**EXHIBIT 10.22****CONSTRUCTION LOAN AGREEMENT**This Construction Loan Agreement (the “AGREEMENT”) is dated as of the 19th day ofDecember, 2006, and is by and between **CARDINAL ETHANOL, LLC**, an Indiana limited liability company(“BORROWER”), and **FIRST NATIONAL BANK OF OMAHA**(“BANK”), a national banking associationheadquartered at Omaha, Nebraska.WHEREAS, BORROWER has requested BANK to lend to BORROWER up to the sum of the lesser of (i)Eighty-Three Million and No/100 Dollars ($83,000,000.00) or (ii) fifty-five percent (55%) of theTOTAL PROJECT COST as shown in the TOTAL PROJECT COST STATEMENT (the “CONSTRUCTION LOAN”), for thepurpose of partially funding the cost of the construction of an ethanol plant on the real estatedescribed in Exhibit F attached hereto and by this reference made a part hereof (the “PROPERTY”)together with a Ten Million and No/100 Dollars ($10,000,000.00) revolving line of credit(“REVOLVING LOAN”), up to Three Million and No/100 Dollars ($3,000,000.00) to support the issuanceof Letters of Credit, and SWAP CONTRACTS with an additional exposure to BANK. The foregoing may becollectively referred to in this AGREEMENT as the “LOANS” and singly referred to as a “LOAN”.WHEREAS, BANK is willing to provide such credit facilities to BORROWER upon the terms andconditions herein set forth.SECTION 1 Definitions.1.1 **“**ADJUSTED EBITDA” means EBITDA less taxes, less capital expenditures and less TAX DISTRIBUTIONSand other distributions permitted under this AGREEMENT, all experienced for the applicablereporting period.1.2 “ASSIGNMENT OF CONSTRUCTION CONTRACT” means the assignment of that certain Lump SumDesign-Build Agreement (“CONSTRUCTION CONTRACT”) between BORROWER and Fagen, Inc. (the“DESIGN-BUILDER”) dated December 14, 2006 for construction of the PROJECT in accordance with PLANS,by which BORROWER assigns, as additional security for repayment of the OBLIGATIONS, BORROWER’sinterest in the CONSTRUCTION CONTRACT in a form acceptable to BANK.1.3 [RESERVED].1.4 “BANKING DAY” means a day on which BANK is open for substantially all of its business.“EURODOLLAR BUSINESS DAY” means a BANKING DAY on which commercial banks are open for internationalbusiness (including dealings in U.S. Dollar deposits) in London, England.1.5 “BORROWING BASE” means the lesser of:(i) $10,000,000.00,or
 

 
(ii) The aggregate of (i) 75% of BORROWER’s corn inventory at current value on the datereported, plus (ii) 75% of the amount of BORROWER’s Ethanol and Distillers Grains Accountsaged thirty (30) days or less, excluding any such Accounts reasonably deemed ineligible byBANK, plus (iii) 75% of the amount of BORROWER’s USDA Commodity Credit Corporation BioenergyProgram Accounts or payments due BORROWER aged less than one hundred twenty (120) days,excluding any such Accounts or payments reasonably deemed ineligible by BANK, plus (iv) 75%of BORROWER’s Finished Goods-Ethanol and Distillers Grains Inventory (both wet and dry),valued at the lower of cost or market.1.6 “CLOSING” shall mean the date on which BANK receives this AGREEMENT, executed by BORROWER,together with the CONSTRUCTION NOTE, the REVOLVING NOTE and the other LOAN DOCUMENTS which must bedelivered by the CLOSING as provided for in this Agreement.1.7 “CONSTRUCTION LOAN TERMINATION DATE” means the earlier of (i) April 8, 2009, or (ii) suchearlier date upon which BANK’s commitment to make a disbursement under the CONSTRUCTION LOAN isterminated in accordance with the terms of the CONSTRUCTION NOTE or this AGREEMENT.1.8 “COMPLETION DATE” means the earlier of January 1, 2009, or the date BANK determines following aproper inspection and in the exercise of BANK’s reasonable discretion, that the PROJECT has beencompleted in accordance with the PLANS.1.9 “CONSTRUCTION NOTE” means the promissory note of BORROWER in the form of Exhibit A evidencingborrowings under the CONSTRUCTION LOAN of up to a maximum amount of Eighty-Three Million and No/100Dollars ($83,000,000.00).1.10 “DRAW REQUEST” means forms acceptable to BANK to be submitted to BANK by BORROWER when anadvance is requested under the CONSTRUCTION NOTE.1.11 “EBITDA” means Earnings Before Interest, Taxes, Depreciation and Amortization, all experiencedduring the applicable reporting period, all as determined in accordance with GAAP.1.12 “EVENT OF DEFAULT” has the meaning provided for in Section 7 of this AGREEMENT.1.13 “EXCESS CASH FLOW” means ADJUSTED EBITDA, less scheduled payments on OBLIGATIONS, allexperienced for the applicable reporting period.1.14 “FIXED CHARGE COVERAGE RATIO” means the ratio derived when comparing (i) ADJUSTED EBITDA to(ii) BORROWER’s scheduled payments on the principal and interest of theOBLIGATIONS made during the applicable reporting period, excluding any principal repaid onREVOLVING LOAN and LONG TERM REVOLVING NOTE.1.15 “GAAP” means generally accepted accounting principles in the United States, applied on a basisconsistent with the accounting principles applied in the preparation of the annual financial
- 2 -

 
statements of BORROWER referred to in Section 6.1 of this AGREEMENT and the PROJECTIONS describedin Section 5.7 of this AGREEMENT. All accounting terms not otherwise defined in this AGREEMENThave the meaning assigned to them in accordance with GAAP.1.16 “INDEBTEDNESS” means all indebtedness for borrowed money from any lender including long-termdebt, short-term debt, the NEGATIVE TERMINATION VALUE of SWAP CONTRACTS, and capital leases.1.17 “INDEPENDENT INSPECTOR” means the firm which will be retained by BANK, at BORROWER’s cost, toconduct on site inspections of the work-in-progress on the PROJECT, and to issue periodic reportsto BANK as to the progress of construction of the PROJECT and adherence to the PLANS.1.18 “INTEREST PERIOD” means for the FIXED RATE NOTE and VARIABLE RATE NOTE a period of three (3)months, and for the CONSTRUCTION NOTE, LONG TERM REVOLVING NOTE and REVOLVING NOTE a period of one(1) month; provided that:     1.18.1 subject to clause 1.18.2 below, any INTEREST PERIOD which would otherwise end ona day which is not a EURODOLLAR BUSINESS DAY shall be extended to the next succeedingEURODOLLAR BUSINESS DAY; and     1.18.2 no INTEREST PERIOD shall extend beyond the LOAN TERMINATION DATE applicable tosuch NOTE.1.19 “LIBOR RATE” shall mean, for each INTEREST PERIOD, the London Interbank Offered Rate for U.S.Dollar Deposits for such INTEREST PERIODS as quoted by the Bloomberg service or such other vendorchosen by BANK for the purpose of determining the London Interbank Offered Rate for U.S. DollarDeposits for each INTEREST PERIOD.1.20 “LOAN DOCUMENTS” means this AGREEMENT and each agreement or instrument referred to in Section4 of this AGREEMENT which is executed by or on behalf of BORROWER to govern, evidence or secure theOBLIGATIONS.1.21 “LOAN TERMINATION DATE” means the earliest to occur of the following: (i) as to theCONSTRUCTION NOTE, the CONSTRUCTION LOAN TERMINATION DATE, as to the REVOLVING NOTE, December 18,2007, as to the FIXED RATE NOTE, the VARIABLE RATE NOTE, and as to the LONG TERM REVOLVING NOTE, adate which is five years subsequent to theCONSTRUCTION LOAN TERMINATION DATE, (ii) the date the OBLIGATIONS are accelerated pursuant to thisAGREEMENT, and (iii) the date BANK has received (a) notice in writing from BORROWER of BORROWER’selection to terminate this AGREEMENT and (b) indefeasible payment in full of the OBLIGATIONS.1.22 “MATERIAL ADVERSE EFFECT” means any event or circumstance that is reasonably likely tomaterially impair the ability of BORROWER to perform and pay the OBLIGATIONS and to perform andcomply with the terms and provisions of the LOAN DOCUMENTS.
- 3 -

 
1.23 MARKETING AND RISK MANAGEMENT CONTRACTS” means the contracts between BORROWER and the entitiesnamed below (or any other entity contracting with BORROWER for similar purposes)   **Contracting Entity** **Regarding**   Commodity Specialist Company Distiller’s dried grains (“DDGS”)Murex, N.A., Ltd. Ethanol productsJohn Stewart & Associates Risk management company[To Be Determined] Hedging1.24 “MAXIMUM AVAILABILITY” means the maximum principal amount on the LONG TERM REVOLVING NOTEavailable to BORROWER for borrowing on the date of determination (which shall initially be$10,000,000.00) as such MAXIMUM AVAILABILITY is reduced by (i) $250,000.00 on each REDUCTION DATEand (ii) the EXCESS CASH FLOW calculation provided for in Section 6.2.3 of this AGREEMENT on eachEXCESS CASH FLOW REDUCTION DATE as defined in Section 6.2.3 of this AGREEMENT.1.25 “MORTGAGE” means the Construction Loan Mortgage, Security Agreement, Assignment of Leases andRents and Fixture Filing Statement between BORROWER as mortgagor and BANK as mortgagee, creating afirst lien on the PROPERTY and a security interest in all of the personal property located on thePROPERTY as security for payment of the OBLIGATIONS, and all modifications and amendments thereof.1.26 “NEGATIVE TERMINATION VALUE” means, with respect to any SWAP CONTRACT of BORROWER, the amount(if any) that BORROWER would be required to pay if such SWAP CONTRACT were terminated by reason ofa default by or other termination event relating to BORROWER, such amount to be determined on thebasis of a good faith estimate made by BANK, in consultation with BORROWER. The NEGATIVETERMINATION VALUE of any such SWAPCONTRACT at any date shall be determined (i) as of the end of the most recent fiscal quarter endedon or prior to such date if such SWAP CONTRACT was then outstanding or (ii) as of the date suchSWAP CONTRACT is terminated. However, if an applicable agreement between BORROWER and the relevantcounterparty provides that, upon any such termination by such counterparty, one or more other SWAPCONTRACTS (if any exist) between BORROWER and such counterparty would also terminate and the amount(if any) payable by BORROWER would be a net amount reflecting the termination of all the SWAPCONTRACTS so terminated, then the NEGATIVE TERMINATION VALUE of all the SWAP CONTRACTS subject tosuch netting shall be, at any date, a single amount equal to such net amount (if any) payable byBORROWER, determined as of the later of (i) the end of the most recently ended fiscal quarter or(ii) the date on which the most recent SWAP CONTRACT subject to such netting was terminated.
- 4 -

 
1.27 “NET WORTH” means, as to BORROWER as of any date, total assets less total liabilities and lessthe following types of assets: (1) leasehold improvements; (2) receivables (other than thosecreated by sale of goods) to a member and other investments in or amounts due from any member,employee or other person or entity related to or affiliated with BORROWER); (3) goodwill, patents,copyrights, mailing lists, trade names, trademarks, servicing rights, organizational and franchisecosts, bond underwriting costs and other like assets properly classified as intangible, and (4)treasury stock or equity interests, all as determined in accordance with GAAP; provided, however,(x) NET WORTH shall not include any debt due to BORROWER not acceptable to BANK in the exercise ofits reasonable discretion, and (y) any TIF Grant funds actually received by BORROWER may beincluded in the determination of total assets.1.28 “OBLIGATIONS” means all obligation of BORROWER to BANK of any nature, direct and indirect,absolute or contingent, and however evidenced, including, without limitation, the following:1.28.1 To pay the principal of, and interest on, the CONSTRUCTION NOTE, the TERM NOTES andthe REVOLVING NOTE in accordance with the terms thereof**,**to pay any fees owed to BANK underthis Agreement**,**and to satisfy all of its other liabilities to BANK whether hereunder orotherwise, whether now existing or hereafter incurred, matured or unmatured, direct orcontingent, joint or several, including any extensions, modifications, renewals thereof, andsubstitutions therefore and including, but not limited to, any obligations under letter ofcredit agreements and SWAP CONTRACTS;1.28.2 To repay to BANK all amounts advanced by BANK hereunder, under any other LOANDOCUMENT (including, without limitation, any protective advance made under the MORTGAGE) orotherwise on behalf of BORROWER, including, but without limitation, advances for principalor interest payments to prior secured parties, mortgagees, or licensors, or taxes, levies,insurance, rent, or repairs to, or maintenance or storage of, any of the real or personalproperty securing BORROWER’s payment and performance of this AGREEMENT; and1.28.3 To reimburse BANK, on demand, for BANK’s reasonable and necessary out of pocketexpenses and costs, including the reasonable fees and expenses of its counsel, in connectionwiththe preparation, administration, amendment, modification, or enforcement of this AGREEMENTand the LOAN DOCUMENTS required hereunder, including, without limitation, any proceedingbrought or threatened, to enforce payment of any of the OBLIGATIONS referred to in thissection of the AGREEMENT.1.29 “PERMIT” or “PERMITS” means any and all licenses, consents or permits required under anyfederal, state or local law or regulation, including, but not limited to any environmental law orregulation, required to construct and operate the facility on the PROPERTY after completion of thePROJECT at its operational capacity, including without limitation the following:
- 5 -

 
1.29.1 An air emissions permit, which PERMIT will allow BORROWER after the COMPLETION DATEto operate the ethanol plant on the PROPERTY after construction of the PROJECT at maximumcapacity.1.29.2 All permits required in connection with the construction and operation of all aboveor below ground storage tanks included in the PLANS for the ethanol plant.1.29.3 A National Pollution Discharge Elimination System Construction Permit for any stormwater that is discharged during construction and after construction of the PROJECT.1.30 “PLANS” means the plans, specifications and materials listing prepared by Fagen Engineering,LLC (“FAGEN ENGINEERING”) on behalf of BORROWER for the PROJECT and certified to BANK as the plansfor the PROJECT by the DESIGN-BUILDER, FAGEN ENGINEERING and BORROWER.1.31 “PROJECT” means collectively the design and construction of an ethanol plant, administrationbuilding and railroad spur, together with all necessary and appropriate fixtures, equipment,attachments, and accessories, as described in the PLANS and the plans, specifications and materialslisting relating to the administration building and railroad spur, to be constructed on thePROPERTY.1.32 “REDUCTION DATE” means the date of any scheduled quarterly payment on the Term Loans asprovided for in Section 2.5 below, on which dates the MAXIMUM AVAILABILITY on the LONG TERMREVOLVING NOTE shall reduce by $250,000.00.1.33 “REVOLVING NOTE” means that promissory note of BORROWER to BANK evidencing the revolvingcredit facility described in Section 2.8 of this AGREEMENT, its renewals, modifications andextensions.1.34 “SECURITY AGREEMENT” means the SECURITY AGREEMENT between BORROWER, as debtor, and BANK, assecured party, creating a first priority security interest in all of BORROWER’s assets, includinggeneral intangibles and payment intangibles, securing the OBLIGATIONS.1.35 “SUBCONTRACTOR” means any person who contracts with the DESIGN-BUILDER, the general contractorof the administration building, the general contractor of the railroad spur or BORROWER to performany work or supply any of the materials or equipment necessary to complete the PROJECT.1.36 “SWAP CONTRACT” or “SWAP CONTRACTS” means (a) any and all rate swap transactions, basis swaps,credit derivative transactions, forward rate transactions, commodity swaps, commodity options,forward commodity contracts, equity or equity index swaps or options, bond or bond price or bondindex swaps or options or forward bond or forward bond price or forward bond index transactions,interest rate options, forward foreign exchange transactions, cap transactions, floor transactions,collar transactions, currency swap transactions, cross currency rate
- 6 -

 
swap transactions, currencyoptions, spot contracts, or any other similar transactions or any combination of any of theforegoing (including any options to enter into any of the foregoing), whether or not any suchtransaction is governed by or subject to any master agreement, and (b) any and all transactions ofany kind, and the related confirmations, which are subject to the terms and conditions of, orgoverned by, any form of master agreement published by the International Swaps and DerivativesAssociation, Inc. Provided, however, the term SWAP CONTRACT shall not, for the purposes of thisAGREEMENT, include commodity hedging or commodity risk management contracts. The term “commodity”includes ethanol, grain, natural gas and other traded commodities.1.37 “TAX DISTRIBUTIONS” means cash distributions to each of BORROWER’s members in an amount equalto such member’s estimated combined federal, state and local tax liability, after application ofall available federal, state and local tax credits allocable to such members, in respect ofBORROWER’s income, gain and/or earnings.1.38 “TERM NOTES” means collectively the FIXED RATE NOTE, VARIABLE RATE NOTE and LONG TERMREVOLVING NOTE to be executed by BORROWER in favor of BANK which evidence permanent financing topay the CONSTRUCTION NOTE as described in Section 2.5 of this AGREEMENT, their renewals,modifications and extensions.1.39 “TOTAL PROJECT COST” means the aggregate total cost to acquire the PROPERTY and construct thePROJECT, including all hard and soft costs, as shown in the TOTAL PROJECT COST STATEMENT.1.40 “TOTAL PROJECT COST STATEMENT” means the budget detailing by category the TOTAL PROJECT COSTto acquire the PROPERTY and construct the PROJECT in accordance with the PLANS, as attached heretoas Exhibit G, which has been approved by BANK, as such TOTAL PROJECT COST STATEMENT may bemodified, amended or supplemented by “CONSTRUCTION VARIANCE REPORTS” submitted by BORROWER to BANKin connection with a DRAW REQUEST. The “CONSTRUCTION COST STATEMENT” shall be the portion of theTOTAL PROJECT COST STATEMENT applicable to the costs incurred under the CONSTRUCTION CONTRACT withthe DESIGN-BUILDER. The TOTAL PROJECT COST STATEMENT includes a “SOURCES ANDUSES OF FUNDS” which demonstrates the source of funds to be applied to the TOTAL PROJECT COST asshown in the TOTAL PROJECT COST STATEMENT.1.41 “WORKING CAPITAL” means current assets (less investments in or other amounts due from anymember, manager, employee or any person or entity related to or affiliated with BORROWER andprepayments), plus the amount available to BORROWER for drawing under the LONG TERM REVOLVING NOTE,less current liabilities.SECTION 2 Amount and Terms of the LOANS.2.1 CONSTRUCTION LOAN. BANK agrees, on the terms and subject to the conditions hereinafterset forth, to make, from time to time during the period from the date of execution of this
- 7 -

 
AGREEMENT to and including the CONSTRUCTION LOAN TERMINATION DATE disbursements to BORROWERpursuant to that certain Disbursing Agreement dated of even date with this AGREEMENT among BANK,BORROWER, the TITLE COMPANY (as defined in Section 4.1.11 below) and Homestead Escrow and ExchangeCompany (the “DISBURSING AGREEMENT”), in an aggregate principal amount not to exceed the amount ofthe CONSTRUCTION LOAN for the sole purpose of paying approved construction costs of the PROJECT.If, prior to the COMPLETION DATE, there is paid to BANK a third party payment (a grant payment, forexample), which is applied to the CONSTRUCTION LOAN, BANK will advance such amount, or a lessersum, as in BANK’s reasonable discretion is necessary to complete the PROJECT. Approvedconstruction costs are costs actually incurred in connection with the construction of the PROJECT,which shall include but not be limited to costs of PERMITS, licenses, labor, supplies, materials,services, equipment, insurance premiums, real estate taxes and interest on disbursements, and BANKapproved operating costs of the ethanol plant. Construction costs do not include the costassociated with payment of lost profits connected with termination under Article 15 of theCONSTRUCTION CONTRACT.2.2 The CONSTRUCTION NOTE. The obligation of BORROWER to repay the CONSTRUCTION LOAN shallbe evidenced by the CONSTRUCTION NOTE. Notwithstanding any provisions of the CONSTRUCTION NOTE,interest shall be payable at the rate provided therein only on such portions of the CONSTRUCTIONLOAN proceeds as actually have been disbursed pursuant to this AGREEMENT and the DISBURSINGAGREEMENT.2.3 Interest on the CONSTRUCTION LOAN. Prior to maturity, interest on the principalbalance outstanding on the CONSTRUCTION LOAN shall accrue at a rate equal to the one month LIBORRATE plus 300 hundred basis points, as more particularly set forth in the CONSTRUCTION NOTE. Theinterest rate on the CONSTRUCTION LOAN shall initially be set two (2) EURODOLLAR BUSINESS DAYSprior to the date of the CONSTRUCTION LOAN, and shall adjust on the 8th day of eachmonth thereafter. After maturity, whether by acceleration or otherwise, interest shall accrue onthe CONSTRUCTION LOAN at a rate equal to the one month LIBOR RATE plus nine hundred (900) basispoints.2.4 Repayment of the CONSTRUCTION NOTE. Interest only shall be payable quarterly on theCONSTRUCTION NOTE as more particularly provided for in the CONSTRUCTION NOTE. All outstandingprincipal and accrued but unpaid interest shall be payable on the LOAN TERMINATION DATE applicableto the CONSTRUCTION NOTE.2.5 TERM LOANS. The existing balance on the CONSTRUCTION LOAN, including any advance madeto increase WORKING CAPITAL, as of CONSTRUCTION LOAN TERMINATION DATE will be restated and saidbalance will be paid by the TERM NOTES in the forms attached hereto as Exhibits B, C, and D,respectively, and are by this reference made a part hereof. The TERM NOTES evidence the “TERMLOANS”. The TERM NOTES shall be amortized on a ten (10) year basis and repaid as follows:     On the eighth (8th) day of every third (3rd) month, commencing three (3) monthsafter the CONSTRUCTION LOAN TERMINATION DATE, BORROWER shall pay to BANK the
- 8 -

 
scheduled principalpayment on the FIXED RATE NOTE shown in Schedule I, attached hereto and by this reference made apart hereof, plus accrued interest on the FIXED RATE NOTE.     In addition, on the eighth (8th) day of every third (3rd) month, commencing three(3) months after the CONSTRUCTION LOAN TERMINATION DATE, BORROWER shall pay $1,546,162.02 to BANK,which payment shall be allocated to the TERM LOANS as follows:   (a). first to accrued interest on the LONG TERM REVOLVING NOTE;    (b). next to accrued interest on the VARIABLE RATE NOTE; and    (c). next to principal on the VARIABLE RATE NOTE.After the VARIABLE RATE NOTE has been fully paid, such quarterly payments shall be allocated firstto accrued interest on the LONG TERM REVOLVING NOTE, and thence to principal outstanding on theLONG TERM REVOLVING NOTE; provided, however, that, if there is no outstanding interest or principalon the LONG TERM REVOLVING NOTE, or the MAXIMUM AVAILABILITY on the LONG TERM REVOLVING NOTE hasbeen reduced to zero dollars ($0), then such quarterly payment shall no longer be required.     In addition, on each REDUCTION DATE and EXCESS CASH FLOW REDUCTION DATE, BORROWER shall payand apply to the then outstanding principal balance of the LONG TERM REVOLVING NOTE, if any, theamount necessary to reduce the outstanding principal balance of the LONG TERM REVOLVING NOTE sothat it is within the MAXIMUM AVAILABILITY applicable on each such REDUCTION DATE and EXCESS CASHFLOW REDUCTION DATE.     All unpaid principal and accrued interest under the TERM LOANS shall be due and payable on theLOAN TERMINATION DATE applicable thereto, if not sooner paid.2.6 Interest on the TERM LOANS. Prior to maturity, interest shall accrue on the TERM LOANSas follows:(a). FIXED RATE NOTE. Interest on the principal balance outstanding on the FIXED RATE NOTEshall accrue at a rate equal to the three month LIBOR RATE plus 300 hundred basis points, asmore particularly set forth in the FIXED RATE NOTE. The interest rate on the FIXED RATENOTE shall initially be set two (2) EURODOLLAR BUSINESS DAYS prior to the date of the FIXEDRATE NOTE, and shall adjust on the 8th day of every third month thereafter. After maturity,whether by acceleration or otherwise, interest shall accrue on the FIXED RATE NOTE at a rateequal to the three month LIBOR RATE plus nine hundred (900) basis points.(b). VARIABLE RATE NOTE. Subject to the incentive pricing provisions contained in Section2.15 of this AGREEMENT, interest on the principal balance outstanding on the VARIABLE RATENOTE shall accrue at a rate equal to the three month LIBOR RATE plus 300 hundred basispoints, as more particularly set forth in the VARIABLE RATE NOTE. The interest rate on theVARIABLE RATE NOTE shall initially be set two (2)
- 9 -

 
EURODOLLAR BUSINESS DAYS prior to the dateof the VARIABLE RATE NOTE, and shall adjust on the 8th day of every third month thereafter.After maturity, whether by acceleration or otherwise, interest shall accrue on the VARIABLERATE NOTE at a rate equal to the three month LIBOR RATE plus nine hundred (900) basispoints.(c). LONG TERM REVOLVING NOTE. Subject to the incentive pricing provisions contained inSection 2.15 of this AGREEMENT, interest on the principal balance outstanding on the LONGTERM REVOLVING NOTE shall accrue at a rate equal to the one month LIBOR RATE plus 300hundred basis points, as more particularly set forth in the LONG TERM REVOLVING NOTE. Theinterest rate on the LONG TERM REVOLVING NOTE shall initially be set two (2) EURODOLLARBUSINESS DAYS prior to the date of the LONG TERM REVOLVING NOTE, and shall adjust on the 8thday of every month thereafter. After maturity, whether by acceleration or otherwise,interest shall accrue on the LONG TERM REVOLVING NOTE at a rate equal to the one month LIBORRATE plus nine hundred (900) basis points.2.7 LONG TERM REVOLVING NOTE. BANK agrees to lend $10,000,000.00 to BORROWER pursuant tothis facility (reducing on each REDUCTION DATE and EXCESS CASH FLOW REDUCTION DATE as provided forabove). BANK will credit proceeds of this revolving loan (“LONG TERM REVOLVING LOAN”) toBORROWER’s deposit account with BANK, bearing number 110118921.2.7.1 Subject to the terms hereof, BANK will lend BORROWER, from time to time until the LOANTERMINATION DATE such sums as BORROWER may request by reasonable same day notice to BANK,received by BANK not later than 11:00 A.M. of such day, but which shall not exceed in theaggregate principal amount at any one time outstanding, the MAXIMUM AVAILABILITY in effecton the date of any requested advance. BORROWER may borrow,repay without penalty or premium and reborrow hereunder, from the date of this AGREEMENTuntil the LOAN TERMINATION DATE, either the full amount of the MAXIMUM AVAILABILITY or anylesser sum.2.8 REVOLVING LOAN. BANK agrees to lend $10,000,000.00 to BORROWER pursuant to thisfacility. BANK will credit proceeds of this revolving loan (“REVOLVING LOAN”) to BORROWER’sdeposit account with BANK, bearing number 110118921.2.8.1 Subject to the terms hereof, BANK will lend BORROWER, from time to time until the LOANTERMINATION DATE, such sums as BORROWER may request by reasonable same day notice to BANK,received by BANK not later than 11:00 A.M. of such day, but which shall not exceed in theaggregate principal amount at any one time outstanding, the lesser of (i) $10,000,000.00 or(ii) the BORROWING BASE (the “REVOLVING LOAN COMMITMENT”). BORROWER may borrow, repaywithout penalty or premium and reborrow hereunder, from the date of this AGREEMENT until theLOAN TERMINATION DATE, either the full amount of the REVOLVING LOAN COMMITMENT or any lessersum. It is the intention of the parties that the outstanding balance of the REVOLVING LOANshall not exceed the BORROWING BASE, as required in Section 6.1.9, and if at any
- 10 -

 
time saidbalance exceeds the BORROWING BASE, BORROWER shall forthwith pay BANK sufficient funds toreduce the balance of the REVOLVING LOAN until it is in compliance with this requirement.2.9 THE REVOLVING NOTE. The REVOLVING LOAN COMMITMENT shall be evidenced by a REVOLVINGNOTE having stated maturity on the LOAN TERMINATION DATE applicable thereto, in the form attachedhereto as Exhibit E.2.10 INTEREST ON THE REVOLVING NOTE. Prior to maturity and subject to the incentivepricing provisions contained in Section 2.15 of this AGREEMENT, interest on the principal balanceoutstanding on the REVOLVING NOTE shall accrue at a rate equal to the one month LIBOR RATE plus 300hundred basis points, as more particularly set forth in the REVOLVING NOTE. The interest rate onthe REVOLVING NOTE shall initially be set two (2) EURODOLLAR BUSINESS DAYS prior to the date of theREVOLVING NOTE, and shall adjust on the 8th day of each month thereafter. After maturity, whetherby acceleration or otherwise, interest shall accrue on the REVOLVING NOTE at a rate equal to theone month LIBOR RATE plus nine hundred (900) basis points.2.11 LETTERS OF CREDIT. BANK will issue its letters of credit at BORROWER’s request, onBORROWER’s account, pursuant to BANK’s customary policies and with its standardized documents, inamounts outstanding at no time exceeding $3,000,000.00 in the aggregate.2.12 Payments and Prepayments. All principal, interest and fees due under the OBLIGATIONSand the LOAN DOCUMENTS shall be paid in immediately available funds as contracted in this AGREEMENTand no later than the payment due dates set forth in the applicable NOTES (and with regards tofees, the due dates set forth in the periodic statements mailed to BORROWER by BANK). Should apayment comedue on a day other than a BANKING DAY, then the payment shall be made no later than the nextBANKING DAY and interest shall continue to accrue during the extended period.     On the occasion of any prepayment of the CONSTRUCTION NOTE or all TERM NOTES in full as aresult of refinancing with a lender other than BANK, BORROWER will pay to BANK a prepayment feecalculated as follows: If the prepayment occurs during the construction of the PROJECT or withinthe first two (2) years of the TERM LOANS, a fee of one (1%) percent of the original amount orexposure of the LOANS.     In the event that BORROWER pre-pays all of the FIXED RATE NOTE or VARIABLE RATE NOTE, wherethe rate is fixed in excess of one month, and except as to such payments as required by thisAGREEMENT, BORROWER shall pay BANK a breakage fee sufficient to make BANK whole for any expensesactually incurred by BANK related to breaking fixed interest rates, which BANK shall apportionamong its participants; provided, however, no payment of EXCESS CASH FLOW shall be the cause of apayment to BANK for interest rate breakage fees or otherwise result in any prepayment fee.
- 11 -

 
2.13 Fees. BORROWER shall pay to BANK the fees and other amounts described and providedfor in that certain fee letter of even date with this AGREEMENT between BORROWER and BANK (as itmay be amended or modified and in effect from time to time, the “FEE LETTER”) in accordance withthe terms of the FEE LETTER.In addition to the fees described and provided for in the FEE LETTER, BORROWER agrees to pay BANKan unused commitment fee equal to 35 basis points of the average unused portion of the REVOLVINGLOAN COMMITMENT and of LONG TERM REVOLVING NOTE, calculated and payable on a quarterly basis inarrears; provided, however, the unused commitment fees on same shall not apply and be payable byBORROWER until the CONSTRUCTION LOAN TERMINATION DATE. BORROWER shall pay BANK commitment feesequal to Two and One-Quarter percent (2.25%) percent of outstanding Letters of Credit issued onBORROWER’s account, together with such other fees as are consistent with BANK’s then currentInternational Trade Services Fee Schedule.2.14 Appraisal. If BANK is required by any government entity with regulatory authorityover BANK to obtain a real estate appraisal**,**BANK will obtain, at BORROWER’s expense, an appraisalof the PROJECT and PROPERTY providing values obtained by use of the cost approach, the incomeapproach and the replacement cost approach. If such appraisal shows that the outstandingCONSTRUCTION LOAN amount at that time exceeds the value of the PROJECT and PROPERTY as determinedby the appraisal, using the replacement cost approach, then BORROWER shall, within thirty (30) daysof notice by BANK and without penalty or premium, pay the difference between the outstandingCONSTRUCTION LOAN amount and the appraised value amount of the PROJECT and PROPERTY as determinedby such appraisal, and no further advances shall be made on the CONSTRUCTION LOAN thereafter untilsuch time as the appraised value of the PROJECT and PROPERTY exceeds the CONSTRUCTION LOAN amount.2.15 Incentive Pricing. The interest rate applicable to the REVOLVING LOAN, VARIABLE RATENOTE and the LONG TERM REVOLVING NOTE is subject to reduction commencing six months subsequent toCONSTRUCTION LOAN TERMINATION DATE, based on the most recent interim financial statements deliveredby or on behalf of BORROWER to BANK. In the event that BORROWER maintains the following ratios,measured quarterly, the interest rate will be reduced accordingly:   **If INDEBTEDNESS to**  **NET WORTH is greater than:** **Interest rate will be:**1.15 : 1.00 LIBOR RATE plus 300 basis points1.00 : 1.00, but less than 1.15 : 1.00 LIBOR RATE plus 285 basis points.75 : 1.00, but less than 1.00 : 1.00 LIBOR RATE plus 270 basis pointsLess than .75 : 1.00 LIBOR RATE plus 255 basis pointsProvided, however, that if on or before the CONSTRUCTION LOAN TERMINATION DATE, BORROWER candemonstrate to BANK, and BANK in its discretion determines, that fifty percent
- 12 -

 
(50%) of the TOTALPROJECT COST was funded by BORROWER’S equity and not the CONSTRUCTION LOAN, then the followingIncentive Pricing shall apply to the principal outstanding on the REVOLVING NOTE, VARIABLE RATENOTE and the LONG TERM REVOLVING NOTE, commencing six months subsequent to the CONSTRUCTION LOANTERMINATION DATE, based on the most recent interim financial statements delivered by or on behalfof BORROWER to BANK (with the INDEBTEDNESS to NET WORTH ratio measured quarterly):   **If INDEBTEDNESS to**  **NET WORTH is greater than:** **Interest rate will be:**1.15 : 1.00 LIBOR RATE plus 290 basis points1.00 : 1.00, but less than 1.15 : 1.00 LIBOR RATE plus 275 basis points.75 : 1.00, but less than 1.00 : 1.00 LIBOR RATE plus 260 basis pointsLess than .75 : 1.00 LIBOR RATE plus 245 basis pointsSECTION 3 Disbursement Procedures.3.1 Submission of DRAW REQUESTS. BORROWER has submitted to BANK, and BANK has approved,the TOTAL PROJECT COST STATEMENT. Whenever BORROWER desires a disbursement under the CONSTRUCTIONLOAN, which shall be no more often than three (3) times a month, unless BANK agrees otherwise,BORROWER shall submit to BANK a DRAW REQUEST, duly executed on behalf of BORROWER setting forth theinformation requested therein. Each DRAW REQUEST shall be delivered to BANK at least ten (10) daysbefore the date the disbursement is desired.3.2 Amount of DRAW REQUEST. Each DRAW REQUEST shall be limited to amounts equal to (i) thetotal of costs actually incurred and paid or owing by BORROWER to the date of such DRAW REQUEST forwork performed or materials incorporated in the PROJECT as described in the PLANS, plus (ii) thecost of materials and equipment not incorporated in the PROJECT, but delivered to and suitablystored at the PROJECT site, plus (iii) prepayments for equipment when prepayment is required by themanufacturer or supplier or, with BANK’s prior written approval, when such prepayment results in amaterial financial benefit to BORROWER; plus (iv) any other hard or soft costs which are consistentwith the TOTAL PROJECT COST STATEMENT approved by BANK, as modified or supplemented by anyCONSTRUCTION VARIANCE REPORT approved by BANK, for which a disbursement under the CONSTRUCTION LOANis available as demonstrated in the SOURCES AND USES OF FUNDS; less, (v) prior disbursements forsuch costs and from the CONSTRUCTION LOAN or BORROWER’s WORKING CAPITAL for such costs.Notwithstanding anything herein to the contrary, no disbursements for materials stored at thePROJECT site will be made by BANK unless BORROWER shall advise BANK of its intention to storematerials prior to their delivery, and provide suitable security for such storage.3.3 Other Documents. At the time of submission of each DRAW REQUEST, BORROWER shall submitor cause to be submitted to BANK the following:
- 13 -

 
3.3.1. A written lien waiver from the DESIGN-BUILDER and each SUBCONTRACTOR for work doneand materials supplied by it which were paid for pursuant to the next preceding DRAW REQUESTwith copies of all invoices supporting the DRAW REQUEST.3.3.2. A document from BORROWER and DESIGN-BUILDER or SUBCONTRACTOR (as applicable), and ifapplicable, the INDEPENDENT INSPECTOR requesting and/or approving payment of the relevantDRAW REQUEST.3.3.3. Such other supporting evidence as may be reasonably requested by BANK to substantiateall payments which are to be made out of the relevant DRAW REQUEST and/or to substantiateall payments then made with respect to the PROJECT.3.3.4. Subject to the provisions of Section 3.4 below, if BORROWER desires to reallocatefunds from one budget category to another or modify, amend or supplement the TOTAL PROJECTCOST STATEMENT, then BORROWER shall submit to BANK for BANK’S approval a CONSTRUCTIONVARIANCE REPORT showing the details of such reallocation, modification, amendment orsupplement. BANK may approve or disapprove of such CONSTRUCTION VARIANCE REPORT in BANK’sdiscretion, but BANK’s approval shall not be unreasonably withheld.3.4 Cost Over Runs. BORROWER agrees that all cost over runs on the PROJECT shall be paidsolely by BORROWER and that BORROWER shall deliver additional funds to BANK in accordance withSection 3.6 of this AGREEMENT to pay any cash required to fund cost over runs on the PROJECT.Notwithstanding the foregoing, BORROWER shall be entitled to apply any previously achieved savingsin any completed category of the TOTAL PROJECT COST STATEMENT to pay for any such cost over runs.In addition, BORROWER may from time to time request that the contingency fund line item in theTOTAL PROJECT COST STATEMENT be reallocated to pay needed costs of the PROJECT. Such requestsshall be subject to BANK’s written approval in its reasonable discretion, which shall not beunreasonably withheld. Notwithstanding the foregoing, BORROWER shall be entitled to advances fromthe contingency fund line item in the TOTAL PROJECT COST STATEMENT so long as at all times thereare sufficient funds remaining from all sources identified in the SOURCES AND USES OF FUNDS tocomplete the construction of the PROJECT in accordance with the PLANS in the discretion of BANK.3.5 Making the Disbursements. If on the date a DRAW REQUEST is received by BANK, BORROWERhas performed all of its agreements and complied with all requirements therefore to be performed orcomplied with hereunder including satisfaction of all applicable conditions precedent contained inSection 4 of this AGREEMENT and, if required by BANK, BANK has received a current report from theINDEPENDENT INSPECTOR documenting compliance with the PLANS for those portions of the PROJECTindicated as completed in the DRAW REQUEST and otherwise confirming the acceptability of thePROJECT work represented by the DRAW REQUEST, BANK shall pay to the ESCROW COMPANY (as defined inthe DISBURSING AGREEMENT) for disbursement to BORROWER in accordance with the DISBURSING AGREEMENTthe amount of the requested disbursement. Each disbursement disbursed to BORROWER under the
- 14 -

 
CONSTRUCTION LOAN shall bear interest at the rate provided in the CONSTRUCTION NOTE evidencing thedisbursement from the date such disbursement is so disbursed to BORROWER or deposited intoBORROWER’s account.3.6 Deposit of Funds by BORROWER. If the INDEPENDENT INSPECTOR shall at any time in goodfaith determine that the undisbursed amount of the CONSTRUCTION LOAN is less than the amountrequired to pay all cash required to pay costs and expenses of any kind which reasonably may beanticipated in connection with the completion of the PROJECT after application of all fundsreceived from BORROWER’s equity and shall thereupon send written notice thereof to BORROWERspecifying the amount required to be deposited by BORROWER with BANK to provide sufficient funds tocomplete the PROJECT, BORROWER agrees that it will, within forty-five (45) calendar days of receiptof any such notice, deposit with BANK, the amount of funds specified in BANK’s notice. BORROWERagrees that any such funds deposited with BANK may be disbursed before any further disbursement ofCONSTRUCTION LOAN proceeds from BANK, to pay any and all costs and expenses of any kind inconnection with completion of the PROJECT.3.7 Disbursements Without Receipt of DRAW REQUEST. Notwithstanding anything herein to thecontrary, BANK shall have the irrevocable right at any time and from time to time to apply fundswhich it agrees to disburse hereunder to pay interest on the CONSTRUCTION NOTE as and when suchinterest becomes due, and to pay any and all of the expenses of BANK related to the PROJECT and theCONSTRUCTION LOAN, all without receipt of a DRAW REQUEST.3.8 Miscellaneous Procedures. BANK may establish additional procedures regardingdisbursements as are reasonable to assure the proceeds of the CONSTRUCTION LOAN are paid only tothose persons and entities entitled to the same, and that the liens securing the OBLIGATIONS are inall cases first and paramount liens on the PROPERTY.3.9 Appointment of INDEPENDENT INSPECTOR. No DRAW REQUEST shall be honored aftercommencement of construction unless BORROWER has acknowledged the appointment of an INDEPENDENTINSPECTOR.SECTION 4 Conditions of Lending.4.1 Conditions Precedent to the Initial Disbursement. The obligation of BANK to make theinitial disbursement under the CONSTRUCTION LOAN is subject to the condition precedent thatBORROWER shall be in compliance with the conditions set forth in Section 4.2 of this AGREEMENT andto the further condition precedent that, unless waived by BANK in writing in the post-closingletter agreement, BANK shall have received on or before the CLOSING all of the following, eachdated (unless otherwise indicated) the day of CLOSING, in form and substance satisfactory to BANK:4.1.1 This AGREEMENT, and the CONSTRUCTION NOTE, duly executed on behalf of BORROWER anddelivered to BANK.
- 15 -

 
4.1.2 The MORTGAGE duly executed on behalf of BORROWER and in form acceptable for recordingin Randolph County, Indiana.4.1.3 The FEE LETTER duly executed by BORROWER and delivered to BANK.4.1.4 The SECURITY AGREEMENT, duly executed on behalf of BORROWER and delivered to BANK.4.1.5 A financing statement or statements sufficient when filed to perfect the securityinterests granted under the MORTGAGE, the SECURITY AGREEMENT, and the ASSIGNMENT OFCONSTRUCTION CONTRACT, to the extent such security interests are capable of being perfectedby filing, and a deposit account control agreement in form and substance acceptable to BANKto perfect BANK’s security interest in any deposit accounts maintained by BORROWER withfinancial institutions other than BANK.4.1.6 A copy of the PLANS, certified by FAGEN ENGINEERING, DESIGN-BUILDER and BORROWER.4.1.7 The ASSIGNMENT OF CONSTRUCTION CONTRACT, duly executed by BORROWER and consented to bythe DESIGN-BUILDER and a copy of theCONSTRUCTION CONTRACT, together with the General Conditions of Contract referred to therein,if any, and an assignment of the general construction contract for the administrationbuilding and railroad spur and a copy of such general contracts.4.1.8 A TOTAL PROJECT COST STATEMENT on the PROJECT duly executed by BORROWER, setting forththe anticipated total cost of the PROJECT’s completion, and a CONSTRUCTION COST STATEMENTduly executed by the DESIGN-BUILDER, setting forth its anticipated construction costs of thePROJECT.4.1.9 An ALTA/ACSM Land Title Survey prepared in accordance with the current accuracystandards jointly adopted by ALTA (American Land Title Association), ACSM (American Congresson Surveying and Mapping) and NSPS (National Society of Professional Surveyors) togetherwith optional survey requirements #2 (vicinity map showing the property surveyed inreference to nearby highway(s) or major street intersections); #6 (identify setbacks); #7(identify exterior dimensions of all existing and proposed buildings “As-Built”, includingsquare footage of exterior footprint of all buildings, gross floor area of all buildings);and #11 (location of utilities). The survey shall show the location of all easements andencroachments onto or from the PROPERTY that are visible on the PROPERTY, known to thesurveyor preparing the survey or of record, identifying easements of record by recordingdata. Such surveyor shall certify there are no easements or encroachments upon the PROPERTYexcept as shown on the survey.4.1.10 An as built appraisal based upon the PLANS to be performed by Natwick AssociatesAppraisal Services which shows the as-completed value of the PROPERTY and PROJECT addressedto and otherwise acceptable to BANK.
- 16 -

 
4.1.11 A title binder, issued by Stewart Title Services of Indiana, Inc. as agent of StewartTitle Guaranty Company (the “TITLE COMPANY”) at BORROWER’s expense, constituting acommitment by the TITLE COMPANY to issue a mortgagee’s title policy in favor of BANK asmortgagee under the MORTGAGE and an owner’s title policy to BORROWER, that will be freefrom all standard exceptions, including mechanics’ liens and all other exceptions notpreviously approved by BANK and that will insure the MORTGAGE to be a valid first lienon the PROPERTY. Such loan policy shall include additional rider coverage as may berequested by BANK, including, without limitation, the following ALTA endorsementforms:   ALTA Endorsement Form 3.1 Zoning-Completed StructureALTA Endorsement Form 6 Variable Rate MortgageALTA Endorsement Form 8.1 Environmental ProtectionALTA Endorsement Form 9 Restrictions, Encroachments, MineralsUsury  ALTA Pending DisbursementEndorsement Mechanic’s Lien CoverageALTA Endorsement Form 14 Future AdvanceALTA Endorsement Form 19 ContiguityALTA Endorsement Form 21 Creditor’s Rights4.1.12 A soil report on the PROPERTY certified by a registered engineer including structuraldesign recommendations in form and substance satisfactory to BANK. Such report shallinclude soil borings and geo-technical analyses.4.1.13 A Phase I Environmental Report of the PROPERTY, as well as any subsequent LimitedEnvironmental Site Assessments issued prior to CLOSING, and such other environmental testingand due diligence as may be reasonably required by BANK, all in form and contentsatisfactory to BANK and establishing the environmental condition of the PROPERTY assatisfactory to BANK.4.1.14 An assignment of any License Agreements with ICM, INC., and ICM, INC.’s consent toany such assignment.4.1.15 Copies of all PERMITS from the applicable regulatory agencies from whom a permit orlicense is required as of the then current stage of the PROJECT.4.1.16 Copies of documents from the appropriate state, federal, city or county authorityhaving jurisdiction over the PROPERTY and the PROJECT that provide to the reasonablesatisfaction of BANK that the PROJECT when constructed in accordance with the PLANS willcomply in all material respects with all applicable ordinances, zoning, subdivision,platting, environmental and land use requirements, without special variance or exception,and such other evidence as BANK shall reasonably request to establish that the PROJECT andthe contemplated use thereof are permitted by and comply in all material respects with
- 17 -

 
allapplicable use or other restrictions and requirements in prior conveyances, zoningordinances, environmental laws and regulations, water shed district regulations and allother applicable laws or regulations, and governmental authorities having jurisdiction overthe PROJECT. BORROWER is not required to obtain advance confirmation from any governmentalbody that the PROJECT will comply with such ordinances, regulations and requirements.4.1.17 Copies of certificates of insurance demonstrating the types, levels, deductibles,endorsements and other coverage parameter issues to the satisfaction of BANK for builder’srisk insurance, commercial general liability, an umbrella policy, business automobileliability insurance, environmental liability insurance, worker’s compensation insurance, andpermanent all risk property insurance thirty days prior to completion of construction, allas required under Section 6.3 of this AGREEMENT, with all such insurance in full force andeffect and approved by BANK, in the exercise of its reasonable discretion, and naming BANKas an additional insured and loss payee together with appropriate flood insurance, if thePROPERTY is in a flood hazard area. Notwithstanding the foregoing, BORROWER is not requiredto obtain worker’s compensation insurance until required by applicable law. In addition,BORROWER shall provide to BANK proof of insurance for business interruption/extra expensecoverage for six months of operatingexpenses, and also directors/officers errors and omissions coverage in a minimum amount of$3,000,000.00.4.1.18 A signed opinion of counsel for BORROWER, addressed to BANK, in form and substanceacceptable to BANK and BANK’s counsel.4.1.19 A Certificate of Authority or Secretary’s Certificate executed by such person orpersons authorized by BORROWER’s organizational documents and/or agreements to do so,certifying the incumbency and signatures of the officers or other persons authorized toexecute the LOAN DOCUMENTS to which it is a party, and authorizing the execution of the LOANDOCUMENTS to which it is a party and performance in accordance with their terms.4.1.20 A recently certified copy of BORROWER’s Second Amended and Restated OperatingAgreement, and any amendments thereto, if applicable.4.1.21 A recently certified copy of BORROWER’s Articles of Organization and any amendments,if applicable.4.1.22 A certificate of existence for BORROWER from the office of the Indiana Secretary ofState.4.1.23 Proof of injection of equity capital into BORROWER of no less than $70,000,000.00 andany funds actually received from tax increment financing or TIF programs.
- 18 -

 
4.1.24 A copy of any MARKETING AND RISK MANAGEMENT CONTRACTS, together with assignments infavor of BANK in form satisfactory to BANK, as well as control agreements reasonablyrequested by BANK, in form reasonably acceptable to BANK.4.1.25 A copy of any existing contracts for BORROWER’s natural gas, electricity, waterservice and grain procurement and assignments of such contracts along with the consent ofBORROWER’s vendors under such contracts.4.1.26 Evidence satisfactory to BANK that BORROWER has acquired marketable fee simple titleto the PROPERTY subject only to the Permitted Exceptions identified in the MORTGAGE, and aneasement to discharge water over an adjoining landowner’s property.4.1.27 Documentation of the SWAP CONTRACTS in form satisfactory to BANK.4.2 Conditions Precedent to All Disbursements on the CONSTRUCTION LOAN. The obligation ofBANK to make any advances under the CONSTRUCTION LOAN (including the initial disbursement) issubject to the further conditions precedent that BORROWER shall remain in compliance with theconditions precedent contained in Section 4.1 of this AGREEMENT and, unless waived by BANK inwriting in thepost-closing letter agreement, BANK shall have received on or before the submission of a DRAWREQUEST for such advance all of the following in form and substance satisfactory to BANK:4.2.1 The disbursement requirements of Section 3 of this AGREEMENT have been satisfied.4.2.2 That the INDEPENDENT INSPECTOR, based upon on-site inspections of the PROJECT, hasreported to BANK that the portion of the PROJECT completed as of the date of last inspectionby the INDEPENDENT INSPECTOR has been completed in accordance with the PLANS and that thePROJECT can be completed by the CONSTRUCTION LOAN TERMINATION DATE in accordance with thePLANS for the remaining funds available for construction of the PROJECT.4.2.3 The TITLE COMPANY shall have issued an endorsement to the loan policy of titleinsurance reflecting the amount of all previous advances on the CONSTRUCTION LOAN, insuringthe continued priority of the MORTGAGE over mechanics’ liens and similar liens and showingno exceptions to title other than those previously approved by BANK and the TITLE COMPANYwill issue an endorsement insuring the requested advance on the CONSTRUCTION LOAN uponcompliance with the terms of the DISBURSING AGREEMENT.4.2.4 Construction of the PROJECT to the date of the request for the advance has beencompleted in accordance with all applicable laws, rules, restrictions, regulations andPERMITS, and BORROWER has complied with all applicable PERMITS and such PERMITS remain validand have not been terminated, revoked or restricted, or modified, altered, restated oramended without the prior written consent of BANK.
- 19 -

 
4.2.5 BORROWER, DESIGN-BUILDER and each SUBCONTRACTOR have each materially complied withall of their respective obligations under the CONSTRUCTION CONTRACT and other generalcontracts for the construction of the railroad spur and administration building and theCONSTRUCTION CONTRACT and such other general contracts remain in full force and effect.4.2.6 Evidence satisfactory to BANK that all then due installments of general real estatetaxes, special assessments and other levies against the PROPERTY or the PROJECT have beenpaid in full.4.2.7 BORROWER has expended the equity referenced in Section 4.1.23 above and any TIF andgrant funds on the PROJECT in accordance with the SOURCES AND USES OF FUNDS.4.2.8 The representations and warranties contained in Section 5 of this AGREEMENT arecorrect in all material respects on and as of the date of such disbursement as though madeon and as of such date, except to the extent that such representations and warranties relatesolely to an earlier date and except to the extent of changes permitted under the terms ofthis AGREEMENT.4.2.9 No event has occurred and is continuing, or would result from such disbursement,which constitutes an EVENT OF DEFAULT.4.2.10 No determination shall have been made by BANK that the undisbursed amount of theCONSTRUCTION LOAN is less than the amount required to pay all costs and expenses of any kindwhich reasonably may be anticipated in connection with the completion of the PROJECT; or, ifsuch a determination has been made and notice thereof sent to BORROWER in accordance withthis AGREEMENT, BORROWER shall have deposited the necessary funds with BANK in accordancewith the Section 3.6 of this AGREEMENT.4.2.11 If required by BANK, BANK shall be furnished with a statement from BORROWER and theDESIGN-BUILDER, in form and substance satisfactory to BANK, in the exercise of itsreasonable discretion, setting forth the names, addresses and amounts due or to become due,as well as the amounts previously paid, to every SUBCONTRACTOR whose charges exceed$20,000.00.4.2.12 No PERMIT necessary for the construction of the PROJECT shall have been revoked orthe issuance thereof subjected to challenge before any court or other governmental authorityhaving or asserting jurisdiction as to the PROJECT.4.2.13 The parties intend that the CONSTRUCTION LOAN is available to fund the lesser offifty-five percent (55%) of the TOTAL PROJECT COST as shown in the TOTAL PROJECT COSTSTATEMENT, including all other approved expenses as set forth in the final version of theSOURCES AND USES OF FUNDS document furnished to BANK by BORROWER prior to CLOSING, or$83,000,000.00. No advances or disbursements under
- 20 -

 
the CONSTRUCTION LOAN shall exceed suchlevels, unless BANK consents in writing to the same.4.3 Conditions Precedent to the Final Disbursements. The obligation of BANK to make thefinal disbursement on the CONSTRUCTION LOAN shall be subject to the condition precedent thatBORROWER shall be in compliance with all conditions set forth in Sections 4.1 and 4.2 of thisAGREEMENT and, further, that the following conditions shall have been satisfied on or prior to theCONSTRUCTION LOAN TERMINATION DATE:4.3.1 The PROJECT has been completed in material compliance with the PLANS and BANK shallhave received a certificate of completion from the DESIGN-BUILDER, certifying that (i) workon the PROJECT has been completed in material compliance with the PLANS and all labor,services, materials and supplies used in such work have been paid for and (ii) the completedPROJECT conforms in all material respects with all applicable zoning, land use planning,building and environmental laws and regulations of the governmental authorities havingjurisdiction over the PROJECT.4.3.2 BANK has received satisfactory evidence that all work requiring inspection bymunicipal or other governmental authorities having jurisdiction has been duly inspected andapproved by such authorities and by the rating or inspection organization, bureau,corporation or office having jurisdiction.4.3.3 BANK shall have received a lien waiver from each SUBCONTRACTOR whose charges exceed$20,000.00 and the DESIGN-BUILDER for all work done and for all materials furnished by itfor the PROJECT.4.3.4 BANK has received an itemized list from BORROWER of all material items of equipmentand fixtures, which are at that time subject to BANK’s security interest.4.3.5 BORROWER has hired a plant operations manager or general manager acceptable to BANK inthe exercise of BANK’s reasonable discretion, with one or the other experienced in ethanolplant operations and management.4.3.6 [RESERVED]4.4 No Waiver. The making of any disbursement under the CONSTRUCTION LOAN prior tofulfillment of any condition thereto shall not be construed as a waiver of such condition, and BANKreserves the right to require fulfillment of any and all such conditions prior to making anysubsequent disbursements under the CONSTRUCTION LOAN.SECTION 5 Representations and Warranties.
- 21 -

 
To induce BANK to enter into this AGREEMENT, BORROWER makes the following representations andwarranties and agrees that each DRAW REQUEST and each request for an advance under the REVOLVINGLOAN or LONG TERM REVOLVING LOAN constitutes a reaffirmation of these representations andwarranties and that such representations and warranties shall survive until all of the OBLIGATIONSare fully and finally paid:5.1 Existence and Power. BORROWER is a limited liability company duly organized andexisting under the laws of the State of Indiana. BORROWER has accomplished all necessary actionsrequired by a limited liability company under applicable law to own the PROPERTY and construct thePROJECT, and to execute and deliver, and to perform all of its obligations under the LOAN DOCUMENTSto which it is a party.5.2 Authorization of Borrowing; No Conflict as to Law or Other Agreements. The execution,delivery and performance by BORROWER of the LOAN DOCUMENTS and the borrowings from time to timehereunder have been duly authorized by all necessary limited liability company actions of BORROWERand do not and will not (a) require any material consent or approval, or authorization, by anygovernmental department, commission, board, bureau, agency or instrumentality, domestic or foreign,other than those obtained and in full force and effect, (b) violate, in any material respect, anyprovision of any law, rule or regulation or of any order, writ, injunction or decree presently ineffect having applicability to BORROWER, or violate any provision of the Articles of Organizationor operating agreement or any members’ agreement or similar agreement of BORROWER, (c) result in abreach of or constitute a default beyond any applicable cure period under any indenture or loan orcredit agreement or any other agreement, lease or instrument to which BORROWER is a party or bywhich it or its properties may be bound or affected, or (d) result in, or require, the creation orimposition of any mortgage, deed of trust, pledge, lien, security interest or other charge orencumbrance of any nature to or with any other creditor of BORROWER, in the aggregate exceeding$100,000.00, upon or with respect to any of the properties now owned or hereafter acquired byBORROWER.5.3 Legal Agreements. The LOAN DOCUMENTS to which it is a party constitute the legal,valid and binding obligations of BORROWER enforceable against BORROWER in accordance with theirrespective terms, and as to any LOAN DOCUMENTS to which BORROWER is not a party, BORROWER believessuch documents constitute the legal, valid and binding obligations of the parties thereto,enforceable against such parties in accordance with their respective terms, except in each case (a)as limited by applicable bankruptcy, insolvency, reorganization, moratorium, and other laws ofgeneral application affecting enforcement of creditors’ rights generally, and (b) as limited bylaws relating to the availability of specific performance, injunctive relief, or other equitableremedies.5.4 Licenses and Permits. BORROWER has all necessary PERMITS required for construction andoperation of the PROJECT except those which are not required for the current stage of constructionof the PROJECT, or which cannot be obtained until completion of the PROJECT. BORROWER will provideBANK copies of all PERMITS as they are obtained and when required
- 22 -

 
by the various regulatoryagencies. BORROWER will timely obtain and will retain all necessary PERMITS and licenses tooperate its businesses at the PROPERTY.5.5 Construction of the PROJECT. The PROJECT will be constructed in material compliancewith the PLANS; and will not encroach upon or overhang any easement or right-of-way on land notconstituting part of the PROPERTY. The PROJECT, both during construction and on COMPLETION DATE,and the contemplated use thereof, will not violate in any material respect, any applicable zoningor use statute, ordinance, building code, rule or regulation, or any covenant or agreement ofrecord. BORROWER agrees that it will furnish from time to time such satisfactory evidence withrespect thereto as may be required by BANK.5.6 Title to the PROPERTY. BORROWER has good and marketable fee simple title to thePROPERTY as required pursuant to Section 4.1.26 above and has maintained good and marketable feesimple title to the PROPERTY, subject to the limitations described in 4.1.11, above, and except tothe extent title is affected by the matters permitted under 6.4.1, below.5.7 Financial Condition. BORROWER has furnished to BANK its compiled cash flow projectionof BORROWER for the construction period and for the first five (5) years of operations, whichprojections were prepared by Christianson & Associates and are dated May 24, 2006 (the“PROJECTIONS”). The PROJECTIONS fairly present the projected financial condition of BORROWER onthe dates thereof, and were prepared in GAAP format and on the basis of assumptions deemedreasonable by BORROWER. There has been no material adverse change in the operations, properties orcondition (financial or otherwise) of BORROWER since the date of the PROJECTIONS and no additionalborrowings have been made by BORROWER other than the borrowing contemplated hereby or approved byBANK. No certificate or statement furnished to BANK by or on behalf of BORROWER in connection withthe transactions contemplated hereby contains any untrue statement of a material fact or omits tostate a material fact necessary in order to make the statements contained therein or herein notmisleading. To the best of the knowledge of BORROWER, there is no fact or circumstance current orin the future (so far as BORROWER now foresees) which is reasonably likely to have a MATERIALADVERSE EFFECT which has not been set forth herein or in a certificate or statement furnished toBANK by BORROWER.5.8 Litigation. There are no actions, suits or proceedings pending or, to the knowledge ofBORROWER, threatened against or affecting BORROWER or the properties of BORROWER before any courtor governmental department, commission, board, bureau, agency or instrumentality, domestic orforeign, which, if determined adversely to BORROWER, would have a MATERIAL ADVERSE EFFECT.5.9 Taxes. BORROWER has filed all federal, state and local tax returns which to theknowledge of BORROWER are required to be filed, and BORROWER has paid or caused to be paid to therespective taxing authorities all taxes as shown on said returns or on any assessment received byit to the extent such taxes have become due except those which BORROWER is contesting in good faithand with respect to which adequate reserves have been set aside.
- 23 -

 
5.10 No Default. There is no event, which is, or with notice or the lapse of time wouldbe, an EVENT OF DEFAULT under this AGREEMENT.5.11 ERISA. BORROWER is in compliance in all material respects with the EmployeeRetirement Income Security Act of 1974, as amended, and has received no notice to the contrary fromthe Internal Revenue Service, the Department of Labor, the Pension Benefit Guaranty Corporation orany other governmental entity or notice of any claims or pending claims under ERISA.5.12 Environmental Matters. BORROWER is in compliance in all material respects with allhealth and environmental laws applicable to BORROWER and its operations and knows of no conditionsor circumstances that could materially interfere with such compliance in the future. Except forPERMITS that cannot be obtained until completion of the PROJECT, BORROWER has obtained all PERMITS,and approvals required by law for the operation of its business; and 3) BORROWER has not identifiedany“recognized environmental conditions,” as that term is defined by the American Society for Testingand Materials in its standards for environmental due diligence, which could subject BORROWER toenforcement action if brought to the attention of appropriate governmental authorities.5.13 Necessary Utilities, Etc. BORROWER has made suitable arrangements so that the PROJECThas all necessary electrical, natural gas, water, storm and sewer facilities in place for theproper construction and operation of its ethanol plant. BORROWER has made adequate provision forall storage facilities, equipment and product supplies, including corn, as specified by itsengineers for the maximum output and operation of the plant.5.14 Securities Regulation Compliance. BORROWER has complied with all applicable federal,state and local statutes, laws, codes, regulations and ordinances applicable to the public offeringand sale of securities in or of BORROWER.SECTION 6 Additional Covenants of BORROWER.6.1 Financial Information and Reporting. Except as otherwise stated in this AGREEMENT, allfinancial information provided to BANK shall be compiled using GAAP consistently applied. Duringthe time period that any amounts are outstanding under the OBLIGATIONS or this AGREEMENT or theLOAN DOCUMENTS to which it is a party, unless BANK shall otherwise agree in writing:6.1.1 BORROWER shall provide BANK within 120 days of BORROWER’s fiscal year end, BORROWER’sannual financial statements. The statements must be audited with an unqualified opinion by acertified public accountant reasonably acceptable to BANK, and must be accompanied by acertificate of such accountants stating whether, in conducting their audit, they have becomeaware of any EVENT OF DEFAULT, or of any event which would, after the lapse of time or thegiving of notice, or both, constitute an EVENT OF DEFAULT, specifying the nature andduration of the default. Such audit statement shall be
- 24 -

 
accompanied by the accountants’calculations of BORROWER’s compliance with the covenants contained in Section 6.2 of thisAGREEMENT as of the said fiscal year end.6.1.2 After the CONSTRUCTION LOAN TERMINATION DATE, BORROWER will furnish to BANK withinthirty (30) days after the end of each calendar month monthly internally prepared financialstatements consisting of a balance sheet and income statement of BORROWER as of the end ofsuch period, and income statements and statements of changes in cash flow for such periodand year to date, prepared in accordance with GAAP, all in reasonable detail, except for theabsence of financial footnotes.6.1.3 For each quarter of each fiscal year ending after the CONSTRUCTION LOAN TERMINATIONDATE, BORROWER will deliver to BANK, within thirty (30) days of each full quarter end, acertificate in form reasonably acceptable to BANK that has been signed by an authorizedmanager or officer of BORROWER, which: 1) certifies that the statements required bySection 6.1.1 and 6.1.2 have been accurately prepared in accordance with GAAP appliedconsistently (except for the absence of financial footnotes to the statements furnishedunder Section 6.1.2); 2) contains calculations of the financial covenants contained inSection 6.2 of this AGREEMENT and certifies compliance with such financial covenants, and 3)certifies that neither the authorized manager or officer nor BORROWER has knowledge of anyEVENT 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 defaultunder this AGREEMENT or the other LOAN DOCUMENTS.6.1.4 After CONSTRUCTION LOAN TERMINATION DATE, BORROWER will deliver to BANK each month,within thirty (30) days of each month end, a monthly Production Report, in form reasonablyacceptable to BANK, reporting for such month BORROWER’s Input and Output amounts of CornUsage, DDGS Output, Ethanol Output, and if applicable, CO2 Output.6.1.5 BORROWER shall notify BANK of the existence of any EVENT OF DEFAULT promptly aftersuch EVENT OF DEFAULT becomes known to any officer, director or general manager of BORROWER.6.1.6 BORROWER shall authorize all federal, state and municipal authorities to furnishreports of examinations, records and other information relating to the condition and affairsof BORROWER and its ethanol plant, and any information from reports, returns, files andrecords by such authorities regarding BORROWER upon request to BANK.6.1.7 BORROWER will give BANK prompt written notice of any material violation as to anyenvironmental matter by BORROWER and, of the commencement of any judicial or administrativeproceeding relating to health, safety or environmental matters (i) in which an adversedetermination or result could result in the revocation of or have a MATERIAL ADVERSE EFFECTon any PERMITS held by BORROWER which are material to the operations of BORROWER, and (ii)which will or threatens to impose a material liability on
- 25 -

 
BORROWER to any person or party orwhich will require a material expenditure by BORROWER to cure any alleged problem orviolation.6.1.8 BORROWER will give prompt notice to BANK of (i) any litigation or proceeding in whichit is a party if an adverse decision therein would require it to pay more than $100,000.00or deliver assets the value of which exceeds such sum (whether or not the claim isconsidered to be covered by insurance); and (ii) the institution of any other suit orproceeding involving it that is reasonably likely to have a MATERIALLY ADVERSE EFFECT.6.1.9 BORROWER shall provide monthly BORROWING BASE certificates in form reasonablyacceptable to BANK, calculating advance rates under the REVOLVING LOAN pursuant to theBORROWING BASE beginning with the certificate with respect to the fourth month followingCONSTRUCTION LOAN TERMINATION DATE.6.1.10 BORROWER shall provide to BANK monthly summaries of all grain hedging transactions,from the entity providing BORROWER’s grain hedging account(s), and from any entity providingBORROWER with an ethanol or natural gas hedging account(s), monthly summaries of all ethanoland natural gas hedging transactions.6.1.11 BORROWER will provide BANK with such other information as it may reasonably request.6.1.12 BORROWER will deliver to BANK, no later than thirty- (30) days prior to its fiscalyear end, its projected financial statements for the ensuing fiscal year, and a budget ofBORROWER’s projected capital expenditures for the ensuing fiscal year (“CAPEX BUDGET”).6.2 Financial Covenants. At all times that any amounts are outstanding under anyOBLIGATION, or this AGREEMENT or the LOAN DOCUMENTS to which BORROWER is a party, unless BANK shallotherwise agree in writing, BORROWER agrees to comply with the financial covenants described below,which shall be calculated using GAAP consistently applied, except as they may be otherwise modifiedby the capitalized definitions:6.2.1 BORROWER shall maintain a FIXED CHARGE COVERAGE RATIO, measured on a rolling fourquarters trailing basis at the end of each full fiscal quarter, of no less than 1.25:1.0,for all periods following the CONSTRUCTION LOAN TERMINATION DATE; provided, however, theFIXED CHARGE COVERAGE RATIO shall be measured as follows for the first three fiscal quartersafter the CONSTRUCTION LOAN TERMINATION DATE:first fiscal quarter: on a rolling one quarter basis at the end of the first fiscalquarter;
- 26 -

 
second fiscal quarter: on a rolling two quarter basis at the end of the secondfiscal quarter;third fiscal quarter: on a rolling three quarter basis at the end of the thirdfiscal quarter.The FIXED CHARGE COVERAGE RATIO shall be tested by BANK quarterly on a fiscal quarter basiscommencing at the end of the first full fiscal quarter after the CONSTRUCTION LOANTERMINATION DATE.6.2.2 After the CONSTRUCTION LOAN TERMINATION DATE, BORROWER shall maintain NET WORTH of notless than $65,000,000.00. The required minimum NET WORTH of BORROWER shall be measuredannually at the end of each fiscal year of BORROWER, and shall increase each fiscal yearcommencing on or after the CONSTRUCTION LOAN TERMINATION DATE by an amount equal to thegreater of (a) $500,000.00 or (b) the amount of undistributed earnings accumulated duringthe fiscal year just ended (less any allowable distributions attributable to the just endedfiscal year’s earnings).6.2.3 For each fiscal year following the CONSTRUCTION LOAN TERMINATION DATE, BORROWER shalldetermine and report to BANK, within 120 days after the end of each such fiscal year, theamount of its EXCESS CASH FLOW for such ended fiscal year. Effective on the120th day after the end of each fiscal year following the CONSTRUCTION LOANTERMINATION DATE (each such day, an “EXCESS CASH FLOW REDUCTION DATE”), the MAXIMUMAVAILABILITY on the LONG TERM REVOLVING NOTE shall reduce by an amount equal to twentypercent (20%) of the EXCESS CASH FLOW for said ended fiscal year; provided, however, that,the maximum amount of such reduction for any fiscal year shall not exceed $4,000,000.00, andthe maximum amount of such reduction during the term of this AGREEMENT shall not exceed$12,000,000.00 in the aggregate. By the payment due date on the LONG TERM REVOLVING LOANimmediately following an EXCESS CASH FLOW REDUCTION DATE or a REDUCTION DATE, BORROWER shallpay and apply to the then outstanding principal balance on the LONG TERM REVOLVING NOTE, theamount necessary to reduce the outstanding principal amount of the LONG TERM REVOLVING NOTEso that it is within the MAXIMUM AVAILABILITY applicable after each EXCESS CASH FLOWREDUCTION DATE or REDUCTION DATE, as applicable. Such reduction payments shall not releaseBORROWER from making any payment of principal or interest otherwise required by thisAGREEMENT or the LONG TERM REVOLVING NOTE.6.2.4 BORROWER shall maintain the following minimum WORKING CAPITAL during the periodsstated below, measured continuously:
- 27 -

 
       **Minimum****Period** **WORKING CAPITAL**Beginning with the first day of the fourth month after theCONSTRUCTION LOAN TERMINATION DATE through the seventhmonth after the CONSTRUCTION LOAN TERMINATION DATE $4,000,000.00 Beginning with the first day of the eighth month throughthe twelfth month after the CONSTRUCTION LOAN TERMINATIONDATE $7,000,000.00 Beginning with the first day of the thirteenth month afterthe CONSTRUCTION LOAN TERMINATION DATE until payment infull of the TERM LOANS $10,000,000.00 For the purpose of this covenant, the amount of any available borrowing under LONG TERMREVOLVING NOTE shall constitute an addition to WORKING CAPITAL.6.3 Affirmative Covenants. During the time period that any amounts are outstanding underany OBLIGATION, this AGREEMENT or the LOAN DOCUMENTS to which BORROWER is a party, unless BANKshall otherwise agree in writing, BORROWER shall:6.3.1 Diligently proceed with construction of the PROJECT in material compliance with thePLANS and in accordance in all material respects with all applicable laws and ordinances,and complete the PROJECT by the COMPLETION DATE.6.3.2 Use the proceeds of each of the disbursements under the CONSTRUCTION LOAN solely forthe purposes set forth in this AGREEMENT.6.3.3 Use its reasonable best efforts to require the DESIGN-BUILDER and each SUBCONTRACTORto comply in all material respects with all rules, regulations, ordinances and laws bearingon its conduct of work on the PROJECT.6.3.4 Provide and maintain at all times during the process of building the PROJECT and, fromtime to time at the request of BANK, furnish BANK with proof of payment of premiums on:(i) Builders’ Risk completed value form insurance insuring the PROJECT (and aftercompletion of the PROJECT, a permanent All Risk property policy of insurance withcoverage equal to the replacement cost of the facility, as well as casualty/umbrella(Commercial General Liability) insurance) insuring the PROJECT, against all risks,including flood, earthquake, and mechanical and electrical breakdown includingtesting to the full value of the PROJECT (subject to reasonable loss deductibleprovisions). BANK’s interest shall be protected by naming BANK as additional insuredon the liability policies and loss payee on the property policies;
- 28 -

 
(ii) Casualty (Commercial General Liability) & Umbrella insurance (includingproducts and completed operations, operations of subcontractors, and contractualliability insurance) with coverage in the amount of $2,000,000.00 in the form ofeither a $2,000,000.00 primary policy or a $1,000,000.00 primary policy and a$1,000,000.00 Umbrella policy. BANK’s interest shall be protected by naming BANK asan additional named insured on all such policies;(iii) State worker’s compensation insurance, with statutory limits, and Employer’sLiability coverage with coverage of no less than $500,000.00.(iv) Business automobile liability insurance insuring all vehicles on the site,including hired and non-owned liability with coverage in the amount of $2,000,000.00in the form of either a $2,000,000.00 primary policy or a $1,000,000.00 primarypolicy and a $1,000,000.00 Umbrella policy.(v) Environmental coverage shall be provided for clean up and removal once theProject becomes operational (unless the condition precedent site survey and soiltests establish adverse findings which may generate the need for environmentalcoverage prior to operation), but only insofar as it is reasonably required by BANK.(vi) Directors/Officers errors and omissions coverage of no less than $3,000,000.00.(vii) By the COMPLETION DATE, Business Interruption and Extra Expense insuranceequal to 100% of the projected revenue loss during a potential interruption ofproduction of not less than six months.The policies of insurance required pursuant to clauses (i) and (ii) above shall bein form and content satisfactory to BANK and shall be placed with financially soundand reputable insurers. The policy of insurance referred to in clause (i) aboveshall contain an agreement of the insurer to give not less than thirty (30) days’advance written notice to BANK in the event of cancellation of such policy or changeaffecting the coverage there under. Acceptance of insurance policies referred toabove shall not bar BANK from requiring additional insurance, which it reasonablydeems necessary.6.3.5 Assign to BANK, in form acceptable to BANK, all equipment and systems warrantiesrelating to the PROJECT, together with all contracts for natural gas, electricity, water andother utilities, grain procurement contracts, grain and ethanol hedging contracts, as thesame are obtained by BORROWER following CLOSING, together with all consents from the vendorsand other parties under such contracts.6.3.6 Maintain accurate and complete books, accounts and records pertaining to the PROPERTYand the PROJECT and its ongoing and continuing operations in form and substance reasonablysatisfactory to BANK. BORROWER will permit BANK, at BANK’s
- 29 -

 
expense if BANK employees makesthe inspection, but at BORROWER’s expense if BANKcontracts with third parties at reasonable expense to make the inspection, to examine uponreasonable notice all books, records, contracts, plans, drawings, PERMITS, bills andstatements of account pertaining to the PROJECT and to inspect upon reasonable notice allbooks and records pertaining to its operations and to make extracts therefrom and copiesthereof.6.3.7 Cause to be paid to the proper authorities when due all federal, state and localtaxes, including taxes on the PROPERTY, required to be paid or withheld by it except thosewhich BORROWER is contesting in good faith and with respect to which adequate reserves havebeen set aside.6.3.8 Allow BANK and BANK’s representatives, at any time upon reasonable notice, and at itsexpense, to conduct such inspections of the PROJECT and BORROWER’s assets, books and recordsas BANK may deem necessary for the protection of BANK’s interest. Provided, however, suchinspections shall occur during regular business hours, or such other time as BORROWER andBANK may agree, shall not occur more frequently than twice per fiscal year unless thereshall have occurred and be continuing an EVENT OF DEFAULT and shall not unreasonablyinterfere with BORROWER’s business operations. Any such inspections shall be made and anycertificates issued are solely for the benefit and protection of BANK, and BORROWER shallnot be entitled to rely thereon.6.3.9 Make all repairs, renewals or replacements necessary to keep its plant, properties andequipment in good working condition.6.3.10 Comply in all material respects with all laws and regulations applicable to its formof organization, offering, sale and regulation of securities, business, and the ownership ofits property and the ownership and operation of the PROJECT on the PROPERTY.6.3.11 Maintain and preserve all PERMITS, licenses, rights, privileges, charters andfranchises that it is required to hold to construct and operate the PROJECT.6.3.12 Observe and comply with all laws, rules, regulations and orders of any government orgovernment agency relating to health, safety, pollution, hazardous materials or otherenvironmental matters to the extent non-compliance could result in a material liability orotherwise have a material adverse effect on BORROWER or the operation of the PROJECT.6.3.13 Maintain primary banking accounts (including those accounts containing BORROWER’sequity capital) at BANK, other than as otherwise agreed by BANK. BANK agrees thatBORROWER’s payroll and other non-primary accounts may be maintained at local financialinstitutions on the conditions that, (i) if required by BANK, BORROWER, BANK and such localfinancial institution enter into a control agreement to perfect BANK’s security interest insuch accounts, (ii) that deposits in such accounts do not exceed at any time $250,000,000and (iii) that BORROWER provide BANK with copies of the monthly statements relating to suchdeposit accounts.
- 30 -

 
6.3.14 BORROWER shall execute and deliver to BANK no later than 90 days following CLOSINGsuch SWAP CONTRACTS as BANK shall require, in form satisfactory to BANK.6.4 Negative Covenants. During the time period that any amounts are outstanding under anyOBLIGATION, or this AGREEMENT or the LOAN DOCUMENTS to which BORROWER is a party, unless BANK shallotherwise agree in writing, BORROWER shall not:6.4.1 Permit any security interest or mortgage or lien on the PROPERTY or PROJECT or otherreal or personal property BORROWER owns now or in the future, or assign any interest that itmay have in any assets or subordinate any rights that it may have in any assets now or inthe future, except: (i) liens, assignments, or subordinations in favor of BANK; (ii) liens,assignments, or subordinations outstanding on the date of this AGREEMENT and disclosed inadvance to BANK in writing and approved by BANK; (iii) liens for taxes or assessments orother governmental charges not delinquent or which BORROWER is contesting in good faith andfor which, if required under GAAP or by BANK, BORROWER has reserved against such taxes,assessments or governmental charges in an amount reasonably satisfactory to BANK; (iv) lienswhich secure purchase money indebtedness allowed under this AGREEMENT; (v) liens, pledges,or deposits under workers’ compensation, unemployment insurance, Social Security, or similarlegislation, but only if any such lien is being contested by BORROWER in good faith byappropriate proceedings which prevent foreclosure and has established reserves which BANKreasonably deems sufficient to satisfy such lien in the event of an adverse determination;and (vi) liens created in favor of a hedging account entity and described in the controlagreements to which such hedging account entity, BORROWER and BANK are party.6.4.2 Agree or consent to any material changes in the PLANS, any material changes in theterms and provisions of the CONSTRUCTION CONTRACT or, to any one change order in an amountexceeding $100,000.00, or all change orders when combined exceeding $500,000.00, or anymaterial change to any other contract identified in Section 4 of this AGREEMENT.6.4.3 Incorporate in the PROJECT any materials, fixtures or property that are subject to theclaims of any other person, whether pursuant to conditional sales contract, securityagreement, lease, mortgage, except as permitted under Section 6.4.1.6.4.4 Lease, sell, transfer, convey, assign, or otherwise transfer all or any material partof the interest of BORROWER in the PROJECT or the PROPERTY.6.4.5 Make any changes in BORROWER’S plant operations manager or general manager for thePROJECT without the prior written consent of BANK, which consent shall not be unreasonablywithheld.6.4.6 Engage in any line of business materially different from that presently engaged in byBORROWER.
- 31 -

 
6.4.7 Make any change to its organizational structure as a limited liability company.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 AGREEMENT or anotheragreement with BANK (including, but not limited to, SWAP CONTRACTS and documentationrelating to letters of credit); (ii) unsecured trade credit incurred in the ordinary courseof business; (iii) indebtedness in existence on the date of this AGREEMENT and disclosed inadvance to BANK in writing and approved by BANK, and (iv) indebtedness set forth on Schedule6.4.9, attached hereto and by this reference made a part hereof, if any. BORROWER shall notborrow other than pursuant to this AGREEMENT or as otherwise permitted hereunder, withoutpermission of BANK. Provided, however, BANK consents to BORROWER in the ordinary course ofits business, borrowing up to $100,000.00 each year, without further permission from BANK.6.4.10 Consolidate, or merge or pool or syndicate or otherwise combine with any otherentity, or give any preferential treatment, make any advance, directly or indirectly, by wayof loan, gift, bonus, or otherwise, to any entity directly or indirectly controlling oraffiliated with or controlled by BORROWER, or any other entity, or to any partner oremployee of BORROWER, or of any such entity.6.4.11 Make, or commit to make, capital expenditures (including the total amount of anycapital leases, but excluding BANK approved plant construction) in an aggregate amountexceeding $1,000,000.00 in any single fiscal year, nor capital expenditures not included ina BANK approved CAPEX BUDGET.6.4.12 Make or pay, without the prior written consent of BANK, which written consent willnot be unreasonably withheld, in and for any fiscal year, distributions to members orshareholders of BORROWER in excess of the TAX DISTRIBUTIONS permitted below anddistributions permitted below based on BORROWER’s previous fiscal year’s net income.(i) TAX DISTRIBUTIONS. So long as no EVENT OF DEFAULT has occurred and iscontinuing, BORROWER may make TAX DISTRIBUTIONS to its members within thirty (30)days prior to each June 15, September 15 and January 15, each in an amount equal toone fourth (1/4) of the estimated income tax liability to be incurred for such year byBORROWER’s members by reason of their membership interest in BORROWER, based uponthe most recent financial information available.(ii) Final TAX DISTRIBUTION. BORROWER may make a final TAX DISTRIBUTION to itsmembers within thirty (30) days prior to each April 15, so long as (a) no EVENT OFDEFAULT has occurred and is continuing or would occur after giving effect to thepayment of such final TAX DISTRIBUTION described herein and the distributionspermitted in Subsection 6.4.12(iii) below, (b)
- 32 -

 
BORROWER has delivered to BANKBORROWER’s annual audited financialstatements and compliance statements as required in this AGREEMENT and (c) BORROWERis in compliance with all of the financial and other covenants provided for in thisAGREEMENT and will remain so after giving effect to the payment of such final TAXDISTRIBUTION described herein and the distributions permitted in Subsection6.4.12(iii) below, in an amount not to exceed the positive difference between thetotal tax liability of BORROWER’s members incurred by reason of their membershipinterest in BORROWER and the amounts previously distributed to such members pursuantto Subsection 6.4.12(i) above, provided, that if the difference between the totaltax liability of BORROWER’s members incurred by reason of their membership interestin BORROWER and the amounts previously distributed to such members pursuant toSubsection 6.4.12(i) above is zero or a negative number, then no final TAXDISTRIBUTION may be made by BORROWER under this Subsection 6.4.12(ii).(iii) Net Income Distributions. So long as (a) no EVENT OF DEFAULT has occurred andis continuing or would occur after giving effect to the payment of the distributiondescribed in this Subsection 6.4.12(iii) and the year ending quarter TAXDISTRIBUTION described in Subsection 6.4.12(ii) above, (b) BORROWER has delivered toBANK BORROWER’s annual audited financial statements and compliance statements asrequired in this AGREEMENT and (c) BORROWER is in compliance with all of thefinancial and other covenants provided for in this AGREEMENT and will remain soafter giving effect to the payment of such distribution described in this Subsection6.4.12(iii) and the year ending quarter TAX DISTRIBUTION described Subsection6.4.12(ii) above, BORROWER may make one distribution of net income each fiscal yearbased upon the net income of BORROWER for the immediately preceding fiscal year inan amount not to exceed the percentage of BORROWER’s net income for such precedingfiscal year determined as follows:     **If BORROWER’s ratio of INDEBTEDNESS** **Allowable****to NET WORTH is:** **distributions up to:**Greater than or equal to 1.00 : 1.00  50%Less than 1.00 : 1.00 but greater than 0.75 : 1.00  60%Less than 0.75 : 1.00  70%Notwithstanding anything contained in this Agreement to the contrary, in no event shall anydistributions, including, but not limited to TAX DISTRIBUTIONS, be made prior to BORROWER’sfull payment and satisfaction of all of BORROWER’s OBLIGATIONS which have accrued to thedate of payment of such distributions (including TAX DISTRIBUTIONS), and the application ofEXCESS CASH FLOW as provided for in Section 6.2.3 of this Agreement above.
- 33 -

 
6.4.13 Assume, guarantee, endorse or otherwise becoming contingently liable for anyobligations of any other person, except for those guaranties outstanding at the time ofexecution of this AGREEMENT and disclosed to BANK in writing.6.4.14 Make sales to or purchases from any affiliate of BORROWER or extend credit or makepayments for services rendered by any affiliate of BORROWER, unless such sales or purchasesare made or such services are rendered in the ordinary course of business and on terms andconditions at least as favorable to BORROWER as the terms and conditions which would applyin a similar transaction with a person or party not an affiliate of BORROWER.6.4.15 Sell or dispose of all or substantially all its assets.6.4.16 Redeem, purchase, or retire any of its membership interests or grant or issue, orpurchase or retire for any consideration, any warrant, right or option pertaining thereto,or permit any redemption, retirement, or other acquisition by BORROWER of the ownership ofthe outstanding membership interests of BORROWER; provided however, that BORROWER mayredeem, purchase or retire its membership interest with funds that otherwise would beavailable for distribution pursuant to Section 6.4.12(iii) above.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 BANK the rightto exercise its remedies under this AGREEMENT:7.1.1 BORROWER shall fail to pay when due any OBLIGATIONS or any other installment ofprincipal or interest or fee payable to BANK.7.1.2 BORROWER shall fail to provide reports and other information and otherwise comply withthe provisions of Section 6.1 above when due or within five (5) BANKING DAYS thereafter.7.1.3 BORROWER shall fail to observe or perform any other obligation to be observed orperformed by it hereunder (other than BORROWER’s obligations under Sections 4, 6.1, 6.2,6.3.2, 6.3.4, 6.3.8, 6.3.13 and Section 6.4 hereof) or under any of the LOAN DOCUMENTS, andsuch failure continues for five (5) BANKING DAYS after performance of the same is due.7.1.4 BORROWER shall fail to pay any INDEBTEDNESS in an aggregate principal amount in excessof $100,000.00 due any third party, and such failure shall continue beyond any applicablegrace period, or BORROWER shall default under any material agreement binding BORROWER, andsuch default shall continue beyond any applicable grace period.7.1.5 Any financial statement, representation, warranty, or certificate made or furnished byor with respect to BORROWER to BANK in connection with this AGREEMENT, or as an inducementto BANK to enter into this AGREEMENT, or in any separate statement or
- 34 -

 
document to be delivered to BANK hereunder, shall be materially false, incorrect, orincomplete when made.7.1.6 BORROWER shall admit its inability to pay its debts as they mature or shall make anassignment for the benefit of itself or any of its creditors.7.1.7 Proceedings in bankruptcy, or for reorganization of BORROWER, or for the readjustmentof 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 becommenced against or by BORROWER and, except with respect to any such proceedings institutedby BORROWER, shall not be discharged within sixty (60) days of their commencement.7.1.8 A receiver or trustee shall be appointed for BORROWER or for any substantial part ofits respective assets, or any proceedings shall be instituted for the dissolution or thefull or partial liquidation of BORROWER, and except with respect to any such appointmentsrequested or instituted by BORROWER, such receiver or trustee shall not be discharged withinsixty (60) days of his appointment, and except with respect to any such proceedingsinstituted by BORROWER, such proceedings shall not be discharged within sixty (60) days oftheir commencement, or BORROWER shall discontinue business or materially change the natureof its business.7.1.9 BORROWER shall suffer final judgments for payment of money aggregating in excess of$100,000.00 which are not covered, without reservation, by insurance and shall not dischargethe same within a period of thirty (30) days unless, pending further proceedings, executionhas not been commenced or, if commenced, has been effectively stayed.7.1.10 A judgment creditor of BORROWER shall obtain possession of any of BANK’s collateralby any means, including (without implied limitation) attachment, levy, distraint, replevin,or self-help which is reasonably likely to have a MATERIAL ADVERSE EFFECT.7.1.11 The construction of the PROJECT is abandoned or shall be unreasonably delayed or bediscontinued for a period of fifteen (15) consecutive calendar days, in each instance forreasons other than acts of God, fire, storm, adverse weather, strikes, blackouts, labordifficulties, riots, inability to obtain materials, equipment or labor, governmentalrestrictions or any similar cause not subject to BORROWER’s control and other than a changein the DESIGN-BUILDER as provided in Section 7.1.14.7.1.12 BORROWER at any time prior to the completion of the PROJECT, shall delay constructionor suffer construction to be delayed for any period of time, for any reason whatsoever, sothat the completion of the PROJECT in accordance with the PLANS approved by BANK cannot beaccomplished, in the reasonable judgment of BANK, by the COMPLETION DATE.
- 35 -

 
7.1.13 The PROJECT is materially damaged or destroyed by fire or other casualty and theloss, in the reasonable judgment of BANK, is not adequately covered by insurance actuallycollected or in the process of collection.7.1.14 Fagen, Inc. shall cease to be the DESIGN-BUILDER and BORROWER has not replaced theDESIGN-BUILDER, within thirty (30) days following the termination of the same with thereplacement contractor to the satisfaction of BANK, which BANK approval shall not beunreasonably withheld, but which approval may include a bonding requirement in thereasonable exercise of BANK’s judgment.7.1.15 Any entity described in any MARKETING AND RISK MANAGEMENT CONTRACTS approved by BANKceases to be the marketing agent of BORROWER, and BORROWER has not within thirty (30) daysfollowing termination of any of the foregoing obtained a replacement to BANK’s satisfaction,which BANK approval will not be unreasonably withheld.7.1.16 BORROWER shall fail to maintain a plant operations manager or general manager withprevious ethanol plant experience, or if BORROWER has not within thirty (30) days followinga termination of any such person obtained a replacement to BANK’s satisfaction, which BANKapproval shall not unreasonably be withheld.7.1.17 The filing of any mechanics’, construction, materialmens’ or similar liens upon thePROPERTY and/or against the PROJECT which are not released or bonded against (in a mannersatisfactory to BANK) for a period in excess of ten (10) BANKING DAYS after the filing dateof such lien, unless such lien is being contested by BORROWER in good faith by appropriateproceedings which prevent foreclosure and has established reserves which BANK reasonablydeems sufficient to satisfy such lien in the event of an adverse determination.7.1.18 If BORROWER defaults under, or suffers a default to exist under, or fails to complywith, keep or perform its obligations under, the CONSTRUCTION CONTRACT or any other contractrelating to the PROJECT to which BORROWER is a party, or the CONSTRUCTION CONTRACT or anysuch other contract relating to the PROJECT is terminated without the prior written consentof BANK, which consent shall not be unreasonably withheld.7.1.19 The occurrence of a material deviation or change in the PLANS approved by BANKwithout the prior written approval of BANK, which approval shall not be unreasonablywithheld.7.1.20 BORROWER fails to timely comply with its obligations contained in that certainpost-closing letter agreement of even date herewith between BANK and BORROWER relating toBORROWER’s post-closing obligations.
- 36 -

 
7.1.21 BORROWER defaults under any contract for the provision of electricity, natural gas,water or water service or any other utility, or any such contract is terminated, revoked,altered, amended or restated without the prior written consent of BANK.7.1.22 BORROWER defaults under any grain procurement contract or any such contract isterminated, revoked, altered, amended or restated without the prior written consent of BANK.7.1.23 BORROWER fails to timely make any payment required after an EXCESS CASH FLOWREDUCTION DATE or REDUCTION DATE to bring the outstanding principal balance of the LONG TERMREVOLVING NOTE within the MAXIMUM AVAILABILITY after each such EXCESS CASH FLOW REDUCTIONDATE or REDUCTION DATE.7.2 Rights and Remedies. If an EVENT OF DEFAULT shall have occurred and be continuing,BANK may refrain from making any further disbursements hereunder (but BANK may make disbursementsafter the occurrence of such an EVENT OF DEFAULT without thereby waiving its rights and remedieshereunder), and BANK may exercise any or all of the following rights and remedies:7.2.1 BANK may declare the OBLIGATIONS to be terminated, whereupon the same shall forthwithterminate, and BANK shall have no further obligation to make any advances thereunder.7.2.2 BANK may declare the entire unpaid principal amount of the OBLIGATIONS thenoutstanding, all interest accrued and unpaid thereon, and all other amounts payable underthis AGREEMENT to be forthwith due and payable, whereupon the OBLIGATIONS, all such accruedinterest and all such amounts shall become and be forthwith due and payable, withoutpresentment, demand, protest or further notice of any kind, all of which are herebyexpressly waived by BORROWER.7.2.3 BANK may exercise and enforce its rights and remedies under any or all of the LOANDOCUMENTS.7.2.4 BANK may enter upon the PROPERTY, if allowed under applicable law, and take possessionthereof, together with the PROJECT then in the course of construction, and proceed either inits own name or in the name of BORROWER, as the attorney-in-fact of BORROWER (whichauthority is coupled with an interest and is irrevocable by BORROWER) to complete or causeto be completed the PROJECT, at the cost and expense of BORROWER. If BANK elects tocomplete or cause to be completed the PROJECT, it may do so according to the PLANS oraccording to such changes, alterations or modifications in and to the PLANS as BANK mayreasonably deem appropriate; and BANK may enforce or cancel all contracts let by BORROWERrelating to construction of the PROJECT, and/or let other contracts which in BANK’s solejudgment, BANK deems advisable; and BORROWER shall forthwith turn over and duly assign toBANK, as BANK
- 37 -

 
may from time to time require,contracts not already assigned to BANK relating to construction of the PROJECT, blueprints,shop drawings, bonds, building permits, bills and statements of accounts pertaining to thePROJECT, whether paid or not, and any other instruments or records in the possession ofBORROWER pertaining to the PROJECT. In addition, BANK and it contractors and agents mayutilize all or any part of the labor, materials, equipment, fixtures and articles ofpersonal property contracted for by BORROWER, whether or not previously incorporated intothe PROJECT, and BANK may pay, settle or compromise all bills or claims which may become alien against the PROPERTY and/or the PROJECT, or any portion thereof. BORROWER shall beliable under this AGREEMENT to pay to BANK, on demand, any amount or amounts reasonablyexpended by BANK in so completing the PROJECT, together with any reasonable costs, charges,or expenses incident thereto or resulting therefrom, all of which shall be secured by theLOAN DOCUMENTS. In the event that a proceeding is instituted against BORROWER for recoveryand reimbursement of any moneys expended by BANK in connection with the completion of thePROJECT, a statement of such expenditures, verified by the affidavit of an officer of BANK,shall be prima facie evidence of the amounts so expended and of the appropriateness andadvisability of such expenditures; and the burden of proving to the contrary shall be uponBORROWER. BANK shall have the right to apply any funds which it agrees to disburse hereunderto bring about the completion of the PROJECT and to pay the costs thereof; and if such moneyso agreed to be disbursed is insufficient, in the sole judgment of BANK, to complete thePROJECT, BORROWER agrees to promptly deliver and pay to BANK such sum or sums of money asBANK may from time to time demand for the purpose of completing the PROJECT or of paying anyliability, charge or expense which may have been incurred or assumed by BANK under or inperformance of this AGREEMENT, or for the purpose of completing the PROJECT. It is expresslyunderstood and agreed that in no event shall BANK be obligated, or liable in any way tocomplete the PROJECT or to pay for the costs of construction thereof beyond the amount ofthe CONSTRUCTION LOAN.7.2.5 BANK may exercise any other rights and remedies available to it by law, in equity oragreement.SECTION 8 Miscellaneous.8.1 Inspections. In addition to the inspections provided for under Section 6.3.8 of thisAGREEMENT above, BORROWER and the DESIGN-BUILDER shall be responsible for making inspections of thePROJECT during the course of construction and shall determine to their own satisfaction that thework done or materials supplied by the DESIGN-BUILDER or any general contractor or SUBCONTRACTOR towhom payment is to be made out of each disbursement has been properly done or supplied inaccordance with the CONSTRUCTION CONTRACT. If any work done or materials supplied by theDESIGN-BUILDER or any SUBCONTRACTOR are not satisfactory to BORROWER and/or its DESIGN-BUILDER andthe same is not remedied within fifteen (15) days of the discovery thereof, BORROWER willimmediately notify BANK in writing of such fact. It is expressly understood and agreed that BANKand the INDEPENDENT
- 38 -

 
INSPECTOR or other party designated by BANK may conduct such inspections ofthe PROJECT, subject to thelimitations expressed in this AGREEMENT, as BANK may deem necessary for the protection of BANK’sinterest, and that any inspections which may be made of the PROJECT by BANK will be made, solelyfor the benefit and protection of BANK, and that BORROWER will not rely thereon.8.2 Indemnification by BORROWER. BORROWER shall bear all loss, expense (includingreasonable attorneys’ fees) and damage in connection with, and agrees to reimburse, indemnify,defend and hold harmless BANK, its agents, servants and employees from, all claims, demands andjudgments made or recovered against BANK, its agents, servants and employees, because of damages,fines, fees, penalties or other charges, bodily injuries, including death at any time resultingthere from, and/or because of damages to property (including loss of use) from any causewhatsoever, arising out of, incidental to, or in connection with the construction of the PROJECT,the operation of the PROJECT, permits applicable to the PROJECT (including, but not limited to,noncompliance with such permits) and other matters relating to the PROJECT, whether or not due toany act of omission or commission, including negligence of BORROWER or the DESIGN-BUILDER or of itsor their employees, servants or agents, other than gross negligence or willful misconduct of BANKor its agents. BORROWER’s liability hereunder shall not be limited to the extent of insurancecarried by or provided by BORROWER or subject to any exclusion from coverage in any insurancepolicy. OBLIGATIONS of BORROWER under this Section shall survive the payment of the CONSTRUCTIONNOTE and the TERM NOTES. Notwithstanding the foregoing, BORROWER’s liability hereunder shallterminate at such time as a private or governmental plaintiff is barred by the applicable statuteof limitations from bringing a claim for the actions giving rise to BANK’s claim forindemnification hereunder.8.3 No Waiver; Cumulative Remedies. No failure or delay on the part of BANK in exercisingany right, power or remedy under the LOAN DOCUMENTS shall operate as a waiver thereof; nor shallany single or partial exercise of any such right, power or remedy preclude any other or furtherexercise thereof or the exercise of any other right, power or remedy under the LOAN DOCUMENTS. Theremedies provided in the LOAN DOCUMENTS are cumulative and not exclusive of any remedies providedby law or in equity.8.4 Amendments, Etc. No amendment, modification, termination or waiver of any provision ofany of the LOAN DOCUMENTS or consent to any departure by BORROWER therefrom shall be effectiveunless the same shall be in writing and signed by BANK and BORROWER, and then such waiver orconsent shall be effective only in the specific instance and for the specific purpose for whichgiven. No notice to or demand on BORROWER in any case shall entitle BORROWER to any other orfurther notice or demand in similar or other circumstances.8.7 Addresses for Notices, Etc. Except as otherwise expressly provided herein, allnotices, requests, demands and other communications provided for under the LOAN DOCUMENTS shall bein writing and sent by first class certified mail, return receipt requested, recognized overnightcourier or telecopy (if by telecopy with a confirmation mailed within two BUSINESS DAYSthereafter), to the applicable party at its address indicated below:
- 39 -

 
       If to BORROWER: Cardinal Ethanol, LLC2 Omco Square, Suite 201