|    | a.  | Master      Loan Agreement dated March 28,2007; |
|--------------|----------|-------------------------------------------------|

|   | b. | First      Supplement to the Master Loan Agreement dated as of March 28,      2007; |
|--------|----|-------------------------------------------------------------------------------------|

|   | c. | Amended      and Restated Master Loan Agreement dated as of June 23,    2008; |
|--------|----|-------------------------------------------------------------------------------|

|   | d. | Amended      and Restated Second Supplement to the Master Loan Agreement dated as of      June 23, 2008; and |
|--------|----|--------------------------------------------------------------------------------------------------------------|

|   | e. | Second      Amended and Restated Third Supplement to the Master Loan Agreement (the      “Prepetition      RLOC”) dated as of June 23,2008. |
|--------|----|---------------------------------------------------------------------------------------------------------------------------------------------------------|

| Debtor:                 | Otter      Tail Ag Enterprises, LLC, a Minnesota limited liability company, as Debtor      in Possession in its Chapter 11 case in the United States Bankruptcy      Court, District of Minnesota (the “Debtor’s Chapter 11      Case”).  |
|-------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Lender:                 | AgStar      Financial Services, PCA, as administrative agent for the      Banks.                                                                                                                                                                                 |
| Credit      Facilities: | A      term loan, representing the unpaid balance of the existing term note in      addition to the unpaid balance of the term revolving note, not to exceed      the original combined amount of $35,000,000.00 (the “Term    Loan”).                    |
|                    |                                                                                                                                                                                                                                                                  |
|                    | A      364-day revolving credit facility in an amount not to exceed the lesser of      (a) 75% of Eligible Accounts and Eligible Inventory or      (b)  $4,000,000.00 (the “Revolving      Loan”).                                              |

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|                 | The      Term Loan and the Revolving Loan are hereinafter referred to as the “Loans.”                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|----------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| Closing      Date:   | A      date not later than 10 Business Days following the entry of a confirmation      order (the “Confirmation      Order”) confirming the Debtor’s plan of reorganization (the “Plan”).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| Purposes:            | The      Loans contemplated by this term sheet may be used by the Debtor for (a)      working capital purposes, (b) payment of professional and United States      Trustee fees as set forth in the Plan; (c) payment of any amounts      necessary to obtain the release of subordinate liens and security      interests in any of the Collateral in an amount acceptable to AgStar in      its sole discretion; and (d) such other purposes as may be acceptable to      AgStar in its sole discretion.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| Maturity      Dates: | The      Term Loan will mature on June 1, 2013. The      Revolving Loan will mature 364 days following the effective date of the      Plan.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| Interest:            | The      outstanding principal amount of the Term Loan shall bear interest at a      fixed rate equal to 6.5% per annum through May 31, 2013, provided,      however, that such rate will be adjusted to reflect any changes in the      three-year U.S. Treasury bond rate of interest between the date of this      term sheet and the effective date of the Plan. Accrued      interest on the Term Loan will be paid in arrears monthly on the first day      of the first three (3) calendar months following the effective date of the      Plan. The      outstanding principal amount of the Revolving Loan shall bear interest at      a fixed rate equal to 6.5% per annum through May 31,      2013,  provided, however, that such rate will be adjusted to      reflect any changes in the three-year U.S. Treasury bond rate of interest      between the date of this term sheet and the effective date of the      Plan. Accrued      interest on the Revolving Loan will be paid in arrears monthly on the      first day of each calendar month beginning with the first calendar month      following the effective date of the Plan. The      default rate of interest will be 2.00% higher than the rate otherwise      payable.  |
| Amortization:        | The      Term Loan will be payable in (i) a special principal payment of $3,150,000      on the first day of the first calendar month following the effective date      of the Plan and (ii) the balance of the Term Loan in equal monthly      installments of principal and interest sufficient to fully amortize the      Term Loan over 10 years from the effective date of the Plan, beginning      with the first day of the fourth calendar month following the effective      date of the Plan.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |

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|                                  | The      Revolving Loan will be payable in full on its applicable maturity      date.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|---------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| Security:                             | The      Term Loan and the Revolving Loan will be secured by a first priority      perfected security interest in all of the real and personal property of      the Debtor, whether now owned or hereafter acquired (the “Collateral”), subject      only to such other liens and encumbrances as may be acceptable to      AgStar.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| Accrued      Default Interest:        | All      default interest provided by the AgStar Prepetition Loan Agreements will      be deferred until June 1, 2013.  Provided the Debtor does not      default in the performance of its obligations under the Loan Documents,      the Loan Documents will provide that such default interest will be waived      by AgStar on June 1, 2013.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| Plan      of Reorganization:          | The      Debtor shall file the Plan, which must be acceptable to AgStar and MMCDC      New Markets Tax Fund (“NMF” and collectively      with AgStar, the “Prepetition Lenders”),      on or before February 28, 2010 (the “PlanDate”). At      a minimum, the Plan shall not be deemed acceptable to the Prepetition      Lenders unless: ·      The      Plan provides for and treats the Prepetition Lenders as  fully      secured creditors; ·      The      Plan provides for the financing set forth in this Term Sheet; ·      The      Confirmation Order and the Plan provide that the assets of Debtor will be      free from any and all subordinate mortgages, liens, and encumbrances,      including any lessor’s interests, except as may be accepted by the      Prepetition Lenders.  |
| Conditions      Precedent To Closing: | Entry      of the Confirmation Order confirming the Plan which is satisfactory to      AgStar on or before May 1, 2010;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|                                  | Execution      and delivery of an amended and restated Credit Agreement together with      such other notes, mortgages, security agreements, control agreements,      documents, and agreements as may be required by AgStar satisfactory to      AgStar and the Banks (collectively the “Loan Documents”) which      Loan Documents will contain representations; warranties; affirmative,      negative and financial covenants (including, but not limited to,      limitations on acquisitions, additional debt, bonuses, distributions,      change in control, change in senior management, capital expenditures,      disposition of assets and other covenants deemed appropriate by AgStar and      the Banks); events of default; and remedies acceptable to AgStar and the      Banks;                                                                                                                                                                            |
|                                  | AgStar’s      receipt of subscription letters, acceptable to AgStar (collectively, the      “Subscription      Letters”), (a) in an amount not less than $6,000,000.00 on or      before January 15, 2010; and (b) in an aggregate amount not less than      $12,000,000.00 on or before the PlanDate                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |

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|                           | Confirmation      of equity contributions pursuant to the Subscription Letters to the      reorganized Debtor of at least $12,000,000;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|--------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                           | Payment      to AgStar of an amount sufficient to reduce the outstanding principal      balance of the Prepetition RLOC to an amount not greater than      $4,000,000;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|                           | Delivery      of a risk management plan reasonably acceptable to AgStar including a      designated risk management officer;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|                           | Compliance      with all conditions precedent required by NMF including payment of all      interest and default charges due;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|                           | If      not expressly provided in the Confirmation Order, execution of an      agreement with U.S. Bank, as Indenture Trustee (the “Trustee”), and Otter      Tail County (the “County”) regarding the      resolution of the outstanding bond debt and the release of all liens,      security interests or lessor interests in any of the assets of the Debtor;      and                                                                                                                                                                                                                                                                                                                                                                                                            |
|                           | Compliance      with all conditions precedent set forth in the LoanDocuments.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| Sale      of Ethanol Facility: | If      no Plan acceptable to the Prepetition Lenders is filed by the Plan Date,      the Debtor shall file, within ten (10) Business Days thereafter, a motion      to sell the Debtor’s assets, including the ethanol production facility,      free and clear of interests, liens, encumbrances and claims pursuant to      Bankruptcy Code § 363(b) and (f).  Such motion must be      accompanied by sales procedures acceptable to AgStar, including that any      such sale shall close not later than May 1, 2010. Within      ten (10) Business Days of filing such motion, the Debtor shall engage a      financial advisor (the “Financial Advisor”)      reasonably acceptable to the Prepetition Lenders to manage the sale of the      ethanol facility.  |
| Expenses:                      | The      Debtor shall reimburse AgStar for all reasonable costs and expenses,      including legal fees, consultant fees, appraisal fees, financial advisor      fees, and other similar fees, costs and expenses in connection with the      negotiation, documentation, execution, syndication and delivery of the      Loans and the Debtor’s Chapter 11 Case.  AgStar shall be      authorized to advance from the Loans an amount equal to such costs and      expenses.                                                                                                                                                                                                                                                                                                                 |

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| Sincerely,                           |
|--------------------------------------|
|                                 |
| AGSTAR      FINANCIAL SERVICES, PCA, |
|                                 |
| /s/ RonMonson                        |

| By:  | Ron Monson |
|-----------|------------|
| Its:      | VP         |

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| By                                        | /s/ Anthony J Hicks |
|-------------------------------------------|---------------------|
|  Name:      Anthony J Hicks          |
|  Title:      Chief Executive Officer |

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