EXHIBIT 10.4 - Construction and Term Loan Supplement




Loan No. RI0457T01



CONSTRUCTION AND TERM LOAN SUPPLEMENT


          THIS
SUPPLEMENT to the Master
Loan Agreement dated January 30, 2007, (the “MLA”), is entered into as of January 30, 2007, between FARM CREDIT SERVICES
OF AMERICA, FLCA (“Farm Credit”) and EAST FORK BIODIESEL, LLC, Algona, Iowa (the “Company”).


          SECTION 1.   The Construction and Term Loan Commitment. On the terms
and conditions set forth in the MLA and this
Supplement, Farm Credit agrees to make construction loans to the Company from time to time during the period set forth
below in an aggregate principal amount not to exceed, at any one time outstanding, $24,500,000.00 (the
“Commitment”). Under the Commitment, amounts borrowed and later repaid
may not be reborrowed. No advance shall be made until evidence has been
provided to the Agent (as that term is
defined in the MLA) as required in Section 7(A)(vi) of the MLA that all requisite equity funds have been received by the
Company and that such funds shall have been utilized for the construction of
the Improvements (as defined herein).


          SECTION 2.  Purpose. The purpose of the Commitment is to partially
finance the Company’s construction of a 60 million gallon (annual capacity)
biodiesel plant (the “Improvements”) identified in the plans and specifications provided to and approved by Agent pursuant
to Section 7(A)(v) of the MLA (as the same may be amended pursuant to Section
12(A) herein, the “Plans”), on real property owned by the Company near Algona,
Iowa (the “Property”), and the Company agrees to utilize the proceeds of the Commitment for this purpose only.


          SECTION
3.   Term. The term of the
Commitment shall be from the date hereof, up to and including November 30, 2007, or such later date
as Agent may, in its sole discretion, authorize in writing.


          SECTION
4.   Disbursements of Proceeds. 


                    (A)          Disbursement
Procedures.


                                    (1)          Limits
on Advances. Agent shall not be required to advance funds: (i) for any category or line item of acquisition
or construction cost an amount greater than the amount specified therefor in the Project Budget (as
defined in Section 7(A)(v) of the MLA); or (ii) for any services not yet performed or for materials or
goods not yet incorporated into the Improvements or delivered to and properly
stored on the Property. No advance hereunder shall exceed 100% of the aggregate
costs actually paid or currently due and payable and represented by invoices
accompanying a Request for Construction Loan
Advance submitted pursuant to Section 9(B)(1) herein less the amount of retainage (“Retainage”) set out in the construction
contract dated October 10, 2006, between the Company and REG Construction Services, LLC, and other construction
contracts of the Company for the Improvements.



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








	
 

	
 


	
Construction and Term Loan
Supplement RI0457T01

	
 - 2 -











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


          SECTION
5.   Interest and Fees.


                    (A)          Interest.
The Company agrees to pay
interest on the unpaid principal balance of the loans in accordance with one or
more of the following interest rate options, as selected by the Company, provided, however, that prior to plant
start-up, only the Agent Base Rate option shall be available:



                                    (1)          Agent
Base Rate. At a rate per annum equal at all times to 3/4 of 1% above
the rate of interest established by Agent from time to time as its Agent Base
Rate, which Rate is intended by Agent to be
a reference rate and not its lowest rate. The Agent Base Rate will change on
the date established by Agent as the effective date of any change
therein and Agent agrees to notify the Company
of any such change. 



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



                                    (3)          LIBOR.
At a fixed rate per annum equal to “LIBOR” (as
hereinafter defined) plus 3.25%.
Under this option: (1) rates may be fixed for “Interest Periods” (as
hereinafter defined) of 1, 2, 3, 6, 9
or 12 months as selected by the Company; (2) amounts may be fixed in increments of $500,000.00 or multiples thereof;
(3) the maximum number of fixes in place at any one time shall be 10; and (4) rates may only be fixed
on a “Banking Day” (as hereinafter defined) on 3 Banking Days’ prior written notice. For purposes hereof: (a)
“LIBOR”
shall mean the rate (rounded upward to the nearest sixteenth and
adjusted for reserves required on “Eurocurrency Liabilities” (as hereinafter defined) for banks subject to ‘FRB
Regulation D” (as herein defined) or required by any other federal law or regulation) quoted by the British
Bankers Association (the “BBA”) at 11:00 a.m. London time 2 Banking Days
before the commencement of the Interest Period for the offering of U.S. dollar deposits in the London interbank market for the
Interest Period designated by the Company; as published by Bloomberg or another major information vendor
listed on BBA’s official website; (b) “Banking Day” shall mean a day on which
Agent is open for business, dealings in U.S. dollar deposits are being carried out in the London interbank market, and banks are
open for business in New York City and London, England; (c) “Interest Period” shall mean a period commencing on the
date this option is to take effect and
ending on the numerically corresponding day in the month that is 2, 3, 6, 9 or
12 months thereafter, as the case may
be; provided, however, that: (i) in the event such ending day is not a Banking
Day, such period shall be extended
to the next Banking Day unless such next Banking Day falls in the next calendar
month, in which case it shall end on
the preceding Banking Day; and (ii) if there is no numerically corresponding
day in the month, then such period shall end on the last Banking Day in the
relevant month; (d) “Eurocurrency
Liabilities” shall have meaning as set forth in “FRB Regulation D”; and (e) 








	
 

	
 


	
Construction
and Term Loan Supplement RI0457T01

	
- 3 -













“FRB
Regulation D” shall mean Regulation D as promulgated by the Board of Governors
of the Federal Reserve System, 12 CFR Part 204, as amended.


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


                    (B)          Arrangement
Fee. In consideration of the Commitment, the Company agrees to pay to Agent an
arrangement fee in the amount of $183,750.00 (less all payments already
received by Agent)
upon the execution hereof.


          SECTION
6.   Promissory Note. The Company promises to repay the loans as follows: (i) in
26 equal,
consecutive quarterly installments of $912,500.00 with the first such
installment due on May 20, 2008, and the last such installment due on August 20, 2014; and
(ii) followed by a final installment in an amount equal to the remaining unpaid
principal balance of the loans on November 20, 2014.


In
addition, for each fiscal year end, beginning with the fiscal year ending 2007,
and ending with the fiscal year ending 2012 the Company shall also, within
ninety (90) days after the end of such fiscal year, make a special payment of
an amount equal to 75% of the “Free Cash Flow” (as defined below) of the Company, not to exceed
$2,000,000.00 per fiscal year; and provided, however, that: (i) if such payment
would
result in a covenant default, the amount of the payment shall be reduced to an
amount which would not result in a covenant default; (ii) if such payment would result in a
breakage of a fixed interest rate, then applicable broken funding surcharges
would still apply; and (iii) the aggregate of such Free Cash Flow payments shall not
exceed $7,000,000.00. The term “Free Cash Flow” is defined as the Company’s
annual profit net of taxes, plus the respective fiscal year’s
depreciation and amortization, minus allowed capitalized expenditures
for fixed assets, allowed distributions to owners, and scheduled term loan
payments to Agent and other long-term debt creditors. This special payment
shall be applied to the principal installments in the inverse order of their
maturity. Additionally, the definition of free cash flow applies to the fiscal
years ending in 2008, 2009, 2010, 2011 and 2012; while for the fiscal year
ending in 2007
such definition is modified to delete the reference to “allowed capitalized
expenditures for fixed assets”. If this term loan is paid in full prior to
receipt of aggregate total received payments of







	
 

	
 


	
Construction and Term Loan
Supplement RI0457T01

	
- 4 -











$7,000,000.00 within the
applicable fiscal years identified, any remaining portion of required payments will be applied to the term revolver loan and the
term revolver commitment reduced accordingly.


If any installment due date is not a day on which
Agent is open for business, then such installment shall be due and payable on
the next day on which Agent is open for business. In addition to the above, the
Company promises to pay interest on the
unpaid principal balance hereof at the times and in accordance with the provisions set forth in Section 5
hereof.


          SECTION
7.  Prepayment. Subject to the broken funding surcharge
provision of the MLA, the Company may on one Business Day’s prior written
notice prepay all or any portion of the loan(s). Unless otherwise agreed, all prepayments will be applied to principal
installments in the inverse order of their
maturity. However, in addition to the foregoing, prepayment of any Loan balance
due to refinancing, or refinancing of any unadvanced Commitment with
another lender, up to and including December
16, 2009, will result in a 2% prepayment charge in addition to any broken
funding surcharges which may be applicable, based on the amounts prepaid and on
the total amount of the Commitments in effect
at such time.


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


          SECTION 9.
  Additional Conditions
Precedent.


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


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


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


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


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


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







	
 

	
 


	
Construction and Term Loan
Supplement RI0457T01

	
- 5 -











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


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


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


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


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


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


                    (A)          Reports
and Notices. Furnish to Agent:


                                    (1)          Regulatory
and Other Notices. Promptly
after receipt thereof, copies of any
notices or other communications received from any governmental authority with
respect to the Property, the
Improvements, or any matter or proceeding the effect of which could have a
material








	
 

	
 


	
Construction and Term Loan
Supplement RI0457T01

	
- 6 -










adverse effect on the condition,
financial or otherwise, operations, properties, or business of the Company, or the ability of the Company to perform
its obligations under the loan documents.



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


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


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


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


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


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


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



                    (A)          Change
Orders. Allow any substantial
deviation, addition, extra, or change order to the Plans, Project Budget
or Project Schedule, the cost of which in the aggregate exceeds $100,000.00, without Agent’s prior written
approval. All requests for substantial changes shall be made using a
Change Order Request in the form of Exhibit B attached hereto. Agent will have
a reasonable time to evaluate any requests
for its approval of any changes referred to in this covenant, and will not be required
to consider approving any changes unless all other approvals that may be
required have been obtained. Agent may
approve or disapprove changes in its discretion. All contracts and subcontracts 







	
 

	
 


	
Construction and Term
 Loan Supplement RI0457T01

	
- 7 -





relating
to the construction of the Improvements must contain provisions satisfactory to
Agent implementing the above provisions of this covenant. Company shall
promptly provide to Agent copies of all change orders that, pursuant to the above
described procedures, did not require Agent’s prior written approval.


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


          SECTION
13. Casualties.


                    (A)           Right
To Elect To Apply
Proceeds. In case of material loss or damage to the Property or to the
Improvements by fire, by a taking by condemnation for public use or the action
of any governmental authority
or agency, or the transfer by private sale in lieu thereof, either temporarily
or permanently, or otherwise, if in the
sole judgment of Agent there is reasonable doubt as to Company’s ability to complete construction of the
Improvements on or before December 16, 2007, by reason of such loss or damage or because of delays in making
settlements with governmental agencies or authorities or with insurers, Agent may terminate its obligations
to make advances hereunder and elect to collect, retain and apply to the Commitment all proceeds of the
taking or insurance after deduction of all expense of collection and settlement, including attorneys’
and adjusters’ fees and charges. In the event such proceeds are insufficient to pay the Commitment in full,
Agent may declare the balance remaining unpaid on the Commitment to be due and payable forthwith and
avail itself on any of the remedies afforded thereby as in any case of default.


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


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


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


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


          SECTION
14. Other Rights of Agent.


                    (A)          
Right To
Inspect. Agent or its agent may enter on the Property at any time and inspect
the Improvements. If the construction of the Improvements is not reasonably
satisfactory to Agent, Agent may reasonably and in good faith stop the construction and
order its replacement or the correction
thereof or additions thereto, whether or not said unsatisfactory construction
has been incorporated in the Improvements,
and withhold all advances hereunder until such construction is satisfactory to Agent. Such construction shall
promptly be made satisfactory to Agent.







	
 

	
 


	
Construction and Term Loan Supplement RI0457T01

	
- 8 -





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


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


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


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







	
 

	
 


	
Construction and Term Loan Supplement RI0457T01

	
- 9 -





hold
Agent harmless hereunder will exclude any liability, cost, or damage related to
Agent’s breach of this Agreement or for Agent’s gross negligence or willful misconduct.


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


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


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


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



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



                    (B)
          Insufficiency of Loan Proceeds. Agent, in
its sole discretion shall determine that the remaining undisbursed portion of
the Commitment is or will be insufficient to fully complete the Improvements in
accordance with the Plans. 


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


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







	
 

	
 


	
Construction and Term Loan Supplement RI0457T01

	
- 10 -




any
obligation on Agent to either complete or not to complete the construction of
the Improvements. For the purposes of carrying out the provisions of this
Section, the Company irrevocably appoints Agent, its attorney-in-fact, with
full power of substitution, to execute and deliver all such documents, pay and
receive such funds, and take such action as may be necessary, in the judgment
of Agent, to complete the construction of the Improvements.


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


	
 

	
 

	
 


	
 

	
EAST FORK
 BIODIESEL, LLC


	
 

	
 

	
 


	
 

	
By:

	




	
 

	
 

	



	
 

	
 

	
 


	
 

	
Title:

	
President