted Indebtedness. Prior to obtaining any
Working Capital Loan Borrower shall deliver to Lender a fully executed copy of
the Working Capital Intercreditor Agreement. Prior to obtaining any Subordinated
Loan Borrower shall deliver to Lender a fully executed copy of the Subordinated
Intercreditor Agreement.

          Section 6.05 Mergers and Acquisitions. Not consolidate with or merge
into any other Person, or permit any other Person to merge into it, or acquire
(in a transaction analogous in purpose or effect to a consolidation or merger)
all or substantially all of the assets or stock of any other Person.

          Section 6.06 Transactions With Affiliates. Directly or indirectly,
purchase, acquire or lease any property from, or sell, transfer or lease any
property to, or otherwise deal with any Affiliate, except transactions in the
ordinary course of business, on an arm’s length basis on terms no less favorable
than terms which would have been obtainable from a Person other than an
Affiliate.

          Section 6.07 Fixed Charge Coverage Ratio. Commencing with the calendar
month ending on December 31, 2012, allow the Fixed Charge Coverage Ratio to be
less than 1.15 to 1.0, as determined on the last day of each calendar month both
(i) for such calendar month and (ii) for the immediately preceding twelve month
period.

          Section 6.08 Distributions. Make any distributions to members of the
Borrower, or otherwise permit any redemption or return of capital to any member
of the Borrower, except as expressly permitted pursuant in this Section 6.08.
The Borrower may make periodic distributions to members of the Borrower provided
that (i) such distributions are made solely from earnings of the Borrower and do
not constitute a redemption of a member’s equity interest or return of capital,
(ii) immediately prior to and immediately after such distribution there exists
no Default or Event of Default and (iii) immediately prior to and immediately
after such distribution, a minimum of $150,000 remains on deposit in the Debt
Service Reserve.

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          Section 6.09 Anti-Terrorism Laws. The Borrower and its Affiliates and
agents shall not (i) conduct any business or engage in any transaction or
dealing with any Blocked Person, including the making or receiving any
contribution of funds, goods or services to or for the benefit of any Blocked
Person, (ii) deal in, or otherwise engage in any transaction relating to, any
property or interests in property blocked pursuant to Executive Order No. 13224;
or (iii) engage in or conspire to engage in any transaction that evades or
avoids, or has the purpose of evading or avoiding, or attempts to violate, any
of the prohibitions set forth in Executive Order No. 13224, the USA Patriot Act
or any other Anti-Terrorism Law. The Borrower shall deliver to the Lender any
certificates or other evidence requested from time to time by the Lender in its
sole discretion, confirming the Borrower’s compliance with this Section 6.09.

          Section 6.10 Guarantees. Become liable upon the obligations of any
Person by assumption, endorsement or guaranty thereof or otherwise (other than
to the Lender) except (a) guarantees made in the ordinary course of business up
to an aggregate amount of $100,000, and (b) the endorsement of checks in the
ordinary course of business.

          Section 6.11 Investments. Except as otherwise specifically consented
to in writing by the Lender, purchase or acquire obligations or stock of, or any
other interest in, any Person, except (a) obligations issued or guaranteed by
the United States of America or any agency thereof, (b) commercial paper with
maturities of not more than 180 days and a published rating of not less than A-1
or P-1 (or the equivalent rating), (c) certificates of time deposit and bankers’
acceptances having maturities of not more than 180 days and repurchase
agreements backed by United States government securities of a commercial bank if
(i) such bank has a combined capital and surplus of at least $500,000,000 or
such certificates of deposits do not exceed FDIC limits, or (ii) its debt
obligations, or those of a holding company of which it is a Subsidiary, are
rated not less than A (or the equivalent rating) by a nationally recognized
investment rating agency, and (d) U.S. money market funds that invest solely in
obligations issued or guaranteed by the United States of America or an agency
thereof.

          Section 6.12 Plans. The Borrower will not permit any event to occur or
condition to exist which would permit any Plan to terminate under any
circumstances which would cause the Lien provided for in Section 4068 of ERISA
to attach to any assets of the Borrower; and the Borrower will not permit, as of
the most recent valuation date for any Plan subject to Title IV of ERISA, the
present value (determined on the basis of reasonable assumptions employed by the
independent actuary for such Plan and previously furnished in writing to the
Lender) of such Plan’s projected benefit obligations to exceed the fair market
value of such Plan’s assets.

          Section 6.13 Change in Nature of Business. The Borrower will not
engage in any material line of business substantially different from those lines
of business carried on by it on the date hereof or any business similarly
related to or which constitutes a reasonable extension thereof.

          Section 6.14 Subsidiaries. The Borrower shall not form any Subsidiary
or enter into any partnership, joint venture or similar arrangement.

          Section 6.15 Negative Pledges. The Borrower will not enter into any
agreement, bond, note or other instrument with or for the benefit of any Person
other than the Lender which would (i) prohibit the Borrower from granting, or
otherwise limit the ability of the Borrower to grant, to the Lender any Lien on
any assets or properties of the Borrower, or (ii) require the Borrower to grant
a Lien to any other Person if the Borrower grants any Lien to the Lender other
than, in each case, (a) in connection with any document or instrument governing
capital leases and purchase money expenditures or other Indebtedness permitted
by this Agreement, provided that any such restriction contained therein relates
only to the asset or assets that are the subject thereof and (b) licenses and
contracts providing that the granting of such Lien in the right, title or
interest of the Borrowers therein would be prohibited and would, in and of
itself, cause or result in a default hereunder enabling another Person party to
such license or contract to enforce any remedy with respect thereto.

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          Section 6.16 Fiscal Year and Accounting Changes. Change its fiscal
year from an October 31 fiscal year end or make any change (i) in accounting
treatment and reporting practices except as required by GAAP or (ii) in tax
reporting treatment except as required by law.

          Section 6.17 Capital Expenditures. Except for the Additional
Improvements, contract for, purchase or make any expenditure or commitments for
fixed or capital assets (including capitalized leases) in any fiscal year in an
aggregate amount in excess of $1,000,000.

          Section 6.18 Amendment of Organizational Documents. Amend, modify or
waive any term or material provision of its Organizational Documents unless
required by law; provided, however, the Lender’s consent to any amendment,
modification or waiver shall not be unreasonably withheld.

          Section 6.19 Prepayment of Indebtedness. Except as otherwise permitted
pursuant to Section 6.20, at any time, directly or indirectly, prepay any
Indebtedness (other than to Lender), or repurchase, redeem, retire or otherwise
acquire any Indebtedness of the Borrower.

          Section 6.20 Indebtedness. After and during the continuance of an
Event of Default, directly or indirectly, pay, prepay, repurchase, redeem,
retire or otherwise acquire, or make any payment on account of any principal of,
interest on or premium payable in connection with the repayment or redemption of
the Subordinated Loan, the Working Capital Loan or any other Permitted
Indebtedness.

          Section 6.21 Loans. Make advances, loans or extensions of credit to
any Person, including without limitation, any parent, Subsidiary or Affiliate
except, subject to the terms and conditions of this Agreement (a) with respect
to the extension of commercial trade credit in connection with the sale of
inventory in the ordinary course of its business and (b) loans made to ethanol
producers to finance the installation of corn oil extraction units, provided
that the maximum principal amount of such loans described in this subparagraph
(b) shall not exceed $6,000,000.

ARTICLE VII

EVENTS OF DEFAULT AND RIGHTS AND REMEDIES

          Section 7.01 Events of Default. Each of the following shall constitute
an Event of Default.

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          (a)     The Borrower shall fail to pay any interest or principal on
the Obligations when due, whether at maturity or by reason of acceleration
pursuant to the terms of this Agreement or the Note;

 

 

 

 

          (b)     Any representation or warranty made by the Borrower herein, in
the Security Documents or in any financial statement, certificate or report
furnished at any time pursuant to this Agreement or the Security Documents shall
prove to have been misleading or untrue in any material respect as of the time
such representation or warranty was made;

 

 

 

 

          (c)     The Borrower shall be in default under Sections 5.19, 5.20,
5.22 or any provision of Article 6 of this Agreement;

 

 

 

 

          (d)     The Borrower shall be in default under the Holdback Reserve
Agreement.

 

 

 

 

          (e)     The Borrower shall fail to (i) furnish financial information
when due or when requested which is unremedied for a period of fifteen (15)
days, or (ii) permit the inspection of its books and records;

 

 

 

 

          (f)     The Borrower shall fail or neglect to duly observe or perform,
any of the terms, conditions, covenants or agreements required to be observed or
performed by the Borrower hereunder (other than terms, conditions, covenants or
agreements otherwise specifically dealt with in this Article VII), except for a
failure or neglect of the Borrower to perform, keep or observe any term,
provision, condition or covenant which is cured within thirty (30) days from the
occurrence of such failure or neglect;

 

 

 

 

          (g)     The Borrower shall be in default under or in breach of any of
the covenants contained in any of the Security Documents and such default or
breach shall not be cured or waived within the period or periods of grace, if
any, applicable thereto;

 

 

 

 

          (h)     The Project shall be materially damaged or destroyed by fire
or other casualty and the loss, in the reasonable judgment of the Lender, shall
not be adequately covered by insurance actually collected or in the process of
collection or by other funds available to the Borrower;

 

 

 

 

          (i)      There shall have been a cessation of the making of the
Additional Improvements for any period after the date of commencement of the
making of the Additional Improvements in excess of twenty (20) successive
calendar days, unless the conditions of each of subparagraphs (1) and (2) below
shall have been satisfied:

 

 

 

 

 

          (1)     the cessation of the making of the Additional Improvements
shall have been caused by conditions beyond the control of the Borrower,
including, without limitation, acts of God or the elements, fire, strikes, labor
disputes, delays in delivery of any material;

--------------------------------------------------------------------------------

 

 

 

 

 

          (2)     from time to time upon the Lender’s request therefor during
any such cessation of the making of the Additional Improvements, the Borrower
shall furnish to the Lender satisfactory evidence that (notwithstanding such
cessation of the making of the Additional Improvements) the completion of the
Additional Improvements can be accomplished on or before the Completion Date
plus an extension for the number of days of the cessation.

 

 

 

 

          (j)     The Borrower shall fail to comply with any requirement of any
Governmental Body within thirty (30) days after notice in writing of such
requirement shall be given to the Borrower by such Governmental Body, subject to
any rights of the Borrower to contest such requirement as provided in the
Mortgage or this Agreement;

 

 

 

 

          (k)     Any judgment or judgments are rendered or judgment Liens filed
against the Borrower for an aggregate amount in excess of $150,000 which within
thirty (30) days of such rendering or filing is not either satisfied, stayed or
discharged of record; provided, however, it will not be a default if the
judgment is being contested in good faith by appropriate proceedings or if
adequate reserves with respect thereto have been set aside on the Borrower’s
books in accordance with GAAP;

 

 

 

 

          (l)     A petition in bankruptcy or for reorganization or for an
arrangement under any bankruptcy or insolvency law or for a custodian, receiver
or trustee for any of its property shall be filed by the Borrower, or a petition
in bankruptcy or for reorganization or for an arrangement under any bankruptcy
or insolvency law or for a custodian, receiver or trustee of any of the
Borrower’s property shall be filed against the Borrower and shall not be
dismissed within sixty (60) days, or a custodian, receiver or trustee of any
property of the Borrower shall be appointed and shall not be discharged within
sixty (60) days, or the Borrower shall make an assignment for the benefit of
creditors or generally shall not pay its debts as they become due, or the
Borrower shall be adjudged insolvent by any state or federal court of competent
jurisdiction, or an attachment or execution shall be levied against any
substantial portion of the property of the Borrower and shall not be discharged
within sixty (60) days;

 

 

 

 

          (m)    The Borrower shall admit in writing its inability, or be
generally unable, to pay its debts as they become due or cease operations of its
present business;

 

 

 

 

          (n)     The Borrower shall be in default under any Material Contract
and, in the Lender’s reasonable opinion, such default cannot be remedied within
the grace periods (if any) afforded the Borrower under such documents, and, in
the Lender’s reasonable opinion, such default will have a material adverse
effect on the Borrower;

 

 

 

 

          (o)     The Borrower shall be dissolved or terminated;

 

 

 

 

          (p)     The Borrower, any of its Affiliates shall be in default under
any other agreement with the Lender (whether in connection with the Loans or
otherwise) and any required notice shall have been given and any time in which
to cure the default shall have elapsed.

--------------------------------------------------------------------------------

 

 

 

 

          (q)     Any Lien created by the Mortgage or any other Security
Document for any reason ceases to be or is not a valid and perfected Lien having
a first priority security interest (except as may be otherwise determined by an
intercreditor or subordination agreement)

 

 

 

 

          (r)     An event of default caused by or related to Borrower has
occurred and been declared under the Acquisition Documents which default shall
not have been cured or waived within any applicable grace period.

 

 

 

 

          (s)     Any material provision of this Agreement shall, for any
reason, cease to be valid and binding on the Borrower, or the Borrower shall so
claim in writing to the Lender.

 

 

 

 

          (t) (i) Any Governmental Body shall (A) revoke, terminate, suspend or
adversely modify any license, permit, patent, trademark or tradename of the
Borrower, the continuation of which is material to the continuation of the
Borrower’s business or (B) commence proceedings to suspend, revoke, terminate or
adversely modify any such license, permit, trademark, tradename or patent and
such proceedings shall not be dismissed or discharged within sixty (60) days, or
(C) schedule or conduct a hearing on the renewal of any license, permit,
trademark, tradename or patent necessary for the continuation of the Borrower’s
business and the staff of such Governmental Body issues a report recommending
the termination, revocation, suspension or material, adverse modification of
such license, permit, trademark, tradename or patent; (ii) any agreement which
is necessary or material to the operation of the Borrower’s business shall be
revoked or terminated and not replaced by a substitute acceptable to the Lender
within thirty (30) days after the date of such revocation or termination, and
such revocation or termination and non-replacement would reasonably be expected
to have a Material Adverse Effect on the Borrower.

--------------------------------------------------------------------------------

 

 

 

 

          (u)     Any portion of the Collateral or the Land shall be seized or
taken by a Governmental Body, or the Borrower or the title and rights of the
Borrower which is the owner of any material portion of the Collateral or the
Land shall have become the subject matter of litigation which might, in the
opinion of the Lender, upon final determination, result in impairment or loss of
the security provided by this Agreement or any other Loan Document.

 

 

 

 

          (v)     A default by Borrower with respect to any Indebtedness of the
Borrower other than the Obligations.

 

 

 

          Section 7.02 Rights and Remedies. Upon the occurrence of a Default or
an Event of Default and at any time thereafter, the Lender may refuse to make
the Acquisition Loan hereunder (but the Lender may make the Acquisition Loan
after the occurrence of a Default or an Event of Default without thereby waiving
its rights and remedies hereunder). In addition, upon the occurrence of an Event
of Default the Lender may, at its option, exercise any and all of the following
rights and remedies (and any other rights and remedies available to it):

 

 

 

 

          (a)     The Lender may terminate the Commitment.

 

 

 

 

          (b)     The Lender may, by written notice to the Borrower, declare
immediately due and payable all unpaid principal of and accrued interest on the
Note, together with all other sums payable hereunder, and the same shall
thereupon be immediately due and payable without presentment or other demand,
protest, notice of dishonor or any other notice of any kind, all of which are
hereby expressly waived; provided, however, that upon the filing of a petition
commencing a case naming the Borrower as debtor under the United States
Bankruptcy Code, the principal of and all accrued interest on the Note shall be
automatically due and payable without any notice to or demand on the Borrower or
any other party.

 

 

 

 

          (c)     The Lender shall have the right, in addition to any other
rights provided by law, to enforce its rights and remedies under the Security
Documents.

 

 

 

--------------------------------------------------------------------------------

 

 

 

 

          (d)     The Lender may enter upon the Land and take possession
thereof, together with the Improvements, and proceed either in its own name or
in the name of the Borrower, as the attorney-in-fact of the Borrower (which
authority is coupled with an interest and is irrevocable by the Borrower) to
complete or cause to be completed the Additional Improvements, at the cost and
expense of the Borrower. If the Lender elects to complete or cause to be
completed the Additional Improvements, it may do so according to the Plans and
Specifications or according to such changes, alterations or modifications in and
to the Plans and Specifications as the Lender may deem reasonable and
appropriate; and the Lender may enforce or cancel all contracts let by the
Borrower relating to construction of the Additional Improvements, and/or let
other contracts which in the Lender’s sole judgment may seem advisable; and the
Borrower shall forthwith turn over and duly assign to the Lender, as the Lender
may from time to time require, contracts not already assigned to the Lender
relating to construction of the Additional Improvements, blueprints, shop
drawings, bonds, building permits, bills and statements of accounts pertaining
to the Additional Improvements, whether paid or not, and any other instruments
or records in the possession of the Borrower pertaining to the Project. The
Borrower shall be liable under this Agreement to pay to the Lender, on demand,
any amount or amounts expended by the Lender in so completing the Additional
Improvements, together with any costs, charges, or expense incident thereto or
resulting therefrom, all of which shall be secured by the Security Documents. In
the event that a proceeding is instituted against the Borrower for recovery and
reimbursement of any moneys expended by the Lender in connection with the
completion of the Additional Improvements, a statement of such expenditures,
verified by the affidavit of an officer of the Lender, shall be prima facie
evidence of the amounts so expended and of the propriety of and necessity for
such expenditures; and the burden of proving to the contrary shall be upon the
Borrower. The Lender shall have the right to apply any funds which it agrees to
advance hereunder and any funds which the Borrower has then on deposit with
Title pursuant to the Additional Improvements Escrow Agreement to bring about
the completion of the Additional Improvements and to pay the costs thereof; and
if such moneys so agreed to be advanced and funds of the Borrower then on
deposit with Title are insufficient, in the sole judgment of the Lender, to
complete the Additional Improvements, the Borrower agrees to promptly deliver
and pay to the Lender such sum or sums of money as the Lender may from time to
time demand for the purpose of completing the Additional Improvements or of
paying any liability, charge or expense which may have been incurred or assumed
by the Lender under or in performance of this Agreement, or for the purpose of
completing the Additional Improvements. It is expressly understood and agreed
that in no event shall the Lender be obligated or liable in any way to complete
the Additional Improvements or to pay for the costs of construction thereof.

          Section 7.03 Assignment and Setoff. The Borrower grants the Lender a
lien and security interest in all of the Borrower’s present and future property
now or hereafter in the possession, control or custody of, or in transit to, the
Lender for any purpose, and the balance of every present and future account of
the Borrower with the Lender, and each present and future claim of the Borrower
against the Lender. Such lien and security interest secures all present and
future debts, obligations and liabilities of the Borrower to the Lender. In
addition to all other rights and remedies, when or at any time after an Event of
Default has occurred, the Lender may foreclose such lien and security interest,
and the Lender may offset or charge all or any part of the aggregate amount of
such debts, obligations and liabilities against any such property, accounts and
claims without notice, regardless of whether such debts, obligations or
liabilities are matured or unmatured.

--------------------------------------------------------------------------------

ARTICLE VIII

MISCELLANEOUS

          Section 8.01 Inspections. The Borrower and the Project Engineer shall
be responsible for making inspections of the Additional Improvements during the
course of construction and shall determine to their own satisfaction that the
work done or materials supplied by the Contractors to whom payment is to be made
has been properly done or supplied in accordance with the Construction Contract
and the other applicable contracts with the Contractors. If any work done or
materials supplied by a Contractor are not satisfactory to the Borrower and/or
the Project Engineer and the same is not remedied within fifteen (15) days of
the discovery thereof, the Borrower will immediately notify the Lender in
writing of such fact. It is expressly understood and agreed that the Lender and
the Inspecting Architect/Engineer may conduct such inspections of the Project as
either may deem necessary for the protection of the Lender’s interest, and that
any inspections which may be made of the Project by the Lender or the Inspecting
Architect/Engineer will be made, and all certificates issued by the Inspecting
Architect/Engineer will be issued, solely for the benefit and protection of the
Lender, and that the Borrower will not rely thereon.

          Section 8.02 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 Lender, its agents, servants and
employees from all claims, demands and judgments made or recovered against the
Lender, its agents, servants and employees, because of bodily injuries,
including death at any time resulting therefrom, and/or because of damages to
property of the Lender or otherwise (including loss of use) from any cause
whatsoever, arising out of, incidental to, or in connection with the Project or
the construction of the Additional Improvements, whether or not due to any act
of omission or commission, including negligence of the Borrower or any
Contractor of its or their employees, servants or agents, and whether or not due
to any act of omission or commission of the Lender, its employees, servants or
agents except for the gross negligence and willful misconduct of Lender, its
employees, servents and 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 Note.

          Section 8.03 Fees and Expenses.

 

 

 

          (a)     Whether or not the Acquisition Loan shall be made hereunder,
the Borrower agrees to pay all fees of Title and the Inspecting
Architect/Engineer, appraisal fees, survey fees, recording fees, license and
permit fees, title insurance and other insurance premiums, and agrees to
reimburse the Lender upon demand for all reasonable out-of-pocket expenses
actually incurred by the Lender, including but not limited to reasonably legal
expenses and attorneys’ fees incurred in connection with the preparation of this
Agreement and the other documents and instruments contemplated hereby; provided,
however, the fees and expenses to be paid by Borrower under this paragraph
8.03(a) shall not exceed $100,000.

--------------------------------------------------------------------------------

 

 

 

          (b)     Borrower shall pay or reimburse Lender for all any and all
costs and expenses, including but not limited to reasonable legal expenses and
attorneys’ fees, incurred or sustained by the Lender in the exercise of any
right or remedy available to it under this Agreement or otherwise by law or
equity (whether or not suit is commenced).

          Section 8.04 Notices. All notices or other communications which are
required or permitted hereunder shall be in writing and sufficient if (a)
delivered personally or sent by telecopier, (b) sent by nationally recognized
overnight courier or (c) sent by certified mail, postage prepaid, return receipt
requested, addressed as follows:

 

 

 

(a)

If to the Lender at:

 

 

 

 

 

OSM—REO FF, LLC

 

 

225 South Sixth Street, Suite 2800

 

 

Minneapolis, MN 55402

 

 

Attn: Steph Lunde

 

 

Telephone: (612) 376-1486

 

 

Facsimile: (612) 692-5107

 

 

 

 

 

with a copy (which shall not constitute notice) to:

 

 

 

 

 

Leonard, Street and Deinard

 

 

150 South Fifth Street, Suite 2300

 

 

Minneapolis, MN 55402

 

 

Attn: Timothy Ring, Esq.

 

 

Facsimile: (612)335-1657

 

 

 

(b)

If to the Borrower at:

 

 

 

 

 

Soy Energy, LLC

 

 

Attn: Chuck Sand

 

 

222 North Main Street

 

 

Marcus, Iowa 50135

 

 

Telephone: (712) 376-2081

 

 

 

with a copy (which shall not constitute notice) to:

 

 

 

 

 

BrownWinick

 

 

666 Grand Avenue, Suite 2000

 

 

Des Moines, IA 50309

 

 

Attn: Thomas Johnson, Esq.

 

 

Facsimile: (515) 323-8514

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or to such other addresses as the party to whom notice is to be given may have
furnished to each other party in writing in accordance herewith. Any such
communication shall be deemed to have been given (i) when delivered if
personally delivered or sent by telecopier during a business day, (ii) on the
business day after dispatch if sent by nationally recognized, overnight courier
or if sent by telecopier on other than during a business day, and (iii) on the
third day after dispatch, if sent by mail.

          Section 8.05 Time of Essence. Time is of the essence in the
performance of this Agreement.

          Section 8.06 Binding Effect and Assignment. This Agreement shall be
binding upon and inure to the benefit of the Borrower and the Lender and their
respective successors and assigns, except that the Borrower may not transfer or
assign its rights hereunder without the prior written consent of the Lender.

          Section 8.07 Waivers. No waiver by the Lender of any default hereunder
shall operate as a waiver of any other default or of the same default on a
future occasion. No delay on the part of the Lender in exercising any right or
remedy hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any right or remedy preclude other or future exercise
thereof or the exercise of any other right or remedy.

          Section 8.08 The Lender’s Remedies Cumulative. The rights and remedies
hereby specified are cumulative and not exclusive of any rights or remedies
which the Lender would otherwise have.

          Section 8.09 Governing Law and Entire Agreement. This Agreement shall
be governed by the laws of the State of Minnesota without regard to conflict of
laws principles. This Agreement, the Notes and the Security Documents contain
the entire agreement of the parties regarding the Loans.

          Section 8.10 Counterparts. This Agreement may be executed in any
number of counterparts, each of which, when so executed and delivered, shall be
an original, but such counterparts shall together constitute one and the same
instrument.

          Section 8.11 Inconsistency. In the event that any of the terms and
provisions of this Agreement are inconsistent with any of the terms and
provisions of the Note or Security Documents, the terms and provisions of this
Agreement shall govern.

          Section 8.12 Conditions of Acquisition Loan. All conditions of the
obligation of the Lender to make the Acquisition Loan hereunder are imposed
solely and exclusively for the benefit of the Lender, and no other Person shall
have standing to require satisfaction of such conditions in accordance with
their terms or be entitled to assume that the Lender will refuse to make the
Acquisition Loan in the absence of strict compliance with any or all thereof,
and no other Person shall, under any circumstances, be deemed to be a
beneficiary of such conditions, any or all of which may be freely waived in
whole or in part by the Lender at any time if the Lender, in its sole
discretion, deems it advisable to do so.

--------------------------------------------------------------------------------

          Section 8.13 Amendments. This Agreement and the Loan Documents may not
be amended or modified, nor may any of their terms (including, without
limitation, terms affecting the maturity of or rate of interest on the Note) be
modified or waived, except by written instruments signed by the Lender and the
Borrower. In any instance where the consent or approval of the Lender may be
given or is required, or where any determination, judgment or decision is to be
rendered by the Lender under this Agreement or under any Loan Document, the
granting, withholding or denial of such consent or approval and the rendering of
such determination, judgment or decision shall be made or exercised by the
Lender in its sole and absolute discretion.

          Section 8.14 Jurisdiction. The Borrower hereby irrevocably agrees that
any legal action or proceedings against it with respect to this Agreement or any
of the Loan Documents (other than the Mortgage) may be brought exclusively in
the courts of the State of Minnesota, or in any United States District Court in
the State of Minnesota, and by the execution and delivery of this Agreement, the
Borrower hereby irrevocably submits to the jurisdiction of each such court and
hereby irrevocably waives any and all objections that the Borrower may have as
to jurisdiction or venue in any of such courts. The Borrower acknowledges that
it has received sufficient consideration for any inconvenience which may be
caused by any legal action brought in the State of Minnesota, and agrees that
the enforcement of the provisions of this paragraph against the Borrower would
not be unreasonable or unfair under all the circumstances of the Loans or this
Agreement.

          Section 8.15 WAIVER OF JURY TRIAL. THE LENDER AND THE BORROWER HEREBY
VOLUNTARILY, KNOWINGLY AND INTENTIONALLY WAIVE ANY AND ALL RIGHTS TO TRIAL BY
JURY IN ANY LEGAL ACTION OR PROCEEDING ARISING UNDER THIS AGREEMENT, REGARDLESS
OF WHETHER SUCH ACTION OR PROCEEDING CONCERNS ANY CONTRACTUAL OR TORTIOUS OR
OTHER CLAIM. THE BORROWER ACKNOWLEDGES THAT THIS WAIVER OF JURY TRIAL IS A
MATERIAL INDUCEMENT TO THE LENDER IN EXTENDING CREDIT TO THE BORROWER, THAT THE
LENDER WOULD NOT HAVE EXTENDED SUCH CREDIT WITHOUT THIS JURY TRIAL WAIVER, AND
THAT THE BORROWER HAS BEEN REPRESENTED BY AN ATTORNEY OR HAS HAD AN OPPORTUNITY
TO CONSULT WITH AN ATTORNEY IN CONNECTION WITH THIS JURY TRIAL WAIVER AND
UNDERSTANDS THE LEGAL EFFECT OF THIS WAIVER.

          Section 8.16 Participations. The Lender may, in its sole discretion,
sell in whole or in part, assign and convey to one or more Participants
undivided participation interests in and to the Loans and the Loan Documents and
the Borrower hereby consents to the same, and the disclosure of all financial
information of the Borrower reasonably necessary to effectuate the same.

--------------------------------------------------------------------------------

          Section 8.17 Rules of Construction. Where any provision of this
Agreement refers to action to be taken by a Person, or which such Person is
prohibited from taking, such provision shall be applicable whether such action
is taken directly or indirectly by such Person. Except as otherwise indicated,
all agreements or instruments herein defined shall mean agreements as the same
may from time to time be supplemented or amended or the terms thereof waived or
modified to the extent permitted, and in accordance with, the terms thereof.
Each representation, covenant and warranty contained in this Agreement shall be
construed (absent an express contrary provision therein) as being independent of
each other representation, covenant and warranty contained herein and compliance
with any one representation, covenant or warranty shall not (absent such an
express contrary provision) be deemed to excuse compliance with any or all
representations, covenants or warranties.

          [The remainder of this page has been left blank intentionally.]

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          IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the day and year first above written.

 

 

 

 

BORROWER:

 

 

 

 

 

 

 

 

SOY ENERGY, LLC, an Iowa limited liability

 

Company

 

 

 

 

 

By: /s/ Charles Sand

 

 

--------------------------------------------------------------------------------

 

 

Name: Charles Sand

 

 

--------------------------------------------------------------------------------

 

 

Its: Chairman

 

 

--------------------------------------------------------------------------------

 

 

 

 

 

LENDER:

 

 

 

 

 

OSM-REO FF, LLC, a Minnesota limited

 

liability company

 

 

 

 

 

By: /s/ Stephanie Lunde

 

 

--------------------------------------------------------------------------------

 

 

Name: Stephanie Lunde

 

 

--------------------------------------------------------------------------------

 

 

Its: Vice President

 

 

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