Exhibit 10.3

GUARANTY AGREEMENT

This GUARANTY AGREEMENT (“Agreement”) is entered into as of the 10 day of August
2007, by David Skjaerlund, whose address is 3755 North M-52, Owosso, MI 48867
(“Guarantor”), to and for the benefit of ICM, Inc., a Kansas Corporation, whose
address is 310 North First Street, Colwich, ,KS 67030 (“ICM”) and its successors
and/or assigns.

W I T N E S S E T H:

WHEREAS, ICM proposes to make a loan to Liberty Renewable Fuels, LLC, a Delaware
limited liability company (“Borrower”), in the amount of $10,000,000.00
(“Loan”), to be evidenced by an Revolving Promissory Note (“Note”), which Note
is to be secured by a Real Estate Mortgage (“Mortgage”), all of even date
herewith, together with the Loan and Security Agreement (“Loan Agreement”) and
such other loan and security documents as may be required by ICM, and identified
on the records of ICM (all of said documents being hereinafter sometimes
referred to as the “Loan Documents”);

WHEREAS, it is a condition precedent to the making of the Loan by ICM that
Guarantor enters into this Agreement;

WHEREAS, Borrower has executed and delivered the Loan Documents to ICM; and

WHEREAS, Guarantor, as a person affiliated with Borrower, will materially
benefit from ICM’s making of the Loan to Borrower.

NOW, THEREFORE, in order to induce ICM to make the Loan and for other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, Guarantor hereby covenants and agrees with ICM as follows:

Article 1: Guaranty Obligations

A. Guarantor hereby absolutely and unconditionally guarantees to and agrees with
ICM, its successors, transferees and assigns, (i) the due and timely performance
of all of Borrower’s obligations under the Loan Documents, (ii) the due and
timely payment of all amounts due under the Note and the Loan Documents, whether
upon acceleration or otherwise, (iii) the due and timely performance of all of
Borrower’s indemnifications under the Loan Documents, and (iv) the due and
timely payment of all costs and expenses paid or incurred by ICM, including
reasonable attorney fees, in the enforcement of the Loan Documents against
Borrower or this Guaranty against Guarantor (collectively, the “Obligations”).

B. The Loan Documents secured thereby are hereby made a part of this Guaranty by
reference thereto with the same force and effect as if fully set forth herein.

C. Until payment in full of the indebtedness evidenced by the Note and all other
obligations in the Loan Agreement, Guarantor shall not be released from any
liability with respect to the indebtedness evidenced by the Note (for which the
Borrower and Guarantor shall be, jointly and severally, personally liable as
provided herein and in the Note) or the Obligations contained herein or
obligations contained in the Loan Documents by any act or thing which

 

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might, but for the provision of this Guaranty, be deemed a legal or equitable
discharge of the surety, or by reason of any waiver, extension, modification,
forbearance or delay of ICM, its successors, transferees or assigns, or its or
their failure to proceed promptly or otherwise, Guarantor hereby expressly
waives and surrenders any defense to his liability hereunder based upon any of
the foregoing acts, things, agreements or waivers of any of them.

Article 2: General Terms and Conditions

A. Personal Liability of Guarantor

1. The Obligations set forth herein shall arise immediately upon the execution
of this Agreement and this Agreement shall be deemed accepted and become
absolute, unconditional and irrevocable upon the execution of this Agreement.
Notwithstanding anything to the contrary in this Agreement, the Obligations of
Guarantor hereunder shall be (a) enforceable against Guarantor, as provided
herein, and (b) enforceable without ICM first resorting to any other security or
collateral securing the Loan or any other assets owned by Borrower and/or
Guarantor.

2. Guarantor represents and warrants to ICM that the Loan Documents executed in
support thereof and other related supporting documents are all duly authorized
and are all legal, valid and binding instruments enforceable against Borrower
and Guarantor according to their terms.

3. The liability of Guarantor hereunder shall be not be affected by: (a) any
amendment or modification of the provisions of the Loan Documents or any other
instruments; (b) any extensions of time for performance required thereby;
(c) the invalidation of any payments by Guarantor, and/or Borrower as being
fraudulent or preferential under applicable bankruptcy law, common law, any
statute or in equity; (d) the failure by ICM to properly effect, perfect or
enforce with respect to any collateral under the Loan Documents; and (e) the
release of Borrower and/or Guarantor, from performance or observance of any of
the agreements, covenants, terms or conditions contained in any of said
instruments by operation of law (whether made with or without notice to Borrower
and/or Guarantor). Guarantor does hereby covenant that he will cause Borrower to
maintain and preserve the enforceability of the Loan Documents aforesaid as the
same may be modified and will not permit Borrower to take or fail to take any
action of any kind which might allow Borrower and/or Guarantor to raise any
defense to his Obligations hereunder. Guarantor hereby agrees to indemnify,
defend and hold ICM harmless against all liability, loss, damage, cost or
expense (including, without limitation, attorney fees) by reason of the
assertion by Borrower and/or Guarantor of any defense to his Obligations under
the Loan Documents or the assertion by Borrower and/or Guarantor, of any defense
to their Obligations hereunder or under the Loan Documents based upon any action
or inaction of Borrower, Guarantor or otherwise. Guarantor waives any right to
cause a marshalling of Borrower’s and/or Guarantor’s assets or to cause ICM to
proceed against Borrower and/or any Guarantor in any particular order and agrees
that any payments required to be made hereunder shall become due on demand in
accordance with the terms hereof, immediately upon the happening of a default
under any of the Loan Documents; and Guarantor expressly waives and relinquishes
all rights and remedies accorded by applicable law to guarantors. Guarantor
further waives any defenses which the may have with respect to any deficiency
established by ICM as to the amount of the Loan or with respect to any amount
bid by ICM, its successors or assigns or any third party at any foreclosure
sale.

 

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4. ICM may proceed directly against Borrower and/or Guarantor, jointly and
severally, in the event that Borrower defaults in the payment of any principal
and/or interest or in the performance of any other obligations evidenced by the
Loan Documents, without resort to any other person, entity or to the assets of
Borrower, or other security held by ICM, but said proceedings against Borrower
and/or Guarantor shall not in any sense release such other person, entity, asset
or security held by ICM.

5. Guarantor grants to ICM a lien upon and right of setoff against any and all
deposits, sums, credits and any and all other property of Guarantor now or at
any time whatsoever with, or in the possession of, ICM or in transit to ICM as
security for any and all obligations of Guarantor to ICM.

6. Guarantor hereby acknowledges acceptance by ICM of this Agreement and waives
all suretyship defenses and notices, notice of acceptance hereof, notice of the
amount of any sums owed by Borrower to ICM from time to time, notice of advance
or change in Borrower’s financial condition or of any other fact which might
increase Guarantor’s risk, and all other notices hereunder, including notices of
demand, presentment and/or protest, default or nonpayment, and consent to any
and all extensions or renewals made for or on account of the Loan Documents,
without releasing or discharging the Guarantor in any way hereunder. Guarantor
further waives all rights by statute or otherwise to require ICM to institute
suit against Borrower or to exhaust its rights and remedies against Borrower,
Guarantor being bound to the payment of all obligations of Borrower to ICM as
fully as if such obligations were directly owed to ICM by Guarantor. Guarantor
further waives any defense arising by reason of any disability, or other defense
of Borrower or by reason of the cessation from any cause whatsoever of the
liability of Borrower. No delay on the part of ICM in exercising any rights,
powers or privileges under the Note, the Mortgage, Loan Documents, this
Agreement or any other documents executed by Borrower or Guarantor shall operate
as a waiver of any such right, power or privilege.

B. General

1. Guarantor waives any right to require that any action be first brought
against any other person or party or to require that resort be had to any
security or to any balance of any deposit or credit on the books of ICM in favor
of Borrower or any other person or party prior to ICM exercising any rights
hereunder. Guarantor specifically waives all rights of subrogation that he may
now or hereafter have as to Borrower or to any other guarantor and specifically
agrees that all indebtedness and obligations at any time due Guarantor from
Borrower or due to Guarantor from another guarantor are and shall be subordinate
to all indebtedness and obligations owed to ICM under the Loan Documents and/or
this Agreement.

2. Guarantor shall pay all reasonable expenses incurred by ICM in connection
with enforcement of its rights under this Agreement, as well as court costs,
collection charges and reasonable attorneys’ fees and disbursements. To the
extent Borrower makes a payment or payments to ICM, which payment or payments or
any part thereof are subsequently

 

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invalidated, declared to be fraudulent or preferential, set aside or required,
for any of the foregoing reasons or for any other reason, to be repaid or paid
over to a trustee, receiver or any other party under any bankruptcy act, state
or federal law, common law or rule of equity, then to the extent of such payment
or repayment, the Obligations or part thereof intended to be satisfied shall be
revived and continued in full force and effect as if said payment had not been
made and Guarantor shall remain liable for such obligation. Guarantor shall pay
any principal, interest, prepayment premiums, reasonable costs, reasonable
expenses and reasonable attorney fees which are due under the Loan Documents
regardless of whether such amounts accrue pre petition or post petition after
the filing for any voluntary or involuntary bankruptcy or reorganization relief
by or against Borrower under any state or federal laws.

3. Any and all present and future debts and obligations of Borrower to Guarantor
not previously assigned to others as of the date hereof are hereby waived and
postponed in favor of, and subordinated to the full payment of the obligations
by Borrower to ICM. As security for this Agreement, Guarantor hereby assigns to
ICM, subject to any currently existing prior assignments, all claims of any
nature which he may now or hereafter have against Borrower.

4. Guarantor agrees that the liability of Guarantor under this Agreement shall
be immediate and shall not be contingent upon the exercise or enforcement by ICM
of whatever remedies it may have against Borrower or others or the enforcement
of any lien or realization upon any security ICM may at any time possess.

5. This Agreement is a primary, independent and original obligation of Guarantor
and is an unconditional, continuing and irrevocable guaranty of payment and
performance and not a guaranty of collection and shall remain in full force and
effect without respect to future changes in conditions, including change of law
or any invalidity or irregularity with respect to the issuance of any
obligations of Borrower to ICM or with respect to the execution and delivery of
any agreement between Borrower and ICM.

6. ICM shall have the right to seek recourse against Guarantor to the full
extent provided for herein and in any other document or instrument evidencing
obligations of Guarantor to ICM, and against Borrower to the full extent
provided for in the Loan Agreement or other agreement between ICM and Borrower.
No election to proceed in one form of action or proceeding, or against any
party, or on any obligation, shall constitute a waiver of ICM’s right to proceed
in any other form of action or proceeding, or against other parties, unless ICM
has expressly waived such right in writing. Guarantor is fully aware of the
financial condition of Borrower. Guarantor delivers this Agreement based solely
upon his own independent investigation and not upon any representation or
statement of ICM with respect thereto. Guarantor is in a position to and hereby
assumes full responsibility for obtaining any additional information concerning
Borrower’s financial condition as Guarantor may deem material to his obligations
hereunder and Guarantor is not relying upon, nor expecting ICM to furnish him
any information concerning Borrower’s financial condition. By acceptance hereof,
Guarantor hereby knowingly accepts the full range of risk encompassed within a
contract of “continuing guaranty,” which risk includes, without limitation, the
possibility that Borrower will contract additional indebtedness for which
Guarantor will be liable hereunder after Borrower’s financial condition or
ability to pay its lawful debts when they fall due has deteriorated.

 

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7. Any suit, action or proceeding against Borrower or Guarantor with respect to
this Agreement, the Note, Loan Agreement or Loan Documents, and any judgment
entered by any court in respect thereto, may be brought in the courts of the
State of Kansas, County of Sedgwick, the United States Courts located in the
State of Kansas, or the appropriate courts in the State of Michigan, as ICM may
select in its sole discretion, and Guarantor hereby submits to the non-exclusive
jurisdiction of such courts for the purpose of any such suit, action, or
proceeding. Guarantor hereby irrevocably consents to the service of process of
any suit, action or proceeding in said courts by registered or certified mail,
postage prepaid to the addresses as set forth above. Guarantor hereby
irrevocably waives any objections which may now or hereafter arise in the laying
of venue of any suit, action, or proceeding arising out of or relating to this
Agreement, the Note, Loan Agreement or Loan Documents, brought in such courts
and hereby further irrevocably waives any claim that any such suit, action or
proceeding brought in such courts has been brought in an inconvenient forum.
Borrower hereby further irrevocably waives any right now existing or that may
hereafter arise to a jury in connection with any suit, action or proceeding
arising out of or relating to this Agreement, the Note, Loan Agreement or Loan
Documents.

8. This Agreement shall be binding upon and inure to the benefit of the parties
hereto (including any holders of the Note) and their respective successors,
assigns, heirs and legal representatives.

9. This Agreement together the Loan Documents contains the entire agreement
between the parties and cannot be changed, modified, waived or cancelled except
by an agreement in writing executed by the parties hereto.

10. This Agreement shall be governed and construed in accordance with the laws
of the State of Kansas. If any provisions of this Agreement are in conflict with
any statute or applicable rule of law, or are otherwise unenforceable for any
reason whatsoever, such provisions shall be deemed null and void to the extent
of such conflict or unenforceability but shall be deemed separate from and shall
not invalidate any other provision of this Agreement.

11. This Agreement may be executed in any number of counterparts, each of which
shall, for all purposes, constitute an original and all of which taken together
shall constitute one and the same agreement.

12. THIS GUARANTY IS FREELY AND VOLUNTARILY GIVEN TO ICM BY GUARANTOR WITHOUT
ANY DURESS OR COERCION, AND AFTER GUARANTOR HAS EITHER CONSULTED WITH COUNSEL OR
BEEN GIVEN AN OPPORTUNITY TO DO SO AND GUARANTOR HAS CAREFULLY AND COMPLETELY
READ ALL OF THE TERMS AND PROVISIONS OF THIS GUARANTY.

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first above set forth.

 

“Guarantor” LOGO [g92285img002.jpg] David Skjaerlund, individually

 

STATE OF Michigan   )   )        ss: COUNTY OF Grand Traverse   )

The foregoing agreement was acknowledged before me this 10th day of August 2007
by David Skjaerlund, individually.

 

LOGO [g92285img003.jpg] Notary Public       , County of    

My Commission Expires:     (SEAL)  

 

SABRINA GAYLORD

NOTARY PUBLIC

GRAND TRAVERSE COUNTY, MICHIGAN

ACTING IN GRAND TRAVERSE COUNTY

MY COMMISSION EXPIRES: MARCH 11, 2008

 

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