exv10w1



 





Exhibit 10.1




AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT




     This AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT dated as of August 31, 2006 (the
“Agreement”), is executed by and between PROVISTA RENEWABLE FUELS MARKETING, LLC, a Kansas
limited liability company f/k/a United Bio Energy Fuels, LLC (the “Borrower”), which has
its chief executive office located at 5500 Cenex Drive, Inver Grove Heights, Minnesota 55077, and
LASALLE BANK NATIONAL ASSOCIATION, a national banking association (the “Bank”), whose
address is 135 South LaSalle Street, Chicago, Illinois 60603.



R E C I T A L S:




     A. The Borrower, United Bio Energy Ingredients, LLC (“Ingredients”) and LaSalle
Business Credit, LLC (“LBC”) previously entered into that certain Loan and Security Loan
Agreement dated as of November 4, 2004, as modified and amended from time to time (collectively,
the “Original Loan Agreement”), pursuant to which Original Loan Agreement, LBC has made
revolving loans to the Borrower and Ingredients evidenced by that certain First Amended and
Restated Revolving Note dated as of September 2, 2005 in the maximum principal amount of Twenty
Million and No/100 Dollars ($20,000,000.00), executed by the Borrower and Ingredients and made
payable to the order of the LBC (the “Existing Revolving Note”).



     B. LBC has assigned the Original Loan Agreement, the Existing Revolving Note and all Other
Agreements (as defined in the Original Loan Agreement) to Bank.



     C. Pursuant to the Borrower’s and Ingredient’s request, the Borrower, Ingredients and Bank now
desire to amend and restate the Original Loan Agreement so as to separate the credit facility
evidenced by the Original Loan Agreement into two separate credit facilities for each of Borrower
and Ingredients.



     D. Borrower and Bank will amend and restate the Original Loan Agreement by entering into this
Agreement to set forth the terms and conditions governing the Loans (as hereinafter defined).
Concurrently herewith, Ingredients and Bank will also amend and restate the Original Loan Agreement
by entering into a separate Amended and Restated Loan and Security Agreement by and between
Ingredients and Bank.



     NOW THEREFORE, in consideration of the premises, and the mutual covenants and agreements set
forth herein, the Borrower agrees to borrow from the Bank, and the Bank agrees to lend to the
Borrower, subject to and upon the following terms and conditions:



A G R E E M E N T S:




Section 1. DEFINITIONS.




     1.1. Defined Terms. For the purposes of this Agreement, the following capitalized
words and phrases shall have the meanings set forth below.



 









 





          “Affiliate” of any Person shall mean (a) any other Person which, directly or
indirectly, controls or is controlled by or is under common control with such Person, (b) any
officer or director of such Person, and (c) with respect to the Bank, any entity administered or
managed by the Bank, or an Affiliate or investment advisor thereof and which is engaged in making,
purchasing, holding or otherwise investing in commercial loans. A Person shall be deemed to be
“controlled by” any other Person if such Person possesses, directly or indirectly, power to direct
or cause the direction of the management and policies of such Person whether by contract, ownership
of voting securities, membership interests or otherwise.



          “Asset Disposition” shall mean the sale, lease, assignment or other transfer for value
(each a “Disposition”) by the Borrower or any Subsidiary to any Person (other than the Borrower or
any Subsidiary) of any asset or right of the Borrower or any Subsidiary (including, the loss,
destruction or damage of any thereof or any actual or threatened (in writing to the Borrower or
such Subsidiary) condemnation, confiscation, requisition, seizure or taking thereof), other than
(a) the Disposition of any asset which is to be replaced, and is in fact replaced, within thirty
(30) days with another asset performing the same or a similar function, (b) the sale or lease of
inventory in the ordinary course of business, and (c) other Dispositions in any fiscal year the net
proceeds of which do not in the aggregate exceed $500,000.00.



          “Bank Product Agreements” shall mean those certain agreements entered into from time
to time by the Borrower or any Subsidiary with the Bank or any Affiliate of the Bank concerning
Bank Products.



          “Bank Product Obligations” shall mean all obligations, liabilities, contingent
reimbursement obligations, fees, and expenses owing by the Borrower or any Subsidiary to the Bank
or any Affiliate of the Bank pursuant to or evidenced by the Bank Product Agreements and
irrespective of whether for the payment of money, whether direct or indirect, absolute or
contingent, due or to become due, now existing or hereafter arising.



          “Bank Products” shall mean any service or facility extended to the Borrower or any
Subsidiary by the Bank or any Affiliate of the Bank, including: (a) credit cards, (b) credit card
processing services, (c) debit cards, (d) purchase cards, (e) ACH transactions, (f) cash
management, including controlled disbursement, accounts or services, or (g) Hedging Agreements.



          “Bankruptcy Code” shall mean the United States Bankruptcy Code, as now existing or
hereafter amended.



          “Business Day” shall mean any day other than a Saturday, Sunday or a legal holiday on
which banks are authorized or required to be closed for the conduct of commercial banking business
in Chicago, Illinois.



          “Capital Expenditures” shall mean all expenditures (including Capitalized Lease
Obligations) which, in accordance with GAAP, would be required to be capitalized and shown on the
consolidated balance sheet of the Borrower, but excluding expenditures made in connection with the
replacement, substitution or restoration of assets to the extent financed (i)



2









 







from insurance proceeds (or other similar recoveries) paid on account of the loss of or damage to
the assets being replaced or restored or (ii) with awards of compensation arising from the taking
by eminent domain or condemnation of the assets being replaced.



          “Capital Lease” shall mean, as to any Person, a lease of any interest in any kind of
property or asset, whether real, personal or mixed, or tangible or intangible, by such Person, as
lessee, that is, or should be, in accordance with Financial Accounting Standards Board Statement
No. 13, as amended from time to time, or, if such statement is not then in effect, such statement
of GAAP as may be applicable, recorded as a “capital lease” on the financial statements of such
Person prepared in accordance with GAAP.



          “Capital Securities” shall mean, with respect to any Person, all shares, interests,
participations or other equivalents (however designated, whether voting or non-voting) of such
Person’s capital, whether now outstanding or issued or acquired after the date hereof, including
common shares, preferred shares, membership interests in a limited liability company, limited or
general partnership interests in a partnership or any other equivalent of such ownership interest.



          “Capitalized Lease Obligations” shall mean, as to any Person, all rental obligations
of such Person, as lessee under a Capital Lease which are or will be required to be capitalized on
the books of such Person.



          “Cash Equivalent Investment” shall mean, at any time, (a) any evidence of Debt,
maturing not more than one year after such time, issued or guaranteed by the United States
government or any agency thereof, (b) commercial paper, maturing not more than one year from the
date of issue, or corporate demand notes, in each case (unless issued by the Bank or its holding
company) rated at least A-l by Standard & Poor’s Ratings Services, a division of The McGraw-Hill
Companies, Inc. or P-l by Moody’s Investors Service, Inc., (c) any certificate of deposit, time
deposit or banker’s acceptance, maturing not more than one year after such time, or any overnight
Federal Funds transaction that is issued or sold by the Bank or its holding company (or by a
commercial banking institution that is a member of the Federal Reserve System and has a combined
capital and surplus and undivided profits of not less than $500,000,000), (d) any repurchase
agreement entered into with the Bank, or other commercial banking institution of the nature
referred to in clause (c), which (i) is secured by a fully perfected security interest in
any obligation of the type described in any of clauses (a) through (c) above, and
(ii) has a market value at the time such repurchase agreement is entered into of not less than 100%
of the repurchase obligation of the Bank, or other commercial banking institution, thereunder, (e)
money market accounts or mutual funds which invest exclusively in assets satisfying the foregoing
requirements, and (f) other short term liquid investments approved in writing by the Bank.



          “Change in Control” shall mean the occurrence of any of the following events: (a) CHS
Inc. and US BioEnergy Corporation combined shall cease to own and control, directly or indirectly,
at least 50% of the outstanding Capital Securities of the Borrower or (b) the Borrower shall cease
to, directly or indirectly, own and control 100% of each class of the outstanding Capital
Securities of each Subsidiary. For the purpose hereof, the terms “control” or “controlling” shall
mean the possession of the power to direct, or cause the direction of, the



3









 







management and policies of the Borrower by contract or voting of securities or ownership interests.



          “Collateral” shall have the meaning set forth in Section 6.1 hereof.



          “Contingent Liability” and “Contingent Liabilities” shall mean, respectively,
each obligation and liability of the Borrower and all such obligations and liabilities of the
Borrower incurred pursuant to any agreement, undertaking or arrangement by which the Borrower: (a)
guarantees, endorses or otherwise becomes or is contingently liable upon (by direct or indirect
agreement, contingent or otherwise, to provide funds for payment, to supply funds to, or otherwise
to invest in, a debtor, or otherwise to assure a creditor against loss) the indebtedness, dividend,
obligation or other liability of any other Person in any manner (other than by endorsement of
instruments in the course of collection), including any indebtedness, dividend or other obligation
which may be issued or incurred at some future time; (b) guarantees the payment of dividends or
other distributions upon the shares or ownership interest of any other Person; (c) undertakes or
agrees (whether contingently or otherwise): (i) to purchase, repurchase, or otherwise acquire any
indebtedness, obligation or liability of any other Person or any property or assets constituting
security therefor, (ii) to advance or provide funds for the payment or discharge of any
indebtedness, obligation or liability of any other Person (whether in the form of loans, advances,
stock purchases, capital contributions or otherwise), or to maintain solvency, assets, level of
income, working capital or other financial condition of any other Person, or (iii) to make payment
to any other Person other than for value received; (d) agrees to lease property or to purchase
securities, property or services from such other Person with the purpose or intent of assuring the
owner of such indebtedness or obligation of the ability of such other Person to make payment of the
indebtedness or obligation; (e) to induce the issuance of, or in connection with the issuance of,
any letter of credit for the benefit of such other Person; or (f) undertakes or agrees otherwise to
assure a creditor against loss. The amount of any Contingent Liability shall (subject to any
limitation set forth herein) be deemed to be the outstanding principal amount (or maximum permitted
principal amount, if larger) of the indebtedness, obligation or other liability guaranteed or
supported thereby.



          “Debt” shall mean, as to any Person, without duplication, (a) all indebtedness of such
Person; (b) all borrowed money of such Person (including principal, interest, fees and charges);
(c) all obligations to pay the deferred purchase price of property or services; (d) all
obligations, contingent or otherwise, with respect to the maximum face amount of all letters of
credit (whether or not drawn), bankers’ acceptances and similar obligations issued for the account
of such Person (including the Letters of Credit), and all unpaid drawings in respect of such
letters of credit, bankers’ acceptances and similar obligations; (e) all indebtedness secured by
any Lien on any property owned by such Person, whether or not such indebtedness has been assumed by
such Person (provided, however, if such Person has not assumed or otherwise become liable in
respect of such indebtedness, such indebtedness shall be deemed to be in an amount equal to the
fair market value of the property subject to such Lien at the time of determination); (f) the
aggregate amount of all Capitalized Lease Obligations of such Person; (g) all Contingent
Liabilities of such Person, whether or not reflected on its balance sheet; (h) all Hedging
Obligations of such Person; (i) all Debt of any partnership of which such Person is a general
partner; and (j) all monetary obligations of such Person under (i) a so-called synthetic,



4









 







off-balance sheet or tax retention lease, or (ii) an agreement for the use or possession of
property creating obligations that do not appear on the balance sheet of such Person but which,
upon the insolvency or bankruptcy of such Person, would be characterized as the indebtedness of
such Person (without regard to accounting treatment). Notwithstanding the foregoing, Debt shall
not include trade payables and accrued expenses incurred by such Person in accordance with
customary practices and in the ordinary course of business of such Person.



          “Default Rate” shall mean a per annum rate of interest equal to the Revolving Interest
Rate plus four percent (4.00%).



          “Employee Plan” includes any pension, stock bonus, employee stock ownership plan,
retirement, profit sharing, deferred compensation, stock option, bonus or other incentive plan,
whether qualified or nonqualified, or any disability, medical, dental or other health plan, life
insurance or other death benefit plan, vacation benefit plan, severance plan or other employee
benefit plan or arrangement, including those pension, profit-sharing and retirement plans of the
Borrower described from time to time in the financial statements of the Borrower and any pension
plan, welfare plan, Defined Benefit Pension Plans (as defined in ERISA) or any multi-employer plan,
maintained or administered by the Borrower or to which the Borrower is a party or may have any
liability or by which the Borrower is bound.



          “Environmental Laws” shall mean all present or future federal, state or local laws,
statutes, common law duties, rules, regulations, ordinances and codes, together with all
administrative or judicial orders, consent agreements, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any governmental authority, in each case
relating to any matter arising out of or relating to public health and safety, or pollution or
protection of the environment or workplace, including any of the foregoing relating to the
presence, use, production, generation, handling, transport, treatment, storage, disposal,
distribution, discharge, emission, release, threatened release, control or cleanup of any Hazardous
Substance.



          “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended
from time to time.



          “Event of Default” shall mean any of the events or conditions which are set forth in
Section 11 hereof.



          “GAAP” shall mean generally accepted accounting principles set forth from time to time
in the opinions and pronouncements of the Accounting Principles Board and the American Institute of
Certified Public Accountants and statements and pronouncements of the Financial Accounting
Standards Board (or agencies with similar functions of comparable stature and authority within the
U.S. accounting profession), which are applicable to the circumstances as of the date of
determination, provided, however, that interim financial statements or reports shall be deemed in
compliance with GAAP despite the absence of footnotes and fiscal year-end adjustments as required
by GAAP.



          “Guarantor” shall mean CHS Inc., a Minnesota corporation.



5









 





          “Guaranty” shall have the meaning set forth in Section 3.1 hereof.



          “Hazardous Substances” shall mean (a) any petroleum or petroleum products, radioactive
materials, asbestos in any form that is or could become friable, urea formaldehyde foam insulation,
dielectric fluid containing levels of polychlorinated biphenyls, radon gas and mold; (b) any
chemicals, materials, pollutant or substances defined as or included in the definition of
“hazardous substances”, “hazardous waste”, “hazardous materials”, “extremely hazardous substances”,
“restricted hazardous waste”, “toxic substances”, “toxic pollutants”, “contaminants”, “pollutants”
or words of similar import, under any applicable Environmental Law; and (c) any other chemical,
material or substance, the exposure to, or release of which is prohibited, limited or regulated by
any governmental authority or for which any duty or standard of care is imposed pursuant to, any
Environmental Law.



          “Hedging Agreement” shall mean any interest rate, currency or commodity swap
agreement, cap agreement or collar agreement, and any other agreement or arrangement designed to
protect a Person against fluctuations in interest rates, currency exchange rates or commodity
prices.



          “Hedging Obligation” shall mean, with respect to any Person, any liability of such
Person under any Hedging Agreement.



          “Indemnified Party” and “Indemnified Parties” shall mean, respectively, each
of the Bank and any parent corporation, Affiliate or Subsidiary of the Bank, and each of their
respective officers, directors, employees, attorneys and agents, and all of such parties and
entities.



          “Intellectual Property” shall mean the collective reference to all rights, priorities
and privileges relating to intellectual property, whether arising under United States,
multinational or foreign laws or otherwise, including copyrights, patents, service marks and
trademarks, and all registrations and applications for registration therefor and all licensees
thereof, trade names, domain names, technology, know-how and processes, and all rights to sue at
law or in equity for any infringement or other impairment thereof, including the right to receive
all proceeds and damages therefrom.



          “Interest Charges” shall mean, for any period, the sum of: (a) all interest, charges
and related expenses payable with respect to that fiscal period to a lender in connection with
borrowed money or the deferred purchase price of assets that are treated as interest in accordance
with GAAP, plus (b) the portion of Capitalized Lease Obligations with respect to that
fiscal period that should be treated as interest in accordance with GAAP, plus (c) all
charges paid or payable (without duplication) during that period with respect to any Hedging
Agreements.



          “Interest Period” shall mean successive one, two, three or six month periods,
beginning and ending as provided in this Agreement.



6









 





          “Investment” shall mean, with respect to any Person, any investment in another Person,
whether by acquisition of any debt or equity security, by making any loan or advance, by becoming
obligated with respect to a Contingent Liability in respect of obligations of such other Person
(other than travel and similar advances to employees in the ordinary course of business).



          “Letter of Credit” and “Letters of Credit” shall mean, respectively, a letter
of credit and all such letters of credit issued by the Bank, in its sole discretion, upon the
execution and delivery by the Borrower and the acceptance by the Bank of a Master Letter of Credit
Agreement and a Letter of Credit Application, as set forth in Section 2.7 of this
Agreement.



          “Letter of Credit Application” shall mean, with respect to any request for the
issuance of a Letter of Credit, a letter of credit application in the form being used by the Bank
at the time of such request for the type of Letter of Credit requested.



          “Letter of Credit Commitment” shall mean, at any time, an amount equal to the lesser
of (a) the Revolving Loan Commitment minus the aggregate amount of all Revolving Loans
outstanding, or (b) the Borrowing Base Amount minus the aggregate amount of all Revolving
Loans outstanding.



          “Letter of Credit Maturity Date” shall mean the Revolving Loan Maturity Date.



          “Letter of Credit Obligations” shall mean, at any time, an amount equal to the
aggregate of the original face amounts of all Letters of Credit minus the sum of (i) the amount of
any reductions in the original face amount of any Letter of Credit which did not result from a draw
thereunder, (ii) the amount of any payments made by the Bank with respect to any draws made under a
Letter of Credit for which the Borrower has reimbursed the Bank, (iii) the amount of any payments
made by the Bank with respect to any draws made under a Letter of Credit which have been converted
to a Revolving Loan as set forth in Section 2.7, and (iv) the portion of any issued but
expired Letter of Credit which has not been drawn by the beneficiary thereunder. For purposes of
determining the outstanding Letter of Credit Obligations at any time, the Bank’s acceptance of a
draft drawn on the Bank pursuant to a Letter of Credit shall constitute a draw on the applicable
Letter of Credit at the time of such acceptance.



          “Liabilities” shall mean at all times all liabilities of the Borrower that would be
shown as such on a balance sheet of the Borrower prepared in accordance with GAAP.



          “LIBOR” shall mean a rate of interest equal to (a) the per annum rate of interest at
which United States dollar deposits for a period equal to the relevant Interest Period are offered
in the London Interbank Eurodollar market at 11:00 a.m. (London time) two Business Days prior to
the commencement of such Interest Period (or three Business Days prior to the commencement of such
Interest Period if banks in London, England were not open and dealing in offshore United States
dollars on such second preceding Business Day), as displayed in the Bloomberg Financial Markets
system (or other authoritative source selected by the Bank in its sole discretion), divided by (b)
a number determined by subtracting from 1.00 the then stated maximum reserve percentage for
determining reserves to be maintained by member banks of the Federal Reserve System for
Eurocurrency funding or liabilities as defined in Regulation D (or



7









 







any successor category of liabilities under Regulation D), or as LIBOR is otherwise determined by
the Bank in its sole and absolute discretion. The Bank’s determination of LIBOR shall be
conclusive, absent manifest error.



          “LIBOR Loan” or “LIBOR Loans” shall mean that portion, and collectively those
portions, of the aggregate outstanding principal balance of the Loans that bear interest at the
LIBOR Rate, of which at any time, the Borrower may identify no more than ten (10) advances of the
Revolving Loans which bear interest at the LIBOR Rate.



          “LIBOR Rate” shall mean a per annum rate of interest equal to LIBOR for the relevant
Interest Period, plus seventy five hundredths of one percent (0.75%), which LIBOR Rate
shall remain fixed during such Interest Period.



          “Lien” shall mean, with respect to any Person, any interest granted by such Person in
any real or personal property, asset or other right owned or being purchased or acquired by such
Person (including an interest in respect of a Capital Lease) which secures payment or performance
of any obligation and shall include any mortgage, lien, encumbrance, title retention lien, charge
or other security interest of any kind, whether arising by contract, as a matter of law, by
judicial process or otherwise.



          “Loans” shall mean, collectively, all Revolving Loans made by the Bank to the Borrower
and all Letter of Credit Obligations, under and pursuant to this Agreement.



          “Loan Documents” shall mean each of the agreements, documents, instruments and
certificates set forth in Section 3.1 hereof, and any and all such other instruments,
documents, certificates and agreements from time to time executed and delivered by the Borrower,
the Guarantor or any of their Subsidiaries for the benefit of the Bank pursuant to any of the
foregoing, and all amendments, restatements, supplements and other modifications thereto.



          “Master Letter of Credit Agreement” shall mean, at any time, with respect to the
issuance of Letters of Credit, a Master Letter of Credit Agreement in the form being used by the
Bank at such time.



          “Material Adverse Effect” shall mean (a) a material adverse change in, or a material
adverse effect upon, the assets, business, properties, prospects, condition (financial or
otherwise) or results of operations of the Borrower taken as a whole, (b) a material impairment of
the ability of the Borrower to perform any of the Obligations under any of the Loan Documents, or
(c) a material adverse effect on (i) any substantial portion of the Collateral, (ii) the legality,
validity, binding effect or enforceability against the Borrower of any of the Loan Documents, (iii)
the perfection or priority of any Lien granted to the Bank under any Loan Document, or (iv) the
rights or remedies of the Bank under any Loan Document.



          “Net Income” shall mean means, with respect to the Borrower for any period, the net
income (or loss) of the Borrower for such period as determined in accordance with GAAP.



          “Net Worth” shall mean at any time the total of Assets minus Liabilities.



8









 





          “Non-Excluded Taxes” shall have the meaning set forth in Section 2.8(a) hereof.



          “Note” shall mean the Revolving Note.



          “Obligations” shall mean the Loans, as evidenced by any Note, all interest accrued
thereon (including interest which would be payable as post-petition in connection with any
bankruptcy or similar proceeding, whether or not permitted as a claim thereunder), any fees due the
Bank hereunder, any expenses incurred by the Bank hereunder, including without limitation, all
liabilities and obligations under this Agreement, under any other Loan Document, any reimbursement
obligations of the Borrower in respect of Letters of Credit and surety bonds, all Hedging
Obligations of the Borrower which are owed to the Bank or any Affiliate of the Bank, and all Bank
Product Obligations of the Borrower, and any and all other liabilities and obligations owed by the
Borrower to the Bank from time to time, now or hereafter existing, or due or to become due,
together with any and all renewals, extensions, restatements or replacements of any of the
foregoing.



          “Obligor” shall mean the Borrower, any Guarantor, accommodation endorser, third party
pledgor, or any other party liable with respect to the Obligations.



          “Organizational Identification Number” means, with respect to Borrower, the
organizational identification number assigned to Borrower by the applicable governmental unit or
agency of the jurisdiction of organization of the Borrower.



          “Other Taxes” shall mean any present or future stamp or documentary taxes or any other
excise or property taxes, charges or similar levies which arise from the execution, delivery,
enforcement or registration of, or otherwise with respect to, this Agreement or any of the other
Loan Documents.



          “Permitted Liens” shall mean (a) Liens for Taxes, assessments or other governmental
charges not at the time delinquent or thereafter payable without penalty or being contested in good
faith by appropriate proceedings and, in each case, for which it maintains adequate reserves in
accordance with GAAP and in respect of which no Lien has been filed; (b) Liens arising in the
ordinary course of business (such as (i) Liens of carriers, warehousemen, mechanics and materialmen
and other similar Liens imposed by law, and (ii) Liens in the form of deposits or pledges incurred
in connection with worker’s compensation, unemployment compensation and other types of social
security (excluding Liens arising under ERISA) or in connection with surety bonds, bids,
performance bonds and similar obligations) for sums not overdue or being contested in good faith by
appropriate proceedings and not involving any advances or borrowed money or the deferred purchase
price of property or services, which do not in the aggregate materially detract from the value of
the property or assets of the Borrower or materially impair the use thereof in the operation of the
Borrower’s business and, in each case, for which it maintains adequate reserves in accordance with
GAAP and in respect of which no Lien has been filed; (c) attachments, appeal bonds, judgments and
other similar Liens, for sums not exceeding One Hundred Thousand and 00/100 Dollars ($100,000.00)
arising in connection with court proceedings, provided the execution or other enforcement
of such Liens is effectively



9









 







stayed and the claims secured thereby are being actively contested in good faith and by appropriate
proceedings and to the extent such judgments or awards do not constitute an Event of Default under
Section 11.8 hereof; (d) easements, rights of way, restrictions, minor defects or irregularities in
title and other similar Liens not interfering in any material respect with the ordinary conduct of
the business of the Borrower; (e) subject to the limitation set forth in Section 9.1(g),
Liens arising in connection with Capitalized Lease Obligations (and attaching only to the property
being leased); (f) subject to the limitation set forth in Section 9.1(h), Liens that
constitute purchase money security interests on any property securing Debt incurred for the purpose
of financing all or any part of the cost of acquiring such property, provided that any such
Lien attaches to such property within twenty (20) days of the acquisition thereof and attaches
solely to the property so acquired; (g) Liens granted to the Bank hereunder and under the Loan
Documents and (h) Liens held in a margin account to secure and provide credit support for regulated
exchange or over-the-counter hedging transactions.



          “Person” shall mean any natural person, partnership, limited liability company,
corporation, trust, joint venture, joint stock company, association, unincorporated organization,
government or agency or political subdivision thereof, or other entity, whether acting in an
individual, fiduciary or other capacity.



          “Prime Loan” or “Prime Loans” shall mean that portion, and collectively, those
portions of the aggregate outstanding principal balance of the Loans that bear interest at the
Prime Rate minus one percent (1.0%) per annum.



          “Prime Rate” shall mean the floating per annum rate of interest which at any time, and
from time to time, shall be most recently announced by the Bank as its Prime Rate, which is not
intended to be the Bank’s lowest or most favorable rate of interest at any one time. The effective
date of any change in the Prime Rate shall for purposes hereof be the date the Prime Rate is
changed by the Bank. The Bank shall not be obligated to give notice of any change in the Prime
Rate.



          “Regulatory Change” shall mean the introduction of, or any change in any applicable
law, treaty, rule, regulation or guideline or in the interpretation or administration thereof by
any governmental authority or any central bank or other fiscal, monetary or other authority having
jurisdiction over the Bank or its lending office.



          “Revolving Interest Rate” shall mean the Borrower’s from time to time option of (i) a
floating per annum rate of interest equal to the Prime Rate minus one percent (1.0%), or
(ii) the LIBOR Rate.



          “Revolving Loan” and “Revolving Loans” shall mean, respectively, each direct
advance and the aggregate of all such direct advances made by the Bank to the Borrower under and
pursuant to this Agreement, as set forth in Section 2.1 of this Agreement.



          “Revolving Loan Availability” shall mean, at any time, an amount equal to the
Revolving Loan Commitment minus the Letter of Credit Obligations.




10












 





          “Revolving Loan Commitment” shall mean Twenty Million and 00/100 Dollars
($20,000,000.00).




          “Revolving Loan Mandatory Prepayment” shall have the meaning set forth in Section
2.1(c)(ii) hereof.




          “Revolving Loan Maturity Date” shall mean November 4, 2007, unless extended by the
Bank pursuant to any modification, extension or renewal note executed by the Borrower and accepted
by the Bank in its sole and absolute discretion in substitution for the Revolving Note.




          “Revolving Note” shall mean a revolving note in the form prepared by and acceptable to
the Bank, dated as of the date hereof, in the amount of the Revolving Loan Commitment and maturing
on the Revolving Loan Maturity Date, duly executed by the Borrower and payable to the order of the
Bank, together with any and all renewal, extension, modification or replacement notes executed by
the Borrower and delivered to the Bank and given in substitution therefor.




          “Subordinated Debt” shall mean that portion of the Debt of the Borrower which is
subordinated to the Obligations in a manner satisfactory to the Bank, including right and time of
payment of principal and interest.




          “Subsidiary” and “Subsidiaries” shall mean, respectively, with respect to any
Person, each and all such corporations, partnerships, limited partnerships, limited liability
companies, limited liability partnerships, joint ventures or other entities of which or in which
such Person owns, directly or indirectly, such number of outstanding Capital Securities as have
more than fifty percent (50.00%) of the ordinary voting power for the election of directors or
other managers of such corporation, partnership, limited liability company or other entity. Unless
the context otherwise requires, each reference to Subsidiaries herein shall be a reference to
Subsidiaries of the Borrower.




          “Taxes” shall mean any and all present and future taxes, duties, levies, imposts,
deductions, assessments, charges or withholdings, and any and all liabilities (including interest
and penalties and other additions to taxes) with respect to the foregoing.




          “UCC” shall mean the Uniform Commercial Code in effect in the state of Illinois from
time to time.




          “Unmatured Event of Default” shall mean any event which, with the giving of notice,
the passage of time or both, would constitute an Event of Default.




          “Voidable Transfer” shall have the meaning set forth in Section 13.21 hereof.




          “Wholly-Owned Subsidiary” shall mean any Subsidiary of which or in which the Borrower
owns, directly or indirectly, one hundred percent (100%) of the Capital Securities of such
Subsidiary.




11









 








          “Working Capital” shall mean the total of cash on hand, cash equivalents, marketable
securities, Accounts minus adequate reserves for doubtful Accounts, and readily salable
Inventory at the lower of cost or market value, minus the total of all liabilities payable within
one year, all as determined in accordance with GAAP.




     1.2. Accounting Terms. Any accounting terms used in this Agreement which are not
specifically defined herein shall have the meanings customarily given them in accordance with GAAP.
Calculations and determinations of financial and accounting terms used and not otherwise
specifically defined hereunder and the preparation of financial statements to be furnished to the
Bank pursuant hereto shall be made and prepared, both as to classification of items and as to
amount, in accordance with sound accounting practices and GAAP as used in the preparation of the
financial statements of the Borrower on the date of this Agreement. If any changes in accounting
principles or practices from those used in the preparation of the financial statements are
hereafter occasioned by the promulgation of rules, regulations, pronouncements and opinions by or
required by the Financial Accounting Standards Board or the American Institute of Certified Public
Accountants (or any successor thereto or agencies with similar functions), which results in a
material change in the method of accounting in the financial statements required to be furnished to
the Bank hereunder or in the calculation of financial covenants, standards or terms contained in
this Agreement, the parties hereto agree to enter into good faith negotiations to amend such
provisions so as equitably to reflect such changes to the end that the criteria for evaluating the
financial condition and performance of the Borrower will be the same after such changes as they
were before such changes; and if the parties fail to agree on the amendment of such provisions, the
Borrower will furnish financial statements in accordance with such changes, but shall provide
calculations for all financial covenants, perform all financial covenants and otherwise observe all
financial standards and terms in accordance with applicable accounting principles and practices in
effect immediately prior to such changes. Calculations with respect to financial covenants
required to be stated in accordance with applicable accounting principles and practices in effect
immediately prior to such changes shall be reviewed and certified by the Borrower’s accountants.



     1.3. Other Terms Defined in UCC. All other capitalized words and phrases used herein
and not otherwise specifically defined herein shall have the respective meanings assigned to such
terms in the UCC, to the extent the same are used or defined therein.



     1.4. Other Interpretive Provisions.




     (a) The meanings of defined terms are equally applicable to the singular and plural
forms of the defined terms. Whenever the context so requires, the neuter gender includes
the masculine and feminine, the single number includes the plural, and vice versa, and in
particular the word “Borrower” shall be so construed.




     (b) Section and Schedule references are to this Agreement unless otherwise specified.
The words “hereof”, “herein” and “hereunder” and words of similar import when used in this
Agreement shall refer to this Agreement as a whole and not to any particular provision of
this Agreement.



12









 






     (c) The term “including” is not limiting, and means “including, without limitation”.




     (d) In the computation of periods of time from a specified date to a later specified
date, the word “from” means “from and including”; the words “to” and “until” each mean “to
but excluding”, and the word “through” means “to and including”.




     (e) Unless otherwise expressly provided herein, (i) references to agreements (including
this Agreement and the other Loan Documents) and other contractual instruments shall be
deemed to include all subsequent amendments, restatements, supplements and other
modifications thereto, but only to the extent such amendments, restatements, supplements and
other modifications are not prohibited by the terms of any Loan Document, and (ii)
references to any statute or regulation shall be construed as including all statutory and
regulatory provisions amending, replacing, supplementing or interpreting such statute or
regulation.




     (f) To the extent any of the provisions of the other Loan Documents are inconsistent
with the terms of this Agreement, the provisions of this Agreement shall govern.




     (g) This Agreement and the other Loan Documents may use several different limitations,
tests or measurements to regulate the same or similar matters. All such limitations, tests
and measurements are cumulative and each shall be performed in accordance with its terms.



Section 2. COMMITMENT OF THE BANK.




     2.1. Revolving Loans.




     (a) Revolving Loan Commitment. Subject to the terms and conditions of this
Agreement and the other Loan Documents, and in reliance upon the representations and
warranties of the Borrower set forth herein and in the other Loan Documents, the Bank agrees
to make such Revolving Loans at such times as the Borrower may from time to time request
until, but not including, the Revolving Loan Maturity Date, and in such amounts as the
Borrower may from time to time request, provided, however, that the aggregate principal
balance of all Revolving Loans outstanding at any time shall not exceed the Revolving Loan
Availability. Revolving Loans made by the Bank may be repaid and, subject to the terms and
conditions hereof, borrowed again up to, but not including the Revolving Loan Maturity Date
unless the Revolving Loans are otherwise accelerated, terminated or extended as provided in
this Agreement. The Revolving Loans shall be used by the Borrower for the purpose of
working capital.




     (b) Revolving Loan Interest and Payments. Except as otherwise provided in this
Section 2.1(b), the principal amount of the Revolving Loans outstanding from time to
time shall bear interest at the applicable Revolving Interest Rate. Accrued and unpaid



13









 







interest on the unpaid principal balance of all Revolving Loans outstanding from time to
time which are Prime Loans shall be due and payable monthly, in arrears, commencing on
October 5, 2006 and continuing on the fifth day of each calendar month thereafter, and on
the Revolving Loan Maturity Date. Accrued and unpaid interest on the unpaid principal
balance of all Revolving Loans outstanding from time to time which are LIBOR Loans shall be
payable on the last Business Day of each Interest Period (provided, however, that for
Interest Periods of six months, accrued interest shall also be paid on the date which is
three months from the first day of such Interest Period), commencing on the first such date
to occur after the date hereof, on the date of any principal repayment of a LIBOR Loan and
on the Revolving Loan Maturity Date. From and after maturity, or after the occurrence and
during the continuation of an Event of Default, interest on the outstanding principal
balance of the Revolving Loans, at the option of the Bank, may accrue at the Default Rate
and shall be payable upon demand from the Bank.




     (c) Revolving Loan Principal Payments.




     (i) Revolving Loan Mandatory Payments. All Revolving Loans hereunder
shall be repaid by the Borrower on the Revolving Loan Maturity Date, unless payable
sooner pursuant to the provisions of this Agreement. In the event the aggregate
outstanding principal balance of all Revolving Loans and Letter of Credit
Obligations hereunder exceeds the Revolving Loan Commitment, the Borrower shall,
without notice or demand of any kind, immediately make such repayments of the
Revolving Loans or take such other actions as are satisfactory to the Bank as shall
be necessary to eliminate such excess. Also, if the Borrower chooses not to convert
any Revolving Loan which is a LIBOR Loan to a Prime Loan as provided in Section
2.4(b) and Section 2.4(c), then such Revolving Loan shall immediately be
due and payable on the last Business Day of the then existing Interest Period or on
such earlier date as required by law, all without further demand, presentment,
protest or notice of any kind, all of which are hereby waived by the Borrower.




     (ii) Reserved.




     (iii) Optional Prepayments. The Borrower may from time to time prepay
the Revolving Loans which are Prime Loans, in whole or in part, without any
prepayment penalty whatsoever, provided that any prepayment of the entire principal
balance of the Prime Loans shall include accrued interest on such Prime Loans to the
date of such prepayment.



     2.2. Reserved.



     2.3. Reserved.



     2.3. Additional LIBOR Loan Provisions.



14









 






     (a) LIBOR Loan Prepayments. Notwithstanding anything to the contrary contained
herein, the principal balance of any LIBOR Loan may not be prepaid in whole or in part at
any time. If, for any reason, a LIBOR Loan is paid prior to the last Business Day of any
Interest Period, whether voluntary, involuntary, by reason of acceleration or otherwise,
each such prepayment of a LIBOR Loan will be accompanied by the amount of accrued interest
on the amount prepaid and any and all costs, expenses, penalties and charges incurred by the
Bank as a result of the early termination or breakage of a LIBOR Loan, plus the amount, if
any, by which (i) the additional interest which would have been payable during the Interest
Period on the LIBOR Loan prepaid had it not been prepaid, exceeds (ii) the interest which
would have been recoverable by the Bank by placing the amount prepaid on deposit in the
domestic certificate of deposit market, the eurodollar deposit market, or other appropriate
money market selected by the Bank, for a period starting on the date on which it was prepaid
and ending on the last day of the Interest Period for such LIBOR Loan. The amount of any
such loss or expense payable by the Borrower to the Bank under this section shall be
determined in the Bank’s sole discretion based upon the assumption that the Bank funded its
loan commitment for LIBOR Loans in the London Interbank Eurodollar market and using any
reasonable attribution or averaging methods which the Bank deems appropriate and practical,
provided, however, that the Bank is not obligated to accept a deposit in the London
Interbank Eurodollar market in order to charge interest on a LIBOR Loan at the LIBOR Rate.




     (b) LIBOR Unavailability. If the Bank determines in good faith (which
determination shall be conclusive, absent manifest error) prior to the commencement of any
Interest Period that (i) the making or maintenance of any LIBOR Loan would violate any
applicable law, rule, regulation or directive, whether or not having the force of law, (ii)
United States dollar deposits in the principal amount, and for periods equal to the Interest
Period for funding any LIBOR Loan are not available in the London Interbank Eurodollar
market in the ordinary course of business, (iii) by reason of circumstances affecting the
London Interbank Eurodollar market, adequate and fair means do not exist for ascertaining
the LIBOR Rate to be applicable to the relevant LIBOR Loan, or (iv) the LIBOR Rate does not
accurately reflect the cost to the Bank of a LIBOR Loan, the Bank shall promptly notify the
Borrower thereof and, so long as the foregoing conditions continue, none of the Loans may be
advanced as a LIBOR Loan thereafter. In addition, at the Borrower’s option, each existing
LIBOR Loan shall be immediately (i) converted to a Prime Loan on the last Business Day of
the then existing Interest Period, or (ii) due and payable on the last Business Day of the
then existing Interest Period, without further demand, presentment, protest or notice of any
kind, all of which are hereby waived by the Borrower.




     (c) Regulatory Change. In addition, if, after the date hereof, a Regulatory
Change shall, in the reasonable determination of the Bank, make it unlawful for the Bank to
make or maintain the LIBOR Loans, then the Bank shall promptly notify the Borrower and none
of the Loans may be advanced as a LIBOR Loan thereafter. In addition, at the
Borrower’s option, each existing LIBOR Loan shall be immediately (i) converted to a
Prime Loan on the last Business Day of the then existing Interest Period or on such earlier
date as required by law, or (ii) due and payable on the last Business Day of the



15









 







then
existing Interest Period or on such earlier date as required by law, all without further
demand, presentment, protest or notice of any kind, all of which are hereby waived by the
Borrower.




     (d) LIBOR Indemnity. If any Regulatory Change, or compliance by the Bank or
any Person controlling the Bank with any request or directive of any governmental authority,
central bank or comparable agency (whether or not having the force of law) shall (a) impose,
modify or deem applicable any assessment, reserve, special deposit or similar requirement
against assets held by, or deposits in or for the account of or loans by, or any other
acquisition of funds or disbursements by, the Bank; (b) subject the Bank or any LIBOR Loan
to any tax, duty, charge, stamp tax or fee or change the basis of taxation of payments to
the Bank of principal or interest due from the Borrower to the Bank hereunder (other than a
change in the taxation of the overall net income of the Bank); or (c) impose on the Bank any
other condition regarding such LIBOR Loan or the Bank’s funding thereof, and the Bank shall
determine (which determination shall be conclusive, absent manifest error) that the result
of the foregoing is to increase the cost to, or to impose a cost on, the Bank or such
controlling Person of making or maintaining such LIBOR Loan or to reduce the amount of
principal or interest received by the Bank hereunder, then the Borrower shall pay to the
Bank or such controlling Person, on demand, such additional amounts as the Bank shall, from
time to time, determine are sufficient to compensate and indemnify the Bank for such
increased cost or reduced amount.



     2.5. Interest and Fee Computation; Collection of Funds. Except as otherwise set forth
herein, all interest and fees shall be calculated on the basis of a year consisting of 360 days and
shall be paid for the actual number of days elapsed. Principal payments submitted in funds not
immediately available shall continue to bear interest until collected. If any payment to be made
by the Borrower hereunder or under any Note shall become due on a day other than a Business Day,
such payment shall be made on the next succeeding Business Day and such extension of time shall be
included in computing any interest in respect of such payment. Notwithstanding anything to the
contrary contained herein, the final payment due under any of the Loans must be made by wire
transfer or other immediately available funds. All payments made by the Borrower hereunder or
under any of the Loan Documents shall be made without setoff, counterclaim, or other defense. To
the extent permitted by applicable law, all payments hereunder or under any of the Loan Documents
(including any payment of principal, interest, or fees) to, or for the benefit, of any Person shall
be made by the Borrower free and clear of, and without deduction or withholding for, or account of,
any taxes now or hereinafter imposed by any taxing authority.



     2.6. Late Charge. If any payment of interest or principal due hereunder is not made
within ten (10) days after such payment is due in accordance with the terms hereof, then, in
addition to the payment of the amount so due, the Borrower shall pay to the Bank a “late charge” of
five cents for each whole dollar so overdue to defray part of the cost of collection and
handling such late payment. The Borrower agrees that the damages to be sustained by the Bank
for the detriment caused by any late payment are extremely difficult and impractical to ascertain,



16









 







and that the amount of five cents for each one dollar due is a reasonable estimate of such damages,
does not constitute interest, and is not a penalty.



     2.7. Letters of Credit. Subject to the terms and conditions of this Agreement and
upon (i) the execution by the Borrower and the Bank of a Master Letter of Credit Agreement in form
and substance acceptable to the Bank and the Borrower (together with all amendments, modifications
and restatements thereof, the “Master Letter of Credit Agreement”), and (ii) the execution
and delivery by the Borrower, and the acceptance by the Bank, in its sole and absolute discretion,
of a Letter of Credit Application, the Bank agrees to issue for the account of the Borrower such
Letters of Credit in the standard form of the Bank and otherwise in form and substance acceptable
to the Bank, from time to time during the term of this Agreement, provided that the Letter of
Credit Obligations may not at any time exceed the Letter of Credit Commitment and provided further,
that no Letter of Credit shall have an expiration date later than the Letter of Credit Maturity
Date. The amount of any payments made by the Bank with respect to draws made by a beneficiary
under a Letter of Credit for which the Borrower has failed to reimburse the Bank upon the earlier
of (i) the Bank’s demand for repayment, or (ii) five (5) days from the date of such payment to such
beneficiary by the Bank, shall be deemed to have been converted to a Revolving Loan as of the date
such payment was made by the Bank to such beneficiary. Upon the occurrence of an Event of a
Default and at the option of the Bank, all Letter of Credit Obligations shall be converted to
Revolving Loans consisting of Prime Loans, all without demand, presentment, protest or notice of
any kind, all of which are hereby waived by the Borrower. To the extent the provisions of the
Master Letter of Credit Agreement differ from, or are inconsistent with, the terms of this
Agreement, the provisions of this Agreement shall govern.



     2.8. Taxes.




     (a) All payments made by the Borrower under this Agreement shall be made free and clear
of, and without deduction or withholding for or on account of, any present or future income,
stamp or other taxes, levies, imposts, duties, charges, fees, deductions or withholdings,
now or hereafter imposed, levied, collected, withheld or assessed by any governmental
authority, excluding net income taxes and franchise taxes (imposed in lieu of net income
taxes) imposed on the Bank as a result of a present or former connection between the Bank
and the jurisdiction of the governmental authority imposing such tax or any political
subdivision or taxing authority thereof or therein (other than any such connection arising
solely from the Bank having executed, delivered or performed its obligations or received a
payment under, or enforced, this Agreement or any other Loan Document). If any such
non-excluded taxes, levies, imposts, duties, charges, fees, deductions or withholdings
(collectively, “Non-Excluded Taxes”) or Other Taxes are required to be withheld from
any amounts payable to the Bank hereunder, the amounts so payable to the Bank shall be
increased to the extent necessary to yield to the Bank (after payment of all Non-Excluded
Taxes and Other Taxes) interest or any such other amounts payable hereunder at the rates or
in the amounts specified in this Agreement, provided, however, that the Borrower shall not
be required to increase any such amounts payable to
the Bank with respect to any Non-Excluded Taxes that are attributable to the Bank’s
failure to comply with the requirements of subsection 2.7(c).



17









 






     (b) The Borrower shall pay any Other Taxes to the relevant governmental authority in
accordance with applicable law.




     (c) At the request of the Borrower and at the Borrower’s sole cost, the Bank shall take
reasonable steps to (i) contest its liability for any Non-Excluded Taxes or Other Taxes that
have not been paid, or (ii) seek a refund of any Non-Excluded Taxes or Other Taxes that have
been paid.




     (d) Whenever any Non-Excluded Taxes or Other Taxes are payable by the Borrower, as
promptly as possible thereafter the Borrower shall send to the Bank a certified copy of an
original official receipt received by the Borrower showing payment thereof. If the Borrower
fails to pay any Non-Excluded Taxes or Other Taxes when due to the appropriate taxing
authority or fails to remit to the Bank the required receipts or other required documentary
evidence or if any governmental authority seeks to collect a Non-Excluded Tax or Other Tax
directly from the Bank for any other reason, the Borrower shall indemnify the Bank on an
after-tax basis for any incremental taxes, interest or penalties that may become payable by
the Bank.




     (e) The agreements in this Section shall survive the satisfaction and payment of the
Obligations and the termination of this Agreement.



     2.9. All Loans to Constitute Single Obligation. The Loans shall constitute one
general obligation of the Borrower, and shall be secured by Bank’s priority security interest in
and Lien upon all of the Collateral and by all other security interests, Liens, claims and
encumbrances heretofore, now or at any time or times hereafter granted by the Borrower to Bank.



Section 3. CONDITIONS OF BORROWING.




     Notwithstanding any other provision of this Agreement, the Bank shall not be required to
disburse, make or continue all or any portion of the Loans, if any of the following conditions
shall have occurred.



     3.1. Loan Documents. The Borrower shall have failed to execute and deliver to the
Bank any of the following Loan Documents, all of which must be satisfactory to the Bank and the
Bank’s counsel in form, substance and execution:




     (a) Loan Agreement. Two copies of this Agreement duly executed by the
Borrower.




     (b) Revolving Note. A Revolving Note duly executed by the Borrower, in the
form prepared by and acceptable to the Bank.




     (c) Reserved.




     (d) Reserved.



18









 






     (e) Master Letter of Credit Agreement. A Master Letter of Credit Agreement
prepared by and acceptable to the Bank, duly executed by the Borrower in favor of the Bank.




     (f) Guaranty. A Guaranty dated as of the date of this Agreement, executed by
the Guarantor to and for the benefit of the Bank, in the form prepared by and acceptable to
the Bank (the “Guaranty”).




     (g) Reserved.




     (h) Reserved.




     (i) Reserved.




     (j) Search Results; Lien Terminations. Copies of UCC search reports dated such
a date as is reasonably acceptable to the Bank, listing all effective financing statements
which name the Borrower, under its present names and any previous names, as debtors,
together with (i) copies of such financing statements, (ii) payoff letters evidencing
repayment in full of all existing Debt to be repaid with the Loans, the termination of all
agreements relating thereto and the release of all Liens granted in connection therewith,
with UCC or other appropriate termination statements and documents effective to evidence the
foregoing (other than Permitted Liens), and (iii) such other UCC termination statements as
the Bank may reasonably request.




     (k) Organizational and Authorization Document. Copies of (i) the Articles of
Organization (Certificate of Formation) and Operating Agreement of the Borrower; (ii)
resolutions of the members/ managers of the Borrower approving and authorizing such Person’s
execution, delivery and performance of the Loan Documents to which it is party and the
transactions contemplated thereby; (iii) signature and incumbency certificates of the
members / managers of the Borrower, executing any of the Loan Documents, each of which the
Borrower hereby certifies to be true and complete, and in full force and effect without
modification, it being understood that the Bank may conclusively rely on each such document
and certificate until formally advised by the Borrower of any changes therein; and (iv) good
standing certificates in the state of formation of the Borrower and in each other state
requested by the Bank.




     (l) Insurance. Evidence satisfactory to the Bank of the existence of insurance
required to be maintained pursuant to Section 8.6, together with evidence that the
Bank has been named as a lender’s loss payee on all related insurance policies.




     (m) Reserved.




     (n) Additional Documents. Such other certificates, financial statements,
schedules, resolutions, opinions of counsel, notes and other documents which are provided
for hereunder or which the Bank shall require.



19









 





     3.2. Event of Default. Any Event of Default shall have occurred and be continuing.



     3.3. Material Adverse Effect. The occurrence of any event having a Material Adverse
Effect upon the Borrower.



     3.4. Litigation. Any litigation or governmental proceeding shall have been instituted
against the Borrower or any of its officers or shareholders having a Materially Adverse Effect upon
the Borrower.



     3.5. Representations and Warranties. Any representation or warranty of the Borrower
contained herein or in any Loan Document shall be untrue or incorrect as of the date of any Loan as
though made on such date, except to the extent such representation or warranty expressly relates to
an earlier date.



     3.6. Reserved.



Section 4. NOTES EVIDENCING LOANS.




     4.1. Revolving Note. The Revolving Loans and the Letter of Credit Obligations shall
be evidenced by the Revolving Note. At the time of the initial disbursement of a Revolving Loan
and at each time any additional Revolving Loan shall be requested hereunder or a repayment made in
whole or in part thereon, a notation thereof shall be made on the books and records of the Bank.
All amounts recorded shall be, absent manifest error, conclusive and binding evidence of (i) the
principal amount of the Revolving Loans advanced hereunder and the amount of all Letter of Credit
Obligations, (ii) any accrued and unpaid interest owing on the Revolving Loans, and (iii) all
amounts repaid on the Revolving Loans or the Letter of Credit Obligations. The failure to record
any such amount or any error in recording such amounts shall not, however, limit or otherwise
affect the obligations of the Borrower under the Revolving Note to repay the principal amount of
the Revolving Loans, together with all interest accruing thereon.



     4.2. Reserved.



     4.3. Reserved.



Section 5. MANNER OF BORROWING.




     5.1. Borrowing Procedures. Each Revolving Loan may be advanced either as a Prime Loan
or a LIBOR Loan, provided, however, that at any time, the Borrower may identify no more than ten
(10) Revolving Loans which may be LIBOR Loans. Each Loan shall be made available to the Borrower
upon any written or electronic loan request which the Bank in good faith believes to emanate from a
properly authorized representative of the Borrower, whether or not that is in fact the case. Each
such request shall be effective upon receipt by the Bank, shall be
irrevocable, and shall specify the date, amount and type of borrowing and, in the case of a
LIBOR Loan, the initial Interest Period therefor. The Borrower shall select Interest Periods so as
not to require a payment or prepayment of any LIBOR Loan during an Interest Period for such



20









 







LIBOR
Loan. The final Interest Period for any LIBOR Loan must be such that its expiration occurs on or
before the Maturity Date of such Loan. A request for a Prime Loan must be received by the Bank no
later than 11:00 a.m. Chicago, Illinois time, on the day it is to be funded. A request for a LIBOR
Loan must be (i) received by the Bank no later than 11:00 a.m. Chicago, Illinois time, three days
before the day it is to be funded, and (ii) in an amount equal to Five Hundred Thousand and 00/100
Dollars ($500,000.00) or a higher integral multiple of One Hundred Thousand and 00/100 Dollars
($100,000.00). The proceeds of each Loan shall be made available at the office of the Bank by
credit to the account of the Borrower or by other means requested by the Borrower and acceptable to
the Bank. The Borrower does hereby irrevocably confirm, ratify and approve all such advances by
the Bank and does hereby indemnify the Bank against losses and expenses (including court costs,
attorneys’ and paralegals’ fees) and shall hold the Bank harmless with respect thereto.



     5.2. LIBOR Conversion and Continuation Procedures. Each LIBOR Loan shall
automatically renew for the Interest Period specified in the initial request received by the Bank
pursuant to Section 5.1, at the then current LIBOR Rate unless the Borrower, pursuant to a
subsequent written notice received by the Bank, shall elect a different Interest Period or the
conversion of all or a portion of such LIBOR Loan to a Prime Loan. Each Interest Period occurring
after the initial Interest Period with respect to any LIBOR Loan shall commence on the same day of
each applicable month as the first day of the initial Interest Period. Whenever the last day of
any Interest Period with respect to any LIBOR Loan would otherwise occur on a day other than a
Business Day, the last day of such Interest Period shall be extended to occur on the next
succeeding Business Day. Whenever an Interest Period with respect to any LIBOR Loan would
otherwise end on a day of a month for which there is no numerically corresponding day in the
calendar month, such Interest Period shall end on the last day of such calendar month, unless such
day is not a Business Day, in which event such Interest Period shall be extended to end on the next
Business Day. Upon receipt by the Bank of such subsequent notice, the Borrower may, subject to the
terms and conditions of this Agreement, elect, as of the last day of the applicable Interest
Period, to continue any LIBOR Loan having an Interest Period expiring on such day for a different
Interest Period, or to convert any such LIBOR Loan to a Prime Loan. Such notice shall, in the case
of a conversion to a Prime Loan, be given before 11:00 a.m., Chicago time, on the proposed date of
such conversion, and in the case of conversion to a LIBOR Loan having a different Interest Period,
be given before 11:00 a.m., Chicago time, at least three Business Days prior to the proposed date
of such conversion, specifying: (i) the proposed date of conversion; (ii) the aggregate amount of
Loans to be converted; (iii) the type of Loans resulting from the proposed conversion; and (iv) the
duration of the requested Interest Period. The Borrower may not elect a LIBOR Rate, and an
Interest Period for a LIBOR Loan shall not automatically renew, with respect to any principal
amount which is scheduled to be repaid before the last day of the applicable Interest Period, and
any such amounts shall bear interest at the Prime Rate, until repaid.



     5.3. Letters of Credit. All Letters of Credit shall bear such application, issuance,
renewal, negotiation and other fees and charges, and bear such interest as charged by the Bank or
otherwise payable pursuant to the Master Letter of Credit Agreement. In addition to the
foregoing, each standby Letters of Credit issued under and pursuant to this Agreement shall bear a
prorated annual issuance fee equal to one percent (1.00%) of the face amount of such standby



21









 







Letter
of Credit, payable by the Borrower prior to the issuance by the Bank of such Letter of Credit and
annually thereafter, until (i) such Letter of Credit has expired or has been returned to the Bank,
or (ii) the Bank has paid the beneficiary thereunder the full face amount of such Letter of Credit.



     5.4. Automatic Debit. In order to effectuate the timely payment of any of the
Obligations when due, the Borrower hereby authorizes and directs the Bank, at the Bank’s option, to
(a) debit the amount of the Obligations to any ordinary deposit account of the Borrower, or (b)
make a Revolving Loan hereunder to pay the amount of the Obligations.



     5.5. Discretionary Disbursements. The Bank, in its sole and absolute discretion, may
immediately upon notice to the Borrower, disburse any or all proceeds of the Loans made or
available to the Borrower pursuant to this Agreement to pay any fees, costs, expenses or other
amounts required to be paid by the Borrower hereunder and not so paid. All monies so disbursed
shall be a part of the Obligations, payable by the Borrower on demand from the Bank.



Section 6. SECURITY FOR THE OBLIGATIONS.




     6.1. Security for Obligations. As security for the payment and performance of the
Obligations, the Borrower does hereby pledge, assign, transfer, deliver and grant to the Bank, for
its own benefit and as agent for its Affiliates, a continuing and unconditional first priority
security interest in and to any and all property of the Borrower, of any kind or description,
tangible or intangible, wheresoever located and whether now existing or hereafter arising or
acquired, including the following (all of which property, along with the products and proceeds
therefrom, are individually and collectively referred to as the “Collateral”):




     (a) all property of, or for the account of, the Borrower now or hereafter coming into
the possession, control or custody of, or in transit to, the Bank or any agent or bailee for
the Bank or any parent, Affiliate or Subsidiary of the Bank or any participant with the Bank
in the Loans (whether for safekeeping, deposit, collection, custody, pledge, transmission or
otherwise), including all earnings, dividends, interest, or other rights in connection
therewith and the products and proceeds therefrom, including the proceeds of insurance
thereon; and




     (b) the additional property of the Borrower, whether now existing or hereafter arising
or acquired, and wherever now or hereafter located, together with all additions and
accessions thereto, substitutions, betterments and replacements therefor, products and
Proceeds therefrom, and all of the Borrower’s books and records and recorded data relating
thereto (regardless of the medium of recording or storage), together with all of the
Borrower’s right, title and interest in and to all computer software required to utilize,
create, maintain and process any such records or data on electronic media, identified and
set forth as follows:




	 	(i)	 	All Accounts and all Goods whose sale, lease or other
disposition by the Borrower has given rise to Accounts and have been returned
to, or




22









 






	 	 	 	repossessed or stopped in transit by, the Borrower, or rejected or
refused by an Account Debtor;
	 
	 	(ii)	 	All Inventory, including raw materials, work-in-process and
finished goods;
	 
	 	(iii)	 	All Goods (other than Inventory), including embedded software,
Equipment, vehicles, furniture and Fixtures;
	 
	 	(iv)	 	All Software and computer programs;
	 
	 	(v)	 	All Securities, Investment Property, Financial Assets and
Deposit Accounts;
	 
	 	(vi)	 	All Chattel Paper, Electronic Chattel Paper, Instruments,
Documents, Letter of Credit Rights, all proceeds of letters of credit,
Health-Care-Insurance Receivables, Supporting Obligations, notes secured by
real estate, Commercial Tort Claims and General Intangibles, including Payment
Intangibles; and
	 
	 	(vii)	 	All Proceeds (whether Cash Proceeds or Noncash Proceeds) of
the foregoing property, including all insurance policies and proceeds of
insurance payable by reason of loss or damage to the foregoing property,
including unearned premiums, and of eminent domain or condemnation awards.





     6.2. Reserved.



     6.3. Possession and Transfer of Collateral. Unless an Event of Default exists
hereunder, the Borrower shall be entitled to possession or use of the Collateral (other than
Instruments or Documents, Tangible Chattel Paper, Investment Property consisting of certificated
securities and other Collateral required to be delivered to the Bank pursuant to this Section 6).
The cancellation or surrender of any Note, upon payment or otherwise, shall not affect the right of
the Bank to retain the Collateral for any other of the Obligations. The Borrower shall not sell,
assign (by operation of law or otherwise), license, lease or otherwise dispose of, or grant any
option with respect to any of the Collateral, except that the Borrower may sell Inventory in the
ordinary course of business.



     6.4. Financing Statements. The Borrower shall, at the Bank’s request, at any time and
from time to time, execute and deliver to the Bank such financing statements, amendments and other
documents and do such acts as the Bank deems necessary in order to establish and maintain valid,
attached and perfected first priority security interests in the Collateral in favor of the Bank,
free and clear of all Liens and claims and rights of third parties whatsoever, except Permitted
Liens. The Borrower hereby irrevocably authorizes the Bank at any time, and from time to time,
to file in any jurisdiction any initial financing statements and amendments thereto without
the signature of the Borrower that (a) indicate the Collateral (i) is comprised of all assets of
the



23









 







Borrower or words of similar effect, regardless of whether any particular asset comprising a
part of the Collateral falls within the scope of Article 9 of the Uniform Commercial Code of the
jurisdiction wherein such financing statement or amendment is filed, or (ii) as being of an equal
or lesser scope or within greater detail as the grant of the security interest set forth herein,
and (b) contain any other information required by Section 5 of Article 9 of the Uniform Commercial
Code of the jurisdiction wherein such financing statement or amendment is filed regarding the
sufficiency or filing office acceptance of any financing statement or amendment, including (i)
whether the Borrower is an organization, the type of organization and any Organizational
Identification Number issued to the Borrower, and (ii) in the case of a financing statement filed
as a fixture filing or indicating Collateral as as-extracted collateral or timber to be cut, a
sufficient description of the real property to which the Collateral relates. The Borrower hereby
agrees that a photocopy or other reproduction of this Agreement is sufficient for filing as a
financing statement and the Borrower authorizes the Bank to file this Agreement as a financing
statement in any jurisdiction. The Borrower agrees to furnish any such information to the Bank
promptly upon request. The Borrower further ratifies and affirms its authorization for any
financing statements and/or amendments thereto, executed and filed by the Bank in any jurisdiction
prior to the date of this Agreement.



     6.5. Additional Collateral. The Borrower shall deliver to the Bank immediately upon
its demand, such other collateral as the Bank may from time to time request, should the value of
the Collateral, in the Bank’s sole and absolute discretion, decline, deteriorate, depreciate or
become impaired, and does hereby grant to the Bank a continuing security interest in such other
collateral, which, when pledged, assigned and transferred to the Bank shall be and become part of
the Collateral. The Bank’s security interests in all of the foregoing Collateral shall be valid,
complete and perfected whether or not covered by a specific assignment.



     6.6. Preservation of the Collateral. The Bank may, but is not required, to take such
actions from time to time as the Bank deems appropriate to maintain or protect the Collateral. The
Bank shall have exercised reasonable care in the custody and preservation of the Collateral if the
Bank takes such action as the Borrower shall reasonably request in writing which is not
inconsistent with the Bank’s status as a secured party, but the failure of the Bank to comply with
any such request shall not be deemed a failure to exercise reasonable care; provided, however, the
Bank’s responsibility for the safekeeping of the Collateral shall (i) be deemed reasonable if such
Collateral is accorded treatment substantially equal to that which the Bank accords its own
property, and (ii) not extend to matters beyond the reasonable control of the Bank, including acts
of God, war, insurrection, riot or governmental actions. In addition, any failure of the Bank to
preserve or protect any rights with respect to the Collateral against prior or third parties, or to
do any act with respect to preservation of the Collateral, not so requested by the Borrower, shall
not be deemed a failure to exercise reasonable care in the custody or preservation of the
Collateral. The Borrower shall have the sole responsibility for taking such action as may be
necessary, from time to time, to preserve all rights of the Borrower and the Bank in the Collateral
against prior or third parties. Without limiting the generality of the foregoing, where Collateral
consists in whole or in part of securities, the Borrower represents to, and covenants with, the
Bank that the Borrower has made arrangements for keeping informed of changes or potential changes
affecting
the securities (including rights to convert or subscribe, payment of dividends, reorganization
or other exchanges, tender offers and voting rights), and the Borrower agrees that the Bank shall



24









 







have no responsibility or liability for informing the Borrower of any such or other changes or
potential changes or for taking any action or omitting to take any action with respect thereto.



     6.7. Other Actions as to any and all Collateral. The Borrower further agrees to take
any other action reasonably requested by the Bank to ensure the attachment, perfection and first
priority of, and the ability of the Bank to enforce, the Bank’s security interest in any and all of
the Collateral, including (a) causing the Bank’s name to be noted as secured party on any
certificate of title for a titled good if such notation is a condition to attachment, perfection or
priority of, or ability of the bank to enforce, the Bank’s security interest in such Collateral,
(b) complying with any provision of any statute, regulation or treaty of the United States as to
any Collateral if compliance with such provision is a condition to attachment, perfection or
priority of, or ability of the Bank to enforce, the Bank’s security interest in such Collateral,
(c) obtaining governmental and other third party consents and approvals, including any consent of
any licensor, lessor or other Person obligated on Collateral, (d) obtaining waivers from mortgagees
and landlords in form and substance satisfactory to the Bank, and (e) taking all actions required
by the UCC in effect from time to time or by other law, as applicable in any relevant UCC
jurisdiction, or by other law as applicable in any foreign jurisdiction. The Borrower further
agrees to indemnify and hold the Bank harmless against claims of any Persons not a party to this
Agreement concerning disputes arising over the Collateral.



     6.8. Reserved.



     6.9. Reserved.



     6.10. Letter-of-Credit Rights. If the Borrower at any time is a beneficiary under a
letter of credit now or hereafter issued in favor of the Borrower, the Borrower shall promptly
notify the Bank thereof and, at the request and option of the Bank, the Borrower shall, pursuant to
an agreement in form and substance satisfactory to the Bank, either (i) arrange for the issuer and
any confirmer of such letter of credit to consent to an assignment to the Bank of the proceeds of
any drawing under the letter of credit, or (ii) arrange for the Bank to become the transferee
beneficiary of the letter of credit, with the Bank agreeing, in each case, that the proceeds of any
drawing under the letter to credit are to be applied as provided in this Agreement.



     6.11. Commercial Tort Claims. If the Borrower shall at any time hold or acquire a
Commercial Tort Claim, the Borrower shall immediately notify the Bank in writing signed by the
Borrower of the details thereof and grant to the Bank in such writing a security interest therein
and in the proceeds thereof, all upon the terms of this Agreement, in each case in form and
substance satisfactory to the Bank, and shall execute any amendments hereto deemed reasonably
necessary by the Bank to perfect its security interest in such Commercial Tort Claim.



     6.12. Electronic Chattel Paper and Transferable Records. If the Borrower at any time
holds or acquires an interest in any electronic chattel paper or any “transferable record”, as that
term is defined in Section 201 of the federal Electronic Signatures in Global and National Commerce
Act, or in Section 16 of the Uniform Electronic Transactions Act as in effect in any
relevant jurisdiction, the Borrower shall promptly notify the Bank thereof and, at the request
of the Bank, shall take such action as the Bank may reasonably request to vest in the Bank control




25












 




under Section 9-105 of the UCC of such electronic chattel paper or control under Section 201
of the federal Electronic Signatures in Global and National Commerce Act or, as the case may be,
Section 16 of the Uniform Electronic Transactions Act, as so in effect in such jurisdiction, of
such transferable record. The Bank agrees with the Borrower that the Bank will arrange, pursuant
to procedures satisfactory to the Bank and so long as such procedures will not result in the Bank’s
loss of control, for the Borrower to make alterations to the electronic chattel paper or
transferable record permitted under Section 9-105 of the UCC or, as the case may be, Section 201 of
the federal Electronic Signatures in Global and National Commerce Act or Section 16 of the Uniform
Electronic Transactions Act for a party in control to make without loss of control.




Section 7. REPRESENTATIONS AND WARRANTIES.




     To induce the Bank to make the Loans, the Borrower makes the following representations and
warranties to the Bank, each of which shall survive the execution and delivery of this Agreement:



     7.1. Borrower Organization and Name. The Borrower is a limited liability company duly
organized, existing and in good standing under the laws of the State of Kansas, with full and
adequate power to carry on and conduct its business as presently conducted. The Borrower is duly
licensed or qualified in all foreign jurisdictions wherein the nature of its activities require
such qualification or licensing, except for such jurisdictions where the failure to so qualify
would not have a Material Adverse Effect. The Borrower’s Organizational Identification Number is
20-0364520. The exact legal name of the Borrower is as set forth in the first paragraph of this
Agreement, and the Borrower currently does not conduct, nor has it during its existence conducted,
business under any other name or trade name, except for United Bio Energy Fuels, LLC.



     7.2. Authorization. The Borrower has full right, power and authority to enter into
this Agreement, to make the borrowings and execute and deliver the Loan Documents as provided
herein and to perform all of its duties and obligations under this Agreement and the other Loan
Documents. The execution and delivery of this Agreement and the other Loan Documents will not, nor
will the observance or performance of any of the matters and things herein or therein set forth,
violate or contravene any provision of law or of the articles of organization of the Borrower. All
necessary and appropriate action has been taken on the part of the Borrower to authorize the
execution and delivery of this Agreement and the Loan Documents.



     7.3. Validity and Binding Nature. This Agreement and the other Loan Documents are the
legal, valid and binding obligations of the Borrower, enforceable against the Borrower in
accordance with their terms, subject to bankruptcy, insolvency and similar laws affecting the
enforceability of creditors’ rights generally and to general principles of equity.



     7.4. Consent; Absence of Breach. The execution, delivery and performance of this
Agreement, the other Loan Documents and any other documents or instruments to be executed and
delivered by the Borrower in connection with the Loans, and the borrowings by the Borrower
hereunder, do not and will not (a) require any consent, approval, authorization of, or filings
with, notice to or other act by or in respect of, any governmental authority or any other



26









 







Person (other than any consent or approval which has been obtained and is in full force and
effect); (b) conflict with (i) any provision of law or any applicable regulation, order, writ,
injunction or decree of any court or governmental authority, (ii) the articles of organization of
the Borrower, or (iii) any material agreement, indenture, instrument or other document, or any
judgment, order or decree, which is binding upon the Borrower or any of its properties or assets;
or (c) require, or result in, the creation or imposition of any Lien on any asset of Borrower,
other than Liens in favor of the Bank created pursuant to this Agreement.




     7.5. Ownership of Properties; Liens. The Borrower is the sole owner all of its
properties and assets, real and personal, tangible and intangible, of any nature whatsoever
(including patents, trademarks, trade names, service marks and copyrights), free and clear of all
Liens, charges and claims (including infringement claims with respect to patents, trademarks,
service marks, copyrights and the like), other than Permitted Liens.



     7.6. Equity Ownership. All issued and outstanding Capital Securities of the Borrower
and each of its Subsidiaries are duly authorized and validly issued, fully paid, non-assessable,
and free and clear of all Liens other than those in favor of the Bank, if any. As of the date
hereof, there are no pre-emptive or other outstanding rights, options, warrants, conversion rights
or other similar agreements or understandings for the purchase or acquisition of any Capital
Securities of the Borrower and each of its Subsidiaries.



     7.7. Intellectual Property. The Borrower owns and possesses or has a license or other
right to use all Intellectual Property, as are necessary for the conduct of the businesses of the
Borrower, without any infringement upon rights of others which could reasonably be expected to have
a Material Adverse Effect upon the Borrower, and no material claim has been asserted and is pending
by any Person challenging or questioning the use of any Intellectual Property or the validity or
effectiveness of any Intellectual Property nor does the Borrower know of any valid basis for any
such claim.



     7.8. Financial Statements. All financial statements submitted to the Bank have been
prepared in accordance with sound accounting practices and GAAP on a basis, except as otherwise
noted therein, consistent with the previous fiscal year and present fairly the financial condition
of the Borrower and the results of the operations for the Borrower as of such date and for the
periods indicated. Since the date of the most recent financial statement submitted by the Borrower
to the Bank, there has been no change in the financial condition or in the assets or liabilities of
the Borrower having a Material Adverse Effect on the Borrower.



     7.9. Litigation and Contingent Liabilities. There is no litigation, arbitration
proceeding, demand, charge, claim, petition or governmental investigation or proceeding pending, or
threatened, against the Borrower, which, if adversely determined, which might reasonably be
expected to have a Material Adverse Effect upon the Borrower, except as set forth in Schedule
7.9. Other than any liability incident to such litigation or proceedings, the Borrower has no
material guarantee obligations, contingent liabilities, liabilities for taxes, or any long-term
leases or unusual forward or long-term commitments, including any interest rate or foreign currency
swap or exchange transaction or other obligation in respect of derivatives, that are not
fully-reflected or fully reserved for in the most recent audited financial statements delivered



27









 







pursuant to subsection 8.8(a) or fully-reflected or fully reserved for in the most recent
quarterly financial statements delivered pursuant to subsection 8.8(b) and not permitted by
Section 9.1.




     7.10. Event of Default. No Event of Default exists or would result from the
incurrence by the Borrower of any of the Obligations hereunder or under any of the other Loan
Document, and the Borrower is not in default (without regard to grace or cure periods) under any
other contract or agreement to which it is a party, which would result in a Material Adverse Effect
to the Borrower.



     7.11. Adverse Circumstances. No condition, circumstance, event, agreement, document,
instrument, restriction, litigation or proceeding (or threatened litigation or proceeding or basis
therefor) exists which (a) would have a Material Adverse Effect upon the Borrower, or (b) would
constitute an Event of Default.



     7.12. Environmental Laws and Hazardous Substances. The Borrower will comply in all
material respects with all Environmental Laws and will obtain all licenses, permits, certificates,
approvals and similar authorizations thereunder. There has been no investigation, proceeding,
complaint, order, directive, claim, citation or notice by any governmental authority or any other
Person, nor is any pending or, to the best of the Borrower’s knowledge, threatened, and the
Borrower shall immediately notify the Bank upon becoming aware of any such investigation,
proceeding, complaint, order, directive, claim, citation or notice, and shall take prompt and
appropriate actions to respond thereto, with respect to any non-compliance with, or violation of,
the requirements of any Environmental Law by the Borrower or the release, spill or discharge,
threatened or actual, of any Hazardous Material or the generation, use, storage, treatment,
transportation, manufacture, handling, production or disposal of any Hazardous Material or any
other environmental, health or safety matter, which affects the Borrower or its business,
operations or assets or any properties at which the Borrower has transported, stored or disposed of
any Hazardous Substances. The Borrower has no material liability, contingent or otherwise, in
connection with a release, spill or discharge, threatened or actual, of any Hazardous Substances or
the generation, use, storage, treatment, transportation, manufacture, handling, production or
disposal of any Hazardous Material. The Borrower further agrees to allow the Bank or its agent
access to the properties of the Borrower to confirm compliance with all Environmental Laws, and the
Borrower shall, following determination by the Bank that there is non-compliance, or any condition
which requires any action by or on behalf of the Borrower in order to avoid any non-compliance,
with any Environmental Law, at the Borrower’s sole expense, cause an independent environmental
engineer acceptable to the Bank to conduct such tests of the relevant site as are appropriate, and
prepare and deliver a report setting forth the result of such tests, a proposed plan for
remediation and an estimate of the costs thereof.



     7.13. Solvency, etc. As of the date hereof, and immediately prior to and after giving
effect to the issuance of each Letter of Credit and each Loan 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 Bankruptcy Code, (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



28









 







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, and does not believe 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.




     7.14. ERISA Obligations. All Employee Plans of the Borrower meet the minimum funding
standards of Section 302 of ERISA and 412 of the Internal Revenue Code where applicable, and each
such Employee Plan that is intended to be qualified within the meaning of Section 401 of the
Internal Revenue Code of 1986 is qualified. No withdrawal liability has been incurred under any
such Employee Plans and no “Reportable Event” or “Prohibited Transaction” (as such terms are
defined in ERISA), has occurred with respect to any such Employee Plans, unless approved by the
appropriate governmental agencies. The Borrower has promptly paid and discharged all obligations
and liabilities arising under the Employee Retirement Income Security Act of 1974 (“ERISA”)
of a character which if unpaid or unperformed might result in the imposition of a Lien against any
of its properties or assets.



     7.15. Labor Relations. Except as could not reasonably be expected to have a Material
Adverse Effect, (i) there are no strikes, lockouts or other labor disputes against the Borrower or
threatened, (ii) hours worked by and payment made to employees of the Borrower have not been in
violation of the Fair Labor Standards Act or any other applicable law, and (ii) no unfair labor
practice complaint is pending against the Borrower or threatened before any governmental authority.



     7.16. Security Interest. This Agreement creates a valid security interest in favor of
the Bank in the Collateral and, when properly perfected by filing in the appropriate jurisdictions,
or by possession or Control of such Collateral by the Bank or delivery of such Collateral to the
Bank, shall constitute a valid, perfected, first-priority security interest in such Collateral.



     7.17. Lending Relationship. The relationship hereby created between the Borrower and
the Bank is and has been conducted on an open and arm’s length basis in which no fiduciary
relationship exists, and the Borrower has not relied and is not relying on any such fiduciary
relationship in executing this Agreement and in consummating the Loans. The Bank represents that
it will receive any Note payable to its order as evidence of a bank loan.



     7.18. Business Loan. The Loans, including interest rate, fees and charges as
contemplated hereby, (i) are business loans within the purview of 815 ILCS 205/4(1)(c), as amended
from time to time, (ii) are an exempted transaction under the Truth In Lending Act, 12 U.S.C. 1601
et seq., as amended from time to time, and (iii) do not, and when disbursed shall
not, violate the provisions of the Illinois usury laws, any consumer credit laws or the usury laws
of any state which may have jurisdiction over this transaction, the Borrower or any property
securing the Loans.



     7.19. Taxes. The Borrower has timely filed all tax returns and reports required by
law to have been filed by it and has paid all taxes, governmental charges and assessments due and



29









 







payable with respect to such returns, except any such taxes or charges which are being
diligently contested in good faith by appropriate proceedings and for which adequate reserves in
accordance with GAAP. To Borrower’s knowledge, there is no controversy or objection pending, or
threatened in respect of any tax returns of the Borrower.




     7.20. Compliance with Regulation U. No portion of the proceeds of the Loans shall be
used by the Borrower, or any Affiliate of the Borrower, either directly or indirectly, for the
purpose of purchasing or carrying any margin stock, within the meaning of Regulation U as adopted
by the Board of Governors of the Federal Reserve System or any successor thereto.



     7.21. Governmental Regulation. The Borrower is not subject to regulation under the
Public Utility Holding Company Act of 1935, the Federal Power Act, the ICC Termination Act of 1995
or the Investment Company Act of 1940 or to any federal or state statute or regulation limiting its
ability to incur indebtedness for borrowed money.



     7.22. Bank Accounts. All Deposit Accounts and operating bank accounts of the Borrower
and its Subsidiaries are located at the Bank and the Borrower has no other Deposit Accounts except
those listed on Schedule 7.22 attached hereto.



     7.23. Place of Business. The principal place of business and books and records of the
Borrower is set forth in the preamble to this Agreement.



     7.24. Complete Information. This Agreement and all financial statements, schedules,
certificates, confirmations, agreements, contracts, and other materials and information heretofore
or contemporaneously herewith furnished in writing by the Borrower to the Bank for purposes of, or
in connection with, this Agreement and the transactions contemplated hereby is, and all written
information hereafter furnished by or on behalf of the Borrower to the Bank pursuant hereto or in
connection herewith will be, true and accurate in every material respect on the date as of which
such information is dated or certified, and none of such information is or will be incomplete by
omitting to state any material fact necessary to make such information not misleading in light of
the circumstances under which made (it being recognized by the Bank that any projections and
forecasts provided by the Borrower are based on good faith estimates and assumptions believed by
the Borrower to be reasonable as of the date of the applicable projections or assumptions and that
actual results during the period or periods covered by any such projections and forecasts may
differ from projected or forecasted results).



     7.25. Letters of Credit. Existing letters of credit for the benefit of the Borrower
issued under that certain Loan and Security Agreement by and among LBC, United Bio Energy Fuels,
LLC and Ingredients dated as of November 4, 2004 will be deemed for all purposes to have been
issued pursuant to this Agreement, provided that any fees accruing with respect to the existing
letters of credit will be payable in accordance with the agreements governing such letters of
credit. Said letters of credit are described on Schedule 7.25 attached hereto.



     7.26.
Reserved.



Section 8. AFFIRMATIVE COVENANTS.




30









 








     8.1. Compliance with Bank Regulatory Requirements; Increased Costs. If the Bank shall
reasonably determine that any Regulatory Change, or compliance by the Bank or any Person
controlling the Bank with any request or directive (whether or not having the force of law) of any
governmental authority, central bank or comparable agency has or would have the effect of reducing
the rate of return on the Bank’s or such controlling Person’s capital as a consequence of the
Bank’s obligations hereunder or under any Letter of Credit to a level below that which the Bank or
such controlling Person could have achieved but for such Regulatory Change or compliance (taking
into consideration the Bank’s or such controlling Person’s policies with respect to capital
adequacy) by an amount deemed by the Bank or such controlling Person to be material or would
otherwise reduce the amount of any sum received or receivable by the Bank under this Agreement or
under any Note with respect thereto, then from time to time, upon demand by the Bank (which demand
shall be accompanied by a statement setting forth the basis for such demand and a calculation of
the amount thereof in reasonable detail), the Borrower shall pay directly to the Bank or such
controlling Person such additional amount as will compensate the Bank for such increased cost or
such reduction, so long as such amounts have accrued on or after the day which is one hundred
eighty days (180) days prior to the date on which the Bank first made demand therefor.



     8.2. Borrower Existence. The Borrower shall at all times (a) preserve and maintain
its existence and good standing in the jurisdiction of its organization, (b) preserve and maintain
its qualification to do business and good standing in each jurisdiction where the nature of its
business makes such qualification necessary (other than such jurisdictions in which the failure to
be qualified or in good standing could not reasonably be expected to have a Material Adverse
Effect), and (c) continue as a going concern in the business which the Borrower is presently
conducting. If the Borrower does not have an Organizational Identification Number and later
obtains one, the Borrower shall promptly notify the Bank of such Organizational Identification
Number.



     8.3. Compliance With Laws. The Borrower shall use the proceeds of the Loans for
working capital and other general corporate or business purposes not in contravention of any
requirements of law and not in violation of this Agreement, and shall comply in all material
respects, including the conduct of its business and operations and the use of its properties and
assets, with all applicable laws, rules, regulations, decrees, orders, judgments, licenses and
permits, except where failure to comply could not reasonably be expected to have a Material Adverse
Effect. In addition, and without limiting the foregoing sentence, the Borrower shall (a) ensure,
and cause each Subsidiary to ensure, that no person who owns a controlling interest in or otherwise
controls the Borrower or any Subsidiary is or shall be listed on the Specially Designated Nationals
and Blocked Person List or other similar lists maintained by the Office of Foreign Assets Control
(“OFAC”), the Department of the Treasury or included in any Executive Orders, (b) not use
or permit the use of the proceeds of the Loans to violate any of the foreign asset control
regulations of OFAC or any enabling statute or Executive Order relating thereto, and (c) comply,
and cause each Subsidiary to comply, with all applicable Bank Secrecy Act (“BSA”) laws and
regulations, as amended.



31









 








     8.4. Payment of Taxes and Liabilities. The Borrower shall pay and discharge, prior to
delinquency and before penalties accrue thereon, all property and other taxes, and all governmental
charges or levies against it or any of the Collateral, as well as claims of any kind which, if
unpaid, could become a Lien on any of its property; provided that the foregoing shall not require
the Borrower to pay any such tax or charge so long as it shall contest the validity thereof in good
faith by appropriate proceedings and shall set aside on its books adequate reserves with respect
thereto in accordance with GAAP and, in the case of a claim which could become a Lien on any of the
Collateral, such contest proceedings stay the foreclosure of such Lien or the sale of any portion
of the Collateral to satisfy such claim.



     8.5. Maintain Property. The Borrower shall at all times maintain, preserve and keep
its plant, properties and Equipment, including any Collateral, in good repair, working order and
condition, and shall from time to time make all needful and proper repairs, renewals, replacements,
and additions thereto so that at all times the efficiency thereof shall be fully preserved and
maintained. The Borrower shall permit the Bank to examine and inspect such plant, properties and
Equipment, including any Collateral, at all reasonable times upon three (3) business day’s written
notice unless an Event of Default exists.



     8.6. Maintain Insurance. The Borrower shall at all times maintain with insurance
companies reasonably acceptable to the Bank, such insurance coverage as may be required by any law
or governmental regulation or court decree or order applicable to it and such other insurance, to
such extent and against such hazards and liabilities, including employers’, public and professional
liability risks, as is customarily maintained by companies similarly situated, and shall have
insured amounts no less than, and deductibles no higher than, are reasonably acceptable to the
Bank. The Borrower shall furnish to the Bank a certificate setting forth in reasonable detail the
nature and extent of all insurance maintained by the Borrower, which shall be reasonably acceptable
in all respects to the Bank. The Borrower shall cause each issuer of an insurance policy to provide
the Bank with an endorsement (i) showing the Bank as lender’s loss payee with respect to each
policy of property or casualty insurance; and (ii) providing that thirty (30) days notice will be
endeavored to be given to the Bank prior to any cancellation of, material reduction or change in
coverage provided by or other material modification to such policy. The Borrower shall execute and
deliver to the Bank a collateral assignment, in form and substance satisfactory to the Bank, of
each business interruption insurance policy maintained by the Borrower.



     In the event the Borrower either fails to provide the Bank with evidence of the insurance
coverage required by this Section or at any time hereafter shall fail to obtain or maintain any of
the policies of insurance required above, or to pay any premium in whole or in part relating
thereto, then the Bank, without waiving or releasing any obligation or default by the Borrower
hereunder, may at any time (but shall be under no obligation to so act), obtain and maintain such
policies of insurance and pay such premiums and take any other action with respect thereto, which
the Bank deems advisable. This insurance coverage (a) may, but need not, protect the Borrower’s
interests in such property, including the Collateral, and (b) may not pay any claim made by, or
against, the Borrower in connection with such property, including the Collateral. The Borrower may
later cancel any such insurance purchased by the Bank, but only after providing the Bank with
evidence that the Borrower has obtained the insurance coverage



32









 







required by this Section. If the Bank purchases insurance for the Collateral, the Borrower
will be responsible for the costs of that insurance, including interest and any other charges that
may be imposed with the placement of the insurance, until the effective date of the cancellation or
expiration of the insurance. The costs of the insurance may be added to the principal amount of
the Loans owing hereunder. The costs of the insurance may be more than the cost of the insurance
the Borrower may be able to obtain on its own.




     8.7. ERISA Liabilities; Employee Plans. The Borrower shall (i) keep in full force and
effect any and all Employee Plans which are presently in existence or may, from time to time, come
into existence under ERISA, and not withdraw from any such Employee Plans, unless such withdrawal
can be effected or such Employee Plans can be terminated without liability in excess of $1,000,000
to the Borrower; (ii) make contributions to all of such Employee Plans in a timely manner and in a
sufficient amount to comply with the standards of ERISA; including the minimum funding standards of
ERISA; (iii) comply with all material requirements of ERISA which relate to such Employee Plans;
(iv) notify the Bank immediately upon receipt by the Borrower of any notice concerning the
imposition of any withdrawal liability in excess of $1,000,000 or of the institution of any
proceeding or other action which may result in the termination of any such Employee Plans or the
appointment of a trustee to administer such Employee Plans; (v) promptly advise the Bank of the
occurrence of any “Reportable Event” or “Prohibited Transaction” (as such terms are defined in
ERISA), with respect to any such Employee Plans; and (vi) amend any Employee Plan that is intended
to be qualified within the meaning of Section 401 of the Internal Revenue Code of 1986 to the
extent necessary to keep the Employee Plan qualified, and to cause the Employee Plan to be
administered and operated in a manner that does not cause the Employee Plan to lose its qualified
status.



     8.8. Financial Statements. The Borrower shall at all times maintain a standard and
modern system of accounting, on the accrual basis of accounting and in all respects in accordance
with GAAP, and shall furnish to the Bank or its authorized representatives such information
regarding the business affairs, operations and financial condition of the Borrower, including:




     (a) promptly when available, and in any event, within ninety (90) days after the close
of each of its fiscal years, a copy of the annual unaudited financial statements of the
Borrower, including balance sheet, statement of income and retained earnings, statement of
cash flows for the fiscal year then ended and such other information (including nonfinancial
information) as the Bank may reasonably request, in reasonable detail, prepared and
certified without adverse reference to going concern value and without qualification by
Guarantor; and




     (b) promptly when available, and in any event, within thirty (30) days following the
end of each fiscal quarter, a copy of the financial statements of the Borrower regarding
such fiscal quarter, including balance sheet, statement of income and retained earnings,
statement of cash flows for the fiscal quarter then ended and such other information
(including nonfinancial information) as the Bank may request, in reasonable detail, prepared
and certified as true and correct by the Borrower’s treasurer or chief financial officer.



33









 







No change with respect to such accounting principles shall be made by the Borrower without giving
prior notification to the Bank. The Borrower represents and warrants to the Bank that the
financial statements delivered to the Bank at or prior to the execution and delivery of this
Agreement and to be delivered at all times thereafter accurately reflect and will accurately
reflect the financial condition of the Borrower. The Bank shall have the right at all times during
business hours to inspect the books and records of the Borrower and make extracts therefrom.




     8.9. Guarantor Financial Statements. The Borrower shall furnish, or cause to be
furnished, to the Bank or its authorized representatives such information regarding the business
affairs, operations and financial condition of the Guarantor, including:




     (a) promptly when available, and in any event, within one hundred twenty (120) days
after the close of each of its fiscal years, a copy of the annual audited financial
statements of the Guarantor, including balance sheet, statement of income and retained
earnings, statement of cash flows for the fiscal year then ended and such other information
(including nonfinancial information) as the Bank may reasonably request, in reasonable
detail, prepared and certified without adverse reference to going concern value and without
qualification by an independent auditor of recognized standing, selected by the Guarantor
and reasonably acceptable to the Bank / as accurate by the Borrower’s treasurer or chief
financial officer; and




     (b) promptly when available, and in any event, within forty five (45) days following
the end of each fiscal quarter, a copy of the financial statements of the Guarantor
regarding such fiscal quarter, including balance sheet, statement of income and retained
earnings, statement of cash flows for the fiscal quarter then ended and such other
information (including nonfinancial information) as the Bank may request, in reasonable
detail, prepared and certified as true and correct by the Guarantor’s treasurer or chief
financial officer.


Notwithstanding the above, the Guarantor shall be deemed to have satisfied, in full, the terms of
this Section 8.9 by delivering to the Bank the annual and quarterly financial statements in
compliance with Sections 11.2.1 and 11.2.2 of the 2006 Amended and Restated Credit Agreement dated
May 18, 2006 with Guarantor as the borrower and Bank as a syndication party so long as the Bank
remains a syndication party thereunder. Delivery of the Guarantor’s Form 10-K and 10-Q as prepared
and filed in accordance with the requirements of the Securities Exchange Commission shall be deemed
to satisfy the requirements hereunder.




     8.10. Supplemental Financial Statements. The Borrower shall immediately upon receipt
thereof, provide to the Bank copies of interim and supplemental reports if any, submitted to the
Borrower by independent accountants in connection with any interim audit or review of the books of
the Borrower.



     8.11.  Reserved.





34









 








     8.12.  Reserved.



     8.13.  Reserved.



     8.14. Covenant Compliance Certificate. The Borrower shall, contemporaneously with the
furnishing of the financial statements pursuant to Section 8.8, deliver to the Bank a duly
completed compliance certificate, dated the date of such financial statements and certified as true
and correct by an appropriate officer of the Borrower, containing a computation of each of the
financial covenants set forth in Section 10 and stating that the Borrower has not become
aware of any Event of Default or Unmatured Event of Default that has occurred and is continuing or,
if there is any such Event of Default or Unmatured Event of Default describing it and the steps, if
any, being taken to cure it.



     8.15. Reserved.



     8.16. Other Reports. The Borrower shall, within such period of time as the Bank may
specify, deliver to the Bank such other schedules and reports as the Bank may require.



     8.17. Reserved.



     8.18. Intellectual Property. The Borrower shall maintain, preserve and renew all
Intellectual Property necessary for the conduct of its business as and where the same is currently
located as heretofore or as hereafter conducted by it.



     8.19. Notice of Proceedings. The Borrower, promptly upon becoming aware, shall give
written notice to the Bank of any litigation, arbitration or governmental investigation or
proceeding not previously disclosed by the Borrower to the Bank which has been instituted or, to
the knowledge of the Borrower, is threatened against the Borrower or to which any of its properties
is subject which might reasonably be expected to have a Material Adverse Effect.



     8.20. Notice of Event of Default or Material Adverse Effect. The Borrower shall,
immediately after the commencement thereof, give notice to the Bank in writing of the occurrence of
any Event of Default or the occurrence of any condition or event having a Material Adverse Effect.



     8.21. Environmental Matters. If any release or threatened release or other disposal
of Hazardous Substances shall occur or shall have occurred and not been properly remedied on any
real property or any other assets of the Borrower, the Borrower shall cause the prompt containment
and removal of such Hazardous Substances and the remediation of such real property or other assets
as necessary to comply with all Environmental Laws and to preserve the value of such real property
or other assets. Without limiting the generality of the foregoing, the Borrower shall comply with
any Federal or state judicial or administrative order requiring the performance at any real
property of the Borrower of activities in response to the release or threatened release of a
Hazardous Substance. To the extent that the transportation of Hazardous Substances is permitted by
this Agreement, the Borrower shall dispose of such Hazardous



35









 







Substances, or of any other wastes, only at licensed disposal facilities operating in
compliance with Environmental Laws.




     8.22. Further Assurances. The Borrower shall take such actions as are necessary or as
the Bank may reasonably request from time to time to ensure that the Obligations under the Loan
Documents are secured by substantially all of the assets of the Borrower, in each case as the Bank
may determine, including (a) the execution and delivery of security agreements, pledge agreements,
mortgages, deeds of trust, financing statements and other documents, and the filing or recording of
any of the foregoing, and (b) the delivery of certificated securities and other collateral with
respect to which perfection is obtained by possession.



     8.23. Banking Relationship. The Borrower covenants and agrees, at all times during
the term of this Agreement, to utilize the Bank as its primary bank of account and depository for
all financial services, including all receipts, disbursements, cash management and related service.



     8.24. Non-Utilization Fee. The Borrower agrees to pay to the Bank a non-utilization
fee equal to one-quarter of one percent (0.25%) of the total of (a) the Revolving Loan Commitment,
minus (b) the sum of (i) the daily average of the aggregate principal amount of all
Revolving Loans outstanding, plus (ii) the daily average of the aggregate amount of the
Letter of Credit Obligations, which non- utilization fee shall be (A) calculated on the basis of a
year consisting of 360 days, (B) paid for the actual number of days elapsed, and (C) payable
monthly in arrears on the last day of each month, commencing on September 30, 2006, and on the
Revolving Loan Maturity Date.



     8.25. Reserved.



     8.26. Prepayment Fee. If, prior to the Revolving Loan Maturity Date, Borrower prepays
all of the Obligations and this Agreement is terminated, Borrower agrees to pay to Bank as a
prepayment fee (i) two percent (2%) of $13,000,000.00 if such prepayment occurs more than one (1)
year prior to the Revolving Loan Maturity Date or (ii) one percent (1%) of $13,000,000.00 if such
prepayment occurs one (1) year or less than one (1) year prior to the Revolving Loan Maturity Date.



Section 9. NEGATIVE COVENANTS.




     9.1. Debt. The Borrower shall not, either directly or indirectly, create, assume,
incur or have outstanding any Debt (including purchase money indebtedness), or become liable,
whether as endorser, guarantor, surety or otherwise, for any debt or obligation of any other
Person, except:




     (a) the Obligations under this Agreement and the other Loan Documents;




     (b) obligations of the Borrower for Taxes, assessments, municipal or other governmental
charges;




     (c) obligations of the Borrower for accounts payable, other than for money borrowed,
incurred in the ordinary course of business;



36









 









     (d) Debt of the Borrower to any domestic Wholly-Owned Subsidiary not to exceed Five
Hundred Thousand and 00/100 Dollars ($500,000.00) in the aggregate, or Debt of any domestic
Wholly-Owned Subsidiary to the Borrower or another domestic Wholly-Owned Subsidiary not to
exceed Five Hundred Thousand and 00/100 Dollars ($500,000.00) in the aggregate; provided
that such Debt shall be evidenced by a note in form and substance reasonably satisfactory to
the Bank and pledged and delivered to the Bank pursuant to the Loan Documents as additional
collateral security for the Obligations, and the obligations under such note shall be
Subordinated Debt;




     (e) Hedging Obligations incurred in favor of the Bank, an Affiliate thereof or a Person
for bona fide hedging purposes and not for speculation;




     (f) Capitalized Lease Obligations, provided that the aggregate amount of all such Debt
outstanding at any time shall not exceed Fifty Thousand and 00/100 Dollars ($50,000.00) in
the aggregate;




     (g) Debt for Capital Expenditures incurred after the date of this Agreement not to
exceed Five Hundred Thousand and 00/100 Dollars ($500,000.00) during the term of this
Agreement;




     (h) Debt described on Schedule 9.1 and any extension, renewal or refinancing
thereof so long as the principal amount thereof is not increased;




     (i) other unsecured subordinated Debt, in addition to the Debt listed above, in an
aggregate amount outstanding at any time not to exceed Fifty Thousand and 00/100 Dollars
($50,000.00).




     (j) any Debt of the Borrower to the Guarantor or US BioEnergy Corporation so long as
such Debt is subordinate to this Loan, is unsecured and not in excess of Two Million and
00/100 Dollars ($2,000,000) and is subject to the execution and delivery of a subordination
agreement signed by Guarantor and/or U.S. Bio Energy Corporation in a mutually agreeable
form similar to the agreement attached as Schedule 9.1(j).



     9.2. Encumbrances. The Borrower shall not, either directly or indirectly, create,
assume, incur or suffer or permit to exist any Lien or charge of any kind or character upon any
asset of the Borrower, whether owned at the date hereof or hereafter acquired, except for Permitted
Liens.



     9.3. Investments. The Borrower shall not, either directly or indirectly, make or have
outstanding any Investment, except:




     (a) contributions by the Borrower to the capital of any Wholly-Owned Subsidiary which
have granted a first perfected security interest in all of its/their assets in favor of the
Bank, or by any Subsidiary to the capital of any other domestic Wholly-Owned Subsidiary;



37









 









     (b) Investments constituting Debt permitted by Section 9.1;




     (c) Contingent Liabilities constituting Debt permitted by Section 9.1 or Liens
permitted by Section 9.2;




     (d) Cash Equivalent Investments;




     (e) bank deposits in the ordinary course of business, provided that the aggregate
amount of all such deposits (excluding amounts in payroll accounts or for accounts payable,
in each case to the extent that checks have been issued to third parties) which are
maintained with any bank other than the Bank shall not at any time exceed $50,000.00;




     (f) Investments in securities of Account Debtors received pursuant to any plan of
reorganization or similar arrangement upon the bankruptcy or insolvency of such account
debtors; and




     (g) Investments listed on Schedule 9.3 as of the Closing Date.




     (h) Investments in addition to those permitted by clauses (a) through (g) above, in an
aggregate amount not to exceed One Million and 00/100 Dollars ($1,000,000.00).


provided, however, that (i) any Investment which when made complies with the requirements of the
definition of the term “Cash Equivalent Investment” may continue to be held notwithstanding that
such Investment if made thereafter would not comply with such requirements; and (ii) no Investment
otherwise permitted by subsections (b) or (c) shall be permitted to be made if, immediately before
or after giving effect thereto, any Event of Default or Unmatured Event of Default exists.




     9.4. Reserved.



     9.5. Reserved.



     9.6. Distributions. The Borrower may make the following distributions using a maximum
of seventy-five percent (75%) of the previous fiscal year’s Net Income (hereinafter the “75%
Cap”): (a) make any distribution or dividend (other than stock dividends), whether in cash or
otherwise, to any of its equityholders, (b) purchase or redeem any of its equity interests or any
warrants, options or other rights in respect thereof, (c) set aside funds for any of the foregoing.
The 75% Cap does not apply to the following distributions: (i) any Subsidiary may pay dividends
or make other distributions to the Borrower; (ii) so long as no Event of Default or Unmatured Event
of Default exists or would result therefrom Borrower may, pay or prepay interest on, principal of,
premium, if any, redemption, conversion, exchange, purchase, retirement, defeasance, sinking fund
or any other payment in respect of any Subordinated Debt; (iii) the Borrower may make quarterly
distributions to each of its members in an amount not greater than the quarterly estimated income
tax payments required to be made by each such



38









 







member based upon the income of such member accruing due to the operations of the Borrower and
the resulting federal tax liability of such member; and (iv) Borrower may pay any management fees
or similar fees to any of its equityholders or any Affiliate thereof pursuant to that certain
Management Agreement dated March 31, 2006. In the event that the aggregate amount of such
quarterly distributions to any member for estimated federal income tax payments in any tax year is
less than the actual annual federal income tax liability of such member in such tax year based upon
the income of such member accruing due to the operations of the Borrower, the Borrower may make an
additional distribution to such member in the amount of such deficit with the first quarterly
distribution for the immediately following calendar year. In the event that the aggregate amount
of such quarterly distributions to any member for estimated federal income tax payments exceeds the
actual annual federal income tax liability of such member based upon the income of such member
accruing due to the operations of the Borrower, the failure of such member, within one hundred
twenty (120) days after the determination of such member’s annual federal income tax liability, to
make a member contribution of capital to the Borrower in the amount of such excess shall be an
Event of Default under this Agreement.




     9.7. Transactions with Affiliates. The Borrower shall not, directly or indirectly,
enter into or permit to exist any transaction with any of its Affiliates or with any director,
officer or employee of the Borrower other than transactions in the ordinary course of, and pursuant
to the reasonable requirements of, the business of the Borrower and upon fair and reasonable terms
which are fully disclosed to the Bank upon the Bank’s reasonable request and are no less favorable
to the Borrower than would be obtained in a comparable arm’s length transaction with a Person that
is not an Affiliate of the Borrower.



     9.8. Unconditional Purchase Obligations. The Borrower shall not enter into or be a
party to any contract for the purchase of materials, supplies or other property or services if such
contract requires that payment be made by it regardless of whether delivery is ever made of such
materials, supplies or other property or services.



     9.9. Cancellation of Debt. The Borrower shall not cancel any claim or debt owing to
it, except for reasonable consideration or in the ordinary course of business.



     9.10. Inconsistent Agreements. The Borrower shall not enter into any agreement
containing any provision which would (a) be violated or breached by any borrowing by the Borrower
hereunder or by the performance by the Borrower or any Subsidiary of any of its Obligations
hereunder or under any other Loan Document, (b) prohibit the Borrower or any Subsidiary from
granting to the Bank a Lien on any of its assets or (c) create or permit to exist or become
effective any encumbrance or restriction on the ability of any Subsidiary to (i) pay dividends or
make other distributions to the Borrower or any other Subsidiary, or pay any Debt owed to the
Borrower or any other Subsidiary, (ii) make loans or advances to the Borrower or any other
Subsidiary, or (iii) transfer any of its assets or properties to the Borrower or any other
Subsidiary, other than (A) customary restrictions and conditions contained in agreements relating
to the sale of all or a substantial part of the assets of any Subsidiary pending such sale,
provided that such restrictions and conditions apply only to the Subsidiary to be sold and such
sale is permitted hereunder, (B) restrictions or conditions imposed by any agreement relating to
purchase money Debt, Capital Leases and other secured Debt permitted by this Agreement if



39









 







such restrictions or conditions apply only to the property or assets securing such Debt, and
(C) customary provisions in leases and other contracts restricting the assignment thereof.




     9.11. Use of Proceeds. Neither the Borrower nor any of its Subsidiaries or Affiliates
shall use any portion of the proceeds of the Loans, either directly or indirectly, for the purpose
of purchasing any securities underwritten by ABN AMRO Incorporated, LaSalle Bank Financial
Services, Inc., or any other Affiliate of the Bank.



     9.12. Bank Accounts. The Borrower shall not establish any new Deposit Accounts or
other bank accounts, other than Deposit Accounts or other bank accounts established at or with the
Bank.



     9.13. Business Activities; Change of Legal Status and Organizational Documents. The
Borrower shall not (a) engage in any line of business other than the businesses engaged in on the
date hereof and businesses reasonably related thereto, (b) change its name, its Organizational
Identification Number, if it has one, its type of organization, its jurisdiction of organization or
other legal structure, or (b) permit its charter, bylaws or other organizational documents to be
amended or modified in any way which could reasonably be expected to materially adversely affect
the interests of the Bank.



10. FINANCIAL COVENANTS.



     10.1. Net Worth. As of the end of each of its fiscal quarters, the Borrower shall
maintain Net Worth in an amount not less than Two Million and 00/100 Dollars ($2,000,000)
plus twenty-five percent (25%) of the aggregate consolidated Net Income commencing with the
fiscal quarter ending August 31, 2006, provided, however, that at any given time the Net Worth may
not be less than Two Million and 00/100 Dollars ($2,000,000)




	 	10.2.	 	 Reserved.
	 
	 	10.3.	 	Reserved.
	 
	 	10.4.	 	Reserved.
	 
	 	10.5.	 	Reserved.
	 
	 	10.6.	 	 Reserved.
	 
	 	10.7.	 	 Reserved.
	 
	 	10.8.	 	Reserved.
	 
	 	10.9.	 	Reserved.
	 
	 	10.10.	 	 Reserved.






40












 





     10.11. Working Capital. At all times the Borrower shall maintain Working Capital of
at least One Million and 00/100 Dollars ($1,000,000.00).



     10.12. Reserved.



Section 11. EVENTS OF DEFAULT.




     The Borrower, without notice or demand of any kind, shall be in default under this Agreement
upon the occurrence of any of the following events (each an “Event of Default”).



     11.1. Nonpayment of Obligations. Any amount due and owing on any Note or any of the
Obligations, whether by its terms or as otherwise provided herein, is not paid when due.



     11.2. Misrepresentation. Any oral or written warranty, representation, certificate or
statement of the Borrower in this Agreement or the other Loan Documents which shall be false in any
material respect when made or at any time thereafter, or if any financial data or any other
financial information now or hereafter furnished to the Bank by or on behalf of the Borrower shall
prove to be false, inaccurate or misleading in any material respect.



     11.3. Nonperformance. Any failure to perform or default in the performance of any
covenant, condition or agreement contained in this Agreement and, if capable of being cured, such
failure to perform or default in performance continues for a period of [thirty (30)] days after the
Borrower receives notice or knowledge from the Bank of such failure to perform or default in
performance, or in the other Loan Documents or any other agreement with the Bank and such failure
to perform or default in performance continues beyond any applicable grace or cure period.
Notwithstanding this provision, there shall be no cure period for a breach of any covenant under
Section 9 of this Agreement.



     11.4. Default under Loan Documents. A default under any of the other Loan Documents,
all of which covenants, conditions and agreements contained therein are hereby incorporated in this
Agreement by express reference, shall be and constitute an Event of Default under this Agreement
and any other of the Obligations.



     11.5. Default under Other Debt. Any default by any Borrower in the payment of any
Debt in excess of $200,000 for any other obligation beyond any period of grace provided with
respect thereto or in the performance of any other term, condition or covenant contained in any
agreement (including any capital or operating lease or any agreement in connection with the
deferred purchase price of property) under which any such obligation is created, the effect of
which default is to cause or permit the holder of such obligation (or the other party to such other
agreement) to cause such obligation to become due prior to its stated maturity or terminate such
other agreement.



     11.6. Other Material Obligations. Any default in the payment when due, or in the
performance or observance of, any material obligation of, or condition agreed to by Borrower with
respect to any material purchase or lease of goods or services where such default, singly or



41









 







in the aggregate with all other such defaults, might reasonably be expected to have a Material
Adverse Effect.



     11.7. Bankruptcy, Insolvency, etc. Any Obligor becomes insolvent or generally fails
to pay, or admits in writing its inability or refusal to pay, debts as they become due; or any
Obligor applies for, consents to, or acquiesces in the appointment of a trustee, receiver or other
custodian for such Obligor or any property thereof, or makes a general assignment for the benefit
of creditors; or, in the absence of such application, consent or acquiescence, a trustee, receiver
or other custodian is appointed for any Obligor or for a substantial part of the property of any
thereof and is not discharged within sixty (60) days; or any bankruptcy, reorganization, debt
arrangement, or other case or proceeding under any bankruptcy or insolvency law, or any dissolution
or liquidation proceeding, is commenced in respect of any Obligor, and if such case or proceeding
is not commenced by such Obligor, it is consented to or acquiesced in by such Obligor, or remains
undismissed for sixty (60) days; or any Obligor takes any action to authorize, or in furtherance
of, any of the foregoing.



     11.8. Judgments. The entry of any final judgment, decree, levy, attachment,
garnishment or other process, or the filing of any Lien (except any Permitted Liens) in an amount
exceeding $500,000, after applying the contribution by US BioEnergy, Corporation required to be
paid to Borrower pursuant to that certain Purchase Agreement dated March 31, 2006 by and between
CHS Inc. and United BioEnergy, LLC, against any Obligor which is not fully covered by insurance.



     11.9. Change in Control. The occurrence of any Change in Control.



     11.10. Collateral Impairment. The entry of any judgment, decree, levy, attachment,
garnishment or other process, or the filing of any Lien against, any of the Collateral or any
collateral under a separate security agreement securing any of the Obligations and such judgment or
other process shall not have been, within thirty (30) days from the entry thereof, (i) bonded over
to the satisfaction of the Bank and appealed, (ii) vacated, or (iii) discharged, or the loss,
theft, destruction, seizure or forfeiture, or the occurrence of any material deterioration or
impairment of any of the Collateral or any of the collateral under any security agreement securing
any of the Obligations, or any material decline or depreciation in the value or market price
thereof (whether actual or reasonably anticipated), which causes the Collateral, in the sole
opinion of the Bank acting in good faith, to become unsatisfactory as to value or character, or
which causes the Bank to reasonably believe that it is insecure and that the likelihood for
repayment of the Obligations is or will soon be impaired, time being of the essence. The cause of
such deterioration, impairment, decline or depreciation shall include, but is not limited to, the
failure by the Borrower to do any act deemed reasonably necessary by the Bank to preserve and
maintain the value and collectability of the Collateral.



     11.11. Material Adverse Effect. The occurrence of any development, condition or event
which has a Material Adverse Effect on the Borrower.



     11.12. Guaranty. There is a discontinuance by the Guarantor of the Guaranty or the
Guarantor shall contest the validity of such Guaranty.



42









 






     11.13. Guarantor Events of Default. Any Event of Default by Guarantor, which is not
waived, and as such Event of Default is defined under the Amended and Restated Credit Agreement
dated May 18, 2006 with Guarantor as the borrower and the Bank as a syndicated party so long as the
Bank remains a syndicated party thereunder.



     11.14. Reserved.



Section 12. REMEDIES.




     Upon the occurrence of an Event of Default, the Bank shall have all rights, powers and
remedies set forth in the Loan Documents, in any written agreement or instrument (other than this
Agreement or the Loan Documents) relating to any of the Obligations or any security therefor, as a
secured party under the UCC or as otherwise provided at law or in equity. Without limiting the
generality of the foregoing, the Bank may, at its option upon the occurrence of an Event of
Default, declare its commitments to the Borrower to be terminated and all Obligations to be
immediately due and payable, provided, however, that upon the occurrence of an Event of Default
under Section 11.7, all commitments of the Bank to the Borrower shall immediately terminate
and all Obligations shall be automatically due and payable, all without demand, notice or further
action of any kind required on the part of the Bank. The Borrower hereby waives any and all
presentment, demand, notice of dishonor, protest, and all other notices and demands in connection
with the enforcement of Bank’s rights under the Loan Documents, and hereby consents to, and waives
notice of release, with or without consideration, of any of the Borrower or of any Collateral,
notwithstanding anything contained herein or in the Loan Documents to the contrary. In addition to
the foregoing:



     12.1. Possession and Assembly of Collateral. The Bank may, without notice, demand or
legal process of any kind, take possession of any or all of the Collateral (in addition to
Collateral of which the Bank already has possession), wherever it may be found, and for that
purpose may pursue the same wherever it may be found, and may at any time enter into any of the
Borrower’s premises where any of the Collateral may be or is supposed to be, and search for, take
possession of, remove, keep and store any of the Collateral until the same shall be sold or
otherwise disposed of and the Bank shall have the right to store and conduct a sale of the same in
any of the Borrower’s premises without cost to the Bank. At the Bank’s request, the Borrower will,
at the Borrower’s sole expense, assemble the Collateral and make it available to the Bank at a
place or places to be designated by the Bank which is reasonably convenient to the Bank and the
Borrower.



     12.2. Sale of Collateral. The Bank may sell any or all of the Collateral at public or
private sale, upon such terms and conditions as the Bank may deem proper, and the Bank may purchase
any or all of the Collateral at any such sale. The Borrower acknowledges that the Bank may be
unable to effect a public sale of all or any portion of the Collateral because of certain legal
and/or practical restrictions and provisions which may be applicable to the Collateral and,
therefore, may be compelled to resort to one or more private sales to a restricted group of
offerees and purchasers. The Borrower consents to any such private sale so made even though at
places and upon terms less favorable than if the Collateral were sold at public sale. The Bank



43









 







shall have no obligation to clean-up or otherwise prepare the Collateral for sale. The Bank
may apply the net proceeds, after deducting all costs, expenses, attorneys’ and paralegals’ fees
incurred or paid at any time in the collection, protection and sale of the Collateral and the
Obligations, to the payment of any Note and/or any of the other Obligations, returning the excess
proceeds, if any, to the Borrower. The Borrower shall remain liable for any amount remaining
unpaid after such application, with interest at the Default Rate. Any notification of intended
disposition of the Collateral required by law shall be conclusively deemed reasonably and properly
given if given by the Bank at least ten (10) calendar days before the date of such disposition.
The Borrower consents to releases of the Collateral at any time (including prior to default) and to
sales of the Collateral in groups, parcels or portions, or as an entirety, as the Bank shall deem
appropriate. The Borrower expressly absolves the Bank from any loss or decline in market value of
any Collateral by reason of delay in the enforcement or assertion or nonenforcement of any rights
or remedies under this Agreement.



     12.3. Standards for Exercising Remedies. To the extent that applicable law imposes
duties on the Bank to exercise remedies in a commercially reasonable manner, the Borrower
acknowledges and agrees that it is not commercially unreasonable for the Bank (a) to fail to incur
expenses reasonably deemed significant by the Bank to prepare Collateral for disposition or
otherwise to complete raw material or work-in-process into finished goods or other finished
products for disposition, (b) to fail to obtain third party consents for access to Collateral to be
disposed of, or to obtain or, if not required by other law, to fail to obtain governmental or third
party consents for the collection or disposition of Collateral to be collected or disposed of, (c)
to fail to exercise collection remedies against Account Debtors or other Persons obligated on
Collateral or to remove liens or encumbrances on or any adverse claims against Collateral, (d) to
exercise collection remedies against Account Debtors and other Persons obligated on Collateral
directly or through the use of collection agencies and other collection specialists, (e) to
advertise dispositions of Collateral through publications or media of general circulation, whether
or not the Collateral is of a specialized nature, (f) to contact other Persons, whether or not in
the same business as the Borrower, for expressions of interest in acquiring all or any portion of
the Collateral, (g) to hire one or more professional auctioneers to assist in the disposition of
Collateral, whether or not the collateral is of a specialized nature, (h) to dispose of Collateral
by utilizing internet sites that provide for the auction of assets of the types included in the
Collateral or that have the reasonable capability of doing so, or that match buyers and sellers of
assets, (i) to dispose of assets in wholesale rather than retail markets, (j) to disclaim
disposition warranties, including any warranties of title, (k) to purchase insurance or credit
enhancements to insure the Bank against risks of loss, collection or disposition of Collateral or
to provide to the Bank a guaranteed return from the collection or disposition of Collateral, or (l)
to the extent deemed appropriate by the Bank, to obtain the services of other brokers, investment
bankers, consultants and other professionals to assist the Bank in the collection or disposition of
any of the Collateral. The Borrower acknowledges that the purpose of this section is to provide
non-exhaustive indications of what actions or omissions by the Bank would not be commercially
unreasonable in the Bank’s exercise of remedies against the Collateral and that other actions or
omissions by the Bank shall not be deemed commercially unreasonable solely on account of not being
indicated in this section. Without limitation upon the foregoing, nothing contained in this
section shall be construed to grant any rights to the Borrower or to impose any duties on the Bank
that would not



44









 







have been granted or imposed by this Agreement or by applicable law in the absence of this
section.



     12.4. UCC and Offset Rights. The Bank may exercise, from time to time, any and all
rights and remedies available to it under the UCC or under any other applicable law in addition to,
and not in lieu of, any rights and remedies expressly granted in this Agreement or in any other
agreements between the Borrower and the Bank, and may, without demand or notice of any kind,
appropriate and apply toward the payment of such of the Obligations, whether matured or unmatured,
including costs of collection and attorneys’ and paralegals’ fees, and in such order of application
as the Bank may, from time to time, elect, any indebtedness of the Bank to the Borrower, however
created or arising, including balances, credits, deposits, accounts or moneys of the Borrower in
the possession, control or custody of, or in transit to the Bank.



     12.5. Additional Remedies. The Bank shall have the right and power to:




     (a) instruct the Borrower, at its own expense, to notify any parties obligated on any
of the Collateral, including any Account Debtors, to make payment directly to the Bank of
any amounts due or to become due thereunder, or the Bank may directly notify such obligors
of the security interest of the Bank, and/or of the assignment to the Bank of the Collateral
and direct such obligors to make payment to the Bank of any amounts due or to become due
with respect thereto, and thereafter, collect any such amounts due on the Collateral
directly from such Persons obligated thereon;




     (b) enforce collection of any of the Collateral, including any Accounts, by suit or
otherwise, or make any compromise or settlement with respect to any of the Collateral, or
surrender, release or exchange all or any part thereof, or compromise, extend or renew for
any period (whether or not longer than the original period) any indebtedness thereunder;




     (c) take possession or control of any proceeds and products of any of the Collateral,
including the proceeds of insurance thereon;




     (d) extend, renew or modify for one or more periods (whether or not longer than the
original period) any Note, any other of the Obligations, any obligation of any nature of any
other obligor with respect to any Note or any of the Obligations;




     (e) grant releases, compromises or indulgences with respect to any Note, any of the
Obligations, any extension or renewal of any of the Obligations, any security therefor, or
to any other obligor with respect to any Note or any of the Obligations;




     (f) transfer the whole or any part of securities which may constitute Collateral into
the name of the Bank or the Bank’s nominee without disclosing, if the Bank so desires, that
such securities so transferred are subject to the security interest of the Bank, and any
corporation, association, or any of the managers or trustees of any trust issuing any of
such securities, or any transfer agent, shall not be bound to inquire, in the event that the
Bank or such nominee makes any further transfer of such securities, or any



45









 







portion thereof, as to whether the Bank or such nominee has the right to make such
further transfer, and shall not be liable for transferring the same;




     (g) vote the Collateral;




     (h) make an election with respect to the Collateral under Section 1111 of the
Bankruptcy Code or take action under Section 364 or any other section of the Bankruptcy
Code; provided, however, that any such action of the Bank as set forth herein shall not, in
any manner whatsoever, impair or affect the liability of the Borrower hereunder, nor
prejudice, waive, nor be construed to impair, affect, prejudice or waive the Bank’s rights
and remedies at law, in equity or by statute, nor release, discharge, nor be construed to
release or discharge, the Borrower, any guarantor or other Person liable to the Bank for the
Obligations; and




     (i) at any time, and from time to time, accept additions to, releases, reductions,
exchanges or substitution of the Collateral, without in any way altering, impairing,
diminishing or affecting the provisions of this Agreement, the Loan Documents, or any of the
other Obligations, or the Bank’s rights hereunder, under any Note or under any of the other
Obligations.


The Borrower hereby ratifies and confirms whatever the Bank may do with respect to the Collateral
and agrees that the Bank shall not be liable for any error of judgment or mistakes of fact with
respect to actions taken in connection with the Collateral.




     12.6. Attorney-in-Fact. The Borrower hereby irrevocably makes, constitutes and
appoints the Bank (and any officer of the Bank or any Person designated by the Bank for that
purpose) as the Borrower’s true and lawful proxy and attorney-in-fact (and agent-in-fact) in the
Borrower’s name, place and stead, with full power of substitution, to (i) take such actions as are
permitted in this Agreement, (ii) execute such financing statements and other documents and to do
such other acts as the Bank may require to perfect and preserve the Bank’s security interest in,
and to enforce such interests in the Collateral, and (iii) carry out any remedy provided for in
this Agreement, including endorsing the Borrower’s name to checks, drafts, instruments and other
items of payment, and proceeds of the Collateral, executing change of address forms with the
postmaster of the United States Post Office serving the address of the Borrower, changing the
address of the Borrower to that of the Bank, opening all envelopes addressed to the Borrower and
applying any payments contained therein to the Obligations. The Borrower hereby acknowledges that
the constitution and appointment of such proxy and attorney-in-fact are coupled with an interest
and are irrevocable. The Borrower hereby ratifies and confirms all that such attorney-in-fact may
do or cause to be done by virtue of any provision of this Agreement.



     12.7. No Marshaling. The Bank shall not be required to marshal any present or future
collateral security (including this Agreement and the Collateral) for, or other assurances of
payment of, the Obligations or any of them or to resort to such collateral security or other
assurances of payment in any particular order. To the extent that it lawfully may, the Borrower
hereby agrees that it will not invoke any law relating to the marshaling of collateral which might
cause delay in or impede the enforcement of the Bank’s rights under this Agreement or under



46









 







any other instrument creating or evidencing any of the Obligations or under which any of the
Obligations is outstanding or by which any of the Obligations is secured or payment thereof is
otherwise assured, and, to the extent that it lawfully may, the Borrower hereby irrevocably waives
the benefits of all such laws.



     12.8. Application of Proceeds. The Bank will within three (3) Business Days after
receipt of cash or solvent credits from collection of items of payment, proceeds of Collateral or
any other source, apply the whole or any part thereof against the Obligations secured hereby. The
Bank shall further have the exclusive right to determine how, when and what application of such
payments and such credits shall be made on the Obligations, and such determination shall be
conclusive upon the Borrower. Any proceeds of any disposition by the Bank of all or any part of
the Collateral may be first applied by the Bank to the payment of expenses incurred by the Bank in
connection with the Collateral, including attorneys’ fees and legal expenses as provided for in
Section 13 hereof.



     12.9. No Waiver. No Event of Default shall be waived by the Bank except in writing.
No failure or delay on the part of the Bank in exercising any right, power or remedy hereunder
shall operate as a waiver of the exercise of the same or any other right at any other time; nor
shall any single or partial exercise of any such right, power or remedy preclude any other or
further exercise thereof or the exercise of any other right, power or remedy hereunder. There
shall be no obligation on the part of the Bank to exercise any remedy available to the Bank in any
order. The remedies provided for herein are cumulative and not exclusive of any remedies provided
at law or in equity. The Borrower agrees that in the event that the Borrower fails to perform,
observe or discharge any of its Obligations or liabilities under this Agreement or any other
agreements with the Bank, no remedy of law will provide adequate relief to the Bank, and further
agrees that the Bank shall be entitled to seek temporary and permanent injunctive relief.



     12.10. Letters of Credit. With respect to all Letters of Credit for which presentment
for honor shall not have occurred at the time of an acceleration pursuant to this Section 12, the
Borrower shall at such time deposit in a cash collateral account opened by the Bank an amount equal
to the Letter of Credit Obligations then outstanding. Amounts held in such cash collateral account
shall be applied by the Bank to the payment of drafts drawn under such Letters of Credit, and the
unused portion thereof after all such Letters of Credit shall have expired or been fully drawn
upon, if any, shall be applied to repay the Obligations, in such order of application as the Bank
may, in its sole discretion, from time to time elect. After all such Letters of Credit shall have
expired or been fully drawn upon, all commitments to make Loans hereunder have terminated and all
other Obligations have been indefeasibly satisfied and paid in full in cash, the balance, if any,
in such cash collateral account shall be returned to the Borrower or such other Person as may be
lawfully entitled thereto.



Section 13. MISCELLANEOUS.




     13.1. Obligations Absolute. None of the following shall affect the Obligations of the
Borrower to the Bank under this Agreement or the Bank’s rights with respect to the Collateral:



47









 






     (a) acceptance or retention by the Bank of other property or any interest in property
as security for the Obligations;




     (b) release by the Bank of any of the Borrower, the Guarantor or of all or any part of
the Collateral or of any party liable with respect to the Obligations;




     (c) release, extension, renewal, modification or substitution by the Bank of any Note,
or any note evidencing any of the Obligations, or the compromise of the liability of the
Guarantor of the Obligations; or




     (d) failure of the Bank to resort to any other security or to pursue the Borrower or
any other obligor liable for any of the Obligations before resorting to remedies against the
Collateral.



     13.2. Entire Agreement. This Agreement and the other Loan Documents (i) are valid,
binding and enforceable against the Borrower and the Bank in accordance with their respective
provisions and no conditions exist as to their legal effectiveness; (ii) constitute the entire
agreement between the parties with respect to the subject matter hereof and thereof; and (iii) are
the final expression of the intentions of the Borrower and the Bank. No promises, either expressed
or implied, exist between the Borrower and the Bank, unless contained herein or therein. This
Agreement, together with the other Loan Documents, supersedes all negotiations, representations,
warranties, commitments, term sheets, discussions, negotiations, offers or contracts (of any kind
or nature, whether oral or written) prior to or contemporaneous with the execution hereof with
respect to any matter, directly or indirectly related to the terms of this Agreement and the other
Loan Documents. This Agreement and the other Loan Documents are the result of negotiations among
the Bank, the Borrower and the other parties thereto, and have been reviewed (or have had the
opportunity to be reviewed) by counsel to all such parties, and are the products of all parties.
Accordingly, this Agreement and the other Loan Documents shall not be construed more strictly
against the Bank merely because of the Bank’s involvement in their preparation.



     13.3. Amendments; Waivers. No delay on the part of the Bank in the exercise of any
right, power or remedy shall operate as a waiver thereof, nor shall any single or partial exercise
by the Bank of any right, power or remedy preclude other or further exercise thereof, or the
exercise of any other right, power or remedy. No amendment, modification or waiver of, or consent
with respect to, any provision of this Agreement or the other Loan Documents shall in any event be
effective unless the same shall be in writing and acknowledged by the Bank and Borrower, and then
any such amendment, modification, waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.



     13.4. RESERVED.



     13.5. FORUM SELECTION AND CONSENT TO JURISDICTION. ANY LITIGATION BASED HEREON, OR
ARISING OUT OF, UNDER, OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, SHALL BE
BROUGHT AND MAINTAINED EXCLUSIVELY IN THE COURTS OF THE STATE OF ILLINOIS OR



48









 







IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS; PROVIDED THAT
NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR OPERATE TO PRECLUDE THE BANK FROM BRINGING SUIT OR
TAKING OTHER LEGAL ACTION IN ANY OTHER JURISDICTION. THE BORROWER HEREBY EXPRESSLY AND IRREVOCABLY
SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE OF ILLINOIS AND OF THE UNITED STATES
DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET
FORTH ABOVE. THE BORROWER FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED
MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF ILLINOIS. THE
BORROWER HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY
OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT
IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM.



     13.6. WAIVER OF JURY TRIAL. THE BANK AND THE BORROWER, AFTER CONSULTING OR HAVING HAD
THE OPPORTUNITY TO CONSULT WITH COUNSEL, EACH KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE
IRREVOCABLY, ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY
RIGHTS UNDER THIS AGREEMENT, ANY NOTE, ANY OTHER LOAN DOCUMENT, ANY OF THE OTHER OBLIGATIONS, THE
COLLATERAL, OR ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE
FUTURE BE DELIVERED IN CONNECTION HEREWITH OR THEREWITH OR ARISING FROM ANY LENDING RELATIONSHIP
EXISTING IN CONNECTION WITH ANY OF THE FOREGOING, OR ANY COURSE OF CONDUCT OR COURSE OF DEALING IN
WHICH THE BANK AND THE BORROWER ARE ADVERSE PARTIES, AND EACH AGREES THAT ANY SUCH ACTION OR
PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY. THIS PROVISION IS A MATERIAL
INDUCEMENT FOR THE BANK GRANTING ANY FINANCIAL ACCOMMODATION TO THE BORROWER.



     13.7. Assignability. The Bank may at any time assign the Bank’s rights in this
Agreement, the other Loan Documents, the Obligations, or any part thereof and transfer the Bank’s
rights in any or all of the Collateral, and the Bank thereafter shall be relieved from all
liability with respect to such Collateral. In addition, the Bank may at any time sell one or more
participations in the Loans. The Borrower may not sell or assign this Agreement, or any other
agreement with the Bank or any portion thereof, either voluntarily or by operation of law, without
the prior written consent of the Bank. This Agreement shall be binding upon the Bank and the
Borrower and their respective assigns and successors. All references herein to the Borrower shall
be deemed to include any successors, whether immediate or remote.



     13.8. Confirmations. The Borrower and the Bank agree from time to time, upon written
request received by it from the other, to confirm to the other in writing the aggregate unpaid
principal amount of the Loans then outstanding under such Note.



49









 





     13.9. Confidentiality. The Bank agrees to use commercially reasonable efforts
(equivalent to the efforts the Bank applies to maintain the confidentiality of its own confidential
information) to maintain as confidential all information provided to it by the Borrower or any
Obligor, including all information designated as confidential, and shall not use of disclose any
Obligor’s financial information, confidential or trade secrets without first obtaining Obligor’s
written consent, except that the Bank may disclose such information (a) to Persons employed or
engaged by the Bank in evaluating, approving, structuring or administering the Loans; (b) to any
assignee or participant or potential assignee or participant that has agreed to comply with the
covenant contained in this Section 13.9 (and any such assignee or participant or potential
assignee or participant may disclose such information to Persons employed or engaged by them as
described in clause (a) above); (c) as compelled by law or any federal or state governmental
authority, so long as Borrower or Obligor is promptly notified so that Borrower or Obligor may seek
a protective order or other remedy and/or waive compliance with this Section 13.9; (d) in
connection with the exercise of any right or remedy under the Loan Documents or in connection with
any litigation to which the Bank is a party so long as Borrower or Obligor may seek a protective
order or other remedy and/or waive compliance with this Section 13.9; or (e) that ceases to
be confidential through no wrongful act of the Bank.



     13.10. Binding Effect. This Agreement shall become effective upon execution by the
Borrower and the Bank. If this Agreement is not dated or contains any blanks when executed by the
Borrower, the Bank is hereby authorized, without notice to the Borrower, to date this Agreement as
of the date when it was executed by the Borrower, and to complete any such blanks according to the
terms upon which this Agreement is executed.



     13.11. Governing Law. This Agreement, the Loan Documents and any Note shall be
delivered and accepted in and shall be deemed to be contracts made under and governed by the
internal laws of the State of Illinois (but giving effect to federal laws applicable to national
banks) applicable to contracts made and to be performed entirely within such state, without regard
to conflict of laws principles.



     13.12. Enforceability. Wherever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law, but if any provision
of this Agreement shall be prohibited by, unenforceable or invalid under any jurisdiction, such
provision shall as to such jurisdiction, be severable and be ineffective to the extent of such
prohibition or invalidity, without invalidating the remaining provisions of this Agreement or
affecting the validity or enforceability of such provision in any other jurisdiction.



     13.13. Survival of Borrower Representations. All covenants, agreements,
representations and warranties made by the Borrower herein shall, notwithstanding any investigation
by the Bank, be deemed material and relied upon by the Bank and shall survive the making and
execution of this Agreement and the Loan Documents and the issuance of any Note, and shall be
deemed to be continuing representations and warranties until such time as the Borrower has
fulfilled all of its Obligations to the Bank, and the Bank has been indefeasibly paid in full in
cash. The Bank, in extending financial accommodations to the Borrower, is expressly acting and
relying on the aforesaid representations and warranties.



50









 





     13.14. Extensions of Bank’s Commitment. This Agreement shall secure and govern the
terms of (i) any extensions or renewals of the Bank’s commitment hereunder, and (ii) any
replacement note executed by the Borrower and accepted by the Bank in its sole and absolute
discretion in substitution for any Note.



     13.15. Time of Essence. Time is of the essence in making payments of all amounts due
the Bank under this Agreement and in the performance and observance by the Borrower of each
covenant, agreement, provision and term of this Agreement.



     13.16. Counterparts; Facsimile Signatures. This Agreement may be executed in any
number of counterparts and by the different parties hereto on separate counterparts and each such
counterpart shall be deemed to be an original, but all such counterparts shall together constitute
but one and the same Agreement. Receipt of an executed signature page to this Agreement by
facsimile or other electronic transmission shall constitute effective delivery thereof. Electronic
records of executed Loan Documents maintained by the Bank shall deemed to be originals thereof.



     13.17. Notices. Except as otherwise provided herein, the Borrower waives all notices
and demands in connection with the enforcement of the Bank’s rights hereunder. All notices,
requests, demands and other communications provided for hereunder shall be in writing and addressed
as follows:



	 	 	 
	To the Borrower:
	 	Provista Renewable Fuels Marketing, LLC

	 	 	5500 Cenex Drive

	 	 	Inver Grove Heights, Minnesota 55077

	 	 	Attention: Dan Ostendorf

	 	 	 

	With a copy to:
	 	CHS Inc.

	 	 	5500 Cenex Drive

	 	 	Inver Grove Heights, Minnesota 55077

	 	 	Attention: Lisa A. Zell, Legal Department

	 	 	 

	To the Lender:
	 	LaSalle Bank National Association

	 	 	135 South LaSalle Street

	 	 	Chicago, Illinois 60603

	 	 	Attention: Commercial Lending Division






or, as to each party, at such other address as shall be designated by such party in a written
notice to each other party complying as to delivery with the terms of this subsection. All notices
addressed as above shall be deemed to have been properly given (i) if served in person, upon
acceptance or refusal of delivery; (ii) if mailed by certified or registered mail, return receipt
requested, postage prepaid, on the third (3rd) day following the day such notice is deposited in
any post office station or letter box; or (iii) if sent by recognized overnight courier, on the
first (1st) day following the day such notice is delivered to such carrier. No notice to or demand
on the Borrower in any case shall entitle the Borrower to any other or further notice or demand in
similar or other circumstances.




51









 








     13.18. Release of Claims Against Bank. In consideration of the Bank making the Loans,
the Borrower do hereby release and discharge the Bank of and from any and all claims, harm, injury,
and damage of any and every kind, known or unknown, legal or equitable, which the Borrower may have
against the Bank from the date of their respective first contact with the Bank until the date of
this Loan Agreement, including any claim arising from any reports (environmental reports, surveys,
appraisals, etc.) prepared by any parties hired or recommended by the Bank. The Borrower confirms
to Bank that they have reviewed the effect of this release with competent legal counsel of their
choice, or have been afforded the opportunity to do so, prior to execution of this Agreement and
the Loan Documents and do each acknowledge and agree that the Bank is relying upon this release in
extending the Loans to the Borrower.



     13.19. Costs, Fees and Expenses. The Borrower shall pay or reimburse the Bank for all
reasonable costs, fees and expenses incurred by the Bank or for which the Bank becomes obligated in
connection with the negotiation, preparation, consummation, collection of the Obligations or
enforcement of this Agreement, the other Loan Documents and all other documents provided for
herein or delivered or to be delivered hereunder or in connection herewith (including any
amendment, supplement or waiver to any Loan Document), or during any workout, restructuring or
negotiations in respect thereof, including reasonable consultants’ fees and attorneys’ fees and
time charges of counsel to the Bank, which shall also include attorneys’ fees plus costs and
expenses of such attorneys or of the Bank; search fees, costs and expenses; and all taxes payable
in connection with this Agreement or the other Loan Documents, whether or not the transaction
contemplated hereby shall be consummated. In furtherance of the foregoing, the Borrower shall pay
any and all stamp and other taxes, UCC search fees, filing fees and other costs and expenses in
connection with the execution and delivery of this Agreement, any Note and the other Loan Documents
to be delivered hereunder, and agrees to save and hold the Bank harmless from and against any and
all liabilities with respect to or resulting from any delay in paying or omission to pay such costs
and expenses. That portion of the Obligations consisting of costs, expenses or advances to be
reimbursed by the Borrower to the Bank pursuant to this Agreement or the other Loan Documents which
are not paid on or prior to the date hereof shall be payable by the Borrower to the Bank on demand.
If at any time or times hereafter the Bank: (a) employs counsel for advice or other representation
(i) with respect to this Agreement or the other Loan Documents, (ii) to represent the Bank in any
litigation, contest, dispute, suit or proceeding or to commence, defend, or intervene or to take
any other action in or with respect to any litigation, contest, dispute, suit, or proceeding
(whether instituted by the Bank, the Borrower, or any other Person) in any way or respect relating
to this Agreement, the other Loan Documents or the Borrower’s business or affairs, or (iii) to
enforce any rights of the Bank against the Borrower or any other Person that may be obligated to
the Bank by virtue of this Agreement or the other Loan Documents; (b) takes any action to protect,
collect, sell, liquidate, or otherwise dispose of any of the Collateral; and/or (c) attempts to or
enforces any of the Bank’s rights or remedies under the Agreement or the other Loan Documents, the
costs and expenses incurred by the Bank in any manner or way with respect to the foregoing, shall
be part of the Obligations, payable by the Borrower to the Bank on demand.



     13.20. Indemnification. The Borrower agrees to defend (with counsel satisfactory to
the Bank), indemnify, and hold harmless each Indemnified Party from and against any and all



52









 







liabilities, obligations, losses, damages, penalties, actions, judgments, suits, claims,
costs, expenses and distributions of any kind or nature (including the disbursements and the
reasonable fees of counsel for each Indemnified Party thereto, which shall also include, without
limitation, reasonable attorneys’ fees), which may be imposed on, incurred by, or asserted against,
any Indemnified Party (whether direct, indirect or consequential and whether based on any federal,
state or local laws or regulations, including securities laws, Environmental Laws, commercial laws
and regulations, under common law or in equity, or based on contract or otherwise) in any manner
relating to or arising out of this Agreement or any of the Loan Documents, or any act, event or
transaction related or attendant thereto, the use or intended use of the proceeds of the Loans, the
enforcement of the Bank’s rights and remedies under this Agreement, the Loan Documents, any Note,
any other instruments and documents delivered hereunder; provided, however, that the Borrower shall
not have any obligations hereunder to any Indemnified Party with respect to matters determined by a
court of competent jurisdiction by final and nonappealable judgment to have been caused by or
resulting from the willful misconduct or gross negligence of such Indemnified Party. To the extent
that the undertaking to indemnify set forth in the preceding sentence may be unenforceable because
it violates any law or public policy, the Borrower shall satisfy such undertaking to the maximum
extent permitted by applicable law. Any liability, obligation, loss, damage, penalty, cost or
expense covered by this indemnity shall be paid to each Indemnified Party on demand, and failing
prompt payment, together with interest thereon at the Default Rate from the date incurred by each
Indemnified Party until paid by the Borrower, shall be added to the Obligations of the Borrower and
be secured by the Collateral. The provisions of this Section shall survive the satisfaction and
payment of the other Obligations and the termination of this Agreement.



     13.21. Revival and Reinstatement of Obligations. If the incurrence or payment of the
Obligations by any Obligor or the transfer to the Bank of any property should for any reason
subsequently be declared to be void or voidable under any state or federal law relating to
creditors’ rights, including provisions of the Bankruptcy Code relating to fraudulent conveyances,
preferences, or other voidable or recoverable payments of money or transfers of property
(collectively, a “Voidable Transfer”), and if the Bank is required to repay or restore, in
whole or in part, any such Voidable Transfer, or elects to do so upon the reasonable advice of its
counsel, then, as to any such Voidable Transfer, or the amount thereof that the Bank is required or
elects to repay or restore, and as to all reasonable costs, expenses, and attorneys fees of the
Bank, the Obligations shall automatically shall be revived, reinstated, and restored and shall
exist as though such Voidable Transfer had never been made.



     13.22. Customer Identification — USA Patriot Act Notice. The Bank hereby notifies the
Borrower that pursuant to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56,
signed into law October 26, 2001) (the “Act”), and the Bank’s policies and practices, the
Bank is required to obtain, verify and record certain information and documentation that identifies
the Borrower, which information includes the name and address of the Borrower and such other
information that will allow the Bank to identify the Borrower in accordance with the Act.



     13.23. Continuing Indebtedness. This Agreement amends and restates the Original
Agreement and the Revolving Note constitutes a renewal and restatement of, and a replacement and
substitution for, the Existing Revolving Note. The indebtedness evidenced by the Existing




53












 





Revolving Note is continuing indebtedness evidenced by the Revolving Note and nothing herein
shall be deemed to constitute a payment, settlement or novation of the Existing Revolving Note, or
to release or otherwise adversely affect any lien, mortgage or security interest securing such
indebtedness or any rights of the Bank against any collateral therefor or any guarantor, surety or
other party primarily or secondarily liable for such indebtedness.




     13.24. Statutory Notice. The following notice is included in compliance with K.S.A.
16-117 and K.S.A. 16-118:



“THIS WRITTEN AGREEMENT IS THE FINAL EXPRESSION OF THE CREDIT AGREEMENT AMONG THE
PARTIES HERETO AS THE SAME EXISTS TODAY AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
ANY PRIOR OR CONTEMPORANEOUS ORAL AGREEMENT BETWEEN THE PARTIES HERETO. THE
FOLLOWING SPACE (WHICH THE PARTIES HERETO AGREE IS SUFFICIENT SPACE) IS PROVIDED FOR
THE PLACEMENT OF NONSTANDARD TERMS, IF ANY (IF THERE ARE NO NONSTANDARD TERMS TO BE
ADDED, STATE “NONE”):



	 	 	 	 	 
	 


	 	NONE
	 	 

	 
	 	 	 	 
	 

	 
	 	 	 	 
	 







BY SIGNING BELOW, THE PARTIES HERETO HEREBY AFFIRM THAT THERE IS NO UNWRITTEN ORAL LOAN
AGREEMENT BETWEEN THEMSELVES WITH RESPECT TO THE SUBJECT MATTER OF THIS WRITTEN CREDIT
AGREEMENT.



[signature page to follow]




54









 





     IN WITNESS WHEREOF, the Borrower and the Bank have executed this Loan and Security Agreement
as of the date first above written.



	 	 	 	 	 
	 	 	PROVISTA RENEWABLE
FUELS MARKETING, LLC,
 a Kansas limited liability company
	 
	 	 	 	 
	 

	 	By:	 	/s/  Dan Ostendorf
	 

	 	 	 	 
	 

	 	Name:	 	Dan Ostendorf
	 

	 	 	 	 
	 

	 	Title:	 	Secretary and Controller
	 

	 	 	 	 
	 
	 	 	 	 
	 	 	Agreed and accepted:
	 
	 	 	 	 
	 	 	LASALLE BANK NATIONAL ASSOCIATION,

a national banking association
	 
	 	 	 	 
	 

	 	By:	 	/s/  Jeffrey Ware
	 

	 	 	 	 
	 

	 	Name:	 	Jeffrey Ware
	 

	 	 	 	 
	 

	 	Title:	 	First Vice President
	 

	 	 	 	 





Signature Page to Loan and Security Agreement





 









 








SCHEDULE 7.9—LITIGATION 




Tri-States Ethanol, LLC f/k/a North Country Ethanol, LLC




Schedule 7.9 to Loan and Security Agreement




 









 








SCHEDULE 7.22—BANK ACCOUNTS




None.




Schedule 7.22 to Loan and Security Agreement




 









 








SCHEDULE 7.25—LETTERS OF CREDIT




	 	 	 
	S580170 for $700,000

	 	GATX RAIL
	 
	 	 
	S582097 for $188,000

	 	State of New York
	 
	 	 
	S558084 for $25,000

	 	State of Montana






Schedule 7.22 to Loan and Security Agreement




 









 








SCHEDULE 9.1—INDEBTEDNESS




None.




Schedule 9.1 to Loan and Security Agreement





 









 








CHEDULE 9.1(j)—FORM OF SUBORDINATION AGREEMENT




Schedule 9.1 to Loan and Security Agreement




 









 








SCHEDULE 9.3—INVESTMENTS 




None.




Schedule 9.3 to Loan and Security Agreement