**Exhibit10.4**

**AMENDED AND RESTATED**

**CONSTRUCTION LOAN AGREEMENT**

**THIS AMENDED AND RESTATED CONSTRUCTION LOANAGREEMENT**(this “Agreement”) is dated this 5th day of April, 2007, and is made by and between**LSCP, LLLP,**an Iowa limited liabilitylimited partnership (“LSCP, LLLP”), successor in interest to LSCP, L.P., anIowa limited partnership (“LSCP, L.P.”), with its principal offices in Marcus,Iowa (LSCP, LLLP and LSCP, L.P. are referred to collectively herein as the “Borrower”),and **FIRST NATIONAL BANK OF OMAHA**, anational banking association with its principal offices in Omaha, Nebraska (the“Bank”).

WHEREAS, the Bank and the Borrower, through itspredecessor in interest LSCP, L.P., are currently parties to a ConstructionLoan Agreement, dated as of July 25, 2002, as amended by (i) that certain FirstAmendment to Construction Loan Agreement, dated as of April 29, 2003, by andbetween the Bank and LSCP, L.P., (ii) that certain Second Amendment toConstruction Loan Agreement, dated as of June 1, 2003, by and between the Bankand LSCP, L.P., (iii) that certain Third Amendment to Construction LoanAgreement, dated as of June 23, 2003, by and between the Bank and LSCP, L.P.,(iv) that certain Fourth Amendment to Construction Loan Agreement, dated as ofJuly 24, 2003, by and between the Bank and LSCP., L.P., (v) that certain Fifth Amendment to Construction LoanAgreement, dated as of July 20, 2004, by and between the Bank and LSCP,LLLP, (vi) that certain Sixth Amendment to Construction Loan Agreement dated asof December 1, 2004, by and between the Bank and LSCP, LLLP, (vii) thatcertain Seventh Amendment to Construction Loan Agreement, dated as ofJune 13, 2005, by and between the Bank and LSCP, LLLP, (viii) that certainEighth Amendment to Construction Loan Agreement, dated as of July 22,2005, by and between the Bank and LSCP, LLLP, (ix) that certain Ninth Amendmentto Construction Loan Agreement, dated as of September 1, 2005, by andbetween the Bank and LSCP, LLLP, (x) that certain Tenth Amendment to ConstructionLoan Agreement, dated as of December 19, 2005, by and between the Bank andLSCP, LLLP, and (xi) that certain Eleventh Amendment to Construction LoanAgreement, dated as of March 30, 2006, by and between the Bank and LSCP,LLLP (collectively, the “Existing Loan Agreement”);

WHEREAS, the Borrower has requested that the Bankamend and restate the Existing Loan Agreement to, among other things, (i) lendto the Borrower, subject to the terms and provisions of this Agreement, a sumnot exceeding Seventy Three Million and No/100ths Dollars ($73,000,000.00) (the“Construction Loan”) for the purpose of partially funding the construction ofthe Expansion Facility (as defined below) on the real estate described inExhibit “A” attached hereto and incorporated herein by this reference (the “Property”)and the subsequent replacement of the Construction Loan with the Term Loan (asdefined below) for the Project (as defined below) and the Property, togetherwith a Five Million and No/100ths Dollars ($5,000,000.00) operating line ofcredit and letter of credit facility (the “Operating Loan”) and the SwapContracts  and (ii) amend and restate theterms and provisions of the Existing Operating Note, the Existing Term Loansand the Business Credit Card Loan (as defined below); and

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WHEREAS, the Bank is willing to amend and restate theExisting Loan Agreement and provide such credit facilities to the Borrowerupon, and subject to, the terms, provisions and conditions herein set forth.

NOW, THEREFORE, inconsideration of the foregoing recitals and the promises herein made, and inreliance upon the representations, warranties and covenants herein contained,and intending to be legally bound hereby, the Borrower and the Bank agree asfollows:

**ARTICLEI**

**DEFINITIONSAND INTERPRETATION**

**Section 1.01.  Defined Terms**.  Terms used in this Agreement, including itspreamble and recitals, shall have the following meanings:

“*Adjusted EBITDA*”means EBITDA less Capital Expenditures, taxes and allowable distributions.

“*Adjustment Period*”shall have the meaning given such term in Section 2.11 of this Agreement.

“*Affiliate*”means any Person (1) which directly or indirectly controls, or is controlledby, or is under common control with such Person; (2) which directly orindirectly beneficially owns or holds ten percent (10%) or more of anymembership or other equity interest of such Person; (3) ten percent (10%) ormore of the voting stock of which is directly or indirectly beneficially ownedor held by such Person; or (4) ten percent (10%) or more of any membership orother equity interest of which is directly or indirectly beneficially owned orheld by such Person.  The term “control”means the possession, directly or indirectly, of the power to direct or causethe direction of the management and policies of a Person, whether through theownership of voting securities, through the ownership of interests in a limitedliability company, by contract, or otherwise.

“*Akron*” meansAkron Riverview Corn Processors, LLC, an Iowa limited liability company.

“*Agreement*”shall have the meaning given such term in the preamble hereto and shall includeall schedules and exhibits to this Agreement, in each case as amended,supplemented or modified from time to time in accordance with the terms of thisAgreement.

“*Assignment of Design/BuildConstruction Contract*” means the Assignment of Design/BuildConstruction Contract, dated the Closing Date, by which the Borrower assigns,as additional security for repayment of the Obligations, the Borrower’sinterest in the Design/Build Construction Contract in a form acceptable to theBank.

“*Assignment of Rents andLeases*” means the Amended and Restated Assignment of Rents andLeases relating to the Property, dated the Closing Date, between the Borrower,as

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assignor, and the Bank, as assignee, as additionalsecurity for repayment of the Obligations in a form acceptable to the Bank inthe exercise of its reasonable discretion.

“*ASTM*” means theAmerican Society for Testing and Materials.

“*Authorized Person*”means, to the extent duly authorized by, or in accordance with the LPAgreement, the General Partner or such other authorized Person of the Borrower.

“*Bank*” shallhave the meaning given such term in the preamble hereto.

“*Banking Day*”means a day (other than a day that is a Saturday, Sunday or legal holiday inNebraska) on which the Bank is open for business.

“*BankruptcyCode*” means Title 11 of the United States Code, as now constitutedor hereafter amended.

 “*Borrower*” shallhave the meaning given such term in the preamble hereto.

“*BorrowingBase*” means the lesser of:

(a)           Five Million andNo/100ths Dollars ($5,000,000.00) less the aggregate amount of any outstandingLetters of Credit; or

(b)           The aggregate of(i) seventy-five percent (75%) of the Borrower’s inventory of corn, atcurrent value on the date reported, plus (ii) seventy-five percent (75%)of the Borrower’s Finished Goods-Distiller’s Grains Inventory, at currentvalue on the date reported, plus (iii) seventy-five percent (75%) of theBorrower’s Finished Goods-Ethanol Inventory, valued at the lower of costor market, plus (iv) seventy-five percent (75%) of the amount of theBorrower’s current sales accounts receivable aged thirty (30) days or less,excluding, however, any accounts receivable reasonably deemed ineligible by theBank, and plus (v) seventy-five percent (75%) of the amount of theBorrower’s current state or federal incentives accounts receivable, including,but not limited to, USDA CCC Bio-Energy Accounts Receivable, aged less than onehundred twenty (120) days.

“*Budget Variance Report*”means the report prepared by the Borrower, from time to time, to be approved bythe Bank allocating the Total Expansion Facility Costs among its various partsand components in a form acceptable to the Bank and providing a line itemcomparison of such allocated costs in relation to the original budget, asamended from time to time by the Borrower with the prior consent of the Bank.

“*Business Credit Card Loan*”shall have the meaning given such term in Section 2.01 of this Agreement.

“*Capital Expenditures*”means expenditures by the Borrower which, in accordance with GAAP, are treatedas capital expenditures and not deductible by the Borrower, other than throughdepreciation or amortization, including capital expenditures in excess of theamount

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provided in Section 6.04(l) of this Agreement, to theextent such expenditures are approved in advance by the Bank.

“*Capital Leases*”shall have the same meaning in this Agreement as those terms are defined byGAAP.

“*Change Orders*”means, collectively, (i) that certain Change Order No. 1, dated October 24,2006, between the Borrower and the Design Builder, (ii) that certain ChangeOrder No. 2, dated November 21, 2006, between the Borrower and the DesignBuilder, (iii) that certain Change Order No. 3, dated December 1, 2006, betweenthe Borrower and the Design Builder, (iv) that certain Change Order No. 4,dated December 7, 2006, between the Borrower and the Design Builder, (v) thatcertain Change Order No. 5, dated January 25, 2007, between Borrower and theDesign Builder and (vi) other change orders approved by the Bank.

“*Closing Date*”means the date on which this Agreement is executed by the Borrower and theBank.

“*Collateral Assignment*”means each collateral assignment of a Material Contract as described in Section4.01(a)(xi) of this Agreement.

“*Completion Date*”means the earlier of (i) April 20, 2008 or (ii) the date the construction ofthe Project is completed.

“*Construction Loan*”shall have the meaning given such term in the recitals hereto.

“*Construction LoanCommitment*” shall have the meaning provided in Section 2.02 of thisAgreement.

“*Construction LoanTermination Date*” means the earlier of (a) July 20, 2008 or(b) such earlier date upon which the Bank’s commitment to make adisbursement under the Construction Loan is otherwise terminated in accordancewith the terms of the Construction Note or this Agreement.

“*Construction Note*”means the Construction Note, dated the Closing Date, by the Borrower in favorof the Bank in the form of Exhibit ”B” attached hereto and incorporatedherein by this reference evidencing borrowings under the Construction Loan ofup to a maximum amount, subject to the terms and provisions of this Agreement,of Seventy Three Million and No/100ths Dollars ($73,000,000.00).

 “*Debt-to-NetWorth Ratio*” means, for any applicable period, the ratio derivedwhen comparing (i) Borrower’s Indebtedness for such period to (ii) Borrower’sNet Worth for such period.

 “*Default*” means any event or condition thatupon notice, lapse of time or both would constitute an Event of Default.

“*Deposit Account ControlAgreements*” means (i) the Control Agreement, dated on or about theClosing Date, among the Borrower, the Bank, and Farmers State Bank of Marcus,

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Iowa, and (ii) the Control Agreement, dated on orabout the Closing Date, among the Borrower, the Bank and Cherokee State Bank ofCherokee, Iowa, each substantially in the form of Exhibit “C” attached heretoand incorporated herein by this reference, pursuant to which a securityinterest is perfected in favor of the Bank in the funds of the Borrower ondeposit with Farmers State Bank of Marcus, Iowa and Cherokee State Bank ofCherokee, Iowa, respectively.

“*Design/Build ConstructionContract*” means the Lump Sum Design-Build Expansion Agreement, datedSeptember 20, 2006, between the Borrower and the Design Builder, as amended bythe Change Orders, setting forth the terms and conditions for the preparationof plans and construction of the Expansion Facility in accordance with theExpansion Facility Plans therein described.

“*Design Builder*”means Fagen, Inc., a Minnesota corporation.

“*Disbursement Agreement*”means the Disbursement Agreement, dated on or about the Closing Date, among theBank, the Borrower, the Title Company, and the Disbursing Agent, containingterms and provisions mutually acceptable to each, pursuant to which funds fromthe Construction Loan, as well as capital of the Borrower, are to be disbursedin accordance with the terms and provisions thereof.

“*Disbursing Agent*”means Homestead Escrow & Exchange Company, a South Dakota corporation.

“*Distiller’s GrainMarketing Contract*” means that Distiller’s Grain MarketingAgreement, dated as of June 19, 2002, by and between the Borrower and CommoditySpecialist Company, a Delaware corporation, by which the latter agrees toprovide marketing services to the Borrower for the Borrower’s distiller’s grainproducts.

“*Draw Request*”means the form or forms acceptable to the Bank to be submitted to the Bank bythe Borrower when a disbursement is requested under the Construction Note.

“*EBITDA*” meansearnings before interest, taxes, depreciation and amortization, all experiencedduring the applicable reporting period.

“*Environmental Requirements*”means all federal, state and local statutes, regulations, rules, requirements,decrees, and ordinances concerning pollution or protection of the environment,health and safety, including all those relating to the presence, use,production, generation, handling, transportation, treatment, storage, disposal,distribution, labeling, testing, processing, discharge, release, threatenedrelease, control, or cleanup of any hazardous materials, substances, or wastes,as such requirements are enacted and in effect on or prior to the date of eachdisbursement to the Borrower hereunder and at all times thereafter until thesatisfaction of Borrower’s Obligations.

“*ERISA*” meansthe Employee Retirement Income Security Act of 1974, as amended from time totime, and the regulations and published interpretations thereof.

“*Ethanol Marketing Contract*”means the Amended and Restated Ethanol Marketing Agreement, dated March 29,2007, by and between the Borrower and Archer Daniels Midland

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Company, by which the latter agrees to providemarketing services to the Borrower for the Borrower’s ethanol products.

“*Eurodollar Business Day*”means a Banking Day on which commercial banks are open for internationalbusiness (including dealings in United States dollar deposits) in London,England.

“*Event of Default*”has the meaning provided for in Article VII of this Agreement.

“*Excess Cash Flow*”means Adjusted EBITDA less Scheduled Payments and scheduled payments on anySubordinated Debt.

“*Existing Assignment ofRents and Leases*” means the Assignment of Rents, dated July 25,2002, by the Borrower in favor of the Bank.

“*Existing Loan Agreement*”shall have the meaning given such term in the preamble hereto and shall includeall schedules and exhibits thereto.

*“Existing Loan Documents”* meansthe Existing Loan Agreement, the Existing Security Agreement, the ExistingAssignment of Rents and Leases, the Existing Mortgage, the Existing Long TermRevolving Note, the Existing Operating Note, the Existing Swap Note, theExisting Term Loan, the Existing Term Notes and the Existing Variable RateNote, to the extent such agreements or any portion thereof is in effect on andafter the Closing Date after giving effect to the terms and conditions of thisAgreement.

“*Existing Long TermRevolving Note*” shall mean the term as it is defined and modifiedunder the provisions of Section 2.01 of this Agreement.

“*Existing Mortgage*”means the Mortgage, dated July 25, 2002, by the Borrower in favor of the Bank,filed with the Cherokee County Recorder on July 26, 2002, as Instrument Number02-1598, and as amended by that certain Amendment to Mortgage by and betweenthe Bank and the Borrower, dated December 2, 2004, filed with the CherokeeCounty Recorder on March 4, 2005 at Book 2005, Page 0448.

“*Existing Operating Note*”shall mean the term as it is defined and modified under the provisions ofSection 2.01 of this Agreement.

“*Existing SecurityAgreement*” means the Security Agreement, dated July 25, 2002, by theBorrower in favor of the Bank.

“*Existing Swap Note*”shall have the meaning given such term in Section 2.01 of this Agreement.

“*Existing Swap LoanTermination Date*” means the earlier to occur of (a) June 1, 2008, or(b) the date the Obligations are accelerated pursuant to this Agreement or theNotes and (c) the date the Bank has received (i) notice in writing from theBorrower of the Borrower’s election to terminate this Agreement or (ii)indefeasible payment in full of the Obligations.

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“*Existing Term Loan*”shall mean an amount of up to Nineteen Million Eight Hundred Fifty ThousandFour Hundred Sixty Dollars and Eighty Six Cents ($19,850,460.86) loaned,subject to the terms and conditions of the Existing Loan Agreement and theExisting Term Notes.

“*Existing Term Notes*”means the Existing Swap Note, the Existing Variable Rate Note and the ExistingLong Term Revolving Note.

“*Existing Variable RateNote*” shall mean the term as it is defined and modified under theprovisions of Section 2.01 of this Agreement.

“*Expansion Facility*”means the design and construction of an additional facility on the Project,together with all necessary appropriate fixtures, equipment, attachments andaccessories, as described in the Expansion Facility Plans, such that followingcompletion thereof the ethanol plant operates at the maximum operationalcapacity of 92 million gallons per year, as provided in the Expansion FacilityPlans.

“*Expansion Facility Plans*”means the plans and specifications for construction of the Expansion Facility.

“*Extension of Credit*”means (i) disbursements under the Construction Loan, the Operating Loan, theTerm Loans, or the Existing Term Loan, or (ii) the issuance of a Letter ofCredit.

“*FCStone*” shallhave the meaning given such term in Section 6.03(h) of this Agreement.

“*Fee Letter*”means the Fee Letter, dated April  5,2007, by the Bank and accepted and agreed to by the Borrower.

“*FEMA*” means theFederal Emergency Management Agency.

“*Final Survey*”means the survey provided for in Section 4.03(d) hereof.

“*Finished Goods-Distiller’sGrains Inventory*” means distiller’s grain, either wet or dry, thatconforms to minimum quality standards as developed by current industrystandards.

“*Finished Goods-EthanolInventory*” means ethanol that conforms to minimum quality standardsas developed by current industry standards, including, but not limited to,ASTM D 4806a specifications for E-Grade denatured ethanol.

“*Fixed Charge CoverageRatio*” means the ratio derived when comparing (i) AdjustedEBITDA to (ii) the Borrower’s Scheduled Payments made during theapplicable reporting period.

“*GAAP*” meansgenerally accepted accounting principles in the United States, applied on abasis consistent with the accounting principles applied in the preparation ofthe annual financial statements of the Borrower referred to inSection 6.01 of this Agreement and the financial statements andProjections described in Section 5.09 of this Agreement.

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“*General Partner*”means Little Sioux Corn Processors, L.L.C., an Iowa limited liability company.

*“Governmental Authority”* shallmean any federal, state, county, or local governmental department, commission,board, bureau, agency, authority, instrumentality or judicial or regulatorybody or entity having or asserting jurisdiction as to the Property, the Projector the Borrower, either during the construction of the Project or the operationof the Project following completion thereof, including courts of appropriatejurisdiction.

“*Guarantor*”means the General Partner.

“*Guaranty*” meansthe unlimited and unconditional guaranty of the General Partner in the form ofExhibit “D” attached hereto and incorporated herein by this reference.

“*Indebtedness*”means, as to the Borrower, all items of indebtedness, obligation or liability,whether matured or unmatured, liquidated or unliquidated, direct or contingent,joint or several including, but without limitation:

(a)           TheObligations;

(b)           Allindebtedness or liability for borrowed money or indebtedness and allindebtedness guaranteed, directly or indirectly, in any manner, or endorsed(other than for collection or deposit in the ordinary course of business) ordiscounted with recourse;

(c)           Allindebtedness in effect guaranteed, directly or indirectly, through agreements,contingent or otherwise (i) to purchase such indebtedness; or (ii) topurchase, sell or lease (as lessee or lessor) property, products, materials orsupplies or to purchase or sell services, primarily for the purpose of enablingthe debtor to make payment of such indebtedness or to insure the owner of theindebtedness against loss;

(d)           Allindebtedness or obligations (i) for the payment of deferred purchase price ofproperty or services (including trade obligations), (ii) as lessee underCapital Leases, (iii) obligations under letters of credit, including theLetters of Credit, (iv) current liabilities in respect of unfunded vestedbenefits under plans covered by ERISA, (v) obligations under acceptancefacilities, and (vi) other contingent obligations of Borrower to purchase, toprovide funds for payment, to supply funds to invest in any Person or entity,or otherwise to assure a creditor against loss;

(e)           Allindebtedness secured by (or for which the holder of such indebtedness has aright, contingent or otherwise, to be secured by) any mortgage, deed of trust,pledge, lien, security interest or other charge or encumbrance upon propertyowned or acquired subject thereto, whether or not the liabilities securedthereby have been assumed, or other indebtedness or obligations otherwiseevidenced by bonds, debentures, notes, or other similar instruments;

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(f)            Allindebtedness incurred as the lessee of goods or services under leases, includingCapital Leases, that, in accordance with GAAP, are not reflected on the lessee’sbalance sheet; and

(g)           TheBorrower’s obligations for payment of the negative termination value of anyinterest rate swap agreement.

“*Independent Inspector*”means Luminate, LLC, a Colorado limited liability company, or such other firmwhich will be retained by the Bank, at the Borrower’s sole cost and expense, toconduct on-site inspections of the work in progress on the Project, andto issue periodic reports to the Bank as to the progress of construction andthe Borrower’s adherence to the Plans, the Projections, the Schedule of Valuesand the Budget Variance Report.  The Bank’sselection of the Independent Inspector shall be subject to the Borrower’sapproval, which approval will not be unreasonably withheld.

“*Interest Period*”means, initially, the period commencing on the date of the Construction Note,the Operating Note, the Swap Note, the Variable Rate Note, the Long TermRevolving Note, the Existing Swap Note, the Existing Variable Rate Note, or theExisting Long Term Revolving Note, as applicable, and ending (i) on thefirst (1st) day of the month in whichthe one-month anniversary of the Construction Note falls, (ii) on thefirst (1st) day of the month in which the one-monthanniversary of the Operating Note falls, (iii) on the first (1st) day of the month in whichthe three-month anniversary of the Swap Note falls, (iv) on thefirst (1st) day of themonth in which the three-month anniversary of the Variable Rate Notefalls, (v) on the first (1st)day of the month in which the one-month anniversary of the Long TermRevolving Note falls, (vi) on the first (1st) day of the month in which the three-month anniversaryof the Existing Swap Note falls, (vii) on the first (1st) day of the month in which thethree-month anniversary of the Existing Variable Rate Note falls, (viii) on thefirst (1st) day of themonth in which the one-month anniversary of the Existing Long Term RevolvingNote falls, and thereafter for each respective three-month or one-month periodas the case may be commencing on the first day immediately following the lastday of the immediately preceding Interest Period and ending after theapplicable one-month or three-month period set forth above thereafter, providedthat:

(a)           subjectto clauses (b) and (c) below, for any calendar month, any Interest Periodwhich would otherwise end on a day which is not a Eurodollar Business Day shallbe extended to the next succeeding Eurodollar Business Day;

(b)           subject toclause (c) below, any Interest Period which begins on the last EurodollarBusiness Day of a calendar month (or a day for which there is no numericallycorresponding Eurodollar Business Day in the calendar month at the end of suchInterest Period) shall be deemed to have its anniversary date on the lastEurodollar Business Day of the last calendar month occurring during suchInterest Period; and

(c)           notwithstandinganything contained herein to the contrary, no Interest Period shall extendbeyond the respective Termination Date for the applicable Note.

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“*Internal Revenue Code*”means the Internal Revenue Code of 1986, as amended, modified, supplemented,restated or replaced from time to time, and the rules, regulations andpublished interpretations thereof.

“*Letter of Credit*”means one or more letters of credit issued under and pursuant to the OperatingLoan or under the Existing Operating Note by execution and delivery by theBorrower of the Bank’s standard form promissory note and continuing letter ofcredit agreement relating to each such letter of credit, pursuant to the Bank’scustomary policies and in accordance with the terms and provisions of the Bank’sstandardized documents, to be executed and delivered to the Bank at the time ofissuance of each such Letter of Credit.

“*LIBOR*” shallmean the London Interbank Offered Rate.

“*LIBOR Base Rate*”shall mean, with respect to the applicable Interest Period, (a) the LIBORIndex Rate for such Interest Period, if such rate is available, or (b) ifthe LIBOR Index Rate cannot be determined, the average (rounded upward, ifnecessary, to the next higher one one hundredth (1/100) of one percent (1%)) ofthe respective rates per annum of interest at which deposits in dollars areoffered to the Bank in the London interbank market by two (2) Eurodollardealers of recognized standing, selected by the Bank in its sole discretion, atsuch time on the date two (2) Eurodollar Business Days before the first day ofsuch Interest Period as the Bank in its sole discretion elects, for delivery onthe first day of the applicable Interest Period for a number of days comparableto the number of days in such Interest Period and in an amount approximatelyequal to the principal amount of the Obligations.

“*LIBOR Index Rate*”shall mean, with respect to the applicable Interest Period, the rate per annum(rounded upwards, if necessary, to the next higher one one hundredth (1/100) ofone percent (1%)) for deposits in U.S. Dollars for a period equal to suchInterest Period, which appears on the Bank’s information vendor as of9:00 a.m. (Omaha, Nebraska time) on the day two (2) Eurodollar BusinessDays before the first day of such Interest Period.  The term “the Bank’s information vendor”means the Bloomberg service or such other vendor chosen by the Bank, in itssole discretion, for the purpose of displaying the British Bankers’ AssociationInterest Settlement Rates for U.S. Dollar Deposits.

“*LIBOR Rate*”shall mean, with respect to any Interest Period, the quotient (rounded upwards,if necessary, to the next higher one one hundredth (1/100) of one percent (1%))of the (i) LIBOR Base Rate divided by (ii) one (1.00) minus theapplicable LIBOR Reserve Percentage.  TheLIBOR Rate shall be adjusted automatically on and as of the effective date ofany change in the LIBOR Reserve Percentage.

“*LIBOR Reserve Percentage*”shall mean for any day that percentage (expressed as a decimal) which is ineffect on such day, as prescribed by the Board of Governors of the FederalReserve System (or any successor), for determining the maximum reserverequirement for a member bank of the Federal Reserve System with respect to “EurocurrencyLiabilities” (or in respect of any other category of liabilities which includesdeposits by reference to which the interest rate on LIBOR loans is determinedor any category of extensions of credit or other assets which include loans bya non-United States office of any bank to United Statesresidents).  The

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LIBOR Rate shall be adjusted automatically on and asof the effective date of any change in the LIBOR Reserve Percentage.

“*LP Agreement*”means that certain Limited Partnership Agreement of the Borrower, dated March6, 2002, as the same may be amended, supplemented or modified from time totime.

“*Loan Documents*”means this Agreement, each of the Notes, the Mortgage, the Security Agreement,the Guaranty, each Letter of Credit, each Swap Contract, each of the ExistingLoan Documents, and each other document referred to in Article IV of thisAgreement.

“*Long Term Revolving Loan*”has the meaning provided in Section 2.12(c) of this Agreement.

“*Long Term Revolving Note*”has the meaning provided in Section 2.12(c) of this Agreement.

“*Manager*”means Steve Roe, an Iowa resident.

“*Material Contracts*” mean the contracts oragreements entered into by the Borrower or any agent on behalf of the Borrowerrelating to the Property, the construction of the Project or the operation ofthe ethanol plant following the Completion Date which the Borrower and the Bankmutually agree are material thereto and are described on Exhibit “E” attachedhereto and incorporated herein by this reference.

“*Maximum Rate*”has the meaning provided in Section 8.16 of this Agreement.

“*Mortgage*” means the Amended, Restated and Expanded Mortgage,dated the Closing Date, between the Borrower and the Bank in the form ofExhibit “F” attached hereto and incorporated herein by this reference creatinga first lien on the Property and a security interest in all of the personalproperty incorporated therein as a fixture as security for payment of theObligations.

“*Net Worth*”means total assets less total liabilities of the Borrower and less thefollowing types of assets: (a) leasehold improvements;(b) receivables (other than those created by sale of goods) (i) to apartner and other investments in or amounts due from any partner, employee orother Affiliate of the Borrower, other than Archer Daniels Midland Company, or(ii) which, in accordance with GAAP, are considered to be doubtful oruncollectible in the ordinary course of business; (c) goodwill, patents,copyrights, mailing lists, trade names, trademarks, servicing rights,organizational and franchise costs, bond underwriting costs and other likeassets properly classified as intangible; and (d) treasury stock ortreasury partnership units or interests in the Borrower.  Net Worth shall not include any debt due tothe Borrower not acceptable to the Bank in the exercise of the Bank’sreasonable discretion, but shall include Subordinated Debt.

“*Note*” or “*Notes*” means any, or all, as the case may be, promissorynote delivered by the Borrower to the Bank, which shall include, but not belimited to, the Construction Note, the Operating Note, the Term Notes, theExisting Term Notes and the Existing Operating Note.

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“*Obligations*” means the obligation of the Borrower:

(a)           to paythe principal of and interest on any of the Notes in accordance with the termsthereof and to satisfy all of its other liabilities to the Bank, whetherhereunder or otherwise, whether now existing or hereafter incurred, matured orunmatured, direct or contingent, joint or several, including any extensions,modifications, renewals thereof and substitutions therefor and including, butnot limited to, any obligations under Letter of Credit agreements;

(b)           to repayto the Bank all amounts advanced by the Bank hereunder or otherwise incurredhereunder on behalf of the Borrower, including, but without limitation,advances for principal or interest payments to prior secured parties,mortgagees or licensers, or taxes, levies, insurance, rent or repairs to, ormaintenance or storage of, any of the real or personal property securing theBorrower’s payment and performance of this Agreement; and

(c)           toreimburse the Bank, on demand, for the Bank’s reasonable and necessary out-of-pocketexpenses and costs, including the reasonable fees and expenses of the Bank’slegal counsel, in connection with the preparation, administration, amendment,modification, or enforcement of this Agreement or any of the other LoanDocuments required hereunder, including, without limitation, any proceedingbrought or threatened to enforce payment of any of the Obligations referred toin the foregoing subparagraphs (a) and (b).

“*Operating Loan*”shall have the meaning given such term in the recitals hereto.

“*Operating Loan Commitment*”shall have the meaning provided in Section 2.06 of this Agreement.

“*Operating Loan TerminationDate*” means the earliest to occur of the following: (a) March31, 2008, or such later date to which the Operating Loan Termination Date hasbeen extended by written agreement by the Bank, (b) the date theObligations are accelerated pursuant to the terms and provisions of thisAgreement or the Operating Note, (c) the date the Bank receives notice inwriting from the Borrower of the Borrower’s election to terminate the OperatingNote as described in Section 2.06 of this Agreement and (d) the date theBank receives (i) notice in writing from the Borrower of the Borrower’selection to terminate this Agreement or (ii) indefeasible payment in fullof the Obligations.

“*Operating Note*”means the Operating Note, dated the Closing Date, by the Borrower in favor ofthe Bank evidencing the three hundred sixty four (364) day operating creditfacility described in Section 2.06 of this Agreement and in the form as setforth in Exhibit ”G” attached hereto and incorporated herein by thisreference and as renewed, modified or extended from time to time in accordancewith the terms thereof and hereof.

“*Original Facility*”means the design and construction of (i) the Borrower’s ethanol plant completedon or about June 1, 2003 and (ii) the addition to Borrower’s ethanol plantcompleted

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on or about October 1, 2005, together with allnecessary and appropriate fixtures, equipment, attachments and accessories, asdescribed in the Original Plans.

“*Original Plans*”means the plans and specifications prepared by ICM, Inc. on behalf of theDesign Builder for the Original Facility and identified to this Agreement bythe Design Builder, the Borrower and the Bank.

“*Other Project Construction*”means all construction or materials to be provided to the Borrower or performedon behalf of the Borrower relating to the Expansion Facility or the Propertywhich are not included in the scope of the work provided for under theDesign/Build Construction Contract.

“*Permit*” and “*Permits*” mean, respectively, any license or permit, and alllicenses or permits, in either case, as required under any law, ordinance orregulation, including the Environmental Requirements, or by any GovernmentalAuthority and that are a requirement to constructing or operating the facilityon the Property after completion of construction of the Project at its maximumoperational capacity, including without limitation the licenses or permits setforth in Exhibit “H” attached hereto and incorporated herein by this reference.

“*Permitted Liens*”means (i) liens, assignments, or subordinations in favor of the Bank; (ii)liens, assignments, or subordinations outstanding on the date of this Agreementand disclosed in advance to the Bank in writing and approved by the Bank,including those easements and other encumbrances described in the titleinsurance commitment provided to the Bank on the Closing Date; (iii) liens fortaxes or assessments or other governmental charges not delinquent or which theBorrower is contesting in good faith and for which the Borrower has madeadequate reserves; (iv) liens which secure purchase money Indebtedness allowedunder this Agreement or the Loan Documents; (v) liens that are imposed by lawfor obligations for labor or materials not overdue for more than 120 days tothe extent and only to the extent Borrower has obtained and posted adequatebonding to secure the payment thereof and release of such lien within theperiod provided under applicable law, such as mechanics’, materialmen’s,carriers’, landlords’, and warehousemen’s liens, or liens, pledges, or depositsunder workers’ compensation, unemployment insurance, Social Security, orsimilar legislation; (vi) liens securing Subordinated Debt; and (vii) lienscreated in favor of a hedging account entity.

“*Person*” meansan individual, partnership, limited liability company, corporation, businesstrust, joint stock company, trust, unincorporated association, joint venture,Governmental Authority, or other entity of whatever nature.

“*Phase I EnvironmentalReport of the Property*” means (i) the Phase I Environmental SiteAssessment, dated May 31, 2006, prepared for Little Sioux Corn Processors forProject No. 27067606 by Terracon Consultants, Inc., and (ii) Phase IEnvironmental Site Assessment, dated April 26, 2002, prepared for Little SiouxCorn Processors, L.P. for Project No. 08027714 by Terracon Consultants, Inc.

“*Plans*” meansthe plans and specifications for construction of the Project, which shall specificallyinclude the Original Plans and the Expansion Facility Plans.

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“*Post Closing Letter*”shall have the meaning give to such term in Section 8.02 of this Agreement.

“*Preliminary Survey*”means the survey provided for in Section 4.01(a)(xiii) hereof.

“*Prepayment Fee*”shall have the meaning given such term in Section 2.15 of this Agreement.

“*Project*” meansthe ethanol plant owned and operated by the Borrower (including, but notlimited to, the Original Facility and the Expansion Facility), together withall necessary and appropriate fixtures, equipment, attachments and accessories,as described in the Plans, constructed or to be constructed on the Property,together with the Other Project Construction, such that following completionthereof the ethanol plant operates at the maximum operational capacity providedin the Plans.

“*Projections*”shall have the meaning given such term in Section 5.09 of this Agreement,including but not limited to the Sources and Uses of Funds.

“*Property*” shallhave the meaning given such term in the recitals hereto.

“*Schedule of Values*”means the schedule of values and related cash flow projections prepared by theDesign Builder allocating the values under the Design/Build ConstructionContract to the various portions or segments thereof.

“*Scheduled Payments*”means payments to be made by, or on behalf of, the Borrower to the Bankpursuant to the terms and provisions of this Agreement or any of the other LoanDocuments, except for payments made pursuant to the provisions of Section 6.02(c)of this Agreement.

“*Security Agreement*”means the Amended and Restated Security Agreement, dated the Closing Date,between the Borrower, as debtor, and the Bank, as secured party, creating afirst security interest in all the Borrower’s assets, including generalintangibles, other than the real estate which is the subject of the Mortgage,securing the Obligations, as the same may be extended, renewed, continued orotherwise modified with the written consent of the Borrower and the Bank.

“*Sources and Uses of Funds*”means the sources and uses of funds included in the updated financialprojections, dated October 3, 2006, as prepared by Gary Grotjohn of theBorrower, and as amended from time to time by the Borrower with the approval ofthe Bank, reflecting the Borrower’s capital and projected sources of income andperiodic expenditure thereof for completion of construction of the ExpansionFacility and operation of the Project, including expenditures which are notanticipated to be funded from the loans provided for in this Agreement.

“*Special Flood Hazard Area*”means the designation of an area by FEMA requiring that the Bank obligate theBorrower to obtain and maintain flood insurance relating to any propertylocated therein.

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“*Subcontractor*”means any Person who contracts with the Design Builder or the Borrower oranother contractor of the Borrower to perform any work or supply any of thematerials or equipment necessary to complete the construction of the Project orthe operation thereof following completion of construction.  Subcontractor shall also include any Personwho performs any work or supplies any of the materials or equipment necessaryto complete construction of the Project.

“*Subordinated Debt*”means Indebtedness of the Borrower to entities other than the Bank that hasbeen approved by the Bank in writing and has been subordinated, in formacceptable to the Bank, to the Obligations, and which specifically includesthat certain promissory note in the amount of Five Hundred Thousand andNo/100ths Dollars ($500,000.00), dated January 29, 2003, executed by theBorrower in favor of Farmers State Bank of Marcus, Iowa, with a currentoutstanding balance of One Hundred Sixty Two Thousand Four Hundred Thirty Nineand 26/100ths Dollars ($162,439.26).

“*Subordination Agreement*”means that certain Subordination Agreement, dated on or about the Closing Date,among the Borrower, the Bank and Farmers State Bank of Marcus, Iowa, in theform attached hereto as Exhibit “I” and incorporated herein by this reference,pursuant to which the Indebtedness of the Borrower to Farmers State Bank ofMarcus, Iowa is subordinated to the Borrower’s Obligations owed to the Bank.

“*Subsidiary*”means, as to the Borrower, a corporation or other entity, including a limitedliability company, of which shares of stock or membership or other equityinterests, having ordinary voting power (other than stock or membership orother equity interests, having such power only by reason of the happening of acontingency) to elect a majority of the board of directors or managers orgovernors of such corporation or other entity are at the time owned, or themanagement of which is otherwise controlled, directly or indirectly, throughone or more intermediaries, or both, by the Borrower.

“*Substantial Completion*”shall have the meaning provided in the Design/Build Construction Contract.

“*Swap Contract*”or “*Swap Contracts*” means (a) any andall rate swap transactions, basis swaps, credit derivative transactions,forward rate transactions, commodity swaps, commodity options, forwardcommodity contracts, equity or equity index swaps or options, bond or bondprice or bond index swaps or options or forward bond or forward bond price orforward bond index transactions, interest rate options, forward foreign exchangetransactions, cap transactions, floor transactions, collar transactions,currency swap transactions, cross-currency rate swap transactions,currency options, spot contracts or any other similar transactions or anycombination of any of the foregoing (including any options to enter into any ofthe foregoing), whether or not any such transaction is governed by or subjectto any master agreement and (b) any and all transactions of any kind, andthe related confirmations, which are subject to the terms and conditions of, orgoverned by, any form of master agreement published by the International Swapsand Derivatives Association, Inc.; provided, however, the term “Swap Contract”shall not, for the purposes of this Agreement, include commodity hedging orcommodity risk management contracts.  “Commodity”includes ethanol, grain, natural gas and other traded commodities.

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“*Swap Loan*” hasthe meaning provided in Section 2.12(a) of this Agreement.

“*Swap Note*” hasthe meaning provided in Section 2.12(a) of this Agreement.

“*Term Loan*”shall mean an amount of up to Eighty Two Million Two Hundred Seventy EightThousand Two Hundred Twenty Six Dollars and Ninety Four Cents ($82,278,226.94)loaned, or to be loaned, subject to the terms and provisions of this Agreementand the Term Notes, to the Borrower under the terms and conditions of thisAgreement to provide the Borrower funds to pay the Construction Loan in fulland which shall include the Swap Loan, the Variable Rate Loan, and the LongTerm Revolving Loan, as further defined and described in Section 2.12 of thisAgreement.

“*Term Loan Termination Date*”means the earliest to occur of the following: (a) the fifth anniversary ofthe Construction Loan Termination Date, (b) the date the Obligations areaccelerated pursuant to this Agreement or the Term Notes and (c) the datethe Bank has received (i) notice in writing from the Borrower of theBorrower’s election to terminate this Agreement or (ii) indefeasiblepayment in full of the Obligations.

“*Term Notes*”means those promissory notes of the Borrower to the Bank which evidencespermanent financing to pay the Construction Note as described and furtherdefined in Article II of this Agreement, and all renewals, modificationsor extensions thereof and which shall include the Swap Note, the Variable RateNote and the Long Term Revolving Note.

“*Title Company*”means Dakota Homestead Title Insurance Company, a South Dakota corporation.

“*Total Expansion FacilityCosts*” means an amount equal to Seventy Three Million and No/100thsDollars ($73,000,000.00).

“*USDA*” means theUnited States Department of Agriculture.

“*USDA CCC Bio-EnergyAccounts Receivable*” shall mean cash incentives offered by the USDAto the Borrower after the Borrower has commenced operations and provided thatthe Borrower has complied with other applicable requirements, terms andconditions of the USDA.

“*Variable Rate Loan*”has the meaning provided in Section 2.12(b) of this Agreement.

“*Variable Rate Note*”has the meaning provided in Section 2.12(b) of this Agreement.

“*Working Capital*”means current assets (including any amount available under the Long TermRevolving Loan at the time of determination) of the Borrower, less (i)investments by the Borrower in or other amounts due to the Borrower from anypartner, employee or other Affiliate of the Borrower, other than Archer DanielsMidland Company, (ii) prepayments made by the Borrower under this Agreement and(iii) current liabilities of the Borrower.

**Section 1.02.  Interpretation**.  The definitions in Section 1.01 of thisAgreement shall apply equally to both the singular and plural forms of theterms defined.  Whenever the context mayrequire, any pronoun shall include the corresponding masculine, feminine andneuter forms.

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The words “include”, “includes” and “including” shall be deemed to befollowed by the phrase “without limitation.” All references herein to Articles, Sections, Exhibits and Schedulesshall be deemed references to Articles and Sections of, and Exhibits andSchedules to, this Agreement unless the context shall otherwise require.  All terms of an accounting or financialnature not specifically defined herein shall be construed in accordance withGAAP consistent with those applied in the preparation of the financialstatements referred to in Sections 5.07 and 6.01 of this Agreement, and allfinancial data submitted pursuant to this Agreement shall be prepared in accordancewith such principles.

**ARTICLE II**

**AMOUNT AND TERMS OF THE LOANS**

**Section 2.01.  Existing Financing**.

(a)           Borrower and Bank acknowledge andagree that, under the Existing Loan Agreement, Borrower’s Obligations currentlyinclude (i) a fixed rate term loan evidenced by that certain Term Note 2, datedJune 23, 2003, executed by Borrower payable to the order of the Bank, which hasa current principal balance of Ten Million Five Hundred Seventy Two ThousandTwo Hundred Thirty Three Dollars and Ninety Two Cents ($10,572,233.92) and isattached hereto as Exhibit “J” and incorporated herein by this reference (the “ExistingSwap Note”), (ii) a variable rate term loan evidenced by that certain Term Note3, dated June 23, 2003, executed by Borrower payable to the order of the Bank,which has a current principal balance of Four Million Two Hundred Seventy EightThousand Two Hundred Twenty Six  Dollarsand Ninety Four Cents ($4,278,226.94) and is attached hereto as Exhibit “K” andincorporated herein by this reference (the “Existing Variable Rate Note”),(iii) a long term revolving loan evidenced by that certain Term Note 4, datedJune 23, 2003, executed by Borrower payable to the order of the Bank, which hasan available commitment of Five Million and No/100ths Dollars ($5,000,000.00)and is attached hereto as Exhibit “L” and incorporated herein by this reference(the “Existing Long Term Revolving Note”), (iv) an operating line and letter ofcredit facility evidenced by that certain Revolving Promissory Note, dated asof March 31, 2006, executed by Borrower payable to the order of the Bank, whichhas an available commitment of Three Million Five Hundred Thousand andNo/100ths Dollars ($3,500,000.00) and is attached hereto as Exhibit “M” andincorporated herein by this reference (the “Existing Operating Note”), and (v)a business credit card loan which has an available commitment of One HundredThousand Dollars ($100,000.00) (the “Business Credit Card Loan”).

(b)           During the period beginning on thedate of execution of this Agreement and ending on the Existing Swap LoanTermination Date, the terms and provisions of the Existing Swap Note shallremain in full force and effect and the interest rate, interest period,repayment and other terms and provisions thereof shall likewise remain in fullforce and effect.

(c)           During the period beginning on thedate of execution of this Agreement and continuing thereafter until terminatedaccording to its terms, the terms and provisions

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of the Business CreditCard Loan shall remain in full force and effect and the interest rate, interestperiod, repayment and other terms and provisions thereof shall likewise remainin full force and effect.

(d)           During the period beginning on thedate of execution of this Agreement and ending on the Construction LoanTermination Date, the terms and provisions of the Existing Variable Rate Noteand the Existing Long Term Revolving Note shall remain in full force and effectand the interest period, repayment and other terms and provisions thereof shalllikewise remain in full force and effect until replaced in accordance with theterms and provisions of this Agreement; provided, however, that during suchtime, interest shall accrue on the Existing Variable Rate Note and the ExistingLong Term Revolving Note at a variable rate equal to the applicable LIBOR Rateset forth in such Notes, plus (a) two hundred eighty (280) basis points priorto acceleration or maturity, and (b) an additional six hundred (600) basispoints after maturity, whether by acceleration or otherwise.

(e)           On the date of execution of thisAgreement, the entire principal amount and all accrued and unpaid interestunder the Existing Operating Note shall be refinanced and replaced in itsentirety by the Operating Note described in Section 2.08 of this Agreement.

(f)            On the Construction Loan TerminationDate and subject to the conditions set forth in Section 2.12 of this Agreement,the entire principal amount and all accrued and unpaid interest under theExisting Variable Rate Note, if any, shall be added to the principal balance ofthe Construction Note and converted to and replaced by the Term Loans describedin Section 2.12 of this Agreement.

(g)           On the Construction Loan TerminationDate and subject to the conditions set forth in Section 2.12 of this Agreement,the Existing Long Term Revolving Note shall be combined with, and replaced inits entirety by, the Long Term Revolving Note described in Section 2.12 of thisAgreement.

**Section 2.02.  Construction Loan**.  The Bank agrees, on the terms and subject tothe conditions set forth in this Agreement, to make, from time to time duringthe period beginning on the date of execution of this Agreement and ending onthe Construction Loan Termination Date, disbursements to the Borrower in anaggregate principal amount not to exceed Seventy Three Million and No/100thsDollars ($73,000,000.00) (the “Construction Loan Commitment”).  The Borrower may borrow, repay withoutpenalty or premium and reborrow hereunder, from the Closing Date until theConstruction Loan Termination Date, either the full amount of the ConstructionLoan Commitment or any lesser sum thereof. If, prior to the Completion Date, there is paid to the Bank a third-partypayment (a grant payment, for example) that is applied to the Construction Loan,the Bank may, in its sole discretion, reduce the amount to be advanced to alesser sum, which the Bank reasonably determines is necessary to complete theExpansion Facility.  Approvedconstruction costs, for purposes hereof, are costs actually incurred inconnection with the construction of the Expansion Facility.  Such approved construction costs shallinclude, but shall not be limited to, the costs of permits, licenses, labor,supplies, materials, services, equipment, insurance premiums, real estate taxesand interest on disbursements and

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operating costs of the ethanol plant. Approved construction costs shall not include (i) the demobilization orother costs of the Design Builder in connection with a termination of theDesign/Build Construction Contract, and any similar provision of any OtherProject Construction agreement, other than upon completion of the Project, or(ii) costs associated with the payment of consequential damages and other costsresulting from any breach of the License Agreement, dated as of September 20,2006, by and between the Borrower and ICM, Inc. a Kansas corporation.

**Section 2.03.  Construction Note**.  The obligation of the Borrower to repay theConstruction Loan shall be evidenced by the Construction Note.

**Section 2.04.  Interest on Construction Note**.  Interest on the Construction Note shall bepayable at the rate provided herein only on such portions of the ConstructionLoan proceeds as actually have been disbursed by the Bank pursuant to thisAgreement.  Interest on the ConstructionNote shall accrue at the one (1) month LIBOR Rate plus (a) three hundredten (310) basis points prior to acceleration or maturity, and (b) anadditional six hundred (600) basis points after maturity, whether byacceleration or otherwise.

**Section 2.05.  Repayment of Construction Note**.  Interest only shall be due and payablequarterly on the Construction Note.  Alloutstanding principal and accrued but unpaid interest on the Construction Noteshall be due and payable on the Construction Loan Termination Date pursuant to,subject to the terms and provisions thereof, Section 2.12 of this Agreement.

**Section 2.06.  Operating Loan**.  The Bank agrees, on the terms and subject tothe conditions set forth in this Agreement, to lend up to Five Million andNo/100ths Dollars ($5,000,000.00) to the Borrower relating to the OperatingLoan, which shall provide both operating line of credit financing and Letter ofCredit financing under the same financing facility and will refinance andreplace the Existing Operating Note.  TheBank will credit proceeds of theOperating Loan to the Borrower’s deposit account with the Bank, bearing accountnumber 22674210.  Subject to the terms ofthis Agreement and the Operating Note, the Bank will lend the Borrower, fromtime to time until the Operating Loan Termination Date such sums as theBorrower may request by reasonable same-day notice to the Bank, receivedby the Bank not later than 11:00 a.m. (Omaha, Nebraska time) of such day,but which shall not exceed in the aggregate principal amount at any one timeoutstanding of Five Million and No/100ths Dollars ($5,000,000.00) less (i) theaggregate amounts of any sums previously disbursed to the Borrower under theOperating Loan by the Bank at the request of, and for the account of, the Borrowerand (ii) the aggregate amount of any outstanding Letters of Credit (the “OperatingLoan Commitment”).  The Borrower mayborrow, repay, and reborrow under the Operating Loan, without penalty orpremium, from the Closing Date until the Operating Loan Termination Date,either the full amount of the Operating Loan Commitment or any lesser sum.  It is the intention of the parties that theoutstanding balance of the Operating Loan shall not exceed the Borrowing Base,and if at any time said balance exceeds the Borrowing Base, the Borrower shallforthwith pay the Bank sufficient funds to reduce the balance of the OperatingLoan until it is in compliance with this requirement.  The Borrower may elect to terminate the OperatingNote at any time upon written notice to the Bank.  In the event the Borrower elects to terminatethe Operating Note, the aggregate principalamount of the Operating Note outstanding, together with

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any accrued andunpaid interest thereon, shall be due and payable to the Bank on the date ofsuch election, if not sooner paid.

**Section 2.07.  Letters of Credit**.  As part of, and not distinct from, theOperating Loan, Bank will issue, or hasissued prior to the date hereof under the Existing Operating Note, Letters ofCredit at Borrower’s request, on Borrower’s account, pursuant to the Bank’scustomary policies and in accordance with the terms and provisions of the Bank’sstandardized documents, to be executed and delivered to the Bank at the time ofissuance of each such Letter of Credit, in an aggregate amount outstanding notto exceed One Million Dollars ($1,000,000.00) and provided that unlessotherwise agreed upon by the Bank, no Letter of Credit shall have an expirationdate more than one (1) year from the date of issuance.  The Bank may elect to not renew any Letter ofCredit in its sole discretion.  The Bankand Borrower acknowledge and agree that the amount available to Borrower underthe Letter of Credit Facility shall be permanently reduced by the amount of anyand all Letters of Credit issued by the Bank to Borrower, whether issued prioror subsequent to, the date of this Agreement, unless the Bank expressly agreesin writing to the subsequent issuance of a Letter of Credit exceeding suchreduced amount.

**Section 2.08.  Operating Note**.  The Operating Loan shall be evidenced by theOperating Note which shall have as its stated maturity date the Operating LoanTermination Date.

**Section 2.09.  Interest on Operating Note**.  Subject to the adjustments set forth inSection 2.11 of this Agreement, interest on the Operating Note shall accrue atthe one (1) month LIBOR Rate plus (a) two hundred eighty (280) basispoints, prior to acceleration or maturity, and (b) an additional six hundred(600) basis points after maturity, whether by acceleration or otherwise.

**Section 2.10.  Repayment of Operating Note**.  Interest only shall be due and payablequarterly on the Operating Note.  Alloutstanding principal and accrued but unpaid interest on the Operating Noteshall be due and payable on the Operating Loan Termination Date, if not soonerpaid.

**Section 2.11.  Incentive Pricing**.  Commencing with the three (3) month periodthat begins on the first (1st)day of the third (3rd)calendar month following the Construction Loan Termination Date, and as of thefirst (1st) day ofeach three (3) month period thereafter (each such three month period, an “AdjustmentPeriod”), the interest rate applicable to the Variable Rate Loan, the Long TermRevolving Loan and the Operating Loan shall be subject to adjustment as follows:

| If, as of the last  Eurodollar Business Day of any Adjustment Period, Borrower’s Debt-to-Net  Worth Ratio is: |   |   | then the interest rate applicable to the Variable  Rate Loan, the Long Term Revolving Loan and the Operating Loan for the  subsequent Interest Period shall be: |
|--------------------------------------------------------------------------------------------------------------------|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                               |   |   |                                                                                                                                                            |
| (i)  greater  than or equal to 1.15:1.00                                                                 |   |   | equal to the LIBOR Rate plus three hundred (300)  basis points                                                                                                  |

 

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| (ii) less than  1.15:1.00 but greater than or equal to 1.00 to 1.00      |   |   | equal to the LIBOR Rate plus two hundred eighty five  (285) basis points |
|-------------------------------------------------------------------------------|--------|--------|--------------------------------------------------------------------------|
|                                                                          |   |   |                                                                     |
| (iii) less  than 1.00 to 1.00 but greater than or equal to .75 to 1.00   |   |   | equal to the LIBOR Rate plus two hundred seventy  (270) basis points     |
|                                                                          |   |   |                                                                     |
|  (iv) less than .75 to 1.00 but greater  than or equal to 0.50:1.00 |   |   | equal to the LIBOR Rate plus two hundred fifty five  (255) basis points  |
|                                                                          |   |   |                                                                     |
| and/or  (v) less than 0.50:1.00                                               |   |   | equal to the LIBOR Rate plus two hundred forty (240)  basis points       |

 

(b)  Notwithstandingthe foregoing, in the event any of the Notes relating thereto mature, whetherby acceleration or otherwise, such incentive pricing shall not be applicablethereto and the interest rates provided for therein at maturity shall beapplicable.

For any calendar month,any Adjustment Period which would otherwise commence or end on a day which isnot a Eurodollar Business Day shall be extended to the next succeedingEurodollar Business Day. Any such adjustment under this Section shall beapplied and take effect for the immediately succeeding Interest Period.

**Section2.12.  Term Loans and Term Notes**.  On the Construction Loan Termination Date andso long as (i) Bank is lender, (ii) all of the terms, conditions and covenantsof this Agreement have been complied with and (iii) there has not been at anytime an Event of Default, the entire principal amount and all accrued andunpaid interest under the ConstructionNote shall be converted to and replaced by the following Term Loans andexecution and delivery by the Borrower of the following Term Notes to the Bank:

(a)           *Swap Loan*.  A loan in the amount of Thirty Six MillionFive Hundred and No/100ths Dollars ($36,500,000.00) (the “Swap Loan”) evidencedby the execution by the Borrower and delivery to the Bank of a promissory notedated as of the Construction Loan Termination Date and subject to the terms andconditions of this Agreement, in the principal amount of Thirty Six MillionFive Hundred and No/100ths Dollars ($36,500,000.00), having a maturity datethat is the date of the fifth anniversary of the Construction Loan TerminationDate, and in the form of Exhibit ”N” attached hereto and incorporatedherein by this reference (the “Swap Note”);

(b)           *Variable Rate Loan*.  A loan in the maximum amount of Thirty FiveMillion Seven Hundred Seventy Eight Thousand Two Hundred Twenty Six Dollars andNinety Four Cents ($35,778,226.94), representing the funded Construction Note,plus the amount outstanding on the Existing Variable Rate Note, less the SwapNote, and less Five Million and No/100ths Dollars ($5,000,000.00) of the LongTerm Revolving Loan

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(the “Variable Rate Loan”)evidenced by the execution by the Borrower and delivery to the Bank of apromissory note dated as of the Construction Loan Termination Date and subjectto the terms and conditions of this Agreement, in the principal amount ofThirty Five Million Seven Hundred Seventy Eight Thousand Two Hundred Twenty SixDollars and Ninety Four Cents ($35,778,226.94), having a maturity date that isthe date of the fifth anniversary of the Construction Loan Termination Date,and in the form of Exhibit ”O” attached hereto and incorporated herein bythis reference (the “Variable Rate Note”); and

(c)           *Long Term Revolving Loan*.  A loan in the amount of Ten Million andNo/100ths Dollars ($10,000,000.00) (the “Long Term Revolving Loan”) evidencedby the execution and delivery of a promissory note dated as of the ConstructionLoan Termination Date and subject to the terms and conditions of thisAgreement, in the principal amount of Ten Million and No/100ths Dollars($10,000,000.00), having a maturity date that is the date of the fifthanniversary of the Construction Loan Termination Date, and in the form ofExhibit ”P” attached hereto and incorporated herein by this reference (the“Long Term Revolving Note”).  The amountsoutstanding under the Long Term Revolving Loan shall consist of (i) FiveMillion and No/100ths Dollars ($5,000,000.00) converted from the ConstructionLoan on the Construction Loan Termination Date, and (ii) amounts outstandingunder the Existing Long Term Revolving Note on the Construction LoanTermination Date.  The Borrower mayborrow, repay and reborrow under the Long Term Revolving Loan, without penaltyor premium, from the Construction Loan Termination Date until the Term LoanTermination Date, either the full amount of the Long Term Revolving Loan or anylesser sum.  Following repayment in fullof the Variable Rate Note, when regularly quarterly principal payments areapplied to the Long Term Revolving Note pursuant to Section 2.14(c) of thisAgreement, the principal amount available to be borrowed under the Long TermRevolving Note will be correspondingly reduced, so that the maximum amount outstandingunder the Long Term Revolving Note will decrease accordingly.

**Section 2.13.  Interest on Term Notes**.  Interest on the Term Notes shall accrue atthe following rates:

(a)           *Swap Note*.  At all times for the Swap Note, interestshall accrue at a variable rate equal to the three (3) month LIBOR Rate, ineffect from time to time, plus (a) two hundred sixty (260) basis points priorto acceleration or maturity, and (b) an additional six hundred (600) basispoints after maturity, whether by acceleration or otherwise.

(b)           *Variable Rate Note*.  Subject to the adjustments set forth inSection 2.11 of this Agreement, interest on the Variable Rate Note shall accrueat a variable rate equal to the three (3) month LIBOR Rate, plus (a) threehundred (300) basis points prior to acceleration or maturity, and (b) anadditional six hundred (600) basis points after maturity, whether byacceleration or otherwise.

(c)           *Long Term Revolving Note*.  Subject to the adjustments set forth inSection 2.11 of this Agreement, interest on the Long Term Revolving Note shallaccrue at a

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variable rate equal tothe one (1) month LIBOR Rate, in effect from time to time, plus (a) threehundred (300) basis points prior to acceleration or maturity, and (b) anadditional six hundred (600) basis points after maturity, whether byacceleration or otherwise.

**Section2.14.  Repayment of Term Notes**.  The Term Notes shall be repaid as follows:

(a)           On the first (1st) day of every third (3rd) month,commencing on the date that is the first to occur of (i) March 1, (ii) June 1,(iii) September 1 or (iv) December 1, immediately following the ConstructionLoan Termination Date, the Borrower shall pay to the Bank the scheduledprincipal payment shown in Schedule I to this Agreement, attached heretoand incorporated herein by this reference, plus accrued interest on the SwapNote.

(b)           On the first (1st) day of every third (3rd) month,commencing on the date that is the first to occur of (i) March 1, (ii) June 1,(iii) September 1 or (iv) December 1, immediately following the ConstructionLoan Termination Date, the Borrower shall pay the sum of One Million ThreeHundred Sixty Two Thousand Four Hundred Twenty Eight Dollars and Sixty SixCents ($1,362,428.66) to the Bank, which shall be allocated as follows: (i) firstto accrued and unpaid interest on the Long Term Revolving Note, (ii) nextto accrued and unpaid interest on the Variable Rate Note, and (iii) nextto principal on the Variable Rate Note.

(c)           After theVariable Rate Note has been fully paid, such quarterly payments shall beallocated first to accrued andunpaid interest on the Long Term Revolving Note, and thence to principal onsuch Note, with reductions in the availability thereof as provided in Section2.12 (c) above.

(d)           Notwithstandingthe foregoing, all unpaid principal and accrued and unpaid interest for allTerm Notes shall be due and payable on the Term Loan Termination Date, if notsooner paid.

**Section 2.15. ****Payments and Prepayments for All Obligations**.  Allprincipal, interest and fees due under this Agreement, the Notes and any of theLoan Documents shall be paid in immediately available funds as contracted inthis Agreement and no later than the payment due dates set forth in the Notesor this Agreement (and, with regards to fees, the due dates set forth in theperiodic statements mailed to the Borrower by the Bank).  Should a payment come due on a day other thana Banking Day, the payment shall be made no later than the immediatelysucceeding Banking Day and interest shall continue to accrue during theextended period until paid.

On the occasion of any prepayment of all orsubstantially all of the outstanding Obligations by the Borrower as a result ofrefinancing with a lender other than the Bank, the Borrower will pay to theBank a prepayment fee calculated as follows: If the prepayment occurs prior tothe Construction Loan Termination Date or within the first three years of the term of the Term Loan, theBorrower shall pay a fee of one percent (1%) of the amount of such prepayment,including principal, interest and other amounts due and payable to the Bankpursuant to the terms

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and provisions of this Agreement, any of the Notes andany of the Loan Documents (the “Prepayment Fee”).

The Borrower also agrees to pay, at the time of anysuch prepayment of the Construction Note or any Term Note other than the LongTerm Revolving Note, as part of, and included in the determination of the totalamount of the Prepayment Fee, any additional amounts as may be provided in theNotes evidencing the Obligations so prepaid as compensation to the Bank forprepayment of such Notes evidencing fixed interest rates, including, but notlimited to, any fees or costs incurred by the Bank as a result of thetermination or breakage of any Swap Contracts to which the Borrower is a partyin relation to the Swap Loan.

**Section2.16.  Fees**.

(a)           At the times set forth therein, theBorrower shall pay to the Bank the fees described in the Fee Letter.

(b)           The Borrower agrees to pay the Bankan unused commitment fee equal to twenty five (25) basis points of the unusedportion of the Long Term Revolving Note and the Operating Note, calculateddaily and payable on a quarterly basis in arrears; provided, however, theunused commitment fee on the Long Term Revolving Note shall not apply prior tothe Construction Loan Termination Date and shall be payable by the Borroweronly for the period of time after the Construction Loan Termination Date.

(c)           The Borrower agrees to pay the Bankan unused commitment fee equal to twenty five (25) basis points of the unusedportion of the Existing Long Term Revolving Note, calculated daily and payableon a quarterly basis in arrears**.**

(d)           Upon issuance of any Letter ofCredit, the Borrower shall pay the Bank (i) a commitment fee equal to a rate ofone and three quarters percent (1.75%) per annum on the stated amount of suchLetter of Credit, and (ii) the Bank fees for issuance of such Letter of Creditaccording to the Bank’s International Trade Services Fee Schedule in effect (acopy of which shall be provided to the Borrower) at the time of the issuance ofthe Letter of Credit.  Unless otherwiseprovided in the Bank’s standard form promissory note or continuing letter ofcredit agreement relating to such Letter of Credit, all fees relating to eachLetter of Credit shall be due and payable quarterly to the Bank.

**Section 2.17.  Reimbursement of Bank or Payment by Borrower**.  The Borrower shall pay all costs associatedwith the negotiation and documentation of the transactions provided for hereinand the closing of the Loan and related in any manner to the time period priorto the indefeasible payment in full by the Borrower of all of the Obligationsand termination of all commitments of the Bank under this Agreement and theLoan Documents, including, but not limited to, title, survey, environmental andappraisal reports, costs of the Title Company, Disbursing Agent, IndependentInspector, mortgage and/or deed of trust fees and taxes, the Bank’s legal fees,costs, fees and any expenses or charges relating to a payment of all or aportion of the amounts due from Borrower prior to the time the same become dueunder or pursuant to the terms of any Loan Documents, and other reasonableexpenses incurred by the Bank relating to the transactions described in thisAgreement.

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**Section 2.18.  Appraisal**.  If the Bank is required by any governmententity with regulatory authority over the Bank to obtain a real estateappraisal, the Bank will obtain, at the Borrower’s sole expense, an appraisalof the Expansion Facility and that portion of the Property on which suchExpansion Facility is to be constructed, providing values obtained by use ofthe cost approach, the income approach and the replacement cost approach.  If such appraisal shows that the outstandingConstruction Loan amount at that time exceeds the value of the Project asdetermined by the appraisal, using the replacement cost approach, then theBorrower shall, within thirty (30) days of receipt of written notice bythe Bank and without penalty or premium, pay the difference between theoutstanding Construction Loan amount and the appraised value amount of theProject as determined by such appraisal, and no further advances shall be madeon the Construction Loan thereafter until such time as the appraised value ofthe Project exceeds the Construction Loan amount.

**ARTICLEIII**

**DISBURSEMENTPROCEDURES**

**Section 3.01.  Submission of Draw Requests**.  Whenever the Borrower desires a disbursementunder the Construction Loan, which at all times shall be pursuant to theDisbursement Agreement and shall be no more often than three (3) times a month,unless the Bank agrees otherwise, the Borrower shall submit to the Bank a DrawRequest, duly executed on behalf of the Borrower, setting forth the informationrequested therein.  Each Draw Requestshall be delivered to the Bank at least seven (7) days before the date thedisbursement is desired.

**Section 3.02.  Amount of Draw Request**.  Each Draw Request shall be limited to amountsequal to (a) the total of approved construction costs actually incurredand paid or owing by the Borrower to the date of such Draw Request for workperformed, materials, or equipment incorporated in the Expansion Facility asdescribed in the Expansion Facility Plans, plus (b) the cost of materialsor equipment not incorporated in the Expansion Facility but delivered to andsuitably stored at the Expansion Facility site, plus (c) prepayments formaterials or equipment for the Expansion Facility when prepayment is requiredby the manufacturer or supplier or when such prepayment results in a materialfinancial benefit to Borrower; less (d) prior disbursements under thisAgreement for such approved construction costs from the Construction Loan orthe Borrower’s equity for such approved construction costs and less (e) any retainagepermitted to be withheld by the Borrower in connection with such Draw Requestpursuant to the Design/Build Construction Contract and all other contracts forOther Project Construction. Notwithstanding anything herein to the contrary, no disbursements formaterials stored at the Expansion Facility site will be made by the Bank unlessthe Borrower shall advise the Bank of its intention to store materials prior totheir delivery, and provide suitable security for such storage.

**Section3.03.  Other Documents**.  At the time of submission of each DrawRequest, the Borrower shall submit or cause to be submitted to the Bank thefollowing:

(a)           A written conditional general lienwaiver, effective to waive any lien arising under the laws of the State ofIowa, from the Design Builder, to be effective as of the date payment is madeto the Design Builder for the amount of approved costs which will be paid forby such Draw Request; and

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(b)           A written final general lien waiver,effective to waive any lien arising under the laws of the State of Iowa, fromeach of Design Builder’s Subcontractors relating to the Design/BuildConstruction Contract for work done and materials supplied for each contractvalue in excess of Five Thousand and No/100ths Dollars ($5,000.00), effectivethe date of the last payment made by the Design Builder to such Subcontractors;and

(c)           A written conditional general lienwaiver, effective to waive any lien arising under the laws of the State ofIowa, from each Person providing services or materials to Borrower relating tothe Other Project Construction for work done and materials supplied, in eachcase, of a contract value in excess of Five Thousand and No/100ths Dollars($5,000.00), by them, to be effective as of the date payment is received by suchPerson for the amount of approved costs which will be paid for by such DrawRequest; and

(d)           A written final general lien waiver,effective to waive any lien arising under the laws of the State of Iowa,  from each Person providing services ormaterials to Borrower relating to the Other Project Construction for work doneand materials supplied, in each case, of a contract value in excess of FiveThousand and No/100ths Dollars ($5,000.00), effective as of the date finalpayment is made to such Person; and

(e)           A document from the Borrower and, ifapplicable, the Independent Inspector, requestingand/or approving the amount of the approved construction costs,conformance thereof with the Schedule of Values and the Budget Variance Report,and the payment of the relevant Draw Request; and

(f)            Invoices from the Borrower, DesignBuilder, and from each Person providing services or materials to Borrowerrelating to the Other Project Construction, as applicable, and such othersupporting evidence as may be reasonably requested by the Bank to substantiateall payments which are to be made out of the relevant Draw Request and/or tosubstantiate all payments then made with respect to the Expansion Facility andconformance of the Draw Request with the Schedule of Values and the BudgetVariance Report.

**Section 3.04.  Project Cost Overruns**.  The Borrower agrees that all costs incurredby the Borrower relating to the Expansion Facility in excess of the TotalExpansion Facility Costs shall be paid solely by the Borrower and the Borrowershall immediately deliver additional funds to the Bank to fund any and allcosts of the Expansion Facility in excess of the Total Expansion Facility Costsupon receipt of written request from the Bank relating thereto.  Notwithstanding the foregoing, Borrower shallbe entitled to apply any previously achieved savings in any completed categoryof the Expansion Facility budget to pay for any such cost overruns.  In addition, Borrower may from time to time requestthat the contingency fund line item in the Expansion Facility budget bereallocated to pay needed costs of the Expansion Facility.  Such requests shall be subject to Bank’sapproval in its reasonable discretion, which shall not be unreasonablywithheld.

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**Section 3.05.  Making Disbursements**.  Provided that on the date a Draw Request isreceived by the Bank (a) the Borrower has performed all of its agreementsand complied with all requirements of this Agreement, and each of the LoanDocuments, to be performed or complied with by the Borrower, including, but notlimited to, satisfaction of all applicable conditions precedent contained inArticle IV of this Agreement, and (b) if required by the Bank, theBank has received a current report from the Independent Inspector (i) documentingmaterial compliance with the Expansion Facility Plans for those portions of theExpansion Facility indicated as completed in the Draw Request, (ii) confirmingconformance of the Draw Request to the Schedule of Values and the BudgetVariance Report, and (iii) otherwise confirming the acceptability of theExpansion Facility work represented by the Draw Request, (c) the Bank hasreceived the approval of the Draw Request by the Disbursing Agent andconfirmation of compliance thereof with the terms and provisions of the DisbursementAgreement, and (d) the Bank has approved the Draw Request, the Bank shall payto the Borrower the amount of the requested disbursement (less any requiredretainage and less amounts payable and advanced by Bank to itself).  Each disbursement disbursed to the DisbursingAgent under the Construction Loan shall bear interest at the rate provided inthe Construction Note evidencing the disbursement from the date suchdisbursement is so disbursed to the Borrower or deposited into the Borrower’saccount.

**Section 3.06.  Disbursements Without Receipt of Draw Request**.  Notwithstanding anything herein to thecontrary, the Bank shall have the irrevocable right at any time and from timeto time to apply funds which it agrees to disburse hereunder to pay interest onthe Construction Note as and when such interest becomes due, and to pay any andall of the expenses of the Bank related to the Expansion Facility, theConstruction Loan or as otherwise provided in this Agreement, all withoutreceipt of a Draw Request.

**Section 3.07.  Miscellaneous Procedures**.  The Bank may establish reasonable additionalprocedures regarding disbursements and Draw Requests as are reasonable toassure the proceeds of the Construction Loan are paid only to those Personsentitled to the same, and that the liens securing the Obligations are in allcases first and paramount liens on the Property and all other assets of theBorrower, except to the extent, and solely to the extent, provided for hereinto the contrary.  Additionally, the Bankmay establish reasonable additional procedures regarding disbursements underand pursuant to the Term Notes, the Operating Note, or the Existing Term Notesto assure compliance by the Borrower with the terms and provisions of thisAgreement, the Loan Documents and the respective Term Notes, Operating Note orExisting Term Notes, as the case may be.

**Section 3.08.  Appointment of Independent Inspector**.  No Draw Request shall be honored aftercommencement of construction unless and until the Borrower has consented to theBank’s appointment of an Independent Inspector.

**ARTICLEIV**

**CONDITIONSOF LENDING**

**Section 4.01.        Conditions Precedent to InitialDisbursement under the Construction Loan**.  The obligation of the Bank to make itsinitial disbursement under the Construction Loan,

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excluding any Letter of Credit issued prior to the date hereof ordisbursements made prior to the date hereof under the Existing Loan Agreement,is subject to the satisfaction of the following conditions, unless waived orextended in writing by the Bank:

(a)           The Bank shall have received all ofthe following, each dated (unless otherwise indicated) the date hereof, in formand substance satisfactory to the Bank:

(i)            This Agreement, duly executed onbehalf of the Borrower.

(ii)           The Construction Note, duly executedon behalf of the Borrower.

(iii)          The Mortgage, duly executed on behalfof the Borrower and delivered to the Title Company for filing of record.

(iv)          The Security Agreement, duly executedby the Borrower, together with (i) acknowledgment copies of the FinancingStatements (UCC-1) duly filed under the Uniform Commercial Code of alljurisdictions necessary or, in the opinion of the Bank, desirable to perfectthe security interest created by the Security Agreement; and(ii) certified copies of Requests for Copies or Information (Form UCC-11)identifying all of the financing statements on file with respect to theBorrower in all jurisdictions referred to under (i), including the FinancingStatement filed by the Bank against the Borrower, indicating that no person orentity claims an interest in any of the collateral “Property” (as such term isdefined in the Security Agreement) except for the Bank.

(v)           The filing of a financing statementor statements sufficient when filed to perfect the security interests grantedunder the Mortgage, the Assignment of Rents and Leases, the Security Agreement,and the Assignment of Design/Build Construction Contract, to the extent suchsecurity interests are capable of being perfected by filing.

(vi)          Certified (as of the date of thisAgreement) copies of all company actions taken by the Borrower, includingresolutions of the Board of Directors of the General Partner, authorizing theexecution, delivery and performance of the Loan Documents to which the Borroweris a party and each other document to be delivered by the Borrower pursuant tothis Agreement.

(vii)         A certificate (dated as of the date ofthis Agreement) of an officer of the General Partner of the Borrower certifyingthe names and true signatures of the Authorized Persons of the Borrowerauthorized to (i) sign the Loan Documents to which it is a party and the otherdocuments to be delivered by the Borrower under this Agreement and (ii) performall of Borrower’s obligations under such documents in accordance with theirterms.

(viii)        A favorable written legal opinion ofcounsel for the Borrower, in substantially the form of Exhibit ”Q”attached hereto and incorporated herein by reference, addressed to the Bank.

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(ix)           The Assignment of Rents and Leases,duly executed on behalf of the Borrower.

(x)            Copies of the Plans, each certifiedby the Design Builder and the Borrower.

(xi)           The Collateral Assignment for thebenefit of the Bank of each of the Material Contracts, duly executed by theBorrower and consented to by the other party or parties to each such MaterialContract, with a copy of such Material Contract attached thereto.

(xii)          The Budget Variance Report or otherTotal Expansion Facility Costs statement on the Expansion Facility dulyexecuted by the Borrower, setting forth the anticipated total cost of theExpansion Facility’s completion, and the Schedule of Values or otherconstruction cost statement duly executed by the Design Builder, setting forthits anticipated construction costs of the Expansion Facility, each in effect oreffective as of the Draw Request.

(xiii)         An ALTA (American Land TitleAssociation) Survey of the Property, prepared at the Borrower’s expense,currently certified by a licensed, registered surveyor and incorporating thelegal description of the Property, showing the location of all points and linesreferred to in the legal description, the location of any existingimprovements, the location of the Project (including parking) and the proposedlocation of the Expansion Facility as being within the exterior boundaries ofthe Property and in compliance with all applicable building set-backrequirements, the location of all utilities and the location of all easementsand encroachments onto or from the Property that are visible on the Property,known to the surveyor preparing the survey or of record, identifying easementsof record by recording data and currently certified by the surveyor that thereare no such easements or encroachments upon the Property except as shown on thesurvey, and such other matters as the Title Company may require in order toissue the title binder referred to in Section 4.01(a)(xv) below (the “PreliminarySurvey”).

(xiv)        An as built appraisal based upon thePlans to be performed by Natwick Associates Appraisal Services which shows theas completed value of the Property and Project addressed to and otherwiseacceptable to the Bank.

(xv)         A title binder, issued by the TitleCompany, at the Borrower’s expense, constituting a commitment by the TitleCompany to issue a mortgagee’s title policy in favor of the Bank as mortgageeunder the Mortgage, that will be free from all standard exceptions, includingmechanics’ liens and all other exceptions not previously approved by the Bankand that will insure the Mortgage to be a valid first lien on the Property, andwith the endorsements as set forth in Exhibit “R” attached hereto andincorporated herein by this reference, each in form and content reasonablyacceptable to the Bank.

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(xvi)        A soil report on the Property certifiedby a registered engineer including structural design recommendations in formand substance satisfactory to the Bank. Such report shall include soil borings and geo-technical analyses.

(xvii)       The Phase I Environmental Report ofthe Property.

(xviii)      Copies of all construction Permits fromthe applicable Governmental Authorities from whom such permit or license isrequired.

(xix)         Copies of documents from theGovernmental Authorities that provide to the reasonable satisfaction of theBank that the Project when constructed in accordance with the Plans will complyin all material respects with all applicable laws, ordinances, zoning,subdivision, platting, environmental and land use requirements, without specialvariance or exception, and such other evidence as the Bank shall reasonablyrequest to establish that the Project and the contemplated use thereof arepermitted by and comply in all material respects with all applicable use orother restrictions and requirements in prior conveyances, zoning ordinances, EnvironmentalRequirements, watershed district regulations and all other applicable laws orregulations of any other Governmental Authorities.

(xx)          Copies of certificates of insurancedemonstrating the types, levels, deductibles, endorsements, and other coverageparameter issues to the satisfaction of the Bank for builders’ risk insurance,casualty/commercial general liability insurance, business automobile liabilityinsurance, environmental liability insurance and workers’ compensationinsurance required (i) of Borrower under Article VI of this Agreement,(ii) of the Design Builder under the Design/Build Construction Contract, and(iii) of each Person providing Other Project Construction services under anyOther Project Construction agreement, with all such insurance in full force andeffect and approved by the Bank, in the exercise of its reasonable discretion,and naming the Bank as a mortgagee and additional insured or loss payee, as thecase may be.

(xxi)         A FEMA designation indicating that theProject is not in a Special Flood Hazard Area.

(xxii)        A certificate (dated as of the date ofthis Agreement) of an Authorized Person of the General Partner of Borrowercertifying a copy of the Borrower’s LP Agreement, and any amendments, ifapplicable.

(xxiii)       A certificate (dated as of the date ofthis Agreement) of an Authorized Person of the General Partner of Borrowercertifying a copy of the Borrower’s Certificate of Limited Partnership andStatement of Qualification and any amendments thereto, if applicable.

(xxiv)       A certificate of good standing orexistence for the Borrower and the General Partner from the Secretary of Stateof the State of Iowa.

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(xxv)        A fully executed Disbursement Agreement.

(xxvi)       The Guaranty, duly executed by theGeneral Partner.

(xxvii)      The Swap Contract, duly executed on behalfof the Borrower.

(xxviii)       TheSubordination Agreement, duly executed on behalf of the Borrower, the Bank, andFarmers State Bank of Marcus, Iowa.

(xxix)       The Deposit Account Control Agreements,duly executed on behalf of the Borrower, the Bank, Farmers State Bank ofMarcus, Iowa, and Cherokee State Bank of Cherokee, Iowa, respectively.

(b)           The representations and warrantiescontained in Article V of this Agreement are correct in all materialrespects on and as of the date of such disbursement as though made on and as ofsuch date, except to the extent that such representations and warranties relatesolely to an earlier date and except to the extent of changes permitted underthe terms of this Agreement or approved by the Bank in writing.

(c)           No event has occurred and iscontinuing, or would result from such disbursement, which constitutes or mayconstitute a Default or an Event of Default.

(d)           The disbursement requirements ofArticle III of this Agreement and the Disbursement Agreement have beensatisfied.

(e)           If required by the Bank, the Bankshall be furnished with a statement from the Borrower and the Design Builder,in form and substance satisfactory to the Bank, in the exercise of itsreasonable discretion, setting forth the names, addresses and amounts due or tobecome due, as well as the amounts previously paid, to the Design Builder andevery Subcontractor.

(f)            All Permits issued for constructionand operation of the Project have been, or will be, timely received so as tonot delay the construction or impact the operation of the Project, and noPermit necessary for the construction or operation of the Project shall havebeen revoked or the issuance thereof subjected to challenge before anyGovernmental Authority.

(g)           The Bank and the Borrower intend thatthe Construction Loan is available, subject to the terms and provisions of thisAgreement, to fund an amount not to exceed Seventy Three Million and No/100thsDollars ($73,000,000.00).  No advances ordisbursements under the Construction Loan shall exceed such levels, unless theBank consents in writing to the same.

(h)           The Borrower shall have amended allsecurity agreements or other agreements granting a security interest inequipment and inventory of the Borrower to the Iowa Department of EconomicDevelopment to provide for the termination and release of all such securityagreements, security interests and financing statements related thereto uponthe condition that the Borrower deliver a Letter of Credit to the IowaDepartment of

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Economic Development inform and substance mutually acceptable to the Borrower, the Bank and the IowaDepartment of Economic Development.

(i)            The Borrower shall have delivered aLetter of Credit to the Iowa Department of Economic Development in form andsubstance mutually acceptable to the Borrower, the Bank and the Iowa Departmentof Economic Development in connection with the termination and release of allsecurity interests and financing statements relating to the equipment andinventory of the Borrower.

(j)            The Bank shall have receivedacknowledgement copies of all termination statements (UCC-3) duly filed underthe Uniform Commercial Code and any other releases, termination statements orother agreements, in form and substance satisfactory to the Bank, necessary toterminate and release all security interests and financing statements relatingto the equipment and inventory of the Borrower granted under any securityagreements or other agreements with the Iowa Department of Economic Development.

**Section4.02.        Conditions Precedent toSubsequent Disbursements under the Construction Loan and any other Extensionsof Credit. **Theobligation of the Bank to make any additional Extensions of Credit, other thanExtensions of Credit under the Operating Note, shall be subject to thecondition precedent, unless waived or extended in writing by the Bank, that theBorrower shall be in compliance with the conditions set forth in Section 4.01of this Agreement and to the further condition precedent that on the date ofsuch Extension of Credit no determination shall have been made by the Bank, inthe exercise of its reasonable judgment, that the undisbursed amount of theConstruction Loan is less than the amount required to pay all costs andexpenses of any kind which reasonably may be anticipated in connection with thecompletion of the Expansion Facility; or, if such a determination has been madeand notice thereof sent to the Borrower in accordance with this Agreement, theBorrower shall have deposited the necessary funds with the Bank in accordancewith Section 3.04 of this Agreement.

**Section 4.03.  Conditions Precedent to Final Disbursementson Construction Loan**. The obligation of the Bank to make the final disbursement on theConstruction Loan shall be subject to the condition precedent, unless waived orextended in writing by the Bank, that the Borrower shall be in compliance withall conditions set forth in Sections 4.01 and 4.02 of this Agreement and,further, that the following conditions shall have been satisfied on or prior tothe Construction Loan Termination Date:

(a)           The Expansion Facility has beencompleted in material compliance with the Expansion Facility Plans and the Bankshall have received a certificate of completion from the Design Builder,certifying that (i) work on the Expansion Facility has been completed inmaterial compliance with the Expansion Facility Plans and the Design/BuildConstruction Contract, and all labor, services, materials and supplies used insuch work have been paid for and (ii) the completed Expansion Facilityconforms in all material respects with all applicable zoning, land useplanning, building and environmental laws and regulations of the GovernmentalAuthorities having jurisdiction over the Project.

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(b)           The Bank has received satisfactoryevidence that all work requiring inspection by municipal or other GovernmentalAuthorities having jurisdiction has been duly inspected and approved by suchauthorities and by the rating or inspection organization, bureau, corporationor office having jurisdiction, and to the extent applicable a certificate ofoccupancy relating thereto has been issued.

(c)           The Bank or the Title Company, on theBank’s behalf, shall have received a lien waiver from each Subcontractor andthe Design Builder for all work done and for all materials furnished for orrelated to the Expansion Facility, in each case, of a contract value in excessof Five Thousand and No/100ths Dollars ($5,000.00).

(d)           The Borrower shall have delivered tothe Bank an updated Preliminary Survey prepared on an as-built basis at theBorrower’s expense, currently certified by a licensed, registered surveyor andincorporating the legal description of the Property, showing the mattersreflected in the Preliminary Survey (the “Final Survey”).

(e)           The Bank shall have received anupdated Zoning Endorsement (ALTA 3.1) to the title binder referenced in Section4.01(a)(xv) based on the Final Survey and the improvements as-built.

(f)            The Bank shall have received copiesof certificates of insurance demonstrating the types, levels, deductibles,endorsements, and other coverage parameter issues to the satisfaction of theBank for permanent all risk property insurance and Business Interruption andExtra Expense (BIEE) insurance required under Article VI of thisAgreement, with all such insurance in full force and effect and approved by theBank, in the exercise of its reasonable discretion, and naming the Bank as amortgagee and additional insured or loss payee, as the case may be.

(g)           The Bank has received an itemizedlist from the Borrower of all equipment and fixtures, which are at that timesubject to the Bank’s security interest.

**Section 4.04.        Conditions Precedent to Operating Loan**.  The obligation of the Bank to make, extend orrenew the Operating Loan shall be, in addition to the conditions set forth inSections 4.01, subject to the following further conditions precedent onthe date of such Operating Loan or the extension or renewal thereof:

(a)           If, at the time of a requesteddisbursement, the most recent monthly Borrowing Base certificate provided bythe Borrower under Section 6.01(j) of this Agreement reflects that thedisbursement requested by the Borrower thereunder will cause the outstandingbalance of the Operating Note to exceed the Borrowing Base, the Bank shall notmake such disbursement to Borrower until such time as the Borrower can providean updated Borrowing Base certificate as of the date of the requesteddisbursement that demonstrates that the requested disbursement will not causethe outstanding balance of the Operating Note, after such disbursement, toexceed the Borrowing Base.

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(b)           The Bank shall have received suchother approvals, opinions or documents as the Bank may reasonably request.

**Section 4.05.        No Waiver**.  The making of any Extension of Credit priorto fulfillment of any condition thereto shall not be construed as a waiver ofsuch condition, and the Bank reserves the right to require fulfillment of anyand all such conditions prior to making any subsequent disbursements under orrelating to the Construction Note or any other Notes.

**ARTICLEV**

**REPRESENTATIONSAND WARRANTIES**

To induce the Bank to enter into this Agreement and tomake the disbursements from time to time provided for herein and in the relatedLoan Documents, the Borrower makes the following representations and warrantiesand agrees that each Draw Request constitutes a reaffirmation of each of theserepresentations and warranties as of the date of such Draw Request:

**Section 5.01.  Existence and Power**.  The Borrower is a limited liability limitedpartnership duly formed, validly existing and in good standing under the lawsof the State of Iowa.  The Borrower hasaccomplished all necessary actions required by a limited liability limitedpartnership under applicable law and has all requisite limited liabilitylimited partnership power and authority to own the Property, to construct theExpansion Facility, and upon completion thereof, to operate the Project, and toexecute and deliver, and to perform all of the Borrower’s Obligations under,the Loan Documents to which the Borrower is a party.

**Section 5.02.  Authorization of Borrowing; No Conflict as toLaw or Other Agreements**. The execution, delivery and performance by the Borrower of the LoanDocuments and the borrowings from time to time hereunder have been dulyauthorized by all requisite actions of the Borrower and do not and will not(a) require any material action, consent or approval of, registration orfiling with or other authorization by any Governmental Authority, other thanthose obtained and in full force and effect, (b) violate in any materialrespect any provision of any law, statute, rule or regulation or of any order,writ, injunction or decree presently in effect having applicability to theBorrower, or violate any provision of the Certificate of Limited Partnership,the Statement of Qualification or the LP Agreement of the Borrower, (c) bein conflict with, result in a breach of or constitute (alone or with notice orlapse of time or both) a default under any indenture or loan or creditagreement or any other agreement, lease or instrument to which the Borrower isa party or by which it or its properties may be bound or affected, or(d) other than Permitted Liens, result in, or require, the creation orimposition of any mortgage, deed of trust, pledge, lien, security interest orother charge or encumbrance of any nature to or with any other creditor of theBorrower, in the aggregate exceeding One Hundred Thousand and No/100ths Dollars($100,000.00) annually and cumulatively, upon or with respect to any of theproperties now owned or hereafter acquired by the Borrower.

**Section 5.03.  Legal Agreements**.  The Loan Documents to which the Borrower is aparty constitute the legal, valid, and binding liability and obligation of theBorrower enforceable 

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against the Borrower in accordance with their respective terms except(a) as limited by applicable bankruptcy, insolvency, reorganization, moratoriumand other laws of general application affecting enforcement of creditors’rights generally and (b) as limited by laws relating to the availabilityof specific performance, injunctive relief or other equitable remedies.  As to the Loan Documents to which theBorrower is not a party, to the best of Borrower’s knowledge, such documentsconstitute the legal, valid and binding obligations of the parties thereto,enforceable against such parties in accordance with their respective terms,except (a) as limited by applicable bankruptcy, insolvency,reorganization, moratorium and other laws of general application affectingenforcement of creditors’ rights generally and (b) as limited by lawsrelating to the availability of specific performance, injunctive relief orother equitable remedies.

**Section 5.04.  General Partner Existence and Power**.  The General Partner is a limited liabilitycompany duly formed, validly existing and in good standing under the laws ofthe State of Iowa.  The General Partnerhas accomplished all necessary actions required by a limited liability companyunder applicable law and has all requisite limited liability company power andauthority to own its assets, and to execute and deliver, and to perform all ofthe General Partner’s obligations under, the Loan Documents to which theGeneral Partner is a party.

**Section 5.05.  Guaranty**.  The Guaranty constitutes the legal, valid,and binding liability and obligation of the General Partner enforceable againstthe General Partner in accordance with its terms, except (a) as limited byapplicable bankruptcy, insolvency, reorganization, moratorium and other laws ofgeneral application affecting enforcement of creditors’ rights generally and(b) as limited by laws relating to the availability of specificperformance, injunctive relief or other equitable remedies.

**Section 5.06.  License and Permits**.  The Borrower has all necessary Permitsrequired for construction and operation of the Project, except those which arenot required for the current stage of construction of the Expansion Facility,or which cannot be obtained until completion of the Expansion Facility.

**Section 5.07.  Construction of Project**.  The Expansion Facility will be constructed inmaterial compliance with the Plans and the Design/Build Construction Contract,and will not encroach upon or overhang any easement or right-of-wayon land not constituting part of the Property. The Property and the Project, both during construction and on theCompletion Date, and the contemplated use thereof following the Completion Datewill not violate in any material respect any applicable zoning or use statute,ordinance, building code, rule or regulation, or any covenant or agreement towhich the Borrower is a party or by which the Property or the Project issubject.  The Borrower agrees that itwill furnish from time to time such satisfactory evidence with respect theretoas may be required by the Bank.

**Section 5.08.  Ownership and Liens**.  The Borrower has good and marketable feesimple title to, or valid leasehold interests in, all of the Borrower’sproperties and assets, real and personal, including the properties and assetsand leasehold interest reflected in the financial statements referred to inSection 5.09 (other than any properties or assets disposed of in theordinary course of business), and, except for Permitted Liens, none of theproperties and assets owned by the Borrower and none of the Borrower’sleasehold interests are subject to any lien,

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mortgage, deed of trust, pledge, security interest or other charge orencumbrance of any nature, except such as may be permitted, and only to theextent permitted, under this Agreement.

**Section 5.09.  Financial Condition**.  The Borrower has furnished to the Bankcompiled cash flow projections, including the Sources and Uses of Funds, of theBorrower prepared in accordance with GAAP which projections were updated as ofOctober 3, 2006, together with the supplementary material included inExhibit ”S” attached hereto and incorporated herein by this reference (the“Projections”).  To the knowledge ofBorrower, the Projections fairly present the projected financial condition ofthe Borrower on the dates thereof, and were prepared in GAAP format and on thebasis of assumptions deemed reasonable by the Borrower.  There has been no material adverse change inthe operations, properties or condition (financial or otherwise) of theBorrower since the date of the Projections and no additional borrowings havebeen made by the Borrower other than the borrowings contemplated hereby orapproved by the Bank or indebtedness secured by Permitted Liens.

**Section 5.10.  Litigation**.  There are no actions, suits or proceedingspending against or, to the knowledge of the Borrower, threatened against oraffecting the Borrower or the properties of the Borrower before any court,arbitrator or any governmental body, department, commission, board, bureau,agency, official or instrumentality, domestic or foreign, which, if determinedadversely to the Borrower, would have a material adverse effect on thefinancial condition, properties, or operations of the Borrower or that in anymanner questions the validity of any Loan Document.

**Section 5.11.  Taxes**.  The Borrower has filed all federal, state andlocal tax returns which to the best of the knowledge of the Borrower arerequired to be filed by it, and the Borrower has paid or caused to be paid tothe respective taxing authorities all taxes as shown on said returns or on anyassessment received by it to the extent such taxes have become due except thosewhich the Borrower is contesting in good faith and with respect to whichadequate accounting reserves have to the extent required by GAAP been setaside.

**Section 5.12.  No Default**.  There exists no Default or Event of Defaultunder this Agreement or any of the Loan Documents.

**Section 5.13.  ERISA**.  The Borrower is in compliance in all materialrespects with ERISA and has received no notice to the contrary from theInternal Revenue Service, the United States Department of Labor, the PensionBenefit Guaranty Corporation or any other governmental entity or notice of anyclaims or pending claims under ERISA.

**Section 5.14.  Environmental Matters**.  Except as set forth in the Phase IEnvironmental Report of the Property, (a) the Borrower is in compliance inall material respects with all Environmental Requirements applicable toBorrower and knows of no conditions or circumstances that could materiallyinterfere with such compliance in the future; (b) except for Permits thatcannot be obtained until completion of the Expansion Facility, the Borrower hasobtained all Permits, and approvals required by law for the operation of itsbusiness; and (c) the Borrower has not identified any “recognizedenvironmental conditions,” as that term is defined by the ASTM in its standardsfor environmental due diligence which could subject the Borrower to enforcementaction if brought to the attention of appropriate Governmental Authorities.

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**Section 5.15.  Necessary Utilities, Etc**.  The Borrower has all necessary electrical,gas, water and sewer facilities in place for the proper construction andoperation of its ethanol plant, including the ability to utilize water andwater rights owned by, or available to, Borrower in the construction andoperation of the ethanol plant.  TheBorrower’s water and water rights described above are, and will be, sufficientfor the operation of the Project.  TheBorrower has made adequate provision for all storage facilities, equipment andproduct supplies, including corn, as specified by the Design Builder orBorrower’s engineers for the maximum output and operation of the plant.

**Section 5.16.  No Subsidiary**. Except for Borrower’s investment in Akron, the Borrower does not have aSubsidiary.

**Section 5.17.  Provided Information**.  No certificate or statement furnished to theBank by, or on behalf of, the Borrower in connection with the transactionscontemplated hereby contains any untrue statement of a material fact or omitsto state a material fact necessary in order to make the statements containedtherein or herein not misleading.  To thebest of the knowledge of the Borrower, there are no facts which materiallyadversely affect or in the future (so far as the Borrower now foresees), andexcluding facts that are not unique to Borrower but rather impact the economyof the United States of America, the economy of the State of Iowa, or theethanol industry as a whole), are likely to have a materially adverse effect onthe operation or prospects or condition (financial or other) of the Borrower orits properties or assets which has not been set forth herein or in a writtencertificate or statement furnished to the Bank by the Borrower.

**ARTICLEVI**

**ADDITIONALCOVENANTS OF BORROWER**

**Section 6.01.  Financial Information and Reporting**.  Except as otherwise provided in thisAgreement, all financial information provided to the Bank shall be compiledusing GAAP consistently applied.  Duringthe time period that any amounts are outstanding under the Notes, thisAgreement or any of the other Loan Documents to which the Borrower is a party,unless the Bank shall otherwise agree in writing:

(a)           The Borrower shallprovide the Bank within one hundred twenty (120) days of the Borrower’sfiscal year end the Borrower’s consolidated, annual financial statements.  The fiscal year end statements must beaudited and reflect an unqualified opinion by an independent certified publicaccountant reasonably acceptable to the Bank and must be accompanied by acertificate of such accountants stating whether, in conducting their audit,they have become aware of any Default or Event of Default under this Agreement,specifying the nature and duration of the Default or Event of Default.  Such audited year end financial statementsshall be accompanied by the accountants’ calculations of the Borrower’scompliance with the covenants contained in Section 6.02 of this Agreementas of the said fiscal year end.

(b)           The Borrower willfurnish to the Bank within thirty (30) days after the end of each calendarmonth consolidated financial statements of the Borrower for such period

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and year to date all inreasonable detail, and which shall include, but not be limited to, (i) Borrower’smonthly balance sheet, income statement and cash flow statement, and (ii)monthly calculations of the Borrower’s compliance with the covenants containedin Section 6.02 of this Agreement.

(c)           The Borrower willdeliver to the Bank, within thirty (30) days of each calendar quarter end(with respect to the financial statements required under Section 6.01(b)) andwithin one hundred twenty (120) days of each fiscal year end (with respect tofinancial statements required under Section 6.01(a)), a certificate in a formreasonably acceptable to the Bank that has been signed by the General Partneror other Authorized Person of the Borrower, which (i) certifies that thestatements required by Section 6.01(a) and (b) have been accurately preparedin accordance with GAAP applied consistently (except for the absence offinancial footnotes to the statements furnished under Section 6.01(b) andnormal or customary year end adjustments to the statements under Section6.01(a)); and (ii) certifies that the General Partner or other AuthorizedPerson of the Borrower has no knowledge of any Event of Default under thisAgreement or the Loan Documents, or of any event which would, after the lapseof time or the giving of notice, or both, constitute an Event of Default underthis Agreement or the Loan Documents and that the Borrower is in fullcompliance with all covenants contained in this Agreement and the LoanDocuments.

(d)           The General Partner orother Authorized Person of the Borrower will deliver to the Bank each month,within thirty (30) days of each month end, a certified monthly productionreport, in form acceptable to the Bank, which shall, at a minimum, report foreach such month the Borrower’s input and output amounts of corn or other grainusage, natural gas usage, electrical usage, dry distillers grains and wetdistillers grains output, ethanol output and, if applicable, CO2 output,and the applicable costs of each such usage.

(e)           At least thirty (30)days prior to the end of each fiscal year, the Borrower shall provide the Bankprojected financial statements for the following fiscal year which shallinclude, but not be limited to, proposed capital projects and expenditures.

(f)            The Borrower shallnotify the Bank of the existence of any Default or Event of Default promptlyafter such Default or Event of Default becomes known to the General Partner,the Manager or any officer, agent, partner, or member of the Borrower.

(g)           The Borrower shallauthorize all Governmental Authorities to furnish reports of examinations,records and other information relating to the condition and affairs of theBorrower and the Project, and any information from reports, returns, files andrecords by such authorities regarding the Borrower upon request by the Bank.

(h)           The Borrower will givethe Bank prompt written notice of any material violation as to anyenvironmental matter by the Borrower of which Borrower obtains knowledge and ofthe commencement of any judicial or administrative proceeding adverse toBorrower relating to Environmental Requirements (i) in which an adversedetermination or result could result in the revocation of or have a materialadverse effect

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on any Permits held bythe Borrower which are material to the operations of the Borrower or(ii) which will or threatens to impose a material liability on theBorrower to any Person or which will require a material expenditure by theBorrower to cure any alleged problem or violation.

(i)            The Borrower will giveprompt written notice to the Bank of (i) any litigation, arbitration orproceeding in which the Borrower is a party if an adverse decision thereincould require the Borrower to pay more than One Hundred Thousand and No/100thsDollars ($100,000.00) or deliver assets the value of which exceeds such sum(whether or not the claim is considered to be covered by insurance); and(ii) the institution of any other suit, arbitration or proceedinginvolving the Borrower that is reasonably likely to have a material and adverseeffect on the Borrower’s operations, financial condition, property or businessprospects or that might in any manner question the validity of any LoanDocument.

(j)            The Borrower shallprovide monthly Borrowing Base certificates in a form reasonably acceptable tothe Bank that have been signed by the General Partner or other AuthorizedPerson of the Borrower, calculating advance rates under the Operating Loanpursuant to the Borrowing Base.

(k)           The Borrower shallprovide a quarterly hedging report in a form reasonably acceptable to the Bank,completed and certified by the grain manager, that sets forth the Borrower’scurrent and projected future hedge positions in regards to ethanol contracts,grain contracts and natural gas contracts.

(l)            The Borrower willprovide the Bank with such other information and reports as the Bank mayreasonably request.

**Section 6.02.  Financial Covenants**.  At all times that any amounts are outstandingunder the Notes, this Agreement or any of the other Loan Documents to which theBorrower is a party, unless the Bank shall otherwise agree in writing, theBorrower agrees to comply with the financial covenants described below, whichshall be calculated using GAAP consistently applied, except as they otherwisemay be modified by the capitalized definitions:

(a)           The Borrower shall maintaina Fixed Charge Coverage Ratio, measured on a rolling four quarters trailingbasis at the end of each full fiscal quarter, of no less than 1.25:1.00.

(b)           The Borrower shallmaintain Net Worth of not less than Sixty Three Million One Hundred Seven ThousandSeven Hundred Sixty Six and No/100ths Dollars ($63,107,766.00).  The required minimum Net Worth of Borrower,which is to be measured annually at the end of each fiscal year of Borrower,shall increase each fiscal year by an amount equal to the greater of (a) TwoHundred Fifty Thousand and No/100ths Dollars ($250,000.00) or (b) the amount ofundistributed earnings accumulated during the fiscal year just ended, but notincluding allowable distributions attributable to the just ended fiscal year’searnings.

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(c)           The Borrower shalldetermine, at the end of each fiscal year, the amount of its Excess Cash Flowfor said year, and within thirty (30) days following the end of suchfiscal year, pay twenty percent (25%) of such sum to the Bank, to beapplied to the outstanding principal amount of the Existing Variable Rate Noteor Variable Rate Note, as applicable, and after the Variable Rate Note isrepaid, to the outstanding principal amount of the Existing Long Term RevolvingNote or the Long Term Revolving Note, as applicable.  Such annual payment shall not release theBorrower from making any payment of principal or interest otherwise required bythis Agreement or the terms and provisions of any of the Notes.  Upon payment of the Long Term Revolving Noteand the Variable Rate Note, the prepayment required under this Section 6.02(c)shall no longer be required.  No paymentof Excess Cash Flow shall be the cause of a payment to the Bank for interestrate breakage fees or otherwise result in any Prepayment Fee.  The percentage of Excess Cash Flow required tobe paid by Borrower under this Section 6.02(c) may be revised at the end ofeach fiscal year upon the mutual agreement of the Borrower and the Bank, butsuch percentage of Excess Cash Flow shall at no time exceed twenty five percent(25%).

(d)           The aggregate amount ofany state and federal incentive payments and the Excess Cash Flow required tobe applied to the outstanding principal amounts of the Notes under Section6.02(c) of this Agreement shall not exceed Five Million and No/100ths Dollars($5,000,000.00) per fiscal year.

(e)           TheBorrower shall maintain the following minimum Working Capital during theperiods stated below, measured continuously:
| Period                                                         | ** ** | **Minimum Working Capital** | ** ** |
|----------------------------------------------------------------|------------|---------------------------------------|------------|
|                                                           |       |                                  |       |
| From the Closing  Date through April 30, 2007                  |       | $                                     | 6,000,000  |   |
|                                                           |       |                                  |       |
| From May 1, 2007  through October 31, 2007                     |       | $                                | 7,500,000  |   |
|                                                           |       |                                  |       |
| From November 1, 2007  until payment in full of the Term Loans |       | $                                     | 9,000,000  |   |

For the purpose of this covenant, the amount of anyavailability to draw under the terms of the Existing Long Term Revolving Noteor the Long Term Revolving Note, in effect at the applicable time, shallconstitute an addition to Working Capital in such amount available.

**Section 6.03.  Affirmative Covenants**.  During the time period that any amounts areoutstanding under the Notes, this Agreement or any of the other Loan Documentsto which the Borrower is a party, unless the Bank shall otherwise agree inwriting, the Borrower shall:

(a)           diligently proceed withconstruction of the Expansion Facility in material compliance with theExpansion Facility Plans and the Design/Build Construction Contract, and inaccordance in all material respects with all applicable laws and

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ordinances, and completethe Expansion Facility by the Construction Loan Termination Date;

(b)           use the proceeds ofeach of the disbursements under the Construction Loan solely for the purposesset forth in this Agreement;

(c)           retain Fagen, Inc., aMinnesota corporation, as the Design Builder. In the event that Fagen, Inc. is no longer the Design Builder for theProject, the Borrower shall replace Fagen, Inc. with another Design Builder,subject to the reasonable approval of the Bank and shall obtain, at theBorrower’s sole expense, and provide the Bank with proof of a performancecompletion bond in such form and in such amount as the Bank deems reasonablysatisfactory;

(d)           retain a plantoperations manager or general manager of the Project with experience working insuch capacity or at a similar level of responsibility in another ethanolplant.  If Borrower desires to pay suchplant operations manager or general manager any bonus or incentive paymentbeyond its required monthly management fee, prior to making such payment,Borrower shall (i) make all Scheduled Payments on the Obligations to the Bank,(ii) deliver to the Bank a certificate in a form reasonably acceptable to theBank that has been signed by the General Partner or other Authorized Person ofthe Borrower which certifies that the Borrower is in full compliance with allcovenants contained in this Agreement and the Loan Documents, and (iii) obtainwritten approval from the Bank, which approval the Bank may withhold in itsreasonable discretion.  Any bonus orincentive payment obligations of the Borrower to the plant operations manageror general manager shall be specifically subordinated to the Borrower’sObligations owed to the Bank.  In theevent that Borrower desires to retain a different general manager or ChiefFinancial Officer of the Borrower prior to the satisfaction of Borrower’sObligations, Borrower shall obtain written approval from the Bank, whichapproval shall not be unreasonably withheld. The foregoing restrictions and requirements under this Section 6.03(d)shall not apply to payments to employees under the Borrower’s deferredcompensation plan nor the payments to employees under the Borrower’s Cash BonusPlan;

(e)           use its reasonableefforts to require the Design Builder, each Subcontractor, and each Personproviding Other Project Construction services or materials to comply in allmaterial respects with all rules, regulations, ordinances and laws bearing onits conduct of work on the Project;

(f)            provide and maintainthe following insurance, at all times until the satisfaction of Borrower’sObligations and, from time to time at the request of the Bank, furnish the Bankwith such additional insurance, which the Bank, in its reasonable discretion,deems necessary and with proof of payment of premiums on:

(i)            Builders’ Risk completedvalue form insurance, in form and content reasonably satisfactory to the Bank,and placed with financially sound and reputable insurers insuring the Project(and a permanent all risk property policy of insurance with coverage equal tothe replacement cost of the Project, as well as

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casualty (CommercialGeneral Liability) and umbrella insurance) against all risks, including flood,earthquake and mechanical and electrical breakdown including testing to thefull value of the Project (subject to reasonable loss deductibleprovisions).  The Bank’s interest shallbe protected by naming the Bank as an “additional insured” on the liabilitypolicies and a “loss payee” on the property policies and shall contain anagreement of the insurer to give not less than thirty (30) days’ advancewritten notice to the Bank in the event of cancellation of such policy orchange affecting the coverage thereunder;

(ii)           Insurance against loss,damage or destruction by fire and other casualty, including theft, vandalismand malicious mischief, flood (if the Property is in a location designated byFEMA as a Special Flood Hazard Area), earthquake (if the Property is in an areasubject to destructive earthquakes within recorded history), boiler explosion(if there is any boiler upon the Property), plate glass breakage, sprinklerdamage (if the Property has a sprinkler system), all matters covered by astandard extended coverage endorsement, special coverage endorsement commonlyknown as an “all risk” endorsement and such other risks as the Bank mayreasonably require, insuring the Project for not less than one hundred percent(100%) of its full insurable replacement cost;

(iii)          Casualty (CommercialGeneral Liability) & Umbrella insurance (including products and completedoperations, operations of subcontractors and contractual liability insurance),in form and content reasonably satisfactory to the Bank, and placed withfinancially sound and reputable insurers with limits reasonably acceptable tothe Bank, but in no event for less than Two Million and No/100ths Dollars($2,000,000.00) per occurrence, in the form of either a Two Million andNo/100ths Dollars ($2,000,000.00) primary policy, or a One Million andNo/100ths Dollars ($1,000,000.00) primary policy and a One Million and No/100thsDollars ($1,000,000.00) Umbrella policy;

(iv)          State Worker’scompensation insurance in the statutorily mandated limits, employer’s liabilityinsurance with limits not less than Five Hundred Thousand and No/100ths Dollars($500,000.00) or such greater amount if required by applicable law;

(v)           Business Interruptionand Extra Expense (BI/EE) insurance with limits not less than the greater of(a) Twenty Million and No/100ths Dollars ($20,000,000.00) or (b) one hundredpercent (100%) of the principal and interest payable under the Notes for aperiod of not less than twelve (12) months;

(vi)          Business automobileliability insurance insuring any and all vehicles on the site, including hiredand non-owned liability coverage with limits reasonably acceptable to theBank, but in no event for less than One Million and No/100ths Dollars($1,000,000) per occurrence;

(vii)         Environmental coveragefor clean up and removal of environmental contamination(unless the Phase IEnvironmental Report of the

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Property and subsequentsurveys establish that the contamination preceded Borrower’sownership/occupancy necessitating the purchase of environmental clean up priorto operation), but only insofar as it is reasonably required by the Bank;

(viii)        All insurance policiesrequired of and provided by the Borrower shall be primary and non-contributoryand in no case shall insurance provided by the Bank, if any, contribute to lossor damage to the Borrower or Borrower’s activities associated with thisAgreement;

(ix)           All insurance policiesshall contain a standard without contribution mortgage clause endorsement infavor of the Bank and its successors and assigns as their interests may appearand any other lender designated by the Bank;

(x)            All insurance policiesshall provide that the policy of insurance shall not be terminated, cancelledor substantially modified without at least thirty (30) days’ prior writtennotice to the Bank and to any lender covered by any standard mortgage clauseendorsement;

(xi)           All insurance policiesshall be issued by insurance companies licensed to do business in the state inwhich the Property is located and which are rated A:VI or better by Best’sInsurance Guide or otherwise approved by the Bank;

(xii)          It is expresslyunderstood and agreed that the foregoing minimum limits of insurance coverageshall not limit the liability of Borrower for its acts or omissions as providedin the Mortgage or otherwise in any of the Loan Documents.  All insurance policies (with the exception ofworker’s compensation insurance to the extent not available under statutorylaw) shall designate the Bank and its successors and assigns as “additionalinsureds” for liability insurance and “loss payee” for property insurance.  All such policies shall be written as primarypolicies, with deductibles not to exceed ten percent (10%) of the amount ofcoverage.  Any other policies, includingany policy now or hereafter carried by the Bank, shall serve as excesscoverage.  Borrower shall procurepolicies for all insurance for periods of not less than one (1) year and shallprovide to the Bank certificates of insurance or, upon the Bank’s request,duplicate originals of insurance policies evidencing that insurance satisfyingthe requirements of this Agreement or any of the other Loan Documents is ineffect at all times.

(g)           assign to the Bank, inform acceptable to the Bank, all equipment and systems warranties relating tothe Project, together with all contracts for natural gas, electricity, waterand other utilities, as the same are obtained by the Borrower following theClosing Date;

(h)           assign to the Bank, inform acceptable to the Bank, Borrower’s account corresponding to non-exchangetraded, over-the-counter swap and option transactions on agricultural andenergy commodities between the Borrower and FCStone, L.L.C., an

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Iowa limited liabilitycompany (“FCStone”) or any other Person providing such services, and provide,in form acceptable to the Bank, a quarterly summary of all of Borrower’stransactions relating to such account(s);

(i)            maintain accurate andcomplete books, accounts and records pertaining to the Property and the Projectand its ongoing and continuing operations in form and substance reasonablysatisfactory to the Bank.  The Borrowerwill permit the Bank, at the Bank’s expense if the Bank employees make theinspection, but at the Borrower’s expense if the Bank contracts with thirdparties at reasonable expense to make the inspection (but only if suchinspections are made during the construction of the Expansion Facility), to examineupon reasonable notice all books, records, contracts, plans, drawings, Permits,bills and statements of account pertaining to the Project and to inspect uponreasonable notice all books and records pertaining to its operations and tomake extracts therefrom and copies thereof;

(j)            cause to be paid tothe proper authorities when due all federal, state and local taxes, includingtaxes on the Property, required to be paid or withheld by it except those whichthe Borrower is contesting in good faith and with respect to which appropriateaccounting reserves have, to the extent required by GAAP, been set aside;

(k)           allow the Bank and itsparticipants, upon reasonable notice, and at the Borrower’s sole expense, toconduct such inspections of the Project and the Borrower’s personal propertysubject to the Bank’s security interest as the Bank may deem necessary for theprotection of the Bank’s interest; provided, however, such inspections shalloccur during regular business hours, or such other time as the Borrower and theBank may agree, and shall not unreasonably interfere with the Borrower’sbusiness operations.  Any suchinspections shall be made and any certificates issued are solely for thebenefit and protection of the Bank, and the Borrower shall not be entitled torely thereon;

(l)            make all repairs,renewals or replacements reasonably required to keep the Borrower’s ethanolplant, properties and equipment in good working condition;

(m)          comply in all materialrespects with all laws applicable to the Borrower’s form of organization andbusiness and the ownership of the Borrower’s property and operation of itsbusiness;

(n)           maintain and preserveall Permits, licenses, rights, privileges, charters and franchises that theBorrower is required to hold to construct and operate the Project;

(o)           observe and comply withall laws, statutes, ordinances, rules, regulations and orders of anyGovernmental Authority relating to health, safety, pollution, hazardousmaterials or other Environmental Requirements to the extent noncompliance couldresult in a material liability or otherwise have a material adverse effect onthe Borrower;

(p)           maintain primaryoperating accounts (including those accounts containing the Borrower’s equitycapital) at the Bank, other than the depository accounts subject to the DepositAccount Control Agreements and described on Exhibit “T” attached hereto

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and incorporated hereinby this reference and such other local operating accounts as may be approved bythe Bank, which approval shall not be unreasonably withheld by the Bank,provided, that such other local operating accounts shall be subject to depositaccount control agreements in form and substance similar to the Deposit AccountControl Agreements;

(q)           preserve and maintainits limited liability limited partnership existence and good standing in thejurisdiction of its formation, and qualify and remain qualified as a foreignlimited liability limited partnership in each jurisdiction in which suchqualification is required;

(r)            immediately providethe Bank with a copy of each notification, including requests for change ordersor written amendments, received from the Design Builder pursuant to theDesign/Build Construction Contract;

(s)           within thirty (30) daysfollowing the Closing Date, duly execute a swap rate lock for the Swap Note inform and substance satisfactory to the Bank; and

(t)            in the event there isan appeal or challenge to the Decision & Order of the Cherokee County, IowaZoning Board of Adjustment, dated as of March 21, 2007, that occurs withinthirty (30) days from the filing of such decision, the Borrower shall defendsuch appeal or challenge and make all arrangements necessary to secure thevariances granted therein on terms acceptable to the Bank, the Borrower and theCherokee County, Iowa Zoning Board of Adjustment.

**Section 6.04.  Negative Covenants**.  During the time period that any amounts areoutstanding under the Notes or this Agreement or any of the other LoanDocuments to which the Borrower is a party, unless the Bank shall otherwiseagree in writing, the Borrower shall not:

(a)           permit any securityinterest in or mortgage or lien on the Property or Project or other real orpersonal property the Borrower owns now or in the future, or assign anyinterest that it may have in any assets or subordinate any rights that it mayhave in any assets now or in the future, except Permitted Liens;

(b)           form or own anySubsidiary except for investments and contributions to Akron;

(c)           agree or consent to anymaterial changes in the Plans or any material changes in the terms andprovisions of the Design/Build Construction Contract, excluding the ChangeOrders, which when combined with all changes (including all Change Orders)exceed One Million and No/100ths Dollars ($1,000,000.00) in the aggregate orany material change to any other contract identified in Article IV of thisAgreement;

(d)           incorporate in theProject any materials, fixtures or property that are subject to the claims ofany other Person, whether pursuant to a conditional sales contract, securityagreement, lease or mortgage, except as permitted under Article VI;

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(e)           lease, sell, transfer,convey, assign or otherwise transfer all or any material part of the interestof the Borrower in the Project or the Property;

(f)            cause or suffer anymaterial change to any Material Contracts without the Bank’s approval, whichwill not be withheld unreasonably;

(g)           engage in any line ofbusiness materially different from that presently engaged in by the Borrower;

(h)           change the Borrower’slegal form of organization or state of formation;

(i)            make any materialchanges in the Borrower’s accounting procedures for tax or other purposesunless such change is, or becomes, required under the Internal Revenue Code;

(j)            incur any Indebtednessexcept (i) debt arising under this or another agreement with the Bank;(ii) reasonable trade credit incurred in the ordinary course of business;(iii) Subordinated Debt; and (iv) Indebtedness in existence on the date ofthis Agreement and approved in advance by the Bank in writing.  The Borrower shall not become obligated forborrowed funds, other than pursuant to this Agreement, without permission ofthe Bank; provided, however, the Bank consents to the Borrower, in the ordinarycourse of its business, borrowing up to an aggregate amount of One HundredThousand and No/100ths Dollars ($100,000.00) each year, without furtherpermission from the Bank, provided that the aggregate amount of such permittedborrowings shall not exceed One Hundred Thousand and No/100ths Dollars ($100,000.00)at any one time without the Bank’s prior written consent, which shall not beunreasonably withheld;

(k)           consolidate, merge,pool, syndicate or otherwise combine with any other entity, give anypreferential treatment or make any advance, directly or indirectly, by way ofloan, gift, bonus or otherwise to any Affiliate or any other Person;notwithstanding the foregoing and provided the same does not otherwise violateany other covenant hereunder or violate any provision of the OperatingAgreement of Akron, the Bank consents to the Borrower making equitycontributions/investments in an aggregate amount of Twenty Million andNo/100ths Dollars ($20,000,000.00) to Akron provided that, in connection withsuch equity contributions/investments, the Borrower shall (i) collaterallyassign to the Bank all of its right, title and interest in and to any and allmembership or other equity interests of Akron, (ii) deliver to the Bank awritten consent to such collateral assignment, duly executed by all of the Directorsof Akron, in form and substance satisfactory to the Bank, (iii) deliver to theBank a certified copy of resolutions of the Board of Directors of the GeneralPartner, in form and substance satisfactory to the Bank, authorizing the equitycontribution/investment in Akron and the execution, delivery and performance ofthe collateral assignment of membership or other equity interests in Akron andany other documents to be delivered by the Borrower in connection therewith,and (iv) deliver any certificates evidencing the membership or other equityinterests of Akron and any and all financing statements or other documentssufficient to create a valid and perfected first priority security interest inand to the membership or other equity interests, together with all increases,replacements, additions, substitutions, and cash and noncash proceeds

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thereof, in favor of theBank as additional collateral to secure repayment of Borrower’s Obligationsunder this Agreement;

(l)            make, or commit tomake, Capital Expenditures (including the total amount of any Capital Leases,but excluding the construction of the Expansion Facility) in an aggregateamount exceeding One Million and No/100ths Dollars ($1,000,000.00) in anysingle fiscal year without Bank’s prior written consent;

(m)          makeor pay, without the prior written consent of the Bank, which written consentwill not be unreasonably withheld, in any fiscal year distributions to partnersof the Borrower which would result in the Borrower at the time of suchdistribution not being in compliance with any of the covenants set forth inthis Agreement after payment of such distribution or in excess of the followingamounts:

| If Borrower’s leverage ratio  (combined total liabilities to Net Worth) is: |   | The allowable distribution (as a percentage of Net  Income) shall be: |
|----------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------|
|                                                                             |   |                                                                  |
| ·     Greater than or equal to  1.0:1.0                 |   | ·     40%                                    |
|                                                                             |   |                                                                  |
| ·     Less than 1.0:1.0                                 |   | ·     65%                                    |

Any such distributions to the partners of the Borrowerallowed hereunder shall be declared by the Borrower only once per fiscal year,and only after receipt by the Bank of the Borrower’s annual audited financialstatements and compliance statements as required herein, and if no Event ofDefault has occurred or is continuing or if such distribution would cause aDefault, both before and after distributions are paid.  Notwithstanding any other provision containedin this Agreement, distributions for any fiscal year hereunder prior to theConstruction Loan Termination Date shall be limited to forty percent (40%) ofthe audited net income of the Borrower, with the exception of fiscal year 2007,which shall be limited to no more than sixty five percent (65%) of the auditednet income of the Borrower for fiscal year 2006.

(n)           assume, guarantee, endorseor otherwise become liable, contingent or otherwise, for any obligations of anyother Person, except for those guaranties outstanding at the time of executionof this Agreement and disclosed to, and approved by, the Bank in writing;

(o)           make sales to, orpurchases from, any Affiliate of the Borrower other than Archer Daniels MidlandCompany or extend credit to, or make payments for services rendered by, anyAffiliate of the Borrower unless such sales or purchases are made or suchservices are rendered in the ordinary course of the Borrower’s business and onterms and conditions at least as favorable to the Borrower as the terms andconditions which would apply in a similar transaction with a Person not anAffiliate of the Borrower;

(p)           sell or dispose of allor substantially all its assets;

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(q)           (i) redeem, purchase orretire any of its partnership units or capital interests or grant or issue, orpurchase or retire for any consideration, any warrant, right or optionpertaining thereto, (ii) permit any redemption, retirement or other acquisitionby the Borrower of the ownership of the outstanding partnership units orcapital interests of the Borrower, or (iii) permit the dilution, transfer,pledge, hypothecation or encumbrance any ownership interest in the Borrower;

(r)            amend, or approve orcause any amendments, relating to the Schedule of Values or the Budget VarianceReport without the prior written approval of the Bank; or

(s)           confirm SubstantialCompletion by the Design Builder and release to the Design Builder of anyretainage under the Design/Build Construction Contract without the priorwritten approval thereof by the Bank.

**ARTICLEVII**

**EVENTSOF DEFAULT, RIGHTS AND REMEDIES**

**Section 7.01.  Events of Default**.  Each of the following shall be an Event ofDefault and give the Bank the right to exercise its remedies under thisAgreement:

(a)           the Borrower shall failto pay when due any Obligations or any other installment of principal orinterest or fee or expense reimbursement payable to the Bank;

(b)           the Borrower shall failto timely provide reports to the Bank as provided in Article VI;

(c)           the Borrower shall failto observe or perform any other obligation to be observed or performed by theBorrower hereunder or under any of the other Loan Documents or any event shalloccur which the Borrower has covenanted and agreed would not occur pursuant tothe terms of this Agreement or any other Loan Document;

(d)           the Borrower shall failto pay any Indebtedness in an aggregate principal amount in excess of One HundredThousand and No/100ths Dollars ($100,000.00) due any third Person and suchfailure shall continue beyond any applicable grace or cure period, or theBorrower shall default under any material agreement binding the Borrower andsuch default shall continue beyond any applicable grace or cure period;

(e)           the Mortgage shall atany time after its execution and delivery for any reason fail or cease (i) tocreate a valid and perfected first priority security interest in and to theproperty purported to be subject to such Mortgage; or (ii) to be in full forceand effect or shall be declared null and void, or the validity orenforceability thereof shall be contested by the Borrower, or the Borrowershall deny it has any further liability or obligation under the Mortgage, orthe Borrower shall fail to perform any of its obligations under the Mortgage;

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(f)            the Security Agreementshall at any time after its execution and delivery and for any reason fail orcease (i) to create a valid and perfected first priority security interestin and to the property purported to be subject to such Security Agreement; or(ii) to be in full force and effect or shall be declared null and void, orthe validity or enforceability thereof shall be contested by the Borrower, orthe Borrower shall deny it has any further liability or obligation under theSecurity Agreement, or the Borrower shall fail to perform any of itsobligations under the Security Agreement;

(g)           the Guaranty shall atany time after its execution and delivery for any reason fail or cease to be infull force and effect or shall be declared null and void, or the validity orenforceability thereof shall be contested by the General Partner, or theGeneral Partner shall deny it has any further liability or obligation under theGuaranty, or the General Partner shall fail to perform any of its obligationsunder the Guaranty;

(h)           the SubordinationAgreement shall at any time after its execution and delivery and for any reason(i) cease to be in full force and effect, (ii) shall be declared null and void,(iii) the validity or enforceability thereof shall be contested by the Borroweror Farmers State Bank of Marcus, Iowa, or (iv) the Borrower or Farmers StateBank of Marcus, Iowa shall deny it has any further liability or obligation under,or shall fail to perform its obligations under, the Subordination Agreement.

(i)            the Deposit AccountControl Agreements shall at any time after their execution and delivery and forany reason (i) cease to be in full force and effect, (ii) shall be declarednull and void, (iii) the validity or enforceability thereof shall be contestedby the Borrower, Farmers State Bank of Marcus, Iowa or Cherokee State Bank ofCherokee, Iowa, or (iv) the Borrower, Farmers State Bank of Marcus, Iowa orCherokee State Bank of Cherokee, Iowa, shall deny it has any further liabilityor obligation under, or shall fail to perform its obligations under, suchDeposit Account Control Agreements.

(j)            the occurrence of anymaterial breach of a representation or warranty by the Borrower ornon-fulfillment of any material term, covenant or agreement of the Borrowerunder the terms and provisions of any Loan Document, including this Agreement;

(k)           any financialstatement, representation, warranty or certificate made or furnished by or withrespect to the Borrower to the Bank in connection with this Agreement or anyother Loan Documents, or as an inducement to the Bank to enter into thisAgreement or any other Loan Documents, or make a disbursement pursuant to theterms and provisions of this Agreement or the respective Notes, or in anyseparate statement or document to be delivered to the Bank hereunder, shall bematerially false, incorrect or incomplete when made;

(l)            the Borrower shalladmit its inability to pay its debts as they mature or shall make an assignmentfor the benefit of itself or any of its creditors;

(m)          proceedings inbankruptcy, or for reorganization of the Borrower, or for the readjustment ofdebt under the Bankruptcy Code, or any part thereof, or under any

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other laws, whether stateor federal, for the relief of debtors, now or hereafter existing, shall becommenced against or by the Borrower and, except with respect to any suchproceedings instituted by the Borrower, shall not be discharged or stayedwithin thirty (30) days of their commencement;

(n)           a receiver or trusteeshall be appointed for the Borrower or for any substantial part of itsrespective assets, or any proceedings shall be instituted for the dissolutionor the full or partial liquidation of the Borrower, and except with respect toany such appointments requested or instituted by the Borrower such receiver ortrustee shall not be discharged within thirty (30) days of hisappointment, and except with respect to any such proceedings instituted by theBorrower such proceedings shall not be discharged within thirty (30) daysof their commencement, or the Borrower shall discontinue business or materiallychange the nature of its business;

(o)           the Borrower shalldiscontinue its business or materially change the nature of its business;

(p)           the Borrower shallsuffer final judgments for payment of money aggregating in excess of OneHundred Thousand and No/100ths Dollars ($100,000.00) which are not covered,without reservation, by insurance and shall not discharge the same within aperiod of thirty (30) days unless, pending further proceedings, executionhas not been commenced or, if commenced, has been effectively stayed;

(q)           a judgment creditor ofthe Borrower shall obtain possession of any of the Bank’s collateral describedin any of the Loan Documents by any means, including (without impliedlimitation) levy, distraint, replevin or self-help which is reasonablylikely to have a material adverse effect on the Borrower;

(r)            the construction ofthe Expansion Facility is abandoned or shall be unreasonably delayed or bediscontinued for a period of fifteen (15) consecutive calendar days, ineach instance for reasons other than acts of God, fire, storm, adverse weather,strikes, blackouts, labor difficulties, riots, terrorism, inability to obtainmaterials, equipment or labor, governmental restrictions or any similar causenot subject to the Borrower’s control and other than a change in the DesignBuilder as provided in Section 7.01(u);

(s)           the Borrower at anytime prior to the completion of the construction of the Expansion Facilityshall delay construction or suffer construction to be delayed for any period oftime, for any reason whatsoever, so that the completion of the ExpansionFacility cannot be accomplished, in the reasonable judgment of the Bank, by theCompletion Date;

(t)            the Project ismaterially damaged or destroyed by fire or other casualty;

(u)           Fagen, Inc. shall ceaseto be the Design Builder and the Borrower has not replaced the Design Builderwithin thirty (30) days following the termination or cessation of servicesby the Design Builder to the satisfaction of the Bank, which Bank approval

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shall not be unreasonablywithheld, but which approval may require the replacement general contractor toprovide a completion bond in form reasonably satisfactory to the Bank;

(v)           the entitiescontracting with the Borrower under any of the Material Contracts, or theirpermitted assignees, shall cease to provide the services provided for therein,and the Borrower has not within thirty (30) days following termination ofthe foregoing hired a replacement contractor satisfactory to the Bank pursuantto a written contract reasonably acceptable to the Bank, which Bank approvalwill not be unreasonably withheld and caused such replacement Material Contractto be collaterally assigned to the Bank on terms acceptable to the Bank;

(w)          the Borrower shallestablish a Subsidiary without the prior written consent of the Bank, exceptfor Akron; or

(x)            the Borrower fails totimely provide to the Bank any document or certification, in a form acceptableto the Bank, listed on the Post Closing Letter.

**Section 7.02.  Rights and Remedies**.  If an Event of Default shall have occurredand be continuing, the Bank may refrain from making any further disbursementshereunder (but the Bank may make disbursements after the occurrence of such anEvent of Default without thereby waiving its rights and remedies hereunder),and the Bank may exercise any or all of the following rights and remedies:

(a)           the Bank may declareits obligation to disburse funds relating to any or all Notes or issue Lettersof Credit to be terminated, whereupon the same shall forthwith terminate;

(b)           the Bank may declarethe entire unpaid principal amount of any or all Notes then outstanding, allinterest accrued and unpaid thereon and all other amounts payable under thisAgreement to be forthwith due and payable, whereupon such Notes, all suchaccrued interest and all such amounts shall become and be forthwith due andpayable, without presentment, demand, protest or further notice of any kind,all of which are hereby expressly waived by the Borrower;

(c)           the Bank may exerciseand enforce its rights and remedies under any or all of the Loan Documents;

(d)           the Bank may enter uponthe Property, if allowed under applicable law, and take possession thereof,together with the Project and the Expansion Facility then in the course ofconstruction, and proceed either in its own name or in the name of theBorrower, as the attorney-in-fact of the Borrower (which authorityis hereby granted by the Borrower and shall be deemed coupled with an interestand is irrevocable by the Borrower) to complete or cause to be completed theExpansion Facility, at the cost and expense of the Borrower.  If the Bank elects to complete or cause to becompleted the Expansion Facility, it may do so according to the ExpansionFacility Plans and the Design/Build Construction Contract, or according to suchchanges, alterations or

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modifications in and tothe Expansion Facility Plans and the Design/Build Construction Contract, as theBank may deem reasonable and appropriate; and the Bank may enforce or cancelall contracts let by the Borrower relating to construction of the Project,and/or let other contracts which in the Bank’s sole judgment may seemadvisable; and the Borrower shall forthwith turn over and duly assign to theBank, as the Bank may from time to time require, contracts not already assignedto the Bank relating to construction or operation of the Project, blueprints,shop drawings, bonds, Permits, bills and statements of accounts pertaining tothe Project, whether paid or not, and any other instruments or records in thepossession of the Borrower pertaining to the Project.  The Borrower shall be liable under this Agreementto pay to the Bank, on demand, any amount or amounts reasonably expended by theBank in so completing the Expansion Facility, together with any reasonablecosts, charges or expenses incident thereto or resulting therefrom, all ofwhich shall be secured by the Loan Documents. In the event that a proceeding is instituted against the Borrower forrecovery and reimbursement of any moneys expended by the Bank in connectionwith the completion of the Expansion Facility, a statement of such expenditures,verified by the affidavit of an officer of the Bank, shall be prima facieevidence of the amounts so expended and of the propriety of, and the necessityfor, such expenditures, and the burden of proving to the contrary shall be uponthe Borrower.  The Bank shall have theright to apply any funds which the Bank agrees to disburse hereunder to bringabout the completion of the Expansion Facility and to pay the costs thereofand, if such money so agreed to be disbursed is insufficient, in the solejudgment of the Bank, to complete the Expansion Facility, the Borrower agreesto promptly deliver and pay to the Bank such sum or sums of money as the Bankmay from time to time demand for the purpose of completing the ExpansionFacility or of paying any liability, charge or expense which may have beenincurred or assumed by the Bank under or in performance of this Agreement orfor the purpose of completing the Expansion Facility.  It is expressly understood and agreed that inno event shall the Bank be obligated, or liable in any way, to complete theExpansion Facility or to pay for the costs of construction thereof beyond theamount of the Construction Loan;

(e)           The Bank may exerciseany other rights and remedies available to the Bank by law or equity or inaccordance with any of the Loan Documents.

**Section 7.03.  Cumulative Remedies**.  All rights and remedies of the Bank providedfor in this Agreement or any of the Loan Documents are cumulative and may beexercised singly or concurrently or in any combination thereof without waivingor releasing any other rights the Bank has or may have. Any one or moresuccessive and/or concurrent actions may be brought hereon by the Bank againstthe Borrower or the Guarantor, either as part of an action brought against theBorrower or the Guarantor, or in one or more separate actions, as often as theBank deems advisable in the exercise of its sole and absolute discretion.

**Section 7.04.  Right of Setoff. **Upon the occurrence andduring the continuance of any Event of Default, the Bank is hereby authorizedat any time, and from time to time, without written notice to the Borrower orthe General Partner (any such notice being expressly waived by the Borrower andthe General Partner), to set off and apply any and all deposits (general orspecial, time or demand, provisional or final) at any time held and otherindebtedness at any time owing by the Bank to or for the credit or the accountof the Borrower or the General Partner against any and

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all of the obligations of the Borrower or the General Partner now orhereafter existing under this Agreement or the Notes or any other LoanDocument, irrespective of whether or not the Bank shall have made any demandunder this Agreement or the Notes or such other Loan Document and although suchobligations may be unmatured.  The Bankagrees promptly to notify the Borrower after any such setoff and theapplication thereof, however, the parties hereto agree that the failure to givesuch notice shall in no way affect the validity of such setoff and the application.  The rights of the Bank under this Section7.04 are in addition to other rights and remedies the Bank may have.

**ARTICLEVIII**

**MISCELLANEOUS**

**Section 8.01.  Inspections**.  The Borrower and the Design Builder shall beresponsible for making inspections of the Expansion Facility during the courseof construction and shall determine to their own satisfaction that the workdone or materials supplied by the Design Builder or any Subcontractor to whompayment is to be made out of each disbursement has been properly done orsupplied in accordance with the Design/Build Construction Contract with allpotential liens relating thereto released. If any work done or materials supplied by the Design Builder or anySubcontractor are not satisfactory to the Borrower and/or the Design Builderand the same is not remedied within the applicable period of time set forth inthe Design/Build Construction Contract or, as relevant, the contracts relatingto the Other Project Construction, the Borrower will immediately notify theBank in writing or by telephone of such fact. It is expressly understood and agreed that the Bank, the DisbursingAgent, the Title Company, the Independent Inspector and any party designated bythe Bank may, but shall not be required to, conduct such inspections of theProject as the Bank may deem necessary for the protection of the Bank’sinterest, and that any inspections which may be made of the Project by the Bankwill be made, solely for the benefit and protection of the Bank and that theBorrower will not rely thereon.  Borrowerhereby agrees that it shall notify Design Builder in advance of any suchinspections of the Project of which the Borrower receives notice from the Bank,the Disbursing Agent, the Title Company or any party designated by the Bank.

**Section 8.02.  Post Closing Letter**.  The Borrower and the Bank acknowledge thatthe closing of the loans provided for herein may occur prior to the time theBorrower has delivered to the Bank all of the documents and certificationsrequired by Bank pursuant to the terms and provisions of this Agreement.  In the event thereof, the Borrower agrees toexecute and deliver to the Bank on the Closing Date a post-closing letter inthe form attached hereto as Exhibit “U” attached hereto and incorporated hereinby this reference (the “Post Closing Letter”). The Borrower acknowledges and agrees that, notwithstanding any terms orprovisions of this Agreement to the contrary, the Bank is not, and shall notbe, required to fund any portion of the credit facilities provided for in thisAgreement until each of the documents and certifications described in the PostClosing Letter have been delivered to Bank in form and content reasonablyacceptable to Bank.

**Section 8.03.  Indemnification by Borrower**.  The Borrower shall bear all loss, expense(including reasonable attorneys’ fees) and damage in connection with, andagrees to defend, indemnify and hold harmless the Bank, its directors,officers, agents and employees from, all

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claims, demands and judgments made or recovered against the Bank, itsagents, servants and employees because of bodily injuries, including death, atany time resulting therefrom, and/or because of damages to property (includingloss of use) from any cause whatsoever, arising out of, incidental to or inconnection with the Project or the construction of the Expansion Facility,whether or not due to any act of omission or commission, including negligenceof the Borrower or the Design Builder or of their employees, directors,officers, managers, members or agents, other than gross negligence or willfulmisconduct of the Bank or its agents. The Borrower’s liability hereunder shall not be limited to the extent ofinsurance carried by or provided by the Borrower or subject to any exclusionfrom coverage in any insurance policy. The obligations of the Borrower under this Section shall survive thepayment of the Notes.

**Section 8.04.  No Waiver; Cumulative Remedies**.  No failure or delay on the part of the Bankin exercising any right, power or remedy under the Loan Documents (unless aparticular limitation on the time for the Bank’s exercise or performance isspecified therein) shall operate as a waiver thereof nor shall any single orpartial exercise of any such right, power or remedy preclude any other orfurther exercise thereof or the exercise of any other right, power or remedyunder the Loan Documents.  The remediesprovided in the Loan Documents are cumulative and not exclusive of any remediesprovided by law.

**Section 8.05.  Amendments, Etc**.  No amendment, modification, termination orwaiver of any provision of any of the Loan Documents or consent to anydeparture by the Borrower therefrom shall be effective unless the same shall bein writing and signed by the Bank and the Borrower, and then such waiver orconsent shall be effective only in the specific instance and for the specificpurpose for which given.  No notice to ordemand on the Borrower in any case shall entitle the Borrower to any other orfurther notice or demand in similar or other circumstances.

**Section 8.06.  Addresses for Notices, Etc**.  Except as otherwise expressly providedherein, all notices, requests, demands and other communications provided forunder the Loan Documents shall be in writing and sent by mail, recognizedovernight courier or facsimile (if by facsimile with a confirmation mailedwithin two (2) Banking Days thereafter), to the applicable party at its addressindicated below:
|        | If to the Borrower: | LSCP, LLLP                     |
|--------|---------------------|--------------------------------|
|   |                | 4808 F Avenue                  |
|   |                | Marcus, Iowa 51035             |
|   |                | Attention: Steve Roe           |
|   |                | Facsimile: (712) 376-2815      |
|   |                |                           |
|   | If to the Bank:     | First National Bank of Omaha   |
|   |                | 1620 Dodge Street STOP 1050    |
|   |                | Omaha, NE 68197-1050           |
|   |                | Attention: Bradley J. Brummund |
|   |                | Facsimile: (402) 633-3519      |

or, as to each party, atsuch other address as shall be designated by such party in a written notice tothe other party complying as to delivery with the terms of this Section.  All such notices, requests, demands and othercommunications, when mailed or sent by recognized overnight

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courier, shall beeffective when deposited in the mails, addressed as aforesaid, or, when sent byfacsimile, shall be effective when confirmation of receipt is received, exceptthat notices or requests to the Bank pursuant to any of the provisionshereunder shall not be effective until actually received by the Bank.

**Section 8.07.  Time of Essence**.  Time is of the essence in the performance ofthis Agreement.

**Section 8.08.  Execution in Counterparts**.  The Loan Documents may be executed in anynumber of counterparts, each of which when so executed and delivered shall bedeemed to be an original and all of which counterparts of each instrument oragreement, taken together, shall constitute but one and the same instrument.

**Section 8.09.  Binding Effect, Assignment**.  The Loan Documents to which they are partiesshall be binding upon and inure to the benefit of the Borrower and the Bank andtheir respective successors and assigns, except that the Borrower shall nothave the right to assign any of its rights or obligations thereunder or anyinterest therein without the prior written consent of the Bank, which consentmay be withheld by the Bank in its sole and absolute discretion.

**Section 8.10.  Governing Law**.  The Loan Documents, to the extent they do nototherwise provide, shall be governed by, and construed in accordance with, thelaws of the State of Nebraska, other than conflict of law provisions thereof.

**Section 8.11.  Submission to Jurisdiction; Venue**.  Except to the extent the Loan Documentsotherwise provide, the Borrower hereby submits to the jurisdiction of anyfederal court sitting in Omaha, Nebraska, in any action or proceeding arisingout of or relating to this Agreement or any of the other Loan Documents andagrees that all claims in respect of the action or proceeding may be heard anddetermined in any such court.  Except tothe extent the Loan Documents otherwise provide, the Borrower also agrees notto bring any action or proceeding arising out of or relating to this Agreementin any other court.  The Borrower waivesany defense of inconvenient forum to the maintenance of any action orproceeding so brought and waives any bond, surety, or other security that mightbe required of the Bank.  The Borroweragrees that a final judgment in any action or proceeding so brought shall beconclusive and may be enforced by suit on the judgment or in any other mannerprovided by law or at equity.  Except tothe extent the Loan Documents otherwise provide, the Borrower hereby waives anyrights it may have to transfer or change the venue of any suit, action or otherproceeding brought against the Borrower by the Bank in accordance with thisSection 8.11 or in connection with this Agreement or any other Loan Documents.

**Section 8.12.  Severability of Provisions**.  In the event any one or more of theprovisions contained in this Agreement shall for any reason be held to beinvalid, illegal or unenforceable in any respect, such invalidity, illegalityor unenforceability shall not in any way affect any other provision of thisAgreement, but this Agreement shall be construed as if such invalid, illegal orunenforceable provision had never been contained herein.

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**Section 8.13.  Headings**.  Section headings in this Agreement areincluded herein for convenience of reference only and shall not constitute apart of this Agreement for any other purpose.

**Section 8.14.  Integration**.  This Agreement supersedes, replaces andterminates any prior oral offers, negotiations, understandings or agreementsand any commitment letters or similar writings relating to any of the matterscontemplated herein, except to the extent specifically provided herein.

**Section 8.15.  Participations**.  Notwithstanding any other provision of thisAgreement, the Borrower understands that the Bank will enter into participationagreements with other lenders whereby the Bank will allocate a certainpercentage of the Loans to them.  TheBorrower specifically permits and authorizes the Bank to exchange financialinformation about the Borrower with actual or potential participants.  The Borrower acknowledges that, for theconvenience of all parties, this Agreement is being entered into with the Bankonly and that its obligations under this Agreement are undertaken for thebenefit of, and as an inducement to, each of the participating lenders as wellas the Bank, and the Borrower hereby grants to each of the participatinglenders to the extent of its participation in any Loan the right to set offdeposit accounts maintained by the Borrower with such participatinglender.  The Borrower understands thatthe terms of such participation agreements with any of the participants willlimit the Bank’s rights to amend, waive or modify the terms and conditions ofthis Agreement without the express written consent of all or a designatedpercentage of such participants.

**Section 8.16.  Prohibition Against Usury**.  In no event, either before or after theoccurrence of an Event of Default, shall the amount of interest due under anyNote or other Loan Document exceed the maximum, lawful, non usurious interestrate of the State of Nebraska or any other applicable law (the “Maximum Rate”).  The Notes and the other Loan Documents arehereby expressly limited so that in no event whatsoever, whether by reason ofacceleration or otherwise, shall the amount paid, or agreed to be paid to theBank for the use, forbearance or detention of the sums advanced to the Borrowerexceed the Maximum Rate.  If fulfillmentof any provisions hereof, at the time performance of such provision shall bedue, shall involve the potential for transcending the Maximum Rate, theobligation to be fulfilled shall be reduced to the Maximum Rate, and if fromany such circumstance the Bank shall ever receive as interest an amount whichwould exceed the Maximum Rate, such excess shall be applied to the reduction ofthe principal amount of the Obligations and not the payment of interest, or ifsuch excessive interest exceeds the unpaid balance of the principal amount ofthe Obligations, such excess shall be refunded to the Borrower.  All sums paid and agreed to be paid to theBank for use, forbearance or detention of the indebtedness of the Borrowershall, to the extent permitted by the laws of the State of Nebraska, beamortized, prorated, allocated, and spread through the whole term of suchindebtedness so that the actual rate of interest on account of suchindebtedness is uniform throughout the term thereof.

**Section 8.17.  Incorporation by Reference**.  The recitals reflected above, and eachExhibit, Schedule, Loan Document or other document referred to in thisAgreement, are incorporated herein by this reference.

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**Section 8.18.  Jury Trial Waiver**. THE BANKAND THE BORROWER HEREBY WAIVE TRIAL BY JURY IN ANY ACTION, PROCEEDING, CLAIM,OR COUNTERCLAIM, WHETHER IN CONTRACT OR TORT, AT LAW OR IN EQUITY, ARISING OUTOF OR IN ANY WAY RELATED TO THIS AGREEMENT OR ANY OF THE LOAN DOCUMENTS.  NO EMPLOYEE OF THE BANK HAS AUTHORITY TOWAIVE, CONDITION, OR MODIFY THE TERMS AND PROVISIONS OF THIS SECTION OF THISAGREEMENT.

**Section8.19.  CREDIT AGREEMENT.**** A CREDIT AGREEMENT MUST BE IN WRITING TO BEENFORCEABLE UNDER NEBRASKA LAW.  TOPROTECT THE PARTIES HERETO FROM ANY MISUNDERSTANDING OR DISAPPOINTMENTS, ANYCONTRACT, PROMISE, UNDERTAKING, OR OFFER TO FORBEAR REPAYMENT OF MONEY OR TOMAKE ANY OTHER FINANCIAL ACCOMMODATION IN CONNECTION WITH THIS LOAN OF MONEY ORGRANT OR EXTENSION OF CREDIT, OR ANY AMENDMENT OF, CANCELLATION OF, WAIVER OF,OR SUBSTITUTION FOR ANY OR ALL OF THE TERMS OR PROVISIONS OF ANY INSTRUMENT OR DOCUMENTEXECUTED IN CONNECTION WITH THIS LOAN OF MONEY OR GRANT OR EXTENSION OF CREDIT,MUST BE IN WRITING TO BE EFFECTIVE.**

IN WITNESS WHEREOF, theparties hereto have caused this Agreement to be executed by their respectiveduly authorized representatives, as of the date first above written.
|      | LSCP, LLLP,                                    |
|-----------|------------------------------------------------|
|      | an Iowa limited  liability limited partnership |
|      |                                           |   |   |   |
|      | By:                                            | Little Sioux Corn Processors, L.L.C., |
|      |                                           | its General Partner |   |   |
|      |                                           |   |   |   |
|      |                                           |   |   |   |
|      |                                           | By: |    Stephen G. Roe |
|      |                                           |   |   |
|      |                                           | Its: |    President |
|      |                                           |   |   |   |
|      |                                           |   |   |   |
|      | FIRST NATIONAL BANK OF OMAHA,                  |
|      | a national banking association                 |
|      |                                           |   |   |   |
|      |                                           |   |   |   |
|      | By:                                            | /s/ Bradley J.  Brummund |
|      |                                           |   Bradley J. Brummund, Vice President |
|      |                                           |   |
| STATE OF  |    Nebraska                     |   | ) |   |   |   |   |
|      | ) ss.                                          |   |   |   |   |
| COUNTY OF |    Douglas                      |   | ) |   |   |   |   |
|           |                                                |  |  |  |  |  |  |  |  |  |

 

57

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On this 5 day of April, 2007, before me, theundersigned, a Notary Public, personally appeared Steve Roe, Presidentof Little Sioux CornProcessors, L.L.C., General Partner of LSCP, LLLP, an Iowa limited liabilitylimited partnership, on behalf of said limited liability limited partnership,who executed the foregoing instrument, and acknowledged that he executed thesame as his voluntary act and deed, as well as that of the limited liabilitylimited partnership.
|      |                       | /s/ Celest M. Gorans                                            |
|-----------|----------------------------|-----------------------------------------------------------------|
|      | Notary Public              |                                                            |   |
|      | [                          | SEAL:   GENERAL NOTARY – State of  Nebraska | ] |
|      | [                          |                                                            | CELEST M. GORANS | ] |
|      | [                          |                                                            | My Comm. Exp. Dec. 25, 2007 | ] |
|      |                       |                                                            |   |   |
| STATE OF  |    Nebraska |                                                            | ) |   |   |   |   |
|      |                       | ) ss.                                                           |   |   |   |   |
| COUNTY OF |    Douglas  |                                                            | ) |   |   |   |   |
|           |                            |                                                                 |  |  |  |  |  |  |  |  |  |  |  |

On this 5 day ofApril, 2007, before me, the undersigned, a Notary Public, personally appearedBradley J. Brummund, on behalf of said entity as Vice President of FirstNational Bank of Omaha, a national banking association, who executed theforegoing instrument, and acknowledged that he executed the same as his voluntaryact and deed, as well as that of the bank.
|        |          | /s/ Celest M. Gorans                                            |                        |
|--------|---------------|-----------------------------------------------------------------|-----------------------------|
|   | Notary Public |                                                            |
|   | [             | SEAL:   GENERAL NOTARY – State of  Nebraska | ]                           |   |
|   | [             |                                                            | CELEST M. GORANS            | ] |   |
|   | [             |                                                            | My Comm. Exp. Dec. 25, 2007 | ] |   |

 

58

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**LIST OF EXHIBITS AND SCHEDULES**
| Exhibit“A”  | -      | Property                                   |
|-----------------------|--------|--------------------------------------------|
|                  |   |                                       |
| Exhibit “B” | -      | Form of Construction Note                  |
|                  |   |                                       |
| Exhibit “C” | -      | Form of Deposit Account Control Agreements |
|                  |   |                                       |
| Exhibit “D” | -      | Form of Guaranty                           |
|                  |   |                                       |
| Exhibit “E” | -      | Material Contracts                         |
|                  |   |                                       |
| Exhibit “F” | -      | Form of Mortgage                           |
|                  |   |                                       |
| Exhibit “G” | -      | Form of Operating Note                     |
|                  |   |                                       |
| Exhibit “H” | -      | Permits                                    |
|                  |   |                                       |
| Exhibit “I” | -      | Subordination Agreement                    |
|                  |   |                                       |
| Exhibit “J” | -      | Existing Swap Note                         |
|                  |   |                                       |
| Exhibit “K” | -      | Existing Variable Rate Note                |
|                  |   |                                       |
| Exhibit “L” | -      | Existing Long Term Revolving Note          |
|                  |   |                                       |
| Exhibit “M” | -      | Existing Operating Note                    |
|                  |   |                                       |
| Exhibit “N” | -      | Form of Swap Note                          |
|                  |   |                                       |
| Schedule I            | -      | Principal Payments on the Swap Note        |
|                  |   |                                       |
| Exhibit “O” | -      | Form of Variable Rate Note                 |
|                  |   |                                       |
| Exhibit “P” | -      | Form of Long Term Revolving Note           |
|                  |   |                                       |
| Exhibit “Q” | -      | Form of Legal Opinion of Counsel           |
|                  |   |                                       |
| Exhibit “R” | -      | Title Insurance Endorsements               |
|                  |   |                                       |
| Exhibit “S” | -      | Borrower’s Projections                |
|                  |   |                                       |
| Exhibit “T” | -      | Depository Accounts                        |
|                  |   |                                       |
| Exhibit “U” | -      | Post Closing Letter                        |

 

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**EXHIBIT “A”**

**PROPERTY**

**Legal Description of Tract 1**

A tract of land in thefractional North Half of the Northeast One Quarter of Section 2, Township 92North, Range 42 West of the 5th P.M., Cherokee County, Iowa, more particularlydescribed as follows:

Beginning at the NorthQuarter Corner of Section 2, thence S 00°28’10” W (bearing assumed with allsubsequent bearings referenced there from) along the West line of NortheastQuarter of Section 2 for a distance of 408.78 feet measured (409.15 feetrecord) to the Northerly right of way line of the Chicago, Central &Pacific Railroad Company; thence S 77°32’41” E along the Northerly right of wayline of said Chicago, Central and Pacific Railroad Company for a distance of2,640.86 feet to the West right of way line of F Avenue; thence N 00°24’06” Ealong said West right of way line for a distance of 702.05 feet; thence N 89°35’54”W for a distance of 230.00 feet; thence N 00°24’06” E for a distance of 245.00feet to the South right of way line of 480th Street; thence S 89°23’02” W alongsaid South right of way line for a distance of 248.92 feet; thence N 00°40’34”W for a distance 55.00 feet to the North line of the fractional NortheastQuarter of Section 2; thence S 89°23’02” W along the said North line of theNortheast Quarter of Section 2 for a distance of 2,102.57 feet to the point ofbeginning.

Said tract contains 40.03acres more or less, with 1.59 acres for roadway easements.

Legal Description ofTract 2

A tract of land in thefractional North half of the Northeast One Quarter of Section 2, Township 92North, Range 42 West of the 5th P.M. Cherokee County, Iowa, more particularlydescribed as follows:

Commencing at theSoutheast corner of the fractional Northeast Quarter of the Northeast Quarterof Section 2; thence S 89°48’24” W (bearing assumed with all subsequentbearings referenced there from) along the South line of North Half of theNortheast Quarter of Section 2 for a distance of 55.00 feet to the point ofbeginning; thence continuing S 89°48’24” W along the South line of the Northhalf of the Northeast Quarter for a distance of 2,598.96 feet to the Southwestcorner of fractional Northwest Quarter of the Northeast Quarter of Section 2;thence N 00°28’10” E along the West line of the fractional Northwest Quarter ofthe Northeast Quarter of Section 2 for a distance of 899.57 feet to theSoutherly right of way line of the Chicago, Central and Pacific RailroadCompany; thence S 77°32’41” E along the said right of way line of the Chicago,Central and Pacific Railroad Company for a distance of 2,656.32 feet to theWest right of way line of F Avenue; thence S 00°24’06” W along said West rightof way line of F Avenue for a distance of 317.87 feet to the point ofbeginning.

Said tract contains 36.31acres more or less.

----

**Legal Description of Tract 3**

A tract of land in theNortheast Quarter of the Northwest Quarter (NE 1⁄4 NW 1⁄4) and the NorthwestQuarter of the Northwest Quarter (NW 1⁄4 NW 1⁄4) of Section 2, Township 92 North,Range 42 West of the 5th P.M., Cherokee County, Iowa, more particularly describedas follows:  Beginning at the NortheastCorner of the NW 1⁄4 of said Section 2; thence South 89°19’10” West (bearingassumed with all subsequent bearings referenced therefrom) along the North lineof said NW1⁄4 of Section 2 for a distance of 1,759.48 feet; thence South 77°32’41”East along the Northerly right of way line of the Chicago, Central &Pacific Railroad for a distance of 1,798.33 feet; thence North 00°28’10” East,along the East line of said NW1⁄4  ofSection 2 for a distance of 408.78 feet to the Point of Beginning.

Said tract contains 8.25acres more or less, with 1.47 acres for easements.

----

**EXHIBIT “B”**

**FORM OF CONSTRUCTION NOTE**

[To be inserted orattached.]

----

**EXHIBIT “C”**

**FORM OF DEPOSIT ACCOUNT CONTROL AGREEMENTS**

[To be inserted orattached.]

----

**EXHIBIT “D”**

**FORM OF GUARANTY**

[To be inserted orattached.]

----

**EXHIBIT “E”**

**MATERIAL CONTRACTS**

(1)           the Design/BuildConstruction Contract;

(2)           the License Agreement,dated as of September 20, 2006, by and between the Borrower and ICM, Inc. aKansas corporation;

(3)           the Ethanol MarketingContract;

(4)           the Distiller’s GrainMarketing Contract;

(5)           the Full ServiceIntegrated Risk Management Contract, dated as of July 16, 2002, by and betweenthe Borrower and FCStone;

(6)           the Letter ofUnderstanding relating to the increased electrical supply requirements of theProject as a result of the Expansion Facility, dated November 7, 2005, fromMidAmerican Energy Company to the Borrower; and

(7)           the PrecedentAgreement, dated August 8, 2006, by and between the Borrower and NorthernNatural Gas Company.

----

**EXHIBIT “F”**

**FORM OF MORTGAGE**

**[To be inserted or attached.]**

----

**EXHIBIT “G”**

**FORM OF OPERATING NOTE**

[To be inserted orattached.]

----

**EXHIBIT “H”**

**PERMITS**

(1)           An air emissionspermit, which allows, or will allow, the Borrower after the Completion Date tooperate the Project on the Property at maximum operational capacity.

(2)           All permits required inconnection with the construction and operation of all aboveground storage tanksincluded in the Plans for the Facility, including, but not limited to, allpermits from the State Fire Marshal required for the installation of suchaboveground storage tanks.

(3)           A National PollutionDischarge Elimination System Construction Permit for any storm water that isdischarged during construction and after construction of the Project and anyapplicable state storm water discharge.

(4)           All construction,building, excavation and flood plain development permits required to constructthe facility on the Property.

(5)           All permits required inconnection with the discharge of waste water from the Project, including, butnot limited to, well and septic system permits.

(6)           All permits requiredrelating to the treatment and augmentation of the water supply to the Project.

(7)           All permits required inconnection with highway and railway access to the Project.

(8)           The Alcohol FuelProducer’s Permit issued by the Alcohol and Tobacco Tax and Trade Bureau forthe production of fuel grade alcohol.

(9)           All mechanical,electrical, and natural gas permits relating to constructing and operating thefacility on the Property.

(10)         All fire protectionpermits.

(11)         The Section 10/404Nationwide General Permit from the Army Corps of Engineers relating to thedetermination/delineation of wetlands on the Property.

(12)         All permits relating tothe Fish and Wildlife Coordination Act and the Endangered Species Act from theU.S. Department of the Interior, Fish and Wildlife Services.

(13)         All permits relating tothe Section 112(r) Risk Management Plan from the U.S. Environmental ProtectionAgency and the Iowa Department of Public Health and Bureau of EnvironmentalHealth Services.

----

(14)         All permits relating tothe Process Safety Management Plan from the U.S. Occupational Safety and HealthAdministration.

(15)         All permits relating tothe Spill Prevention Control and Countermeasure Plan from the U.S.Environmental Protection Agency and the Iowa Department of Public Health andBureau of Environmental Health Services.

(16)         All permits relating tothe Emergency Planning and Community Right-to-Know Notification from the U.S.Environmental Protection Agency and the Iowa Department of Public Health andBureau of Environmental Health Services.

(17)         All permits relating tothe Storm Water Pollution Prevention Plan from the Iowa Department of Public Healthand Bureau of Environmental Health Services

(18)         Allhistorical/archeological permits required by the Code of Iowa and the StateHistorical Society of Iowa.

(19)         Allpermits required by the local zoning ordinances of the City of Marcus and theCounty of Cherokee, Iowa.

----

**EXHIBIT “I”**

**SUBORDINATION AGREEMENT**

[To be inserted orattached.]

----

**EXHIBIT “J”**

**EXISTING SWAP NOTE**

[To be inserted orattached.]

----

**EXHIBIT “K”**

**EXISTING VARIABLE RATE NOTE**

**[To be inserted or attached.]**

----

**EXHIBIT “L”**

**EXISTING LONG TERM REVOLVING NOTE**

[To be inserted orattached.]

----

**EXHIBIT “M”**

**EXISTING OPERATING NOTE**

[To be inserted orattached.]

----

**EXHIBIT “N”**

**FORM OF SWAP NOTE**

[To be inserted orattached.]

----

**SCHEDULE I**

**PRINCIPAL PAYMENTS ON THE SWAP NOTE**
|        | ** ** | **Principal** | ** ** |
|--------|------------|---------------|------------|
|   |       |          |       |
| 1      |       | 612,194.15    |       |
| 2      |       | 616,441.62    |       |
| 3      |       | 621,046.22    |       |
| 4      |       | 633,679.68    |       |
|   |       |          |       |
| 5      |       | 654,091.59    |       |
| 6      |       | 667,252.64    |       |
| 7      |       | 673,449.21    |       |
| 8      |       | 687,148.67    |       |
|   |       |          |       |
| 9      |       | 714,983.70    |       |
| 10     |       | 722,441.51    |       |
| 11     |       | 730,367.22    |       |
| 12     |       | 745,224.51    |       |
|   |       |          |       |
| 13     |       | 772,952.73    |       |
| 14     |       | 782,221.05    |       |
| 15     |       | 792,019.72    |       |
| 16     |       | 808,131.17    |       |
|   |       |          |       |
| 17     |       | 835,743.69    |       |
| 18     |       | 846,973.11    |       |
| 19     |       | 858,800.55    |       |
| 20     |       | 22,724,837.26 |       |

 

----

**EXHIBIT “O”**

**FORM OF VARIABLE RATE NOTE**

[To be inserted orattached.]

----

**EXHIBIT “P”**

**FORM OF LONG TERM REVOLVING NOTE**

[To be inserted orattached.]

----

**EXHIBIT “Q”**

**FORM OF LEGAL OPINION OF COUNSEL**

[To be inserted orattached.]

----

**EXHIBIT “R”**

**TITLE INSURANCE ENDORSEMENTS**

(1)                                  ExtendedCoverage Endorsement (Deletion of all standard exceptions, including deletionof the mechanic’s lien exception)

(2)                                  AccessEndorsement

(3)                                  ArbitrationEndorsement

(4)                                  ComprehensiveEndorsement  (ALTA Form 9:   Restrictions, Encroachments, Minerals)

(5)                                  Creditor’sRights Endorsement

(6)                                  DoingBusiness Endorsement

(7)                                  SurveyEndorsement

(8)                                  ZoningEndorsement (ALTA Form 3.1 Revised)

(9)                                  TaxParcel Endorsement

(10)                            UsuryEndorsement

(11)                            Lineof Credit Endorsement (Revised)

(12)                            VariableRate Endorsement

(13)                            GapEndorsement

(14)                            ContiguityEndorsement

----

**EXHIBIT “S”**

**BORROWER’S PROJECTIONS**

[To be inserted orattached.]

----

**EXHIBIT “T”**

**DEPOSITORY ACCOUNTS**

**Farmers State Bank, Marcus, Iowa(All operating company accounts)**

Account 3297659 - AFLAC Flex PlanDistribution Account

Account 651435 - Savings Account

Account3297535 - Regular Checking Account

**Cherokee State Bank, Cherokee,Iowa**

Account132810 - Little Sioux Corn Processors, LLC Checking Account

----

**EXHIBIT “U”**

**POST CLOSING LETTER**

[To be inserted orattached.]

----