Exhibit 10.40

Loan No. RI0487T01A

CONSTRUCTION AND TERM LOAN SUPPLEMENT

THIS SUPPLEMENT to the Master Loan Agreement dated August 31, 2007, (the “MLA”),
is entered into as of August 31, 2007, between FARM CREDIT SERVICES OF
MID-AMERICA, FLCA (“Farm Credit”) and ETHANOL GRAIN PROCESSORS, LLC, Rives,
Tennessee (the “Company”), and amends and restates the Supplement dated January
18, 2007, and numbered RI0487TOl.

SECTION 1. The Construction and Term Loan Commitment. On the terms and
conditions set forth in the MLA and this Supplement, Farm Credit agrees to make
construction loans to the Company from time to time during the period set forth
below in an aggregate principal amount not to exceed, at any one time
outstanding, $60,000,000.00 (the “Commitment”). Under the Commitment, amounts
borrowed and later repaid may not be reborrowed. No advance shall be made until
evidence has been provided to the Agent (as that term is defined in the MLA) as
required in Section 7(A)(vi) of the MLA that all requisite equity funds have
been received by the Company and that such funds shall have been utilized for
the construction of the Improvements (as defined herein).

SECTION 2. Purpose. The purpose of the Commitment is to partially finance the
Company’s construction of a 100 million gallon (annual capacity) dry-mill
ethanol production facility (the “Improvements”) identified in the plans and
specifications provided to and approved by Agent pursuant to Section 7(A)(v) of
the MLA (as the same may be amended pursuant to Section l2(A) herein, the
“Plans”), on real property owned by the Company near Rives, Tennessee (the
“Property”), and the Company agrees to utilize the proceeds of the Commitment
for this purpose only.

SECTION 3. Term. The term of the Commitment shall be from the date hereof, up to
and including October 31, 2008, or such later date as Agent may, in its sale
discretion, authorize in writing.

SECTION 4. Disbursements of Proceeds.

(A)

Disbursement Procedures.

(1)

Limits on Advances. Agent shall not be required to advance funds: (i) for any
category or line item of acquisition or construction cost an amount greater than
the amount specified therefore in the Project Budget (as defined in Section
7(A)(v) of the MLA) (notwithstanding the foregoing, however, the Company may
request Agent to advance, and Agent shall not unreasonably refuse to advance,
funds in excess of such amount if an offsetting amount has not been advanced for
a category or line item in the Project Budget such that the budgeted amounts
saved under one category or line item can be transferred to another category or
line item); or (ii) for any services not yet performed or for materials or goods
not yet incorporated into the Improvements or delivered to and properly stored
on the Property. No advance hereunder shall exceed 100% of the aggregate costs
actually paid or currently due and payable and represented by invoices
accompanying a Request for Construction Loan Advance submitted pursuant to
Section 9(B)(l) herein less the amount of retainage (“Retainage”) set out in the
construction contract dated August 25, 2006, between the Company and Fagen,
Inc., and other construction contracts of the Company for the Improvements.

(2)

Advance of Retainage. The Retainage (but in no case greater than the unused
balance of the Commitment allocated for construction) will be advanced by Agent
to the Company pursuant to the conditions set forth in such construction
contracts, upon written request by the Company certifying the satisfaction of
such conditions precedent for payment of Retain age.

(B)

Payments to Third Parties. At its option and without further authorization from
the Company, Agent is authorized to make advances under the Commitment by
paying, directly or jointly with the Company, any person to whom Agent in good
faith determines payment is due and any such advance shall be deemed made as of
the date on which Agent makes such payment and shall be secured under the deed
of trust/mortgage securing the Commitment and any other loan documents securing
the Commitment as fully as if made directly to the Company.

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Construction and Term Loan Supplement RI0487T01A

SECTION 5. Interest and Fees.

(A)

Interest. The Company agrees to pay interest on the unpaid principal balance of
the loans in accordance with one or more of the following interest rate options,
as selected by the Company:

(1)

Agent Base Rate. At a rate per annum equal at all times to the rate of interest
established by Agent from time to time as its Agent Base Rate, which Rate is
intended by Agent to be a reference rate and not its lowest rate plus the
Pricing Adjustment set forth in Section 5(A)(4) below. The Agent Base Rate will
change on the date established by Agent as the effective date of any change
therein and Agent agrees to notify the Company of any such change.

(2)

Quoted Rate. At a fixed rate per annum to be quoted by Agent in its sale
discretion in each instance. Under this option, rates may be fixed on such
balances and for such periods, as may be agreeable to Agent in its sole
discretion in each instance, provided that: (1) the minimum fixed period shall
be 180 days; (2) amounts may be fixed in increments of $500,000.00 or multiples
thereof; and (3) the maximum number affixes in place at anyone time shall be 10.

(3)

LIBOR. At a fixed rate per annum equal to “LIBOR” (as hereinafter defined) plus
the Pricing Adjustment set forth in Section 5(A)(4) below. Under this option:
(1) rates may be fixed for “Interest Periods” (as hereinafter defined) of 1, 2,
3, 6, 9 or 12 months as selected by the Company; (2) amounts may be fixed in
increments of $500,000.00 or multiples thereof; (3) the maximum number of fixes
in place at anyone time shall be 10; and (4) rates may only be fixed on a
“Banking Day” (as hereinafter defined) on 3 Banking Days’ prior written notice.
For purposes hereof: (a) “LIBOR” shall mean the rate (rounded upward to the
nearest sixteenth and adjusted for reserves required on “Eurocurrency
Liabilities” (as hereinafter defined) for banks subject to “FRB Regulation D”
(as herein defined) or required by any other federal law or regulation) quoted
by the British Bankers Association (the “BBA”) at 11 :00 a.m. London time 2
Banking Days before the commencement of the Interest Period for the offering of
U.S. dollar deposits in the London interbank market for the Interest Period
designated by the Company; as published by Bloomberg or another major
information vendor listed on BBA’s official website; (b) “Banking Day” shall
mean a day on which Agent is open for business, dealings in U.S. dollar deposits
are being carried out in the London interbank market, and banks are open for
business in New York City and London, England; (c) “Interest Period” shall mean
a period commencing on the date this option is to take effect and ending on the
numerically corresponding day in the next calendar month or the month that is
2,3,6,9 or 12 months thereafter, as the case may be; provided, however, that:
(i) in the event such ending day is not a Banking Day, such period shall be
extended to the next Banking Day unless such next Banking Day falls in the next
calendar month, in which case it shall end on the preceding Banking Day; and
(ii) if there is no numerically corresponding day in the month, then such period
shall end on the last Banking Day in the relevant month; (d) “Eurocurrency
Liabilities” shall have meaning as set forth in “FRB Regulation D”; and (e) “FRB
Regulation D” shall mean Regulation D as promulgated by the Board of Governors
of the Federal Reserve System, 12 CFR Part 204, as amended.

(4)

Pricing Adjustment. The interest rate spread parameters set forth in Subsections
(1) and (3) above shall be decreased in accordance with the following schedule
upon full payment of $18,000,000.00 in Free Cash Flow Payments (as defined in
Section 6 hereof):

Pricing Type

Initial Spread

Spread After Completion of

$18,000,000.00 of Free Cash Flow

Payments

Agent Base Rate

+25 Basis Points

0 Basis Points

LIBOR

+315 Basis Points

+290 Basis Points

The applicable interest rate adjustment shall (i) become effective 30 calendar
days after completion of $18,000,000.00 in Free Cash Flow Payments; and (ii)
shall be effective on a prospective basis only and shall not affect existing
fixed rate pricing.

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Construction and Term Loan Supplement RI0487T01A

The Company shall select the applicable rate option at the time it requests a
loan hereunder and may, subject to the limitations set forth above, elect to
convert balances bearing interest at the variable rate option to one of the
fixed rate options. Upon the expiration of any fixed rate period, interest shall
automatically accrue at the variable rate option unless the amount fixed is
repaid or fixed for an additional period in accordance with the terms hereof.
Notwithstanding the foregoing, rates may not be fixed in such a manner as to
cause the Company to have to break any fixed rate balance in order to pay any
installment of principal. All elections provided for herein shall be made
electronically (if applicable), telephonically or in writing and must be
received by Agent not later than 12:00 Noon Company’s local time in order to be
considered to have been received on that day; provided, however, that in the
case of LIBOR rate loans, all such elections must be confirmed in writing upon
Agent’s request. Interest shall be calculated on the actual number of days each
loan is outstanding on the basis of a year consisting of 360 days and shall be
payable monthly in arrears by the 20th day of the following month or on such
other day in such month as Agent shall require in a written notice to the
Company; provided, however, in the event the Company elects to fix all or a
portion of the indebtedness outstanding under the LIBOR interest rate option
above, at Agent’s option upon written notice to the Company, interest shall be
payable at the maturity of the Interest Period and if the LIBOR interest rate
fix is for a period longer than 3 months, interest on that portion of the
indebtedness outstanding shall be payable quarterly in arrears on each three
month anniversary of the commencement date of such Interest Period, and at
maturity.

(B)

Arrangement Fee. In consideration of the Commitment, the Company agrees to pay
to Agent on the execution hereof an arrangement fee in the amount of
$450,000.00. This fee has already been received.

SECTION 6. Promissory Note. The Company promises to repay the loans as follows:
(i) in 25 equal, consecutive quarterly installments of $2,400,000.00 with the
first such installment due on May 20, 2009, and the last such installment due on
February 20, 2015; and (ii) followed by a final installment in an amount equal
to the remaining unpaid principal balance of the loans on May 20, 2015.

In addition, for each fiscal year end, beginning with the fiscal year ending
2008, and ending with the fiscal year ending 2013 the Company shall also, within
ninety (90) days after the end of such fiscal year, make a special payment of an
amount equal to 75% of the “Free Cash Flow” (as defined below) of the Company,
such payment not to exceed $8,000,000.00 in any fiscal year of the Company;
provided, however, that: (i) if such payment would result in a covenant default
under this Supplement or the MLA, the amount of the payment shall be reduced to
an amount which would not result in a covenant default; (ii) if such payment
would result in a breakage of a fixed interest rate, the applicable broken
funding surcharges would still apply; and (iii) the aggregate of such payments
shall not exceed $18,000,000.00. The term “Free Cash Flow” is defined as the
Company’s annual profit net of taxes, plus the respective fiscal year’s
depreciation and amortization expense, minus allowable capitalized expenditures
for fixed assets during fiscal year 2009 and thereafter, allowed distributions
to members/owners, and scheduled term loan payments to Agent. This special
payment shall be applied to the principal installments in the inverse order of
their maturity.

In the event that all outstanding principal balances under this Supplement are
paid in full prior to the end of fiscal year 2013, Free Cash Flow payments, as
described above, shall nevertheless continue, and the amount thereof (including
any remaining portion in the event that part of such payment is applied to the
remaining balance under this Supplement) shall be applied to the Construction
and Revolving Term Loan Supplement dated August 31,2007, and numbered
RI0487T02A, and any restatements and amendments thereto, in the form of early
reductions in the Commitment thereunder, as specified therein, of a like dollar
amount. The foregoing requirement shall survive payment in full of this
Supplement.

If any installment due date is not a day on which Agent is open for business,
then such installment shall be due and payable on the next day on which Agent is
open for business. In addition to the above, the Company promises to pay
interest on the unpaid principal balance hereof at the times and in accordance
with the provisions set forth in Section 5 hereof. This note replaces and
supersedes, but does not constitute payment of the indebtedness evidenced by,
the promissory note set forth in the Supplement being amended and restated
hereby.

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Construction and Term Loan Supplement RI0487T01A

SECTION 7. Prepayment. Subject to the broken funding surcharge provision of the
MLA, the Company may on one Business Day’s prior written notice prepay all or
any portion of the loan(s). Unless otherwise agreed, all prepayments will be
applied to principal installments in the inverse order of their maturity.
However, in addition to the foregoing, prepayment of any Loan balance due to
refinancing, or refinancing of any unadvanced Commitment with another lender, up
to and including October 31, 2011, will result in a 2% prepayment charge in
addition to any broken funding surcharges which may be applicable, based on the
amounts prepaid and on the total amount of the Commitments in effect at such
time.

SECTION 8. Security. Security is set forth in the MLA.

SECTION 9. Additional Conditions Precedent.

(A)

Initial Advance. Agent’s obligation to make the initial advance is subject to
the satisfaction of each of the following additional conditions precedent on or
before the date of such advance:

(1)

List of Permits. Receipt by Agent of a detailed list of all permits required for
both the construction of the improvements and the operation of the facility
setting forth for each listed permit whether such permit is required for
commencement of construction or required for commencement of operation, and
identifying to Agent’s reasonable satisfaction whether such permits have been
issued or can reasonably be expected to be issued.

(2)

Construction Permits. Receipt by Agent of evidence of issuance of all permits
that are required to be obtained prior to the commencement of construction of
the improvements.

(3)

Engineer’s Certificate. Receipt by Agent of a report of Agent’s retained
engineer (pursuant to the provisions of Section 14(D)) indicating that the
current plans and specifications of the Improvements and the related contracts
establish that the finished project will have adequate natural gas, electricity,
water and waste water treatment to service the requirements of the project.

(B)

Each Advance. Agent’s obligation to make each advance hereunder, including the
initial advance, is subject to the satisfaction of each of the following
additional conditions precedent on or before the date of such advance:

(1)

Request for Construction Loan Advance. That Agent receives an executed request
for construction loan advance from the Company in the form of Exhibit A attached
hereto (the “Request for Construction Loan Advance”), together with all items
called for therein.

(2)

Construction Certificate. If an independent inspector has been employed by Agent
pursuant to Section 14(D), a certificate or report of such inspector to the
effect that the construction of the Improvements to the date thereof has been
performed in a good and workmanlike manner and in accordance with the Plans,
stating the estimated total cost of construction of the Improvements, stating
the percentage of in-place construction of the Improvements, and stating that
the remaining non-disbursed portion of the Commitment is adequate to complete
the construction of the Improvements.

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Construction and Term Loan Supplement RI0487T01A

SECTION 10. Representations and Warranties. In addition to the representations
and warranties contained in the MLA, the Company represents and warrants as
follows:

(A)

Project Approvals; Consents; Compliance. The Company has obtained all Project
Approvals relating to the construction and operation of the Improvements, except
those the Company has disclosed to Agent in writing. All such Project Approvals
heretofore obtained remain in full force and effect and the Company has no
reason to believe that any such Project Approval not heretofore obtained will
not be obtained by the Company in the ordinary course during or following
completion of the construction of the Improvements. No such Project Approval
will terminate, or become void or voidable or terminable, upon any sale,
transfer or other disposition of the Property or the Improvements, including any
transfer pursuant to foreclosure sale under the Mortgage. No consent,
permission, authorization, order, or license of any governmental authority is
necessary in connection with the execution, delivery, performance, or
enforcement of the loan documents to which the Company is a party, except such
as have been obtained and are in full force and effect. The Company is in
compliance in all material respects with all Project Approvals having
application to the Property or the Improvements except as the Company has
disclosed to Agent in writing. Without limiting the foregoing, there are no
unpaid or outstanding real estate or other taxes or assessments on or against
the Property or the Improvements or any part thereof (except only real estate
taxes not yet due and payable). The Company has received no notice nor has any
knowledge of any pending or contemplated assessments against the Property or the
Improvements which have not been disclosed to Agent in writing.

(B)

Environmental Compliance. Without limiting the provisions of the MLA, all
property owned or leased by the Company, including, without limitation, the
Property and the Improvements, and all operations conducted by it are in
compliance in all material respects with all Laws and all Project Approvals
relating to environmental protection, the failure to comply with which could
have a material adverse effect on the condition, financial or otherwise,
operations, properties, or business of the Company, or on the ability of the
Company to perform its obligations under the loan documents, except as the
Company has disclosed to Agent in writing.

(C)

Feasibility. Each of the Project Budget, the Project Schedule and the
Disbursement Schedule is realistic and feasible.

SECTION 11. Affirmative Covenants. In addition to the affirmative covenants
contained in the MLA, the Company agrees to:

(A)

Reports and Notices. Furnish to Agent:

(1)

Regulatory and Other Notices. Promptly after receipt thereof, copies of any
notices or other communications received from any governmental authority with
respect to the Property, the Improvements, or any matter or proceeding the
effect of which could have a material adverse effect on the condition, financial
or otherwise, operations, properties, or business of the Company, or the ability
of the Company to perform its obligations under the loan documents.

(2)

Notice of Nonpayment. Promptly after the filing or receipt thereof, a
description of or a copy of any lien filed by or any notice, whether oral or
written, from any laborer, contractor, subcontractor or materialman to the
effect that such laborer, contractor, subcontractor or materialman has not been
paid when due for any labor or materials furnished in connection with the
construction of the Improvements,

(3)

Notice of Suspension of Work. Prompt notice of any suspension in the
construction of the Improvements, regardless of the cause thereof, in excess of
ten (10) days and a description of the cause for such suspension.

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Construction and Term Loan Supplement RI0487T01A

(B)

Construction Liens. Payor cause to be removed, within fifteen (15) days after
notice from Agent, any lien on the Improvements or Property, provided, however,
that Company shall have the right to contest in good faith and with reasonable
diligence the validity of any such lien or claim upon furnishing to the
appropriate title insurance company such security or indemnity as it may
reasonably require to induce said title insurance company to issue its title
insurance commitment or its mortgage title insurance policy insuring against all
such claims or liens, and provided further that Agent will not be required to
make any further advances of the proceeds of the Commitment until any mechanic’s
lien claims shown by the title insurance company or interim binder have been so
insured against by the title insurance company.

(C)

Identity of Contractors, etc. Furnish to Agent from time to time on request by
Agent, in a form reasonably acceptable to Agent, correct lists of all
contractors, subcontractors and suppliers of labor and material supplied in
connection with construction of the Improvements and true and correct copies of
all executed contracts, subcontracts and supply contracts. Agent may contact any
contractor, subcontractor or supplier to verify any facts disclosed in the lists
and contracts. All contracts and subcontracts relating to construction of the
Improvements must contain provisions authorizing Company to supply to Agent the
listed information and copies of contracts.

(D)

Lien Waivers. Furnish to Agent, at any time and from time to time upon the
request of Agent, lien waivers bearing a then current date and prepared on a
form reasonably satisfactory to Agent from such contractor, subcontractor, or
supplier as Agent shall designate.

(E)

Operating Permits. Furnish to Agent, unless as otherwise consented to in writing
by Agent, as soon as possible but prior to the commencement of operation of the
constructed facility, evidence of the issuance of all necessary permits for such
operation.

SECTION 12. Negative Covenants. In addition to the negative covenants contained
in the MLA, the Company will not:

(A)

Change Orders. Allow any substantial deviation, addition, extra, or change order
to the Plans, Project Budget or Project Schedule, the cost of which in the
aggregate exceeds $1,000,000.00, without Agent’s prior written approval. All
requests for substantial changes shall be made using a Change Order Request in
the form of Exhibit B attached hereto. Agent will have a reasonable time to
evaluate any requests for its approval of any changes referred to in this
covenant, and will not be required to consider approving any changes unless all
other approvals that may be required have been obtained. Agent may approve or
disapprove changes in its discretion. All contracts and subcontracts relating to
the construction of the Improvements must contain provisions reasonably
satisfactory to Agent implementing the above provisions of this covenant.
Company shall promptly provide to Agent copies of all change orders that,
pursuant to the above described procedures, did not require Agent’s prior
written approval.

(B)

Materials. Purchase or install any materials, equipment, fixtures or articles of
personal property for the Improvements if such shall be covered under any
security agreement or other agreement where the seller reserves or purports to
reserve title or the right of removal or repossession, or the right to consider
them personal property after their incorporation in the Improvements, except for
Permitted Liens (as defined in the MLA).

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Construction and Term Loan Supplement RI0487T01A

SECTION 13. Casualties.

(A)

Right To Elect To Apply Proceeds. In case of material loss or damage to the
Property or to the Improvements by fire, by a taking by condemnation for public
use or the action of any governmental authority or agency, or the transfer by
private sale in lieu thereof, either temporarily or permanently, or otherwise,
if in the sole judgment of Agent there is reasonable doubt as to Company’s
ability to complete construction of the Improvements on or before October
31,2008, by reason of such loss or damage or because of delays in making
settlements with governmental agencies or authorities or with insurers, Agent
may terminate its obligations to make advances hereunder and elect to collect,
retain and apply to the Commitment all proceeds of the taking or insurance after
deduction of all expense of collection and settlement, including attorneys’ and
adjusters’ fees and charges. ill the event such proceeds are insufficient to pay
the Commitment in full, Agent may declare the balance remaining unpaid on the
Commitment to be due and payable forthwith and avail itself on any of the
remedies afforded thereby as in any case of default.

(B)

Election Not To Apply Proceeds. In case Agent does not elect to apply such
proceeds to the Commitment, Company will:

(1)

Settle. Proceed with diligence to make settlement with the governmental agencies
or authorities or the insurers and cause the proceeds of insurance to be paid to
Company.

(2)

Resume Construction. Promptly proceed with the resumption of construction of the
Improvements, including the repair of all damage resulting from such fire or
other cause and restoration to its former condition.

(C)

Use of Proceeds. All such proceeds shall be fully used before the disbursement
of any further proceeds of the Commitment.

SECTION 14. Other Rights of Agent.

(A)

Right To Inspect. Agent or its agent may enter on the Property at any time and
inspect the Improvements. If the construction of the Improvements is not
reasonably satisfactory to Agent, Agent may reasonably and in good faith stop
the construction and order its replacement or the correction thereof or
additions thereto, whether or not said unsatisfactory construction has been
incorporated in the Improvements, and withhold all advances hereunder until such
construction is satisfactory to Agent. Such construction shall promptly be made
reasonably satisfactory to Agent; provided, however, that Agent may not stop
construction unless it first delivers a report from a qualified engineer
specifying that the construction is not satisfactory and offering the Company a
reasonable opportunity to correct the unsatisfactory construction.

(B)

Obligation of Agent. Neither Agent nor any inspector hired pursuant to
Subsection (D) below is obligated to construct or supervise construction of the
Improvements. Inspection by Agent or such inspector thereof is for the sole
purpose of protecting Agent’s security and is not to be construed as a
representation that there will be compliance on anyone’s part with the Plans or
that the construction will be free from faulty material or workmanship. Neither
Agent nor such inspector shall be liable to the Company or any other person
concerning the quality of construction of the Improvements or the absence
therefrom of defects. The Company will make or cause to be made such other
independent inspections as it may desire for its own protection.

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Construction and Term Loan Supplement RI0487T01A

(C)

Right To Complete Upon Event of Default. Upon the occurrence and during the
continuance of any Event of Default hereunder, Agent may complete construction
of the Improvements, subject to Agent’s right at any time to discontinue any
work without liability, and apply the proceeds of the Commitment to such
completion, and may demand such additional sums from the Company as may be
necessary to complete construction, which sums the Company shall promptly pay to
Agent. In connection with any construction of the Improvements undertaken by
Agent pursuant to this Subsection, Agent may (i) enter upon the Property; (ii)
employ existing contractors, architects, engineers and subcontractors or
terminate them and employ others; (iii) make such addition, changes and
corrections in the Plans as shall, in the reasonable judgment of Agent, be
necessary or desirable; (iv) take over and use any personal property, materials,
fixtures, machinery, or equipment of the Company to be incorporated into or used
in connection with the construction or operation of the Improvements; (v) pay,
settle, or compromise all existing or future bills and claims which are or may
be liens against the Property or the Improvements; and (vi) take such other
action, as Agent may in its reasonable discretion determine, to complete the
construction of the Improvements. The Company shall be liable to Agent for all
costs paid or incurred for construction of the Improvements, and all payments
made hereunder shall be deemed advances by Agent, shall be evidenced by the Note
and shall be secured by the Mortgage and any other loan document securing the
Commitment (including any amounts in excess of the Commitment).

(D)

Right To Employ Independent Engineer. Agent reserves the right to employ an
independent construction engineer, among other things, to review the Project
Budget, the Project Schedule and the Plans, inspect all construction of the
Improvements and the periodic progress of the same, and review all Draw Requests
and change orders, the cost therefore to be the sale responsibility of the
Company and shall be paid by the Company upon demand by Agent.

(E)

Indemnification and Hold Harmless. The Company shall indemnity and hold Farm
Credit and Agent harmless from and against all liability, cost or damage arising
out of this Agreement or any other loan document or the transactions
contemplated hereby and thereby, including, without limitation, (i) any alleged
or actual violation of any Law or Project Approval relating to the Property or
the Improvements and (ii) any condition of the Property or the Improvements
whether relating to the quality of construction or otherwise and whether Agent
elects to complete construction upon an Event of Default or discontinues or
suspends construction pursuant to this Section 14. Agent may commence, appear in
or defend any such action or proceeding or any other action or proceeding
purporting to affect the rights, duties or liabilities of the parties hereunder,
or the Improvements, or the Property, or the payment of the Commitment, and the
Company agrees to pay all of Agent’s costs and expenses, including its
reasonable attorneys’ fees, in any such actions. The obligations of the Company
under this Subsection 14(E) shall survive the termination of this Agreement. As
to any action or inaction taken by Agent hereunder, Agent shall not be liable
for any error of judgment or mistake of fact or law, absent gross negligence or
willful misconduct on its part. The Company’s obligation to indemnify and hold
Agent harmless hereunder will exclude any liability, cost, or damage related to
Agent’s breach of this Agreement or for Agent’s gross negligence or willful
misconduct.

SECTION 15. Notice of Completion. Company irrevocably appoints Agent as
Company’s agent to file of record any notice of completion, cessation of labor
or any other notice that Agent deems necessary to file to protect any of the
interests of Agent. Agent, however, shall have no duty to make such filing,

SECTION 16. Signs and Publicity. At Farm Credit’s and Agent’s request, Company
will allow Farm Credit and Agent to post signs on the Property at the
construction site for the purpose of identifying Farm Credit and Agent as the
“Construction Lenders”. At the request of Farm Credit and Agent, Company will
use its reasonable best efforts to identify Farm Credit and Agent as the
construction lenders in publicity concerning the project.

SECTION 17. Cooperation. Company will cooperate at all times with Agent in
bringing about the timely completion of the Improvements, and Company will
resolve all disputes arising during the work of construction in a manner which
will allow work to proceed expeditiously.

SECTION 18. Events of Default. In addition to the events of default set forth in
the MLA, each of the following shall constitute an “Event of Default” hereunder:

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Construction and Term Loan Supplement RI0487T01A

(A)

Cessation of Construction. Any cessation at any time in the construction of the
Improvements for more than thirty (30) consecutive days, except for strikes,
acts of God, or other causes beyond the Company’s control, or any cessation at
any time in construction of the Improvements for more than thirty (30)
consecutive days, regardless of the cause.

(B)

Insufficiency of Loan Proceeds. Agent, in its reasonable discretion shall
determine that the remaining undisbursed portion of the Commitment is or will be
insufficient to fully complete the Improvements in accordance with the Plans;
provided, however, that upon such determination Agent shall provide the Company
with written notice and a period of thirty (30) days to cure such default.

SECTION 19. Remedies Upon Default. In addition to the remedies set forth in the
MLA, upon the occurrence of and during the continuance of each and every Event
of Default:

Construction. Agent may (but shall not be obligated to) take over and complete
construction of the Improvements in accordance with plans and specifications
approved by Agent with such changes as Agent may, in its reasonable discretion,
deem appropriate, all at the risk, cost, and expense of the Company. Agent may
assume or reject any contracts entered into by the Company in connection with
the Improvements, and may enter into additional or different contracts for
services, labor, and materials required, in the judgment of Agent, to complete
the construction of the Improvements and may pay, compromise, and settle all
claims in connection with the construction of the Improvements. All sums,
including reasonable attorneys’ fees, charges, or fees for supervision and
inspection of the construction, and for any other necessary purpose in the
discretion of Agent, expended by Agent in completing the construction of the
Improvements (whether aggregating more or less than the amount of this
Commitment) shall be deemed advances made by Agent to the Company under this
Commitment, and the Company shall be liable to Agent for the repayment of such
sums, together with interest on such amounts from the date of their expenditure
at the default rate specified above. Agent may, in its sole discretion, at any
time, abandon work on the construction of the Improvements after having
commenced such work, and may recommence such work at any time, it being
understood that nothing in this Section shall impose any obligation on Agent to
either complete or not to complete the construction of the Improvements. For the
purposes of carrying out the provisions of this Section, the Company irrevocably
appoints Agent, its attorney-in-fact, with full power of substitution; to
execute and deliver all such documents, pay and receive such funds, and take
such action as may be necessary, in the judgment of Agent, to complete the
construction of the Improvements.

IN WITNESS WHEREOF, the parties have caused this Supplement to be executed by
their duly authorized officers as of the date shown above.

FARM CREDIT SERVICES OF

 

ETHANOL GRAIN PROCESSORS, LLC

MID-AMERICA, FCLA

 

 

 

 

 

 

 

By:

/s/ Ralph M. Bowman

 

By:

/s/ James K. Patterson

Title: Vice President

 

Title: Chief Executive Officer

9

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EXHIBIT A

REQUEST FOR CONSTRUCTION LOAN ADVANCE

Request No:

 

 

Date:

 

 

 

To:

CoBank, ACB

From:

Ethanol Grain Processors, LLC

 

(Name of Borrower)

 

 

Loan Agreement No.

RI0487T01A

 

Dated:

August 31, 2007

Project Description:

100 million gallon ethanol plant

 

Project Location:

Near Rives, Tennessee

 

 

 

 

In accordance with the terms of the above referenced Loan Agreement, you are
hereby authorized and requested to make a construction advance, as set forth in
said Loan Agreement, of the amount and for the construction items set forth in
the request schedule attached hereto as Schedule “A” and incorporated herein.

The undersigned hereby certify that:

1.

The labor, services and/or materials covered hereby have been performed upon or
furnished to the above referenced project and are accurately described in the
supporting invoices attached to the request schedule;

2.

There have been no material changes in the cost breakdown for the project dated
_________ supplied to CoBank, except those approved in writing by CoBank;

3.

All construction to date has been substantially performed in accordance with the
Plans for the Improvements, and there have been no material changes in the Plans
except as approved in writing by CoBank;

4.

There have been no material changes in the scope or time of performance of the
work of construction, nor any extra work, labor or materials ordered or
contracted for, nor are any such changes or extras contemplated, except as may
be expressly permitted by the Loan Agreement or as have been approved in writing
by CoBank;

5.

The payments to be made with the requested funds will pay all bills received to
date, less any required withholds, for labor, materials, equipment and/or
services furnished in connection with the construction of the Improvements;

6.

All amounts previously advanced by CoBank for labor, services, equipment and/or
materials for the above referenced project pursuant to previous Requests for
Construction Loan Disbursement have been paid to the parties entitled thereto in
the manner required in the Loan Agreement; and

7.

All conditions to the advance of Loan funds required herein as set forth in the
Loan Agreement have been fulfilled, and to the actual knowledge of the
undersigned, no Event of Default under the Loan Agreement has occurred and is
continuing.

1

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

BORROWER: Ethanol Grain Processors, LLC

 

 

 

 

Signature

 

 

 

 

 

Printed Name and Title

 

 

 

ENGINEER & CONTRACTOR: Fagen, Inc.

 

 

 

 

Signature

 

 

 

 

 

Printed Name and Title

We have reviewed the Pay Application Numbered
                                   and dated                                   .
Based on our conversations with the Contractor and the Owner, our review of the
current schedule, and our site observations, the construction in place is judged
to be in general accordance with industry standards and in general conformity
with the approved plans and specifications, proceeding generally on schedule,
and the request for payment is a reasonable representation of the materials
ordered and the work effort of the Contractor to date.

AGENT CONSULTING ENGINEER:

 

 

 

 

Signature - BKBM ENGINEERS

 

 

 

 

 

 

 

APPROVED FOR PAYMENT BY AGENT:

 

 

 

 

 

 

 

 

 

 

 

Signature - CoBank

 

Printed Name & Title –CoBank

 

Date

 

 

 

 

 

 

 

 

2

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

SCHEDULE A

to Exhibit A - Request for Loan Advance

Request No:

 

 

Date:

 

 

 

To:

CoBank, ,ACB

From:

Ethanol Grain Processors, LLC

 

(Name of Borrower)

 

 

Loan Agreement No.

RI0487T01A

 

Dated:

August 31, 2007

Project Description:

100 million gallon ethanol plant

 

Project Location:

Near Rives, Tennessee

 

 

 

 

Loan advance to be used to pay General Contractor:

$

 

 

 

 

Loan advance to be used to reimburse Owners Costs:

$

 

(construction costs, development costs, start-up

 

 

expenses, or working capital)

 

 

 

 

 

Total advance requested:

$

 

Please attach supporting documentation for all requested amounts.

3

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

EXHIBIT B

CHANGE ORDER REQUEST

Request No:

CO#

 

Date:

 

 

 

To:

CoBank, ,ACB

From:

Ethanol Grain Processors, LLC

 

(Name of Borrower)

 

 

Loan Agreement No.

RI0487T01A

 

Dated:

August 31, 2007

Project Description:

100 million gallon ethanol plant

 

Project Location:

Near Rives, Tennessee

 

 

 

 

In accordance with the terms of the above referenced Loan Agreement, the
undersigned hereby requests that Agent approve the change orders more
particularly described in the schedule attached hereto as Schedule “A” and
incorporated herein.

The undersigned hereby certifies that:

1.

There have been no material changes in the Plans and or contracts except those
permitted in the Loan Agreement and/or approved in writing by Agent; and

2.

Copies of the proposed changes to the Plans and/or contracts are attached hereto
as Schedule “B” and that all such documents are complete and fully comply with
all applicable permits and approvals, subject to the written approval of Agent.

BORROWER:

 

CONTRACTOR & ENGINEER:

 

 

 

Ethanol Grain Processors, LLC

 

Fagen, Inc.

 

 

 

By:

 

 

By:

 

 

 

 

CHANGE ORDER APPROVED BY AGENT:

 

 

CoBANK, ACB

 

 

 

 

 

By:

 

 

 

 

Date:

 

 

 

 

1