1.7. THE BORROWER WAIVES ANY RIGHT TO REQUIRE THE LENDER TO PURSUE ANY REMEDY OR PARTICULARCOLLATERAL IN ANY ORDER. THE BORROWER ALSO WAIVES ALL LEGAL OR EQUITABLE DEFENSES TO(INCLUDING ANY RIGHT OF SETOFF, RECOUPMENT OR COUNTERCLAIM) AND ANY DEFECTS IN THE LOANDOCUMENTS. THIS AGREEMENT DOES NOT CONSTITUTE A NOVATION AND DOES NOT DISCHARGE THEBORROWER’S OBLIGATIONS UNDER THE LOAN DOCUMENTS EXCEPT AS EXPRESSLY PROVIDED IN THISAGREEMENT. 1.8. The Lender and Participants have made no commitment to (i) loan money to or (ii) enterinto any kind of financial accommodation with the Borrower except as expressly provided inthis Agreement. 1.9. Nothing in the Agreement shall modify, release or discharge the obligations of theBorrower, any guarantor or any other person or entity under the Loan Documents and theLender expressly reserves all such rights. Any forbearance by the Lender to the Borrower,any guarantor or any other person or entity shall not modify the Borrower’s obligations tothe Lender under the Loan Documents or this Agreement.2. FORBEARANCE 2.1. If all of the following conditions precedent are satisfied by September 1, 2010,without default, the Lender shall (i) forbear until February 1, 2011 (the “**TerminationDate**”) from exercising its remedies with regard to the Existing Defaults, (ii) modifypayment terms and interest rates under the Note, and (iii) release certain funds from theDebt Service Reserve, 2.1.1. The Borrower shall have executed this Agreement and all other documents required tobe executed by it pursuant to this Agreement. 2.1.2. Contemporaneous with the execution of this Agreement, the Borrower shall execute anddeliver to the Lender a modification of the Note in the form attached and marked asExhibit 2.1.2. 2.1.3. The Lender’s board of directors and the other Participants shall have approved ofthis Agreement in a form satisfactory to the Lender. 2.1.4. The Borrower shall have paid to the Lender by wire transfer the accrued but unpaidinterest that was due on the Note as of September 1, 2010, in the amount of $81,804.99. 2.1.5. The Borrower shall have paid to the Lender by wire transfer a nonrefundable closingfee in the amount of One Hundred Thousand Dollars ($100,000.00). 2.1.6. The Borrower shall have delivered to the Lender an Assignment of its ManagementServices Agreement that it entered into with WMG Services LLC dated as of January 27,2010, in the form attached and marked as Exhibit 2.1.6. 2.1.7. Except for those matters to which the Lender has agreed or waived, there shall havebeen no material change in the business or financial condition of the Borrower sinceJune 30, 2010.
 
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 2.1.8. The Borrower shall have delivered to the Lender a copy, duly certified as of the dateofthis Agreement by its manager of (i) the resolutions of its members authorizing theexecution and delivery of this Agreement and each other document required hereunderto be executed by it, (ii) a certificate of the name(s) of the person(s) authorizedto sign this Agreement and such other documents on its behalf, and all otherdocuments and certificates of it to be delivered hereunder, together with the truesignatures(s) of such person(s), (iii) all documents evidencing other necessarylimited liability company action, and (iv) all approvals or consents required, ifany, with respect to this Agreement and the other documents required to be executedby it. 2.1.9. The Borrower shall have furnished to the Lender the favorable written opinion of itslegal counsel dated as of the execution of this Loan Agreement, and in a form andsubstance satisfactory to the Bank and its counsel, to the effect that: (a) The Borrower is a limited liability company duly organized andvalidly existing under the laws of the State of Iowa and is duly qualified todo business in such states and each other foreign jurisdiction in which thenature of its activities or the character of its properties makes suchqualification necessary. (b) The Borrower has requisite power and authority to execute anddeliver this Agreement and the documents provided for hereunder and to performits obligations under this Agreement and the Loan Documents. (c) The execution, delivery and performance by the Borrower of thisAgreement and the other documents provided for hereunder (a) have been dulyauthorized by all requisite limited liability company action and (b) will notviolate (i) the Borrower’s articles of organization or operating agreement, orany law or regulation of the State of Iowa, or, (ii) any note, indenture,mortgage, lease or other agreement to which the Borrower is a party or by whichit is bound. (d) There is no action, suit or proceeding at law or in equity orby or before any governmental, municipal or other agency now pending or to thebest knowledge of such counsel threatened against or affecting the Borrower orany property or rights of the Borrower that, if adversely determined, wouldmaterially impair the ability of the Borrower to carry on its businesssubstantially as now conducted. (e) This Agreement and the other documents provided for hereunderhave been duly executed and constitute the valid, legal and binding obligationsof the Borrower, enforceable against the Borrower in accordance with theirterms, except as the enforceability thereof may be limited by applicablebankruptcy, insolvency, reorganization, moratorium or similar laws affectingthe enforceability of creditors’ rights generally. (f) No authorization, consent or approval or other action by and nonotice to or filing with any governmental authority or regulatory body isrequired for the due execution, delivery and performance by the Borrower ofthis Agreement or the documents provided for hereunder.
 
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 2.2. Upon satisfaction in full of all the conditions precedent set-out in Section 2.1 above: (a) The Lender shall forbear until the Termination Date (February1, 2011) from exercising its remedies under the Loan Documents with regard tothe ExistingDefaults provided that the Borrower remains in compliance with all of the termsand conditions of this Agreement and the Loan Documents (except for the ExistingDefaults). (b) The Lender shall waive until the Termination Date, theBorrower’s- compliance with Sections 5.02(n)-(q) of the Loan Agreement. (c) The Lender shall debit interest payments from the Debt ServiceReserve in accordance with the terms and conditions set forth in Section 2.4below. (d) The Note shall be deemed to be modified pursuant to Exhibit2.1.2. (e) The Loan Agreement shall be deemed to be modified pursuant toSection 2.5 below.   IF THE BORROWER FAILS TO PERFORM ALL THE CONDITIONS PRECEDENT SET OUT IN SECTION 2.1ABOVE WITHOUT DEFAULT, THIS SECTION 2.2 AND SECTIONS 2.4 THROUGH 2.5 BELOW SHALL BEVOID AND WITHOUT EFFECT AND THE LENDER SHALL HAVE THE RIGHT TO IMMEDIATELY PROCEEDWITHOUT NOTICE OR DEMAND WITH ALL REMEDIES AVAILABLE TO IT UNDER THE LOAN DOCUMENTSAND THIS AGREEMENT. 2.3. During the term of this Agreement, the Borrower shall comply with and not be in default(except for the Existing Defaults) of any term or condition of any of the Loan Documents,including without limitation, the affirmative and negative covenants contained in the LoanAgreement. 2.4. Commencing on September 1, 2010, and thereafter on the first day of each monththereafter, through and including February 1, 2011, the Lender shall, without any furthernotice to the Borrower, debit the Debt Service Reserve for the accrued interest due on theNote for the prior month. 2.5. Upon satisfaction in full of all the conditions precedent set out in Section 2.1 above,Section 5.02 of the Loan Agreement shall be deemed to be modified to delete Section 5.01(i)and replace the following new Section 5.01(i): (i) Commencing on September 25, 2010, and within twenty (20)business days after the end of each month, a copy of the monthly financialstatement of Borrower that shall include the balance sheet of Borrower as atthe end of such month and related statements of income and expenses, statementof changes in financial position, a statement of changes in capital accountsand a statement of allocation of distribution of profits and losses ofBorrower, all in reasonable detail, prepared in accordance with GAAP (or taxaccounting reconciled to GAAP). Such statements shall be accompanied by aCovenant Compliance Certificate in the form of Exhibit C to the Loan Agreement.
 
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And to add the following additional subparagraphs:(u) The Borrower shall prepare and deliver to the Lender a rolling twelve month budget (the“Budget”) in the form attached and marked as Exhibit 2.5 which shall (i) begin on September1, 2010 and (ii) be in a form and detail satisfactory to the Lender and include, withoutlimitation, projections of the receipts, expenses and cash balances of the Borrower for eachmonth of thefollowing twelve months. The Budget shall be updated by the Borrower each month and bedelivered to the Lender within five (5) business days following the end of each month.(v) On or before 5:00 p.m. on each Monday, the Borrower shall deliver to the Lender, in aform and content detail satisfactory to the Lender, a 13-week cash flow projection in theform attached and marked as Exhibit 2.5(v). It is the intent of the Lender that the 13 weekcash flow projection will be updated each week to account for any variances in theBorrower’s income and expenses from the prior week.(w) Commencing October 1, 2010, the Borrower shall pay that percentage of its monthlyearnings before interest, taxes, depreciation and amortization and less monthly principaland interest payments on the Note (“Adjusted monthly EBITDA”) as shown on the Borrower’smonthly financial statements into the Debt Service Reserve on or before the first day of thefollowing month based upon percentages shown on the table below. Such payments shallcontinue until such time as the amounts debited from the Debt Service Reserve pursuant toSection 2.4 above have been replenished.   Adjusted monthly EBITDA Amount of Cash Flow Sweep$0 to greater than or equal to $150,000 5% of adjusted EBITDA$150,000 to greater than or equal to $350,000 7% of adjusted EBITDA$350,000 to greater than or equal to $550,000 10% of adjusted EBITDA$550,000 to greater than or equal to $750,000 15% of adjusted EBITDAGreater than $750,000 25% of adjusted EBITDA(x) Within twenty (20) business days after the end of each month the Borrower shall providethe Lender with a Sources and Uses Statement in a form and content acceptable to the Lenderin its sole discretion.(y) The Borrower shall not make any disbursements or withdrawals without the express consentof the Lender.(z) The Borrower shall maintain at all times a minimum Tangible Net Worth of not less thanEight Million Dollars, ($8,000,000.00). As used herein “Tangible Net Worth” shall mean unitholders’ equity less any assets representing amounts or obligations due from employees, unitholders, insiders and any intangible assets and subordinated debt.Intangible Assets are those assets without physical substance which are classified as havingvalue by carrying such value on the balance sheet of the entity claiming such value.Intangible assets include, but are not limited to, goodwill, patents, trademarks,organizational costs, copyrights, franchise rights, territory rights, licenses, memberships,exploration rights, processes, and designs.3. REPRESENTATIONS AND WARRANTIESThe Borrower represents and warrants to the Lender: 3.1. The financial statements of Borrower submitted with their 10Q filing with the SecurityExchange Commission are complete and correct and fairly present the financial conditions ofthe Borrower as of the date of such financial statements. Since the date of such financialstatements, there has been no material adverse change in the financial conditions of theBorrower.
 
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 3.2. Except as otherwise disclosed in writing to the Lender prior to the execution of thisAgreement, there are no actions, suits or proceedings pending or, to the Borrower’sknowledge, threatened against or affecting the Borrower which could result in any materialadverse change in the Borrower’s properties or assets. 3.3. The Borrower has filed or caused to be filed all federal, state and local tax returnsand all other governmental reports which are required to be filed and the same are true andcorrect. All taxes and fees shown on such returns and reports have been paid to the extentthat they have become due. 3.4. Except as otherwise disclosed in writing to the Lender prior to the execution of thisAgreement, the Borrower is not in default with respect to any of the Borrower’s existingindebtedness, obligations or liabilities. 3.5. This Agreement, the Loan Documents, and any documents and instruments required of theBorrower by this Agreement are, or when executed and delivered will be, valid, binding andenforceable in accordance with their respective terms. 3.6. No representation or warranty of the Borrower contained in this Agreement or in anystatement, instrument or other document furnished by the Borrower pursuant to thisAgreement or prior to this Agreement contains any untrue statement of material fact oromits to state any material fact. 3.7. To the Borrower’s knowledge, with respect to the Real Estate, no reasonable basisexists for the possible imposition of liability for clean-up, removal or otherenvironmental remedial response under any federal laws, including without limitation, theComprehensive Environmental Response Compensation and Liability Act of 1980, 42 U. S.C.Sections 9601-9675, as amended, and the regulations promulgated thereunder, or any state orlocal laws governing clean-up, remediation or removal of wastes.ADDITIONAL PROVISIONS CONCERNING COLLATERAL 4.1. All the Collateral secures all obligations of the Borrower to the Lender, whether underthe Loan Documents, this Agreement or otherwise. 4.2. The Borrower shall defend the Collateral against all claims adverse to the interests ofthe Lender and represents that there are no such claims except as otherwise disclosed inwriting to the Lender prior to the execution of this Agreement. 4.3. Upon forty-eight (48) hours notice, the Lender shall have the right to enter upon anypremises where any of the Collateral, or the records with respect thereto, are located. Atsuch times the Lender shall have the right to inspect, verify and photocopy all suchrecords and to inspect, appraise and document the Collateral. The Borrower hereby grantsthe Lender, its agents and employees, a license to enter upon all such premises for suchpurposes and otherwise ensuring compliance by the Borrower with this Agreement.
 
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EVENTS OF DEFAULTThe failure of the Borrower to perform each and every obligation under this Agreement or the LoanDocuments shall constitute a “Default”.Upon a Default, the Lender may, in its sole discretion, exercise all of its legal and equitablerights and its rights under this Agreement and the Loan Documents, including without limitation,the right to recover reasonable attorney’s fees and legal expenses incurred by Lender in theenforcement of such rights and remedies. Any repossession or retaking or sale of the Collateralpursuant to the terms hereof shall not operate to release Borrower until full payment of anydeficiency has been made in cash. The exercise of any right by the Lender shall not estop Lenderfrom pursuing any other right or remedy, either successively or concurrently.6. MISCELLANEOUS 6.1. **The Borrower does hereby release and forever discharge the Lender, the otherParticipants, the prior holders of the Loan Documents and their officers, agents andemployees, successors and assigns from all causes of action, suits, claims and demands ofevery kind and character, known or unknown, without limit, including any action in law orequity, which the Borrower has or may ever have had against the them, if the circumstances,or any part of the circumstances, giving rise to such cause of action, suit, claim ordemand occurred prior to the date of this Agreement.**   This Section shall survive payment of the Note or termination of this Agreement. 6.2. Except as otherwise required by the Security Exchange Commission, the Borrower agreesthat the terms and conditions of this Agreement will not be disclosed in any way to anyperson or persons, except to an attorney, accountant or similar professional working onbehalf of the Borrower, without written authorization of the Lender, and the Borrowerfurther agrees to advise any such professional that the terms and conditions of thisAgreement are not to be disclosed by that professional. Disclosure of this Agreement to theInternal Revenue Service in conjunction with and in the filing of income tax returns onbehalf of the parties is not a violation of this Agreement. 6.3. The Borrower is legally responsible for any and all tax liabilities, whether federal orstate, arising out of this Agreement or any other transactions with the Lender. TheBorrower further acknowledges that the Lender, its officers, directors, employees andagents have made no representation to the Borrower with respect to any tax liability, inconnection with or related to this Agreement, to induce the Borrower to execute thisAgreement, or with respect to any tax liabilities arising out of this transaction. 6.4. Time is of the essence for each provision of this Agreement in which time is anelement. 6.5. Acceptance of or acquiescence in any past or future course of performance under thisAgreement, the Loan Documents shall neither modify their terms nor be relevant to theirinterpretation, even though the accepting or acquiescing party had knowledge of the natureof the performance and opportunity for objection. 6.6. No delay or failure of the Lender in exercising any right, power or privilegehereunder, or under the terms and provisions of the Loan Documents shall affect any suchright, power or privilege; nor shall any single or partial exercise thereof preclude anyfurther exercise of any other right, power or privilege. The rights and remedies of theLender are cumulative and are not exclusive of any rights or remedies which the Lenderwould otherwise have.
 
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 6.7. All representations, covenants and agreements of the Borrower herein shall survive thisAgreement. 6.8. The parties shall execute such documents as are necessary to make the Loan Documentsand this Agreement effective. The Lender’s rights under this Agreement and such additionaldocuments shall be in addition to Lender’s rights under the Loan Documents and not insubstitution of such rights. 6.9. If for any reason any provision of this Agreement shall be inoperative, the validityand effect of the other provisions shall not be affected thereby. 6.10. This Agreement and the Loan Documents shall be construed under the laws of the Stateof Iowa. Any action to enforce the provisions of this Agreement or the Loan Documents, orarising from the actions of any party in connection herewith or therewith, shall be broughtin the United States District Court for the Southern District of Iowa or in the IowaDistrict Court in Washington County, Iowa, except such action as may be necessary by theLender to protect, preserve and realize its security interest in Collateral located inanother jurisdiction. In the event there is any conflict between this Agreement and theLoan Documents in this regard, this Agreement shall control. 6.11. All notices provided for in this Agreement shall be given in accordance with the termsof the Loan Agreement. 6.12. The words and phrases contained in this Agreement, shall be construed as singular,plural, masculine, feminine or neuter according to the context in which such words andphrases appear. Unless otherwise defined, all words and phrases shall have the meaninggiven to them under the Loan Documents. 6.13. This Agreement shall be binding upon and inure to the benefit of Borrower itssuccessors. The Borrower shall not have the right to assign this Agreement or the LoanDocuments. 6.14. The Loan Documents and this Agreement may be assigned by the Lender and all rights andprivileges of the Lender thereunder shall inure to the benefit of its successors andassigns. 6.15. This Agreement and the Loan Documents are solely for the benefit of Lender and theBorrower and nothing contained in this Agreement or the Loan Documents shall be deemed toconfer upon anyone other than Lender and Borrower any right to insist upon or to enforcethe performance or observance of any of the obligations contained herein or therein. Allconditions to the obligations of Lender hereunder are imposed solely and exclusively forthe benefit of Lender and no other person shall have standing to require satisfaction ofsuch conditions in accordance with their terms and no other person shall under anycircumstances be deemed to be a beneficiary of such conditions, any or all of which may befreely waived in whole or in part by Lender if, in Lender’s sole discretion, Lender deemsit advisable or desirable to do so. Borrower and Lender intend that the relationshipscreated hereunder and under the Loan Documents be solely that of borrower and lender.Nothing herein or therein is intended to create a joint venture, partnership,tenancy-in-common, or joint tenancy relationship between Borrower and Lender.
 
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 6.16. Any notice hereunder to the Borrower or to the Lender shall be in writing and, ifmailed, shall be deemed to be given when sent by registered or certified mail, postageprepaid, and addressed to the Borrower or the Lender at the addresses set forth below or atsuch otheraddresses as the Borrower or the Lender may, by written notice, designate as its addressfor purposes of notice hereunder.   The Lender: MLIC Asset Holdings LLC  ATTN: Doug Gibson, Director  4500 Westown Parkway, Suite 330A  West Des Moines, IA 50266   Copy to: G. Mark Rice  Whitfield & Eddy, PLC  317 Sixth Avenue, Suite 1200  Des Moines, IA 50309   To Borrower: Iowa Renewable Energy, LLC  ATTN: William Pim  1701 E. 7th Street  P.O. Box 2  Washington, IA 52353   Copy to: Richard K. Updegraff  Brown Winnick Law Firm  666 Grand Avenue, Suite 200 Ruan Center  Des Moines, IA 50309 6.17. This Agreement may be executed in any number of counterparts, each of which shall bedeemed an original and all together but one instrument.  6.18. Headings to sections of this Agreement are descriptive only and are inserted forconvenience and are not a part of this Agreement.  6.19. Whitfield & Eddy, P.L.C., Attorneys at Law, is acting in this matter solely asattorneys for Lender; Brown Winnick Law Firm, Attorneys at Law, is acting in this matter asattorneys for Borrower. Borrower is not relying on the Lender or any attorney representingLender for advice regarding the legal effect of this Agreement or Borrower’ obligations tothe Lender.  6.20. This Agreement contains the entire agreement of the parties, integrates all the termsand conditions mentioned in or incidental to this Agreement and supersedes all priornegotiations and writings with respect to this Agreement. No modification or waiver of anyof the provisions of this Agreement shall be valid unless in writing and signed by all theparties.IMPORTANT: READ BEFORE SIGNING. THE TERMS OF THIS AGREEMENT SHOULD BE READ CAREFULLY BECAUSE ONLYTHOSE TERMS IN WRITING ARE ENFORCEABLE. NO OTHER TERMS OR ORAL PROMISES NOT CONTAINED IN THISWRITTEN CONTRACT MAY BE LEGALLY ENFORCED. YOU MAY CHANGE THE TERMS OF THIS AGREEMENT ONLY BYANOTHER WRITTEN AGREEMENT. THIS NOTICE ALSO APPLIES TO ANY OTHER CREDIT AGREEMENTS, (EXCEPTCONSUMER LOANS OR OTHER EXEMPT TRANSACTIONS) NOW IN EFFECT BETWEEN YOU AND THIS LENDER.WE HAVE EACH READ THE FOREGOING AGREEMENT, UNDERSTAND ITS TERMS AND FREELY AND VOLUNTARILY SIGNTHIS AGREEMENT ON THE DATE WRITTEN ABOVE.
 
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           **BORROWER:**   **LENDER:**             Iowa Renewable Energy, LLC   MLIC Asset Holdings LLC, a Delaware limited liability company             By: /s/ Michael Bohannan   By:Transmountain Land & Livestock Company,   Name: Michael Bohannan    a Montana corporation, its Manager   Its: President              By: /s/ Michael Wilson         Name: Michael Wilson         Title: Vice President  
 
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