Exhibit 4(a)


LOAN AGREEMENT


This Loan Agreement (the “AGREEMENT”) is dated as of the 1st
day of November, 2011, and is by and among NUGEN
ENERGY, LLC, a South Dakota limited liability company (“BORROWER”), FIRST
NATIONAL BANK OF OMAHA (“FNBO”), a national banking association
headquartered in Omaha, Nebraska as a BANK and as administrative agent for the
BANKS (in such capacity, the “ADMINISTRATIVE AGENT”), as accounts bank (in such
capacity, the “ACCOUNTS BANK”) and as collateral agent for the BANKS (in such
capacity, the “COLLATERAL AGENT”), and the other financial institutions which
are or may become a party to this AGREEMENT in accordance with the terms of
this AGREEMENT and listed in Exhibit C to this AGREEMENT.


WHEREAS, BORROWER has requested BANKS to lend to BORROWER up to the sum
of the lesser of (i) Fifty-Five Million and No/100 Dollars ($55,000,000.00) or
(ii) sixty percent (60%) of the appraised value of the PROJECT (the “TERM
LOAN”), for the purpose of refinancing BORROWER’S existing indebtedness to
Dougherty Funding, LLC partially funding the cost of the construction of an
ethanol plant on the real estate described in Exhibit D attached hereto and by
this reference made a part hereof (together with all property encumbered by the
MORTGAGE or otherwise constituting collateral for the LOANS, the “PROPERTY”)
together with a Ten Million and No/100 Dollars ($10,000,000.00) revolving line
of credit (“REVOLVING LOAN”). The foregoing may be collectively referred to in
this AGREEMENT as the “LOANS” and singly referred to as a “LOAN”.


WHEREAS, BANKS are willing to provide such LOANS to BORROWER upon the
terms and conditions herein set forth.


SECTION 1 Definitions.


1.1          “ACCOUNTS
BANK” means FNBO in its capacity as depositary bank, bank and securities intermediary
hereunder, and any successor to FNBO in such capacity.


1.2          “ADJUSTED
EBITDA” means EBITDA less taxes, less capital expenditures and less TAX
DISTRIBUTIONS, less non-cash items and less other distributions permitted under
this AGREEMENT, in each case for the applicable reporting period.


1.3          “Adjusted
Libor Rate” means the LIBOR RATE determined in accordance with this AGREEMENT
plus the Applicable Margin at such time.


1.4          “Applicable
Margin” means, at any date, (a) in the case of Revolving Loan Advances, 3%, (b)
in the case of the Term Loan, 3.25%, and (c) in the case of the Non-Use Fee,
0.5%.


1.5          “ADMINISTRATIVE
AGENT” means FNBO in its capacity as administrative agent for the BANKS
hereunder, and any successor to FNBO in such capacity.


1.6          “AGENT”
means collectively, the ACCOUNTS AGENT, ADMINISTRATIVE AGENT and COLLATERAL
AGENT. 





1.7          ““BANKS”
means collectively the financial institutions which are or become a party to
this AGREEMENT and agree to make the LOANS to BORROWER, with any one of the
BANKS individually referred to as a “BANK”.


1.8          “BANKING
DAY” means a day on which ADMINISTRATIVE AGENT is open for substantially all of
its business. 


1.9          “BORROWING
BASE” means, at any time, an amount equal to the sum of (without duplication):


	
  

 	
  

 
	
  

 	
 (a)          75% of
 the Borrowers’ corn inventory on which BANKS have a first priority lien
 valued at the lower of cost or Market Price on the date reported, less
 accounts payable with a first priority lien; plus 

 
	
  

 	
  

 
	
  

 	
 (b)          75% of
 the Borrowers’ Eligible Finished Goods-Ethanol, Corn Oil and Distiller’s
 Grains Inventory (both wet and dry) on which BANKS have a first priority
 lien, valued at Market Price; plus 

 
	
  

 	
  

 
	
  

 	
 (c)          50% of
 the Borrowers’ chemical and spare parts inventory on which BANKS have a first
 priority lien, valued at the lower of cost or Market Price; plus

 
	
  

 	
  

 
	
  

 	
 (d)          80% of
 the amount of the Borrowers’ Ethanol, Distillers Grains and Corn Oil Eligible
 Accounts aged thirty (30) days or less, excluding any such accounts
 reasonably deemed ineligible by Lender; minus

 
	
  

 	
  

 
	
  

 	
 (e)          100%
 of Debt outstanding under the REVOLVING LOAN and 100% of the exposure under
 letters of credit issued for the account of BORROWER.

 


If an item of COLLATERAL could be included in the BORROWING BASE under
more than one subparagraph above, such item shall only be included in the
BORROWING BASE under the subparagraph that produces the lowest value for such
item for purposes of the BORROWING BASE.


1.10        “CLOSING”
shall mean the date on which ADMINISTRATIVE AGENT receives this AGREEMENT,
executed by BORROWER and the BANKS, together with the TERM NOTES, the REVOLVING
NOTES and the other LOAN DOCUMENTS which must be delivered by the CLOSING as
provided for in this Agreement.


1.11        “COLLATERAL”
means all property (real and personal, tangible and intangible) of the BORROWER
with respect to which a security interest, assignment, mortgage or other lien
has been or is hereafter granted to or for the benefit of the BANKS. The term
includes, but is not limited to, all property encumbered at any time pursuant
to the Mortgage, all property encumbered at any time pursuant to the Security
Agreement and the Control Agreements, the 


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assignment, and consents thereto, of the Material Contracts, and the
property pledged under any other LOAN DOCUMENTS. 

1.12        “COLLATERAL
AGENT” means FNBO in its capacity as collateral agent for the BANKS hereunder,
and any successor to FNBO in such capacity.


1.13        “COMMITMENTS”
means with respect to each BANK, as applicable, such BANK’s respective amount
of each LOAN, as applicable, committed to BORROWER by such BANK under this
AGREEMENT, which COMMITMENTS for each BANK are listed in Exhibit C to this
AGREEMENT.


1.14        “DEFAULTING
BANK” means any BANK that (a) has failed to make any portion of the LOANS
required to be funded by it hereunder on the date required to be funded by it
hereunder within one (1) BANKING DAY of the date when due, (b) has otherwise
failed to pay over to the ADMINISTRATIVE AGENT or any other BANK any other
amount required to be paid by it hereunder or under any LOAN DOCUMENT within
one (1) BANKING DAY of the date when due, unless the subject of a good faith
dispute, or (c) has been deemed insolvent, become the subject of a bankruptcy
or insolvency proceeding or had its assets and/or control frozen or seized by
the applicable banking regulators or other governmental agency.


1.15        “EBITDA”
means without duplication Earnings Before Interest, Taxes, Depreciation and
Amortization, in each case during the applicable reporting period, all as
determined in accordance with GAAP.


1.16        “Eligible
Account” means an account owing to BORROWER arising in the ordinary course of
BORROWER’s business out of the sale of ethanol, corn oil and/or distiller’s
grains in which the BANKS have a perfected first priority security interest and
which meets all of the following specifications at the time it came into
existence and continues to meet the same until it is collected in full:


	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 The account is due and payable no later than thirty (30) days after
 the date of the applicable invoice or other writing evidencing such account,
 and the account has been due and payable not more than thirty (30) days after
 the due date stated in the applicable invoice or other writing evidencing
 such account;

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 The account is not owing by an account debtor who has failed to pay
 twenty-five percent (25%) or more of the aggregate outstanding amount of its
 accounts owing to BORROWER within thirty (30) days after the due date stated
 in the applicable invoices or other writings evidencing such accounts;

 
	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 The account is due and payable from an account debtor located in the
 continental United States which is not a subsidiary or affiliate (under
 common ownership and/or control) of BORROWER;

 


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 (d)

 	
 The account arose from a bona fide, outright sale of goods by
 BORROWER or from the performance of services by BORROWER and BORROWER has
 possession of and will deliver to the AGENT, if requested, shipping and
 delivery receipts evidencing shipment of the goods or inventory and, if
 representing services, receipts and/or invoices evidencing that the services
 have been fully performed for the respective account debtor;

 
	
  

 	
  

 	
  

 
	
  

 	
 (e)

 	
 The account is not subject to any Lien created by BORROWER, or
 claimed under or through BORROWER, except the security interest of the BANKS,
 and BORROWER will not make any other assignment thereof or create any further
 security interest therein nor permit its or their rights therein to be
 reached by attachment, levy, garnishment or other judicial process;

 
	
  

 	
  

 	
  

 
	
  

 	
 (f)

 	
 The account is the valid and legally enforceable obligation of the
 account debtor thereunder and is not subject to any claim for credit,
 netting, set-off, allowance or adjustment by the account debtor or any
 counterclaim, and the account debtor has not returned any of the goods from
 the sale of which the account arose, nor has any partial payment been made thereon;

 
	
  

 	
  

 	
  

 
	
  

 	
 (g)

 	
 The account arose in the ordinary course of BORROWER’s business, and
 the account debtor has not filed bankruptcy, is not insolvent or no material
 adverse change in the financial condition of the account debtor has occurred;

 
	
  

 	
  

 	
  

 
	
  

 	
 (h)

 	
 The account is not owing by an account debtor who has died or
 dissolved or terminated its existence, the account debtor’s business has not
 failed, the account debtor has not disappeared, a receiver has not been
 appointed for any part of the property of the account debtor, the account
 debtor has not made an assignment for the benefit of creditors or filed, or
 has had filed against it, a petition under or the commencement of any
 proceeding under any bankruptcy code or process;

 
	
  

 	
  

 	
  

 
	
  

 	
 (i)

 	
 The account is not evidenced by a judgment, an instrument or chattel
 paper;

 
	
  

 	
  

 	
  

 
	
  

 	
 (j)

 	
 The account debtor is not an employee of BORROWER; and

 
	
  

 	
  

 	
  

 
	
  

 	
 (k)

 	
 The account or any portion thereof is acceptable to the AGENT or is
 not otherwise deemed ineligible by the AGENT in its sole discretion.

 


An account which is at any time an Eligible Account but which
subsequently fails to meet any of the foregoing requirements shall forthwith
cease to be an Eligible Account. 


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The AGENT shall determine whether accounts qualify as Eligible Accounts
from time to time in its reasonable discretion and any such determination shall
be conclusive and binding for all purposes, absent manifest error.


1.17        “Eligible
Finished Goods – Ethanol, Corn Oil and Distiller’s Grains Inventory” means all
ethanol, corn oil and distiller’s grains (wet and dry) inventory of BORROWER
(i) that is owned by (and in the possession or under the control of) BORROWER
as of such date and is not consigned or covered by or subject to a seller’s
right to repurchase or any consensual or nonconsensual Lien (including, without
limitation, purchase money Liens) in favor of any party other than the BANKS,
(ii) that is located at a facility owned or leased (provided the lessor or
warehouseman has acknowledged BANKS’ lien in a form acceptable to the AGENT) by
BORROWER and listed in Schedule A of the Security Agreement referenced below
and is in BORROWER’s exclusive possession, (iii) that is in good and marketable
condition, (iv) that meets all standards imposed by any governmental agency or
department or division thereof having regulatory authority over such inventory,
its use or sale, (v) that is either currently usable or currently saleable in
the normal course of BORROWER’s business without any notice to, or consent of,
any governmental agency or department or division thereof (excluding however,
any such inventory that has been shipped to a customer of BORROWER, even if on
a consignment or “sale or return” basis), (vi) is not work-in-process, in
transit, obsolete or slow-moving and (vii) no prepayment has been received for
such inventory; provided that the AGENT may at any time exclude from Eligible
Finished Goods – Ethanol, Corn Oil and Distiller’s Grains Inventory any type of
ethanol, corn oil or distiller’s grains inventory that the AGENT reasonably
determines to be unmarketable or ineligible in its sole discretion. The AGENT
shall have the right, in the exercise of reasonable discretion, to determine
whether finished goods ethanol, corn oil and distiller’s grains inventory is eligible
for inclusion in the BORROWING BASE at any particular time. 


1.18        EQUITY
INTEREST” means, with respect to any PERSON, all of the shares of capital stock
or units, shares or membership interests of (or other ownership or profit
interests in) such PERSON, all of the warrants, options or other rights for the
purchase or acquisition from such Person of shares of capital stock of (or
other ownership or profit interests in) such Person, all of the securities
convertible into or exchangeable for shares of capital stock or units, shares
or membership interests of (or other ownership or profit interests in) such
PERSON or warrants, rights or options for the purchase or acquisition from such
PERSON of such shares, units or membership interests (or such other interests),
and all of the other ownership or profit interests in such PERSON (including
partnership, member or trust interests therein), whether voting or nonvoting,
and whether or not such shares, units, membership interests, warrants, options,
rights or other interests are outstanding on any date of determination, in each
such case including all voting rights and economic rights related thereto.


1.19        “EVENT
OF DEFAULT” has the meaning provided for in Section 7 of this AGREEMENT.


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1.20        “EXCESS
CASH FLOW” means ADJUSTED EBITDA, less scheduled payments on the TERM LOAN, in
each case for the applicable reporting period.


1.21        “FIXED
CHARGE COVERAGE RATIO” means the ratio derived when comparing (i) ADJUSTED
EBITDA to (ii) BORROWER’s scheduled payments on the principal and interest of
the LOANS made during the applicable reporting period, excluding any principal
repaid on the REVOLVING LOAN.


1.22        “Floor”
with respect to the REVOLVING LOAN, means a per annum rate equal to three and
three quarters percent (33⁄4%), and with respect to the TERM LOAN, means a per
annum rate equal to four percent (4%).


1.23        “GAAP”
means generally accepted accounting principles in the United States, applied on
a basis consistent with the accounting principles applied in the preparation of
the annual financial statements of BORROWER referred to in Section 6.1 of this
AGREEMENT and the PROJECTIONS described in Section 5.7 of this AGREEMENT. All
accounting terms not otherwise defined in this AGREEMENT have the meaning
assigned to them in accordance with GAAP.


1.24        “INDEBTEDNESS”
with respect to any Person means (a) all obligations of such Person for
borrowed money or with respect to deposits or advances of any kind, (b) all obligations
of such Person evidenced by bonds, debentures, notes or similar instruments,
(c) all obligations of such Person upon which interest charges are customarily
paid, (d) all obligations of such Person under conditional sale or other title
retention agreements relating to property acquired by such Person, (e) all
obligations of such Person in respect of the deferred purchase price of
property or services (excluding current accounts payable incurred in the
ordinary course of business), (f) all INDEBTEDNESS of others secured by (or for
which the holder of such INDEBTEDNESS has an existing right, contingent or
otherwise, to be secured by) any Lien on property owned or acquired by such
Person, whether or not the INDEBTEDNESS secured thereby has been assumed, (g)
all guarantees by such Person of INDEBTEDNESS of others, (h) all capital lease
obligations (as determined in accordance with generally accepted accounting
principles) of such Person, (i) all obligations, contingent or otherwise, of
such Person as an account party in respect of letters of credit and letters of
guaranty, (j) all liabilities in respect of unfunded vested benefits under
plans covered by Title IV of the Employee Retirement Income Security Act of
1974, as amended, and (k) all obligations, contingent or otherwise, of such
Person in respect of bankers’ acceptances. The INDEBTEDNESS of any Person shall
include the INDEBTEDNESS of any other entity (including any partnership in
which such Person is a general partner) to the extent such Person is liable
therefor as a result of such Person’s ownership interest in or other
relationship with such entity, except to the extent the terms of such
INDEBTEDNESS provide that such Person is not liable therefor.


1.25        “LIBOR
RATE” means the London Interbank Offered Rate for U.S. Dollar deposits
published in The Wall Street Journal as the Three (3) Month LIBOR Rate
with respect to the TERM LOAN and as the One (1) Month LIBOR Rate with respect
to the REVOLVING LOAN. The LIBOR RATE will be adjusted and determined without
notice to BORROWER as set forth


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herein, as of the date of the REVOLVING NOTES and TERM NOTES, and on
the first (1st) day of every third calendar month thereafter with respect to
the TERM NOTES and on the first day of each calendar month thereafter with
respect to the REVOLVING NOTES (each such date, an “Interest Rate Change Date”)
to the Three (3) Month LIBOR RATE with respect to the TERM NOTES and to the One
(1) Month LIBOR Rate with respect to the REVOLVING NOTES, which is published in
The Wall
Street Journal as the reported rate for the date that is two London
Banking Days prior to each Interest Rate Change Date. The published LIBOR RATE
will be rounded upwards to the next higher one one hundredth (1/100th) of one
percent (1%). If the initial Advance under the REVOLVING NOTES or the initial
funding of the TERM NOTES occurs on any day other than the first London Banking
Day of a month, the initial LIBOR RATE to be in effect until the beginning of
the next succeeding month shall be that Three (3) Month LIBOR RATE or One (1)
Month LIBOR RATE, as applicable, in effect on the date that is two London
Banking Days prior to the first day of the month in which the REVOLVING NOTES
and TERM NOTES are dated. If for any reason the LIBOR RATE published by The Wall
Street Journal is no longer available and/or the AGENT is unable to
determine the LIBOR RATE for any Interest Rate Change Date, the AGENT may, in
its sole discretion, select an alternate source to determine the LIBOR RATE and
will provide notice to BORROWER of the source selected. The LIBOR RATE
determined as set forth above shall be referred to herein as (the “Index”). The
Index is not necessarily the lowest rate charged by BANKS on their loans. If
the Index becomes unavailable during the term of the LOANS, the AGENT may
designate a substitute index after notifying BORROWER. The AGENT will tell
BORROWER the current Index rate upon BORROWER’s request. The interest rate
change will not occur more often than each month on the first (1st) day of each
month with respect to the REVOLVING LOAN and once every three months on the
first (1st) day of the applicable month with respect to the TERM LOAN. BORROWER
understands that BANKS may make loans based on other rates as well. The one
month Index currently is .25% per annum and the three month Index is currently
..43% per annum.


1.26        “LOAN
DOCUMENTS” means this AGREEMENT and each agreement or instrument referred to in
Section 4 of this AGREEMENT which is executed by or on behalf of BORROWER to
govern, evidence or secure the OBLIGATIONS.


1.27        “LOAN
TERMINATION DATE” means the earliest to occur of the following: (i) as to the
REVOLVING NOTES, November 1, 2012, as to the TERM NOTES, October 31, 2016, (ii)
the date the OBLIGATIONS are accelerated pursuant to this AGREEMENT, and (iii)
the date ADMINISTRATIVE AGENT has received (a) notice in writing from BORROWER
of BORROWER’s election to terminate this AGREEMENT and (b) indefeasible payment
in full of the OBLIGATIONS.


1.28        “London
Banking Day” means any day other than a Saturday or Sunday, on which commercial
banking institutions in London, England are generally open for business.


1.29        “Market
Price” of any inventory means, at any time, the then-current market price of
such inventory as reasonably determined by the AGENT.


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1.30        “MATERIAL
ADVERSE EFFECT” means, with respect to any event, act, condition or occurrence
of whatever nature (including any adverse determination in any litigation,
arbitration, or governmental investigation or proceeding), whether singularly
or in conjunction with any other event or events, act or acts, condition or
conditions, occurrence or occurrences whether or not related, a material
adverse change in, or a material adverse effect on, (i) the business,
operations, results of operations, financial condition, assets, Collateral or
liabilities, of BORROWER taken as a whole, (ii) the ability of BORROWER to
perform any of its obligations under the LOAN DOCUMENTS, (iii) the rights and
remedies of BANKS under any of the Loan Documents or (iv) the legality,
validity or enforceability of any of the LOAN DOCUMENTS.


1.31        “MARKETING
AND RISK MANAGEMENT CONTRACTS” means the contracts between BORROWER and third
parties for the marketing and sale of ethanol products, the marketing and sale
of distiller’s dried grains (“DDGS”), the marketing and sale of corn oil, CO2
and other ethanol production byproducts, risk management, management of the
PROJECT, including, but not limited to that certain Management Agreement dated
on or about November 1, 2011 between BORROWER and Rex NuGen, LLC (the
“Management Contract”), and commodity hedging accounts, all of which shall be
assigned to the COLLATERAL AGENT and shall be subject to the reasonable approval
of the ADMINISTRATIVE AGENT.


1.32        “Material
Contracts” means collectively, (a) the Supply Contracts, MARKETING AND RISK
MANAGEMENT CONTRACTS, Transportation Contracts, Utility Contracts, and (b) any
other contract or agreement, written or oral, of BORROWER, the failure to
comply with which could reasonably be expected to have a MATERIAL ADVERSE
EFFECT on the BORROWER.


1.33        “MORTGAGE”
means, collectively, the Mortgage, Security Agreement, Assignment of Leases and
Rents and Fixture Financing Statement and Collateral Mortgage, Security
Agreement, Assignment of Leases and Rents and Fixture Financing Statement
executed and delivered by BORROWER as grantor in favor of COLLATERAL AGENT as
mortgagee and COLLATERAL AGENT for the BANKS, creating a first lien on the
PROPERTY and a security interest in all of the personal property and fixtures
located on the PROPERTY as security for payment of the OBLIGATIONS, and all
modifications and amendments thereof.


1.34        “OBLIGATIONS”
means the obligation of the BORROWER:


	
  

 	
  

 
	
  

 	
 (a)          To pay
 the principal of, and interest on, the LOANS in accordance with the terms
 thereof, to pay any fees owed to ADMINISTRATIVE AGENT or BANKS under this
 AGREEMENT, and to satisfy all of its other liabilities to BANKS whether
 hereunder or otherwise, whether now existing or hereafter incurred, matured
 or unmatured, direct or contingent, joint or several, including any
 extensions, modifications, restatements and renewals thereof, and
 substitutions therefore and including, but not limited to, any obligations
 under letter of credit agreements, swap contracts and credit cards or
 purchasing cards, agreements or programs and overdrafts and other deposit
 account liabilities;

 
	
  

 	
  

 
	
  

 	
 (b)          To
 repay to BANKS all amounts advanced by BANKS hereunder, under any

 


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 other LOAN DOCUMENT (including, without limitation, any protective
 advance made under the MORTGAGE) or otherwise on behalf of BORROWER,
 including, but without limitation, advances for principal or interest payments
 to prior secured parties, mortgagees, or licensors, or taxes, levies,
 insurance, rent, or repairs to, or maintenance or storage of, any of the real
 or personal property securing BORROWER’s payment and performance of this
 AGREEMENT; and

 
	
  

 	
  

 
	
  

 	
 (c)          To
 reimburse BANKS, on demand, for BANKS’ reasonable and necessary out of pocket
 expenses and costs, including the reasonable fees and expenses of counsel, in
 connection with the preparation, administration, amendment, modification, or
 enforcement of this AGREEMENT and the LOAN DOCUMENTS required hereunder,
 including, without limitation, any proceeding brought or threatened, to
 enforce payment of any of the OBLIGATIONS referred to in this section of the
 AGREEMENT.

 


1.35        “PERMIT”
or “PERMITS” means any and all licenses, consents or permits required under any
federal, state or local law or regulation, including, but not limited to any
environmental law or regulation, required to construct and operate the facility
on the PROPERTY after completion of the PROJECT at its operational capacity,
including without limitation the following:


	
  

 	
  

 
	
  

 	
 (a)          An air
 emissions permit, which PERMIT will allow BORROWER to operate the PROJECT at
 maximum capacity;

 
	
  

 	
  

 
	
  

 	
 (b)          All
 permits required in connection with the operation of all above or below
 ground storage tanks at the PROJECT;

 
	
  

 	
  

 
	
  

 	
 (c)          A
 National Pollution Discharge Elimination System Permit for any storm water
 and/or waste water that is discharged from the PROJECT; and

 
	
  

 	
  

 
	
  

 	
 (d)          The other
 permits listed on Exhibit E attached hereto and incorporated herein by
 reference.

 



1.36        “Percentage”
means, at any time, with respect to a Bank, in each case expressed as a
percentage:


	
  

 	
  

 
	
  

 	
 (a)          in the
 case of a BANK’s obligation to make Advances on the REVOLVING LOAN, or to
 receive payments on the REVOLVING LOAN, a fraction (i) the numerator of which
 is such BANK’s REVOLVING LOAN COMMITMENT at such time, and (ii) the
 denominator of which is the TOTAL REVOLVING LOAN COMMITMENT at such time;

 
	
  

 	
  

 
	
  

 	
 (b)          in the
 case of a BANK’s obligation to fund its TERM LOAN COMMITMENT or to receive
 payments on the TERM LOAN, a fraction (i) the numerator of which is such
 BANK’s TERM LOAN COMMITMENT at such time, and (ii) the denominator of which
 is the TOTAL TERM LOAN COMMITMENT at such time;

 


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 (c)          in the
 case of a BANK’s right to receive payment of principal or interest with
 respect to its outstanding LOANS other than as provided for above, a fraction
 (i) the numerator of which is the amount of the unpaid principal balance of
 such BANK’s LOANS giving rise to such principal or interest payment, and (ii)
 the denominator of which the aggregate unpaid principal balance of all LOANS
 giving rise to such principal or interest payment; and

 
	
  

 	
  

 
	
  

 	
 (d)          in the
 case of a BANK’s indemnification or similar obligations to a AGENT under this
 AGREEMENT or the other LOAN DOCUMENTS or in any other cases not addressed in
 clauses (a) through (c) above, a fraction (i) the numerator of which is such
 BANK’s REVOLVING LOAN COMMITMENT plus TERM LOAN COMMITMENT at such time, and
 (ii) the denominator of which is the TOTAL REVOLVING LOAN COMMITMENT plus the
 TOTAL TERM LOAN COMMITMENT at such time (and the foregoing fraction shall be
 calculated without regard to whether such BANK or any other BANK has any
 commitment to make advances under the REVOLVING LOAN or advances under the
 TERM LOAN at such time).

 


1.37        “PERSON”
means an individual, partnership, limited liability company, corporation, business
trust, joint stock company, trust, unincorporated association, joint venture,
GOVERNMENTAL AUTHORITY, or other entity of whatever nature. GOVERNMENTAL
AUTHORITY means any federal, state, county, or local governmental department,
commission, board, bureau, agency, authority, instrumentality or judicial or
regulatory body or entity having or asserting jurisdiction as to any of the
PROPERTY, the PROJECT or BORROWER, either during the construction of the
PROJECT or the operation of the PROJECT following completion thereof, including
courts of appropriate jurisdiction.


1.38        “PROJECT”
means collectively BORROWER’s ethanol plant, administration building and
railroad spur, together with all necessary and appropriate fixtures, equipment,
attachments, and accessories, located in Turner County, South Dakota located on
the PROPERTY.


1.39        “REQUIRED
BANKS” means, at any time, ADMINISTRATIVE AGENT and any combination of BANKS
(other than AGENT) whose COMMITMENTS in the LOANS aggregate at least fifty-one
percent (51%) of the aggregate COMMITMENTS; provided, however, that the
COMMITMENTS of any DEFAULTING BANK other than AGENT shall be excluded for
purposes of making a determination of the REQUIRED BANKS.


1.40        “REVOLVING
LOAN COMMITMENT” means, with respect to any BANK, the amount set opposite such
BANK’s name under the column entitled “Revolving Loan Commitment” on Exhibit C.


1.41        “REVOLVING
NOTES” means the promissory note of BORROWER to each BANK with a REVOLVING LOAN
COMMITMENT, in the amount of such BANK’s REVOLVING LOAN COMMITMENT, evidencing
the REVOLVING LOAN described in Section 2.2 of this AGREEMENT, their
restatements, renewals, modifications and extensions.


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1.42        “SECURITY
AGREEMENT” means the SECURITY AGREEMENT between BORROWER, as debtor, and
COLLATERAL AGENT, as secured party and collateral agent for the BANKS, creating
a first priority security interest in all of BORROWER’s assets, including
general intangibles and payment intangibles, securing the OBLIGATIONS.


1.43        “Supply
Contracts” means all agreements and contracts related to the supply of inputs
material to operation of BORROWER’s business in effect and entered into from
time to time hereafter, as the same such agreements and contracts are amended,
restated, supplemental or otherwise modified from time to time.


1.44        “TAX
DISTRIBUTIONS” means quarterly cash
distributions to BORROWER’s members for the purpose of paying their respective
quarterly estimated federal and state income tax payments required to be made
by each of BORROWER’s members based upon the operations of BORROWER and the
resulting federal and state income tax liability of such members in an amount
based upon an assumed combined federal and state tax rate for each member of 42%.


1.45        “TERM
LOAN COMMITMENT” means, with respect to any BANK, the amount set opposite such
BANK’s name under the column entitled “Term Loan Commitment” on Exhibit C.


1.46        “TERM
NOTES” means collectively the TERM NOTES to be executed by BORROWER in favor of
each BANK with a TERM LOAN COMMITMENT up to the amount of each such BANK’s TERM
LOAN COMMITMENT, their renewals, restatements, modifications and extensions. 


1.47        “TOTAL
REVOLVING LOAN COMMITMENT” means, at any time, the sum of all BANKS’ REVOLVING
LOAN COMMITMENTS at such time.


1.48        “TOTAL
TERM LOAN COMMITMENT” means, at any time, the sum of all BANKS’ TERM LOAN
COMMITMENTS at such time.


1.49        “Transportation
Contracts” means all agreements and contracts in effect presently and entered
into from time to time hereafter related to the provision of transportation or
shipping services which are material to the operation of BORROWER’s business,
as the same such agreements and contracts are amended, restated, supplemented
or otherwise modified from time to time.


1.50        “Utility
Contracts” means all contracts and agreements in effect presently and entered
into from time to time hereafter which are material to the provision to
BORROWER of necessary electricity, natural gas, water, fuel oil, and other
energy resources in connection with the operation of the PROJECT and BORROWER’s
equipment and offices, as the same such agreements and contracts are amended,
restated, supplemented or otherwise modified from time to time.


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1.51        “WORKING
CAPITAL” means current assets (less investments in or other amounts due from
any member, manager, employee or any person or entity related to or affiliated
with BORROWER and prepayments) minus current liabilities.


All accounting terms not specifically defined herein shall be construed
in accordance with generally accepted accounting principles, as in effect in
the United States. “Including” (and with correlative meaning “include”) means
including without limiting the generality of any description preceding such
term. This AGREEMENT and the other LOAN DOCUMENTS shall be construed without
regard to any presumption or rule requiring construction against the party
causing any such document or any portion thereof to be drafted. The Section and
other headings in this AGREEMENT and any index in this AGREEMENT are for
convenience of reference only and shall not limit or otherwise affect any of
the terms of this AGREEMENT. Similarly, any page footers or headers or similar
word processing, document or page identification numbers in this AGREEMENT or
any index or exhibit are for convenience of reference only and shall not limit
or otherwise affect any of the terms of this AGREEMENT, nor shall there be any
requirement that any such footers or other numbers be consistent from page to
page. Unless the context clearly requires otherwise, any reference to a Section
of this AGREEMENT refers to all Sections and Subsections thereunder. Any
pronoun used herein shall be deemed to cover all genders. Defined terms used in
this AGREEMENT may be set forth in Section 1.1 or other Sections of this
AGREEMENT, and all such definitions defined in the singular shall have a
corresponding meaning when used in the plural and vice versa. Unless the
context requires otherwise, references herein to “fiscal year” or “fiscal
quarter” shall mean the fiscal year or fiscal quarter, as the case may be, of
the BORROWER.


SECTION 2 Amount
and Terms of the LOANS.


	
  

 	
  

 
	
 A.

 	
 REVOLVING LOAN

 


          2.1.          Revolving
Loan. Subject to the terms of this AGREEMENT and the maximum amount
available at any time under the BORROWING BASE, BANKS with a REVOLVING LOAN
COMMITMENT severally agree to lend BORROWER, from time to time until the LOAN
TERMINATION DATE applicable to the REVOLVING LOAN and up to their respective
REVOLVING LOAN COMMITMENTS, such sums as BORROWER may request, but which sums
shall not collectively exceed in the aggregate principal amount at any time
outstanding the lesser of (i) the amount available under the BORROWING BASE or
(ii) Ten Million and No/100 Dollars ($10,000,000.00). The aggregate maximum
principal amount outstanding on the REVOLVING LOAN at any time may never exceed
the amount of the TOTAL REVOLVING LOAN COMMITMENT or the amount then derived
from the BORROWING BASE. Subject to the conditions and limitations set forth in
this AGREEMENT, advances and readvances under the REVOLVING LOAN (collectively,
“Advances”) will be made to BORROWER, from time to time during the period
commencing on the date of this AGREEMENT to but not including the LOAN
TERMINATION 


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DATE applicable to the REVOLVING LOAN, unless extended by written
agreement between BANKS, AGENT and BORROWER. So long as no EVENT OF DEFAULT has
occurred and is continuing, BORROWER may, from the date of this AGREEMENT
through the LOAN TERMINATION DATE applicable to the REVOLVING LOAN, borrow,
repay and reborrow sums not to exceed at any time outstanding the lesser of (1)
the maximum principal amount available as provided for above as of the relevant
date or (2) the BORROWING BASE as of the relevant date.


          In addition
to the foregoing, the REVOLVING LOAN shall be deemed to automatically
terminate, and all amounts outstanding under the REVOLVING LOAN shall become
immediately due and payable, if the occurrence of an EVENT OF DEFAULT (as
defined in this AGREEMENT or any other LOAN DOCUMENT) causes the REVOLVING LOAN
to become immediately due and payable.


          2.2.          Revolving
Notes. On the closing of this AGREEMENT, BORROWER will execute and deliver
to the AGENT (i) a REVOLVING NOTE payable to each BANK with a REVOLVING LOAN
COMMITMENT a REVOLVING NOTE in the maximum principal amount of up to such
BANKS’ respective REVOLVING LOAN COMMITMENTS (the foregoing notes, and any and all
restatements, refinancing, replacements, substitutions, modification and
amendments thereof, shall be each individually referred to as a “REVOLVING
NOTE” and collectively referred to as the “REVOLVING NOTES”). The form of
REVOLVING NOTE is attached as Exhibit A. Each BANK will advance its Percentage
of each Advance to the AGENT as provided for in this AGREEMENT. The AGENT is
authorized to record in a manner satisfactory to the AGENT appropriate
notations evidencing the date and amount of each Advance, the interest rate
applicable thereto and the date and amount of each payment, which recording
shall constitute prima facie evidence, absent manifest error, of the accuracy
of the information recorded; provided, however, that the failure to make such
recordings or to make such recording accurately shall not affect the obligation
of BORROWER under the REVOLVING NOTES, this AGREEMENT and/or any other LOAN
DOCUMENT, or affect the validity of any Advance.


          2.3.          Principal
Payment. The REVOLVING LOAN shall be payable in full by BORROWER on the
LOAN TERMINATION DATE applicable to the REVOLVING LOAN, pursuant to the terms
of this AGREEMENT.


          2.4.          Interest.


	
  

 	
  

 
	
  

 	
                 (a)          The
 outstanding principal balance of the REVOLVING LOAN will bear interest at a
 per annum variable rate equal to the greater of (i) the LIBOR RATE plus the
 Applicable Margin applicable to the REVOLVING LOAN or (ii) the FLOOR
 applicable to the REVOLVING LOAN. NOTICE: In no event will the interest rate
 charged on the REVOLVING LOAN be less than the FLOOR applicable to the
 REVOLVING LOAN.

 
	
  

 	
  

 
	
  

 	
                 (b)          The
 outstanding principal balance of the REVOLVING LOAN will bear interest after
 occurrence and during the continuance of an EVENT OF DEFAULT and after the
 LOAN TERMINATION DATE applicable to the REVOLVING LOAN, whether by demand,
 acceleration or otherwise, at a per annum rate equal to 6% plus the interest
 rate applicable to the REVOLVING LOAN calculated in subsection (a) above, but
 not to exceed the maximum rate allowed by applicable law. 

 


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Interest on the outstanding principal balance of the REVOLVING LOAN
will be due and payable by BORROWER monthly, in arrears, on the first calendar
day of each month. Accrued interest on the REVOLVING LOAN will also be due and
payable in full on the LOAN TERMINATION DATE applicable to the REVOLVING LOAN,
whether by acceleration or otherwise. In all cases, interest on the outstanding
principal balance of the REVOLVING LOAN and all obligations with respect to
which interest accrues pursuant to the terms of this AGREEMENT is computed on a
360 day basis; that is, by applying the ratio of the interest rate over a year
of 360 days, multiplied by the outstanding principal balance, multiplied by the
actual number of days the principal balance is outstanding. All interest
payable under the REVOLVING LOAN and other OBLIGATIONS is computed using this
method. 


          2.5.          Borrowing
Base. In addition to the maximum amount limitation set forth in Section 2.1
above, the aggregate outstanding principal amount of all Advances on the
REVOLVING LOAN shall be limited to the amount derived from the BORROWING BASE.
The BORROWING BASE may be recalculated at any time at the REQUIRED BANKS’
request, but shall, in any event, be recalculated upon receipt of any Notice of
Borrowing. 


          If at any
time the aggregate outstanding Advances under the REVOLVING LOAN exceed the
BORROWING BASE, as calculated by the AGENT from time to time, for any reason,
then BORROWER shall immediately upon the AGENT’s demand pay and apply on the
REVOLVING LOAN such amounts as are necessary to bring the principal amount
outstanding on the REVOLVING LOAN to an amount no greater than the amount
derived from the BORROWING BASE.


          The most recent
borrowing base certificate delivered by BORROWER to the AGENT shall govern the
availability on the REVOLVING LOAN under the BORROWING BASE until such time as
BORROWER timely delivers to the AGENT a new borrowing base certificate. The
BORROWING BASE shall be deemed to be zero dollars ($0.00) if BORROWER fails to
timely deliver to the AGENT a borrowing base certificate at the times provided
for in Section 5.1.9 below.


          2.6.          Notice
of Borrowing/Disbursements. BORROWER may
request an Advance by delivering a notice (a “Notice of Borrowing”) to the
AGENT no later than 1:00 p.m. central time on the first BANKING DAY prior to
the date of the funding of the requested Advance. Each Notice of Borrowing
shall specify the requested (i) date of such Advance which shall be a
BANKING DAY, and (ii) the amount of such requested Advance. The AGENT will
promptly forward all Notices of Borrowing for an Advance to each BANK with a
REVOLVING LOAN COMMITMENT.


          Upon
receipt of a Notice of Borrowing for an Advance, BANKS with a REVOLVING LOAN
COMMITMENT will, on the date of funding of such Advance, make available to the
AGENT in same day funds, such BANK’s respective Percentage of such Advance.
After the AGENT’s receipt of such funds, the AGENT will that same day deposit
such funds into BORROWER’s account with the ACCOUNTS BANK. Notwithstanding the
foregoing, unless


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the AGENT shall have received notice from a
BANK prior to the date of funding of any Advance that such BANK will not make
available to the AGENT such BANK’s Percentage of such Advance, the AGENT may
assume that each BANK with a REVOLVING LOAN COMMITMENT has made its Percentage
available to the AGENT on the date of funding of such Advance in accordance
with this Section, and the AGENT may, in reliance upon such assumption, make
available to the BORROWER on such date a corresponding amount by depositing the
same in BORROWER’s deposit account with the ACCOUNTS BANK.


          The AGENT
will remit to each BANK with a REVOLVING
LOAN COMMITMENT its Percentage of each payment received by the AGENT on
the REVOLVING LOAN; provided, however, that the AGENT may withhold from a
DEFAULTING BANK the amount of such DEFAULTING BANK’s Percentage of payments
sufficient to pay the obligations of such DEFAULTING BANK under this AGREEMENT
and apply such sum to such obligations of the DEFAULTING BANK under this
AGREEMENT in such order as determined by the AGENT.


          2.7.          Conditions
to Advances. Each request for an Advance under the REVOLVING LOAN shall be
deemed to constitute a representation by BORROWER at the time of the request
that no EVENT OF DEFAULT exists or is imminent or that, upon giving effect to
the Advance, would occur, and that the representations and warranties of
BORROWER contained in this AGREEMENT and the other LOAN DOCUMENTS are true in
all material respects on or as of the date of such request for an Advance. 


          2.8.          Purpose.
BORROWER will use the REVOLVING LOAN to finance its purchase of grain inputs
for the PROJECT and for general working capital needs. 


          2.9.          Fees.
In consideration of the extension of the REVOLVING LOAN to BORROWER, BORROWER
agrees to pay to the AGENT for the account of each BANK with a REVOLVING LOAN COMMITMENT a fee equal to 0.5% per annum on
the unused portion of the REVOLVING LOAN, with such fee determined and payable
quarterly, in arrears. BORROWER will also pay to the AGENT an origination fee
equal to one percent (1%) of the TOTAL TERM LOAN COMMITMENTS. The foregoing unused
fees will be shared by BANKS with a
REVOLVING LOAN COMMITMENT pro rata based upon their respective
Percentages in the REVOLVING LOAN. The foregoing origination fee will be shared
by BANKS pro rata based upon their respective Percentages in the LOANS in
total. BORROWER will also pay to ADMINISTRATIVE AGENT the fees and other
amounts described and provided for in that certain fee letter of even date with
this AGREEMENT between BORROWER and ADMINISTRATIVE AGENT (as it may be amended
or modified and in effect from time to time, the “FEE LETTER”) in accordance
with the terms of the FEE LETTER. 


          2.10.        Maximum
Interest Rate. Regardless of any provisions contained in this AGREEMENT or
in any other LOAN DOCUMENTS, BANKS shall never be deemed to have contracted for
or be entitled to receive, collect or apply as interest on the LOANS any amount
in excess of the maximum rate allowed by law, and in the event any BANK ever
receives, collects or applies as interest any such excess, such amount which
would be excessive interest shall be applied to the reduction of the unpaid
principal balance of the LOAN for which such excess was


- 15 -





 received, collected or applied,
and, if the principal balance of such LOAN is paid in full, any remaining
excess shall forthwith be paid to BORROWER. All sums paid or agreed to be paid
to the BANKS for the use, forbearance or detention of the indebtedness
evidenced by the NOTES and/or this AGREEMENT shall, to the extent permitted by
applicable law, be amortized, prorated, allocated and spread throughout the
full term of such indebtedness until payment in full so that the rate or amount
of interest on account of such indebtedness does not exceed the maximum rate
allowed by law. In determining whether or not the interest paid or payable
under any specific contingency exceeds the maximum rate of interest permitted
by law, BORROWER and BANKS shall, to the maximum extent permitted under
applicable law, (i) characterize any non-principal payment as an expense, fee
or premium, rather than as interest; and (ii) exclude voluntary prepayments and
the effect thereof; and (iii) compare the total amount of interest contracted
for, charged or received with the total amount of interest which could be
contracted for, charged or received throughout the entire contemplated term of
the LOANS at the maximum rate allowed by law.


          2.11        Late
Fee. With respect to any payment due on the REVOLVING LOAN which is 10 days
or more late, in addition to any rights and remedies BANKS may have BORROWER
will be charged a late fee equal to 3.000% of the regularly scheduled payment
or $25.00 whichever is greater.


	
  

 	
  

 
	
 B.

 	
 Term Loan

 



          2.12.        Term
Loan. Subject to the terms of this Agreement, BANKS with a TERM LOAN
COMMITMENT severally agree to lend to BORROWER Fifty-Five Million and No/100
Dollars ($55,000,000.00). The TERM LOAN will be evidenced by those certain TERM
NOTES of even date with this AGREEMENT (the foregoing and any and all
restatements, refinancing, replacements, substitutions, modification and
amendments thereof will be referred to in the AGREEMENT individually as a “TERM
NOTE” and collectively as the “TERM NOTES”) in the amount of each BANK’s TERM
LOAN COMMITMENT. The form of TERM NOTE is attached as Exhibit B.


          2.13.        Interest.
The TERM LOAN will bear interest at a per annum variable rate equal to the
greater of (i) the LIBOR Rate plus the Applicable Margin for the TERM LOAN or
(ii) the FLOOR applicable to the TERM LOAN. NOTICE: In no event will the
interest rate charged on the TERM LOAN be less than the FLOOR applicable to the
TERM LOAN. Interest will be calculated on the actual number of days outstanding
on the basis of a year consisting of 360 days, and will be payable quarterly in
arrears, together with principal, on the date principal installments are due.
The TERM LOAN will bear interest after occurrence and during the continuance of
an EVENT OF DEFAULT and after maturity, whether by demand, acceleration or
otherwise, at a per annum rate equal to 6% in excess of the interest rate
applicable to the TERM LOAN calculated above, but not to exceed the maximum
rate allowed by applicable law.


          2.14.        Repayment;
Maturity. The principal balance of the TERM LOAN will be payable in equal
quarterly installments of $1,375,000, commencing on February 1, 2012, and
continuing on each May 1, August 1, November 1 and February 1 thereafter until
October 31, 2016 when


- 16 -





the outstanding principal balance of the TERM LOAN, together with
accrued and unpaid interest, will be due and payable in full. The quarterly
principal payment on the TERM LOAN is calculated based upon a ten (10) year
amortization schedule. Each BANK with a TERM LOAN COMMITMENT will be entitled
to its pro rata share of each principal and interest payment on the TERM LOAN
in accordance with its Percentage of the TERM LOAN.


          2.15.   Purpose.
The proceeds of the Term Loan will be used by Borrower to refinance and repay
in full its existing INDEBTEDNESS to Dougherty Funding LLC.


          2.16.   Prepayment.
BORROWER may prepay the TERM LOAN in full or in part at any time; provided,
however, that any prepayment of the TERM LOAN in full as a result of refinancing
with a lender other than AGENT, BORROWER will pay to ADMINISTRATIVE AGENT, for
the account of the BANKS with a TERM LOAN COMMITMENT in accordance with their
respective Percentages in the TERM LOAN, a prepayment fee calculated as
follows: If the prepayment occurs within the first two (2) years of the TERM
LOAN, a fee of one (1%) percent of the original amount of the TERM LOAN (or
$55,000,000.00). Any partial prepayments shall be applied to the quarterly
installments due in the inverse order of their maturities.


          2.17.   Payments.
All principal, interest and fees due under the LOANS, OBLIGATIONS and the LOAN
DOCUMENTS shall be paid in immediately available funds as contracted in this
AGREEMENT and no later than the payment due dates set forth above (and with
regards to fees, the due dates set forth in the periodic statements mailed to
BORROWER by ADMINISTRATIVE AGENT). Should a payment come due on a day other
than a BANKING DAY, then the payment shall be made no later than the next
BANKING DAY and interest shall continue to accrue during the extended period.
If BORROWER makes any prepayment of principal with respect to the TERM LOAN on
a day other than the due date, BORROWER shall reimburse the BANKS, on demand,
for any resulting reasonable loss, breakage fees or expense (including without
limitation, administrative costs) incurred by a BANK including any loss
incurred in obtaining, liquidating, or employing deposits from third parties,
provided that such BANK shall have delivered to BORROWER a certificate as to
the amount of such loss or expense, which certificate shall be conclusive in
the absence of manifest error.


          2.18    Late
Fee. With respect to any payment due on the TERM LOAN which is 10 days or
more late, in addition to any rights and remedies BANKS may have BORROWER will
be charged a late fee equal to 3.000% of the regularly scheduled payment or
$25.00 whichever is greater.


SECTION 3 Representations and Warranties.


To induce BANKS to enter into this AGREEMENT, BORROWER makes the
following representations and warranties and agrees that each request for an
advance under the REVOLVING LOAN constitutes a reaffirmation of these
representations and warranties and that such representations and warranties
shall survive until all of the OBLIGATIONS are fully and finally paid and all
REVOLVING LOAN COMMITMENTS have terminated:


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          3.1     Existence
and Power. BORROWER is a limited liability company duly organized and
validly existing under the laws of the State of South Dakota. BORROWER has
accomplished all necessary actions required by a limited liability company
under applicable law to own the PROPERTY and operate the PROJECT, and to
execute and deliver, and to perform all of its obligations under the LOAN
DOCUMENTS to which it is a party. There are no outstanding subscriptions,
options, warrants, calls or rights (including preemptive rights) to acquire,
and no outstanding securities or instruments convertible into, EQUITY INTERESTS
of BORROWER, except as set forth on Exhibit F attached hereto and incorporated
herein by reference.


          3.2     Authorization
of Borrowing; No Conflict as to Law or Other Agreements. The execution,
delivery and performance by BORROWER of the LOAN DOCUMENTS and the borrowings
from time to time under this AGREEMENT have been duly authorized by all
necessary limited liability company actions of BORROWER and do not and will not
(a) require any material consent or approval, or authorization, by any
GOVERNMENTAL AUTHORITY, domestic or foreign, other than those obtained and in
full force and effect, (b) violate, in any material respect, any provision of
any law, rule or regulation or of any order, writ, injunction or decree
presently in effect having applicability to BORROWER, or violate any provision
of the Articles of Organization or operating agreement or any members’
agreement or similar agreement of BORROWER, (c) result in a breach of or
constitute a default beyond any applicable cure period under any indenture or
loan or credit agreement or any other agreement, lease or instrument to which
BORROWER is a party or by which it or its properties may be bound or affected,
or (d) other than liens in favor of the COLLATERAL AGENT and the liens set
forth in Section 5.4.1 below, result in, or require, the creation or imposition
of any mortgage, deed of trust, pledge, lien, security interest or other charge
or encumbrance of any nature to or with any other creditor of BORROWER, in the
aggregate exceeding $100,000.00, upon or with respect to any of the properties
now owned or hereafter acquired by BORROWER. 


          3.3     Legal
Agreements. The LOAN DOCUMENTS to which it is a party constitute the legal,
valid and binding obligations of BORROWER enforceable against BORROWER in
accordance with their respective terms, and as to any LOAN DOCUMENTS to which
BORROWER is not a party, BORROWER has no knowledge that any such LOAN DOCUMENTS
do not constitute the legal, valid and binding obligations of the parties
thereto other than the BANKS and the AGENT, enforceable against such parties in
accordance with their respective terms, except in each case (a) as limited by
applicable bankruptcy, insolvency, reorganization, moratorium, and other laws
of general application affecting enforcement of creditors’ rights generally,
and (b) as limited by laws relating to the availability of specific
performance, injunctive relief, or other equitable remedies. 


          3.4     Licenses
and Permits. BORROWER has all necessary PERMITS required for operation of
the PROJECT. BORROWER will provide ADMINISTRATIVE AGENT copies of all PERMITS.
BORROWER will timely obtain and will retain all necessary PERMITS and licenses
to operate its businesses at the PROPERTY. Other than the PERMITS, no consent,
permission, order, license, approval or authorization of any GOVERNMENTAL
AUTHORITY 


- 18 -





is necessary or desirable in connection with the operation of the
PROJECT. BORROWER has complied with and will continue to comply with all of the
terms, conditions, limitations and restrictions contained in any PERMIT.


          3.5     The
PROJECT. The PROJECT does not encroach upon or overhang any easement or
right-of-way on land not constituting part of the PROPERTY. The PROJECT does
not violate in any material respect, any applicable PERMIT, zoning or use
statute, ordinance, building code, rule or regulation, or any covenant or
agreement of record. BORROWER agrees that it will furnish from time to time
such satisfactory evidence with respect thereto as may be required by
ADMINISTRATIVE AGENT.


          3.6     Title
to the PROPERTY. BORROWER has good and marketable fee simple title to the
PROPERTY and has maintained good and marketable fee simple title to the
PROPERTY, except to the extent title is affected by the matters permitted under
Section 5.4.1 below. Except as created by the LOAN DOCUMENTS and the liens set
forth in Section 5.4.1 below, there is no lien, security interest or other
charge or encumbrance upon or with respect to any of the assets, properties or
income of BORROWER.


          3.7     Financial
Condition. BORROWER maintains its books on a fiscal year basis ending on
July 31 of each year. The audited financial statements and schedules of
BORROWER for and as of the fiscal year ended July 31, 2011 and the unaudited
financial statements and statement of operations and members’ equity and the
balance sheet of BORROWER for the period ending August 31, 2011, certified by
an officer of BORROWER, copies of which have been delivered to the AGENT,
fairly present the financial condition of BORROWER at such dates and the
results of their operations for such periods, and since August 31, 2011, there
has been no MATERIAL ADVERSE EFFECT. No information, exhibit or report
furnished by or on behalf of BORROWER to the AGENT or BANKS contains any
material misstatement of fact or omits to state a material fact or any fact or
information necessary to make the statements and information contained therein
incomplete or not materially misleading. To the best of the knowledge of
BORROWER, there is no fact or circumstance current or in the future (so far as
BORROWER now foresees) which is reasonably likely to have a MATERIAL ADVERSE
EFFECT which has not been set forth herein or in a certificate or statement
furnished to ADMINISTRATIVE AGENT by BORROWER. 


          3.8     Litigation.
There are no actions, suits or proceedings pending or, to the knowledge of
BORROWER, threatened against or affecting BORROWER or the properties of
BORROWER before any court or governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign, which would have a
MATERIAL ADVERSE EFFECT.


          3.9     Taxes.
BORROWER has filed all federal, state and local tax returns which to the
knowledge of BORROWER are required to be filed, and BORROWER has paid or caused
to be paid to the respective taxing authorities all taxes as shown on said
returns or on any assessment received by it to the extent such taxes have
become due except those which BORROWER is contesting in good faith and with
respect to which adequate reserves have been set aside.


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          3.10     No
Default. There is no event, which is, or with notice or the lapse of time
would be, an EVENT OF DEFAULT under this AGREEMENT or any other LOAN DOCUMENT.


          3.11     ERISA.
Each “employee benefit plan”, “employee pension benefit plan”, “defined benefit
plan” or “multi-employer benefit plan” (as such terms are defined in the
Employee Retirement Income Security Act of 1974, as amended) which the BORROWER
has established, maintained or to which it is required to contribute
(collectively, the “Plans”) is in compliance with all applicable provisions of
the Employee Retirement Income Security Act of 1974, as amended (as amended,
replaced or supplemented from time to time, “ERISA”), and the Internal Revenue
Code and the rules and regulations thereunder as well as the Plan’s terms and
conditions. There have been no “prohibited transactions” and no “reportable
event” (as such terms are defined in ERISA) has occurred with respect to any
Plan. The BORROWER does not have a “multi-employer benefit plan”. The BORROWER
has not incurred any liability to the Pension Benefit Guaranty Corporation in
connection with a Plan, other than for premiums due in the ordinary course.


          3.12     Environmental
Matters. Except as set forth in the Phase I Environmental Report referenced
in Section 4 of this AGREEMENT, BORROWER is in compliance in all material
respects with all health and environmental laws applicable to BORROWER
and its operations and knows of no existing conditions or circumstances that
could materially interfere with such compliance in the future. BORROWER has
obtained all PERMITS, and approvals required by law for the operation of its
business. BORROWER has not identified any “recognized environmental conditions”,
as that term is defined by the American Society for Testing and Materials in
its standards for environmental due diligence, which could subject BORROWER to
enforcement action if brought to the attention of appropriate governmental
authorities.


          3.13     Necessary
Utilities, Etc. The PROJECT has all necessary electrical, natural gas,
water, storm and sewer facilities in place for the proper and efficient
operation of the PROJECT to its nameplate capacity. BORROWER has made adequate
provision for all storage facilities, equipment and product supplies, including
corn, as specified by its engineers for the maximum output and operation of the
plant.


          3.14     Securities
Regulation Compliance. BORROWER has complied with all applicable federal,
state and local statutes, laws, codes, regulations and ordinances applicable to
the public offering and sale of securities in or of BORROWER.


          3.15     Compliance
With Law. To the best of BORROWER’s knowledge, the business and operations of
BORROWER comply in all respects with all applicable federal, state, regional,
county and local laws, including without limitation statutes, rules,
regulations and ordinances relating to public health, safety or the environment
or disposals to air, water, land or groundwater, to the withdrawal or use of
groundwater, to the use, handling or disposal of polychlorinated biphenyls
(PCBs), asbestos or urea formaldehyde, to the treatment, storage, disposal or
management of hazardous substances (including, without limitation, petroleum,
its derivatives, by-products or other hydrocarbons), to exposure to toxic,
hazardous, or other controlled, prohibited or regulated substances, to the
transportation, storage, disposal, 


- 20 -





management or release of gaseous or liquid substances, and any
regulation, order, injunction, judgment, declaration, notice or demand issued
thereunder, except where the failure to so comply (individually or in the
aggregate) would not reasonably be expected to have a Material Adverse Effect.


          3.16     Notices.
BORROWER has not been given, nor is it required to give, nor has it received,
any notice, letter, citation, order, warning, complaint, inquiry, claim or
demand to or from any GOVERNMENTAL AUTHORITY or in connection with any court
proceeding that: (i) BORROWER has violated, or is about to violate, any
federal, state, regional, county or local statute, law, rule, regulation,
ordinance, PERMIT, judgment or order, including without limitation those
relating to environmental, health or safety; (ii) there has been a release, or
there is a threat of release, of hazardous substances (including, without
limitation, petroleum, its by-products or derivatives, or other hydrocarbons)
from BORROWER’s property, facilities, equipment or vehicles; (iii) BORROWER
may, or is liable, in whole or in part, for the costs of cleaning up,
remediating or responding to a release of hazardous substances (including,
without limitation, petroleum, its by-products or derivatives, or other
hydrocarbons); or (iv) any of BORROWER’s property or assets are subject to a
lien in favor of any GOVERNMENTAL AUTHORITY for any liability, costs or
damages, under any federal, state or local environmental law, rule or
regulation arising from, or costs incurred by such GOVERNMENTAL AUTHORITY in
response to, a release of a hazardous substance (including, without limitation,
petroleum, its by-products or derivatives, or other hydrocarbons).


          3.17     Statements.
All statements by BORROWER contained in any certificate, statement, document or
other instrument or writing delivered by or on behalf of BORROWER at any time
pursuant to this AGREEMENT or the other LOAN DOCUMENTS shall constitute
representations and warranties made by BORROWER under this AGREEMENT. No
representation or warranty of BORROWER contained in this AGREEMENT or any other
LOAN DOCUMENT, and no statement contained in any certificate, schedule, list,
financial statement or other instrument furnished to AGENT or the BANKS by or
on behalf of BORROWER contains, or will contain, any untrue statement of a
material fact, or omits, or will omit, to state a material fact necessary to
make the statements contained herein or therein not misleading. To the best of
BORROWER’s knowledge, all information material to the transactions contemplated
in this AGREEMENT has been disclosed to the AGENT.


          3.18     Regulation
U. No part of the proceeds of the LOANS will be used to purchase or carry
any margin stock or to extend credit to others for the purpose of purchasing or
carrying any such margin stock or to reduce or retire any indebtedness incurred
for any such purpose. If requested by AGENT, BORROWER will furnish to AGENT a
statement in conformity with the requirements of Federal Reserve Form U 1
referred to in Regulation U to the foregoing effect.


          3.19     Commodity
Accounts. BORROWER does not have any commodity accounts or similar
commodity hedging accounts except for those described in the Control Agreements
perfecting the BANKS’ security interest in such commodity accounts.


- 21 -





          3.20     Defaults.
BORROWER is not in default under or with respect to, or a party to, any
contractual obligation that could, either individually or in the aggregate,
reasonably be expected to have a MATERIAL ADVERSE EFFECT. No EVENT OF DEFAULT
has occurred and is continuing or would result from the consummation of the
transactions contemplated by the LOAN DOCUMENTS.


          3.21     Investment
Company. BORROWER is not an “investment company” within the meaning of the Investment
Company Act of 1940.


          3.22     Permits.
Each PERMIT necessary or appropriate for operation of Borrowers’ ethanol plant
at maximum capacity is listed on Exhibit E.


          3.23     Material
Contracts. As of the CLOSING, there are no Material Contracts other than
the agreements and contracts disclosed to the AGENT pursuant to this Section.


          (i)       Supply
Contracts. As of the CLOSING, there are no Supply Contracts other than those
listed on Schedule 3.23(i). BORROWER has made adequate provision for all
storage facilities, equipment and inputs, including corn, as specified by
BORROWER’s engineers for the maximum output and operation of the PROJECT.


          (ii)       Marketing
and Risk Management Contracts. As of the CLOSING, there are no MARKETING AND
RISK MANAGEMENT CONTRACTS other than those listed on Schedule 3.23(ii).


          (iii)      Transportation
Contracts. As of the CLOSING, there are no Transportation Contracts other than
those listed on Schedule 3.23(iii). 


          (iv)      Utility
Contracts. As of the CLOSING, there are no Utility Contracts other than those
listed on Schedule 3.23(iv). BORROWER has made suitable arrangements so that
the PROJECT has all necessary electrical, natural gas, water, storm and sewer
facilities in place for the proper operation of the PROJECT at maximum
efficiency.


Each Material Contract is in full force and effect as of the CLOSING
and there are no defaults now existing or which would occur with the giving of
notice or the passage of time.


SECTION 4 Conditions of Lending. 


4.1     Conditions Precedent to the Initial
Disbursement. The obligation of BANKS to fund the TERM LOAN and make an
initial Advance under the REVOLVING LOAN is subject to the condition precedent,
unless waived by the ADMINISTRATIVE AGENT, that ADMINISTRATIVE AGENT shall have
received on or before the CLOSING all of the following, each dated (unless
otherwise indicated) the day of CLOSING, in form and substance satisfactory to
ADMINISTRATIVE AGENT:


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4.1.1     This AGREEMENT, and the REVOLVING
NOTES, TERM NOTES and other LOAN DOCUMENTS not specifically described below,
duly executed on behalf of BORROWER and delivered to ADMINISTRATIVE AGENT.


	
 

	
 


	
 

	
4.1.2     The MORTGAGE duly executed on
behalf of BORROWER and in form acceptable for recording in Turner County,
South Dakota.


	
 

	
 


	
 

	
4.1.3     The FEE LETTER duly executed by
BORROWER and delivered to ADMINISTRATIVE AGENT.


	
 

	
 


	
 

	
4.1.4     The SECURITY AGREEMENT and a
SECURITY AGREEMENT AND ASSIGNMENT OF HEDGING ACCOUNTS granting the COLLATERAL
AGENT a security interest in BORROWER’S commodity hedging accounts and
corresponding Control Agreements, duly executed on behalf of BORROWER and
delivered to ADMINISTRATIVE AGENT.


	
 

	
 


	
 

	
4.1.5     A financing statement or
statements sufficient when filed to perfect the security interests granted
under the MORTGAGE, the SECURITY AGREEMENT, SECURITY AGREEMENT AND ASSIGNMENT
OF HEDGING ACCOUNTS, and the assignments of the Material Contracts, to the
extent such security interests are capable of being perfected by filing, and
a deposit account control agreement in form and substance acceptable to the
ACCOUNTS BANK to perfect the ACCOUNTS BANK’s security interest in any deposit
accounts maintained by BORROWER with financial institutions other than the
ACCOUNTS BANK and a securities control agreement to perfect any investment
property held by a financial intermediary.


	
 

	
 


	
 

	
4.1.6     An ALTA/ACSM Land Title
Survey prepared in accordance with the current accuracy standards jointly
adopted by ALTA (American Land Title Association), ACSM (American Congress on
Surveying and Mapping) and NSPS (National Society of Professional Surveyors)
together with optional survey requirements #2 (vicinity map showing the
property surveyed in reference to nearby highway(s) or major street
intersections); #6 (identify setbacks); #7 (identify exterior dimensions of
all existing and proposed buildings “As-Built”, including square footage of
exterior footprint of all buildings, gross floor area of all buildings); and
#11 (location of utilities). The survey shall show the location of all
easements and encroachments onto or from the PROPERTY that are visible on the
PROPERTY, known to the surveyor preparing the survey or of record,
identifying easements of record by recording data. Such surveyor shall
certify there are no easements or encroachments upon the PROPERTY except as
shown on the survey. 


	
 

	
 


	
 

	
4.1.7     An appraisal to be performed by
Natwick Associates Appraisal Services which shows the as-completed value of
the PROPERTY and PROJECT addressed to and otherwise acceptable to
ADMINISTRATIVE AGENT.





- 23 -









	
 

	
 


	
 

	
4.1.8     A title commitment from Commercial
Partners Title, LLC as agent of Stewart Title Guaranty Company (the “TITLE
COMPANY”) at BORROWER’s expense, constituting a commitment by the TITLE
COMPANY to issue a mortgagee’s title policy in favor of COLLATERAL AGENT as
mortgagee under the MORTGAGE that will be free from all standard exceptions,
including mechanics’ liens and all other exceptions not previously approved
by AGENT and that will insure the MORTGAGE to be a valid first lien on the
PROPERTY. Such loan policy shall include additional endorsement coverage as
may be reasonably requested by AGENT, including, without limitation, the
following ALTA endorsement forms:








	
 

	
 

	
 

	
 


	
  ALTA
Endorsement Form 3.1

	
 

	
 

	
Zoning-Improved
Land


	
  ALTA
Endorsement Form 6

	
 

	
 

	
Variable
Rate Mortgage


	
  ALTA
Endorsement Form 8.1

	
 

	
 

	
Environmental
Lien


	
  ALTA
Endorsement Form 9

	
 

	
 

	
Comprehensive


	
  ALTA
Endorsement Form 27

	
 

	
 

	
Usury


	
  ALTA
Endorsement Form 16

	
 

	
 

	
Access


	
  ALTA
Endorsement Form 14

	
 

	
 

	
Future
Advance


	
  ALTA
Endorsement Form 19

	
 

	
 

	
Contiguity


	
 

	
 

	
 

	
 


	
  ALTA
Endorsement Form 26

	
 

	
 

	
Subdivision


	
  Deletion of
Arbitration Endorsement

	
 

	
 

	
 


	
  ALTA
Endorsement Form 17.2

	
 

	
 

	
Utility
Access covering water, natural

gas, telephone, electrical power,

sanitary sewer, storm water drainage


	
  Contiguity
Endorsement

	
 

	
 

	
 


	
  ALTA
Endorsement Form 18

	
 

	
 

	
Tax Parcel


	
  ALTA
Endorsement Form 20

	
 

	
 

	
First Loss


	
 

	
 

	
 

	
 








	
 

	
 


	
 

	
4.1.9     A Phase I Environmental Report of
the PROPERTY, as well as any subsequent Environmental Site Assessments issued
prior to CLOSING, and such other environmental testing and due diligence as
may be reasonably required by ADMINISTRATIVE AGENT, all in form and content
satisfactory to ADMINISTRATIVE AGENT and establishing the environmental
condition of the PROPERTY as satisfactory to ADMINISTRATIVE AGENT.


	
 

	
 


	
 

	
4.1.10   Copies of all PERMITS from the
applicable regulatory agencies from whom a permit or license is required as
of the then current stage of the PROJECT. 


	
 

	
 


	
 

	
4.1.11   Copies of documents from the
appropriate state, federal, city or county authority having jurisdiction over
the PROPERTY and the PROJECT that provide to the reasonable satisfaction of
ADMINISTRATIVE AGENT that the PROJECT and the contemplated use thereof are
permitted by and comply in all material respects with all applicable use or
other restrictions and requirements in prior conveyances, zoning 





- 24 -









	
 

	
 


	
 

	
ordinances, environmental laws and regulations, water shed district
regulations and all other applicable laws or regulations, and GOVERNMENTAL
AUTHORITIES having jurisdiction over the PROJECT.


	
 

	
 


	
 

	
4.1.12   Copies of certificates of
insurance demonstrating the types, levels, deductibles, endorsements and
other coverage parameter issues to the satisfaction of ADMINISTRATIVE AGENT
for all risk property insurance, commercial general liability, an umbrella
policy, business automobile liability insurance, environmental liability
insurance, worker’s compensation insurance, and the other insurance required in
this AGREEMENT, all as required under Section 5.3.1 of this AGREEMENT, with
all such insurance in full force and effect and approved by ADMINISTRATIVE
AGENT, in the exercise of its reasonable discretion, and naming
ADMINISTRATIVE AGENT as an additional insured and loss payee together with
appropriate flood insurance, if the PROPERTY is in a flood hazard area. In
addition, BORROWER shall provide to ADMINISTRATIVE AGENT proof of insurance
for business interruption/extra expense coverage for six months of operating
expenses, and also Directors/Officers coverage of no less than $5,000,000.00.


	
 

	
 


	
 

	
4.1.13   A signed opinion of counsel for
BORROWER, addressed to AGENT but for the benefit of and reliance upon by the
BANKS, in form and substance acceptable to AGENT and AGENT’s counsel.


	
 

	
 


	
 

	
4.1.14   A Secretary’s Certificate
executed by such person or persons authorized by BORROWER’s organizational
documents and/or agreements to do so, certifying the incumbency and
signatures of the officers or other persons authorized to execute the LOAN
DOCUMENTS to which it is a party, and resolutions or consents authorizing the
execution of the LOAN DOCUMENTS to which it is a party and performance in
accordance with their terms.


	
 

	
 


	
 

	
4.1.15   A recently certified copy of BORROWER’s
Operating Agreement, and any amendments thereto.


	
 

	
 


	
 

	
4.1.16   A recently certified copy of
BORROWER’s Articles of Organization and any amendments thereto.


	
 

	
 


	
 

	
4.1.17   A certificate of good standing
for BORROWER from the office of the South Dakota Secretary of State.


	
 

	
 


	
 

	
4.1.18   A copy of each Material Contract
together with assignments thereof in favor of AGENT and consents thereto in
form satisfactory to AGENT, as well as control agreements reasonably
requested by AGENT, and with the management fees in the Management Contract
subordinated to the payment of the LOANS, in form reasonably acceptable to
AGENT.





- 25 -









	
 

	
 


	
 

	
4.1.19     The obligations and INDEBTEDNESS
of BORROWER to Dougherty Funding LLC and all liens securing such INDEBTEDNESS
shall be terminated and released. 


	
 

	
 


	
 

	
4.1.20     AGENT shall have received a duly
executed Borrowing Base Certificate dated as of the BANKING DAY preceding the
CLOSING.


	
 

	
 


	
 

	
4.1.21     AGENT has received all fees and
other amounts due and payable on or prior to the CLOSING, including the
Origination Fee and fees described in the FEE LETTER due at CLOSING, and
amounts for reimbursement or payment of all out-of-pocket expenses required
to be reimbursed or paid by BORROWER pursuant to this AGREEMENT, under any
other LOAN DOCUMENT, or any other agreement with AGENT or BANKS.


	
 

	
 


	
 

	
4.1.22     AGENT has received copies of
favorable UCC, tax, judgment, bankruptcy and fixture lien search reports (or
other evidence of the same satisfactory to AGENT) in all necessary or
appropriate jurisdictions and under all legal and trade names of BORROWER and
all other parties requested by AGENT, indicating that there are no prior
liens on any of the COLLATERAL other than Permitted Liens;


	
 

	
 


	
 

	
4.1.23     Evidence satisfactory to AGENT
that all necessary utilities are available to the PROJECT, and a copy of each
executed Utility Contract and the assignments thereof and consents thereto
required in this AGREEMENT and the other LOAN DOCUMENTS, all of the foregoing
in form and substance acceptable to AGENT.


	
 

	
 


	
 

	
4.1.24     Such other matters as AGENT may
reasonably require.


	
 

	
 


	
 

	
In the event AGENT waives any of the foregoing conditions precedent
to the initial advance, BORROWER agrees to take all steps required to satisfy
the same within thirty (30) days of the funding of the initial Advance or
funding of the TERM LOAN and further agrees that failure to do so within such
thirty (30) day period shall constitute an EVENT OF DEFAULT.








	
 

	
 


	
 

	
               4.2     All
Advances. As of the time of each Advance hereunder:


	
 

	
 


	
 

	
               (a)     Each
of the representations and warranties of BORROWER set forth in Section 3 of
this AGREEMENT shall be and remain true and correct as of said time, except
to the extent that any such representation or warranty relates solely to an
earlier date;


	
 

	
 


	
 

	
               (b)     BORROWER
shall be in full compliance with all of the terms and conditions hereof, and
no EVENT OF DEFAULT shall have occurred and be continuing or would occur as a
result of such Advance; and


	
 

	
 


	
 

	
               (c)     Such
Advance shall not violate any order, judgment or decree of any court or other
authority or any provision of law or regulation applicable to AGENT or BANKS





- 26 -








	
  

 	
  

 
	
  

 	
 (including, without limitation, Regulation U of the Board of
 Governors of the Federal Reserve System) as then in effect.

 
	
  

 	
  

 
	
  

 	
 Each request for an Advance shall be deemed to be a representation
 and warranty by BORROWER on the date of such Advance as to the facts
 specified in paragraphs (a) through (c) of this Section 4.2.

 



SECTION 5 Covenants
of BORROWER.


5.1     Financial
Information and Reporting. Except as otherwise stated in this AGREEMENT,
all financial information provided to ADMINISTRATIVE AGENT shall be compiled
using GAAP consistently applied. During the time period that any amounts are
outstanding under the OBLIGATIONS or this AGREEMENT or the LOAN DOCUMENTS to
which it is a party and any COMMITMENTS are outstanding, unless ADMINISTRATIVE
AGENT shall otherwise agree in writing:


	
  

 	
  

 
	
  

 	
 5.1.1   BORROWER shall provide ADMINISTRATIVE AGENT
 within 120 days of BORROWER’s fiscal year end, BORROWER’s annual financial
 statements. The statements must be audited with an unqualified opinion by a
 certified public accountant reasonably acceptable to ADMINISTRATIVE AGENT,
 and must be accompanied by a certificate of such accountants stating whether,
 in conducting their audit, they have become aware of any EVENT OF DEFAULT, or
 of any event which would, after the lapse of time or the giving of notice, or
 both, constitute an EVENT OF DEFAULT, specifying the nature and duration of
 the default. Such audit statement shall be accompanied by the accountants’
 calculations of BORROWER’s compliance with the financial covenants contained
 in Section 5 of this AGREEMENT as of the said fiscal year end.

 
	
  

 	
  

 
	
  

 	
 5.1.2   BORROWER will furnish to ADMINISTRATIVE AGENT
 within thirty (30) days after the end of each calendar month monthly
 internally prepared financial statements consisting of a balance sheet and
 income statement of BORROWER as of the end of such period, and income
 statements and statements of cash flow for such period and year to date,
 prepared in accordance with GAAP, all in reasonable detail, except for the
 absence of financial footnotes, and calculations of the financial covenants
 set forth below.

 
	
  

 	
  

 
	
  

 	
 5.1.3   For each quarter of each fiscal year, BORROWER
 will deliver to ADMINISTRATIVE AGENT, within forty-five (45) days of each
 full fiscal quarter end, a certificate in form reasonably acceptable to
 ADMINISTRATIVE AGENT that has been signed by an authorized manager or officer
 of BORROWER, which: 1) certifies that the statements required by Section
 5.1.1 and 5.1.2 have been accurately prepared in accordance with GAAP applied
 consistently (except for the absence of financial footnotes to the statements
 furnished under Section 5.1.2 and normal or customary year-end adjustments to
 the statements furnished under Section 5.1.2); 2) contains calculations of
 the financial covenants contained in Section 5 of this AGREEMENT and
 certifies 

 


- 27 -









	
  

 	
  

 
	
  

 	
 compliance with such financial covenants, and 3) certifies that
 neither the authorized manager or officer nor BORROWER has knowledge of any
 EVENT OF DEFAULT under this AGREEMENT or the LOAN DOCUMENTS, or of any event
 which would, after the lapse of time or the giving of notice, or both,
 constitute an event of default under this AGREEMENT or the other LOAN
 DOCUMENTS.

 
	
  

 	
  

 
	
  

 	
 5.1.4   BORROWER will deliver to ADMINISTRATIVE AGENT
 each month, within thirty (30) days of each month end, a monthly Production
 Report, in form reasonably acceptable to ADMINISTRATIVE AGENT, reporting for
 such month BORROWER’s Input and Output amounts and costs of Corn Usage, DDGS
 output, Ethanol output, and if applicable, CO2 output and corn oil
 output. 

 
	
  

 	
  

 
	
  

 	
 5.1.5   BORROWER shall notify ADMINISTRATIVE AGENT of
 the existence of any EVENT OF DEFAULT promptly after such EVENT OF DEFAULT
 becomes known to any officer, director or general manager of BORROWER.

 
	
  

 	
  

 
	
  

 	
 5.1.6   BORROWER shall authorize all federal, state
 and municipal authorities to furnish reports of examinations, records and
 other information relating to the condition and affairs of BORROWER and its
 ethanol plant, and any information from reports, returns, files and records
 by such authorities regarding BORROWER upon request to ADMINISTRATIVE AGENT.

 
	
  

 	
  

 
	
  

 	
 5.1.7   BORROWER will give ADMINISTRATIVE AGENT prompt
 written notice of any material violation as to any environmental matter by
 BORROWER of which BORROWER obtains knowledge and, of the commencement of any
 judicial or administrative proceeding adverse to BORROWER relating to health,
 safety or environmental matters (i) in which an adverse determination or
 result could result in the revocation of or have a MATERIAL ADVERSE EFFECT on
 any PERMITS held by BORROWER which are material to the operations of
 BORROWER, and (ii) which will or threatens to impose a material liability on
 BORROWER to any person or party or which will require a material expenditure
 by BORROWER to cure any alleged problem or violation.

 
	
  

 	
  

 
	
  

 	
 5.1.8   BORROWER will give prompt notice to
 ADMINISTRATIVE AGENT of (i) any litigation or proceeding in which it is a
 party if an adverse decision therein would require it to pay more than
 $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 or proceeding involving it that is reasonably
 likely to have a MATERIALLY ADVERSE EFFECT.

 
	
  

 	
  

 
	
  

 	
 5.1.9   BORROWER shall provide monthly BORROWING BASE
 certificates in form reasonably acceptable to ADMINISTRATIVE AGENT,
 calculating advance rates under the REVOLVING LOAN pursuant to the BORROWING
 BASE beginning with the certificate with respect to the first month following
 CLOSING or at the time of any request for an Advance on the REVOLVING LOAN.

 


- 28 -









	
  

 	
  

 
	
  

 	
 5.1.10 BORROWER shall provide to ADMINISTRATIVE AGENT monthly
 summaries of all grain hedging transactions, from the entity providing
 BORROWER’s grain hedging account(s), and from any entity providing BORROWER
 with an ethanol or natural gas hedging account(s), monthly summaries of all
 ethanol and natural gas hedging transactions.

 
	
  

 	
  

 
	
  

 	
 5.1.11 BORROWER will provide ADMINISTRATIVE AGENT with such
 other information as it may reasonably request.

 
	
  

 	
  

 
	
  

 	
 5.1.12 BORROWER will deliver to ADMINISTRATIVE AGENT, no later
 than thirty- (30) days prior to its fiscal year end, its projected financial
 statements for the ensuing fiscal year, and a budget of BORROWER’s projected
 capital expenditures for the ensuing fiscal year (“CAPEX BUDGET”).

 


5.2     Financial
Covenants. At all times that any amounts are outstanding under any
OBLIGATION, or this AGREEMENT or the LOAN DOCUMENTS to which BORROWER is a
party and any COMMITMENTS are outstanding, unless the REQUIRED BANKS shall
otherwise agree in writing, BORROWER agrees to comply with the financial
covenants described below, which shall be calculated using GAAP consistently
applied, except as they may be otherwise modified by the capitalized
definitions:


	
  

 	
  

 
	
  

 	
 5.2.1   BORROWER shall maintain a FIXED CHARGE
 COVERAGE RATIO, measured on a rolling four quarters trailing basis at the end
 of each full fiscal quarter, of no less than 1.10:1.0. The FIXED CHARGE
 COVERAGE RATIO shall be tested by ADMINISTRATIVE AGENT quarterly on a fiscal
 quarter basis. 

 
	
  

 	
  

 
	
  

 	
 5.2.2   For each fiscal year, BORROWER shall determine
 and report to ADMINISTRATIVE AGENT, within 120 days after the end of each
 such fiscal year, the amount of its EXCESS CASH FLOW for such ended fiscal
 year. Effective on the 120th day after the end of each fiscal year
 following the CLOSING (each such day, an “EXCESS CASH FLOW REDUCTION DATE”),
 the BORROWER shall pay and apply to the principal balance of the TERM LOAN an
 amount equal to forty percent (40%) of the EXCESS CASH FLOW for said ended
 fiscal year; provided, however, that, the maximum amount of such reduction
 for any fiscal year shall not exceed $5,000,000.00. Such payments shall not
 release BORROWER from making any payment of principal or interest otherwise
 required by this AGREEMENT or the TERM NOTES.

 
	
  

 	
  

 
	
  

 	
 5.2.3   BORROWER shall maintain the minimum WORKING
 CAPITAL of not less than $10,000,000.00, measured quarterly beginning April
 30, 2012.

 


5.3     Affirmative Covenants. During
the time period that any amounts are outstanding under any OBLIGATION, this
AGREEMENT or the LOAN DOCUMENTS to which BORROWER is a party and any
COMMITMENTS are outstanding, unless the REQUIRED BANKS shall otherwise agree in
writing, BORROWER shall:


- 29 -









	
  

 	
  

 
	
  

 	
 5.3.1   Provide
 and maintain at all times and, from time to time at the request of
 ADMINISTRATIVE AGENT, furnish ADMINISTRATIVE AGENT with proof of payment of
 premiums on: 

 





	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (i)           All
 Risk property policy of insurance with coverage equal to the replacement cost
 of the facility, as well as casualty/umbrella (Commercial General Liability)
 insurance) insuring the PROJECT, against all risks, including flood,
 earthquake, and mechanical and electrical breakdown including testing to the
 full value of the PROJECT (subject to reasonable loss deductible provisions).
 Notwithstanding the foregoing, the policy limits on flood and earthquake
 coverage may be $40,000,000.00 each. BANKS’ interest shall be protected by
 naming AGENT as additional insured on the liability policies and loss payee
 on the property policies; 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (ii)          Casualty
 (Commercial General Liability) & Umbrella insurance (including products
 and completed operations, operations of subcontractors, and contractual
 liability insurance) with coverage in the amount of $2,000,000.00 in the form
 of either a $2,000,000.00 primary policy or a $1,000,000.00 primary policy
 and a $1,000,000.00 Umbrella policy. BANKS’ interest shall be protected by
 naming AGENT as loss payee on all such policies;

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (iii)         State
 worker’s compensation insurance, with statutory limits, and Employer’s
 Liability coverage with coverage of no less than $500,000.00;

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (iv)         Business
 automobile liability insurance insuring all vehicles on the site, including
 hired and non-owned liability with coverage in the amount of $2,000,000.00 in
 the form of either a $2,000,000.00 primary policy or a $1,000,000.00 primary
 policy and a $1,000,000.00 Umbrella policy. BANKS’ interest shall be protected
 by naming AGENT as loss payee on all such policies;

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (v)          Environmental
 coverage shall be provided for clean up and removal once the Project becomes
 operational (unless the condition precedent site survey and soil tests
 establish adverse findings which may generate the need for environmental
 coverage prior to operation), but only insofar as it is reasonably required
 by AGENT. BANKS’ interest shall be protected by naming AGENT as additional
 insured on the liability policies and loss payee on the property policies;

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (vi)         Directors/Officers
 coverage of no less than $5,000,000.00; and

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (vii)        Business
 Interruption and Extra Expense insurance equal to 100% of the projected
 revenue loss during a potential interruption of production of not less than
 six months.

 


- 30 -









	
  

 	
  

 	
  

 
	
  

 	
  

 	
 The policies of insurance required pursuant to clauses (i) and (ii)
 above shall be in form and content and with coverages and deductibles
 satisfactory to AGENT and shall be placed with financially sound and
 reputable insurers. The policy of insurance referred to in clause (i) above
 shall contain an agreement of the insurer to give not less than thirty (30)
 days’ advance written notice to AGENT in the event of cancellation of such
 policy or change affecting the coverage thereunder. Acceptance of insurance
 policies referred to above shall not bar AGENT from requiring additional
 insurance, which it reasonably deems necessary.

 





	
  

 	
  

 
	
  

 	
 5.3.2   Assign to ADMINISTRATIVE AGENT, in form
 acceptable to ADMINISTRATIVE AGENT, all Material Contracts, together with all
 consents from the vendors and other parties under such contracts.

 
	
  

 	
  

 
	
  

 	
 5.3.3   Maintain accurate and complete books, accounts
 and records pertaining to the PROPERTY and the PROJECT and its ongoing and
 continuing operations in form and substance reasonably satisfactory to
 ADMINISTRATIVE AGENT. BORROWER will permit ADMINISTRATIVE AGENT, at
 ADMINISTRATIVE AGENT’s expense if ADMINISTRATIVE AGENT’s employees make the
 inspection, but at BORROWER’s expense if ADMINISTRATIVE AGENT contracts with
 third parties at reasonable expense to make the inspection and if an EVENT OF
 DEFAULT has occurred, to examine upon reasonable notice and in a manner that
 does not interfere with the PROJECT or BORROWER’s operations all books,
 records, contracts, plans, drawings, PERMITS, bills and statements of account
 pertaining to the PROJECT and to inspect upon reasonable notice all books and
 records pertaining to its operations and to make extracts therefrom and
 copies thereof.

 
	
  

 	
  

 
	
  

 	
 5.3.4   Cause to be paid to the proper authorities
 when due all federal, state and local taxes, including taxes on the PROPERTY,
 required to be paid or withheld by it except those which BORROWER is
 contesting in good faith and with respect to which adequate reserves have
 been set aside. 

 
	
  

 	
  

 
	
  

 	
 5.3.5   Allow AGENT and AGENT’s representatives, at
 any time upon reasonable notice, and at its expense, to conduct such
 inspections of the PROJECT and BORROWER’s assets, books and records as AGENT
 may deem necessary for the protection of BANKS’ interest. Provided, however,
 such inspections shall occur during regular business hours, or such other
 time as BORROWER and AGENT may agree, shall not occur more frequently than
 twice per fiscal year unless there shall have occurred and be continuing an
 EVENT OF DEFAULT and shall not unreasonably interfere with BORROWER’s
 business operations. Any such inspections shall be made and any certificates
 issued are solely for the benefit and protection of BANKS, and BORROWER shall
 not be entitled to rely thereon. 

 
	
  

 	
  

 
	
  

 	
 5.3.6   Make all repairs, renewals or replacements
 necessary to keep its plant, properties and equipment in good working
 condition.

 


- 31 -









	
  

 	
  

 
	
  

 	
 5.3.7   Comply in all material respects with all laws
 and regulations applicable to its form of organization, offering, sale and
 regulation of securities, business, and the ownership of its property and the
 ownership and operation of the PROJECT on the PROPERTY. 

 
	
  

 	
  

 
	
  

 	
 5.3.8   Maintain and preserve all PERMITS, licenses,
 rights, privileges, charters, franchises and easements that are required to
 hold to construct and operate the PROJECT and comply with the terms,
 conditions, limitations and restrictions contained in such PERMITS, licenses,
 rights, privileges, charters, franchises and easements.

 
	
  

 	
  

 
	
  

 	
 5.3.9   Observe and comply with all laws, rules,
 regulations and orders of any government or government agency relating to
 health, safety, pollution, hazardous materials or other environmental matters
 to the extent non-compliance could result in a material liability or
 otherwise have a MATERIAL ADVERSE EFFECT on BORROWER or the operation of the
 PROJECT.

 
	
  

 	
  

 
	
  

 	
 5.3.10  Maintain primary banking accounts (including
 those accounts containing BORROWER’s equity capital) with the ACCOUNTS BANK,
 other than as otherwise agreed by ADMINISTRATIVE AGENT. AGENT agrees that
 BORROWER’s payroll and other non-primary accounts may be maintained at local
 financial institutions on the conditions that, (i) if required by AGENT,
 BORROWER, AGENT and such local financial institution enter into a control
 agreement to perfect AGENT’s security interest in such accounts, (ii) that
 deposits in such accounts do not exceed at any time $250,000.00 and (iii)
 that BORROWER provide AGENT with copies of the monthly statements relating to
 such deposit accounts.

 


5.4     Negative Covenants. During the
time period that any amounts are outstanding under any OBLIGATION, or this
AGREEMENT or the LOAN DOCUMENTS to which BORROWER is a party and any
COMMITMENTS are outstanding, unless the REQUIRED BANKS shall otherwise agree in
writing, BORROWER shall not:


	
  

 	
  

 
	
  

 	
 5.4.1   Permit any security interest or mortgage or
 lien on the PROPERTY or PROJECT or other real or personal property BORROWER
 owns now or in the future, or assign any interest that it may have in any
 assets or subordinate any rights that it may have in any assets now or in the
 future, except: (i) liens, assignments, or subordinations in favor of AGENT;
 (ii) liens, assignments, or subordinations outstanding on the date of this
 AGREEMENT and disclosed in advance to AGENT in writing and approved by AGENT;
 (iii) liens for taxes or assessments or other governmental charges not
 delinquent or which BORROWER is contesting in good faith and for which, if
 required under GAAP or by ADMINISTRATIVE AGENT, BORROWER has reserved against
 such taxes, assessments or governmental charges in an amount reasonably
 satisfactory to ADMINISTRATIVE AGENT; (iv) purchase money liens upon or in
 property acquired or held by BORROWER in the ordinary course of business to
 secure the purchase price of such property or to secure indebtedness incurred
 solely for the purpose of financing the 

 


- 32 -









	
  

 	
  

 
	
  

 	
 acquisition of any such property to be subject to such liens, or
 liens existing on any such property at the time of acquisition, or
 extensions, renewals or replacements of any of the foregoing for the same or
 a lesser amount, provided that no such lien will extend to or cover any
 property other than the property being acquired and no such extension,
 renewal or replacement will extend to or cover property not theretofore
 subject to the lien being extended, renewed or replaced, and provided,
 further, that the aggregate principal amount of debt at any one time
 outstanding secured by liens permitted by this clause will not exceed
 $100,000.00; (v) liens, pledges, or deposits under workers’ compensation,
 unemployment insurance, Social Security, or similar legislation, but only if
 any such lien is being contested by BORROWER in good faith by appropriate
 proceedings which prevent foreclosure and BORROWER has established reserves
 which ADMINISTRATIVE AGENT reasonably deems sufficient to satisfy such lien
 in the event of an adverse determination; (vi) liens created in favor of a
 hedging account entity and described in the control agreements to which such
 hedging account entity, BORROWER and AGENT are party and (vii) carriers’,
 mechanics’, material suppliers’, repairmen’s and similar liens imposed by
 law, arising in the ordinary course of BORROWER’s business and securing
 obligations that are not overdue by more than thirty (30) days or are being
 contested by BORROWER in good faith by appropriate proceedings which prevent
 foreclosure and BORROWER has established reserves which ADMINISTRATIVE AGENT
 reasonably deems sufficient to satisfy such lien in the event of an adverse
 determination.

 
	
  

 	
  

 
	
  

 	
 5.4.2   Lease, sell, transfer, convey, assign, or
 otherwise transfer all or any material part of the interest of BORROWER in
 the PROJECT or the PROPERTY.

 
	
  

 	
  

 
	
  

 	
 5.4.3   Make any changes in BORROWER’S general manager
 for the PROJECT without the prior written consent of ADMINISTRATIVE AGENT,
 which consent shall not be unreasonably withheld.

 
	
  

 	
  

 
	
  

 	
 5.4.4   Engage in any line of business materially
 different from that presently engaged in by BORROWER.

 
	
  

 	
  

 
	
  

 	
 5.4.5   Make any change to its name or organizational
 structure as a limited liability company.

 
	
  

 	
  

 
	
  

 	
 5.4.6   Make any material changes in its accounting
 procedures for tax or other purposes except as required by applicable law or
 GAAP.

 
	
  

 	
  

 
	
  

 	
 5.4.7   Incur any INDEBTEDNESS except: (i) debt
 arising under this AGREEMENT or another agreement with AGENT (including, but
 not limited to, documentation relating to letters of credit); (ii) unsecured
 trade credit incurred in the ordinary course of business; (iii) indebtedness
 set forth on Schedule 5.4.7, attached hereto and by this reference made a
 part hereof, if any and (iv) debt incurred in the ordinary course of business
 secured by purchase money liens permitted in Section 5.4.1 above, provided,
 that such debt does not exceed at any one time outstanding in the aggregate
 $100,000 or more. BORROWER 

 


- 33 -









	
  

 	
  

 
	
  

 	
 shall not borrow other than pursuant to this AGREEMENT or as
 otherwise permitted hereunder, without permission of ADMINISTRATIVE AGENT.
 Provided, however, ADMINISTRATIVE AGENT consents to BORROWER in the ordinary
 course of its business, borrowing up to $100,000.00 cumulatively each year,
 without further permission from ADMINISTRATIVE AGENT.

 
	
  

 	
  

 
	
  

 	
 5.4.8   Consolidate, or merge or pool or syndicate or
 otherwise combine with any other entity, or give any preferential treatment,
 make any advance, directly or indirectly, by way of loan, gift, bonus, or
 otherwise, to any entity directly or indirectly controlling or affiliated
 with or controlled by BORROWER, or any other entity, or to any partner or
 employee of BORROWER, or of any such entity.

 
	
  

 	
  

 
	
  

 	
 5.4.9   Make, or commit to make, capital expenditures
 (including the total amount of any capital leases) in an aggregate
 amount exceeding $6,000,000.00 in BORROWER’s 2012 fiscal year and in excess
 of $2,500,000.00 in the aggregate in any single fiscal year thereafter, nor
 capital expenditures not included in a ADMINISTRATIVE AGENT approved CAPEX
 BUDGET.

 
	
  

 	
  

 
	
  

 	
 5.4.10  Make or pay, without the prior written consent of
 ADMINISTRATIVE AGENT, which written consent will not be unreasonably
 withheld, in and for any fiscal year, distributions or dividends to members
 or shareholders of BORROWER in excess of the TAX DISTRIBUTIONS permitted
 below.

 





	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (i)     TAX DISTRIBUTIONS. So long as no EVENT
 OF DEFAULT has occurred and is continuing or would occur after giving effect
 to the payment of such TAX DISTRIBUTIONS, BORROWER may make TAX DISTRIBUTIONS
 to its members within thirty (30) days prior to each June 15, September 15
 and January 15, each in an amount equal to one fourth (1⁄4) of the estimated
 income tax liability to be incurred for such year by BORROWER’s members by
 reason of their membership interest in BORROWER, based upon an assumed 42%
 combined federal and state income tax rate for each member and based upon
 BORROWER’s most recent financial information available.

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (ii)     Final TAX DISTRIBUTION. BORROWER
 may make a final TAX DISTRIBUTION to its members within thirty (30) days
 prior to each April 15, so long as (a) no EVENT OF DEFAULT has occurred and
 is continuing or would occur after giving effect to the payment of such final
 TAX DISTRIBUTION described herein and (b) BORROWER has delivered to
 ADMINISTRATIVE AGENT BORROWER’s annual audited financial statements and
 compliance statements as required in this AGREEMENT, in an amount equal to
 the remaining estimated income tax liability to be incurred for such year by
 BORROWER’s members by reason of their membership interest in BORROWER, based
 upon an assumed 42% combined federal and state income tax rate for each
 member and based upon BORROWER’s most recent financial information available,
 provided, that if the difference between the total tax liability of
 BORROWER’s members 

 


- 34 -









	
  

 	
  

 	
  

 
	
  

 	
  

 	
 incurred by reason of their membership interest in BORROWER and the
 amounts previously distributed to such members pursuant to Subsection
 6.4.12(i) above is zero or a negative number, then no final TAX DISTRIBUTION
 may be made by BORROWER under this Subsection 5.4.10(ii).

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Notwithstanding anything contained in this Agreement to the contrary,
 in no event shall any TAX DISTRIBUTIONS be made prior to BORROWER’s full
 payment and satisfaction of all of BORROWER’s OBLIGATIONS which have accrued
 to the date of payment of such TAX DISTRIBUTIONS.

 





	
  

 	
  

 
	
  

 	
 5.4.11  Assume, guarantee, endorse or otherwise
 becoming contingently liable for any obligations of any other person, except
 for those guaranties outstanding at the time of execution of this AGREEMENT
 and disclosed to ADMINISTRATIVE AGENT in writing.

 
	
  

 	
  

 
	
  

 	
 5.4.12  Make sales to or purchases from any affiliate
 of BORROWER or extend credit or make payments for services rendered by any
 affiliate of BORROWER, unless such sales or purchases are made or such
 services are rendered in the ordinary course of business and on terms and
 conditions at least as favorable to BORROWER as the terms and conditions
 which would apply in a similar transaction with a person or party not an
 affiliate of BORROWER.

 
	
  

 	
  

 
	
  

 	
 5.4.13  Sell or dispose of all or substantially all
 its assets.

 
	
  

 	
  

 
	
  

 	
 5.4.14  Without the prior written consent of the
 AGENT, redeem, purchase, or retire any of its membership interests or grant
 or issue, or purchase or retire for any consideration, any warrant, right or
 option pertaining thereto, or permit any redemption, retirement, or other
 acquisition by BORROWER of the ownership of the outstanding membership
 interests of BORROWER.

 
	
  

 	
  

 
	
  

 	
 5.4.15  Except to the extent as could not reasonably
 be expected to result in a MATERIAL ADVERSE EFFECT, BORROWER will not terminate,
 amend, modify, or waive any of its rights under (a) its Articles of
 Organization, Operating Agreement or other organizational documents, or (b)
 any Material Contract.

 
	
  

 	
  

 
	
  

 	
 5.4.16  BORROWER will not permit any federal, state
 or local license, PERMIT, registration, consent or approval of any nature
 which is required or desirable in connection with BORROWER’s business and the
 operation thereof to expire, lapse, terminate, be suspended or revoked for
 any reason. In addition, BORROWER will timely apply for any renewals of any
 PERMIT required for the continued operation of the PROJECT such that the
 operation of the PROJECT will not be interrupted or suspended.

 


- 35 -





SECTION 6 EVENTS OF DEFAULT, Rights and Remedies.


6.1     EVENTS OF DEFAULT. Each of the following
shall be an EVENT OF DEFAULT and give ADMINISTRATIVE AGENT the right to
exercise its remedies under this AGREEMENT:


	
  

 	
  

 
	
  

 	
 6.1.1   BORROWER shall fail to pay when due any
 OBLIGATIONS or any other installment of principal or interest or fee payable
 to BANKS.

 
	
  

 	
  

 
	
  

 	
 6.1.2   BORROWER shall fail to provide reports and
 other information and otherwise comply with the provisions of Section 5.1
 above when due. 

 
	
  

 	
  

 
	
  

 	
 6.1.3   If BORROWER shall default in the due
 performance or observance of any of the covenants found in Sections 5.2,
 5.4.1, 5.4.2, 5.4.5, 5.4.7, 5.4.8, 5.4.10, 5.4.11, 5.4.13, or 5.4.14.

 
	
  

 	
  

 
	
  

 	
 6.1.4   If BORROWER shall default in the due
 performance or observance of any other covenant undertaken by them under the
 LOAN DOCUMENTS and such default shall not have been remedied within ten (10)
 days after written notice thereof by the AGENT to BORROWER. 

 
	
  

 	
  

 
	
  

 	
 6.1.5   BORROWER shall fail to pay any INDEBTEDNESS
 other than the LOANS in an aggregate principal amount in excess of
 $100,000.00 due any third party, and such failure shall continue beyond any
 applicable grace period, or BORROWER shall default under any material
 agreement binding BORROWER, and such default shall continue beyond any
 applicable grace period, unless such INDEBTEDNESS or contract default is
 being contested by BORROWER in good faith by appropriate proceedings which
 prevent foreclosure and has established reserves which ADMINISTRATIVE AGENT
 reasonably deems sufficient to satisfy such INDEBTEDNESS or damages in the
 event of an adverse determination.

 
	
  

 	
  

 
	
  

 	
 6.1.6   Any financial statement, representation,
 warranty, or certificate made or furnished by or with respect to BORROWER to
 AGENT in connection with this AGREEMENT, or as an inducement to BANKS to
 enter into this AGREEMENT, or in any separate statement or document to be
 delivered to AGENT hereunder, shall be materially false, incorrect,
 incomplete or misleading when made.

 
	
  

 	
  

 
	
  

 	
 6.1.7   BORROWER shall generally not pay, or shall be
 unable to pay, or shall admit in writing its inability to pay its debts as
 such debts become due or shall make an assignment for the benefit of itself
 or any of its creditors.

 
	
  

 	
  

 
	
  

 	
 6.1.8   Proceedings in bankruptcy, or for
 reorganization of BORROWER, or for the readjustment of debt under the
 Bankruptcy Code, as amended, or any part thereof, or under any other laws,
 whether state or federal, for the relief of debtors, now or hereafter
 existing, shall be commenced against or by BORROWER and, except with respect
 to any such proceedings instituted by BORROWER, shall not be discharged
 within sixty (60) 

 


- 36 -









	
  

 	
  

 
	
  

 	
 days of their commencement.

 
	
  

 	
  

 
	
  

 	
 6.1.9   A receiver or trustee shall be appointed for
 BORROWER or for any substantial part of its respective assets, or any
 proceedings shall be instituted for the dissolution or the full or partial
 liquidation of BORROWER, and except with respect to any such appointments
 requested or instituted by BORROWER, such receiver or trustee shall not be
 discharged within sixty (60) days of his appointment, and except with respect
 to any such proceedings instituted by BORROWER, such proceedings shall not be
 discharged within sixty (60) days of their commencement, or BORROWER shall
 discontinue business or materially change the nature of its business.

 
	
  

 	
  

 
	
  

 	
 6.1.10  BORROWER shall suffer final judgments for payment
 of money aggregating in excess of $1,000,000.00 which are not covered,
 without reservation, by insurance and shall not discharge the same within a
 period of thirty (30) days unless, pending further proceedings, execution has
 not been commenced or, if commenced, has been effectively stayed.

 
	
  

 	
  

 
	
  

 	
 6.1.11  A judgment creditor of BORROWER shall obtain
 possession of any of BANKS’ collateral by any means, including (without
 implied limitation) attachment, levy, distraint, replevin, or self-help which
 is reasonably likely to have a MATERIAL ADVERSE EFFECT.

 
	
  

 	
  

 
	
  

 	
 6.1.12  The PROJECT is materially damaged or destroyed by
 fire or other casualty and the loss, in the reasonable judgment of
 ADMINISTRATIVE AGENT, is not adequately covered by insurance actually
 collected or in the process of collection.

 
	
  

 	
  

 
	
  

 	
 6.1.13  [RESERVED]

 
	
  

 	
  

 
	
  

 	
 6.1.14  BORROWER shall fail to maintain a general manager
 acceptable to ADMINISTRATIVE AGENT, or if BORROWER has not within thirty (30)
 days following a termination of any such person obtained a replacement to
 ADMINISTRATIVE AGENT’s satisfaction, which ADMINISTRATIVE AGENT approval
 shall not unreasonably be withheld.

 
	
  

 	
  

 
	
  

 	
 6.1.15  The filing of any mechanics’, construction,
 materialmens’ or other liens upon the PROPERTY and/or against the PROJECT
 which are not released or bonded against (in a manner satisfactory to
 ADMINISTRATIVE AGENT) for a period in excess of ten (10) BANKING DAYS after
 the filing date of such lien, unless such lien is being contested by BORROWER
 in good faith by appropriate proceedings which prevent foreclosure and has
 established reserves which ADMINISTRATIVE AGENT reasonably deems sufficient
 to satisfy such lien in the event of an adverse determination.

 
	
  

 	
  

 
	
  

 	
 6.1.16  BORROWER defaults under any Utility Contract for
 the provision of electricity, natural gas, water or water service or any
 other utility, or any such contract is terminated, 

 


- 37 -









	
  

 	
  

 
	
  

 	
 revoked, altered, amended or restated without the prior written
 consent of ADMINISTRATIVE AGENT.

 
	
  

 	
  

 
	
  

 	
 6.1.17  BORROWER defaults under any other Material Contract
 or any such contract is terminated, revoked, altered, amended or restated
 without the prior written consent of ADMINISTRATIVE AGENT.

 
	
  

 	
  

 
	
  

 	
 6.1.18  BORROWER fails to timely make any required payment
 of EXCESS CASH FLOW under this AGREEMENT.

 
	
  

 	
  

 
	
  

 	
 6.1.19  The termination, suspension or non-renewal of any
 PERMIT which causes the PROJECT to cease operations or otherwise which could
 be have a MATERIAL ADVERSE EFFECT in the discretion or determination of
 AGENT.

 
	
  

 	
  

 
	
  

 	
 6.1.20  This AGREEMENT or any of the LOAN DOCUMENTS shall
 cease for any reason to be in full force and effect other than by reason of
 any action or inaction of the AGENT, or BORROWER shall so assert in writing,
 or the security interests created by the LOAN DOCUMENTS shall cease to be
 enforceable or shall not have the priority purported to be created thereby
 other than by reason of any action or inaction by the AGENT or BORROWER shall
 so assert in writing, or any event occurs which could reasonably be expected
 to result in a MATERIAL ADVERSE EFFECT.

 


6.2     Rights and Remedies. If an
EVENT OF DEFAULT shall have occurred and be continuing, ADMINISTRATIVE AGENT
may refrain from making any further disbursements hereunder (but ADMINISTRATIVE
AGENT may make disbursements after the occurrence of such an EVENT OF DEFAULT
without thereby waiving its rights and remedies hereunder), and ADMINISTRATIVE
AGENT may exercise any or all of the following rights and remedies:


	
  

 	
  

 
	
  

 	
 6.2.1   ADMINISTRATIVE AGENT may declare the
 OBLIGATIONS to be terminated, whereupon the same shall forthwith terminate,
 and ADMINISTRATIVE AGENT and BANKS shall have no further obligation to make
 any Advances thereunder.

 
	
  

 	
  

 
	
  

 	
 6.2.2   ADMINISTRATIVE AGENT may declare the entire
 unpaid principal amount of the OBLIGATIONS then outstanding, all interest
 accrued and unpaid thereon, and all other amounts payable under this
 AGREEMENT to be forthwith due and payable, whereupon the OBLIGATIONS, all
 such accrued interest and all such amounts shall become and be forthwith due
 and payable, without presentment, demand, protest or further notice of any
 kind, all of which are hereby expressly waived by BORROWER.

 
	
  

 	
  

 
	
  

 	
 6.2.3   AGENT may exercise and enforce its rights and
 remedies under any or all of the LOAN DOCUMENTS.

 
	
  

 	
  

 
	
  

 	
 6.2.4   AGENT may enter upon the PROPERTY, if allowed
 under applicable law, and take possession thereof, together with the PROJECT.
 

 


- 38 -









	
  

 	
  

 
	
  

 	
 6.2.5   The ADMINISTRATIVE AGENT is hereby authorized
 at any time, and from time to time, without written notice to BORROWER (any
 such notice being expressly waived by BORROWER) and without regard to the
 source of any funds, to instruct AGENT to set off and apply any and all
 deposits (general or special, time or demand, provisional or final) at any
 time held and other indebtedness at any time owing by the BANKS to or for the
 credit or the account of BORROWER against any and all of the obligations of
 BORROWER now or hereafter existing under this AGREEMENT or the LOANS or any
 other LOAN DOCUMENT, irrespective of whether or not the ADMINISTRATIVE AGENT
 shall have made any demand under this AGREEMENT or such other LOAN DOCUMENT
 and although such obligations may be unmatured. The ADMINISTRATIVE AGENT
 agrees promptly to notify BORROWER after any such setoff and the application
 thereof, however, the parties hereto agree that the failure to give such
 notice shall in no way affect the validity of such setoff and the
 application. The rights of the AGENT and the BANKS under this Section 6.2.5
 are in addition to other rights and remedies the AGENT and the BANKS may
 have.

 
	
  

 	
  

 
	
  

 	
 6.2.6   AGENT may exercise any other rights and
 remedies available to it by law, in equity or agreement.

 


SECTION 7 Miscellaneous.


7.1     Indemnification by BORROWER.
BORROWER shall bear all loss, expense (including reasonable attorneys’ fees)
and damage in connection with, and agrees to reimburse, indemnify, defend and
hold harmless BANKS, their respective agents, servants and employees from, all
claims, demands and judgments made or recovered against BANKS, their respective
agents, servants and employees, because of damages, fines, fees, penalties or
other charges, bodily injuries, including death at any time resulting there
from, and/or because of damages to property (including loss of use) from any
cause whatsoever, arising out of, incidental to, or in connection with the
construction of the PROJECT, the operation of the PROJECT, permits applicable
to the PROJECT (including, but not limited to, noncompliance with such permits)
and other matters relating to the PROJECT, whether or not due to any act of
omission or commission, including negligence of BORROWER or the DESIGN-BUILDER
or of its or their employees, servants or agents, other than gross negligence
or willful misconduct of BANKS or their respective agents. BORROWER’s liability
hereunder shall not be limited to the extent of insurance carried by or
provided by BORROWER or subject to any exclusion from coverage in any insurance
policy. OBLIGATIONS of BORROWER under this Section shall survive the payment of
the REVOLVING NOTES and the TERM NOTES. Notwithstanding the foregoing,
BORROWER’s liability hereunder shall terminate at such time as a private or
governmental plaintiff is barred by the applicable statute of limitations from
bringing a claim for the actions giving rise to any BANK’s claim for
indemnification hereunder.


7.2     No Waiver; Cumulative Remedies.
No failure or delay on the part of AGENT or BORROWER in exercising any right,
power or remedy under the LOAN DOCUMENTS shall operate as a waiver thereof; nor
shall any single or partial exercise of any such right, power or remedy
preclude any other or further exercise thereof or the exercise of any other
right, power or 


- 39 -





remedy under the LOAN DOCUMENTS. The remedies provided in the LOAN
DOCUMENTS are cumulative and not exclusive of any remedies provided by law or
in equity. 


7.3     Amendments, Etc. Any provision
of this AGREEMENT and the other LOAN DOCUMENTS may be amended or waived if, but
only if, such amendment or waiver is in writing and is signed by (a) the
BORROWER (b) the REQUIRED BANKS, and (c) the AGENT; provided that:


	
  

 	
  

 
	
  

 	
 (a)     any increase in any BANKS’
 COMMITMENT may not be made without the consent of the affected BANK, and any
 extension of the LOAN TERMINATION DATE of a LOAN may not be made without the
 written consent of each BANK;

 
	
  

 	
  

 
	
  

 	
 (b)     any reduction of the Applicable
 Margin on any LOAN may not be made without the written consent of each BANK;

 
	
  

 	
  

 
	
  

 	
 (c)     any change of any of the provisions
 of this Section may not be made without the written consent of each BANK; and

 
	
  

 	
  

 
	
  

 	
 (e)     any release of any COLLATERAL for
 the LOANS prior to the time the LOANS are indefeasibly paid in full and the
 BANKS’ commitment to make Advances has terminated may not be made without the
 written consent of each BANK. 

 


7.4     Addresses for Notices, Etc.
Except as otherwise expressly provided herein, all notices, requests, demands
and other communications provided for under the LOAN DOCUMENTS shall be in
writing and sent by first class certified mail, return receipt requested,
recognized overnight courier or telecopy (if by telecopy with a confirmation
mailed within two BUSINESS DAYS thereafter), to the applicable party at its
address indicated below: 


	
  

 	
  

 	
  

 
	
  

 	
 If to
 BORROWER:

 	
 NuGen Energy,
 LLC

 
	
  

 	
  

 	
 27283 447th
 Avenue

 
	
  

 	
  

 	
 Marion,
 South Dakota 57043

 
	
  

 	
  

 	
 Attention:
 General Manager

 
	
  

 	
  

 	
 Telecopy:
 (605) 648-2190

 
	
  

 	
  

 
	
 With copies
 to:

 	
  

 
	
  

 	
  

 
	
  

 	
  

 	
 Rex American
 Resources Corporation

 
	
  

 	
  

 	
 2875
 Needmore Road

 
	
  

 	
  

 	
 Dayton, Ohio
 45414

 
	
  

 	
  

 	
 Attention:
 Zafar Rizvi

 
	
  

 	
  

 	
 Telecopy:
 937-276-8643

 
	
  

 	
  

 
	
 And

 	
  

 


- 40 -









	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Edward M.
 Kress

 
	
  

 	
  

 	
 Dinsmore LLP

 
	
  

 	
  

 	
 1100
 Courthouse Plaza SW

 
	
  

 	
  

 	
 Dayton, Ohio
 45402

 
	
  

 	
  

 	
 Telecopy:
 937-463-4947

 
	
  

 	
  

 	
  

 
	
  

 	
 If to AGENT:

 	
 First
 National Bank of Omaha

 
	
  

 	
  

 	
 1620 Dodge
 St. STOP 1050

 
	
  

 	
  

 	
 Omaha, NE
 68197-1050

 
	
  

 	
  

 	
 Attention:
 Fallon Savage

 
	
  

 	
  

 	
 Telecopy:
 402-602-3519

 


or, as to each party, at such other address as shall be designated by
such party in a written notice to the other party complying as to delivery with
the terms of this Section. All such notices, requests, demands and other
communications shall, when mailed, be effective when deposited in the mails or
with an overnight courier, addressed as aforesaid, or, when telecopied, is
effective when confirmation of receipt is received, except that notices or
requests to AGENT pursuant to any of the provisions hereunder shall not be
effective until received by AGENT.


7.5     Time of Essence. Time is of the
essence in the performance of this AGREEMENT.


7.6     Execution in Counterparts. The
LOAN DOCUMENTS may be executed in any number of counterparts, each of which
when so executed and delivered shall be deemed to be an original and all of
which counterparts, taken together, shall constitute but one and the same
instrument.


7.7     Binding Effect, Assignment. The
LOAN DOCUMENTS to which they are parties shall be binding upon and inure to the
benefit of BORROWER and BANKS and their respective successors and assigns,
except that BORROWER shall not have the right to assign its rights thereunder
or any interest therein without the prior written consent of ADMINISTRATIVE
AGENT which consent shall not be unreasonably withheld. Each BANK is extending
its COMMITMENTS in the LOANS for its own account, and no BANK may participate,
subparticipate, assign or otherwise transfer any of its COMMITMENTS or
interests in the LOANS without the prior written consent of ADMINISTRATIVE
AGENT, which consent shall not be unreasonably withheld, and ADMINISTRATIVE
AGENT shall notify BORROWER of any such participation, subparticipation,
assignment or transfer.


7.8     Governing Law. The LOAN
DOCUMENTS, to the extent they do not otherwise provide, shall be governed by,
and construed in accordance with, the laws of the State of Nebraska, exclusive
of its choice of laws principles.


7.9     Severability of Provisions. Any
provision of this AGREEMENT, which is prohibited or unenforceable, shall be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof.


- 41 -





7.10   Headings. Section headings in
this AGREEMENT are included herein for convenience of reference only and shall
not constitute a part of this AGREEMENT for any other purpose.


7.11   Integration. This AGREEMENT
supersedes, replaces and terminates any prior oral offers, negotiations,
understandings or agreements and any commitment letters or similar writings
relating to any of the matters contemplated herein.


7.12   Post-Closing Matters.
BORROWER, AGENT, and the BANKS acknowledge that the closing of the LOANS
provided for herein may occur prior to the time BORROWER has delivered to AGENT
all of the items, documents, consents and certifications required pursuant to
the terms and provisions of this AGREEMENT. In the event thereof, BORROWER
agrees to execute and deliver to AGENT at CLOSING a post closing letter in form
and substance acceptable to ADMINISTRATIVE AGENT (the “POST CLOSING LETTER”).
BORROWER acknowledges and agrees that, notwithstanding any terms or provisions
of this AGREEMENT to the contrary, AGENT and the BANKS are not, and shall not
be, required to make available or fund any portion of the LOANS provided for in
this AGREEMENT until each of the items, documents, consents and certifications
described in the POST CLOSING LETTER have been delivered to ADMINISTRATIVE
AGENT in form and content reasonably acceptable to ADMINISTRATIVE AGENT.


7.13   USA Patriot Act Notice.
IMPORTANT NOTICE: to help the government fight the funding of terrorism and
money laundering activities, the USA Patriot Act requires all banks to obtain
and verify the identity of each person or business that opens an account. When
BORROWER opens an account AGENT will ask BORROWER for information that will
allow BANKS to properly identify BORROWER and AGENT will verify that information.
If AGENT cannot properly verify identity within 30 calendar days, AGENT
reserves the right to deem all of the balance and accrued interest on the LOANS
due and payable immediately.


7.14   Exclusion of Consequential and
Special Damages. Notwithstanding anything to the contrary in this
Agreement, neither AGENT nor any BANK will be liable for, nor will any measure
of damages against AGENT or any BANK include, under any theory of liability
(whether legal, strict or equitable), any indirect, consequential, incidental,
special or punitive damages or amounts for business interruption, loss of
income, revenue, profits or savings arising out of or relating to their
performance or non-performance under this AGREEMENT or any LOAN DOCUMENT, and
BORROWER hereby waives any right to pursue or recover any of the foregoing
damages.


7.15   Waiver of Borrower’s Rights Under
Farm Credit Act. BORROWER, having been represented by legal counsel in
connection with this AGREEMENT and, in particular, in connection with the
waiver contained in this Section, does hereby voluntarily and knowingly waive,
relinquish, and agree not to assert at any time, any and all rights that
BORROWER may have or be afforded under the sections of the Agricultural Credit
Act of 1987 designated as 12 U.S.C. Sections 2199 through 2202e and the
implementing Farm Credit Administration regulations as set forth in 12 C.F.R
Sections 617.7000 through 617.7630, including those provisions which afford
BORROWER certain rights, and/or impose on any lender to 


- 42 -





BORROWER certain duties, with respect to the collection of any amounts
owing hereunder or the foreclosure of any liens securing any such amounts, or
which require the AGENT or any present or future BANK or participant to
disclose to BORROWER the nature of any such rights or duties. This waiver is
given by BORROWER pursuant to the provisions of 12 C.F.R. Section 617.7010(c)
to induce the BANKS to fund and extend to BORROWER the credit facilities
described herein and to induce those BANKS which are Farm Credit System
institutions to agree to provide such credit facilities commensurate with their
individual commitments as they may exist from time to time.


7.16   Expenses. To the extent not
paid or reimbursed by BORROWER under the Due Diligence and Negotiation Fee
under the FEE LETTER, BORROWER agrees to pay the reasonable attorneys fees and
disbursements of the AGENT in connection with the preparation and execution of
this AGREEMENT and the LOAN DOCUMENTS, and any amendment, waiver or consent related
hereto, whether or not the transactions contemplated herein are consummated,
and all reasonable recording, filing, title insurance or other fees, costs and
taxes incident to perfecting a lien upon the COLLATERAL. BORROWER further
agrees to pay the reasonable attorney’s fees and disbursements of the AGENT and
the BANKS in connection with the enforcement of the LOAN DOCUMENTS and to
indemnify the AGENT and the BANKS and any security trustee and their respective
directors, officers and employees, against all losses, claims, damages,
penalties, judgments, liabilities and expenses (including, without limitation,
all expenses of litigation or preparation therefor, whether or not the
indemnified person is a party thereto) which any of them may pay or incur arising
out of or relating to this AGREEMENT or any LOAN DOCUMENT or any of the
transactions contemplated thereby or the direct or indirect application or
proposed application of the proceeds of any Advance except as may arise from
the gross negligence or willful misconduct of the party claiming
indemnification. BORROWER upon demand by the AGENT, at any time, shall
reimburse each such indemnified party for any legal or other expenses incurred
in connection with investigating or defending against any of the foregoing
except if the same is directly due to the gross negligence or willful
misconduct of such indemnified party.


SECTION 8 AGENT


Section 8.1     Appointment and Authority.


          (a)  Each
of the BANKS (in its capacity as a BANK) hereby irrevocably appoints,
designates and authorizes AGENT to take such action on its behalf under the
provisions of this AGREEMENT and each other LOAN DOCUMENT and to exercise such
powers and perform such duties as are expressly delegated to AGENT by the terms
of this AGREEMENT or any other LOAN DOCUMENT, together with such actions as are
reasonably incidental thereto. The provisions of this Section 8 are solely for
the benefit of AGENT and the BANKS, and neither the BORROWER nor any other
PERSON shall have rights as a third party beneficiary of any of such
provisions.


          (b)  Each
BANK hereby appoints FNBO as its ADMINISTRATIVE AGENT under and for purposes of
each LOAN DOCUMENT. FNBO hereby accepts this appointment and agrees 


- 43 -





to act as the ADMINISTRATIVE AGENT for the BANKS in accordance with the
terms of this AGREEMENT. Each BANK appoints and authorizes the ADMINISTRATIVE
AGENT to act on behalf of such BANK under each LOAN DOCUMENT and, in the
absence of other written instructions from the REQUIRED BANKS received from
time to time by the ADMINISTRATIVE AGENT (with respect to which the
ADMINISTRATIVE AGENT agrees that it will comply, except as otherwise provided
in this Section 8.1 or as otherwise advised by counsel), to exercise such
powers hereunder and thereunder as are specifically delegated to or required of
the ADMINISTRATIVE AGENT by the terms hereof and thereof, together with such
powers as may be reasonably incidental thereto. Notwithstanding any provision
to the contrary contained elsewhere in any LOAN DOCUMENT, the ADMINISTRATIVE
AGENT shall not have any duties or responsibilities, except those expressly set
forth herein, nor shall the ADMINISTRATIVE AGENT have or be deemed to have any
fiduciary relationship with any BANK, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into any
LOAN DOCUMENT or otherwise exist against the ADMINISTRATIVE AGENT. Without
limiting the generality of the foregoing sentence, the use of the term “agent”
in this AGREEMENT or any other LOAN DOCUMENT with reference to the
ADMINISTRATIVE AGENT is not intended to connote any fiduciary or other implied
(or express) obligations arising under agency doctrine of any applicable law.
Instead, such term is used merely as a matter of market custom, and is intended
to create or reflect only an administrative relationship between independent
contracting parties. 


          (c)  Each
BANK (in its capacity as a BANK) hereby appoints FNBO as its COLLATERAL AGENT
under and for purposes of each LOAN DOCUMENT. FNBO hereby accepts this
appointment and agrees to act as the COLLATERAL AGENT for the BANKS in
accordance with the terms of this AGREEMENT. Each of the BANKS hereby
irrevocably appoints and authorizes the COLLATERAL AGENT to act as the agent of
such BANK for purposes of acquiring, holding and enforcing any and all
mortgages, deeds of trust, pledges, liens, security interests or other charges
or encumbrances of any nature on collateral granted by BORROWER or other PERSON
to the COLLATERAL AGENT in order to secure any of the OBLIGATIONS, together
with such powers and discretion as are reasonably incidental thereto. In this
connection the COLLATERAL AGENT, and any co-agents, sub-agents and
attorneys-in-fact appointed by the COLLATERAL AGENT, as the case may be,
pursuant to Section 8.5 for purposes of holding or enforcing any
mortgages, deeds of trust, pledges, liens, security interests or other charges
or encumbrances of any nature on any collateral (or any portion thereof)
granted under the LOAN DOCUMENTS, or for exercising any rights and remedies
thereunder at the direction of the COLLATERAL AGENT, as the case may be, shall
be entitled to the benefits of all provisions of this Section 8 as if set forth
in full herein with respect thereto. Notwithstanding any provision to the
contrary contained elsewhere in any LOAN DOCUMENT, the COLLATERAL AGENT shall
not have any duties or responsibilities, except those expressly set forth
herein or in the other LOAN DOCUMENTS, nor shall the COLLATERAL AGENT have or
be deemed to have any fiduciary relationship with any BANK, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities
shall be read into any LOAN DOCUMENT or otherwise exist against the COLLATERAL
AGENT. Without limiting the generality of the foregoing sentence, the use of
the term “agent” in this AGREEMENT or any other LOAN DOCUMENT with reference to
the COLLATERAL AGENT is not intended to 


- 44 -





connote any fiduciary or other implied (or express) obligations arising
under agency doctrine of any applicable law. Instead, such term is used merely
as a matter of market custom, and is intended to create or reflect only an
administrative relationship between independent contracting parties. 


          (d)  Each
BANK hereby appoints and authorizes the ACCOUNTS BANK to act as depository for
the COLLATERAL AGENT, on behalf of the BANKS, and as the securities
intermediary or bank with respect to any securities accounts held with the
ACCOUNTS BANK for the benefit of the COLLATERAL AGENT, on behalf of the BANKS,
with such powers as are expressly delegated to the ACCOUNTS BANK by the terms
of this AGREEMENT, together with such other powers as are reasonably incidental
thereto. The ACCOUNTS BANK hereby accepts this appointment and agrees to act as
the depository for the COLLATERAL AGENT, on behalf of the BANKS, and as the
securities intermediary or bank with respect to securities accounts held with
the ACCOUNTS BANK, for the benefit of the COLLATERAL AGENT, on behalf of the
BANKS, in accordance with the terms of this AGREEMENT. Notwithstanding any
provision to the contrary contained elsewhere in any LOAN DOCUMENT, the
ACCOUNTS BANK shall not have any duties or responsibilities, except those
expressly set forth herein, nor shall the ACCOUNTS BANK have or be deemed to
have any fiduciary relationship with any BANK, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read
into any LOAN DOCUMENT or otherwise exist against the ACCOUNTS BANK. Without
limiting the generality of the foregoing sentence, the use of the term “agent”
in this AGREEMENT with reference to the ACCOUNTS BANK is not intended to
connote any fiduciary or other implied (or express) obligations arising under
agency doctrine of any applicable law. Instead, such term is used merely as a
matter of market custom, and is intended to create or reflect only an
administrative relationship between independent contracting parties.


Section 8.2     Rights as a BANK. Each
Person serving as AGENT hereunder or under any other LOAN DOCUMENT shall have
the same rights and powers in its capacity as a BANK as any other BANK and may
exercise the same as though it were not an AGENT. Each such Person and its
affiliates may accept deposits from, lend money to, act as the financial
advisor or in any other advisory capacity for and generally engage in any kind
of business with BORROWER or affiliate thereof as if such Person were not an
AGENT hereunder and without any duty to account therefor to the BANKS or any
other AGENT. 


Section 8.3    Exculpatory Provisions.
No AGENT shall have any duties or obligations except those expressly set forth
herein and in the other LOAN DOCUMENTS. Without limiting the generality of the
foregoing, no AGENT shall: 


	
  

 	
  

 
	
  

 	
           (i)      be
 subject to any fiduciary or other implied duties, regardless of whether an
 EVENT OF DEFAULT has occurred and is continuing;

 
	
  

 	
  

 
	
  

 	
           (ii)     have
 any duty to take any discretionary action or exercise any discretionary
 powers, except discretionary rights and powers expressly contemplated hereby
 or by the other LOAN DOCUMENTS that such AGENT is required to exercise as
 directed in writing by the REQUIRED BANKS; provided that such AGENT
 shall not be required to take any action that, in its opinion or 

 


- 45 -









	
  

 	
  

 
	
  

 	
 the opinion of its counsel, may expose the AGENT to liability or that
 is contrary to any LOAN DOCUMENT or applicable law; or

 
	
  

 	
  

 
	
  

 	
           (iii)     except
 as expressly set forth herein and in the other LOAN DOCUMENTS, have any duty
 to disclose, nor shall any AGENT be liable for any failure to disclose, any
 information relating to BORROWER or any of its affiliates that is
 communicated to or obtained by the PERSON serving as an AGENT or any of its
 affiliates in any capacity.

 


          No AGENT
shall be liable for any action taken or not taken by it (i) with the prior
written consent or at the request of the REQUIRED BANKS (or such other number
or percentage of the Lenders as may be necessary, or as such AGENT may believe
in good faith to be necessary, under the circumstances as provided in Section
9) or (ii) in the absence of its own gross negligence or willful
misconduct. Each AGENT shall be deemed not to have knowledge of any EVENT OF
DEFAULT unless and until notice describing such EVENT OF DEFAULT is given to
such AGENT in writing by BORROWER. 


No AGENT shall be responsible for or have any duty to ascertain or
inquire into (i) any statement, warranty or representation made in or in
connection with this AGREEMENT or any other LOAN DOCUMENT, (ii) the
contents of any certificate, report or other document delivered hereunder or
thereunder or in connection herewith or therewith, (iii) the performance
or observance of any of the covenants, agreements or other terms or conditions
set forth herein or therein or the occurrence or continuance of any EVENT OF
DEFAULT, (iv) the validity, enforceability, effectiveness or genuineness
of this AGREEMENT, any other LOAN DOCUMENT or any other agreement, instrument
or document, or the perfection or priority of any mortgage, deed of trust,
pledge, lien, security interest or other charge or encumbrance of any nature
created or purported to be created by any LOAN DOCUMENT, or (v) the
satisfaction of any condition set forth in this AGREEMENT or any other LOAN
DOCUMENT, other than to confirm receipt of items expressly required to be
delivered to any such AGENT. 


8.4    Reliance by AGENT. Each AGENT
shall be entitled to rely upon, and shall not incur any liability for relying
upon, any notice, request, certificate, consent, statement, instrument,
document or other writing (including any electronic message, internet or
intranet website posting or other distribution) believed by it to be genuine
and to have been signed, sent or otherwise authenticated by the proper PERSON.
Each AGENT also may rely upon any statement made to it orally or by telephone
and believed by it to have been made by the proper PERSON, and shall not incur
any liability for relying thereon. Each AGENT may consult with legal counsel
(who may be counsel for any of the Borrowers), independent accountants and
other experts selected by it, and shall not be liable for any action taken or
not taken by it in accordance with the advice of any such counsel, accountants
or experts.


8.5    Delegation of Duties. Each
AGENT may perform any and all of its duties and exercise any and all of its
rights and powers hereunder or under any other LOAN DOCUMENT by or through any
one or more sub-agents appointed by such AGENT. Each AGENT and any such
sub-agent may perform any and all of its duties and exercise its rights and
powers by or through their respective affiliates or subsidiaries. The
exculpatory provisions of this Section 8 shall 


- 46 -





apply to any such sub-agent and to the affiliates and subsidiaries of such
AGENT and any such sub-agent, and shall apply to their respective activities in
connection with their acting as AGENT.


8.6    Resignation or Removal of AGENT.
Any AGENT may resign from the performance of all of its functions and duties
hereunder and/or under the other LOAN DOCUMENTS at any time by giving thirty
(30) days’ prior notice to
BORROWER and the BANKS. Any AGENT also may be removed at any time by the
REQUIRED BANKS upon thirty (30) days’ prior notice. Such resignation or removal
shall take effect upon the appointment of a successor AGENT, in accordance with
this Section 8.6.


Upon any notice of resignation by any AGENT or upon the removal of any
AGENT by the REQUIRED BANKS, the BANKS shall, so long as no EVENT OF DEFAULT
has occurred and is continuing, with the consent (not to be unreasonably
withheld or delayed) of BORROWER, appoint a successor to such AGENT hereunder
and under each other LOAN DOCUMENT who shall be a commercial bank having a
combined capital and surplus of at least Two Hundred Fifty Million and
No/100ths Dollars ($250,000,000.00). If no successor AGENT has been appointed
by the BANKS within thirty (30) days after the date such notice of
resignation was given by such AGENT or the REQUIRED BANKS elected to remove
such AGENT, any BANK may petition any court of competent jurisdiction for the
appointment of a successor AGENT. Such court may thereupon, after such notice,
if any, as it may deem proper, appoint a successor AGENT, as applicable, who
shall serve as such AGENT, hereunder and under each other LOAN DOCUMENT until
such time, if any, as the BANKS appoint a successor AGENT, as provided above.
Upon the acceptance of a successor’s appointment as an AGENT hereunder, such
successor shall succeed to and become vested with all of the rights, powers,
privileges and duties of the retiring or removed AGENT, and the retiring or
removed AGENT shall be discharged from all of its duties and obligations
hereunder or under the other LOAN DOCUMENTS. After the retirement or removal of
any AGENT hereunder and under the other LOAN DOCUMENTS, the provisions of this
Section 9 shall continue in effect for the benefit of such retiring or removed
AGENT, its sub-agents and their respective affiliates and subsidiaries in
respect of any actions taken or omitted to be taken by any of them while the
retiring AGENT was acting as AGENT. 


If a retiring or removed AGENT is the ACCOUNTS BANK, such ACCOUNTS BANK
will promptly transfer all of the deposit accounts and security accounts of
BORROWER relating to this AGREEMENT to the possession or control of the
successor ACCOUNTS BANK, and the ACCOUNTS BANK and BORROWER will execute and
deliver such notices, instructions and assignments as may be reasonably
necessary or desirable to transfer the rights of the ACCOUNTS BANK with respect
thereto to the successor ACCOUNTS BANK. 


If a retiring or removed AGENT is the COLLATERAL AGENT, such COLLATERAL
AGENT will promptly transfer any collateral for the LOANS in the possession or
control of such COLLATERAL AGENT to the successor COLLATERAL AGENT, and the
COLLATERAL AGENT and BORROWER will execute and deliver such notices,
instructions and assignments as may be reasonably necessary or desirable to
transfer the rights of the COLLATERAL AGENT 


- 47 -





with respect to such collateral property for the LOANS to the successor
COLLATERAL AGENT. 


8.7    No Amendment to Duties of AGENT
Without Consent. No AGENT shall be bound by any waiver, amendment,
supplement or modification of this AGREEMENT or any other LOAN DOCUMENT that
affects its rights or duties hereunder or thereunder unless such AGENT shall
have given its prior written consent, in its capacity as AGENT, thereto.


8.8    Non-Reliance on AGENT and Other
BANKS. Each BANK acknowledges that it has, independently and without
reliance upon any AGENT or any other BANK or any of their affiliates or
subsidiaries and based on such documents and information as it has deemed
appropriate, made its own credit analysis of the PROJECT and BORROWER and has
made its own decision to enter into this AGREEMENT and make the LOANS. Each
BANK also acknowledges that it will, independently and without reliance upon
any AGENT or any other BANK or any of their affiliates or subsidiaries and
based on such documents and information as it shall from time to time deem
appropriate, continue to make its own decisions in taking or not taking action
under or based upon this AGREEMENT, any other LOAN DOCUMENT or any related
agreement or any document furnished hereunder or thereunder.


8.9    COLLATERAL
AGENT May File Proofs of Claim. In case of the pendency of any bankruptcy
or insolvency proceeding relative to BORROWER (including any event described in
Sections 6.1.6, 6.1.7 or 6.1.8 of this AGREEMENT, the COLLATERAL AGENT
(irrespective of whether the principal of any LOAN shall then be due and
payable as herein expressed or by declaration or otherwise and irrespective of
whether the COLLATERAL AGENT or any other BANK shall have made any demand on
BORROWER) shall be entitled and empowered, but shall not be obligated to, by
intervention in such proceeding or otherwise: 


	
  

 	
  

 
	
  

 	
 8.9.1   to file and prove a claim for the whole amount
 of the principal and interest owing and unpaid in respect of the LOANS and
 all other OBLIGATIONS that are owing and unpaid and to file such other documents
 as may be necessary or advisable in order to have the claims of the BANKS
 (including any claim for the reasonable compensation, expenses, disbursements
 and advances of the BANKS and their respective agents and counsel and all
 other amounts due the BANKS under this AGREEMENT or the other LOAN DOCUMENTS)
 allowed in such judicial proceeding;

 
	
  

 	
  

 
	
  

 	
 8.9.2   to collect and receive any monies or other
 property payable or deliverable on any such claims and to distribute the
 same; and

 
	
  

 	
  

 
	
  

 	
 8.9.3   any custodian, receiver, assignee, trustee,
 liquidator, sequestrator or other similar official in any such judicial
 proceeding is hereby authorized by each BANK to make such payments to the
 COLLATERAL AGENT and, in the event that the COLLATERAL AGENT may consent to the
 making of such payments directly to the BANKS, to pay to the COLLATERAL AGENT
 any amount due for the reasonable compensation, expenses, disbursements and
 advances of the AGENT and their respective agents and counsel, and 

 


- 48 -









	
  

 	
  

 
	
  

 	
 any other amounts due the AGENT under this AGREEMENT and the other
 LOAN DOCUMENTS.

 


8.10   Collateral Matters. The BANKS
irrevocably authorize the COLLATERAL AGENT, upon the direction of the
ADMINISTRATIVE AGENT, to release any mortgage, deed of trust, pledge, lien,
security interest or other charge or encumbrance of any nature on any property
granted to or held by the COLLATERAL AGENT under any LOAN DOCUMENT upon
BORROWER’s full and final satisfaction of the OBLIGATIONS. Upon request by the
COLLATERAL AGENT at any time, the BANKS will confirm in writing the COLLATERAL
AGENT’s authority to release its interest in particular types or items of
property pursuant to this Section 8.10. In each case as specified in this
Section 8.10, the COLLATERAL AGENT will, at BORROWER’s expense, execute and
deliver to BORROWER such documents as BORROWER may reasonably request to
evidence the release of such item of collateral from the assignment and
security interest granted under the LOAN DOCUMENTS in accordance with the terms
of the LOANS DOCUMENTS and this Section 8.10. 


Notwithstanding anything to the contrary in any LOAN DOCUMENT, the
powers conferred on the COLLATERAL AGENT under the LOAN DOCUMENTS are solely to
protect its interest (on behalf of the BANKS) in the collateral securing the
LOANS and shall not impose any duty upon it to exercise any such powers. Except
for the reasonable care of any such collateral in its possession and the
accounting for moneys actually received by it under the LOAN DOCUMENTS, the
COLLATERAL AGENT shall have no duty as to any such collateral, or
responsibility, for (i) ascertaining or taking action with respect to calls,
conversions, exchanges, maturities, tenders or other matters relative to any
investment property constituting collateral, whether or not the COLLATERAL
AGENT has or is deemed to have knowledge of such matters, or (ii) taking any
necessary steps to preserve rights against prior parties or any other rights
pertaining to any such collateral. The COLLATERAL AGENT shall be deemed to have
exercised reasonable care in the custody and preservation of any collateral in
its possession if such collateral is accorded treatment substantially equal to
that which it accords its own property.


The COLLATERAL AGENT shall not be liable for interest on any money or
assets received by it. Assets held in trust by the COLLATERAL AGENT need not be
segregated from other assets except to the extent required by law.


Before the COLLATERAL AGENT acts or refrains from acting, it may
require a certificate of an appropriate officer of BORROWER at the expense of
BORROWER. The COLLATERAL AGENT shall not be liable for any action it takes or
omits to take in good faith in reliance on such officer’s certificate.


The COLLATERAL AGENT shall not be liable for any action that it takes or
omits to take in good faith that it reasonably believes to be authorized or
within its rights or powers under the LOAN DOCUMENTS. The COLLATERAL AGENT
shall not be bound to make any investigation into the facts or matters stated
in any resolution, certificate, statement, instrument, opinion, notice,
request, direction, consent, order, bond, debenture, or other paper or
document, but the COLLATERAL AGENT, in its discretion, may make such further
inquiry or 


- 49 -





investigation into such facts or matters as it may see fit and, if the
COLLATERAL AGENT shall determine to make such further inquiry or investigation,
it shall be entitled, upon reasonable notice to BORROWER, to examine the books,
records and premises of BORROWER, personally or by agent or attorney and to
consult with the officers and representatives of BORROWER, including BORROWER’s
accountants and attorneys. 


The COLLATERAL AGENT shall be under no obligation to exercise any of
the rights or powers vested in it by the LOAN DOCUMENTS at the request, order
or direction of the BANKS unless such BANKS have offered to the COLLATERAL
AGENT security or indemnity reasonably satisfactory to the COLLATERAL AGENT
against the costs, expenses and liabilities that may be incurred by it in
compliance with such request, order or direction. The COLLATERAL AGENT shall
not be required to give any bond or surety in respect of the performance of its
powers and duties under the LOAN DOCUMENTS.


The COLLATERAL AGENT may from time to time, at its option, perform any
act that BORROWER agrees hereunder or under any LOAN DOCUMENT to perform and
that BORROWER shall fail to perform after being requested in writing so to
perform (it being understood that no such request need be given after the
occurrence of an EVENT OF DEFAULT) and the COLLATERAL AGENT may from time to
time take any other action that the COLLATERAL AGENT reasonably deems necessary
for the maintenance, preservation or protection of any of the collateral for
the LOANS or of its security interest therein.


The COLLATERAL AGENT is authorized to endorse, in the name of BORROWER,
any item, howsoever received by the COLLATERAL AGENT, representing any payment
on or other proceeds of any of the collateral for the LOANS.


8.11   Indemnification. Each
BANK other than AGENT jointly and severally agrees to indemnify AGENT (to the
extent not reimbursed by BORROWER), ratably according to the respective
COMMITMENTS of the BANKS, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever which may be imposed
on, incurred by, or asserted against AGENT acting as AGENT in any way relating
to or arising out of this AGREEMENT or any other LOAN DOCUMENT or any action
taken or omitted by AGENT acting as the AGENT under this AGREEMENT or any other
LOAN DOCUMENT, provided that no BANK shall be liable for any portion of
such liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting from AGENT’s gross negligence
or willful misconduct in connection with AGENT acting as AGENT. Without
limitation of the foregoing, each BANK jointly and severally agrees to
reimburse AGENT promptly upon demand for its ratable share of any out-of-pocket
expenses (including counsel fees) incurred by AGENT in connection with the
preparation, execution, delivery, administration, modification, amendment or
enforcement (whether through negotiations, legal proceedings or otherwise) of,
or legal advice in respect of rights or responsibilities under, this AGREEMENT
or any other LOAN DOCUMENT to the extent that AGENT is not reimbursed for such
expenses by BORROWER.


- 50 -





8.12   Borrower
Indemnity. BORROWER shall indemnify and hold the AGENT and each BANK (each
such Person being called an “Indemnitee”) harmless from and against any and all
claims, liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses (including attorneys’ fees), or disbursements
resulting from: (a) the material inaccuracy of any representation or warranty
of BORROWER described in this AGREEMENT or the LOAN DOCUMENTS or any financing
statements or other financial information provided to Indemnitee; (b) the
breach of any covenant or other obligation of BORROWER described in this
AGREEMENT or the LOAN DOCUMENTS (including, but not limited to, BORROWER’s
failure to comply with any Environmental Law); (c) Indemnitee’s exercise of any
of their rights and remedies described in this AGREEMENT or the LOAN DOCUMENTS;
or (d) otherwise pertaining to the NOTES, Material Contracts, this AGREEMENT,
or the LOAN DOCUMENTS; provided, however, that BORROWER shall not be required
to indemnify any Indemnitee to the extent that any claim is found by a
non-appealable order of a court with proper jurisdiction to be due to such
Indemnitee’s gross negligence or willful misconduct. BORROWER’s obligations to
indemnify and hold Indemnitees harmless shall survive the payment of the LOANS
and the OBLIGATIONS and the termination of this AGREEMENT or any other LOAN
DOCUMENT.


 [SIGNATURE
PAGES FOLLOW]


- 51 -





A
CREDIT AGREEMENT MUST BE IN WRITING TO BE ENFORCEABLE UNDER NEBRASKA LAW. TO
PROTECT YOU (BORROWER) AND US (LENDER) FROM ANY MISUNDERSTANDINGS OR
DISAPPOINTMENTS, ANY CONTRACT, PROMISE, UNDERTAKING, OR OFFER TO FOREBEAR
REPAYMENT OF MONEY OR TO MAKE ANY OTHER FINANCIAL ACCOMMODATION IN CONNECTION
WITH THIS LOAN OF MONEY OR GRANT 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 DOCUMENT EXECUTED IN CONNECTION WITH THIS LOAN
OF MONEY OR GRANT OR EXTENSION OF CREDIT, MUST BE IN WRITING TO BE EFFECTIVE.


          IN
WITNESS WHEREOF, the parties hereto have caused this AGREEMENT to be executed
by their respective officers thereunto duly authorized, as of the date first
above written.


	
  

 	
  

 	
  

 	
  

 
	
  

 	
 NUGEN ENERGY, LLC, a South Dakota limited liability company

 
	
  

 	
  

 	
  

 	 
	
  

 	
 By:

 	
  

 	 
	
  

 	
  

 	 

 	 
	
  

 	
 Title:

 	
  

 	 
	
  

 	
  

 	 

	 
	
  

 	
  

 	
  

 	 
	
  

 	
 FIRST
 NATIONAL BANK OF OMAHA, in its capacity as a BANK, ADMINISTRATIVE AGENT,
 COLLATERAL AGENT and ACCOUNTS BANK

 
	
  

 	
  

 	
  

 	 
	
  

 	
 By:

 	
  

 	 
	
  

 	
  

 	 

	 
	
  

 	
  

 	
 Fallon Savage, Vice President

 	 


- 52 -









	
  

 	
  

 	
  

 	
  

 
	
  

 	
 AgStar Financial Services, PCA, as a BANK

 
	
  

 	
  

 	
  

 	 
	
  

 	
 By:

 	
  

 	 
	
  

 	
  

 	 

 

 	 
	
  

 	
  

 	
  

 	 
	
  

 	
 Title:

 	
  

 	 
	
  

 	
  

 	 

 

 	 













	
  

 	
  

 	
  

 	
  

 
	
  

 	
 1st Farm Credit Services, PCA, as a BANK

 
	
  

 	
  

 	
  

 	 
	
  

 	
 By:

 	
  

 	 
	
  

 	
  

 	 

 

 	 
	
  

 	
  

 	
  

 	 
	
  

 	
 Title:

 	
  

 	 
	
  

 	
  

 	 

 

 	 













	
  

 	
  

 	
  

 	
  

 
	
  

 	
 1st Farm Credit Services, FLCA, as a BANK

 
	
  

 	
  

 	
  

 	 
	
  

 	
 By:

 	
  

 	 
	
  

 	
  

 	 

 

 	 
	
  

 	
  

 	
  

 	 
	
  

 	
 Title:

 	
  

 	 
	
  

 	
  

 	 

 

 	 













	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Farm Credit Services of America, PCA as a BANK

 
	
  

 	
  

 	
  

 	 
	
  

 	
 By:

 	
  

 	 
	
  

 	
  

 	 

 

 	 
	
  

 	
  

 	
  

 	 
	
  

 	
 Title:

 	
  

 	 
	
  

 	
  

 	 

 

 	 













	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Farm Credit Services of America, FLCA as a BANK

 
	
  

 	
  

 	
  

 	 
	
  

 	
 By:

 	
  

 	 
	
  

 	
  

 	 

 

 	 
	
  

 	
  

 	
  

 	 
	
  

 	
 Title:

 	
  

 	 
	
  

 	
  

 	 

 

 	 













	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Badgerland Financial, FLCA, as a BANK

 
	
  

 	
  

 	
  

 	 
	
  

 	
 By:

 	
  

 	 
	
  

 	
  

 	 

 

 	 
	
  

 	
  

 	
  

 	 
	
  

 	
 Title:

 	
  

 	 
	
  

 	
  

 	 

 

 	 













	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Midwest Bank of Western Illinois, as a BANK

 
	
  

 	
  

 	
  

 	 
	
  

 	
 By:

 	
  

 	 
	
  

 	
  

 	 

 

 	 
	
  

 	
  

 	
  

 	 
	
  

 	
 Title:

 	
  

 	 
	
  

 	
  

 	 

 

 	 










EXHIBIT A
Revolving Note


REVOLVING NOTE


	
  

 	
  

 
	
 $

 	
 November
 1, 2011

 



     For
value received, the undersigned, NUGEN ENERGY, LLC, a South Dakota limited
liability company (“Borrower”), promises to pay to the order of
________________________ in care of FIRST NATIONAL BANK OF OMAHA, a national
banking association in its capacity as Administrative Agent for the Banks (in
such capacity, the “Lender”, which term shall include any subsequent holder
hereof), in lawful money of the United States of America, at such address as is
required by the Lender, the principal sum of _____________ and __/100 Dollars
($_________________) or, if different, the principal amount outstanding under
Section 2.1 of the Credit Agreement referred to below.


     This
Revolving Note (the “Note”) is issued pursuant to, and is subject to the terms
and conditions of, the Loan Agreement, dated on or about the date hereof, among
the Borrower, the Lender and the Banks party thereto (as the same may be
amended, renewed, restated, replaced, consolidated or otherwise modified from
time to time (the “Credit Agreement”). To the extent of any conflict between
the terms and conditions of this Note and the terms and conditions of the
Credit Agreement, the terms and conditions of the Credit Agreement shall prevail
and govern. Capitalized terms used but not defined in this Note have the
meanings given to them in the Credit Agreement.


     Interest
shall accrue on the outstanding principal balance of this Note as provided in
the Credit Agreement. Principal, interest and all other amounts, if any,
payable in respect of this Note shall be payable as provided in the Credit
Agreement. 


     The
termination of the Credit Agreement or the occurrence of an Event of Default
shall entitle the Lender, at its option, to declare the then outstanding
principal balance hereof, all accrued interest thereon, and all other amounts,
if any, payable in respect of this Note to be, and the same shall thereupon
become, immediately due and payable without notice to or demand on the Borrowers,
all of which the Borrowers waive.


     Time
is of the essence with respect to this Note. To the fullest extent permitted by
applicable law, Borrower, for itself and its successors and assigns, waives
presentment, demand, protest, notice of dishonor, and any and all other
notices, demands and consents in connection with the delivery, acceptance,
performance, default or enforcement of this Note, and consents to any
extensions of time, renewals, releases of any parties to or guarantors of this
Note, waivers and any other modifications that may be granted or consented to
by the Lender from time to time in respect of the time of payment or any other
provision of this Note.


     This
Note shall be governed by the laws of the State of Nebraska, without regard to
any choice of law rule thereof giving effect to the laws of any other
jurisdiction.





     IN
WITNESS WHEREOF, Borrower has executed and delivered this Note as of the date
first above written.


	
  

 	
  

 	
  

 	
  

 
	
  

 	
 NUGEN
 ENERGY, LLC, a South Dakota 

 
	
  

 	
 limited
 liability company

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
  

 	
  

 
	
  

 	
 Title:

 	
  

 	
  

 


- 2 -





EXHIBIT B
Term Note


TERM NOTE


	
  

 	
  

 
	
 $__________________

 	
 November 1, 2011

 



     For
value received, the undersigned, NUGEN ENERGY, LLC, a South Dakota limited
liability company (“Borrower”, promises to pay to the order of
_________________________ in care of FIRST NATIONAL BANK OF OMAHA in its
capacity as Administrative Agent (in such capacity, the “Lender”; which term
shall include any subsequent holder hereof), in lawful money of the United
States of America, at such address as is required by the Lender, the principal
sum of _______________ and ___/100 Dollars ($_______________).


     This
Term Note (the “Note”) is issued pursuant to, and is subject to the terms and
conditions of, the Loan Agreement, dated on or about the date hereof, among
Borrower, Lender and the Banks party thereto (as the same may be amended,
renewed, restated, replaced, consolidated or otherwise modified from time to
time (the “Credit Agreement”). To the extent of any conflict between the terms
and conditions of this Note and the terms and conditions of the Credit
Agreement, the terms and conditions of the Credit Agreement shall prevail and
govern. Capitalized terms used but not defined in this Note have the meanings
given to them in the Credit Agreement.


     Interest
shall accrue on the outstanding principal balance of this Note as provided in
the Credit Agreement. Principal, interest and all other amounts, if any,
payable in respect of this Note shall be payable as provided in the Credit
Agreement. 


     The
termination of the Credit Agreement or the occurrence of an Event of Default
shall entitle the Lender, at its option, to declare the then outstanding
principal balance hereof, all accrued interest thereon, and all other amounts,
if any, payable in respect of this Note to be, and the same shall thereupon
become, immediately due and payable without notice to or demand on the
Borrowers, all of which the Borrowers waive.


     Time
is of the essence with respect to this Note. To the fullest extent permitted by
applicable law, Borrower, for itself and its successors and assigns, waives
presentment, demand, protest, notice of dishonor, and any and all other
notices, demands and consents in connection with the delivery, acceptance,
performance, default or enforcement of this Note, and consents to any
extensions of time, renewals, releases of any parties to or guarantors of this
Note, waivers and any other modifications that may be granted or consented to
by the Lender from time to time in respect of the time of payment or any other
provision of this Note.


     This
Note shall be governed by the laws of the State of Nebraska, without regard to
any choice of law rule thereof giving effect to the laws of any other
jurisdiction.





     IN
WITNESS WHEREOF, Borrower has executed and delivered this Note as of the date
first above written.


	
  

 	
  

 	
  

 	
  

 
	
  

 	
 NUGEN
 ENERGY, LLC, an Illinois

 
	
  

 	
 limited
 liability company

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
  

 	
  

 
	
  

 	
 Title:

 	
  

 	
  

 


- 2 -





EXHIBIT C
BANKS’ COMMITMENTS


	
  

 	
  

 	
  

 	
  

 
	
 BANK

 	
 TERM LOAN 

 COMMITMENT 

 AMOUNT

 	
 REVOLVING LOAN COMMITMENT 

 AMOUNT

 	
 TOTAL 

 COMMITMENT, 

 TERM LOAN AND 

 REVOLVING LOAN

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
 First National Bank of 

 Omaha

 	
 $16,750,000.00

 	
 $3,250,000.00

 	
 $20,000,000.00

 
	
 1st Farm Credit 

 Services, PCA

 	
 N/A

 	
 $2,000,000.00

 	
 $2,000,000.00

 
	
 1st Farm Credit 

 Services, FLCA

 	
 $11,000,000.00

 	
 N/A

 	
 $11,000,000.00

 
	
 Farm Credit Services 

 of America, PCA

 	
 N/A

 	
 $1,500,000.00

 	
 $10,000,000.00

 
	
 Farm Credit Services 

 of America, FLCA

 	
 $8,500,000.00

 	
 N/A

 	
  

 
	
 AgStar Financial 

 Services, PCA

 	
 $8,500,000.00

 	
 $1,500,000.00

 	
 $10,000,000.00

 
	
 Badgerland Financial, 

 FLCA

 	
 $6,000,000.00

 	
 $1,000,000.00

 	
 $7,000,000.00

 
	
 Midwest Bank of 

 Western Illinois

 	
 $4,250,000.00

 	
 $750,000.00

 	
 $5,000,000.00

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
 Totals

 	
 $55,000,000.00

 	
 $10,000,000.00

 	
 $65,000,000.00

 









EXHIBIT D
Real Estate Description


Parcel 1:


Lots 1 and 2 of Millennium Ethanol LLC Addition, located in Section 36,
Township 100 North, Range 55 West of the 5th P.M. and in Section 31, Township
100 North, Range 54 West of the 5th P.M., Turner County, South Dakota, as shown
on the plat recorded in Book 7 of Plats Pages 415-417.


Identification Numbers:


Lot 1: 1100-10055-361-05
Lot 2: 1100-10054-314-00


Parcel 2:


Lot 20, Marion Industrial Park Addition, an addition to the City of
Marion, Turner County, South Dakota.


Identification Number 25935-00000-020-00





EXHIBIT E
PERMITS


	
  

 	
  

 	
  

 
	
 1.

 	
 Final Air
 Permit – Permit # 28.0502

 
	
  

 	
  

 	
  

 
	
 2.

 	
 Above Ground
 Storage Tank Permit from the South Dakota Department of Environment and
 Natural Resources

 
	
  

 	
  

 	
  

 
	
 3.

 	
 National
 Pollution Discharge Elimination System Permit, consisting of:

 
	
  

 	
 -

 	
 Storm Water
 Pollution Prevention Plan for Industrial

 
	
  

 	
  

 	
  

 
	
 4.

 	
 Fire
 Protection Permit

 
	
  

 	
  

 
	
 5.

 	
 .

 	
 Railroad
 Approval/Track Agreement

 
	
  

 	
  

 	
  

 
	
 6.

 	
 Site
 Security Plan

 
	
  

 	
  

 	
  

 
	
 7.

 	
 Water
 Permits

 
	
  

 	
 -

 	
 Water
 Appropriations Permit

 
	
  

 	
 -

 	
 Potable
 Water

 
	
  

 	
  

 	
  

 
	
 8.

 	
 Authorization
 to Discharge Under the Surface Water Discharge System from the State of South
 Dakota

 
	
  

 	
  

 	
  

 
	
 9.

 	
 Tobacco
 Trade Bureau Permit

 
	
  

 	
  

 	
  

 
	
 10.

 	
 Archeological
 Survey

 
	
  

 	
  

 	
  

 
	
 11.

 	
 Risk
 Management Plan

 
	
  

 	
  

 	
  

 
	
 12.

 	
 Spill
 Prevention, Control and Countermeasure Plan

 









EXHIBIT F
OUTSTANDING EQUITY INTERESTS


	
  

 	
  

 
	
 Rex NuGen,
 LLC

 	
 100,100
 Class A (voting) Units

 
	
  

 	
  

 
	
 Various
 Producers

 	
 2,658,369
 Class B (non-voting) Units

 










SCHEDULE 3.23(i)
Supply Contracts


	
  

 	
  

 
	
 1.

 	
 Farming
 Services Agreement dated September 26, 2011 between Borrower and Alan
 Schoenwald

 
	
  

 	
  

 
	
 2.

 	
 Agency
 Agreement dated June 25, 2009 between Borrower and FREMAR, LLC for the
 purchase of corn

 
	
  

 	
  

 
	
 3.

 	
 Supply
 Agreement dated June 1, 2011 between Borrower and Dansico US Inc. for the
 purchase of enzymes

 
	
  

 	
  

 
	
 4.

 	
 Supply
 Agreement dated April 1, 2010 between Borrower and U.S.Water Services for the
 supply of chemicals

 









SCHEDULE 3.23(ii)
Marketing and Risk Management Contracts


	
  

 	
  

 
	
 1.

 	
 NuGen
 Ethanol Marketing Agreement dated August 11, 2011 between the Borrower and
 Archer Daniels Midland Company.

 
	
  

 	
  

 
	
 2.

 	
 Distiller’s
 Grain Marketing Agreement dated June 16, 2009 between Borrower and CHS Inc.

 
	
  

 	
  

 
	
 3.

 	
 Management
 Agreement dated November 1, 2011 between Borrower and Rex NuGen, LLC

 









SCHEDULE 3.23(iii)
Transportation Contracts


	
  

 	
  

 
	
 1.

 	
 Car Leasing
 Agreement between Borrower and General Electric Railcar Services Corporation

 
	
  

 	
  

 
	
 2.

 	
 Locomotive
 Lease Agreement dated August 29, 2009 between Borrower and Independent
 Locomotive Leasing Company, LLC

 
	
  

 	
  

 
	
 3.

 	
 Master
 Railcar Lease dated August 5, 2009 between Borrower and The CIT
 Group/Equipment Financing, Inc.

 
	
  

 	
  

 
	
 4.

 	
 Railroad Car
 Lease Agreement dated June 24, 2009 between Borrower and Trinity Industries
 Leasing Company

 
	
  

 	
  

 
	
 5.

 	
 Railcar
 lease between Borrower and GATX Corporation

 









SCHEDULE 3.23(iv)
Utility Contracts


	
  

 	
  

 
	
 1.

 	
 Utility
 Management Agreement dated August 1, 2009 between Borrower and Energy
 Management & Consulting Services, LLC

 
	
  

 	
  

 
	
 2.

 	
 Electric
 Service Agreement dated July 14, 2006 between Marion Energy Investments, LLC
 and Southeastern Electric Cooperative, Inc. as assigned to Borrower

 
	
  

 	
  

 
	
 3.

 	
 Water User
 Agreement dated June 14, 2006 between TM Rural Water District and Millenium
 Ethanol, LLC, as assigned to Borrower

 









SCHEDULE 5.4.7
Permitted Indebtedness


None