Exhibit 10.1


 


FIRST AMENDED AND RESTATED
CONSTRUCTION LOAN AGREEMENT


 


This
FIRST AMENDED AND RESTATED CONSTRUCTION LOAN AGREEMENT (the “AGREEMENT”) is
dated as of the 18th day of June, 2009, and is by and between DAKOTA ETHANOL, L.L.C., a South Dakota limited liability
company (“BORROWER”) and FIRST NATIONAL BANK OF
OMAHA (“BANK”), a national banking association established at Omaha,
Nebraska.


 


WHEREAS,
the BORROWER requested the BANK to lend to BORROWER up to the sum of Twenty Six
Million, Six Hundred Thousand ($26,600,000.00) Dollars (the “CONSTRUCTION LOAN”),
for the purpose of partially funding the cost of construction for an ethanol
plant (the “PROJECT’) on premises owned by BORROWER, and described on Exhibit “A”
attached hereto andy by this reference made a part hereof (the “PROPERTY”) and
providing permanent financing for the PROJECT. 
BANK and BORROWER entered into a Construction Loan Agreement dated as of
September 25, 2000, as well as numerous amendments thereto (the “ORIGINAL
CREDIT FACILITIES”).  The parties now
desire to renew, restate and amend such ORIGINAL CREDIT FACILITIES in their
entirety.


 


WHEREAS, pursuant
to the terms of this AGREEMENT, the parties desire that (i), the ORIGINAL
CREDIT FACILITIES shall be replaced by credit facilities as described in Section II
of this AGREEMENT; (ii) all loans and other obligations of BORROWER
outstanding as of this date under the ORIGINAL CREDIT FACILITIES shall be
deemed to be loans and obligations outstanding under this AGREEMENT, and (iii) all
other provisions of this AGREEMENT not in effect, shall become effective;


 


WHEREAS,
the parties agree as follows:


 


SECTION 1
Definitions.


 


1.1                                 “ASSIGNMENT OF CONSTRUCTION CONTRACT”
means the assignment of the agreement between the BORROWER and Broin and
Associates, Inc. (the “GENERAL CONTRACTOR”) for design and construction of
the PROJECT (the “DESIGN/BUILD CONTRACT”) in accordance with PLANS therein
described, by which the BORROWER assigns, as additional security for repayment
of the OBLIGATIONS, the BORROWER’s interest in the DESIGN/BUILD CONTRACT in a
form acceptable to the BANK.


 


1.2                                 “ASSIGNMENT OF RENTS” means the
assignment of rents and leases as to the PROPERTY between BORROWER as assignor
and the BANK as assignee as security for payment of the CONSTRUCTION NOTE in a
form acceptable to the BANK.


 


1.3                                 “BANKING DAY” means a day on which the
BANK is open for substantially all of its business.


 


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1.4                                 “CLOSING” shall mean the date on which
the BANK receives this AGREEMENT, executed by the BORROWER, together with the
NOTES of BORROWER.


 


1.5                                 intentionally left blank


 


1.6                                 intentionally left blank


 


1.7                                 “CONSTRUCTION NOTE” means the promissory
note of the BORROWER which evidenced borrowings under the CONSTRUCTION LOAN of
up to a maximum amount of Twenty Six Million Six Hundred Thousand
($26,600,000.00) Dollars.


 


1.8                                 “DEBT SERVICE” means the sum of a)
interest expense attributable to all BORROWER’s loans and b) scheduled
principal payments on all INDEBTEDNESS due within one year.


 


1.9                                 “DRAW REQUEST” means forms acceptable to
the BANK to be submitted to the BANK when a disbursement is requested under the
CONSTRUCTION NOTE.


 


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


 


1.11                           “EXCESS CASH FLOW” means net income plus
interest expense, extraordinary loss, depreciation and amortization, less
scheduled payments on the OBLIGATIONS and approved INDEBTEDNESS other than the
OBLIGATIONS, capital expenditures, and any extraordinary gain.


 


1.12                           “GAAP” means generally accepted
accounting principles, applied on a basis consistent with the accounting
principles applied in the preparation of the annual financial statements of the
BORROWER referred to in the Financial Condition Section of this AGREEMENT.
All accounting terms not otherwise defined in this AGREEMENT have the meaning
assigned to them in accordance with GAAP.


 


1.13                           “INDEBTEDNESS” means all indebtedness for
borrowed money including long term debt, and capital leases.


 


1.14                           “INDEPENDENT INSPECTOR” means the firm
which will was retained by BANK, at BORROWER’s cost, to conduct on site
inspections of the work-in-progress on the PROJECT, and to issue periodic
reports to BANK as to the progress of construction and adherence to the PLANS.


 


1.15                           “LOAN DOCUMENTS” means this AGREEMENT,
any amendments to this AGREEMENT, any NOTES, and each document referred to in Section 4
of this AGREEMENT.


 


1.16                           “LOAN
TERMINATION DATE” means the earliest to occur of the following:  (i) as to TERM NOTE 2 and TERM NOTE 5, September 1,
2011; as to the REVOLVING NOTE, May 17, 2010 (ii) the date the OBLIGATIONS
are accelerated pursuant to this AGREEMENT, and (iii) the date BANK
receives (a) notice in writing from BORROWER of BORROWER’s election to
terminate this AGREEMENT and (b) indefeasible payment in full of the OBLIGATIONS.


 


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1.17                         intentionally left blank xxx


 


1.18                         “MARKETING CONTRACT” means that written
contract between BORROWER and RPMG, Inc. by which the latter agreed to provide
marketing services as to BORROWER’s products.


 


1.19                         “MORTGAGE” means the Mortgage between the
BORROWER as mortgagor and the BANK as mortgagee, creating a first lien on the
PROPERTY and a security interest in all of the personal property located thereon
as security for payment of the OBLIGATIONS in a form acceptable to the BANK.


 


1.20                         “NET WORTH” means total assets less total
liabilities and less the following types of assets: (1) leasehold
improvements; (2) receivables and other investments in or amounts due from
any member, employee or other person or entity related to or affiliated with
the BORROWER; (3) goodwill, patents, copyrights, mailing lists, trade
names, trademarks, servicing rights, organizational and franchise costs, bond
underwriting costs and other like assets properly classified as intangible, and
(4) treasury stock or treasury membership units.


 


1.21                         “OBLIGATIONS” means the obligation of the
BORROWER:


 


(A)                              To pay the principal of, and interest on,
the CONSTRUCTION NOTE together with each other NOTE in favor of BANK, all in
accordance with the terms thereof and to satisfy all of its other liabilities
to the BANK, whether hereunder or otherwise, whether now existing or hereafter
incurred, matured or unmatured, direct or contingent, joint or several,
including any extensions, modifications, renewals thereof, and substitutions
therefor and including, but not limited to, any obligations under letter of
credit agreements;


 


(B)                                To repay to the BANK all amounts advanced
by the BANK hereunder or otherwise on behalf of the BORROWER, including, but
without limitation, advances for principal or interest payments to prior
secured parties, mortgagees, or licensers, or taxes, levies, insurance, rent,
or repairs to, 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 the BANK, on demand, for all
of the BANK’s expenses and costs, including the reasonable fees and expenses of
its counsel, in connection with the preparation, administration, amendment,
modification, or enforcement of this AGREEMENT and the documents required
hereunder, including, without limitation, any proceeding brought or threatened,
to enforce payment of any of the OBLIGATIONS referred to in the foregoing
Paragraphs (A) and (B).


 


1.22                         “OPERATING CASH FLOW” means operating
revenue (excluding extra-ordinary revenues or income not derived from the
ordinary course of business) less all direct operating expenses other than
interest expense (other than interest on accounts payable), depreciation and
other similar non-cash charges, interest, and income taxes.


 


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1.23                         “PERMIT” or “PERMITS” means any permit,
and all permits, required under 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 the BORROWER to operate the facility on the PROPERTY after
construction of the PROJECT at maximum capacity.


 


(b)                                 All permits required in connection with
the construction and operation of all above ground storage tanks included in
the PLANS for the facility on the PROPERTY after construction of the PROJECT.


 


(c)                                  A National Pollution Discharge
Elimination System Construction Permit for any storm water that is discharged
from the facility on the PROPERTY during construction and after construction of
the PROJECT.


 


1.24                         “PLANS” means the plans and
specifications prepared by the GENERAL CONTRACTOR for the PROJECT and
identified to this AGREEMENT by the GENERAL CONTRACTOR, the BORROWER and the
BANK.


 


1.25                         “PROJECT” means the design and
construction of an ethanol plant, together with all necessary and appropriate
fixtures, equipment, attachments, and accessories, as described in the PLANS,
to be constructed on the PROPERTY.


 


1.26                         “SECURITY AGREEMENT” means the SECURITY
AGREEMENT between the BORROWER and the BANK, creating a first security interest
in all BORROWER’s assets, including all personal property and General
Intangibles, securing the OBLIGATIONS in a form acceptable to the BANK.


 


1.27                         “SUBCONTRACTOR” means any person who
agrees with the GENERAL CONTRACTOR to perform any work or supply any of the
materials or equipment necessary to complete the PROJECT.


 


1.28                         “WORKING CAPITAL” means current assets
(less investments in or other amounts due from any member, employee or any
person or entity related to or affiliated with the BORROWER and prepayments)
less current liabilities (less any portion of such current liabilities that
constitute debt that is expressly subordinated to the BANK in a writing
acceptable to the BANK) plus the amount available to BORROWER for drawing under
TERM NOTE 5.


 


1.29                         “REVOLVING NOTE” means that promissory
note of BORROWER to BANK evidencing the revolving credit facility described in Section 2.2
of this AGREEMENT, its renewals, modifications and extensions.


 


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1.30                         “BORROWING BASE” means the lesser of:


 


A.                                   $4,000,000.00, less the amount of any
Letters of Credit issued and outstanding on BORROWER’s account, or


 


B.                                     The aggregate of (i) 75% of BORROWER’s
Inventory of corn or milo, at current value on the date reported, plus (ii) 
75% of BORROWER’s Finished Goods - Distiller’s Grains Inventory, at current
value on the date reported, plus (iii) 75% of BORROWER’s Finished
Goods-Ethanol Inventory, valued at the lower of cost or market on the date
reported, plus (iv) 75% of the amount of BORROWER’s Ethanol or Distiller’s
Grains Accounts aged thirty days or less, and (v) 75% of the amount of
BORROWER’s current State or Federal Incentives Accounts Receivable aged less
than 120 days, excluding any Accounts reasonably deemed ineligible by BANK.


 


SECTION 2
Amount and Terms of the LOANS.


 


2.1                               TERM NOTES.  The BORROWER has previously delivered to BANK
two term promissory notes, referred to herein as TERM NOTE 2, and TERM NOTE 5
(collectively called “TERM NOTES”). 
Interest shall accrue as set forth in the TERM NOTES.  Payment of principal and interest on TERM
NOTE 2 shall be as specified in TERM NOTE 2. 
On the first day of each calendar quarter, commencing July 1, 2009,
BORROWER shall pay interest to BANK on TERM NOTE 5,. All unpaid principal and
accrued interest shall be due and payable on LOAN TERMINATION DATE, if not
sooner paid.


 


2.2                               REVOLVING LOAN.  BANK agrees to lend $4,000,000.00 to BORROWER
pursuant to this facility.  BANK will
credit proceeds of this revolving loan (“REVOLVING LOAN”) to BORROWER’s deposit
account with the BANK, bearing number 22673981.


 


2.2.1                        Subject to the terms hereof, the BANK will lend the
BORROWER, from time to time until the LOAN TERMINATION DATE such sums in
integral multiples of $10,000.00 as the BORROWER may request by reasonable same
day notice to the BANK, received by the BANK not later than 11:00 A.M. of
such day, but which shall not exceed in the aggregate principal amount at any
one time outstanding, $4,000,000.00 (the “LOAN COMMITMENT”).  The BORROWER may borrow, repay without
penalty or premium and reborrow hereunder, from the date of this AGREEMENT
until the LOAN TERMINATION DATE, either the full amount of the LOAN COMMITMENT
or any lesser sum which is $10,000.00 or an integral multiple thereof.  It is the intention of the parties that the
outstanding balance of the REVOLVING LOAN shall not exceed the BORROWING BASE,
and if at any time said balance exceeds the BORROWING BASE, BORROWER shall
forthwith pay BANK sufficient funds to reduce the balance of the REVOLVING LOAN
until it is in compliance with this requirement.


 


2.3                               THE REVOLVING NOTE.  The LOAN COMMITMENT shall be evidenced by a
REVOLVING NOTE.  Principal and interest
shall be payable according to the repayment schedule 


 


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and
interest rate accrual as described in the REVOLVING NOTE.  The balance will be due and payable on LOAN
TERMINATION DATE.


 


2.4                               Payments. 
All principal, interest and fees due under this AGREEMENT, the REVOLVING
NOTE, the TERM NOTES and the LOAN DOCUMENTS shall be paid in immediately
available funds and no later than the payment due date set forth in the monthly
statement mailed to the BORROWER by the BANK. 
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.


 


2.5                               Fees. 
BORROWER agrees to pay BANK unused commitment fees equal to 50 basis
points of the unused portion of the REVOLVING LOAN, and equal to 50 basis
points of the unused portion of TERM LOAN 5, with such fees payable quarterly
in arrears.


 


2.6                               Incentive Pricing.  The interest rates applicable to TERM NOTE 5
and the REVOLVING LOAN are subject to adjustment as set forth in the NOTES.


 


SECTION 3
intentionally left blank


 


SECTION 4
Conditions of Lending.


 


4.1                               Conditions Precedent to the Initial
Disbursement.  BORROWER previously provided the following
documents to BANK:


 


4.1.1                        The CONSTRUCTION NOTE, duly executed on behalf of the
BORROWER.


 


4.1.2                        The MORTGAGE duly executed on behalf of the BORROWER.


 


4.1.3                        The ASSIGNMENT OF RENTS, duly executed on behalf of
the BORROWER.


 


4.1.4                        The SECURITY AGREEMENT, duly executed on behalf of the
BORROWER.


 


4.1.5                        A financing statement or statements sufficient when
filed to perfect the security interests granted under the MORTGAGE, the
ASSIGNMENT OF RENTS, the SECURITY AGREEMENT, and the ASSIGNMENT OF CONSTRUCTION
CONTRACT, to the extent such security interests are capable of being perfected by
filing.


 


4.1.6                        A copy of the PLANS, certified by the GENERAL
CONTRACTOR and the BORROWER.


 


4.1.7                        The Assignment of the DESIGN/BUILD CONTRACT, duly
executed by the BORROWER and consented to by the GENERAL CONTRACTOR and a copy
of the DESIGN/BUILD CONTRACT.


 


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4.1.8                        A Total Project Cost Statement on the PROJECT duly
executed by the BORROWER and the GENERAL CONTRACTOR, setting forth the
anticipated total cost of the PROJECT’s completion.


 


4.1.9                        An ALTA (American Land Title
Association) Survey of the PROPERTY, prepared at the BORROWER’s
expense, currently certified by a licensed, registered surveyor and
incorporating the legal description of the PROPERTY, showing the location of
all points and lines referred to in the legal description, the location of any
existing improvements, the proposed location of the PROJECT (including parking)
as being within the exterior boundaries of the PROPERTY and in compliance with
all applicable building set-back requirements, and the location of all
utilities and 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, and currently
certified by the surveyor that there are no such easements or encroachments
upon the PROPERTY except as shown on the survey.


 


4.1.14                  An as built appraisal to the BANK based upon the PLANS to be performed
by Herman Natwick & Co., which shows the as-completed value of the
PROPERTY and PROJECT acceptable to BANK.


 


4.1.15                  A title binder, issued by Dakota Homestead Title Insurance Corporation
(the “Title Company”), at the BORROWER’s expense, constituting a commitment by
the Title Company to issue a mortgagee’s title policy in favor of the BANK as
mortgagee under the MORTGAGE, that will be free from all standard exceptions,
including mechanics’ liens and all other exceptions not previously approved by
the BANK and includes a plat endorsement and that will insure the MORTGAGE to
be a valid first lien on the PROPERTY.


 


4.1.16                  A soil report on the PROPERTY certified by a registered engineer  including structural design recommendations in form and
substance satisfactory to  the BANK.


 


4.1.17                  A Phase I Environmental Report of the PROPERTY in form and content
satisfactory to the BANK.


 


4.1.18                  Copies of all PERMITS from the applicable county or any other state or
local agency from whom a construction permit is required and such other
licenses and permits, as may be required to construct and operate the facility
on the PROPERTY after completion of the PROJECT.


 


4.1.19                  Copies of all environmental permits and other PERMITS as my be required
to construct and operate the facility on the PROPERTY at maximum capacity after
completion of the PROJECT.


 


4.1.20                  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 


 


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satisfaction of the BANK that the PROJECT when
constructed in accordance with the PLANS will comply in all respects with all
applicable ordinances, zoning, subdivision, platting, environmental and land
use requirements, without special variance or exception, and such other
evidence as the BANK shall reasonably request to establish that the PROJECT and
the contemplated use thereof are permitted by and comply with all applicable
use or other restrictions and requirements in prior conveyances, zoning
ordinances, environmental laws and regulations, water shed district regulations
and all other applicable laws or regulations, and governmental authorities
having jurisdiction over the PROJECT. 
BORROWER is not required to obtain advance confirmation from any governmental
body that the PROJECT will comply with such ordinances, regulations and
requirements.


 


4.1.22                  Copies of the policy of property/casualty insurance and comprehensive
general liability insurance and a certificate of the worker’s compensation
insurance required under Section 6.3 of this AGREEMENT, with all such
insurance in full force and effect and approved by the BANK, and naming BANK as
additional named insured, together with appropriate flood insurance, if the
PROPERTY is in a flood hazard area.  BORROWER
is not required to obtain worker’s compensation insurance until required by
South Dakota law.


 


4.1.23                  A signed opinion of counsel for the BORROWER, addressed to the BANK,
opining that: 1) the BORROWER is duly organized and in good standing in its
state of organization; 2) the BORROWER is qualified in each state in which it
does business and is legally required to be qualified; 3) the BORROWER has the
power to execute and deliver the LOAN DOCUMENTS and to borrow money and perform
in accordance with the terms of the LOAN DOCUMENTS; 4) all actions and consents
necessary to the validity of the LOAN DOCUMENTS have been obtained; 5) the LOAN
DOCUMENTS have been duly signed and are the valid and binding obligation of the
BORROWER and enforceable in accordance with their terms; and 6) to the best of
counsel’s knowledge, the LOAN DOCUMENTS and the transactions contemplated
thereunder do not conflict with any provision of the operating agreement of
BORROWER or any agreement binding upon the BORROWER or its properties.


 


4.1.24                  A Certificate of Authority executed by such person or persons
authorized by the BORROWER’s organizational documents and/or agreements to do
so, certifying the incumbency and signatures of the managers or other persons
authorized to execute the LOAN DOCUMENTS, and authorizing the execution of the
LOAN DOCUMENTS and performance in accordance with their terms.


 


4.1.25                  A recently certified copy of the BORROWER’s operating agreement, and
any amendments, if applicable.


 


4.1.26                  A recently certified copy of the BORROWER’s Articles of Organization
and any amendments, if applicable.


 


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4.1.27                  A certificate of good standing from the office of the South Dakota
Secretary of State on the BORROWER.


 


4.1.28                  A Flood Hazard Determination Form for the PROPERTY, confirming
whether or not the parcel is in a flood hazard area and whether or not flood
insurance must be obtained.


 


4.1.29 If requested by the BANK at any time, a copy of
the payment and performance bond relating to the performance of any
SUBCONTRACTOR on the PROJECT.


 


4.1.30 Proof of injection of equity capital into
BORROWER of no less than $2,000,000.00 by Broin Enterprises, Inc., and no
less than $14,700,000.00 by Lake Area Corn Processors Cooperative.


 


4.1.31                  intentionally left blank


 


4.1.32                  A copy of the MARKETING CONTRACT, together with an assignment in favor
of BANK in form satisfactory to BANK.


 


4.2                               intentionally left blank


 


4.3                               intentionally left blank


 


SECTION 5
Representations and Warranties.


 


To
induce the BANK to enter into this AGREEMENT, the BORROWER, makes the following
representations and warranties and agrees that each request for a disbursement
under this AGREEMENT constitutes a reaffirmation of these representations and
warranties.


 


5.1                               Existence and Power. 
The BORROWER is a limited liability company duly formed and in good
standing under the laws of the State of South Dakota. The BORROWER has all
requisite power and authority to own the PROPERTY and construct the PROJECT,
and to execute and deliver, and to perform all of its obligations under the
LOAN DOCUMENTS.


 


5.2                               Authorization of Borrowing; No Conflict
as to Law or Other Agreements.  The
execution, delivery and performance by the BORROWER of the LOAN DOCUMENTS and
the borrowings from time to time hereunder have been duly authorized by all
necessary actions of the BORROWER and do and will not (a) require any
consent or approval, or authorization, by any governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign, (b) violate
any provision of any law, rule or regulation or of any order, writ,
injunction or decree presently in effect having applicability to the BORROWER,
or of the operating agreement of the BORROWER, (c) result in a breach of
or constitute a default under any indenture or loan or credit agreement or any
other agreement, lease or instrument to which the BORROWER is a party or by
which it or its properties may be bound or affected, or (d) 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 


 


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to
or with any other creditor of the BORROWER upon or with respect to any of the
properties now owned or hereafter acquired by the BORROWER.


 


5.3                               Legal Agreements. 
The LOAN DOCUMENTS constitute the legal, valid and binding obligations
of the BORROWER enforceable against the BORROWER in accordance with their
respective terms.


 


5.4                               License and Permits. 
The BORROWER has all necessary licenses and PERMITS required for
construction and operation of the PROJECT.


 


5.5                               Construction of the PROJECT. 
The PROJECT was constructed strictly in accordance with the PLANS; was
constructed entirely on the PROPERTY; and does not encroach upon or overhang
any easement or right-of-way on land not constituting part of the PROPERTY,
except for the rail spur line which is in part located upon the rail line
property owned by the State of South Dakota. The PROJECT, both during
construction and at the time of completion, and the contemplated use thereof,
did not and will not violate any applicable zoning or use statute, ordinance,
building code, rule or regulation, or any covenant or agreement of record.
The BORROWER agrees that it will furnish from time to time such satisfactory
evidence with respect thereto as may be required by the BANK.


 


5.6                               Title to the PROPERTY. 
The BORROWER has good and marketable fee simple title to the PROPERTY.


 


5.7                               Financial Condition. 
The BORROWER has furnished to the BANK the annual financial statement of
the BORROWER as of December 31, 2008. 
This financial statement fairly presents the financial condition of the
BORROWER on the date thereof and the results of its operations for the period
then ended, and was prepared in accordance with GAAP. There has been no
material adverse change in the operations, properties or condition (financial
or otherwise) of the BORROWER since the date of the financial statement
referred to above and no additional borrowings have been made by the BORROWER
other than the borrowing contemplated hereby or approved by the BANK. The
above-referenced financial statement or any certificate or statement furnished
to the BANK by or on behalf of the BORROWER in connection with the transactions
contemplated hereby, and the representations and warranties in this AGREEMENT,
do not contain any untrue statements of a material fact or omit to state a
material fact necessary in order to make the statements contained therein or
herein not misleading. To the best of the knowledge of the BORROWER, there is
no fact which materially adversely affects or in the future (so far as the
BORROWER can now foresee) may materially adversely affect the operation or
prospects or condition (financial or other) of the BORROWER or its properties
or assets, which has not been set forth herein or in a certificate or statement
furnished to the BANK by the BORROWER.


 


5.8                               Litigation.  There are no
actions, suits or proceedings pending or, to the knowledge of the BORROWER,
threatened against or affecting the BORROWER or the properties of the BORROWER
before any court or governmental department, commission, board, bureau, agency
or instrumentality, domestic or foreign, which, if determined adversely to the
BORROWER, would


 


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have
a material adverse effect on the financial condition, properties, or operations
of the BORROWER.


 


5.9                                 Taxes.  The BORROWER
has paid or caused 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. The BORROWER has filed all federal, state and local tax returns
which to the knowledge of the members of the BORROWER are required to be filed,
and the 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.


 


5.10                           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.


 


5.11                           intentionally left blank


 


5.12                           ERISA.  The BORROWER
is in compliance in all material respects with the Employee Retirement Income
Security Act of 1974, as amended, and has received no notice to the contrary
from the Internal Revenue Service, the Department of Labor, the Pension Benefit
Guaranty Corporation or any other governmental entity or notice of any claims
or pending claims under ERISA.


 


5.13                           Environmental Matters. 
1) The BORROWER is in compliance in all material respects with all health
and  environmental laws applicable to the
BORROWER and its operations and knows of no conditions or circumstances that
could interfere with such compliance in the future; 2) the BORROWER has
obtained all PERMITS, environmental permits and approvals required by law for
the operation of its business; and 3) the 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 the BORROWER to enforcement
action if brought to the attention of appropriate governmental authorities.


 


5.14                           Necessary Utilities, Etc. 
BORROWER has made suitable arrangements so that the PROJECT has all
necessary electrical, gas, water, and sewer facilities in place for the proper
construction and operation of its ethanol plant.  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.


 


SECTION 6
Additional Covenants of the BORROWER.


 


6.1                                 Financial Information and Reporting. 
Except as otherwise stated in this AGREEMENT, all financial information
provided to the BANK shall be compiled using GAAP consistently applied.  During the time period that any amounts are
outstanding under this AGREEMENT or the LOAN DOCUMENTS, unless the BANK shall
otherwise agree in writing:


 


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6.1.1                        Annual Financial Statements. Provide the BANK within
120 days of the BORROWER’s fiscal year end, the BORROWER’s consolidated, annual
financial statements. The statements must be audited with an unqualified
opinion by a certified public accountant acceptable to the BANK, 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 under this AGREEMENT, 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, specifying the
nature and duration of the default.  Such
audit statement shall be accompanied by the accountants’ calculations of
BORROWER’s compliance with the covenants contained in Section 6.2 of this
AGREEMENT as of the said fiscal year end.


 


6.1.2                        The BORROWER will furnish to the BANK
within thirty-(30) days after the end of each calendar month, consolidated
financial statements of the BORROWER for such period and year to date all in
reasonable detail, except for the absence of financial footnotes.  Such financial statements shall be
accompanied by a calculation of BORROWER’s compliance with covenants contained
in Section 6.2 of this AGREEMENT, certified by a manager of BORROWER.


 


6.1.3                        For each full calendar quarter, BORROWER will deliver
to BANK, within thirty-(30) days of each calendar quarter end, a certificate in
a form reasonably acceptable to BANK that has been signed by an officer or
manager of BORROWER, which: 1) certifies that the statements required by
section 6.1.1 and 6.1.2 have been accurately prepared in accordance with GAAP
applied consistently (except for the absence of financial footnotes to the
statements furnished under Section 6.1.2); 2) certifies that the officer
or manager has no 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 LOAN DOCUMENTS.


 


6.1.4                        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 the BORROWER and its
ethanol plant, and any information from reports, returns, files and records by
such authorities regarding BORROWER upon request to the BANK.


 


6.1.5                        The BORROWER will give the BANK prompt written notice
of any violation as to any environmental matter by the BORROWER and, of the
commencement of any judicial or administrative proceeding 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 operating permits, air emission permits, water discharge permits, hazardous
waste permits or other PERMITS held by the BORROWER which are material to the
operations of the BORROWER, and (ii) which will or threatens to impose a
material liability on the BORROWER to any person or party or which will require
a material expenditure by the BORROWER to cure any alleged problem or
violation.


 


12

















 


6.1.6                        The BORROWER will give immediate notice to the BANK 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 might materially and adversely
affect its operations, financial condition, property, or business
prospects.  BORROWER shall immediately
notify BANK of the existence of any EVENT OF DEFAULT


 


6.1.7                        The BORROWER will provide the BANK with such other
information as it may reasonably request.


 


6.1.8                        BORROWER shall provide weekly borrowing base
certificates in a form reasonably acceptable to BANK, calculating advance rates
under the REVOLVING LOAN pursuant to the BORROWING BASE.


 


6.1.9                        The BORROWER shall provide to BANK each month its six
month future cash flow projections, including a quarterly forward looking debt
service coverage projection and operating metrics with anticipated cash flow
requirements for such period.


 


6.1.10                  The BORROWER shall provide to BANK hedging statements showing all
hedging activity of BORROWER.  On request
of BANK, BORROWER will also provide sensitivity analysis regarding BORROWER’s
financial futures positions.


 


6.1.11                  The BORROWER has developed and delivered to BANK BORROWER’s corn
procurement and forward pricing strategy and plan, providing a minimization of
BORROWER’s speculative positions in a form acceptable to BANK.  Such plan and strategy shall be maintained to
BANK’s satisfaction that will maintain sufficient liquidity to manage potential
market price volatility.  BORROWER will
adhere to such plan and strategy, implementing the same in its ongoing business
operations.


 


6.2                               Financial Covenants. 
At all times that any amounts are outstanding under the any NOTE, this
AGREEMENT or the LOAN DOCUMENTS, unless the BANK shall otherwise agree in
writing, the 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:


 


6.2.1                        The BORROWER shall maintain a DEBT SERVICES COVERAGE
RATIO of no less than 1.25 : 1.0, for all periods following COMPLETION
DATE.   This covenant shall be measured
at a quarterly basis each calendar quarter, beginning June 30, 2009, but
measured on a trailing four quarters basis at the end of the full calendar
year, commencing December 31, 2009 and continuously thereafter.  For purposes of this covenant, to determine
such ratio, OPERATING CASH FLOW shall be compared to DEBT SERVICE.


 


13

















 


6.2.2                      The BORROWER shall maintain WORKING CAPITAL of at
least $1,000,000.00 at all times after COMPLETION DATE.


 


6.2.3                      The BORROWER shall maintain a NET WORTH of not less
than (i) $20,000,000.00 at all times.


 


6.2.4                      The BORROWER shall determine, at each
fiscal year end, the amount of its EXCESS CASH FLOW for said fiscal year, and
within ninety days following such fiscal year end the borrowing availability
commitment of TERM NOTE 5 shall be reduced by seventy-five percent (75%) of
such sum (“the REDUCTION AMOUNT”). The BORROWER shall pay to BANK such amount
as is required to reduce the amount of outstanding principal on TERM NOTE 5 to
such reduced commitment amount.  After
TERM NOTE 5 is repaid, BORROWER shall pay BANK the REDUCTION AMOUNT and BANK
shall hold such payments as additional collateral for repayment of TERM
NOTE  2. 
Such annual payment shall not release BORROWER from making any payment
of principal or interest otherwise required by this AGREEMENT.


 


6.2.5                      The BORROWER shall maintain a debt ratio
measured at the end of each calendar month of no more than 1.50 : 1.0, for all
periods following COMPLETION DATE.  For
purposes of this covenant, to determine such ratio, INDEBTEDNESS shall be
compared to NET WORTH.


 


6.3                               Affirmative Covenants. 
During the time period that any amounts are outstanding under any NOTE
or this AGREEMENT or the LOAN DOCUMENTS, unless the BANK shall otherwise agree
in writing the BORROWER shall:


 


6.3.1                      intentionally left blank


 


6.3.2                      intentionally left blank


 


6.3.3                      intentionally left blank


 


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


 


(i)                                     Comprehensive general liability insurance
(including operations, contingent liability, operations of subcontractors,
complete operations, removal of contaminated soil and other environmental
coverage and contractual liability insurance) with limits reasonably acceptable
to BANK;


 


(ii)                                  Worker’s compensation insurance, with
statutory coverage.


 


The policies of insurance required pursuant to clause (i) above
shall be in form and content satisfactory to the BANK and shall be placed with
financially sound and 


 


14

















 


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 the BANK in the event
of cancellation of such policy or change affecting the coverage thereunder.
Acceptance of insurance policies referred to in clause (i) above shall not
bar the BANK from requiring additional insurance which it reasonably deems
necessary.


 


6.3.5                        Purchase and maintain hazard insurance (including
fire, extended coverage vandalism and malicious mischief) on the PROPERTY and
all assets in which BANK has a security interest with limits acceptable to the
BANK. BANK shall be named as additional named insured.


 


6.3.6                        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 satisfactory to the BANK. The
BORROWER will permit the BANK, acting by and through its officers and
employees, to examine upon reasonable notice 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.


 


6.3.7                        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 the BORROWER is contesting in
good faith and with respect to which adequate reserves have been set aside.


 


6.3.8                        Allow the BANK to conduct such inspections of the
PROJECT and BORROWER’s real and personal property subject to the BANK’s
security interest as the BANK may deem necessary for the protection of the BANK’s
interest. Any such inspections shall be made and any certificates issued are
solely for the benefit and protection of the BANK, and the BORROWER shall not
be entitled to rely thereon.


 


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


 


6.3.10                  Comply in all material respects with all laws applicable to its form of
organization, business, and the ownership of its property.


 


6.3.11                  Maintain and preserve all PERMITS, licenses, rights, privileges,
charters and franchises that it now owns.


 


6.3.12                  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 the BORROWER.


 


15

















 


6.3.13                On or before July 31, 2009, BORROWER will obtain
no less than $2,000,000.00 of additional capital, either by contributions from
existing members of BORROWER or by issuing subordinated debt in form acceptable
to BANK.


 


6.3.14                  intentionally left blank


 


6.3.15                  BORROWER will maintain all its banking depository relationships at BANK,
including money market accounts.


 


6.4                               Negative Covenants. 
During the time period that any amounts are outstanding under the any
NOTE or this AGREEMENT or the LOAN DOCUMENTS, unless the BANK shall otherwise
agree in writing the BORROWER shall not:


 


6.4.1                        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 the BANK; (ii) liens,
assignments, or subordinations outstanding on the date of this AGREEMENT and
disclosed in advance to the BANK in writing and approved by the BANK; (iii) liens
for taxes or assessments or other governmental charges not delinquent or which
the BORROWER is contesting in good faith; (iv) liens which secure purchase
money indebtedness allowed under this AGREEMENT; (v) liens that are
imposed by law for obligations for labor or materials not overdue for more than
120 days, such as mechanics’, materialmen’s, carriers’, landlords’, and
warehousemen’s liens, or liens, pledges, or deposits under workers’
compensation, unemployment insurance, Social Security, or similar legislation.


 


6.4.2                        intentionally left blank


 


6.4.3                        Incorporate in the PROJECT any materials, fixtures or
property which are subject to the claims of any other person, whether pursuant
to conditional sales contract, security agreement, lease, mortgage or
otherwise.


 


6.4.4                        Lease, sell, transfer, convey, assign, or otherwise
transfer all or any part of the interest of the BORROWER in its assets out of
the ordinary course of business.


 


6.4.5                        Permit or suffer any material change in its management
personnel or management structure or any change, direct or indirect, in its
capital ownership.


 


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


 


6.4.7                        Change its legal form of organization.


 


16

















 


6.4.8                        Make any material changes in its accounting procedures
for tax or other purposes.


 


6.4.9                        Incur any indebtedness except: (1) debt arising
under this or another agreement with the BANK; (ii) trade credit incurred in
the ordinary course of business; and (iii) indebtedness in existence on
the date of this AGREEMENT and disclosed in advance to the BANK in writing.


 


6.4.10                  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
company directly or indirectly controlling or affiliated with or controlled by
BORROWER, or any other company, or to any partner or employee of BORROWER, or
of any such company.


 


6.4.11                  Make, or commit to make, capital expenditures (including  the total amount of any capital leases) in an aggregate
amount exceeding $500,000.00 in any single fiscal year.


 


6.4.12                  Make or pay, in any fiscal year, distributions to members or
shareholders of the           BORROWER except as may be agreed to in
writing, in advance, by BANK.


 


6.4.13                  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 the
BANK in writing.


 


6.4.14                  Make sales to or purchases from any affiliate of the BORROWER or extend
credit or make payments for services rendered by any affiliate of the BORROWER,
except under the MARKETING CONTRACT, 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 the BORROWER as the terms and conditions
which would apply in a similar transaction with a person or party not an
affiliate of the BORROWER.


 


SECTION 7
EVENTS OF DEFAULT, Rights and Remedies.


 


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


 


7.1.1                        The BORROWER shall fail to pay when due any
OBLIGATIONS or any other installment of principal or interest or fee payable to
BANK.


 


7.1.2                        The BORROWER shall fail to observe or
perform any other obligation to be observed or performed by it hereunder or
under any of the LOAN DOCUMENTS.


 


7.1.3                        The BORROWER shall fail to pay any
INDEBTEDNESS due any third persons, and such failure shall continue beyond any
applicable grace period, or the BORROWER shall suffer to exist any other
default under any agreement binding the BORROWER.


 


17

















 


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


 


7.1.5                        The BORROWER shall admit its inability to
pay its debts as they mature or shall make an assignment for the benefit of
itself or any of its creditors.


 


7.1.6                        Proceedings in bankruptcy, or for
reorganization of the 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 the BORROWER and, except with respect to any
such proceedings instituted by the BORROWER, shall not be discharged within
thirty (30) days of their commencement.


 


7.1.7                        A receiver or trustee shall be appointed
for the 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 the BORROWER, and except with respect to any such appointments
requested or instituted by the BORROWER, such receiver or trustee shall not be
discharged within thirty (30) days of his appointment, and except with respect
to any such proceedings instituted by the BORROWER, such proceedings shall not
be discharged within thirty (30) days of their commencement, or the BORROWER
shall discontinue business or materially change the nature of its business, or
the property securing the OBLIGATIONS becomes, in the reasonable judgment of
the BANK, insufficient in value to satisfy the OBLIGATIONS, or the BANK
otherwise reasonably finds itself insecure as to the prompt and punctual
payment and discharge of the OBLIGATIONS.


 


7.1.8                        The BORROWER shall suffer final judgments
for payment of money aggregating in excess of $100,000.00 which are not
covered, without reservation, by insurance or 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.


 


7.1.9                        A judgment creditor of the BORROWER shall obtain
possession of any of the BORROWER’s assets by any means, including (without
implied limitation) levy, distraint, replevin, or self-help.


 


7.1.10                  intentionally left blank


 


7.1.11                  intentionally left blank


 


18

















 


7.1.12                  The BORROWER’s ethanol plant is materially damaged or destroyed by fire
or other casualty and the loss, in the reasonable judgment of the BANK, is not
adequately covered by insurance actually collected or in the process of
collection.


 


7.1.13                  intentionally left blank


 


7.1.14                  RPMG, Inc. or its permitted assignee shall cease to be the
marketing agent of BORROWER as to sale of its products, and BORROWER has not
within thirty (30) days following termination of the MARKETING CONTRACT hired a
replacement marketing agent to the BANK’s satisfaction, which BANK approval
will not be unreasonably withheld.


 


7.2                               Rights and Remedies. 
Upon the occurrence of an EVENT OF DEFAULT and at any time thereafter,
the BANK may refrain from making any further disbursements hereunder (but the
BANK may make disbursements after the occurrence of such an EVENT OF DEFAULT
without thereby waiving its rights and remedies hereunder), and upon the
occurrence of an EVENT OF DEFAULT or at any time thereafter, the BANK may
exercise any or all of the following rights and remedies:


 


7.2.1                        The BANK may declare the all LOANS to be terminated,
whereupon the same shall forthwith terminate.


 


7.2.2                        The BANK may declare the entire unpaid principal
amount of each NOTE then outstanding, all interest accrued and unpaid thereon,
and all other amounts payable under this AGREEMENT to be forthwith due and
payable, whereupon each NOTE and all OBLIGATIONS, all 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 the BORROWER.


 


7.2.3                        The BANK may exercise and enforce its rights and
remedies under any or all of the LOAN DOCUMENTS.


 


7.2.4                        The BANK may enter upon the PROPERTY and take
possession thereof.


 


7.2.5                        The BANK may exercise any other rights and remedies
available to it by law or agreement.


 


SECTION 8 Miscellaneous.


 


8.1                               Inspections. 
BORROWER hereby consents to inspections of BORROWER’s assets at any
reasonable time by BANK or its representatives.


 


8.2                               Indemnification by the BORROWER. 
The BORROWER shall bear all loss, expense (including attorneys’ fees)
and damage in connection with, and agrees to indemnify and hold harmless the
BANK, its agents, servants and employees from, all claims, demands and
judgments made or recovered against the BANK, its agents, servants and employees,
because of bodily injuries,


 


19
















 


including
death at any time resulting therefrom, 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, whether or not due
to any act of omission or commission, including negligence of the BORROWER or
of its employees, servants or agents, and whether or not due to any act of
omission or commission of the BANK, its employees, servants or agents.  The BORROWER’s liability hereunder shall not
be limited to the extent of insurance carried by or provided by the BORROWER or
subject to any exclusions from coverage in any insurance policy. The
obligations of the BORROWER under this Section shall survive the payment
of the OBLIGATIONS.


 


8.3           No Waiver; Cumulative Remedies.  No failure or delay on the part of the BANK
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 remedy under the LOAN DOCUMENTS. The
remedies provided in the LOAN DOCUMENTS are cumulative and not exclusive of any
remedies provided by law.


 


8.4           Amendments, Etc.  No amendment, modification, termination or
waiver of any provision of any of the LOAN DOCUMENTS or consent to any
departure by the BORROWER therefrom shall be effective unless the same shall be
in writing and signed by the BANK, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given. No notice to or demand on the BORROWER in any case shall entitle the
BORROWER to any other or further notice or demand in similar or other
circumstances.


 


8.7           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 mailed or delivered to the
applicable party at its address indicated below:


 


	
  If to the BORROWER:

  	
  DAKOTA ETHANOL,
  L.L.C.

  
	
   

  	
  c/o Lake Area
  Corn Processors Cooperative

  
	
   

  	
  P.O. Box
  100

  
	
   

  	
  Wentworth, South
  Dakota 57075

  
	
   

  	
  Attention: Brian
  Woldt

  
	
   

  	
   

  
	
  with a copy to:

  	
  Doug Hajek

  
	
   

  	
  Davenport, Evan,
  Hurwitz & Smith LLP

  
	
   

  	
  206 West 14th Street

  
	
   

  	
  P.O. Box
  1030

  
	
   

  	
  Sioux Falls,
  South Dakota 57101-1030

  
	
   

  	
   

  
	
  If to the BANK:

  	
  First National
  Bank of Omaha

  
	
   

  	
  One First
  National Center

  
	
   

  	
  1620 Dodge
  Street STOP 1050

  



 


20

















 


	
   

  	
  Omaha, Nebraska
  68197-1050

  
	
   

  	
  Attention:
  Andrew Wong

  
	
   

  	
   

  
	
  with a copy to:

  	
  Richard D. Myers

  
	
   

  	
  McGill,
  Gotsdiner, Workman & Lepp, P.C.

  
	
   

  	
  #500, 11404 W.
  Dodge Rd.

  
	
   

  	
  Omaha, Nebraska
  68154

  



 


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, addressed as
aforesaid, except that notices or requests to the BANK pursuant to any of the
provisions hereunder shall not be effective until received by the BANK.


 


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


 


8.9           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 of each instrument or
agreement, taken together, shall constitute but one and the same instrument.


 


8.10         Binding Effect, Assignment.  The LOAN DOCUMENTS shall be binding upon and
inure to the benefit of the BORROWER and the BANK and their respective
successors and assigns, except that the BORROWER shall not have the right to
assign its rights thereunder or any interest therein without the prior written
consent of the BANK.


 


8.11         Governing Law.  The LOAN DOCUMENTS shall be governed by, and
construed in accordance with, the laws of the State of Nebraska except for the
MORTGAGE and ASSIGNMENT OF RENTS which shall be governed by and construed in
accordance with the laws of the State of South Dakota.


 


8.12         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.


 


8.13         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.


 


8.14         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.


 


21

















 


8.15         Participations.  Notwithstanding any other provision of this
AGREEMENT, the BORROWER understands that the BANK may enter into participation
agreements with other lenders whereby the BANK will allocate a certain
percentage of the CONSTRUCTION LOAN to them. The BORROWER specifically permits
and authorizes the BANK to exchange financial information about the BORROWER
with actual or potential participants. The BORROWER acknowledges that, for the
convenience of all parties, this AGREEMENT is being entered into with the BANK
only and that its obligations under this AGREEMENT are undertaken for the
benefit of, and as an inducement to, each of the Participating Lenders as well
as the BANK, and the BORROWER hereby grants to each of the Participating
Lenders to the extent of its participation in the CONSTRUCTION LOAN, the right
to set off deposit accounts maintained by the BORROWER with such BANK.  The BORROWER understands that the terms of
such participation agreements with any of the participants will limit the BANK’s
rights to amend, waive or modify the terms and conditions of this AGREEMENT
without the express written consent of all or a designated percentage of such
participants.


 


22

















 


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


 


	
  Dakota
  Ethanol, L.L.C.

  	
   

  	
  First
  National Bank of Omaha

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Brian Woldt

  	
   

  	
  By:

  	
  /s/
  Andrew Wong

  
	
   

  	
  Brian Woldt

  	
   

  	
   

  	
  Andrew Wong

  
	
   

  	
  Chairman of the
  Board of Managers

  	
   

  	
   

  	
  Commercial Loan
  Officer

  



 


23

















 


NOTARY
ACKNOWLEDGEMENT


 


	
  STATE OF SOUTH DAKOTA

  	
  )

  
	
   

  	
  ) ss.

  
	
  COUNTY OF LAKE

  	
  )

  



 


On this 18 day of
June, 2009, before me, the undersigned, a Notary Public, personally appeared
Brian Woldt, Chairman of the Board of Managers of Dakota Ethanol, L.L.C., who
executed the foregoing instrument, and acknowledged that he executed the same
as his voluntary act and deed.


 


 


	
   

  	
  /s/ Alan E. May

  
	
   

  	
  Notary Public

  
	
   

  	
   

  
	
   

  	
  [Notarial Seal]

  



 


24

















 


NOTARY
ACKNOWLEDGEMENT


 


	
  STATE OF NE 

  	
  )

  
	
   

  	
  ) ss.

  
	
  COUNTY OF Douglas

  	
  )

  



 


On this 26 day of June,
2009, before me, the undersigned, a Notary Public, personally appeared Andrew
Wong, the Commercial Loan Officer of First National Bank of Omaha, on behalf of
said entity, who executed the foregoing instrument, and acknowledged that he
executed the same as his voluntary act and deed.


 


 


	
   

  	
  /s/ Jacqueline K. Sims

  
	
   

  	
  Notary Public

  
	
   

  	
   

  
	
   

  	
  [Notarial Seal]

  



 


25

















 


EXHIBIT A


 


DAKOTA ETHANOL, L.L.C.


Real Estate Description


 


West
Half of the Northeast Quarter (W 1⁄2 NE 1⁄4 ) except Tract A of the Water Tower
Addition thereof, and except Railroad Right of Way thereof, Section Twenty-one
(21), Township One Hundred Six (106) North, Range Fifty-one (51) West of the
Fifth P,M. in Lake County, South Dakota, and except Lot H-1 thereof, and except
Lot E-1 thereof.