EXHIBIT
10.21


THE
SECURITIES ISSUABLE PURSUANT TO THIS AGREEMENT HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS AND
MAY NOT BE SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF
EXCEPT PURSUANT TO (1) REGISTRATION IN COMPLIANCE WITH SUCH ACT AND SUCH STATE
LAWS OR (2) AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY TO THE
EFFECT THAT SUCH REGISTRATION IS NOT REQUIRED.


AGREEMENT
TO ISSUE CAPITAL UNITS


TENNESSEE VALLEY AGRI-ENERGY, LLC


THIS AGREEMENT is made and
entered into on August 1, 2007 by and between TENNESSEE
VALLEY AGRI-ENERGY, LLC, a Delaware limited liability company (the “Company”),
and NASH M. DAVIS, an independent
contractor of the Company (“Davis”).


WHEREAS,
Davis is the project coordinator for the Company in connection with its ethanol
project, on an independent contractor basis;


WHEREAS,
pursuant to board resolution adopted on April 17, 2006, the Company agreed to
issue Davis 25,000 fully-paid and non-assessable capital units of the Company
at financial closing of its ethanol project, as additional compensation to
Davis for services rendered to the Company;


WHEREAS,
the parties wish to confirm their agreement in writing;


NOW
THEREFORE, for good and valuable consideration, the parties agree as follows:


1.                                       Issuance
of Units.


(a)                                  The Company agrees to issue Twenty-Five
Thousand (25,000) capital units of the Company to Davis upon the closing by the
Company on the debt and equity financing necessary to commence construction of
the Company’s proposed ethanol production facility (“Financial Closing”).


(b)                                 Notwithstanding the above, the obligation
of the Company to issue the capital units is conditioned upon Davis continually
serving as the project coordinator for the Company in connection with its
ethanol project through Financial Closing. 
If Davis does not continually serve as the project coordinator through
Financial Closing, this Agreement shall automatically terminate and the Company
shall have no obligation to issue any capital units to Davis hereunder.


(c)                                Davis understands and agrees that the
capital units that may be issued to Davis hereunder will constitute non-cash
compensation to Davis, that the Company will not withhold from any payment to
be made to Davis, any amounts of income tax withholding and other taxes due in
connection with the receipt of capital units hereunder, and that Davis will be
responsible for all income taxes, self-employment taxes and other taxes dues in
connection with the receipt of capital units hereunder.


2.                                       Record Date. 
The Company agrees that the capital units to be issued hereunder shall
be and are deemed to be issued to Davis as of the close of business on the date
on which Financial Closing occurs.













3.                                       Investment Representations.  Davis
represents to the Company that she understands that the capital units to be
issued hereunder will not be registered under applicable state or federal
securities laws by reason of specific exemptions under the provisions of such
laws, and that no federal or state agency has made any findings or
determination as to the fairness of investment in, or any recommendation or
endorsement of, the capital units.  Davis
makes these representations in order that the Company and its managers may rely
upon them in connection with the issuance of capital units to Davis
hereunder.  Davis also represents and
warrants to the Company and its managers as set forth in Exhibit A attached hereto.


4.                                       Covenants
of Company.  The Company agrees that
all of the capital units which may be issued to Davis pursuant to this
Agreement will, upon issuance, be duly authorized and issued, fully paid and
nonassessable capital units of the Company.


5.                                       Anti-dilution
Adjustments.  The above provisions
are subject to the following:


(a)                                  In
case the Company shall at any time hereafter subdivide or combine its
outstanding capital units, the number of capital units to be issued hereunder in
effect immediately prior to the subdivision or combination shall forthwith be
proportionately decreased, in the case of combination, or increased, in the
case of subdivision.


(b)                                 If
any merger, capital reorganization or reclassification of the outstanding
capital interests of the Company, or consolidation or merger of the Company
with another entity, or the sale of all or substantially all of its assets to
another entity shall be effected in such a way that holders of the Company’s capital
units shall be entitled to receive securities or assets with respect to or in
exchange for their capital units (an “Exchange Event”), then, from and after
such Exchange Event, Davis shall be entitled to be issued, upon the terms and
conditions specified in this Agreement, an amount of such securities or assets
to which a holder of the number of capital units to be issued hereunder at the
time of such Exchange Event would have been entitled to receive upon such
Exchange Event.  Appropriate provisions
will be made with respect to the rights and interests of Davis hereunder to
ensure that the provisions of this Agreement (including without limitation the
provisions to adjust the number of units to be issued hereunder) will be
applicable, as nearly as may be, in relation to any such securities or assets
deliverable upon the issuance of units hereunder after an Exchange Event.  The Company will not effect any Exchange
Event unless, prior to the consummation thereof, the successor or purchasing
corporation (if other than the Company) with respect to such Exchange Event,
assumes by written instrument executed and delivered to Davis at the address of
Davis as shown on the books of the Company, the obligation to deliver to Davis such
securities or assets as, in accordance with the foregoing provisions, Davis may
be entitled to be issued hereunder.


(c)                                  Upon
any adjustment in accordance with this Section 5, then and in each such
case, the Company shall give written notice thereof, by first class mail,
postage prepaid, addressed to Davis at her address as shown on the books of the
Company, which notice shall state the adjustment and the increase or decrease,
if any, in the number of capital units to be issued hereunder, setting forth in
reasonable detail the method of calculation and the facts upon which such
calculation is based.


6.                                       No
Voting Rights.  This Agreement shall
not entitle Davis to any voting rights or other rights as a unit holder of the
Company prior to the issuance of capital units hereunder.


7.                                       Transfer
of Option or Resale.  Davis
acknowledges (a) that neither this Agreement nor any of the securities
obtainable under it have been registered under the Securities Act of 1933, as 



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amended, or any state
securities statutes, and (b) that neither this Agreement nor any securities
obtained under it may be transferred without such registration or an opinion of
legal counsel acceptable to the Company that such transfer may be made without
registration.


8.                                       Successors
and Assigns.  This Agreement shall
inure to the benefit of and be binding upon the successors and permitted
assigns of the parties hereto.  Davis may
assign its rights under this Agreement only upon the written consent of the
Company, which consent shall not be unreasonably withheld.


9.                                       Governing
Law.  This Agreement shall be
governed by and construed in accordance with the laws of the State of Delaware,
without regard to the principles of conflicts of law thereof.


IN
WITNESS WHEREOF, Nash M. Davis and Tennessee Valley
Agri-Energy, LLC have caused this Agreement to be executed as of August 1,
2007.


	
   

  	
  TENNESSEE VALLEY AGRI-ENERGY, LLC

  
	
   

  	
   

  
	
   

  	
  /s/ Dennis L.
  Bragg

  
	
   

  	
  Dennis L. Bragg,

  
	
   

  	
  Manager and Vice
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  NASH M.
  DAVIS

  
	
   

  	
   

  
	
   

  	
  /s/ Nash M.
  Davis

  
	
   

  	
  Nash M. Davis,

  
	
   

  	
  Independent
  Contractor

  



 



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EXHIBIT A


(To be signed by Nash M. Davis)


Certain Additional Representations
of Nash M. Davis.  In connection
with, and in consideration of, the Agreement and the issuance of the capital
units to the undersigned, the undersigned hereby represents and warrants to the
Company and its managers that the undersigned:


·                  realizes that the capital units represent
a speculative investment involving a high degree of risk;


·                  realizes that there will be no
market for the capital units, that there are significant restrictions on the
transferability of the capital units, and the undersigned may not be able to
liquidate an investment in the capital units for an indefinite period;


·                  has obtained, to the extent deemed
necessary, professional advice with respect to the risks inherent in an
investment in the capital units; and


·                  is acquiring the capital units for
the undersigned’s own account and for long term investment and without the
intention of reselling or redistributing the capital units, that the
undersigned has made no agreement with others regarding any of the capital
units, and that the undersigned’s financial condition is such that it is not
likely that it will be necessary for the undersigned to dispose of any of the capital
units in the foreseeable future.


State of Residence. 
The undersigned is a resident of the State of Tennessee.


	
  Dated: August 1, 2007

  	
   

  	
  Nash M. Davis

  	
   

  
	
   

  	
   

  	
  Nash M. Davis

  



 



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