Exhibit 4(f)



 

 







CONSTRUCTION AND TERM

LOAN AGREEMENT 


     dated as of September 27, 2006 

among

MERRILL LYNCH
CAPITAL,


     a division of Merrill Lynch
Business Financial Services Inc., 

as Administrative Agent, Sole Bookrunner and Sole Lead Arranger,

the
Lenders,


and


LEVELLAND/HOCKLEY COUNTY
ETHANOL, LLC


as Borrower

 


 

 









	
Table of Contents
  
	 

  
	 

  	 
  	 

  	 
  	
Page 
  
	 

  
	
ARTICLE I. DEFINITIONS 
  	 
  	
1 
  
	
                    Section 1.1 
  	 
  	
Specific Terms 
  	 
  	
1 
  
	
                    Section 1.2 
  	 
  	
Other Terms 
  	 
  	
18 
  
	
                    Section 1.3 
  	 
  	
UCC Filing 
  	 
  	
18 
  
	
                    Section 1.4 
  	 
  	
Computations of Time; Other Definitional Provisions 
  	 
  	
18 
  
	 

  
	
ARTICLE II. THE LOAN 
  	 
  	
18 
  
	
                    Section 2.1 
  	 
  	
Agreement to Lend 
  	 
  	
18 
  
	
                    Section 2.2 
  	 
  	
Note 
  	 
  	
18 
  
	
                    Section 2.3 
  	 
  	
Repayment Schedule 
  	 
  	
19 
  
	
                    Section 2.4 
  	 
  	
Interest 
  	 
  	
19 
  
	
                    Section 2.5 
  	 
  	
Loan Conversion 
  	 
  	
22 
  
	
                    Section 2.6 
  	 
  	
Late Charge; Default Interest; Usury Savings Provision 
  	 
  	
23 
  
	
                    Section 2.7 
  	 
  	
Payments 
  	 
  	
24 
  
	
                    Section 2.8 
  	 
  	
Advance Procedures 
  	 
  	
26 
  
	
                    Section 2.9 
  	 
  	
Use of Loan Proceeds 
  	 
  	
30 
  
	
                    Section 2.10 
  	 
  	
Fees 
  	 
  	
30 
  
	
                    Section 2.11 
  	 
  	
Prepayment 
  	 
  	
31 
  
	
                    Section 2.12 
  	 
  	
Advance Not a Waiver or Approval 
  	 
  	
31 
  
	
                    Section 2.13 
  	 
  	
Borrower’s Equity 
  	 
  	
32 
  
	
                    Section 2.14 
  	 
  	
Sharing of Payments, Etc 
  	 
  	
32 
  
	
                    Section 2.15 
  	 
  	
Status of Lenders 
  	 
  	
33 
  
	 

  
	
ARTICLE III. CONDITIONS PRECEDENT TO ADVANCES 
  	 
  	
34 
  
	
                    Section 3.1 
  	 
  	
Conditions of Closing and Initial Advance 
  	 
  	
34 
  
	
                    Section 3.2 
  	 
  	
Conditions of All Advances 
  	 
  	
38 
  
	
                    Section 3.3 
  	 
  	
[Reserved] 
  	 
  	
39 
  
	
                    Section 3.4 
  	 
  	
Additional Conditions Precedent to All Advances 
  	 
  	
39 
  
	
                    Section 3.5 
  	 
  	
Conditions Precedent to Final Advance 
  	 
  	
40 
  
	 

  
	
ARTICLE IV. REPRESENTATIONS AND WARRANTIES 
  	 
  	
41 
  
	
                    Section 4.1 
  	 
  	
Organization and Existence 
  	 
  	
41 
  
	
                    Section 4.2 
  	 
  	
Execution, Delivery and Performance 
  	 
  	
42 
  
	
                    Section 4.3 
  	 
  	
Notices and Approvals 
  	 
  	
42 
  
	
                    Section 4.4 
  	 
  	
Enforceability 
  	 
  	
42 
  
	
                    Section 4.5 
  	 
  	
Collateral 
  	 
  	
42 
  
	
                    Section 4.6 
  	 
  	
Financial Statements 
  	 
  	
43 
  
	
                    Section 4.7 
  	 
  	
Litigation 
  	 
  	
43 
  
	
                    Section 4.8 
  	 
  	
Tax Returns 
  	 
  	
43 
  
	
                    Section 4.9 
  	 
  	
Relationship with Merrill Lynch 
  	 
  	
43 
  
	
                    Section 4.10 
  	 
  	
No Default 
  	 
  	
43 
  
	
                    Section 4.11 
  	 
  	
No Outside Broker 
  	 
  	
43 
  
	
                    Section 4.12 
  	 
  	
Material Adverse Effect 
  	 
  	
43 
  




i 











	
                    Section 4.13 
  	 
  	
Environmental Matters 
  	 
  	
44 
  
	
                    Section 4.14 
  	 
  	
Investment Company Act 
  	 
  	
44 
  
	
                    Section 4.15 
  	 
  	
Public Utility Holding Company Act 
  	 
  	
44 
  
	
                    Section 4.16 
  	 
  	
No Assignment 
  	 
  	
44 
  
	
                    Section 4.17 
  	 
  	
Compliance With Laws 
  	 
  	
44 
  
	
                    Section 4.18 
  	 
  	
Plans 
  	 
  	
44 
  
	
                    Section 4.19 
  	 
  	
Utility Services 
  	 
  	
45 
  
	
                    Section 4.20 
  	 
  	
Access 
  	 
  	
45 
  
	
                    Section 4.21 
  	 
  	
No Commencement 
  	 
  	
45 
  
	
                    Section 4.22 
  	 
  	
Budget Correct 
  	 
  	
45 
  
	
                    Section 4.23 
  	 
  	
Projections 
  	 
  	
45 
  
	
                    Section 4.24 
  	 
  	
Contracts 
  	 
  	
45 
  
	
                    Section 4.25 
  	 
  	
Land 
  	 
  	
46 
  
	
                    Section 4.26 
  	 
  	
ERISA 
  	 
  	
46 
  
	
                    Section 4.27 
  	 
  	
Disclosure; Accuracy 
  	 
  	
46 
  
	
                    Section 4.28 
  	 
  	
Subsidiaries 
  	 
  	
46 
  
	
                    Section 4.29 
  	 
  	
Labor Controversies 
  	 
  	
47 
  
	 

  
	
ARTICLE V. AFFIRMATIVE COVENANTS 
  	 
  	
47 
  
	
                    Section 5.1 
  	 
  	
Financial and Other Information 
  	 
  	
47 
  
	
                    Section 5.2 
  	 
  	
General Agreements With Respect to Financial Information 
  	 
  	
48 
  
	
                    Section 5.3 
  	 
  	
Financial Records; Inspection 
  	 
  	
48 
  
	
                    Section 5.4 
  	 
  	
Taxes 
  	 
  	
48 
  
	
                    Section 5.5 
  	 
  	
Compliance With Laws and Agreements 
  	 
  	
48 
  
	
                    Section 5.6 
  	 
  	
Notification By Borrower 
  	 
  	
49 
  
	
                    Section 5.7 
  	 
  	
Entity Organization 
  	 
  	
50 
  
	
                    Section 5.8 
  	 
  	
Environmental Compliance 
  	 
  	
50 
  
	
                    Section 5.9 
  	 
  	
Insurance 
  	 
  	
50 
  
	
                    Section 5.10 
  	 
  	
Additional Subsidiaries 
  	 
  	
54 
  
	
                    Section 5.11 
  	 
  	
Intellectual Property 
  	 
  	
54 
  
	
                    Section 5.12 
  	 
  	
Use of Proceeds 
  	 
  	
55 
  
	
                    Section 5.13 
  	 
  	
Title; Maintenance of Assets 
  	 
  	
55 
  
	
                    Section 5.14 
  	 
  	
Operating Margin Protection 
  	 
  	
55 
  
	
                    Section 5.15 
  	 
  	
Deposit Accounts 
  	 
  	
55 
  
	
                    Section 5.16 
  	 
  	
Lockbox Agreement 
  	 
  	
55 
  
	
                    Section 5.17 
  	 
  	
Reorganizations 
  	 
  	
56 
  
	
                    Section 5.18 
  	 
  	
Further Assurances 
  	 
  	
56 
  
	 

  
	
ARTICLE VI. NEGATIVE COVENANTS 
  	 
  	
56 
  
	
                    Section 6.1 
  	 
  	
Merger, Change in Business 
  	 
  	
56 
  
	
                    Section 6.2 
  	 
  	
Use of Property; Transactions with Affiliates; Nature of Business; 
  	 
  	 

  
	 

  	 
  	
Financial Condition 
  	 
  	
57 
  
	
                    Section 6.3 
  	 
  	
Indebtedness 
  	 
  	
57 
  
	
                    Section 6.4 
  	 
  	
Liens 
  	 
  	
58 
  
	
                    Section 6.5 
  	 
  	
Restricted Payments 
  	 
  	
58 
  
	
                    Section 6.6 
  	 
  	
Investments, Loans and Advances 
  	 
  	
58 
  
	
                    Section 6.7 
  	 
  	
Lease Approval 
  	 
  	
58 
  




ii 











	
                    Section 6.8 
  	 
  	
Amendments to Entity Documents and Other Agreements 
  	 
  	
58 
  
	
                    Section 6.9 
  	 
  	
ERISA 
  	 
  	
59 
  
	
                    Section 6.10 
  	 
  	
Financial Covenants 
  	 
  	
59 
  
	
                    Section 6.11 
  	 
  	
Project Management 
  	 
  	
60 
  
	
                    Section 6.12 
  	 
  	
Alterations 
  	 
  	
60 
  
	
                    Section 6.13 
  	 
  	
No Commingling of Funds 
  	 
  	
60 
  
	
                    Section 6.14 
  	 
  	
No Use of Administrative Agent or any Lender’s Name 
  	 
  	
60 
  
	
                    Section 6.15 
  	 
  	
Swap Contract 
  	 
  	
60 
  
	
                    Section 6.16 
  	 
  	
Burdensome Agreements 
  	 
  	
60 
  
	
                    Section 6.17 
  	 
  	
Sale or Discount of Receivables 
  	 
  	
60 
  
	
                    Section 6.18 
  	 
  	
Abandonment 
  	 
  	
60 
  
	
                    Section 6.19 
  	 
  	
Sale and Leaseback Transactions 
  	 
  	
61 
  
	 

  
	
ARTICLE VII. ADDITIONAL CONSTRUCTION COVENANTS 
  	 
  	
61 
  
	
                    Section 7.1 
  	 
  	
[Reserved] 
  	 
  	
61 
  
	
                    Section 7.2 
  	 
  	
Surveys 
  	 
  	
61 
  
	
                    Section 7.3 
  	 
  	
Appraisals 
  	 
  	
61 
  
	
                    Section 7.4 
  	 
  	
Permits; Licenses; Approvals 
  	 
  	
62 
  
	
                    Section 7.5 
  	 
  	
Plans and Construction Contracts, and Approvals and Amendments 
  	 
  	
62 
  
	
                    Section 7.6 
  	 
  	
Construction 
  	 
  	
63 
  
	
                    Section 7.7 
  	 
  	
Defects and Variances 
  	 
  	
63 
  
	
                    Section 7.8 
  	 
  	
Independent Consultant 
  	 
  	
64 
  
	
                    Section 7.9 
  	 
  	
Contracts 
  	 
  	
64 
  
	
                    Section 7.10 
  	 
  	
Affidavit of Commencement 
  	 
  	
65 
  
	
                    Section 7.11 
  	 
  	
Affidavit of Completion 
  	 
  	
65 
  
	
                    Section 7.12 
  	 
  	
Advertising by Administrative Agent and Lenders 
  	 
  	
65 
  
	
                    Section 7.13 
  	 
  	
Delivery of Property Contracts 
  	 
  	
65 
  
	
                    Section 7.14 
  	 
  	
Operating Contracts 
  	 
  	
65 
  
	
                    Section 7.15 
  	 
  	
Safe Storage 
  	 
  	
65 
  
	
                    Section 7.16 
  	 
  	
Title Insurance Endorsement 
  	 
  	
66 
  
	
                    Section 7.17 
  	 
  	
Site Visits, Observation and Testing 
  	 
  	
66 
  
	
                    Section 7.18 
  	 
  	
Project Commencement and Operation 
  	 
  	
66 
  
	
                    Section 7.19 
  	 
  	
Reserve Account 
  	 
  	
66 
  
	
                    Section 7.20 
  	 
  	
Accounts 
  	 
  	
66 
  
	 

  
	
ARTICLE VIII. COLLATERAL 
  	 
  	
67 
  
	
                    Section 8.1 
  	 
  	
Collateral 
  	 
  	
67 
  
	
                    Section 8.2 
  	 
  	
Collateral Assignment of Construction Contracts and Property 
  	 
  	 

  
	 

  	 
  	
Contracts 
  	 
  	
67 
  
	
                    Section 8.3 
  	 
  	
Collateral Assignment of Plans 
  	 
  	
68 
  
	
                    Section 8.4 
  	 
  	
No Obligation or Agency of Administrative Agent or any Lender 
  	 
  	
69 
  
	
                    Section 8.5 
  	 
  	
Casualty; Condemnation 
  	 
  	
70 
  
	 

  
	
ARTICLE IX. EVENTS OF DEFAULT AND REMEDIES 
  	 
  	
72 
  
	
                    Section 9.1 
  	 
  	
Events of Default 
  	 
  	
72 
  
	
                    Section 9.2 
  	 
  	
Remedies 
  	 
  	
74 
  
	
                    Section 9.3 
  	 
  	
Set-Off 
  	 
  	
76 
  




iii 











	
                    Section 9.4 
  	 
  	
Power of Attorney 
  	 
  	
76 
  
	
                    Section 9.5 
  	 
  	
Remedies are Severable and Cumulative 
  	 
  	
76 
  
	
                    Section 9.6 
  	 
  	
No Marshalling 
  	 
  	
76 
  
	
                    Section 9.7 
  	 
  	
Notices 
  	 
  	
77 
  
	
                    Section 9.8 
  	 
  	
Application of Funds 
  	 
  	
77 
  
	
                    Section 9.9 
  	 
  	
Completion of the Improvements 
  	 
  	
77 
  
	
                    Section 9.10 
  	 
  	
Receiver 
  	 
  	
78 
  
	
                    Section 9.11 
  	 
  	
Right to Perform Obligations 
  	 
  	
78 
  
	 

  
	
ARTICLE X. ADMINISTRATIVE AGENT 
  	 
  	
79 
  
	
                    Section 10.1 
  	 
  	
Appointment and Duties of Administrative Agent 
  	 
  	
79 
  
	
                    Section 10.2 
  	 
  	
Discretion and Liability of Administrative Agent 
  	 
  	
79 
  
	
                    Section 10.3 
  	 
  	
Event of Default 
  	 
  	
80 
  
	
                    Section 10.4 
  	 
  	
Consultation 
  	 
  	
80 
  
	
                    Section 10.5 
  	 
  	
Communications to and from Administrative Agent 
  	 
  	
80 
  
	
                    Section 10.6 
  	 
  	
Limitations of Agency 
  	 
  	
81 
  
	
                    Section 10.7 
  	 
  	
No Representations or Warranty 
  	 
  	
81 
  
	
                    Section 10.8 
  	 
  	
Lender Credit Decision 
  	 
  	
81 
  
	
                    Section 10.9 
  	 
  	
Indemnity 
  	 
  	
81 
  
	
                    Section
 10.10 
  	 	Resignation 	 
  	
82 
  
	
                    Section
 10.11  
  	 	Disbursements and Distributions	 
  	
82 
  
	
                    Section
 10.12 	 	Limitation of Suits  	 
  	
82 
  
	
                    Section
 10.13 	 	Right of Setoff  	 
  	
82 
  
	 

  
	
ARTICLE XI. MISCELLANEOUS 
  	 
  	
83 
  
	
                    Section 11.1 
  	 
  	
Non-Waiver 
  	 
  	
83 
  
	
                    Section 11.2 
  	 
  	
Disclosure 
  	 
  	
83 
  
	
                    Section 11.3 
  	 
  	
Communications 
  	 
  	
83 
  
	
                    Section 11.4 
  	 
  	
Costs and Expenses 
  	 
  	
84 
  
	
                    Section 11.5 
  	 
  	
Taxes and Fees 
  	 
  	
84 
  
	
                    Section 11.6 
  	 
  	
Further Assurances 
  	 
  	
84 
  
	
                    Section 11.7 
  	 
  	
Binding Effect 
  	 
  	
84 
  
	
                    Section 11.8 
  	 
  	
Interpretation; Construction 
  	 
  	
84 
  
	
                    Section 11.9 
  	 
  	
GOVERNING LAW 
  	 
  	
85 
  
	
                    Section
 11.10  
  	 	Severability of Provisions	 
  	
85 
  
	
                    Section
 11.11  
  	 	Term	 
  	
85 
  
	
                    Section
 11.12 	 	Exhibits  	 
  	
85 
  
	
                    Section
 11.13  
  	 	Counterparts; Facsimiles	 
  	
85 
  
	
                    Section
 11.14 	 	Jurisdiction; Waiver  	 
  	
85 
  
	
                    Section
 11.15 
  	 	Jury Waiver 	 
  	
86 
  
	
                    Section
 11.16 
  	 	Survival 	 
  	
86 
  
	
                    Section
 11.17  
  	 	Borrower’s Acknowledgments	 
  	
86 
  
	
                    Section
 11.18 	 	Customer Identification – USA
    Patriot Act Notice; OFAC and  	 
  	 

  
	 

  	 
  	
Bank Secrecy Act 
  	 
  	
86 
  
	
                    Section
 11.19 	 	Amendment  	 
  	
87 
  
	
                    Section
 11.20  
  	 	Assignments and Participations	 
  	
88 
  
	
                    Section
 11.21  
  	 	Integration	 
  	
90 
  





iv 











	
EXHIBITS 
  	 
  	 

  
	 

  
	
A 
  	
–
  	 

  	 
  	
Land 
  
	
B 
  	
–
  	 

  	 
  	
Form of Certificate of Compliance 
  
	
C 
  	
–
  	 

  	 
  	
Form of Draw Request 
  
	
D 
  	
–
  	 

  	 
  	
Form of Affidavit of Commencement 
  
	
E 
  	
–
  	 

  	 
  	
Form of Affidavit of Completion 
  
	
F 
  	
–
  	 

  	 
  	
Budget 
  
	 

  
	
SCHEDULES 
  
	 

  
	
    1.1
    
	 

  	
–
  	 

  	 
  	
Commitments 
  
	
    3.1
    
	(e)
	– 	 
	 
  	
Governmental Approvals 
  
	
    3.1
    
	
(f) 
  	
–
  	 

  	 
  	
Operating Contracts 
  
	
    4.28
    
	 

  	
–
  	 

  	 
  	
Subsidiaries 
  





v












 

	
    
	
      CONSTRUCTION AND TERM LOAN AGREEMENT






          This CONSTRUCTION AND TERM LOAN AGREEMENT is dated as of September 27, 2006, among LEVELLAND/HOCKLEY COUNTY ETHANOL, LLC, a limited liability company organized and existing under the laws of the State of Texas
having its principal office at 1012 Austin Street, Levelland, Texas 79336 (together with its successors and permitted assigns, “Borrower”), each of Lenders that is a signatory hereto or
which becomes a signatory hereto pursuant to Section 11.20 hereof (individually, together with its successors and assigns, a “Lender” and collectively, “Lenders”), and MERRILL LYNCH CAPITAL, a division of Merrill Lynch Business Financial Services
Inc., a corporation organized and existing under the laws of the State of Delaware having its principal office at 222 North LaSalle Street, Chicago, IL 60601, as administrative agent for Lenders (in such capacity, “Administrative Agent”). 


          In consideration of $10, other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and the covenants and agreements herein contained, Borrower,
Administrative Agent and each Lender hereby agree as follows, intending to be legally bound: 


ARTICLE I. DEFINITIONS


          Section 1.1       Specific Terms.       In addition to terms defined elsewhere in this Construction and Term Loan
Agreement, when used herein, the following terms shall have the following meanings: 


          “Administrative Agent” is defined in the introductory paragraph hereof.


          “Advance” means a disbursement by Administrative Agent, whether by journal entry, deposit to Borrower’s account, check or wire transfer to
third party, or otherwise, of any of the proceeds of the Loan. 


          “Adverse Environmental Condition” means (a) the existence or the continuation of the existence of an Environmental Contamination (including a
sudden or non-sudden accidental or non-accidental Environmental Contamination), or exposure to any substance, chemical, material, pollutant, Hazardous Substance, odor or audible noise or other release or emission in, into or onto the environment
(including without limitation, the air, ground, water or any surface) at, in, by, from or related to any Collateral, (b) the environmental aspect of the transportation, storage, treatment or disposal of materials in connection with the operation of
any Collateral, or (c) the violation, or alleged violation, of any Environmental Law, permits or licenses of, by or from any Governmental Agency relating to environmental matters connected with any of the Collateral. 


          “Affidavit of Commencement” means the affidavit substantially in form and substance as set forth on Exhibit
D attached hereto or as otherwise acceptable to Administrative Agent. 


          “Affidavit of Completion” means the affidavit substantially in form and substance as set forth on Exhibit
E attached hereto or as otherwise acceptable to Administrative Agent. 












          “Affiliate” of any Person means any Person directly or indirectly controlled by, controlling or under common control with such first Person.
For the purposes of this definition “control” of any Person includes (a) with respect to any corporation or other Person having voting shares or the equivalent and elected directors, managers, or Persons performing similar functions, the ownership
or power to vote, directly or indirectly shares or the equivalent representing 25% or more of the power to vote in the election of directors, managers or Persons performing similar functions (other than as a limited partner of such other Person) and
(b) the ability to direct the business and affairs of any Person by acting as a general partner, manager or otherwise. 


          “Allocations” means the line items set forth in the Budget for which Advances of Loan proceeds may be made. 


          “Appraisal” means a current appraisal prepared by a qualified appraiser, who is designated as an MAI appraiser by the Appraisal Institute,
and who is licensed in the state in which the Land is located and who is completely independent from each Credit Party and each Affiliate of any Credit Party, in scope and substance acceptable to Administrative Agent, in conformity with the
Financial Institutions Reform, Recovery and Enforcement Act of 1989, as amended from time to time, and the requirements of Administrative Agent, and approved in accordance with any requirements of Administrative Agent. 


          “Approved Fund” means, with respect to Lender, any Person (other than a natural person) that is engaged in making, purchasing, holding or
investing in bank loans and similar extensions of credit in the ordinary course of its business and that is administered or managed by (a) such Lender, (b) an Affiliate of such Lender or (c) an entity or an Affiliate of an entity that administers,
operates or manages such Lender. 


          “Assignment and Acceptance” means an agreement by which an assignment is made pursuant to Section
11.20 hereof, in form and substance reasonably satisfactory to Administrative Agent. 


          “Assignment Fee” is defined in Section 11.20(a).      


          “Bankruptcy Code” means the Bankruptcy Code of the United States.


          “Bankruptcy Event” means any of the following: (a) a proceeding under any bankruptcy, reorganization, arrangement, insolvency, readjustment
of debt, liquidation, winding up or receivership law or statute shall be commenced, filed or consented to by any Credit Party; or (b) any such proceeding shall be filed against any Credit Party and shall not be dismissed or withdrawn within 60 days
after filing; (c) any Credit Party shall make a general assignment for the benefit of creditors; (d) any Credit Party shall generally fail to pay or admit in writing its inability to pay its debts as they become due; (e) any Credit Party shall be
adjudicated a bankrupt or insolvent; (f) any Credit Party shall take advantage of any other law or procedure for the relief of debtors or shall take any action for the purpose of or with a view towards effecting any of the foregoing; or (g) a
receiver, trustee, custodian, fiscal agent or similar official for any Credit Party or for any substantial part of any of their respective property or assets shall be sought by such Credit Party or appointed. 


2












          “Borrower” is defined in the introductory paragraph hereof.


          “Borrower’s Deposit” means such cash amounts as Administrative Agent may deem necessary for Borrower to deposit with it in accordance with
the provisions of Section 2.8(e).      


          “Borrower’s Equity” means the amount or amounts shown in the Budget which are required to be contributed by Borrower and utilized for the
purposes reflected in the Budget. The amount of Borrower’s Equity as of the Closing Date shall not be less than $29,140,000 plus, if applicable, the additional amount required pursuant to Section
3.1(g).       For purposes of this Loan Agreement, the amount of the Rex Subordinated Debt shall be included as part of the Borrower’s Equity. 


          “Budget” means a budget prepared by Borrower, in form and substance acceptable to Administrative Agent and approved by Administrative Agent
in writing, that reflects an itemization of all costs associated with the acquisition, construction, and financing of the Project, including (a) all costs needed or anticipated to acquire the Land and all equipment and materials that comprise the
Improvements and to design and construct the Improvements in accordance with the Plans (including all Construction Costs), (b) all marketing costs, and (c) all costs associated with financing any of the foregoing (including Loan fees, interest, and
other financing charges) that are anticipated to be incurred during the Construction Phase, which budget is attached hereto as Exhibit F, as such budget may be amended from time to time in
accordance with the provisions of this Loan Agreement. 


          “Business Day” means any day other than a Saturday, a Sunday, and any day on which banking institutions located in the State of Illinois are
authorized by law or other governmental action to close and which Administrative Agent has designated as its holiday. 


          “Casualty” means the damage or destruction by any cause of any portion of the Collateral. 


          “Closing Date” means the date upon which all conditions precedent to a Lender’s obligation to make the first Advance under the Construction
Loan shall have been met or waived to the satisfaction of all Lenders. 


          “Code” means the Internal Revenue Code of 1986, as amended from time to time.


          “Collateral” means the Property (as such term is defined in the Mortgage) and the Collateral (as such term is defined in the Security
Agreement), including the Real Property Collateral and the Personal Property Collateral, and any other property, rights, or interests which, at any time and for such time, secure all or any portion of the Obligations.



          “Commitment” means the commitment of each Lender to make Advances under the Construction Loan pursuant to Section 2.1 in an aggregate principal amount not to exceed the amount set forth opposite such Lender’s name on Schedule 1.1 or in the Assignment
and Acceptance pursuant to which such Lender becomes a party hereto, as applicable, as such amount may be adjusted from time to time in accordance with this Loan Agreement. As of the Closing Date, the total Commitments equal the Note Amount.



3












          “Commitment Expiration Date” means the earlier of (a) March 31, 2008, (b) the day before the Conversion Date, or (c) the date on which the
Commitment is terminated pursuant to Section 9.2(a).      


          “Completion” means the full and complete performance of all work (including all punch list items) required to fully construct the
Improvements in accordance with this Loan Agreement, the other Loan Documents, the Plans, and all Legal Requirements, and issuance of a Certificate of Occupancy (or its equivalent) by the appropriate Governmental Agencies authorizing the use and
occupancy of the Improvements. 


          “Condemnation” means the taking, condemnation, confiscation or acquisition of any portion of the Collateral pursuant to the exercise of the
power of eminent domain or other action of a Governmental Agency or the threat thereof. 


          “Construction Account” means an account established by Borrower with Administrative Agent into which all Advances made directly to Borrower
will be deposited, and other amounts for payment of Construction Costs may be deposited as provided in this Loan Agreement. 


          “Construction Commencement Date” means a date on or before November 15, 2006, which is after the date the Mortgage was recorded in the
appropriate records of the county where the Land is located. 


          “Construction Contracts” means any and all contracts, subcontracts and agreements, written or oral, between Borrower and any other party, and
between parties other than Borrower, in any way relating to the design or construction of the Improvements on the Land or the supplying of material (specially fabricated or otherwise), labor, supplies, or other services therefor. 


          “Construction Costs” means all costs to acquire the Land and all equipment and materials that comprise the Improvements and to design and
construct the Improvements, including labor and materials, architectural, engineering, interior and landscape design, legal, consulting and other related fees; costs for Construction Contracts; the Imposition costs; bond and insurance costs; and any
financing costs payable to any creditor other than Administrative Agent or any Lender during the Construction Phase but excluding all financing costs payable to Administrative Agent and Lenders. 


          “Construction Loan” means the Loan, during the term beginning on the Closing Date through the earlier of (a) the Maturity Date or (b) the
Commitment Expiration Date. 


          “Construction Phase” means the period from the Closing Date through the earliest to occur of (a) the Commitment Expiration Date or (b) the
last to occur of (i) Completion or (ii) disbursement of the final Advance. 


          “Construction Schedule” means a schedule of the construction of the Improvements, which shall include the anticipated commencement and
completion dates of each phase or aspect of construction of the Improvements, in detail and form reasonably acceptable to Administrative Agent, as such Construction Schedule is amended from time to time. 


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          “Contractor” means ICM, Inc., and any other contractor with whom Borrower contracts for construction of the Improvements or any portion
thereof, including for the development of the Land. 


          “Contractor Consents” means a consent and agreement, by a Contractor or Design Professional, as applicable, to the collateral assignment to
Administrative Agent of a Construction Contract, and the granting of nondisturbance rights in favor of Administrative Agent, opportunity to cure rights in favor of Administrative Agent, and such other matters as Administrative Agent may require, all
in form and substance acceptable to Administrative Agent.


          “Conversion Date” means the effective date of the Loan Conversion, if any, as provided in Section
2.5.      


          “Conversion Notice” is defined in Section 2.5.     


          “Credit Party” and “Credit Parties” means, individually or collectively, Borrower
and any and all other Persons guaranteeing the Obligations or providing Collateral to secure the Obligations. 


          “Default” means either an “Event of Default” as defined in Section 9.1 hereof, or an event which with the giving of notice, passage of time, or both, would constitute such an Event of Default. 


          “Default Rate” means a rate per annum equal to the Interest Rate otherwise applicable, plus 6.00% . 


          “Design Professional” means each engineer, interior designer, space planner, landscape designer or other Person with whom Borrower contracts
for the providing of planning, design, engineering or other similar services relating to the Improvements. 


          “Disqualified Capital Stock” means any Stock that, by its terms (or by the terms of any security into which it is convertible or for which it
is exchangeable) or upon the happening of any event, matures or is mandatorily redeemable for any consideration other than other Stock (which would not constitute Disqualified Capital Stock), pursuant to a sinking fund obligation or otherwise, or is
convertible or exchangeable for Indebtedness or redeemable for any consideration other than other Stock (which would not constitute Disqualified Capital Stock) at the option of the holder thereof, in whole or in part, on or prior to the date that is
one year after the earlier of (a) the Maturity Date and (b) the date on which there are no outstanding Obligations and all of the Commitments for Advances are terminated. 


          “Dollars,” “$” or “USD” means lawful currency of
the United States of America.


          “Draw Period” means a calendar month.


          “Draw Request” means a request duly completed, executed, and submitted by Borrower to Administrative Agent and the Independent Consultant as
a condition precedent to an Advance, in the form of Exhibit C attached hereto or as otherwise acceptable to Administrative Agent,


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together with such Lien waivers, releases, affidavits, invoices, certifications, and other documents as Administrative Agent may require. 


          “EBITDAR” means the Borrower’s income before interest (including payments in the nature of interest under capital leases), taxes,
depreciation, amortization, other non-cash charges, and rent; all as determined (a) for the period beginning April 1, 2008 through and including March 31, 2009, on an annualized basis and (b) thereafter on a trailing 12-month basis in accordance
with GAAP. 


          “EBITDAR Coverage Ratio” means the ratio of (a) EBITDAR of Borrower to (b) the sum of Borrower’s (i) interest (including payments in the
nature of interest under capital leases), plus (ii) current maturities of long-term Funded Debt, plus (iii) rent under operating leases; all as determined on a trailing 12-month basis in accordance with GAAP. 


          “Eligible Assignee” means (a) a commercial bank organized under the laws of the United States, or any state thereof, and having total assets
in excess of $250,000,000, (b) a commercial bank organized under the laws of any other country which is a member of the Organization for Economic Cooperation and Development or a political subdivision of any such country and which has total
assets in excess of $250,000,000, provided that such bank is acting through a branch or agency located in the United States, (c) a finance company, insurance company, or other financial institution or fund that is engaged in making, purchasing,
or otherwise investing in commercial loans in the ordinary course of its business and having (together with its Affiliates) total assets in excess of $250,000,000, (d) a Lender, any Affiliate (other than individuals) or Approved Fund of a
Lender, and (e) during the continuation of a Default, any other Person so long as the assigning Lender provides at least five Business Days prior written notice to Administrative Agent of such assignment; provided, however, in order for any assignee
to be a party to this Agreement, such assignee must be exempt from withholding taxes. 


          “Eligible Swap Counterparty” means a Lender or any Affiliate of a Lender that at the time it occupies such role or capacity enters into a
Swap Contract with Borrower or any Subsidiary. 


          “Environmental Claim” means any accusation, allegation, notice of violation, claim, demand, abatement or other order or direction
(conditional or otherwise) by any Governmental Agency or any Person for personal injury (including sickness, disease or death), tangible or intangible property damage, damage to the environment or other adverse affects on the environment, or for
fines, penalties or restrictions, resulting from or based upon any Adverse Environmental Condition. 


          “Environmental Contamination” means any actual or threatened release, spill, emission, leaking, pumping, injection, presence, deposit,
abandonment, disposal, discharge, dispersal, leaching or migration into the indoor or outdoor environment, or into or out of any of the Collateral, including, without limitation, the movement of any Hazardous Substance or other substance through or
in the air, soil, surface water, groundwater or property which is not in compliance with applicable Environmental Laws. 


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          “Environmental Law” means any federal, state or local law, statute, ordinance, or regulation, whether now or hereafter in effect, pertaining
to environmental regulation, contamination, remediation or human health or safety, industrial hygiene, or the environmental conditions on, under, or about the Real Property Collateral, and regulations, rules, guidelines, or standards promulgated
pursuant to such laws, statutes, ordinances and regulations, as such laws, statutes, ordinances, regulations, rules, guidelines, and standards are amended from time to time. 


          “ERISA” means the Employee Retirement Income Security Act of 1974 (or any successor legislation thereto), as amended from time to time, and
any regulations promulgated thereunder. 


          “ERISA Affiliate” means any trade or business (whether or not incorporated) that, together with Borrower, is treated as a single employer
under Section 414(b) or (c) of the Code or, solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single employer under Section 414 of the Code. 


          “ERISA Event” means (a) any “reportable event”, as defined in Section 4043 of ERISA or the regulations issued thereunder with respect to an
ERISA Plan (other than an event for which the 30-day notice period is waived); (b) the existence with respect to any ERISA Plan of an “accumulated funding deficiency” (as defined in Section 412 of the Code or Section 302 of ERISA), whether or not
waived; (c) the filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an application for a waiver of the minimum funding standard with respect to any ERISA Plan; (d) the incurrence by Borrower or any of its ERISA Affiliates of
any liability under Title IV of ERISA with respect to the termination of any ERISA Plan; (e) the receipt by Borrower or any ERISA Affiliate from the PBGC or a plan administrator of any notice relating to an intention to terminate any ERISA Plan or
ERISA Plans or to appoint a trustee to administer any ERISA Plan; (f) the incurrence by Borrower or any of its ERISA Affiliates of any liability with respect to the withdrawal or partial withdrawal from any ERISA Plan or Multiemployer Plan; or (g)
the receipt by Borrower or any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from Borrower or any ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability or a determination that a Multiemployer Plan
is, or is expected to be, insolvent or in reorganization, within the meaning of Title IV of ERISA. 


          “ERISA Plan” means any employee pension benefit plan (other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or
Section 412 of the Code or Section 302 of ERISA, and in respect of which Borrower or any ERISA Affiliate is (or, if such plan were terminated, would under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.



          “Event of Loss” means the occurrence whereby any Tangible Collateral is damaged beyond repair, lost, totally destroyed, or confiscated,
whether or not covered by property insurance. 


          “Excess Cash Flow” means the sum of Borrower’s (a) EBITDAR, minus (b) current principal and interest payments due on any of Borrower’s debt,
minus (c) current operating lease expense, minus (d) any maintenance capital expenditures, minus (e) taxes; all as determined for the fiscal year most recently ended in accordance with GAAP. 


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          “Excluded Taxes” means, with respect to Administrative Agent or any Lender, (a) income or franchise taxes measured by its net income (however
denominated) and imposed on it by a Governmental Agency, (b) any branch profits taxes imposed by the United States of America or any similar tax imposed by any other jurisdiction in which Borrower is located, (c) franchise taxes imposed by the State
of Texas or other Governmental Agency on either Administrative Agent or any Lender as a result of doing business in the State of Texas or other jurisdiction. 


          “Facility Fee” means the facility fee described in the fee letter dated September 27, 2006 between Borrower and Administrative Agent.



          “FEL” means Farmers Energy Levelland, LLC, an Ohio limited liability company.


          “FEL Subordinated Debt” means the Indebtedness in an aggregate original principal amount of $5,595,000 evidenced by the FEL Subordinated
Debt Documents.  As of September 25, 2006, the outstanding principal amount of the FEL Subordinated Debt together with the accrued and unpaid interest payable thereon total $2,875,613.45. 


          “FEL Subordinated Debt Documents” means, collectively (a) that certain Secured Promissory Note dated July 27, 2006 in the aggregate original
principal amount of $5,595,000 executed by Borrower and payable to the order of FEL and (b) that certain Security Agreement dated effective July 27, 2006 by and between Borrower and FEL. 


          “Force Majeure” means acts of God, strikes, lockouts, embargo, fire, tornadoes, unavoidable casualty, acts of terrorism, national emergency
or any other unforeseeable event beyond the control of Borrower. 


          “Foreign Lender” means any Lender that is organized under the laws of a jurisdiction other than that in which Borrower is resident for tax
purposes. For purposes of this definition, the United States, each State thereof and the District of Columbia shall be deemed to constitute a single jurisdiction. 


          “Funded Debt” means, as of any date of determination and for any Person, the Indebtedness described in clauses
(a), (b), (c) and (d) of the definition of
“Indebtedness” and guarantees and other surety obligations by such Person of the Funded Debt of others. 


          “Funding Source” is defined in Section 11.20(e).     


          “GAAP” means the generally accepted accounting principles in effect in the United States of America from time to time, consistently applied
from period to period. 


          “Governmental Agencies” means any government or any state, department or other political subdivision thereof, or governmental body, agency,
authority, department or commission having jurisdiction over Borrower or its properties (including any court or tribunal) exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government and any
corporation, partnership or other entity directly or indirectly owned by the foregoing. 


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          “Guaranteed Indebtedness” means, as to any Person, any obligation of such Person guaranteeing any indebtedness, lease, dividend, or other
obligation (“primary obligations”) of any other Person (the “primary obligor”) in any manner, including any obligation or
arrangement of such guaranteeing Person (whether or not contingent): (a) to purchase or repurchase any such primary obligation; (b) to advance or supply funds (i) for the purchase or payment of any such primary obligation or (ii) to maintain working
capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency or any balance sheet condition of the primary obligor; (c) to purchase property, securities or services primarily for the purpose of assuring the
owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation; or (d) to indemnify the owner of such primary obligation against loss in respect thereof. 


          “Hazardous Substances” means any hazardous, toxic or harmful substances, wastes, materials, pollutants or contaminants (including, without
limitation, asbestos, polychlorinated biphenyls, petroleum products, radon, lead-based paint, flammable explosives, radioactive materials, infectious substances or raw materials) which are included under or regulated by Environmental Laws.



          “Impositions” means (a) all real estate and personal property taxes, charges, assessments, standby fees, excises, and levies and any
interest, costs, or penalties with respect thereto, general and special, ordinary and extraordinary, foreseen and unforeseen, of any kind and nature whatsoever which at any time prior to or after the execution hereof may be assessed, levied, or
imposed upon the Collateral or the ownership, use, occupancy, or enjoyment thereof, or any portion thereof, or the sidewalks, streets, or alleyways adjacent thereto; (b) any charges, fees, license payments, or other sums payable for or under any
easement, license, or agreement maintained for the benefit of the Collateral; (c) water, gas, sewer, electricity, and other utility charges and fees relating to the Collateral; and (d) assessments and charges arising under any subdivision,
condominium, planned unit development, or other declarations, restrictions, regimes, or agreements affecting the Collateral. 


          “Improvements” means the ethanol production facility and other facilities that are ancillary, incidental, necessary or related to the
marketing, management, servicing, ownership or operation of such facility; any and all buildings, covered garages, storage sheds, silos and buildings, air conditioning towers, work rooms, open parking areas, structures and other improvements, and
any and all additions, alterations, betterments or appurtenances thereto, now or at any time hereafter situated, placed, or constructed upon the Land or any part thereof. 


          “Indebtedness” of any Person means, without duplication, (a) all indebtedness of such Person for borrowed money or for the deferred purchase
price of property or services (including reimbursement and all other obligations with respect to surety bonds, letters of credit and bankers’ acceptances, whether or not matured, but not including accounts payable and accrued expenses, liabilities,
or other obligations to pay the deferred purchase price of property or services, from time to time incurred in the ordinary course of business which are not greater than 60 days past the date of invoice or which are being contested in good faith by
appropriate action and for which adequate reserves have been maintained in accordance with GAAP); (b) all obligations evidenced by notes, bonds, debentures or similar instruments; (c) all indebtedness created or arising under any conditional sale or
other title retention agreements with respect to


9












property acquired by such Person (even though the rights and remedies of the seller or lender under such agreement in the event of default are limited to repossession or sale of such property); (d) all capital lease obligations;
(e) all Guaranteed Indebtedness; and (f) all Indebtedness referred to in clauses (a), (b), (c), (d) or (e) above secured by (or for which the holder of such Indebtedness has an
existing right, contingent or otherwise, to be secured by) any Lien upon or in property (including accounts and contract rights) owned by such Person, even though such Person has not assumed or become liable for the payment of such Indebtedness.



          “Indemnified Taxes” means Taxes other than Excluded Taxes.


          “Independent Consultant” means any architectural or engineering firm or other Person (and all of them, if more than one) retained by
Administrative Agent at Borrower’s expense for the purpose of: approving the Plans, Advances, and each Construction Contract; verifying the Budget; performing inspections as construction progresses to verify that the Improvements are constructed to
Completion in a manner satisfactory to Administrative Agent and in accordance with the Plans, and such other purposes permitted by this Loan Agreement. 


          “Interest Period” means each calendar month occurring during the period commencing with the month of the Closing Date through and including
the calendar month of the Maturity Date; provided, however, that no Interest Period shall commence or extend past the Maturity Date and the Loan shall bear interest at the Default Rate after the Maturity Date. 


          “Interest Rate” means, with respect to the Loan, a floating rate per annum equal to the sum of the LIBO Rate for such Interest Period plus
400 basis points (or if LIBO Rate is not available or permitted as described in Section 2.4, the sum of Prime Rate plus 400 basis points) which floating rate will be adjusted from time to
time as contemplated in the definitions of LIBO Rate and Prime Rate. 


          “Knowledge” means actual knowledge and such knowledge as a person of ordinary experience and intelligence and exercising reasonable care
should have under and in light of the particular facts and circumstances. For purposes of this definition the term “actual knowledge” is limited to facts and circumstances known to any officer, agent, plant manager or supervisor responsible for the
financial affairs, business, assets, management or operations of Borrower or the Property (as defined in the Mortgage), or both, or any member of the Board of Managers of Borrower. 


          “Land” means the real property described in Exhibit A attached hereto.


          “Late Charge” is defined in Section 2.6.     


          “Leases” means any and all leases, master leases, subleases, licenses, concessions, or other agreements (written or oral, now or hereafter in
effect) which grant to third parties a possessory interest in and to, or the right to use, all or any part of the Real Property Collateral, together with all security and other deposits or payments made in connection therewith. 


          “Legal Requirements” means (a) any and all present and future judicial decisions, statutes (including all disabilities laws and Environmental
Laws), rulings, rules, regulations, permits, certificates, or ordinances of any Governmental Agency in any way applicable to any Credit


10












Party or the Collateral, including, without limiting  the generality of the foregoing, the ownership, use, occupancy, possession, construction, operation, maintenance, alteration, repair, or reconstruction thereof, (b) any and all
covenants, conditions, and restrictions contained in any deeds, other forms of conveyance, or in any other instruments of any nature that relate in any way or are applicable to the Collateral or the ownership, use, or occupancy thereof, (c) each
Credit Party’s presently or subsequently effective certificate of formation, governing documents, bylaws and articles of incorporation, operating agreement and articles of organization, or partnership, limited partnership, joint venture, trust, or
other form of business association agreement, (d) any and all Leases, (e) any and all Contracts (as such term is defined in the Mortgage) and (f) any and all leases, other than those described in clause
(d) above, and other contracts (written or oral) of any nature that relate in any way to the Property (as defined in the Mortgage) and to which Borrower or any Credit Party may be bound, including, without limiting the
generality of the foregoing, any lease or other contract pursuant to which Borrower is granted a possessory interest in and to the Land and/or the Improvements. 


          “Lender” and “Lenders” are defined in the introductory paragraph hereof.


          “Leverage Ratio” means the ratio of (a) the sum of (i) all Borrower’s Funded Debt, plus all Borrower’s unused availability under any
revolving credit facility, and including debt to Administrative Agent and Lenders, plus (ii) two-thirds of the future rents payable under Borrower’s operating leases, to (b) EBITDAR of Borrower; all as determined on a trailing 12-month basis in
accordance with GAAP. 


          “LIBO Rate” means, with respect to the Loan for any Interest Period, an interest rate per annum (rounded upward to the next higher whole
multiple of one-sixteenth percent if such rate is not such a multiple), equal to the rate per annum (rounded upwards to the next higher whole multiple of one-sixteenth percent if such rate is not such a multiple) as determined on the basis of the
average of the rates offered by a majority of the banks in the London interbank market for deposits in U.S. Dollars for one month, to the extent the rates as published in the “Bloomberg Professional Service, Screen BAAM”
two Business Days prior to the first Business Day of such Interest Period (provided, however, that with respect to the first Interest Period of the Loan, on the second Business Day immediately preceding the first day of
such Interest Period with such rate having an effective date as of the date of execution of the Loan). 


          “Lien” means any interest in property securing an obligation owed to, or a claim by, a Person other than the owner of the property, whether
such interest is based on the common law, statute or contract, and whether such obligation or claim is fixed or contingent, and including the lien or security interest arising from a mortgage, encumbrance, pledge, security agreement, conditional
sale or trust receipt, or a lease, consignment or bailment for security purposes. 


          “Loan” means the loan from Administrative Agent and Lenders to Borrower evidenced, governed, and secured by the Note, this Loan Agreement,
the Mortgage, and the other Loan Documents. 


          “Loan Agreement” means this Construction and Term Loan Agreement, as this Construction and Term Loan Agreement may hereafter be modified,
amended, or restated in accordance with the terms hereof. 


11












          “Loan Conversion” means the conversion of the Construction Loan into the Term Loan in accordance with the provisions hereof. 


          “Loan Conversion Request” is defined in Section 2.5.     


          “Loan Documents” mean this Loan Agreement, the Note, the Security Agreement, the Mortgage, the Subordination Agreement and all other security
and other instruments, assignments, consents, certificates, certifications and agreements of any kind relating to any of the Obligations, whether obtained, authorized, authenticated, executed, sent or received concurrently with or subsequent to this
Loan Agreement, or which evidence the Loan or the creation, guaranty or collateralization of any of the Obligations or the granting or perfection of Liens or security interests upon any Collateral or any other collateral securing a guaranty of the
Obligations, including any modifications, amendments or restatements of the foregoing. 


          “Loan Purpose” means the purpose for which the proceeds of the Loan will be used; to wit:  (i) to finance the construction of the Project,
(ii) to finance related costs and expenses including without limitation, the acquisition of the Land, in accordance with the Budget and this Loan Agreement and (iii) to pay accrued and unpaid interest on the Loan prior to the Conversion Date so that
it can be capitalized for Borrower’s accounting purposes. 


          “Lockbox Agreement” is defined in Section 5.16.     


          “Material Adverse Effect” means any event, fact, circumstance, change in, or effect on (a) the business, property, prospects, operations,
condition (financial or otherwise), of Borrower and its Subsidiaries, that individually, in the aggregate or on a cumulative basis with any other events, facts, circumstances, changes in, or effects on, Borrower has had or could reasonably be
expected to have a materially adverse effect on or material change in (i) the ability of Borrower to (A) operate or conduct business in all material respects in the manner in which such business is proposed to be operated or conducted as outlined in
the Prospectus or (B) perform under the Loan Documents or pay the Obligations, (ii) the assets, properties, business, operations, condition (financial or otherwise) or prospects of Borrower, (iii) the validity or enforceability of the Loan Documents
or any of the material rights or remedies of the Administrative Agent or any Lender thereunder, or (iv) the value, enforceability, or collectibility of all or any material portion of the Collateral.  In determining whether any individual event would
result in a Material Adverse Effect, notwithstanding that such event in and of itself does not have such effect or change, a Material Adverse Effect shall be deemed to have occurred if the cumulative effect of such event and all other then existing
events would result in a Material Adverse Effect; provided however, that it is understood and agreed that short-term swings in commodity prices or business interruptions that are covered by Borrower’s insurance policies which name Administrative
Agent as additional insured and loss payee do not, in and of themselves, create a Material Adverse Effect. 


          “Maturity Date” means (a) as to the Construction Loan, the earliest of (i) March 31, 2008, (ii) the date Completion shall have occurred, plus
30 days or (iii) the date the Commitments are sooner terminated and the Obligations are due and payable in accordance with Section 9.2, and (b) if the Construction Loan is converted to a
Term Loan, then as to the Term Loan, the earlier of


12












(i) the date that is the fifth anniversary of the Conversion Date, or (ii) the date the Note and the other Obligations are due and payable in accordance with Section 9.2.     



          “Minimum Advance” means $2,000,000.



          “MLPF&S” is defined in Section 4.11.      


          “Mortgage” means the Mortgage, Deed of Trust, Security Agreement, Assignment and Fixture Financing Statement, dated as of September 6, 2006
executed by Borrower, in favor of the Trustee (as defined therein), the trustee to the extent that the Mortgage operates as a deed of trust, and to Administrative Agent for the benefit of Secured Parties, covering, among other property, the Land and
Improvements, to secure the Loan, as it may be modified, amended, or restated from time to time. 


          “Multiemployer Plan” means a multiemployer plan as defined in Section 4001(a)(3) of ERISA. 


          “Note” is defined in Section 2.2.     


          “Note Amount” means $43,710,000, minus, if applicable, the additional amount of Borrower’s Equity required under Section 3.1(g).      


          “Obligations” mean all present and future liabilities, indebtedness and obligations of Borrower to Administrative Agent or any Lender,
howsoever created, arising or evidenced, whether now existing or hereafter arising, whether direct or indirect, absolute or contingent, due or to become due, primary or secondary or joint or several, and, without limiting the generality of the
foregoing, shall include principal, accrued interest (including interest accruing after the filing of any petition in bankruptcy), all Advances made by or on behalf of Administrative Agent and Lenders, or any of them, under this Loan Agreement and
the other Loan Documents, collection and other costs and expenses incurred by or on behalf of Administrative Agent and Lenders, or any of them, whether incurred before or after judgment, and all present and future liabilities, indebtedness and
obligations of Borrower under the Note, this Loan Agreement, or the other Loan Documents. In addition to, but without duplication of, the foregoing, the Obligations shall also include without limitation, all obligations, liabilities and indebtedness
arising from or in connection with all Swap Contracts entered into with any Eligible Swap Counterparty. 


          “OFAC” is defined in Section 11.18.     


          “Operating Contracts” means any material contracts or agreements related to the purchase or delivery of materials used as energy resources,
inventory, or otherwise for production of the products or by-products from the operations of the Project or related to the sale, distribution, or delivery of products or by-products produced in whole or in part at the Project, including (a) all
contracts listed on Schedule 3.1(f) and (b) all other contracts identified in the Prospectus. 


          “Other Taxes” is defined in Section 2.7(a).     


          “Participant Register” is defined in Section 11.20(e).     


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          “Payment Date” means (a) the first day of each calendar month beginning on the first day of the calendar month after the Closing Date and (b)
the Maturity Date. 


          “PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in ERISA and any successor entity performing similar functions.



          “Permitted Exceptions” means (a) Liens in favor of Administrative Agent for the benefit of itself and Lenders, (b) as to Real Property
Collateral, the liens, easements, restrictions, security interests and other title matters, if any, as reflected on the mortgagee policy of title insurance accepted by Administrative Agent with respect to the Mortgage, (c) Liens of Governmental
Agencies for taxes not yet due and payable, (d) Liens not delinquent arising in the ordinary course of business and created by statute in connection with worker’s compensation, unemployment insurance, social security and similar statutory
obligations, (e) as to Personal Property Collateral, other non-consensual liens arising in the ordinary course of business for sums not due, (f) if Secured Parties’ rights to and interest in the Collateral would not be materially and adversely
affected thereby, any Liens for taxes or other non-consensual Liens against the Collateral arising in the ordinary course of business and being contested in good faith by appropriate proceedings, so long as adequate reserves are maintained with
respect to such contested amounts in amount (including the amount contested, and potential costs, interest, and penalties) and manner acceptable to Administrative Agent, (g) as to grain in storage or in transit but excluding grain in-process,
finished products and proceeds of grain in-process and finished products, Liens in favor of a third party reasonably acceptable to Administrative Agent to secure Indebtedness permitted under Section
6.3(f), (h) Liens arising pursuant to the Rex Subordinated Debt Documents, and (i) any other Liens expressly permitted in writing by Administrative Agent. 


          “Person” means any natural person and any corporation, partnership (general, limited or otherwise), limited liability company, trust,
association, joint venture, governmental body or agency or other entity having legal status of any kind. 


          “Personal Property Collateral” means all Collateral that constitutes personal property.


          “Plans” means (a) the plans and specifications for the development of the Land and construction of the Improvements, prepared by the Design
Professional and approved as required herein, and all amendments thereof and supplements thereto, and (b) all other plans, designs, engineering or architectural work, test reports, surveys, shop drawings, and similar items related to the foregoing,
approved as required herein. 


          “Prepayment Premium” is defined in Section 2.11.     


          “Prime Rate” means, with respect to any Interest Period, the rate publicly announced in New York, New York from time to time as the prime
rate of JPMorgan Chase Bank N.A. (or any successor thereof) (“JPMorgan”). The Prime Rate shall be determined by Administrative Agent at the close of business two Business Days before a
Payment Date, and shall be effective to but not including the next applicable Payment Date. The Prime Rate is not intended to be the lowest rate of interest charged by JPMorgan or the Lenders in connection with extensions of credit to debtors.



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          “Project” means the constructed, under construction, or to be constructed, as the case may be, fuel ethanol plant on the Land which will be
capable of producing, upon Completion, not less than 40 million gallons of ethanol per year, approximately 128,000 tons of distillers grains with solubles on a dry matter basis, and other value-added products in connection with such process, and
includes the Improvements and any and all other improvements on the Land from time to time. 


          “Projections” means Borrower’s forecasted (a) balance sheets, (b) profit and loss statements, and (c) cash flow statements, all prepared on a
combined basis and otherwise consistent with the historical financial statements of Borrower, together with appropriate supporting details and a statement of underlying assumptions, all of which are believed by Borrower to be reasonable and fair in
light of the current condition and past performance of Borrower and to reflect a reasonable estimate of the projected balance sheets, results of operations, cash flows and other information presented therein for five years following the Closing
Date. 


          “Property Contracts” means any Contract (as such term is defined in the Mortgage) related to or which affects all or any portion of the
operation or use of any portion of the Collateral, including all management agreements, service contracts, and utility, maintenance, and security contracts and other contracts and agreements identified in the Prospectus, but excluding Operating
Contracts. 


          “Prospectus” means the Borrower’s Prospectus dated July 26, 2005. 


          “Real Property Collateral” means all Collateral that constitutes real property.


          “Register” is defined in Section 11.20(c).     


          “Registered Loans” is defined in Section 11.20(c).     


          “Related Lender Assignment” means an assignment of all or any portion of a Loan made by a Lender to an Affiliate of such Lender or an
Approved Fund of such Lender. 


          “Related Party Register” is defined in Section 11.20(c).     


          “Required Lenders” means those Lenders holding at least 51% of the aggregate outstanding principal amount of the Loan or, if no Advances are
then outstanding, Lenders having at least 51% of the total Commitments. 


          “Restricted Payment” means (a) any dividend or distribution (whether in cash, securities or other property) with respect to any Stock in
Borrower, or any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any such Stock in Borrower or
any option, warrant or other right to acquire Stock in Borrower; or (b) any payment or distribution made in respect of any subordinated Indebtedness of Borrower or its Subsidiaries by Borrower or its Subsidiaries in violation of any subordination or
other agreement made in favor of Administrative Agent and Lenders. 


15












“Rex” means Rex Radio and Television, Inc., an Ohio corporation.


          “Rex Subordinated Debt” means the Indebtedness in an aggregate original principal amount of up to $5,050,000 evidenced by the Rex
Subordinated Debt Documents. 


          “Rex Subordinated Debt Documents” means, collectively (a) that certain Convertible Secured Promissory Note Purchase Agreement dated effective
as of November 22, 2005 by and between Borrower and Rex, as amended by that certain Amendment to Convertible Secured Promissory Note Purchase Agreement dated effective as of May 31, 2006 by and between Borrower and Rex, (b) that certain Convertible
Secured Promissory Note in an original principal amount of up to $5,050,000 to be issued by Borrower and payable to the order of Rex pursuant to the Convertible Secured Promissory Note Purchase Agreement described in clause (a) above, (c) that certain Guaranty dated as of May 31, 2006 executed by Rex Stores Corporation, a Delaware corporation, in favor of Borrower, (d) that certain Right of First Offer and Co-Sale
Agreement dated effective as of November 22, 2005 by and among Rex, RIO, Lindy Walker and James P. Halbert, all as assigned by Rex to FEL under that certain Assignment and Acknowledgement dated as of July 19, 2006 pursuant to which Rex assigned all
its rights to FEL under the documents described in clauses (a), (b) and (d) above, and (e) any subordinate security agreements and mortgages or deeds of trust securing payment thereof to the extent the terms and provisions thereof are reasonably satisfactory to Administrative Agent. 


          “RIO” means RIO Technical Services, Inc., a Nevada corporation.


          “Secured Parties”  means, collectively, Administrative Agent, Lenders and all Eligible Swap Counterparties. 


          “Security Agreement” means the one or more Security Agreements now or hereafter in effect executed by Borrower or a Credit Party in favor of
Administrative Agent for the benefit of Secured Parties to secure all or any portion of the Obligations. 


          “Special Accounts” means collectively or individually, one or more deposit accounts (other than the Construction Account) that Borrower
establishes with Administrative Agent pursuant to the terms of the Loan Documents, each of which shall be used solely for the purpose or purposes stated in the Loan Documents for the respective account. 


          “Stock” means all certificated and uncertificated shares, options, warrants, membership interests, general or limited partnership interests,
participation or other equivalents (regardless of how designated) of or in a corporation, partnership, limited liability company or equivalent entity whether voting or nonvoting, including common stock, preferred stock, or any other “equity
security” (as such term is defined in Rule 3a11-1 of the General Rules and Regulations promulgated by the Securities and Exchange Commission under the Securities Exchange Act of 1934). 


          “Subordination Agreement” means that certain Subordination Agreement dated as of the Closing Date, by and among Administrative Agent,
Borrower and FEL, in form and substance satisfactory to Administrative Agent. 


16












          “Subsidiary” means as to any particular parent entity, any corporation, partnership, limited liability company or other entity (whether now
existing or hereafter organized or acquired) in which more than 50% of the outstanding equity ownership interests having voting rights as of any applicable date of determination, shall be owned directly, or indirectly through one or more
Subsidiaries, by such parent entity. Unless otherwise expressly stated herein, each reference to the term “Subsidiary” shall mean a Subsidiary of the Borrower. 


          “Swap Contract” means any “swap agreement,” as defined in Section 101 of the Bankruptcy Code, that is intended to provide protection against
fluctuations in interest or currency exchange rates. 


          “Tangible Collateral” means all Real Property Collateral, except the Land, and all Personal Property Collateral that is Equipment, Fixtures,
Inventory, and any other Goods (as those terms are defined in Article 9 of the UCC), vehicles and other titled personal property, and any other similar, tangible personal property. 


          “Taxes” means any present or future taxes, levies, duties, imposts, fees, deductions, withholdings, assessments or other charges imposed by
any Governmental Agency, including any interest, additions to tax or penalties with respect thereto. 


          “Term Loan” means the Loan on and after the Conversion Date.


          “Title Company” means the Title Company (and its issuing agent, if applicable) issuing the Title Policy, which shall be acceptable to
Administrative Agent in its sole and absolute discretion. 


          “Title Policy” means an American Land Title Association Loan Policy of Title Insurance (or if such title insurance policy cannot be obtained
in the state in which the Property (as defined in the Mortgage) is located, then such other title insurance policy which is as similar thereto as can be obtained) with extended coverage and such other endorsements thereto as are typically required
with respect to properties similar to the Property (as defined in the Mortgage), in the amount of the Note Amount, insuring Administrative Agent, its successors and assigns, of the first Lien status of the Mortgage, subject only to such Liens,
easements, restrictions, security interests and other title matters as are approved by Administrative Agent in writing, and with deletions or modifications thereto as are standard and customary with respect to properties similar to the Property (as
defined in the Mortgage), and issued by the Title Company. 


          “UCC” means the Uniform Commercial Code of Illinois as in effect in Illinois from time to time. 


          “USA Patriot Act” means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act
of 2001 (Title III of Pub. L. 107-56, signed into law October 26, 2001). 


          “Withdrawal Liability” means liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan,
as such terms are defined in Part I of Subtitle E of Title IV of ERISA. 


17












          Section 1.2       Other Terms.      Except as otherwise defined herein, all terms used in this Loan Agreement which are
defined in the UCC shall have the meanings set forth in the UCC and accounting terms not defined herein shall have the meaning ascribed to them in GAAP. 


          Section 1.3       UCC Filing.      Borrower hereby authorizes Administrative Agent to file a record or records (as
defined or otherwise specified under the UCC), including financing statements, in all jurisdictions and with all filing offices as Administrative Agent may determine, in its sole discretion, are necessary or advisable to perfect the security
interests granted to Administrative Agent for the benefit of Secured Parties or contemplated to be granted to Administrative Agent for the benefit of Secured Parties herein or in any other Loan Document. Such financing statements may describe the
Collateral in the same manner as described herein or may contain an indication or description of collateral that describes such property in any other manner as Administrative Agent may determine, in its sole discretion, is necessary, advisable or
prudent to ensure the perfection of the security interest in such Collateral. 


          Section 1.4       Computations of Time; Other Definitional Provisions.       In this Loan Agreement and the other Loan
Documents in the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including” and the words “to” and “until” mean “to but excluding.” In this Loan Agreement, the words “include,”
“includes,” and “including” shall be deemed to be followed by the phrase “without limitation”, unless the content clearly indicates otherwise.  All terms used herein, including those defined in Section
1.1, may be used in the plural or singular and shall be deemed to refer to the object of such term whether such object is singular or plural in nature, as the context may suggest or require. References in this Loan
Agreement to any contract or agreement shall be a reference to such contract or agreement as the same may be amended, restated, supplemented, renewed, extended, or otherwise modified from time to time in accordance with its terms. 


ARTICLE II. THE LOAN


          Section 2.1       Agreement to Lend.      Each Lender hereby agrees, severally and not jointly, to lend to Borrower its
percentage share of the Advances in an aggregate amount not to exceed its Commitment, and Borrower hereby agrees to borrow such sum from Lenders, all upon and subject to the terms and provisions of this Loan Agreement, the Note, and the other Loan
Documents. After giving effect to any requested Advance, the total Advances made under the Loan shall not exceed the Note Amount.  The Loan is not a revolving credit; therefore, no principal amount repaid by Borrower may be reborrowed by Borrower.
Each Lender’s Commitment shall terminate automatically upon the Commitment Expiration Date or if the Loan is prepaid in full. Advances shall only be for Loan Purposes set forth in the Budget, and each Lender’s Commitment shall only be effective
during the Construction Phase. To the extent that Loan proceeds are insufficient to pay all costs required for the acquisition, development, construction, and completion of the Improvements and Collateral, and all other costs associated with the
Collateral, the Project, or the Loan Documents, Borrower shall pay such excess costs with funds derived from sources other than the Loan. 


          Section 2.2       Note.      The Loan will be evidenced by that certain Master Promissory Note executed of even date
herewith by Borrower, payable to the order of Administrative Agent for the benefit of Lenders, in the stated principal amount of the Note Amount, and issued pursuant to


18












this Loan Agreement (as the same has been or may be amended, restated, extended, increased or modified from time to time, the “Note”). The Note is hereby incorporated as a
part hereof as if fully set forth herein. Interest on the principal of the Loan shall be limited to and calculated with respect to Loan proceeds actually disbursed pursuant to the terms of this Loan Agreement and which are outstanding from time to
time. Outstanding principal and accrued but unpaid interest under the Note shall be due and payable as provided in this Loan Agreement. 

	          	Section 2.3    Repayment
            Schedule.     

                 (a)       Construction
            Loan.      At all times prior to the Conversion
            Date, if any, and on the Conversion Date, if any, all accrued but
            unpaid interest at the Interest Rate on the outstanding principal
            balance of the Note shall be due and payable in arrears in monthly
            installments of interest only on each Payment Date through the earlier
            of (i) the Maturity Date or (ii) the Conversion Date, if any. 

                 (b)       Term
            Loan.      If the Loan Conversion occurs,
            then during the term of the Term Loan, beginning on the first Payment
            Date following the Conversion Date, and continuing on each Payment
            Date thereafter through the Maturity Date, Borrower shall pay to
            Administrative Agent, for the account of Lenders, the outstanding
            principal amount of the Note, in 59 equal monthly principal installments
            (such principal installments shall be calculated based upon a 120
            months amortization schedule), and one final installment equal to
            the then unpaid principal balance thereof (due on the Maturity Date),
            in each case together with all accrued but unpaid interest at the
            Interest Rate on the outstanding principal balance of the Note on
            each such Payment Date. Borrower shall pay to Administrative Agent,
            for the account of each Lender, all outstanding Obligations on the
            Maturity Date. 

                 (c)       Excess
            Cash Flow.      If the Loan Conversion occurs,
            then during the term of the Term Loan, beginning on the date that
            is 120 days after the end of Borrower’s fiscal year following the
            Conversion Date and continuing on each April 30 thereafter,
            Borrower shall make annual payments to Administrative Agent (unless
            otherwise waived by Administrative Agent in its sole discretion)
            equal to 70% of Excess Cash Flow as of December 31 of the immediately
            preceding fiscal year. All payments of Excess Cash Flow shall be
            applied to reduce the outstanding principal balance of the Loan. 

       Section 2.4   
      Interest.     

                 (a)       Interest
            Payments.      Beginning on the Closing
            Date and continuing until the principal amount of the Loan is paid
            in full, Borrower shall pay interest, in arrears, on the unpaid principal
            amount of the Loan at a floating rate of interest (computed on the
            basis of a 360-day year and for the actual number of days elapsed)
            equal to (i) the Interest Rate at all times when the provisions of Section
            2.6(b) hereof do not apply and (ii)
            the Default Rate when and as provided in Section
            2.6(b) hereof. Payments of accrued
            but unpaid interest shall be due and payable on each Payment Date,
    on demand in the case of the Default Rate, and on the Maturity Date. 
    



  19










	          	
          (b)       Illegality.      If any Lender determines that any Legal Requirement has made it unlawful, or that any
Governmental Authority has asserted that it is unlawful, for any Lender or its applicable lending office to make, maintain or fund Advances bearing interest based on the LIBO Rate, or to determine or charge interest rates based upon the LIBO Rate,
or any Governmental Authority has imposed material restrictions on the authority of such Lender to purchase or sell, or to take deposits of, Dollars in the London interbank market, then, on notice thereof by such Lender to Borrower through
Administrative Agent, any obligation of such Lender to make or continue Advances bearing interest based on the LIBO Rate shall be suspended until such Lender notifies Administrative Agent and Borrower that the circumstances giving rise to such
determination no longer exist. Upon receipt of such notice, Borrower shall, upon demand from such Lender (with a copy to Administrative Agent), convert all Advances bearing interest based on the LIBO Rate of such Lender to Advances bearing interest
based on the Prime Rate (for avoidance of doubt, such Advances shall bear interest at a rate per annum equal to the Prime Rate plus 400 basis points), either on the last day of the Interest Period therefor, if such Lender may lawfully continue to
maintain such Advances bearing interest based on the LIBO Rate to such day, or immediately, if such Lender may not lawfully continue to maintain such Advances bearing interest based on the LIBO Rate. Upon any such conversion, Borrower shall also pay
all amounts due under clause (e) below in accordance with the terms thereof due to such conversion. 


          (c)       Inability to Determine Rates.       If Administrative Agent determines in connection with any request for an
Advance bearing interest based on the LIBO Rate or a continuation thereof that (a) Dollar deposits are not being offered to banks in the London interbank eurodollar market for the applicable amount and Interest Period of such Advance bearing
interest based on the LIBO Rate, (b) adequate and reasonable means do not exist for determining the LIBO Rate for any requested Interest Period with respect to a proposed Advance bearing interest based on the LIBO Rate, or (c) the LIBO Rate for any
requested Interest Period with respect to a proposed Advance bearing interest based on the LIBO Rate does not adequately and fairly reflect the cost to such Lenders of funding or maintaining such Advance.  Administrative Agent will promptly so
notify Borrower and each Lender. Thereafter, the obligation of Lenders to make or maintain Advances bearing interest based on the LIBO Rate shall be suspended until Administrative Agent revokes such notice. Upon receipt of such notice, Borrower may
revoke any pending request for an Advance or continuation of Advances bearing interest based on the LIBO Rate or, failing that, will be deemed to have converted such request into a request for an Advance bearing interest based on the Prime Rate in
the amount specified therein. 


	 	 
	 	
          (d)       Increased Costs.      


	 	 
	 	           	          (i)       Increased Costs Generally.      If any change in Legal Requirements shall: 


	 	 	 
	 	 	          	
          (A)          impose, modify or deem applicable any reserve,
special
deposit, compulsory loan, insurance charge or similar requirement against assets of, deposits with or for the account of, or credit
extended or


	 	 



20











	          	          	          	
participated in by, any Lender (except any reserve requirement reflected in the LIBO Rate); 


          (B)               subject any Lender to any tax of any kind whatsoever with respect to this Loan Agreement or any Advance bearing interest based on the LIBO
Rate made by it, or change the basis of taxation of payments to such Lender in respect thereof (except for Indemnified Taxes or Other Taxes covered by Section 2.7 and the imposition of, or
any change in the rate of, any Excluded Tax payable by such Lender); or 


          (C)        impose on any Lender or the London interbank market any other condition, cost or expense affecting this Loan Agreement or Advances bearing
interest based on the LIBO Rate made by such Lender; 


	 	 	 	 
	 	 	and the result of any of the foregoing
          shall be to increase the cost to such Lender of making or maintaining
          any Advance bearing interest based on the LIBO Rate (or of maintaining
          its obligation to make any such Advance), or to reduce the amount of
          any sum received or receivable by such Lender hereunder (whether of
          principal, interest or any other amount) then, upon request of such
          Lender, Borrower will pay to such Lender such additional amount or
          amounts as will compensate such Lender for such additional costs incurred
          or reduction suffered. 

               (ii)       Capital
            Requirements.      If any Lender determines
            that any change in Legal Requirements affecting such Lender or any
            lending office of such Lender or such Lender’s holding company, if
            any, regarding capital requirements has or would have the effect
            of reducing the rate of return on such Lender’s capital or on the
            capital of such Lender’s holding company, if any, as a consequence
            of this Loan Agreement, the Commitment of such Lender or the Advances
            made by such Lender to a level below that which such Lender or such
            Lender’s holding company could have achieved but for such change
            in Legal Requirements (taking into consideration such Lender’s policies
            and the policies of such Lender’s holding company with respect to
            capital adequacy), then from time to time Borrower will pay to such
            Lender such additional amount or amounts as will compensate such
            Lender or such Lender’s holding company for any such reduction suffered. 

               (iii)       Certificates
            for Reimbursement.      A certificate of
            a Lender setting forth the amount or amounts necessary to compensate
            such Lender or its holding company, as the case may be, as specified
            in clauses (i) or (ii) above
            and delivered to Borrower shall be conclusive absent manifest error.
            Borrower shall pay such Lender the amount shown as due on any such
            certificate within 10 days after receipt thereof. 

                       (iv)       Delay
            in Requests.      Failure or delay on the
            part of any Lender to demand compensation pursuant to the foregoing
            provisions of this Section shall not constitute a waiver of such
            Lender’s right to demand such compensation, provided that Borrower
            shall not be required to compensate a Lender pursuant to the foregoing
    provisions of this Section for any increased costs incurred or
      
	 	 	 	 



  21










	          	          	 reductions suffered more than nine months prior to
        the date that such Lender notifies Borrower of the change in Legal Requirements
        giving rise to such increased costs or reductions and of such Lender’s
        intention to claim compensation therefor (except that, if the change
        in Legal Requirements giving rise to such increased costs or reductions
        is retroactive, then the nine-month period referred to above shall be
    extended to include the period of retroactive effect thereof). 
	 	 	          	 
	 	          (e)       Compensation
            for Losses.      Upon demand of any Lender
            (with a copy to Administrative Agent) from time to time, Borrower
            shall promptly compensate such Lender for and hold such Lender harmless
    from any loss, cost or expense incurred by it as a result of: 

	 	 	 	 
	 	 	          (i)        any
          continuation, conversion, payment or prepayment of any Advance other
          than an Advance bearing interest based on the Prime Rate on a day other
          than the last day of the Interest Period for such Advance (whether
          voluntary, mandatory, automatic, by reason of acceleration, or otherwise);
          or 

                 (ii)        any
          failure by Borrower (for a reason other than the failure of such Lender
          to make an Advance) to prepay, borrow, continue or convert any Loan
          other than an Advance bearing interest based on the Prime Rate on the
    date or in the amount notified by Borrower;  
      
	 	 	 	 
	 	 including any loss of anticipated profits and any
          loss or expense arising from the liquidation or reemployment of funds
          obtained by it to maintain such Advance or from fees payable to terminate
          the deposits from which such funds were obtained. Borrower shall also
          pay any customary administrative fees charged by such Lender in connection
          with the foregoing. For purposes of calculating amounts payable by Borrower
          to Lenders under this Section 2.4,
          each Lender shall be deemed to have funded each Advance bearing interest
          based on the LIBO Rate made by it at the LIBO Rate used in determining
          the LIBO Rate for such Advance by a matching deposit or other borrowing
          in the London interbank eurodollar market for a comparable amount and
          for a comparable period, whether or not such Advance bearing interest
      based on the LIBO Rate was in fact so funded. 
        

                (f)       Computations.     
            All computations of interest, fees and any other amounts shall be
            made on the basis of a  360-day year and actual days elapsed. Each
            determination by Administrative Agent of an interest rate or fee
            hereunder shall be conclusive and binding for all purposes, absent
            manifest error. 

	 	 	 	 
	           
      Section
        2.5     Loan
        Conversion.      The
        Loan Conversion of the Construction Loan into the Term Loan shall be
        effectuated upon (a) either (i) the written request (“Loan
        Conversion Request”) by Borrower to Administrative
        Agent and the Independent Consultant not less than 30 days prior to the
        requested Conversion Date, or (ii) upon election by the Administrative
        Agent with five Business Days notice to Borrower, and (b) achievement
        by Borrower to the reasonable satisfaction of Administrative Agent of
        each of the following: (i) fulfillment of the conditions in Section
        3.5; (ii) the Title Policy shall have been
    endorsed to remove any exception for



22











mechanics’ or materialmen’s Liens or pending disbursements, with no additional title change or exception objectionable to Administrative Agent, and Borrower shall have obtained such other endorsements as may be reasonably required
by Administrative Agent; (iii) no Default or Event of Default shall occur or exist at any time on or between the Conversion Notice and the Conversion Date; (iv) no Material Adverse Effect shall have occurred; (v) Borrower shall have paid all
reasonable expenses incurred by Administrative Agent in connection with Administrative Agent’s review and approval of the Loan Conversion; (vi) Administrative Agent shall have received certification by the Independent Consultant that Completion has
occurred; (vii) the earlier of (A) verification by Administrative Agent that the Project will operate at least at its nameplate rating of 40 million gallons of ethanol per year and (B) 90 days after Completion has occurred; and (viii) Borrower shall
have delivered to Administrative Agent and the Independent Consultant evidence of payment of, and executed releases and lien waivers from, all Contractors and any other Persons with respect to the Collateral.  If Administrative Agent determines that
the conditions to the Loan Conversion have been satisfied, Administrative Agent shall give Borrower written notice (“Conversion Notice”) that the Construction Loan will convert to the Term
Loan, in which case the Loan Conversion shall be effective on the first day of the month following the date Administrative Agent gives a Conversion Notice; provided that a Conversion Notice shall not constitute or be deemed a waiver of any
obligations, covenants, representations, or warranties of Borrower or any other party under any of the Loan Documents, nor an acknowledgment, confirmation or agreement (i) that all conditions for the Loan Conversion were fully satisfied or (ii) as
to the lack of existence of a Default, Event of Default, or Material Adverse Effect.  Until Administrative Agent gives a Conversion Notice upon satisfaction of all conditions thereto, the conditions for a Loan Conversion shall be deemed not to have
been satisfied.  Notwithstanding anything in the Loan Documents to the contrary, if the Loan Conversion has not occurred on or before the Maturity Date for the Construction Loan, Borrower shall not thereafter be eligible for such Loan Conversion and
all such rights shall automatically terminate, without any notice or other action by any party. 

	          	Section 2.6     Late
            Charge; Default Interest; Usury Savings Provision.      

                 (a)        If
          any payment required under this Loan Agreement or the Note is not paid
          within five days after such payment is due, then Borrower shall pay,
          at Administrative Agent’s request, a late charge (the “Late
          Charge”) equal to 5.00% of the amount
          of such payment to compensate Administrative Agent for administrative
          expenses and other costs of delinquent payments. Each such Late Charge
          shall be immediately due and payable and shall be in addition to all
          other rights and remedies available to Administrative Agent and Lenders. 

                 (b)        If
          any amount which is due and payable by Borrower to Administrative Agent
          pursuant to any of the Loan Documents is not paid when due, including
          at stated maturity, upon acceleration or otherwise, or if a Default
          has occurred and is continuing then, at the election of Administrative
          Agent (without giving notice thereof to Borrower), the Loan shall bear
          interest, after as well as before judgment, at a rate per annum equal
          to the Default Rate, unless otherwise expressly provided in any of
          the Loan Documents; provided however, if Administrative Agent has been
          paid a Late Charge for a particular month as provided in clause
          (a) above in connection with such late
          payment, the Default Rate shall not apply with respect to the amount
          of such late payment during such month

    
	 	 



  23










	          	for which a Late Charge has been paid.
          Interest at the Default Rate shall be immediately due and payable ON
          DEMAND as it accrues. Borrower acknowledges that failure to timely
          make payments due under this Loan Agreement may affect any amortization
          schedule contained in the Loan Documents. 

                 (c)        In
          no event shall any interest rate provided for in this Loan Agreement,
          the Note or any other Loan Document exceed the maximum rate permitted
          by the then Legal Requirements. It is the intention of the parties
          hereto to strictly comply with applicable usury laws; accordingly,
          it is agreed that, notwithstanding any provision to the contrary in
          this Loan Agreement, in the Note, or in the other Loan Documents, in
          no event shall this Loan Agreement, the Note, or the other Loan Documents
          be construed to charge, contract for or require the payment or permit
          the collection of interest in excess of the maximum amount permitted
          by Legal Requirements. If any interest is contracted for, charged or
          received pursuant to this Loan Agreement, the Note, the other Loan
          Documents, or any actions taken in connection therewith, or in the
          event that any portion of the principal balance shall be prepaid, so
          that under any of such circumstances the amount of interest contracted
          for, charged or received on the principal balance shall exceed the
          maximum amount of interest permitted by Legal Requirements, then in
          such event (i) the provisions of this Section
          2.6(c) shall govern and control, (ii)
          neither Borrower nor any other Person now or hereafter liable for the
          payment thereof shall be obligated to pay the amount of such interest
          to the extent that it is in excess of the maximum amount of interest
          permitted by Legal Requirements, (iii) any such excess which may have
          been collected shall be either applied as a credit against the then
          unpaid principal balance or refunded to Borrower, at the option of
          Administrative Agent, and (iv) the effective rate of interest shall
          be automatically reduced to the maximum lawful contract rate allowed
          under Legal Requirements as now or hereafter construed by the courts
          having jurisdiction thereof. It is further agreed that without limitation
          of the foregoing, all calculations of the rate of interest contracted
          for, charged or received under this Loan Agreement, the Note and the
          other Loan Documents, which are made for the purpose of determining
          whether such rate exceeds the maximum lawful contract rate, shall be
          made, to the extent permitted by Legal Requirements, by amortizing,
          prorating, allocating and spreading in parts during the period of the
          full stated term of the indebtedness, all interest at any time contracted
          for, charged or received from Borrower or otherwise by Administrative
          Agent and Lenders in connection with such indebtedness; provided, however,
          that if any applicable state law is amended or any law of the United
          States of America preempts any applicable state law, so that it becomes
          lawful for Administrative Agent or any Lender to receive a greater
          interest rate than is presently allowed, Borrower agrees that, on the
          effective date of such amendment or preemption as the case may be,
          the maximum lawful interest rate hereunder shall be increased to the
          maximum interest rate allowed by the higher of the amended state law
          or the law of the United States of America. 

       Section 2.7     Payments.     

                 (a)        Payments
          of principal and interest on the Note, and payments of all other amounts
          payable by Borrower to Administrative Agent or a Lender pursuant to
          any of the Loan Documents, shall be made by Automated Clearing House
          debit of immediately available funds from the account designated by
    Borrower in the Automated Clearing
    



  24










	          	House debit authorization executed
          by Borrower in connection with this Loan Agreement, or by wire transfer
          of immediately available funds to LaSalle Bank, 135 South LaSalle Street,
          Chicago, Illinois 60603, ABA 071000505, Account name: Merrill Lynch
          Equipment Finance Group, Account # 5800393166,
          Attention: Portfolio Management, reference: Levelland/Hockley County
          Ethanol, LLC, or such other address as Administrative Agent shall have
          designated to Borrower in writing, and shall be effective upon receipt.
          All payments by Borrower to Administrative Agent or a Lender under
          the Loan Documents shall be paid to Administrative Agent at such address,
          not later than 2:00 p.m. Central Time on the due date thereof, in lawful
          money of the United States. All payments under the Loan Documents shall
          be made (i) without setoff, counterclaim or condition and (ii) free
          and clear of, and without deduction for or on account of, any Indemnified
          Taxes; provided that if Borrower is required by Legal Requirements
          to make any deduction or withholding on account of any Indemnified
          Taxes from any payment due under the Loan Documents, then: (A) Borrower
          shall notify Administrative Agent promptly as soon as it becomes aware
          of such requirement and shall remit promptly the amount of such Taxes
          to the appropriate taxation authority, and in any event prior to the
          date on which penalties attach thereto; and (B) such payment shall
          be increased by such amount as may be necessary to ensure that Administrative
          Agent and Lenders receive a net amount, after deduction of such Indemnified
          Taxes, equal to the full amount which Administrative Agent and Lenders
          would have received had such payment not been subject to such deduction
          or withholding of Indemnified Taxes. In addition, Borrower agrees to
          pay to the relevant Governmental Agency in accordance with Legal Requirements
          any present or future stamp or documentary taxes or any other excise
          or property taxes, charges or similar levies that arise from any payment
          made hereunder or from the execution, delivery or registration of,
          or otherwise with respect to, this Loan Agreement, the Note, or the
          recording or filing of any Loan Document but excluding the Excluded
          Taxes (“Other Taxes”).
          Borrower shall deliver to Administrative Agent an official receipt
          (or, if an official receipt is not available, such other evidence of
          payment as shall be reasonably satisfactory to Administrative Agent
          or Lenders) in respect of any Other Taxes payable hereunder promptly
          after payment of such Other Taxes. Borrower shall indemnify Administrative
          Agent and Lenders in respect of Indemnified Taxes or Other Taxes paid
          by Administrative Agent and Lenders whether or not such Indemnified
          Taxes or Other Taxes were correctly or legally asserted and shall supply
          copies of applicable tax receipts or other evidence of payment reasonably
          satisfactory to Administrative Agent. Such indemnification shall be
          paid within ten Business Days from the date on which Administrative
          Agent or a Lender makes written demand therefor specifying in reasonable
          detail the nature and amount of such Indemnified Taxes or Other Taxes. 

                 (b)        If
          any payment to be made by Borrower shall become due on a day which
          is not a Business Day, such payment shall be made on the next succeeding
          Business Day. 

                 (c)        Each
          payment to be made on a Payment Date, all prepayments, and all other
          payments shall be applied to the Obligations in such order and manner
          as Administrative Agent may, in its reasonable discretion, elect; provided
          however, if no election is made by Administrative Agent, then such
          payment shall be applied by Administrative Agent in the following order:
          first, to payment of that portion of the
    



  25










	          	Obligations constituting accrued and
          unpaid interest on the Loan; second, to payment of that portion of
          the Obligations constituting outstanding principal of the Loan; third,
          to payment of that portion of the Obligations constituting fees, indemnities
          and other amounts (other than principal and interest) payable to Administrative
          Agent or a Lender; and fourth, to payment of any remaining Obligations.
          Prepayments of principal will be applied to the Obligations in inverse
          order of maturity. 

                 (d)        Borrower
          shall indemnify Administrative Agent and Lenders on demand against
          all costs, expenses, liabilities and losses (including funding losses)
          incurred as a result of or in connection with (i) any postponement
          of the Closing Date occurring because of one or more of the conditions
          precedent set forth in Article III shall
          not have been satisfied or waived as a result of Borrower’s failure
          to satisfy such condition and/or (ii) any payment of principal of the
          Loan made on a Business Day which is not a Payment Date. The above
          indemnities are separate and independent obligations of Borrower and
          apply irrespective of any indulgence granted by Administrative Agent
          or any Lender. 

                 (e)        If
          Administrative Agent or a Lender receives a refund of any Indemnified
          Taxes or Other Taxes as to which it has been indemnified by Borrower
          or with respect to which Borrower has paid additional amounts pursuant
          to this Section 2.7,
          it shall pay over such refund to Borrower (but only to the extent of
          indemnity payments made, or additional amounts paid, by Borrower under
          this Section 2.7 with
          respect to the Indemnified Taxes or Other Taxes giving rise to such
          refund), net of all out-of-pocket expenses of Administrative Agent
          or such Lender and without interest (other than any interest paid by
          the relevant Governmental Agency with respect to such refund); provided,
          that Borrower, upon the request of Administrative Agent or such Lender,
          agrees to repay without interest the amount paid over to Borrower to
          Administrative Agent or such Lender in the event Administrative Agent
          or such Lender is required to repay such refund to such Governmental
          Agency. This Section shall not be construed to require Administrative
          Agent or any Lender to make available its tax returns (or any other
          information relating to its taxes which it deems confidential) to Borrower
          or any other Person. 
    
	 	 
	           Section
        2.8     Advance
        Procedures. All Advances are subject to the following
    conditions and requirements: 
	 	 
	 	          
      (a)       Procedures.     
        Advances shall be made only once each Draw Period during the Construction
        Phase. Each Advance shall be in an amount of not less than the Minimum
        Advance, and Borrower shall not request an Advance for less than the
        Minimum Advance. Advances will be made only for actual costs incurred
        in accordance with the Budget and other provisions hereof. For each Advance,
        Borrower must submit to Administrative Agent and the Independent Consultant
        a written Draw Request. Each Draw Request must include the information
        and documentation required in this Agreement, along with the lien waivers
        and releases, information, certifications, approvals, instruments, and
        documents required as a condition to the requested Advance (except the
        down date endorsement to the Title Insurance must be received by Administrative
    Agent and the Independent Consultant prior to the date that the requested



26










	          	Advance is actually made). In each
          Draw Request, Borrower must (i) specify the amount of such Draw Request
          that applies to each Allocation; (ii) identify all funds being used
          to pay any portion of the costs reflected in the Draw Request other
          than the funds being requested to be advanced, and identify the sources
          and respective amounts from each source of such other funds; and (iii)
          state the date the Advance is requested, which shall be at least 15
          Business Days after Administrative Agent and the Independent Consultant
          receive the Draw Request. All Draw Requests shall account for the retainage
          and other withholdings required pursuant to Section
          2.8(f).      Except as otherwise provided
          in this Loan Agreement, all Advances will be deposited in the Construction
          Account; provided that if not all of the conditions to an Advance have
          been met or satisfied (including if a Default or an Event of Default
          exists), but Administrative Agent and each Lender elects to make such
          Advance, then Administrative Agent and such Lender shall have the unconditional
          right, exercisable in Administrative Agent’s and such Lender’s sole
          discretion, to make such Advance, in whole or in part, upon such terms
          and conditions as Administrative Agent may require, to one or more
          of (A) directly to Borrower by depositing same in the Construction
          Account, (B) directly to the Contractor, Design Professional, subcontractors,
          laborers, or materials suppliers owed, and/or (C) jointly to Borrower
          and any one or more of the Contractor, Design Professional, subcontractors,
          laborers, or materials suppliers owed. Borrower will hold the Advances
          deposited in the Construction Account (until payment to the proper
          payee) as a trust fund for the purpose of paying the respective costs
          contained in the Draw Request, pursuant to which such Advance was made.
          Borrower will apply the same promptly to the payment of the respective
          costs specified in the subject Draw Request and for which the Advance
          is made, and will not use any part thereof for any other purpose. Borrower
          irrevocably authorizes Administrative Agent to make an Advance in an
          amount equal to the accrued and unpaid interest on the Loan notwithstanding
          that (i) such Advance may be less than the Minimum Advance, (ii) Borrower
          has previously requested an Advance during such Draw Period, (iii)
          Borrower has not satisfied the conditions contained in Sections
          3.2, 3.4 and 3.5,
          (iv) Borrower has not provided a completed Draw Request and/or (v)
          a Default has occurred and is continuing. 

                 (b)       Allocations.     
          The purposes for which the Loan proceeds are allocated and the respective
          amounts of such Allocations are set forth in the Budget. All Advances
          requested by Borrower shall conform to the Allocations. Neither Administrative
          Agent nor any Lender shall be obligated to make an Advance from an
          Allocation set forth in the Budget to the extent limited by the provisions
          of this Loan Agreement or the other Loan Documents, including Section
          2.8(d) below. Neither Administrative
          Agent nor any Lender shall be obligated to make an Advance from an
          allocation for a “contingency” as set forth in the Budget; all Loan
          proceeds provided in a “contingency” Allocation in the Budget must
          be reallocated pursuant to Section 2.8(c) hereof
          as a condition to the Advance of such proceeds. 

                 (c)       Reallocations.     
          Borrower shall not be entitled to require that Administrative Agent
          and Lenders reallocate Loan proceeds from one Allocation to any other
          Allocations. Borrower may request Administrative Agent and Lenders
          to make a reallocation of Loan proceeds among one or more Allocations
          (including any “contingency” Allocation) in the Budget; provided, however,
    any such reallocation shall
    



  27










	          	be in Administrative Agent’s sole
          and absolute discretion. To the extent the amount of the Loan proceeds
          actually needed and disbursed for any Allocation is less than the amount
          of the Allocation, and the use of those Loan proceeds are not otherwise
          reallocated as herein provided, then such unused Loan proceeds shall
          not be available for Advances. If any Loan proceeds are reallocated
          at the request of Borrower and in accordance with this Section
          2.8(c), then the Budget shall be deemed
          amended in accordance with such reallocation. If a Default or an Event
          of Default exists, Administrative Agent shall have the right, at its
          option, to disburse Loan proceeds allocated to any of the Allocations
          for such other purposes or in such different proportions as Administrative
          Agent may, in its sole discretion, deem necessary or advisable. 

                 (d)       Limitation
            on Advances.      The aggregate amount of
            all Advances shall not exceed the Note Amount. Without limiting any
            of the other provisions in this Loan Agreement, neither Administrative
            Agent nor any Lender shall be required to approve any Draw Request
            or make an Advance if (i) any cost requested in the Draw Request
            is not set forth in the Budget, (ii) the requested amount from any
            Allocation, when added to all prior Advances and any applicable Borrower’s
            Equity and retention requirements for such Allocation, would exceed
            the lesser of (A) the actual costs incurred by Borrower for such
            Allocation, or (B) the amount allocated in the Budget for such Allocation,
            or (iii) an amount is requested directly from a contingency Allocation.
            Administrative Agent may withhold from an Advance or, on account
            of subsequently discovered evidence, withhold from a later Advance
            or require Borrower to repay to Administrative Agent and Lenders
            the whole or any part of any earlier Advance, to the extent necessary
            to protect Administrative Agent and Lenders from loss on account
            of (1) defective work not remedied or requirements of this Loan Agreement
            not performed, (2) Liens filed or reasonable evidence indicating
            probable filing of Liens, (3) the failure of Borrower to make payments
            to the Contractor or subcontractors for materials or labor, or (4)
            a reasonable doubt by Administrative Agent that the construction
            of the Improvements can be completed for the sum of (x) the balance
            of the Loan then undisbursed, (y) the balance of any undisbursed
            Borrower’s Deposits, and (z) the balance of any other deposits made
            by Borrower into a Special Account with Administrative Agent for
            any of the foregoing purposes. When all such grounds are cured, Borrower
            may request the Advance of any amount so withheld because of the
            foregoing. 

                 (e)       Borrower’s
            Deposit.      If at any time and from time
            to time Administrative Agent shall in its reasonable discretion deem
            that the undisbursed proceeds of the Loan allocated in the Budget
            for Construction Costs, plus the then balance of the Construction
            Account and any Special Account to be applied to Construction Costs,
            are insufficient to meet Construction Costs, plus any other unpaid
            costs contained in the Budget related to construction of the Improvements,
            excluding financing costs, Administrative Agent and Lenders may refuse
            to make any additional Advances to Borrower hereunder until Borrower
            shall have deposited with Administrative Agent in the Construction
            Account or a Special Account, as Administrative Agent may require,
            sufficient additional funds as a Borrower’s Deposit to cover the
            deficiency which Administrative Agent deems to exist. Such Borrower’s
            Deposit will be disbursed by Administrative Agent to Borrower pursuant
            to the terms and conditions hereof as if they constituted a portion
    of the Loan
    



  28










	          	proceeds, prior to any Advance.
          Borrower agrees to establish such Special Account (if applicable) and
          make the Borrower’s Deposit into the Construction Account or Special
          Account, as applicable, within 30 days after written demand by Administrative
          Agent. Unless required by any Governmental Agency requirements, neither
          Administrative Agent nor any Lender shall be required to pay interest
          on Borrower’s Deposit. 

                 (f)       Retainage.     
          An amount equal to 10% of all costs incurred pursuant to a Construction
          Contract for acquisition or construction of any Improvements, excluding
          Construction Contracts for design, and for which an Advance has been
          requested or made, plus the amount of any claims asserted by any laborers
          or materialmen against any portion of the Collateral pursuant to stop
          notices, lien claims or similar demands or notices received by Administrative
          Agent and the Independent Consultant (which have not been bonded against
          or otherwise secured in accordance with the applicable provisions of
          the Mortgage), shall be retained by Administrative Agent. Such retainage
          shall be paid over by Administrative Agent to Borrower, excluding the
          amount of any such unbonded or unsecured lien claims, plus potential
          costs and interest related thereto (which funds will be disbursed only
          as such claims are resolved or bonded around reasonably satisfactorily
          to Administrative Agent in addition to the satisfaction of the following
          conditions), when all of the following have occurred to the satisfaction
          of Administrative Agent: 
    
	 	 
	 	          	          (i)        Administrative
          Agent has received a certificate of completion, in form and substance
          acceptable to Administrative Agent, executed by Borrower, the Contractor
          and the appropriate Design Professional, and approved by the Independent
          Consultant, certifying, among other things, that all requirements for
          Completion have been satisfied, the date of Completion, that direct
          connection has been made to all proposed utility facilities and such
          utilities are available for use at the Project, and that the construction
          of the Project has been completed in a good and workmanlike manner,
          free of defects and damages. 

                 (ii)        Administrative
          Agent and the Independent Consultant shall have received such other
          evidence as Administrative Agent may require that no mechanics’ or
          materialmen’s liens or other encumbrances have been filed and remain
          in effect against the Collateral, and the time periods for the filing
          of any stop notice or lien claim with respect to the construction of
          the Improvements shall have elapsed without the filing or providing
          of any such stop notice or lien claim. The Design Professional, Contractor,
          and all subcontractors and material suppliers who performed or provided
          work or materials related to the Improvements have been paid in full,
          subject to the release of the retainage as provided in this Section
          2.8(f).      

                 (iii)        Each
          applicable Governmental Agency shall have duly inspected and approved
          the Improvements and the right of occupancy of same and issued the
          appropriate permits, licenses and certificates evidencing proper completion
          of the Improvements and the right of occupancy, and Administrative
          Agent and the Independent Consultant shall have received satisfactory
    evidence of the foregoing. 
    


 29










	          	          	           (iv)         All
        conditions to an Advance contained in Section
    3.5 are met or satisfied. 
	 	 	 
	 	 Notwithstanding the previous provisions
          of this Section 2.8(f) to
          the contrary, Administrative Agent hereby agrees to release separately
          the amount of retainage withheld with respect to each subcontractor providing
          services or materials for the construction of the Improvements, but only
          after (A) all other conditions to an Advance are satisfied, (B) the Independent
          Consultant approves the separate release of such amount, and (C) such
          subcontractor and the Contractor execute an affidavit, lien waiver, and
          release in form and substance acceptable to Administrative Agent in Administrative
          Agent’s sole discretion, for the benefit of Administrative Agent and
          Lenders (1) stating that the subcontractor has completed all of its services
          relating to the construction of the Improvements and has been paid in
          full for such services, and (2) providing a waiver and release by the
          subcontractor of any and all mechanic’s and materialmen’s or other Liens
    it may have against the Land, Improvements, and other Collateral. 

	 	 
	 	          (g)       Final
            Advance.      Notwithstanding anything else
            contained in this Loan Agreement to the contrary, if Borrower is
            able to make final payment to all Contractors, Design Professionals,
            and other Persons who supplied labor or materials with respect to
            the construction of the Project and are to be paid in whole or part
            from Loan proceeds, and all of their subcontractors, except with
            respect to any disputed claims related to same, then Borrower shall
            request a final Advance pursuant to Section
            3.5, including any Loan proceeds allocable
            to the disputed claims, and any Loan proceeds allocable to such disputed
            claims pursuant to the Budget shall be disbursed in a Special Account,
            with such terms and conditions as Administrative Agent may require,
            until final resolution of the respective disputed claim. 

                 Section
          2.9       Use
          of Loan Proceeds.      The proceeds of the
          Loan shall be used by Borrower solely for a Loan Purpose, or, with
          the prior written consent of Administrative Agent and Lenders, which
          may be withheld by Administrative Agent and Lenders in their sole discretion,
          for other lawful business purposes of Borrower not prohibited hereby.
          Borrower agrees that under no circumstances will the proceeds of the
          Loan be used: (a) for personal, family or household purposes of any
          Person whatsoever, or (b) to purchase, carry or trade in securities,
          or repay debt incurred to purchase, carry or trade in securities, or
          (c) to pay any amount to Merrill Lynch and Co., Inc. or any of its
          Subsidiaries, other than Merrill Lynch Bank USA, Merrill Lynch Bank & Trust
          Co. or any Subsidiary of either of them (including Administrative Agent
          and Merrill Lynch Credit Corporation). The Collateral forms no part
          of any property claimed by any Person as homestead or otherwise exempt
          from creditors’ rights or forced sale. 

    
	 	 
	 	Section 2.10  Fees.     

                 (a)       Facility
            Fee.      In consideration of the agreement
            by Administrative Agent and Lenders to extend the Loan to Borrower
            in accordance with and subject to the terms hereof, Borrower has
            paid or shall, on or before the Closing Date, pay the Facility Fee
            to Administrative Agent. Borrower acknowledges and agrees that the
            Facility Fee has been fully earned by Administrative Agent, and that
    it will not under any circumstances be refundable. 
    


30










	          	          (b)       Additional
            Fees.      Borrower shall pay to Administrative
            Agent for Administrative Agent’s own account, the administrative
            fee and other fees in the amounts and at the times specified in the
            fee letter dated September 27, 2006, between Borrower and Administrative
            Agent. Such fees shall be fully earned when paid or as otherwise
            provided in such fee letter and shall be nonrefundable for any reason
            whatsoever. 

               (c)       Non-conversion
            Fee.      If the Loan Conversion has not
            occurred on or before the Commitment Expiration Date, Borrower shall
            pay to Administrative Agent for the pro rata account of Lenders a
            fee in an amount equal to 3.0% of the Note Amount; provided however,
            Borrower shall not be required to pay such fee if the Loan Conversion
            fails to occur solely as a result of Administrative Agent’s willful
            failure to give a Conversion Notice without reasonable justification
            after the terms, conditions and requirements of Loan Conversion have
            been met. 

     Section 2.11   Prepayment.     
                 (a)        Borrower
          may not prepay the Loan prior to the second anniversary of the Conversion
          Date. On or after the date that is two years after the Conversion Date,
          Borrower may prepay in full (but not in part) the outstanding principal
          amount of the Loan on any Payment Date after giving at least 30 days
          prior written notice of such prepayment and payment to Administrative
          Agent of accrued and unpaid interest thereon and the Prepayment Premium
          referred to below, if any. Any notice of prepayment hereunder shall
          be irrevocable. All such prepayments shall also include payment of
          that portion of the Obligations constituting obligations owing to any
          Eligible Swap Counterparty in respect of any Swap Contracts permitted
          by the terms of this Loan Agreement. 
                 (b)        Lenders
          shall apply payments received pursuant to this Section
          2.11 in accordance with Section
          2.7(c) above. 

                     (c)        Prepayments
          made under this Section 2.11 (other
          than prepayments made in accordance with Section
          2.3(c)) shall include a “Prepayment
    Premium” as follows: 
      
	 	          	 
	 	 	          (i)        If
          made on or after the second anniversary but prior to the third anniversary
          of the Conversion Date, 3.0% of the aggregate principal amount prepaid; 

                 (ii)        If
          made on or after the third anniversary but prior to the fourth anniversary
          of the Conversion Date, 2.0% of the aggregate principal amount prepaid;
          and 

                 (iii)        If
          made on or after the fourth anniversary of the Conversion Date, 1.0%
          of the aggregate principal amount prepaid. 
    
	 	 	 
	           
      Section
        2.12    Advance
        Not a Waiver or Approval.      Administrative
        Agent or any Lender may make an Advance of all or any portion of a request
        for an Advance (including a Draw Request) notwithstanding the fact that
        one or more conditions to such Advance have not been met or satisfied.
        No Advance of the proceeds of the Loan shall constitute a waiver of any
    of the



31











conditions to Administrative Agent’s or any Lender’s obligation to make such Advance that have not been met or satisfied. In the event Borrower makes an Advance when all conditions have not been met or satisfied, such Advance
shall not preclude Administrative Agent or any Lender from requiring that all such conditions be met and satisfied before another Advance is made.  The making of any Advance or part thereof shall not be deemed an approval or acceptance by
Administrative Agent or any Lender of the work theretofore done. Neither Administrative Agent nor any Lender shall have any obligation to make any Advance or part thereof during the existence of any Default or Event of Default, but shall have the
right and option so to do; provided that if Administrative Agent or any Lender elects to make any such Advance, no such Advance shall be deemed to be either a waiver of any Default or Event of Default nor of the right to demand payment of the
Obligations, or any part thereof, or exercise any other right or remedy that Administrative Agent or such Lender has with respect to such Default or Event of Default. 


          Section 2.13    Borrower’s Equity.       All of Borrower’s Equity shall be expended, and evidence thereof shall be
provided to Administrative Agent prior to disbursement of any Advance. 


          Section 2.14    Sharing of Payments, Etc.       Borrower agrees that, in addition to (and without limitation of) any
right of set-off, bankers’ lien or counterclaim a Lender may otherwise have, each Lender shall be entitled, at its option after an Event of Default has occurred and is continuing to offset balances held by it for the account of Borrower at any of
its offices against any principal of or interest on any portion of the Loan attributable to such Lender hereunder or any other obligation of Borrower hereunder which is not paid (regardless of whether such balances are then due to Borrower), in
which case it shall promptly notify Borrower and Administrative Agent thereof, provided that such Lender’s failure to give such notice shall not affect the validity thereof. If a Lender shall obtain payment of any principal of or interest on any
portion of the Loan attributable to it under this Loan Agreement or other Obligation then due hereunder to such Lender, through the exercise of any right of set-off or lien granted under Section 9.3, bankers’ lien, counterclaim or similar right, or otherwise, it shall promptly purchase from the other Lenders participations in the Loan attributable to it, or the other obligations of Borrower hereunder of, the other Lenders in such
amounts, and make such other adjustments from time to time as shall be equitable to the end that all Lenders shall share the benefit of such payment (net of any expenses which may be incurred by such Lender in obtaining or preserving such benefit)
pro rata in accordance with their respective portions of the Loan. To such end, all Lenders shall make appropriate adjustments among themselves (by the resale of participations sold or otherwise) if such payment is rescinded or must otherwise be
restored. Borrower agrees, to the fullest extent it may effectively do so under applicable Legal Requirements, that any Lender so purchasing a participation in the Loan may exercise all rights of set-off, bankers’ lien, counterclaim or similar
rights with respect to such participation as fully as if such Lender were a direct holder of the Loan or other obligations in the amount of such participation.  Nothing contained herein shall require any Lender to exercise any such right or shall
affect the right of any Lender to exercise, and retain the benefits of exercising, any such right with respect to any other indebtedness or obligations of Borrower to such Lender. 


32











	          	Section 2.15       Status
            of Lenders.     
                 (a)         Any
          Foreign Lender that is entitled to an exemption from or reduction of
          withholding tax under the law of the jurisdiction in which Borrower
          is resident for tax purposes, or any treaty to which such jurisdiction
          is a party, with respect to payments hereunder or under any other Loan
          Document shall deliver to Borrower (with a copy to Administrative Agent),
          at the time or times prescribed by Legal Requirements or reasonably
          requested by Borrower or Administrative Agent, such properly completed
          and executed documentation prescribed by Legal Requirements as will
          permit such payments to be made without withholding or at a reduced
          rate of withholding. In addition, any Lender, if requested by Borrower
          or Administrative Agent, shall deliver such other documentation prescribed
          by Legal Requirements or reasonably requested by Borrower or Administrative
          Agent as will enable Borrower or Administrative Agent to determine
          whether or not such Lender is subject to backup withholding or information
          reporting requirements. 

                       (b)        Without
          limiting the generality of the foregoing clause
          (a), in the event that Borrower is resident
          for tax purposes in the United States, any Foreign Lender shall deliver
          to Borrower and Administrative Agent (in such number of copies as shall
          be requested by the recipient) on or prior to the date on which such
          Foreign Lender becomes a Lender under this Agreement (and from time
          to time thereafter upon the request of Borrower or Administrative Agent,
          but only if such Foreign Lender is legally entitled to do so), whichever
    of the following is applicable: 
      
	 	          	 
	 	 	          (i)        duly
          completed copies of Internal Revenue Service Form W-8BEN claiming eligibility
          for benefits of an income tax treaty to which the United States is
          a party; 

                 (ii)        duly
          completed copies of Internal Revenue Service Form W-8ECI;

                 (iii)        in
          the case of a Foreign Lender claiming the benefits of the exemption
          for portfolio interest under section 881(c) of the Code, (A) a certificate
          to the effect that such Foreign Lender is not (1) a “bank” within the
          meaning of section 881(c)(3)(A) of the Code, (2) a “10 percent shareholder” of
          Borrower within the meaning of section 881(c)(3)(B) of the Code, or
          (3) a “controlled foreign corporation” described in section 871(h)
          or 881(c)(3)(C) of the Code and (B) duly completed copies of Internal
          Revenue Service Form W-8BEN; or 

                 (iv)        any
          other form prescribed by Legal Requirements as a basis for claiming
          exemption from or a reduction in United States Federal withholding
          tax duly completed together with such supplementary documentation as
          may be prescribed by Legal Requirements to permit Borrower to determine
          the withholding or deduction required to be made. 

    



  33











ARTICLE III. CONDITIONS PRECEDENT TO ADVANCES

	          Section
          3.1       Conditions
          of Closing and Initial Advance.      The Closing
          Date and Lenders’ obligation to make the initial Advance under the
          Loan are subject to the prior fulfillment, or waiver by Administrative
    Agent in writing, of each of the following conditions:
      
	          	          	 
	 	          (a)        Administrative
          Agent and Lenders shall have received this Loan Agreement and all of
          the other Loan Documents, duly executed and filed or recorded (or in
          a form suitable for filing and recording for the first Advance) where
          applicable, all of which shall be in form and substance satisfactory
          to Administrative Agent, including (i) the Note, (ii) the Mortgage,
          (iii) the Security Agreement, (iv) Financing Statements, (v) a Contractor
          Consent for each Construction Contract between Borrower and a Contractor
          or Design Professional, (vi) a closing certificate of Borrower, (vii)
          the Subordination Agreement, and (viii) a certification by an authorized
          representative of each Credit Party certifying as to (A) resolutions
          of the governing authority, board of directors, members or managers,
          or general partner, as applicable, of each Credit Party authorizing
          the Loan, the execution, delivery and performance of the Loan Documents,
          and any other action that is then being proposed to be taken, (B) an
          incumbency certificate of each Credit Party who will sign any Loan
          Document, (C) governmental certificates of good standing and existence
          of each Credit Party, where applicable, (D) certified articles of incorporation
          or other certificate of formation document and bylaws, operating agreement
          or regulations, partnership agreement, or other governing documents
          of each Credit Party, and (E) such other matters as may be required
          by Administrative Agent; 
                 (b)        Borrower
          shall have performed, satisfied, and delivered, as applicable, all
          in Administrative Agent’s sole discretion, (i) all items set forth
          in Borrower’s Loan Application, which was approved by Administrative
          Agent, in connection with the Loan, and (ii) all items on the closing
          checklist, as amended, issued by Administrative Agent in connection
          with such Loan Application; 

                     (c)        Administrative
          Agent shall be satisfied with the financial condition of Borrower and
          any other Credit Party;
                 (d)        The
          Facility Fee shall have been paid to Administrative Agent;
                       (e)        Administrative
          Agent shall have received, in form and substance acceptable to Administrative
          Agent, at no cost to Administrative Agent or any Lender, each of the
    following: 
      
	 	 	 
	 	 	          (i)        an
          opinion of Credit Parties’ legal counsel, dated as of the Closing Date,
          and covering such matters as are required by Administrative Agent;

                 (ii)        to
          the extent applicable as of the date of the initial Advance, copies
          of each authorization, license, permit, consent, order or approval
          of, or registration, declaration or filing with, any Governmental Agencies
          or other Person obtained or made by Borrower, any other Credit Party
          or any other Person in connection with the transactions contemplated
          by the Loan Documents and

    


 34










	          	          	which is material to the financial
          condition of Borrower or such other Person or the conduct of its business
          or the transactions contemplated hereby or the Collateral or the Project,
          including building permits and those listed in Schedule
          3.1(e)(ii), which is attached hereto
          and incorporated herein for all purposes and those identified in the
          Prospectus; 

                 (iii)        UCC,
          tax lien and judgment lien record searches, disclosing no notice of
          any Liens filed against any of the Collateral, other than the Permitted
          Exceptions;

                 (iv)        the
          Title Policy (or the Title Company’s unconditional commitment to issue
          the Title Policy upon recordation of the Mortgage), and legible copies
          of all instruments representing exceptions to the state of title to
          the Land; 

                 (v)        a
          Phase I environmental report (jointly addressed to Borrower and Administrative
          Agent or with an appropriate reliance letter addressed to Administrative
          Agent) covering the Land, in form and content and conducted and prepared
          by an environmental consultant acceptable to Administrative Agent,
          and any other environmental reports or tests that Administrative Agent
          may request with respect to the Land, and any improvements thereon,
          all in form and substance acceptable to Administrative Agent (and Borrower
          agrees Administrative Agent may disclose the contents of such environmental
          report to Governmental Agencies, and if requested by Administrative
          Agent, Borrower shall deliver to Administrative Agent the written consent
          to such disclosure from the respective environmental consultant); 

                 (vi)      an
          Appraisal of the Land and Improvements showing the “completed and stabilized” value,
          and/or such other valuations as may be required by Administrative Agent; 

                 (vii)      a
          current pre-construction survey of the Land and any then existing improvements
          thereon as required pursuant to and in conformity with Section
          7.2(a) hereof; 

                 (viii)      a
          full-size, single sheet copy of all recorded subdivision or plat maps
          of the Land approved (to the extent required by Legal Requirements)
          by all Governmental Agencies; 

                 (ix)       a
          copy of each Construction Contract, except that Borrower shall not
          be obligated to provide an original or copy of any Construction Contract
          related to construction (versus design) which is not executed by the
          Contractor directly with Borrower unless such subcontract (when aggregated
          with all contracts with such subcontractor) exceeds $50,000 or
          is requested by Administrative Agent; 

                 (x)        a
    copy of the Plans;
    



  35










	          	          	          (xi)        evidence
          that all applicable zoning ordinances and restrictive covenants affecting
          the Land permit the use for which the Improvements are intended and
          have been or will be complied with in all respects;

                 (xii)        current
          Financial Statements of Borrower as required by Administrative Agent;

                 (xiii)        a
          soils and geological report covering the Land issued by a Design Professional
          approved by Administrative Agent, which report shall be addressed to
          Borrower, Administrative Agent, Lenders, and their respective successors
          and assigns, shall be satisfactory in form and substance to Administrative
          Agent, and shall include an affirmative confirmation that construction
          of all Improvements as proposed is feasible under existing soils conditions
          so long as the recommendations of the soils report are followed and
          confirmation that the Plans adequately incorporate such recommendations; 

                 (xiv)       if
          there are existing improvements on the Land, a property condition report
          prepared by a Design Professional acceptable to Administrative Agent
          and reflecting no facts or conditions that are objectionable to Administrative
          Agent;

                 (xv)        the
          Construction Schedule; 

                 (xvi)        the
          Budget, which must have been approved by Administrative Agent; 

                 (xvii)        evidence
          that all permits, approvals, contracts, rights-of-way, and other matters have been obtained in
          order to provide rail access, spur upgrade construction, rail spur
          and container loading services, and similar upgrades and services for
          operation of the Plant, all satisfactory to Administrative Agent; 

                 (xviii)      evidence
          that all applicable impact fees, use fees, utility fees and deposits,
          connection fees, and other fees and assessments related to the streets,
          rail access, and utility services for, and development and operation
          of, the Project have been paid or are included in the Budget; 

                 (xix)        an
          Automated Clearing House debit authorization duly executed by Borrower; 

                 (xx)        the
          Projections;

                 (xxi)       all
          of Borrower’s marketing agreements and agreements with members satisfactory
          in form and substance to Administrative Agent; 

                 (xxii)        evidence
          that Borrower has received the Borrower’s Equity in an amount not less
    than $29,140,000 in cash; 
    



  36










	 	 	          (xxiii)        fully
          executed copies of the Borrower’s contracts with the West Texas and
          Lubbock Railway Company for spur upgrade construction and with a Person
          approved by Administrative Agent for rail access, a rail spur and container
          loading services and other similar contracts for Borrower’s operation
          of the Project, including those contracts identified in the Prospectus; 

                 (xxiv)       evidence
          that all tax credits, incentives, mandates and the like described in
          the Prospectus are available to Borrower; 

                 (xxv)         evidence
          that Borrower shall have purchased and received clear title in fee
          simple to the Land free and clear of all Liens; 

                 (xxvi)         mortgagee
          title policy re-insurance or co-insurance as required by Administrative
          Agent; 

                 (xxvii)        evidence
          that no Collateral is located in an area identified as having special
          flood hazards or, if any Collateral is located in an area identified
          as having any flood hazards, evidence of flood insurance for such area
          as required by applicable Legal Requirements; 

                 (xxviii)       
          evidence that each Credit Party has paid all of its taxes, assessments
          and other governmental charges which are due and payable; 

                 (xxix)        evidence
          that the Real Property Collateral abuts and has fully adequate direct
          and free access to one or more dedicated streets and thoroughfares
          and to rail lines and has adequate rights of ingress and egress; 

                 (xxx)         evidence
          of the availability of utilities and other necessary services; 

                 (xxxi)        copies
          of all Rex Subordinated Debt Documents and all FEL Subordinated Debt
          Documents; and 

                 (xxxii)        evidence
          that Borrower has paid in full the FEL Subordinated Debt.

     

	          	          	 
	 	           
      (f)        Borrower
        shall have (i) executed all Operating Contracts necessary for the operation
        of the Project, including Operating Contracts of the nature identified
        on Schedule 3.1(f) attached
        hereto and incorporated herein for all purposes, each of which shall
        be in form and substance and with party(s) reasonably acceptable to Administrative
        Agent and (ii) caused to be executed and delivered to Administrative
        Agent a consent and agreement for each such Operating Contract executed
        by the parties thereto to the collateral assignment to Administrative
        Agent of such Operating Contract, and the granting of nondisturbance
        rights in favor of Administrative Agent, opportunity to cure rights in
        favor of Administrative Agent, and such other matters as Administrative
        Agent may require, all in form and substance acceptable to Administrative
    Agent. 



37










	 	           
      (g)        With
        respect to the initial Advance only, either (i) Borrower shall have received
        and used for approved Construction Costs an additional amount equal to $7,285,000
        in Borrower’s Equity and shall have consented to a reduction of the Note
        Amount by such amount or (ii) Administrative Agent shall have received
        an update feasibility study and pro forma financial statements for the
        Project prepared by an independent third party acceptable to Administrative
        Agent that confirm or reflect improved findings and outcomes than those
        in the feasibility study previously provided by Borrower to Administrative
        Agent, all as approved by Administrative Agent’s chief credit and risk
    officer. 

	          	          	 
	           Section
        3.2  Conditions
        of All Advances.      The Closing Date and Lenders’        obligation to make any Advance (including the initial Advance) under
        the Loan are subject to the prior fulfillment, or waiver by Administrative
    Agent in writing, of each of the following conditions: 
	 	 
	 	          (a)        no
          Default or Event of Default shall have occurred and be continuing or
          would result from the making of any such Advance hereunder;

                 (b)        there
          shall not have occurred and be continuing any Material Adverse Effect;

                 (c)        the
          Commitment Expiration Date shall not then have occurred; 

                 (d)        all
          representations and warranties of all of the Credit Parties herein
          or in any of the other Loan Documents shall then be true and correct
          in all material respects (provided those that relate to a specific
          date shall be true and correct as of such date), and Borrower shall
          have provided Administrative Agent such evidence of compliance with
          the representations and warranties as Administrative Agent may reasonably
          request; 

                 (e)        each
          Credit Party shall have performed and complied with all agreements
          and conditions contained in the Loan Documents applicable to it and
          which are to be performed or complied with on or before the date of
          the Advance, all in accordance with the provisions of the Loan Documents; 

                 (f)        Borrower
          shall have paid any and all fees due Administrative Agent and Lenders
          under the Loan Documents and any and all costs and expenses (including
          legal fees and expenses) incurred by Administrative Agent that are
          to be reimbursed by Borrower under the Loan Documents up to the date
          of such Advance; 

                 (g)        Administrative
          Agent shall have received evidence satisfactory to it that the Credit
          Parties own the Collateral and Administrative Agent’s Liens against
          the Collateral are duly perfected in a first priority Lien position; 

                 (h)        Administrative
          Agent shall have received evidence satisfactory to it of the insurance
          required hereby or by any of the other Loan Documents; 

                 (i)        all
          of the Loan Documents shall be in full force and effect and binding
          and enforceable obligations of each Person who may be a party thereto
    or otherwise bound thereby;
    


38










	          	          (j)        in
          Administrative Agent’s determination, which cannot be made in bad faith,
          Completion will occur on or before March 31, 2008; 

                 (k)        Borrower
          shall have disbursed, or Borrower shall be disbursing with the requested
          Advance, (i) all funds previously advanced, and (ii) all Borrower’s
          Deposits made or required to be made as of the date of the Advance;
          and all Borrower’s Equity, which was to have been paid prior to such
          Advance being disbursed, shall have been paid; 

                 (l)        the
          aggregate of all Advances (including the requested Advance) shall not
          exceed the value of the Land, the work done, and the materials physically
          incorporated into the Improvements or paid for and delivered to the
          Land or stored off-site as provided in this Agreement; 

                 (m)        Administrative
          Agent shall have received such other documents and information as Administrative
          Agent may reasonably request; and 

                 (n)        Borrower
          shall have satisfied all of the conditions set forth in Section
          3.1.     

    
	 	 
	          Section
          3.3 [Reserved]
                       Section
          3.4       Additional
          Conditions Precedent to All Advances.     
          Lenders’ obligation to make any Advance is subject to the prior fulfillment,
          or waiver by Administrative Agent in writing, of each of the following
    conditions:
      
	 	 
	 	          (a)        Administrative
          Agent and the Independent Consultant shall have received a Draw Request
          for the subject Advance at least 15 Business Days prior to the requested
          date of disbursement of the Construction Advance, and Administrative
          Agent and the Independent Consultant shall have approved such Draw
          Request, such approval not to be unreasonably withheld or delayed; 

                 (b)        each
          of the conditions contained in Sections
          3.1 and 3.2 shall
          have been met or satisfied;

                 (c)        the
          Mortgage and any other Loan Documents which are to be recorded or filed
          were duly recorded and filed prior to commencement of any construction
          on the Land, including pre-construction activity, placing any materials
          or supplies on the Land, or any other act or occurrence which could
          give rise to a lien claim equal or superior to the Liens created by
          the Loan Documents; 

      
          (d)        Completion
          shall not then have occurred;

                 
       (e)        (i)
          the Improvements shall not have been damaged by fire or other casualty
          (x) that has not been fully repaired or (y) that is not in the process
          of being repaired with sufficient funds set aside therefor and such
          repair shall not result in a material delay in construction and completion
    of the Project; 
         
    



 39










	          	          (f)        Administrative
          Agent and the Independent Consultant shall have received, at Borrower’s
          expense, a down date endorsement to the Title Policy (or if an endorsement
          is not available, a letter from the Title Company) dated within five
          days of the requested Advance and showing no state of facts objectionable
          to Administrative Agent, including showing no intervening Lien has
          been filed affecting the Land or the Project; 

                 (g)        if
          requested by Administrative Agent, Administrative Agent and the Independent
          Consultant shall have received, after the location of the foundation
          for any building site on the Land has been established and staked on
          the ground and before the foundation is poured, a survey in conformity
          with Section 7.2(b) hereof;

                 (h)        Administrative
          Agent and the Independent Consultant shall have received waivers and
          releases signed and acknowledged (notarized) by each Contractor that
          has done work included within any prior Draw Request that the respective
          Contractor has been paid in full (except for required retainage) for,
          and waiving and releasing any mechanic’s and materialmen’s Lien rights
          with respect to, all work done through the date of the preceding Draw
          Request; 

                 (i)        Administrative
          Agent and the Independent Consultant shall have received an inspection
          report prepared by the Independent Consultant approving the Draw Request
          and confirming that the amount of the Advance included in the Draw
          Request does not exceed the cost of the work completed less prior Advances
          and required retainage, that the undisbursed Loan proceeds, together
          with funds in the Construction Account and any Special Account designated
          for Construction Costs plus any outstanding Borrower’s Equity for Construction
          Costs, are sufficient to complete all of the Improvements, that the
          Improvements have been constructed in accordance with the Plans and
          applicable Legal Requirements, that the construction is proceeding
          in conformity with the Budget and Construction Schedule, and such other
          matters as may be reasonably requested by Administrative Agent; and 

                 (j)        Administrative
          Agent shall have received evidence that the full amount of the Interest
          Reserve has been deposited into the Interest Reserve Account. 
    
	 	 
	          Section
          3.5       Conditions
          Precedent to Final Advance.      Lenders’
          obligation to make the final Advance is subject to the prior fulfillment,
          or waiver by Administrative Agent in writing, of each of the following
    conditions:
      
	 	 
	 	          (a)        each
          of the conditions contained in Sections
          3.1, 3.2 and 3.4 shall
          have been met or satisfied;

                 (b)        Completion
          shall have occurred, and Administrative Agent and the Independent Consultant
          shall have received satisfactory evidence that Completion has occurred; 

                 (c)        Administrative
          Agent and the Independent Consultant shall have received an “as-built” survey
          as required pursuant to and in conformity with Section
          7.2(c) hereof and approved in writing
    by Administrative Agent;
    


 40










	          	          (d)        Administrative
          Agent and the Independent Consultant shall have received a complete
          set of “as-built” plans and specifications for the Improvements, certified
          as accurate by each applicable Design Professional; 

                 (e)        Administrative
          Agent and the Independent Consultant shall have received an affidavit
          of bills paid and lien waivers and releases, in form and substance
          acceptable to Administrative Agent, executed by each Contractor and
          any other Person Administrative Agent reasonably requires;

                 (f)        Administrative
          Agent and the Independent Consultant shall have received evidence that
          there are no Liens against any of the Collateral, other than Permitted
          Exceptions;

                 (g)        Administrative
          Agent and the Independent Consultant shall have received evidence that
          40 days shall have elapsed from the later of (i) the date of completion
          of the Improvements, as specified in Texas
          Property Code § 53.106, if the Affidavit
          of Completion provided for in this Loan Agreement is filed within 10
          days after such date of Completion, or (ii) the date of filing of such
          Affidavit of Completion if such Affidavit of Completion is filed 10
          days or more after the date of the completion of the Improvements,
          as specified in Texas Property Code § 53.106;

                 (h)        Administrative
          Agent and the Independent Consultant shall have received evidence that
          the Improvements and their use comply fully with any and all applicable
          zoning, subdivision, building and environmental requirements and other
          Legal Requirements (and such evidence must include documentation establishing
          that both the zoning and subdivision approval is based on no requirement
          or condition involving any real property, or rights appurtenant thereto,
          other than the property encumbered by the Mortgage, that the number
          of parking spaces available on the Land is sufficient to comply with
          all applicable Legal Requirements for the Project, and that all fire
          and other health and safety systems in the Improvements are installed,
          operational and sufficient to comply with all applicable Legal Requirements);

                 (i)        satisfaction
          of the requirements set forth in Section
          2.8(f); and

                 (j)        Administrative
          Agent and the Independent Consultant shall have received any other
          evidence or information concerning Completion that Administrative Agent
          reasonably requires. 

    



  ARTICLE IV. REPRESENTATIONS AND WARRANTIES


          Borrower represents and warrants to Administrative Agent and each Lender (each of the following representations and warranties: (a) has been and will be relied upon as an inducement to Administrative
Agent and each Lender to make the Loan, and (b) is continuing and shall be deemed remade by Borrower on the Closing Date and at all times thereafter until all Obligations have been fully satisfied) that:


          Section 4.1        Organization and Existence.      Borrower is a limited liability company,
duly organized, validly existing and in good standing, if applicable, under the laws of its jurisdiction


41












of organization; the organizational number assigned to Borrower by such jurisdiction is 800306780; Borrower is qualified to do business and is in good standing in each other jurisdiction where the nature of its business or the
property owned by it make such qualification necessary; and each Credit Party, if any, is duly organized, validly existing and in good standing, if applicable, under the laws of the state of its formation and is qualified to do business and in good
standing in each other jurisdiction where the nature of its business or the property owned by it make such qualification necessary. 


          Section 4.2       Execution, Delivery and Performance.      Each Credit Party has the requisite organizational power and
authority to enter into and perform its obligations under the Loan Documents to which it is a party. Borrower holds all necessary permits, licenses, certificates of occupancy and other governmental authorizations and approvals required for the then
current stage of construction or Completion of the Improvements and for the then current operations of Borrower’s business. The execution, delivery and performance by Borrower and by each of the other Credit Parties of each of the Loan Documents to
which it is a party: (a) have been duly authorized by all requisite organizational action, (b) do not and will not violate or conflict with any law, order or other Legal Requirement, (c) do not and will not violate or conflict with any of the
agreements, instruments or documents which formed or govern the respective Credit Party, and (d) do not and will not breach or violate any of the provisions of, and will not result in a default by any of the Credit Parties under, any other material
agreement, instrument or document to which it is a party or is subject. 


          Section 4.3       Notices and Approvals.      Except as may have been given or obtained, no notice to or consent or
approval of any Governmental Agency or other third party whatsoever (including any other creditor) is required in connection with the execution, delivery or performance by any Credit Party of this Loan Agreement, the Note and the other Loan
Documents to which it is a party. 


          Section 4.4       Enforceability.      The Loan Documents to which any Credit Party is a party are the respective legal,
valid and binding obligations of such Credit Party, enforceable against it or them, as the case may be, in accordance with their respective terms, except as enforceability may be limited by bankruptcy and other similar laws affecting the rights of
creditors generally or by general principles of equity. 


          Section 4.5       Collateral.      Borrower has good and marketable title to the Real Property Collateral, free and clear
of any Liens, charges, claims, easements, restrictions, rights of first refusal, options, leases, covenants, or other rights, titles, or interests except the Permitted Exceptions. Except for Permitted Exceptions and priorities afforded to any
Permitted Exception: (a) Borrower has good and marketable title to the Personal Property Collateral, (b) none of the Personal Property Collateral is subject to any Lien, and (c) upon the filing of all UCC financing statements with respect to the
Personal Property Collateral in the appropriate jurisdiction(s) and the completion of any other action required by Legal Requirements to perfect its Liens, Administrative Agent (for the benefit of Secured Parties) will have valid and perfected first
Liens upon all of the Personal Property Collateral. Any Tangible Collateral which is not located on the Land is and will remain Personal Property Collateral and is not and shall not constitute real property at such location. Within the past six
years, Borrower has not changed its name, done


42












business under any other name, or merged or been the surviving entity of any merger, except as disclosed in writing to Administrative Agent prior to the Closing Date. 


          Section 4.6       Financial Statements.      Except as expressly set forth in Borrower’s financial statements, all
financial statements of Borrower furnished to Administrative Agent and any Lender have been prepared in conformity with GAAP are true and correct and present fairly in all material respects, the financial condition of Borrower as of such dates and
the results of its operations for the periods then ended (subject, in the case of interim unaudited financial statements, to normal year-end adjustments); and since the most recent date covered by such financial statements, there has been no
material adverse change in any such financial condition or operation. 


          Section 4.7       Litigation.       No litigation, arbitration, administrative or governmental proceedings are pending
or, to the Knowledge of Borrower, threatened against any Credit Party, which would, if adversely determined, materially and adversely affect (a) such Credit Party’s interest in the Collateral or the Liens and security interests of Administrative
Agent for the benefit of Secured Parties hereunder or under any of the Loan Documents, or (b) the financial condition of such Credit Party or its continued operations. 


          Section 4.8       Tax Returns.       All federal, state and local tax returns, reports and statements required to be
filed by any Credit Party have been filed with the appropriate Governmental Agencies, and all taxes due and payable by any Credit Party have been timely paid (except to the extent that any such failure to file or pay will not materially and
adversely affect (a) either the Liens and security interests of Administrative Agent for the benefit of Secured Parties hereunder or under any of the Loan Documents, (b) the financial condition of any Credit Party, or (c) its continued operations).



          Section 4.9       Relationship with Merrill Lynch.      Neither Borrower nor any shareholder or other Person that
controls Borrower is (a) an executive officer or director of Merrill Lynch & Co., Inc. or any of its subsidiaries or Affiliates, or (b) a holder of more than 10% of any class of voting securities of Merrill Lynch & Co., Inc. or any of its
subsidiaries or Affiliates.  For purposes of this representation, “control” means the power to vote 25% or more of any class of voting securities; the ability to control the election of a majority of directors; or the power to exercise a controlling
influence over management policies. 


          Section 4.10       No Default.       No Default or Event of Default has occurred and is continuing. 


          Section 4.11       No Outside Broker.       Except for employees of Administrative Agent, Merrill Lynch, Pierce, Fenner
& Smith Financial Consultant (“MLPF&S”) or one of their Affiliates or as described in writing by Borrower to Administrative Agent, Borrower has not in connection with the
transactions contemplated hereby directly or indirectly engaged or dealt with, and was not introduced or referred to Administrative Agent by, any broker or other loan arranger. 


          Section 4.12       Material Adverse Effect.      Since June 30, 2006, there has been no change which would reasonably be
expected to have a Material Adverse Effect. 


43












          Section 4.13       Environmental Matters.      In the ordinary course of its business, the officers of Borrower consider
the effect of Environmental Laws on the business of Borrower, in the course of which they identify and evaluate potential risks and liabilities accruing to Borrower due to Environmental Laws.  On the basis of this consideration, Borrower has
concluded that Environmental Laws and Environmental Claims would not reasonably be expected to have a Material Adverse Effect on Borrower. Neither Borrower nor any Subsidiary has received any written notice of a material Environmental Claim or to
the effect that its operations are not in material compliance with any of the requirements of applicable Environmental Laws or are the subject of any federal or state investigation evaluating whether any remedial action is needed to respond to a
release of any toxic or hazardous waste or substance into the environment, which non-compliance or remedial action would reasonably be expected to have a Material Adverse Effect on Borrower. 


          Section 4.14       Investment Company Act.       Neither Borrower nor any Subsidiary is an “investment company” or a
company “controlled” by an “investment company”, within the meaning of the Investment Company Act of 1940, as amended. 


          Section 4.15       Public Utility Holding Company Act.  Neither Borrower nor any
Subsidiary is a “holding company” or a “subsidiary company” of a “holding company”, or an “affiliate” of a “holding company” or of a “subsidiary company” of a “holding company”, within the meaning of the Public Utility Holding Company Act of 2005,
as amended. 


          Section 4.16       No Assignment.      Borrower has made no previous assignment of its interest in the Plans, any
Construction Contract, any Property Contract, or any Operating Contract. 


          Section 4.17       Compliance With Laws.      Each Credit Party is in compliance in all material respects with all Legal
Requirements applicable to such Credit Party.  Upon completion of construction of the Improvements in accordance with the Plans, the Improvements will comply with all applicable Legal Requirements, including zoning laws, building codes, handicap or
disability laws, Environmental Laws, and all rules, regulations and orders relating thereto, and the use to which Borrower is using and intends to use the Land and Improvements complies with and will comply with such Legal Requirements.  Borrower
has obtained all permits, licenses, consents and approvals which are needed as of such date for the construction of the Improvements and use of the Land and Improvements in order to comply with all Legal Requirements. 


          Section 4.18       Plans.      The Plans are satisfactory to Borrower, are in compliance with all Legal Requirements and,
to the extent required by any Legal Requirements, have been approved by each Governmental Agency and/or by the governing authority and beneficiaries, as appropriate, of any restrictive covenant or other nongovernmental legal requirements affecting
the Land or Improvements. The Plans are complete in all material respects, contain all necessary detail for construction of the Improvements, are sufficient for construction of all infrastructure and improvements necessary to complete construction
of the Project so that the Project is capable of operating in its intended capacity, and have been sealed by the Design Professional(s) who prepared such Plans. 


44 












          Section 4.19       Utility Services.       All utility services of sufficient size and capacity necessary for the
construction of the Improvements and the use thereof for their intended purposes are available at the property line(s) of the Land for connection, and upon Completion are connected, to the Improvements, including potable water, storm and sanitary
sewer, gas, electric and telephone facilities. 


          Section 4.20       Access.       Access by vehicles to the Land for the full utilization of the Improvements for their
intended purposes exists over paved roadways that have been completed, dedicated to the public use and accepted by the appropriate Governmental Agencies, or the necessary rights-of-way for such road ways have been acquired by the appropriate
Governmental Agencies and all necessary steps have been taken by Borrower and such Governmental Agencies to assure the complete construction and installation of such roadways. 


          Section 4.21       No Commencement.      As of the date of recordation of the Mortgage, (a) no steps to commence
construction on the Land, including steps to clear or otherwise prepare the Land for construction thereon or the delivery of materials for use in construction of the Improvements, have been taken, and (b) no contract or other agreement has been
executed for construction (including development) on the Land for engineering, architecture or other design related to any such construction, has been entered into, for furnishing materials for such construction or for any other related purpose, the
performance of which by the other party thereto could give rise to a Lien. 


          Section 4.22       Budget Correct.      The Budget is true, correct, and complete, and accurately reflects Borrower’s
best good faith estimate of all of the direct and indirect costs of all matters reflected therein, including completing the Improvements in accordance with the Plans, the Loan Documents, and all Legal Requirements. 


          Section 4.23       Projections.      The Projections fairly present Borrower’s reasonable forecast of the most probable
results of operations and changes in cash flows for the periods covered thereby, based on the assumptions set forth therein, which assumptions are reasonable based on historical experience and presently known facts. As of the date of this Loan
Agreement, to the best of Borrower’s Knowledge (with such due diligence as a reasonable Person would have performed), there have been no changes with respect to any facts, assumptions, or any other matters or conditions which could reasonably be
expected to result in, singly or in the aggregate, a material discrepancy or change with respect to the Projections. 


          Section 4.24       Contracts.       There are no Construction Contracts, Property Contracts, or Operating Contracts
(including all amendments thereto), a copy of which has not been delivered to Administrative Agent and the Independent Consultant (if in existence on the date of this Loan Agreement) or that will not have been delivered to Administrative Agent and
the Independent Consultant within five days after execution (if not currently in existence), and all such copies are and shall be true, correct and complete. All Construction Contracts, Operating Contracts, and material Property Contracts have been
duly executed by all parties thereto, and Borrower is not in default, and there exists no event or fact that with the giving of notice, the passage of time, or both, would constitute a default, thereunder.  Borrower has all Operating Contracts (duly
executed and binding upon all parties thereto) needed to operate the Project consistent with the Projections. 


45 












          Section 4.25       Land.      If required by applicable Legal Requirements, the Land has been duly platted in accordance
with all Legal Requirements, which plat has been approved and executed by all appropriate Governmental Agencies and has been duly recorded. The Project is taxed separately without regard to any other property, and for all purposes, the Project may
be mortgaged, conveyed, and otherwise dealt with as an independent parcel. 


          Section 4.26       ERISA. No ERISA Event has occurred or is reasonably expected to occur that, when taken together
with all other such ERISA Events for which liability is reasonably expected to occur, could reasonably be expected to result in a Material Adverse Effect.  The present value of all accumulated benefit obligations under each ERISA Plan (based on the
assumptions used for purposes of Statement of Financial Accounting Standards No. 87) did not, as of the date of the most recent financial statements reflecting such amounts, exceed by more than a de minimis amount the fair market value of the assets
of such ERISA Plan, and the present value of all accumulated benefit obligations of all underfunded ERISA Plans (based on the assumptions used for purposes of Statement of Financial Accounting Standards No. 87) did not, as of the date of the most
recent financial statements reflecting such amounts, exceed by more than de minimis amount the fair market value of the assets of all such underfunded ERISA Plans. 


          Section 4.27       Disclosure; Accuracy. Borrower has disclosed to Administrative Agent, Lenders and the Independent
Consultant all agreements, instruments, reports, inspections and corporate or other restrictions related to the Project or to which it or any of its Subsidiaries is subject, and all other matters known to any of them, that, individually or in the
aggregate, could reasonably be expected to result in a Material Adverse Effect.  None of the reports, financial statements, certificates or other information furnished or hereafter furnished by or on behalf of Borrower or any other Credit Party to
Administrative Agent, the Independent Consultant or any Lender in connection with the negotiation of this Loan Agreement or any of the Loan Documents or delivered hereunder (as modified or supplemented by other information so furnished) contains or
will contain any material misstatement of fact or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that, with respect to projected
financial information, Borrower represents only that such information was prepared in good faith based upon assumptions believed to be reasonable at the time. 


          Section 4.28       Subsidiaries.      As of the Closing Date, Borrower has no Subsidiaries other than those specifically
disclosed in Schedule 4.28, and all of the outstanding equity interests in such Subsidiaries have been validly issued, are fully paid and nonassessable and are owned by a Credit Party in the
amounts specified in Schedule 4.28 free and clear of all Liens.  Neither Borrower nor any Subsidiary has any equity investments in any other Person other than those specifically disclosed on
Schedule 4.28.       All of the equity interests in Borrower have been validly issued and are fully paid and nonassessable.  The Subsidiaries of Borrower as of the Closing Date are specified on
Schedule 4.28, and Schedule 4.28 correctly sets forth the complete and correct name of each Subsidiary, the jurisdiction of
organization of each Subsidiary, the percentage of Borrower’s ownership of the outstanding equity interests of each Subsidiary directly owned by Borrower, the percentage of each Subsidiary’s ownership of the outstanding equity interests of each
other Subsidiary and the authorized, issued and outstanding equity interests of Borrower and each Subsidiary. Other than those set forth on Schedule 4.28, there are no outstanding
subscriptions, options, warrants, calls or rights (including preemptive rights) to 


46 










acquire, and no outstanding securities, instruments or rights convertible into, any
    equity interests of Borrower or any Subsidiary. 


          Section 4.29       Labor Controversies.       There are no labor controversies pending or threatened against any Credit
Party which could reasonably be expected to result in a Material Adverse Effect. 


ARTICLE V. AFFIRMATIVE COVENANTS 


          Borrower covenants and agrees that, as long as the Obligations or any part thereof are outstanding or any Lender has any outstanding Commitment hereunder, Borrower will, and will cause each Credit
Party to, perform and observe the following covenants:


          Section 5.1       Financial and Other Information.       Borrower shall furnish or cause to be furnished to
Administrative Agent and Lenders during the term of this Loan Agreement all of the following: 

	          	          (a)       Annual
            Financial Statements.      Within 120 days
            after the close of each fiscal year of Borrower, a copy of the annual
            audited financial statements of Borrower, including, in reasonable
            detail, a balance sheet and statement of retained earnings as at
            the close of such fiscal year and statements of profit and loss and
            cash flow for such fiscal year; 

                 (b)       Quarterly
            Certificate of Compliance.      Within 60
            days after the close of each calendar quarter, a Certificate of Compliance,
            duly executed by the president, chief financial officer or chief
            executive officer of Borrower, in the form of Exhibit
            B attached hereto, or such other form
            as may be reasonably required by Administrative Agent from time to
            time; 

                 (c)       Interim
            Financial Statements.      Within 60 days
            after the close of each fiscal quarter of Borrower, a copy of the
            interim financial statements of Borrower for such fiscal quarter
            (including in reasonable detail both a balance sheet as of the close
            of such fiscal period, and statement of profit and loss for the applicable
            fiscal period); 

                 (d)       Projections.     
          Within 60 days prior to the close of each fiscal year of Borrower,
          a copy of the internally prepared projections for Borrower of balance
          sheets and statements of income or operations and cash flows of Borrower
          and its Subsidiaries on a monthly basis for the immediately following
          fiscal year (including the fiscal year in which the Maturity Date occurs); 

                 (e)       Operating
            Statement.      On or before 60 days after
            the end of each calendar month and on or before 120 days after the
            end of each fiscal year of Borrower, an operating statement for the
            Collateral, such reports to be in such form and in reasonable detail
            as Administrative Agent may request, setting forth the financial
            condition and the income and expenses for the Collateral for the
            immediately preceding calendar month or fiscal year, as applicable,
            and a certificate executed by Borrower certifying that such report
            has been prepared in accordance with GAAP that fairly presents the
            results of the operations of the Collateral for the period covered
    thereby; 
    



  47 










	          	          (f)       Operating
            Budget.      On or before 60 days prior
            to the start of each fiscal year, an annual operating budget for
            the Collateral for the next fiscal year, in form and substance acceptable
            to Administrative Agent; and 

                 (g)       Other
            Information.      Such other financial statements,
            reports and information as Administrative Agent may from time to
            time reasonably request relating to Borrower, any Credit Party or
            the Collateral. 

    
	 	 
	          Section
          5.2       General
          Agreements With Respect to Financial Information.     
          Borrower agrees that except as otherwise specified herein or otherwise
    agreed to in writing by Administrative Agent: 
      
	 	 
	 	          (a)        all
          annual financial statements required to be furnished by Borrower to
          Administrative Agent hereunder will be prepared by either the current
          independent accountants for Borrower or other independent accountants
          of recognized standing reasonably acceptable to Administrative Agent; 

                 (b)        all
          other financial information required to be furnished by Borrower to
          Administrative Agent or any Lender hereunder will be certified as correct
          in all material respects by the party who has prepared such information,
          and, in the case of internally prepared information with respect to
          Borrower, certified as correct by its chief financial officer; 

                 (c)        all
          financial statements shall be prepared in accordance with GAAP; and 

                 (d)        the
          fiscal year of Borrower will end on December 31. 

      Section 5.3     Financial
            Records; Inspection.      Each Credit Party
            will:

      
          (a)        maintain at its principal place of business complete and accurate books and records, and maintain all of its financial records in a manner
consistent with the financial statements heretofore furnished to Administrative Agent, or prepared on such other basis as may be approved in writing by Administrative Agent; and


          (b)        permit Administrative Agent, any Lender or their duly authorized representatives, upon reasonable notice and at reasonable times, to
inspect Borrower’s, its Subsidiaries’ and each Credit Party’s properties (both real and personal), operations, books and records and to audit, examine, and make copies or extracts of Borrower’s books of account and records relating to the
Collateral. 




    
	 	 
	          Section
          5.4     Taxes.     
          Each Credit Party will pay when due all of its respective taxes, assessments
          and other governmental charges, howsoever designated, and all other
          liabilities and obligations, except to the extent that any such failure
          to file or pay will not materially and adversely affect either the
          Liens of Administrative Agent under any of the Loan Documents or the
          financial condition or continued operations of any Credit Party. 

                 Section
          5.5     Compliance
          With Laws and Agreements.      Borrower will,
          and will cause its Subsidiaries to, timely comply (to prevent any breach)
    with and satisfy all Legal 
      


 48 











Requirements that affect or are otherwise related to the Collateral, or the construction, use, or occupancy thereof, excluding non-compliance that, either individually or in the aggregate, could not reasonably be expected to
result in (i) a Material Adverse Effect or (ii) seizure of, forfeiture of or a Lien upon any material portion of the Collateral. No Credit Party will violate (a) any law, regulation or other governmental requirement, any judgment or order of any
court or Governmental Agency, or any other Legal Requirement; (b) any agreement, instrument or document which is material to its operations or to the operation or use of any Collateral, in each case as contemplated by the Loan Documents; or (c) any
agreement, instrument or document to which it is a party or by which it is bound, in each case, if any such violation will materially and adversely affect either the Liens and security interests of Administrative Agent hereunder or under any of the
Loan Documents or the financial condition or continued operations of any Credit Party. 


          Section
5.6    Notification
By Borrower.      Borrower
shall provide Administrative Agent and the Independent  Consultant with prompt
written notification of:

	          	          (a)        any
          Default or Event of Default;

                 (b)        any
          Material Adverse Effect;

                 (c)        any
          information which indicates that any financial statements of any Credit
          Party fail in any material respect to present fairly the financial
          condition and results of operations purported to be presented in such
          statements;

                 (d)        any
          threatened or pending litigation involving any Credit Party;

                 (e)        any
          Event of Loss, Casualty or Condemnation or any attachment, Lien, judicial
          process, encumbrance or claim affecting or involving any Collateral
          other than a Permitted Exception;

                 (f)        any
          change in Borrower’s outside accountants;

                 (g)        any
          violation of any Legal Requirement applicable to the Collateral or
          any Credit Party, except for violations that, either individually or
          in the aggregate, could not reasonably be expected to have a material
          effect on the Borrower or create or result in a Lien on any material
          portion of the Collateral;

                 (h)        any
          actual or threatened condemnation of any portion of the Collateral,
          any negotiations with respect to any such taking, or any loss of or
          substantial damage to the Collateral;

                 (i)        any
          notice received by Borrower with respect to the cancellation, alteration,
          or nonrenewal of any insurance coverage maintained as required by the
          Loan Documents;

                 (j)        any
          failure by Borrower or any Contractor, subcontractor, or supplier to
          perform any material obligation under any Construction Contract or
          subcontract, or any other breach under any Construction Contract, or
    any event or condition which would 
    



  49 










	          	permit termination of a Construction
          Contract or subcontract or suspension of work thereunder, or any notice
          given by Borrower or any Contractor or Design Professional with respect
          to any of the foregoing;

                 (k)        any
          required permit, license, certificate, or approval with respect to
          the Collateral that is not timely issued, or lapses or ceases to be
          in full force and effect; and 

                 (l)        the
          occurrence of a default of any agreement involving any Credit Party
          and involving or evidencing trade payables in an aggregate amount equal
          to or greater than $250,000. 

    
	 	 
	Each notification by Borrower pursuant
          hereto shall specify the event or information causing such notification,
          and, to the extent applicable, shall specify the steps being taken
          to rectify or remedy such event or information. 
                 Section
          5.7       Entity
          Organization.      Each Credit Party which
          is an entity will (a) remain (i) validly existing and in good standing
          in the state of its organization and (ii) qualified to do business
          and in good standing in each other state where the nature of its business
          or the property owned by it make such qualification necessary, and
          (b) maintain all governmental permits, licenses and authorizations
          necessary for the operation of its business. Borrower and each Credit
          Party shall give Administrative Agent not less than 30 days prior written
          notice before changing the state where it is organized, changing its “place
          of business” (as defined in the UCC) if not the state of organization
          or otherwise changing the place where its books and records are maintained,
          changing its name (including any fictitious name), or changing its
          organizational number or taxpayer identification number. 
                 Section
          5.8       Environmental
          Compliance.      Except, in each case, where
          the failure to so comply could not reasonably be expected to have a
          Material Adverse Effect, Borrower will conduct its business operations,
          handle, store, transmit, discharge, emit, release and dispose of Hazardous
          Substances, and use the Collateral so as to comply with all Environmental
          Laws in all material respects and will avoid Environmental Contamination;
          and Borrower, so long as any Obligations remains outstanding, will,
          and will cause each Subsidiary to, continue to have in full force and
          effect all Federal, state and local licenses, permits, orders and approvals
          required to operate the Collateral in compliance with all Environmental
    Laws in all material respects. 

           Section
    5.9       Insurance.      
      
	 	 
	 	          (a)         Coverage.     
          Without limiting any of the other obligations or liabilities of Borrower
          under the Loan Documents, Borrower shall, and shall cause each Subsidiary
          to, during the term of this Loan Agreement, carry and maintain (or
          cause to be carried and maintained), at its own expense, at least the
          minimum insurance coverage and deductibles in at least such amounts
          (A) as are, at a minimum, usually obtained by similarly-situated companies
          engaged in the same or similar business and with the same or similar
          assets and operations as Borrower and (B) as Administrative Agent may
          reasonably require, with insurers having a minimum A.M. Best rating
          of A- VII and licensed to provide such insurance in the jurisdictions
          where coverage is to be provided, and be in such form, with terms,
          conditions, limits and deductibles as shall be reasonably acceptable
    to 
    



  50 










	 	 Administrative Agent. In addition, Borrower shall,
          and shall cause each Subsidiary to, carry and maintain any other insurance
    that Administrative Agent may reasonably require from time to time.

	          	          	 
	 	 	         (i)        All
          risk property insurance, including boom and overload and boiler and
          machinery coverage (including electrical malfunction and mechanical
          breakdown), and such other coverage as Administrative Agent may require,
          and insuring the Collateral against physical loss or damage from perils
          including fire and extended coverage, windstorm, collapse, earth movement,
          and such other perils as Administrative Agent may require. Notwithstanding
          anything herein to the contrary, coverage shall be written for an amount
          which is no less than the replacement cost value of the Collateral,
          without reduction for depreciation. Such insurance policy shall contain
          an endorsement waiving any coinsurance requirement and contain deductibles
          not greater than $5,000.

                 (ii)        Commercial
          general liability insurance, including pollution liability (which may
          be provided under a separate policy), products/completed operations,
          blanket contractual liability, environmental liability, premises/ operations,
          independent contractors, personal injury, fire legal liability, loss
          of use, and employee benefits liability with each written on an occurrence
          basis. Such insurance shall not contain an exclusion for punitive or
          exemplary damages where insurable by law. If boom and overload is not
          available as required in clause (i) above,
          this policy shall be endorsed to include coverage for rigger’s liability. 

                 (iii)        Business
          interruption, extra expense, and contingent business interruption insurance
          (whether a separate policy or additional coverage included under another
          policy) in an amount equal to 12 months projected net profits and continuing
          expenses (including the loan payments due on the Collateral). 

                 (iv)        Workers’
          compensation insurance in accordance with statutory provisions and
          employer’s liability. Such coverage shall not contain any occupational
          disease exclusions. All such insurance will be compulsory and not elective.
          Any deductible contained under the policy will be disclosed to Administrative
          Agent. 

                 (v)        Automobile
          liability and automobile physical damage insurance (as appropriate)
          covering all owned, rented, non-owned and hired vehicles written on
          an occurrence basis. 

                 (vi)        Excess
          or umbrella liability insurance written on an occurrence basis providing
          coverage on a follow-form basis in excess of the insurance limits and
          terms required under subsections (ii), (iv),
          and (v) above.
          Any differences in coverage terms under this policy will be fully disclosed
          to Administrative Agent. 

                 (vii)        Prior
          to commencing any construction on the Land, builder’s risk insurance,
          including theft, to insure, without limitation, all buildings, machinery, 

    


 51 










	 	 	equipment, materials, supplies, temporary
          structures, foundations, other underground property, personal property,
          and all other property of any nature on-site, off-site, and while in
          transit which is to be used in fabrication, construction, and completion
          of the improvements (other than tenant finish-out improvements not
          financed hereby) being constructed, and to remain in effect until all
          such improvements being constructed have been completed and accepted
          by Borrower and Administrative Agent (or Administrative Agent’s designee)
          and a Certificate of Occupancy has been issued. Such insurance shall
          be provided on a replacement cost value basis and shall (A) be on a
          non-reporting, completed value, form; (B) cover damage to landscaping
          and debris removal expense (including removal of pollutants); (C) provide
          that Borrower can complete and occupy the premises without further
          written consent from the insurer; (D) cover loss of income resulting
          from delay in occupancy, loss and damage to property due to faulty
          or defective workmanship or materials and error in design or specification,
          and loss while the property is in the care, custody and control of
          others to whom the property may be entrusted; (E) not exclude losses
          due to explosions, collapses, or underground hazards; (F) cover soft
          costs and continuing expenses not directly involved in the direct cost
          of construction or renovation, including interest on money borrowed
          to finance construction or renovation, advertising, promotion, real
          estate taxes and other assessments, the cost of renegotiating leases,
          architectural and engineering costs, legal and accounting costs, and
          other expenses incurred as the result of property loss or destruction
          by the insured peril; (G) cover settling, subsidence, riots, civil
          commotion, vandalism, and malicious mischief; (H) not contain any safeguard
          warranties; and (I) not contain any monthly limitation. 

                 (viii)        If
          requested by Administrative Agent with respect to any time any improvements
          are being constructed on the Land, Borrower shall cause each Contractor
          performing any of such construction work to maintain worker’s compensation
          insurance or other applicable insurance providing coverage for injuries
          to such Contractor’s personnel, auto liability insurance, and general
          liability insurance, all in the amounts and providing such coverage
          as is reasonably acceptable to Administrative Agent. 

                 (ix)        Borrower
          shall cause each Design Professional to maintain errors and omissions
          insurance in amounts and providing such coverage as is reasonably acceptable
          to Administrative Agent. 

                 (x)        Other
          insurance in such amounts as may from time to time be reasonably required
          by Administrative Agent, including liquor liability, environmental
          liability and professional liability. 

     

	          	          	 
	 	          (b)       Endorsements.     
          Borrower shall, and shall cause each Subsidiary to, cause all insurance
          policies carried and maintained in accordance with this Loan Agreement
          to be endorsed to Administrative Agent for the benefit of Secured Parties,
    its successors and assigns as indicated below. 
      


 52 










	          	          	          (i)        As
          the sole loss payee as its interest may appear with respect to the
          Collateral under the property, builder’s risk, auto, boiler and machinery,
          business interruption/extra expense, and contingent business interruption
          insurance, and any other insurance obtained pursuant to the provisions
          hereof for which Administrative Agent for the benefit of Secured Parties
          can be named as a loss payee as its interest may appear. Any obligation
          imposed upon Borrower, including the obligation to pay premiums and/or
          coverage deductibles, shall be the sole obligation of Borrower and
          not an obligation of Administrative Agent or any Lender. 

                 (ii)        With
          respect to property and builder’s risk policies described in the subsection
          (i) “Coverage” above, the interests of
          Administrative Agent or a Lender shall not be invalidated by any action
          or inaction of Borrower or any other Person, and shall insure Administrative
          Agent and Lenders regardless of any breach or violation by Borrower
          or any other Person, of any warranties, declarations or conditions
          of such policies. 

                 (iii)        Inasmuch
          as such policies are written to cover more than one insured, all terms,
          conditions, insuring agreements and endorsements, with the exception
          of the limits of liability, shall operate in the same manner as if
          there were a separate policy covering each insured. 

                 (iv)        The
          insurers providing the coverage required hereunder shall waive all
          rights of subrogation against Administrative Agent or any Lender, any
          right of setoff or counterclaim and any other right to deduction, whether
          by attachment or otherwise. 

                 (v)        Such
          insurance shall be primary without right of contribution of any other
          insurance carried by or on behalf of Administrative Agent and Lenders
          with respect to its interests as such in the Collateral. 

                 (vi)        If
          such insurance is canceled for any reason whatsoever, including nonpayment
          of premium, or any material changes are made in the coverage which
          adversely affect the interests of Administrative Agent or a Lender,
          such cancellation or change shall not be effective as to Administrative
          Agent until 30 days, except for non-payment of premium which shall
          not be effective as to Administrative Agent or any Lender until 10
          days, in each case, after receipt by Administrative Agent of written
          notice sent by registered mail from such insurer. 

                 (vii)        Upon
          the occurrence of a Default hereunder, Borrower irrevocably, appoints
          Administrative Agent as Borrower’s true and lawful attorney (and agent-in
          fact) for the purpose of making, settling and adjusting claims under
          such policies, endorsing the name of Borrower on any check, draft,
          instrument or other item of payment for the proceeds of such policies
          and for making all determinations and decisions with respect to such
    policies. 
    



  53 










	 	 	          (viii)       All
          insurance policies should include a waiver of terrorism exclusion or
          confirmation of said coverage. 

                 (ix)        Administrative
          Agent for the benefit of Secured Parties shall be named as an additional
          insured with respect to the commercial general liability, excess or
          umbrella liability, and any other insurance obtained pursuant to the
          provisions hereof for which Administrative Agent for the benefit of
          Secured Parties can be named as an additional insured. Any obligation
          imposed upon Borrower, including but not limited to the obligation
          to pay premiums and/or coverage deductibles, shall be the sole obligation
          of Borrower and not an obligation of Administrative Agent or any Lender. 

    
	          	          	 
	 	          (c)       Certifications.     
          On the Closing Date, and at each policy renewal, but not less than
          annually with respect to all Collateral, Borrower shall provide to
          Administrative Agent an Acord 27 – Evidence of Property Insurance
          and loss payable endorsements for each such property policy and an Acord
          25 Certificate of Liability Insurance for general liability, workers’
          compensation, automobile liability, umbrella or excess liability policies.
          All certificates shall identify the insurance carriers, the type of
          insurance, the limits, deductibles, and terms thereof and shall specifically
          list the special provisions delineated for such insurance required
          by this Section. Borrower shall furnish to Administrative Agent a certificate
          signed by a duly authorized representative of the insurer, showing
          the insurance then maintained by or on behalf of Borrower pursuant
          to this Section and stating that such insurance complies in all material
          aspects with the terms hereof, together with evidence of payment of
          premiums.
                       (d)       Forced
            Placement.      In the event that at any
            time the insurance required by this Section shall be reduced or cease
            to be maintained, then (without limiting the rights of Administrative
            Agent or any Lender hereunder in respect of the Default which arises
            as a result of such failure) Administrative Agent may, at its option,
            maintain the insurance required hereby. Borrower shall reimburse
            Administrative Agent upon demand for the cost thereof with interest
            thereon at a rate per annum equal to the Default Rate, but in no
            event shall the rate of interest exceed the maximum rate permitted
    by law. 
      
	 	 	 
	         Section
          5.10    Additional
          Subsidiaries.      If any Subsidiary is acquired
          or formed by Borrower after the Closing Date, Borrower will, within
          10 Business Days after such Subsidiary is acquired or formed, notify
          Administrative Agent and will cause such Subsidiary to execute a guaranty,
          a Security Agreement and such other Loan Documents as Administrative
          Agent shall reasonably require, in form and substance satisfactory
          to Administrative Agent, and will cause such Subsidiary to deliver
          simultaneously therewith similar documents applicable to such Subsidiary
          required under Section 3.1 as
          requested by Administrative Agent. 
                       Section
          5.11    Intellectual
          Property.      Borrower will, and will cause
          each Subsidiary to, obtain and maintain in full force and in effect
          all patents, trademarks, service marks, licenses, franchises, trade
          names, trade styles, copyrights, technology, formulas, know–how
          and processes to be used in or necessary for the construction, ownership
          and operation of the Project and for the current and proposed conduct
    of its business, and in its use thereof it will obtain all required 
      


  54 











licenses and consents and not injure or infringe upon the property or rights of any Person in any material respect. 


          Section 5.12       Use of Proceeds.      Borrower shall use the proceeds of the Loan solely for a Loan Purpose or as
otherwise permitted under Section 2.9.      No part of the proceeds of the Loan will be used, whether directly or indirectly, for any purpose that would violate Regulation T, U or X of the Board
of Governors of the Federal Reserve System of the United States of America. 


          Section 5.13       Title; Maintenance of Assets.       Borrower shall, and shall cause each Subsidiary to, maintain good
and marketable title to its interest in the Collateral in which it has an interest and shall warrant and defend its interest and title to the Collateral against all claims that do not constitute Permitted Exceptions. Borrower shall, and shall cause
each Subsidiary to, maintain and preserve the Collateral and all of its other assets and properties in good working order and condition, ordinary wear and tear excepted, such that the Collateral remains in good and safe working order and in
compliance with (a) all manufacturer’s or similar provider’s suggested and/or approved maintenance programs, (b) insurance and warranty requirements and (c) applicable Legal Requirements. Borrower shall, and shall cause each of its Subsidiaries to,
do or cause to be done all things necessary to preserve, renew and maintain in full force and effect its respective rights, licenses, permits, privileges, franchises, patents, copyrights, trademarks and trade names material to the conduct of its
business and will continue to engage in and operate its business as presently conducted. 


          Section 5.14       Operating Margin Protection.       Borrower shall employ, to the extent available for customary and
usual costs, long-term hedging and price-management strategies customary and usual in the ethanol production industry, when it is reasonable to do so, for (a) the procurement of feedstocks, energy and fuel for the Project and (b) the sale of
products produced by the Project. Such hedging and price management strategies will be employed to minimize any reductions in (i) the Project’s operating margin and (ii) the Project’s ability to repay the Loan in accordance with this Loan Agreement.



          Section 5.15       Deposit Accounts.       Borrower shall maintain all Deposit Accounts (as defined in the Security
Agreement) with financial institutions acceptable to Administrative Agent and shall have executed and delivered all documents, agreements, instruments, including without limitation, control agreements, and taken all action requested by
Administrative Agent to grant to Administrative Agent for the benefit of Secured Parties a first priority perfected Lien in such Deposit Accounts, all in accordance with the Security Agreement and the other Loan Documents. 


          Section 5.16       Lockbox Agreement.      Upon the request of Administrative Agent and after the occurrence and
continuation of an Event of Default, Borrower shall instruct all customers and other Persons obligated with respect to all of Borrower’s accounts receivable to make all payments to Administrative Agent (by instructing that such payments be remitted
to a post office box which shall be in the name and control of Administrative Agent) under a lockbox agreement (the “Lockbox Agreement”) in the form and substance satisfactory to
Administrative Agent in its sole discretion, duly executed by Borrower and Administrative Agent or under other arrangements pursuant to which Borrower shall have irrevocably instructed Administrative Agent, to remit all proceeds of such payments to
Administrative Agent to be applied to the 


55 












Obligations in such order and manner as Administrative Agent may elect.  Any proceeds received by Borrower in violation of this Section shall be promptly delivered to Administrative Agent and until so delivered, all such proceeds
shall be held in trust by Borrower for the benefit of Administrative Agent and shall be segregated from any other funds or property of Borrower. 


          Section 5.17       Reorganizations.      To the extent Borrower requests consent to the corporate or other entity
reorganization of Borrower, any Subsidiary or any other Credit Party as permitted by this Loan Agreement, due to the often time intensive nature of reviewing such reorganizations, Borrower agrees that the Administrative Agent may retain counsel to
assist in reviewing any reorganization documentation at the Borrower’s expense, and may also require an additional review fee of at least $5,000 in the Administrative Agent’s reasonable discretion. 


          Section 5.18       Further Assurances.      Borrower shall, and shall cause each Subsidiary to, at the request of
Administrative Agent duly execute and deliver to Administrative Agent such further instruments and do and cause to be done such further acts as may be necessary or proper in the opinion of Administrative Agent to carry out more effectively the
provisions and purposes of this Loan Agreement. Furthermore, Borrower shall, and shall cause each Subsidiary to, at the request of Administrative Agent or the Independent Consultant duly execute and deliver to Administrative Agent and the
Independent Consultant such further instruments and do and cause to be done such further acts as may be necessary or proper, in the opinion of Administrative Agent or the Independent Consultant, for the Independent Consultant to carry out more
effectively its duties, obligations and responsibilities with respect to the construction of the Project and to comply with its duties, obligations and responsibilities outlined in this Loan Agreement and the other Loan Documents. 


ARTICLE VI. NEGATIVE COVENANTS 


          Borrower covenants and agrees that, as long as the Obligations or any part thereof are outstanding or any Lender has any outstanding Commitment hereunder, Borrower will, and will cause each Subsidiary
to, perform and observe the following covenants: 


          Section 6.1       Merger, Change in Business.      Borrower shall not cause or permit any of its Subsidiaries to:


	          	         (a)        form
          any Subsidiary unless promptly after the formation thereof, such Subsidiary
          executes and delivers to Administrative Agent a guaranty in form and
          substance satisfactory to Administrative Agent;

                 (b)        consummate
          any merger or consolidation with, or purchase or otherwise acquire
          all or substantially all of the assets of, or any material stock, partnership,
          joint venture or other equity interest in, any Person, or sell, transfer
          or lease all or any substantial part of its assets;

                 (c)        sell,
          dispose of, or transfer any assets, except for (i) sales of inventory
          in the ordinary course of business or (ii) sales of obsolete, worn-out
          and redundant assets in an aggregate amount not to exceed $250,000
    during any fiscal year of Borrower;
    



 56 










	          	          (d)        engage
          in any material business substantially different from its business
          in effect as of the date of application by Borrower for credit from
          Administrative Agent or as contemplated for the Project, or cease operating
          any such material business;

                 (e)        cause
          or permit any other Person to assume or succeed to any material business
          or operations of such Credit Party; or 

                 (f)         liquidate
          or dissolve. 
    
	 	 
	          Section
          6.2     Use
          of Property; Transactions with Affiliates; Nature of Business; Financial
          Condition.      At no time shall Borrower,
          any Subsidiary or any other Credit Party, use, maintain, operate, or
          occupy, or allow the use, maintenance, operation, or occupancy of,
          any portion of the Collateral for any purpose which (a) in any manner
          may be dangerous unless safeguarded as required by law; (b) may constitute
          a public or private nuisance; or (c) may make void, voidable, or cancelable
          or increase the premium of any insurance then in force with respect
          thereto. At no time shall Borrower, any Subsidiary or any other Credit
          Party (i) enter into or conduct any transaction with any Affiliate
          of Borrower, except a transaction upon terms that are not less favorable
          to it than would be obtained in a comparable transaction at the same
          time as such transaction negotiated at arm’s-length with a Person who
          is not such an Affiliate; (ii) conduct any business other than, or
          make any material change in the nature of, its business as carried
          on as of the date hereof or as contemplated for the Project; (iii)
          change its fiscal year or make any significant change in accounting
          treatment or reporting practices except as required by GAAP; (iv) pay
          or become obligated to pay any management, lease, brokerage fee or
          other similar expense to any Person unless approved by Administrative
          Agent, provided that Administrative Agent shall not unreasonably withhold
          or delay such approval; or (v) conduct business or allow the conduct
          of business or other activities on the Collateral that are not consistent
          with the intended uses by Borrower as contemplated and more fully described
          in the Prospectus. 

                 Section
          6.3     Indebtedness.     
          Borrower shall not, and shall not permit any Subsidiary to, create,
    incur, assume or permit to exist any Indebtedness, except: 
      
	 	 
	 	          (a)        the
          Note or other Obligations arising under the Loan Documents or any guaranty
          of or suretyship arrangement for the Note or other Obligations arising
          under the Loan Documents; 

                 (b)        Indebtedness
          under capital leases not to exceed $1,000,000 in the aggregate
          from time to time; 

                 (c)        endorsements
          of negotiable instruments for collection in the ordinary course of
          business;

                 (d)        the
          Rex Subordinated Debt; 

                 (e)        the
          FEL Subordinated Debt (to be paid prior to the first Advance hereunder);
    and 
    


 57 










	          	          (f)        other
          Indebtedness not to exceed $5,000,000 in the aggregate at any one
          time outstanding to finance grain in storage and in transit. 

    
	 	 
	          Section
          6.4     Liens.     
          Except for Permitted Exceptions, Liens in favor of Administrative Agent
          for the benefit of Secured Parties securing the Obligations, and Liens
          on non-Collateral assets and the proceeds thereof securing the Indebtedness
          referred to in Sections 6.3(b), (d),
          and (e) above,
          Borrower shall not, and shall not permit any Subsidiary to, create
          or permit to exist any Liens on any property or assets of Borrower
          or its Subsidiaries, including any of the Collateral. 

                 Section
          6.5     Restricted
          Payments.      Borrower shall not make or
          permit any Restricted Payment, except Borrower may prepay in full the
          FEL Subordinated Debt and may pay the Rex Subordinated Debt to the
          extent permitted in the Subordination Agreement. 

                 Section
          6.6     Investments,
          Loans and Advances.      Borrower will not,
          and will not permit any Subsidiary to, make or permit to remain outstanding
          any investment in, or loan or advance to, any Person (an “Investment”),
    except that the foregoing restriction shall not apply to: 

	 	 
	 	          (a)        accounts
          receivable arising in the ordinary course of business;

                 (b)        direct
          obligations of the United States or any agency thereof, or obligations
          guaranteed by the United States or any agency thereof, in each case
          maturing within one year from the date of creation thereof; 

                 (c)        commercial
          paper maturing within one year from the date of creation thereof rated
          in the highest grade by S&P or Moody’s; 

                 (d)        deposits
          maturing within one year from the date of creation thereof with, including
          certificates of deposit issued by, any Lender or any office located
          in the United States of any other bank or trust company which is organized
          under the laws of the United States or any state thereof, has capital,
          surplus and undivided profits aggregating at least $100,000,000
          (as of the date of such bank or trust company’s most recent financial
          reports) and has a short term deposit rating of no lower than A2 or
          P2, as such rating is set forth from time to time by S&P or Moody’s,
          respectively; and 

                 (e)        deposits
          in money market funds investing exclusively in Investments described
          in clauses (b), (c),
          and (d) above. 

    
	 	 
	          Section
          6.7     Lease
          Approval.      Borrower shall not, and shall
          not permit any Subsidiary to, enter into any Lease for any portion
          of the Land, Improvements, or Project without the prior written consent
          of Administrative Agent. 

                 Section
          6.8     Amendments
          to Entity Documents and Other Agreements.     
          Borrower will not, and will not permit any Subsidiary to, amend its
          formation or governing documents without the prior written consent
          of Administrative Agent. Borrower will not amend, modify, waive or
          consent to any change or modification in any material agreement, document,
          contract or instrument to which it is a party, including without limitation,
          any Rex Subordinated Debt Documents, any FEL Subordinated Debt Documents,
    any Operating Contract, any Construction 
      


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Contract, any Property Contract or the Plan, except as otherwise permitted pursuant to Section 7.5.      


          Section 6.9       ERISA.      Borrower will not, and will not permit any Subsidiary to, incur liabilities under Title IV
of ERISA except to the extent that such liabilities would not reasonably be expected to have a Material Adverse Effect. 


          Section 6.10       Financial Covenants.      

	          	          (a)          EBITDAR
            Coverage Ratio.      Borrower’s EBITDAR
            Coverage Ratio shall at all times equal or exceed 1.40 to 1.00 except,
            in the event that the Texas Fuel Ethanol and Biodiesel Production
            Incentive Program is terminated, then (i) for the fiscal quarter
            during which such termination occurred and the next succeeding two
            fiscal quarters thereafter, 1.30 to 1.00 and (ii) thereafter 1.40
            to 1.00. 

                 (b)          Leverage
            Ratio.      Borrower’s Leverage Ratio shall
            at all times during the applicable periods below equal or exceed
    the ratio corresponding to the applicable period set forth below: 



 

	 	
                                  Period: 
  	 
  	
Ratio: 
  
	 	
April 1, 2008 through and 
  	 
  	
3.34 to 1.00 
  
	 	
including March 31, 2009 
  	 
  	 

  
	 	
April 1, 2009 through and 
  	 
  	
2.93 to 1.00 
  
	 	
including March 31, 2010 
  	 
  	 

  
	 	
April 1, 2010 through and 
  	 
  	
2.54 to 1.00 
  
	 	
including March 31, 2011 
  	 
  	 

  
	 	
April 1, 2011 through and 
  	 
  	
2.17 to 1.00 
  
	 	
including March 31, 2012 
  	 
  	 

  
	 	
April 1, 2012 and thereafter 
  	 
  	
1.82 to 1.00 
  





          Notwithstanding anything to the contrary contained herein, (i) in the event Borrower is not in compliance with clause (a) above, if Borrower
obtains an equity investment by one or more Persons within 45 days after the occurrence of such non-compliance and in an amount sufficient to cure such non-compliance, such non-compliance shall not be deemed a Default or Event of Default hereunder,
and (ii) in the event Borrower is not in compliance with clause (b) above, if Borrower obtains funds in an amount equal to the principal and interest payments due under the Loan for the next
succeeding six-month period from one or more Persons and deposits same with Administrative Agent within 45 days after the occurrence of such non-compliance, such non-compliance shall not be deemed a Default or Event of Default hereunder so long as,
in case of clauses (i) and (ii) above, (A) no other Default or Event of Default has occurred and is continuing, (B) Borrower has
not elected to utilize clauses (i) and/or (ii) more than two times during the term of this Loan Agreement and (C) Borrower has not
elected to utilize clauses (i) and (ii) during any two consecutive reporting periods. 


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          Section 6.11       Project Management.       Borrower shall not, and shall not permit any Subsidiary to, engage any other
Person to manage the Project without Administrative Agent’s prior written consent as to such Person and the management agreement, including all amendments thereto, which consent shall not be unreasonably withheld or delayed by Administrative Agent.



          Section 6.12       Alterations.      Borrower shall not, and shall not permit any Subsidiary to, make any material
alterations to the Project, including any improvements on the Land, without the prior written consent of Administrative Agent, which consent shall not be unreasonably withheld. 


          Section 6.13       No Commingling of Funds.      Borrower shall not, and shall not permit any Subsidiary to, commingle,
or allow the commingling of, funds related to the Project, including Loan proceeds, revenues, or other receivables, with funds from any other property or business. 


          Section 6.14       No Use of Administrative Agent or any Lender’s Name.      No Credit Party will directly or indirectly
publish, disclose or otherwise use in any advertising or promotional material, or press release or interview, the name, logo or any trademark of Administrative Agent, any Lender, MLPF&S, Merrill Lynch and Co., Inc. or any of their Affiliates,
except as required in any applicable securities filing.  Any press release mentioning this Loan facility must be (a) factual only as to the making of the Loan and not have the appearance of an endorsement, and (b) expressly pre-approved by
Administrative Agent’s Equipment Finance Senior Transaction Attorney. 


          Section 6.15       Swap Contract.      Borrower shall not enter into any Swap Contract without the written consent of
Administrative Agent. 


          Section 6.16       Burdensome Agreements.       Borrower will not, and will not permit any Subsidiary to, directly or
indirectly, enter into, incur or permit to exist any agreement that prohibits, restricts or imposes any condition upon (a) the ability of Borrower or such Subsidiary to create, incur or permit any Lien upon any of its assets or properties, whether
now owned or hereafter acquired, or (b) the ability of any Subsidiary to make any Restricted Payment to Borrower or any other Subsidiary, to make or repay loans or advances to Borrower or any other Subsidiary, to create or incur Guaranteed
Indebtedness where the Borrower or any other Subsidiary is the primary obligor or to transfer any of its assets or properties to Borrower or any other Subsidiary; provided however, the foregoing shall not apply to restrictions or conditions imposed
by applicable Legal Requirements, this Loan Agreement or any other Loan Document. 


          Section 6.17       Sale or Discount of Receivables.       Neither Borrower nor any of its Subsidiaries shall discount or
sell (with or without recourse) any of its notes receivables or accounts receivable. 


          Section 6.18       Abandonment.      Borrower shall not abandon the Project or cease to operate the Project for any
period other than (a) down-time for usual and customary maintenance or repair and (b) by reason of the occurrence of an event of Force Majeure so long as (i) such cessation of operations of the Project as a result of such Force Majeure does not
continue for 


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more than three consecutive months and (ii) such cessation is covered by business interruption insurance for such three-month period. 


          Section 6.19       Sale and Leaseback Transactions.      Borrower shall not, and shall not permit any Subsidiary to,
enter into any arrangement, directly or indirectly, whereby it shall sell or transfer any property, real or personal, used or useful in its business, whether now owned or hereinafter acquired, and thereafter rent or lease such property or other
property that it intends to use for substantially the same purpose or purposes as the property sold or transferred. 


ARTICLE VII. ADDITIONAL CONSTRUCTION COVENANTS 


          Borrower covenants and agrees that, so long as the Obligations or any part thereof are outstanding or any Lender has any outstanding Commitment hereunder, Borrower will, and will cause each Subsidiary
to, perform and observe the following covenants: 


          Section 7.1 [Reserved] 


          Section 7.2       Surveys.       Borrower will furnish to Administrative Agent and the Independent Consultant, at
Borrower’s expense, the following surveys prepared by a registered engineer or surveyor acceptable to Administrative Agent: (a) a pre-construction survey of the Land and any existing improvements thereon, prepared by a registered surveyor or
engineer and certified to Administrative Agent, Borrower, and the Title Company, with a certification in form and substance acceptable to Administrative Agent, reflecting such matters as required by Administrative Agent, showing no state of facts
objectionable to Administrative Agent, and certifying that none of the Land is located within any designated flood plain or special flood hazard area (or, in lieu thereof, Borrower shall provide evidence that Borrower has applied for and received
flood insurance covering the Improvements in an amount acceptable to Administrative Agent); (b) if requested by Administrative Agent, a foundation survey, upon completion of staking the foundation for the Improvements, showing the location of the
foundation and all Improvements, reflecting that the location of the Improvements will be entirely within the boundary lines of the Land, will not encroach upon any set-back line, easement, or right-of-way, and will not violate any covenant,
condition, or restriction affecting the Land, and other matters customarily included in a foundation survey for the type of property and improvements being surveyed; and (c) an “as built” survey, within 60 days after substantial completion of the
Improvements, showing the locations of the Improvements, and certifying that same are entirely within the property lines of the Land, do not encroach upon any easement, setback or building line or restrictions, and are placed in accordance with the
Plans and all Legal Requirements affecting the Land and/or Improvements, showing and certifying to such other matters customarily shown and contained in certifications for an “as built” survey for the type of property and improvements being
surveyed, and showing no state of facts objectionable to Administrative Agent.  All surveys shall be in form and substance reasonably acceptable to Administrative Agent.


          Section 7.3       Appraisals.       In addition to the Appraisal contemplated in Section
3.1, Administrative Agent may, from time to time, obtain an Appraisal of all or any part of the Collateral prepared in accordance with written instructions from Administrative Agent. Administrative Agent, in
Administrative Agent’s sole discretion, may (but shall have no 


61 












obligation to) have any such Appraisal reviewed by another appraiser.  The cost of any such Appraisal and review (if any) shall be borne by Borrower if the Appraisal (a) is obtained to confirm compliance with any financial
covenants of Borrower pursuant to this Loan Agreement, (b) is obtained at least 24 months after the last appraisal of the Collateral, or (c) is obtained after the occurrence of an Event of Default. If the Appraisal cost is payable by Borrower, such
cost shall be due and payable upon demand from Administrative Agent and shall be secured by the Loan Documents. 


          Section 7.4       Permits; Licenses; Approvals.       Borrower shall (a) timely obtain, in accordance with the
Construction Schedule and in conformity with the Plans, building permits and all other permits and licenses, and all approvals or consents of Governmental Agencies and appropriate bodies or Persons pursuant to any restrictive covenants, required
with respect to the construction of the Improvements; (b) obtain prior to the date Completion has occurred, certificates of occupancy and all other permits and licenses required with respect to the occupancy and use of the Collateral for its
intended purposes; and (c) obtain prior to the date Borrower has commenced operating any portion of the Project, all permits, licenses, approvals and consents of Governmental Agencies, and any other approvals or consents necessary to operate the
Project for its intended purposes. 


          Section 7.5       Plans and Construction Contracts, and Approvals and Amendments.      Borrower shall deliver to
Administrative Agent and the Independent Consultant a true and complete copy of the Plans and each Construction Contract for Administrative Agent’s review and approval, including each amendment or supplement thereto.  Administrative Agent’s approval
is subject to Administrative Agent being satisfied, in Administrative Agent’s reasonable discretion, with each Contractor, each Design Professional, the terms and conditions of the Construction Contracts, all aspects of the Plans, and any other
issues or matters related thereto. Each Construction Contract shall be for a fixed price or a guaranteed maximum price, and all Construction Contracts, individually and jointly, shall be in conformity with the Budget. The Plans shall incorporate all
recommendations contained in any soils or geological report that is obtained with respect to the Improvements. The Plans and Construction Contracts will not be amended, altered, or changed (pursuant to change order, amendment, or otherwise) unless
the same shall have been approved in advance (a) in writing by Administrative Agent (except to the extent Administrative Agent’s approval is expressly not required for such action as provided below), (b) by all requisite Governmental Agencies, (c)
by each surety under payment or performance bonds (if any) covering the Construction Contracts or otherwise covering the construction of all or any portion of the Improvements; and (d) by any another third party who has a contractual or other right
to approve the amendment.  Borrower shall have provided evidence reasonably satisfactory to Administrative Agent of all such third party approvals, or, if requested by Administrative Agent, evidence that an approval not obtained by Borrower is not
required.  Administrative Agent may have the Independent Consultant review and advise Administrative Agent as to any or all of the foregoing or approve any of the foregoing on behalf of Administrative Agent.  Notwithstanding the foregoing, Borrower
shall not be required to obtain Administrative Agent’s approval of an amendment to the Plans made pursuant to a change order which satisfies all of the following conditions:  (i) such amendment does not have a material effect on the contemplated
Improvements, and complies with all Legal Requirements and other requirements applicable thereto and all other requirements of the Loan Documents; (ii) such amendment does not increase the cost of the construction of the Improvements; 


62 












(iii) such amendment does not substitute a lesser quality material; (iv) the anticipated date of Completion is not changed; (v) the Budget is not modified, including any Allocation or contingency; (vi) any such change, or all
changes in the aggregate, shall not affect any structural component or the structural integrity, or the utility or appearance, of the Improvements; and (vii) Borrower, Contractor, and the Design Professional who prepared the Plans approve such
amendment and the corresponding change order in writing, and a copy of such approval and change order is promptly provided to Administrative Agent or the Independent Consultant. 


          Section 7.6       Construction.       No construction will be commenced or otherwise performed on the Land until after
(a) the Mortgage is duly recorded in the appropriate records of the county in which the Land is located; (b) Administrative Agent and Independent Consultant have approved, in writing, the Plans, such review by Administrative Agent and Independent
Consultant not to be unreasonably delayed; and (c) Administrative Agent and Independent Consultant have approved, in writing, each Construction Contract which in any way relates to, or will relate to, the construction being performed, such review by
Administrative Agent and Independent Consultant not to be unreasonably delayed. Borrower will cause the construction of the Improvements (i) to be constructed pursuant to the Construction Contracts; (ii) to commence by the Construction Commencement
Date and to be prosecuted with diligence and continuity until completion; (iii) to be constructed in a good and workman like manner; (iv) to comply with the Plans and all applicable Legal Requirements; and (v) to be completed on or before March 31,
2008, free and clear of Liens or claims for Liens, except for Liens created by the Loan Documents and any Liens inferior to the Lien of the Loan Documents which inferior Liens have been approved in writing by Administrative Agent.  Borrower shall
promptly report to Administrative Agent and the Independent Consultant any variances in which the Construction Costs with respect to any Allocation are exceeding the Budget for such Allocation. Borrower shall exercise diligent efforts to cause the
Contractors to meet all time lines in the Construction Schedule, and shall amend the Construction Schedule, and provide a copy thereof to Administrative Agent and the Independent Consultant, as soon as Borrower determines that a time contained
therein will not be met. Borrower must resolve all disputes arising in connection with the construction of the Improvements in a manner allowing the construction to proceed expeditiously and to be completed by March 31, 2008.  Further, from time to
time, Administrative Agent may direct Borrower to provide such additional reports related to the construction as Administrative Agent may reasonably request, and Borrower agrees to provide such reports promptly. 


          Section 7.7       Defects and Variances.       Upon demand of Administrative Agent and at Borrower’s sole expense,
Borrower shall correct (a) any structural defect in the Improvements; (b) any material variance from the Plans which is not approved in writing by Administrative Agent; (c) any non-compliance with any Legal Requirement; (d) any encroachment by any
part of the Improvements or any other structures or improvements over or on any set-back line, easement, adjoining property or other restricted area; and (e) any encroachment of any adjoining structure upon the Land which any survey or inspection
reflects. If Administrative Agent makes demand for Borrower to correct any such nonconformities, Borrower must promptly correct the nonconformity to Administrative Agent’s reasonable satisfaction, and Administrative Agent may (i) withhold its
consent to further Advances, and (ii) with respect to a nonconformity under clauses (a), (b), (c), or (d) above, require the nonconforming work and all other work which may be
affected by the nonconforming work to be stopped, until the nonconformity is completely 


63 












corrected to Administrative Agent’s reasonable satisfaction. No such action by Administrative Agent will affect Borrower’s obligation to complete the Improvements on or before the Completion Date. Administrative Agent’s reliance
on the recommendations of the Independent Consultant in making any demands or requiring any work to be stopped pursuant to this Section shall be deemed reasonable. Administrative Agent shall have no obligation to make demand for Borrower to correct
any such nonconformity, and Administrative Agent not making a demand for Borrower to correct any such nonconformity shall not relieve Borrower from any of its obligations under the Loan Documents or otherwise with respect to construction of the
Improvements, nor imply or be deemed to constitute a consent or waiver by Administrative Agent with respect to any such nonconformity. No disbursement of any Loan proceeds or other actions taken by Administrative Agent shall constitute a waiver of
Administrative Agent’s rights under this Section. 


          Section 7.8       Independent Consultant.      Administrative Agent shall be entitled to engage one or more Independent
Consultants from time to time to assist Administrative Agent with any and all matters related to the acquisition, development, construction, or operation of the Project or requests for Advances. Borrower shall pay the reasonable fees and expenses
of, and cooperate with, the Independent Consultant and cause each Design Professional and each Contractor to cooperate with the Independent Consultant in connection with the performance of the Independent Consultant’s duties.  Without limiting the
generality of the foregoing, Borrower shall furnish or cause to be furnished to the Independent Consultant such items as working details, the Plans and details thereof, samples of materials, licenses, permits, certificates of Governmental Agencies,
zoning ordinances, building codes and copies of the Construction Contracts and related subcontracts (if applicable). Borrower will permit Administrative Agent, the Independent Consultant and their representatives to enter upon the Land and wherever
else any of the Collateral is located for the purposes of inspecting same. Borrower acknowledges that the duties of the Independent Consultant run solely to Administrative Agent and that the Independent Consultant shall have no obligations or
responsibilities whatsoever to Borrower, any Contractor, any Design Professional, or to any of Borrower’s, Contractor’s, or Design Professional’s agents, employees, contractors or subcontractors. 


          Section 7.9       Contracts.       Borrower will (a) deliver to Administrative Agent (or its representatives) and the
Independent Consultant immediately upon demand, counterparts and, if requested by Administrative Agent, collateral assignments of any and all contracts, bills of sale, chattel paper, statements, conveyances, receipted vouchers, or agreements of any
nature under which Borrower claims title to any materials, fixtures, or personal property used or to be used in the construction of the Improvements; (b) either cause each Construction Contract to contain a provision specifically subordinating any
Lien right against the Collateral to the Liens created by the Loan Documents or cause the other party thereto to execute any and all instruments, acceptable in form and substance to Administrative Agent, to accomplish the same; (c) cause each
Construction Contract to be based on a fixed price or a guaranteed maximum contract amount consistent with the Budget; (d) if Administrative Agent shall request, furnish Administrative Agent and the Independent Consultant with a list of
subcontractors, materialmen, vendors, and laborers who are to provide materials for or perform work with respect to the Improvements, and promptly notify Administrative Agent and the Independent Consultant of any changes to any list provided to
Administrative Agent; and (e) comply with and satisfy all the 


64 












terms and conditions of Borrower under each Construction Contract, any Property Contracts, and any Operating Contracts. 


          Section 7.10       Affidavit of Commencement.       Within 10 days after the Construction Commencement Date, but not
before construction of the Improvements has actually begun, Borrower shall file or cause to be filed in the appropriate records of the county or counties in which the Land is situated, an Affidavit of Commencement duly executed by Borrower and
Contractor. The date of commencement of work set forth in such Affidavit of Commencement shall not be the date of or prior to the date on which the Mortgage was recorded. 


          Section 7.11       Affidavit of Completion.       Within 10 days after construction of the Improvements has been
completed, Borrower shall file or cause to be filed in the appropriate records in the county or counties in which the Land is situated an Affidavit of Completion. 


          Section 7.12       Advertising by Administrative Agent and Lenders.      Upon the direction of Administrative Agent, but
not otherwise, Borrower shall erect and thereafter during the Construction Phase maintain on the Land one or more advertising signs furnished by Administrative Agent and Lenders indicating that the financing for construction of the Improvements has
been furnished by Administrative Agent and Lenders. 


          Section 7.13       Delivery of Property Contracts.      Borrower shall deliver to Administrative Agent and the
Independent Consultant a copy of each Property Contract promptly after the execution of same by all parties thereto. Within 20 days after a request by Administrative Agent, Borrower shall prepare and deliver to Administrative Agent and the
Independent Consultant a complete listing of all Property Contracts, showing date, term, parties, subject matter, concessions, contractual fees and costs payable by Borrower, whether any defaults exist, and other information specified by
Administrative Agent, with respect to each of such Property Contracts. 


          Section 7.14       Operating Contracts.      Borrower shall deliver to Administrative Agent and the Independent
Consultant a copy of each Operating Contract promptly after the execution of same by all parties thereto, such Operating Contract to be in form and substance satisfactory to Administrative Agent. Within 20 days after a request by Administrative
Agent, Borrower shall prepare and deliver to Administrative Agent and the Independent Consultant a complete listing of all Operating Contracts, showing date, term, parties, subject matter, concessions, contractual fees and costs payable by Borrower,
anticipated revenues to Borrower (if applicable), whether any defaults exist, and other information specified by Administrative Agent, with respect to each of such Operating Contracts. Borrower agrees to promptly execute and deliver such collateral
assignments and other documents, obtain such consents, and take such other actions as Administrative Agent may reasonably request to perfect Administrative Agent’s security interest and (in the case of an Event of Default) enable Administrative
Agent, at Administrative Agent’s option, to succeed to Borrower’s rights under any or all Operating Contracts. Borrower shall not amend or terminate any Operating Contract without the prior consent of Administrative Agent. 


          Section 7.15       Safe Storage.      Borrower shall store all equipment, supplies and materials not affixed to or
incorporated into the Improvements (a) on the Land or (b) with Administrative Agent’s prior approval, in a bonded warehouse, or other facility, acceptable to Administrative 


65 












Agent and with such agreements and certifications as Administrative Agent may require to assure the perfected security interest therein, and in each case under adequate safeguard to minimize the possibility of loss, theft, damage
or commingling with other property.  Upon Administrative Agent’s request, Borrower will furnish an inventory of all such equipment, supplies and materials stored off the Land, specifying their location, and will furnish such other information,
including any requisition, invoice, bill of sale, evidence of insurance, evidence of bond, and other documentation, as Administrative Agent may request. Administrative Agent, or its representatives, must have the right to inspect from time to time
all such equipment, supplies, and materials not stored on the Land. 


          Section 7.16       Title Insurance Endorsement.       Within 15 days after Completion and the final Advance, Borrower
shall cause the Title Policy to be endorsed to remove any exceptions related to completion of improvements, mechanics’ or materialmen’s liens, or pending disbursements, with no additional title change or exception objectionable to Administrative
Agent. 


          Section 7.17       Site Visits, Observation and Testing.      Administrative Agent and its agents and representatives
shall have the right at any reasonable time to enter and visit the Project for the purpose of performing appraisals, observing the Project, inspecting the progress of construction of the Project, taking and removing soil or groundwater samples, and
conducting tests on any part of the Project. Administrative Agent has no duty, however, to visit or observe the Project or to conduct tests, and no site visit, observation or testing by Administrative Agent, its agents or representatives, shall
impose any liability on any of Administrative Agent, its agents or representatives.  Neither Borrower nor any other party is entitled to rely on any site visit, observation or testing by any of Administrative Agent, its agents or representatives.
Neither Administrative Agent, its agents nor representatives owe any duty of care to protect Borrower or any other party against, or to inform Borrower or any other party of any other adverse condition affecting the Project.  Administrative Agent
shall give Borrower reasonable notice before entering the Project. 


          Section 7.18       Project Commencement and Operation.       Borrower shall commence operating the Project for its
intended purposes on or before 30 days after the date Completion shall have occurred. 


          Section 7.19       Reserve Account.       Upon written request by Administrative Agent, Borrower shall establish a
Special Account and maintain cash reserves in such Special Account in the amount of the reserves set forth in the budgets provided to Administrative Agent pursuant to Section 7.1 or in an
amount reasonably determined by Administrative Agent as being appropriate for deferred maintenance of the Collateral. 


          Section 7.20       Accounts.       Borrower agrees promptly to execute and provide such documentation and information as
Administrative Agent may reasonably request in connection with opening, securing, servicing, and closing any accounts opened with financial institutions acceptable to Administrative Agent or with any Lender pursuant to this Loan Agreement. All
accounts opened pursuant to this Loan Agreement shall be in such form and content and have such persons with signature authority as Administrative Agent deems acceptable, including to 


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make an officer or officers of Administrative Agent as a required, joint signator or to make an officer or officers of Administrative Agent as the sole signator. 


ARTICLE VIII. COLLATERAL 


          Section
8.1     Collateral.     
To secure payment and performance of the Obligations, Borrower and each other
Credit  Party shall grant to Administrative Agent, for the benefit of Secured
Parties, Liens in and upon all of the Collateral, subject only to the Permitted
Exceptions. Furthermore, Borrower
shall  grant, assign, and transfer to Administrative Agent, for the Secured Parties,
a security interest in all accounts, and all funds in such accounts, which are
established by Borrower with Administrative Agent pursuant to this Loan Agreement,
including  the Construction Account and any Special Account, to secure the full
and timely payment of all Obligations, which accounts shall be deemed Personal
Property Collateral and subject to all of the applicable provisions of the Mortgage
and Security  Agreement. 


          Section
8.2     Collateral
Assignment of Construction Contracts and Property Contracts.     
As additional security for  the payment and performance of the Obligations, Borrower
hereby grants, transfers and assigns to Administrative Agent for the benefit
of Secured Parties all of Borrower’s rights and interest, but not its obligations,
in, under and to each  Construction Contract and Property Contract upon the following
terms and conditions: 

	          	          (a)        Borrower
          represents and warrants that the copy of each Construction Contract
          and Property Contract Borrower has furnished or will furnish to Administrative
          Agent and the Independent Consultant is or will be (as applicable)
          a true and complete copy thereof, including all amendments thereto,
          if any, and that Borrower’s interest therein is not subject to any
          Lien, claim, setoff or other encumbrance. 

                 (b)        Neither
          this assignment nor any action by Administrative Agent or any Lender
          shall constitute an assumption by Administrative Agent or such Lender
          of any obligations under any Construction Contract or Property Contract,
          and Borrower shall continue to be liable for all obligations of Borrower
          thereunder, Borrower hereby is agreeing to perform all of its obligations
          under each Construction Contract and Property Contract. Borrower agrees
          to indemnify and hold Administrative Agent and Lenders harmless against
          and from any loss, cost, liability or expense (including attorneys’
          fees) resulting from any failure of Borrower to so perform. 

                 (c)        After
          the occurrence of an Event of Default, Administrative Agent shall have
          the right at any time (but shall have no obligation) to take in its
          name or in the name of Borrower any action which Borrower could take
          under or with respect to each Construction Contract and Property Contract,
          including such action as Administrative Agent may at any time determine
          to be necessary or advisable to cure any default under any Construction
          Contract or Property Contract or to protect the rights of Borrower
          or Administrative Agent and Lenders thereunder. Neither Administrative
          Agent nor any Lender shall incur any liability if any action so taken
          by it or in its behalf shall prove to be inadequate or invalid other
          than liability resulting solely from the gross negligence or willful
          misconduct of Administrative Agent or such Lender, and Borrower agrees
          to indemnify and hold Administrative Agent and Lenders harmless against
    and from any 
    



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	 	loss, cost, liability or expense (including
          but not limited to reasonable attorneys’ fees) incurred in connection
          with any such action, excluding any such loss, liabilities or expenses
          arising solely from the gross negligence or willful misconduct of Administrative
          Agent or any Lender. 

                 (d)        Prior
          to the occurrence of an Event of Default, Borrower shall have the right
          to exercise its rights as owner under each Construction Contract and
          Property Contract, provided that Borrower shall not cancel or amend
          any Construction Contract or Property Contract or do or suffer to be
          done any act which would impair the security constituted by this assignment
          without the prior written consent of Administrative Agent. Administrative
          Agent shall have the right, but no obligation, to exercise its rights
          as attorney-in-fact granted pursuant to Section
          9.4 in connection with this assignment,
          along with any other rights or remedies, all of which are cumulative.

                 (e)        This
          assignment shall inure to the benefit of Administrative Agent and its
          successors and assigns, any purchaser upon foreclosure of the Mortgage,
          any receiver in possession of any portion of the Collateral and any
          Person affiliated with Administrative Agent which assumes Administrative
          Agent’s rights and obligations under this Loan Agreement. 
    
	          	 
	          Section
          8.3      Collateral
          Assignment of Plans.      As additional security
          for the payment and performance of the Obligations, Borrower hereby
          grants, transfers and assigns to Administrative Agent for the benefit
          of Secured Parties all of Borrower’s rights and interest in and to
          the Plans and hereby represents and warrants to and agrees with Administrative
    Agent and Lenders as follows: 
      
	 	 
	 	          (a)        The
          copy of the Plans (or schedules thereof if so specified by Administrative
          Agent) delivered or to be delivered to Administrative Agent and the
          Independent Consultant is and shall be complete and accurate. 

                 (b)        The
          Plans are and shall be complete and adequate for the construction of
          the Improvements, and there have been no modifications thereof except
          as reflected in such Plans (and described in the schedules, if provided). 

                 (c)        Administrative
          Agent may use the Plans for any purpose relating to the Improvements,
          including inspections of construction and the Completion of the Improvements. 

                 (d)        Administrative
          Agent’s acceptance of this assignment shall not constitute approval
          of the Plans by Administrative Agent. Neither Administrative Agent
          nor any Lender has any liability or obligation in connection with the
          Plans and no responsibility for the adequacy thereof or for the construction
          of the Improvements contemplated by the Plans. Neither Administrative
          Agent nor any Lender has any duty to inspect the Improvements, and
          if Administrative Agent or any Lender should inspect the Improvements,
          neither Administrative Agent nor any Lender shall have any liability
          or obligation to Borrower or any other party arising out of such inspection.
          No such inspection nor any failure by Administrative Agent or any Lender
    to make objections 
    


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	          	after any such inspection shall constitute
          a representation by Administrative Agent or such Lender that the Improvements
          are in accordance with the Plans or any other requirement or constitute
          a waiver of Administrative Agent’s or such Lender’s right thereafter
          to insist that the Improvements be constructed in accordance with the
          Plans or any other requirement. 

                 (e)        This
          assignment shall inure to the benefit of Administrative Agent, Lenders
          and their respective successors and assigns, any purchaser upon foreclosure
          under the Mortgage, any receiver in possession of the Collateral and
          any entity which assumes Administrative Agent’s rights and obligations
          under this Agreement. 

       Section 8.4       No
            Obligation or Agency of Administrative Agent or any Lender.      

                 (a)       No
            Obligation by Administrative Agent or any Lenders to Construct.     
            Neither Administrative Agent nor any Lender has any liability or
            obligation in connection with the Land or Improvements or the development,
            construction or completion thereof or work performed thereon, and
            has no obligation except to disburse the Loan proceeds as herein
            agreed. Neither Administrative Agent nor any Lender is obligated
            to inspect the Improvements nor is Administrative Agent or any Lender
            liable, and under no circumstances shall Administrative Agent or
            any Lender be or become liable, for the performance or default of
            any contractor or subcontractor, or for any failure to construct,
            complete, protect or insure the Collateral, or any part thereof,
            or for the payment of any cost or expense incurred in connection
            therewith, or for the performance or nonperformance of any obligation
            of any Credit Party to Administrative Agent or any Lender nor to
            any other person, firm or entity, without limitation. Nothing, including
            any disbursement of Loan proceeds or Borrower’s Deposit, any inspection,
            any other action taken pursuant to any Loan Document, or acceptance
            of any document or instrument, shall be construed as an assumption,
            representation or warranty, express or implied, on Administrative
            Agent’s or any Lender’s part. 

                 (b)       No
            Obligation by Administrative Agent or any Lender to Operate.     
            Any term or condition of any of the Loan Documents to the contrary
            notwithstanding, neither Administrative Agent nor any Lender shall
            have, and by its execution and acceptance of this Loan Agreement
            hereby expressly disclaims, any obligation or responsibility for
            the management, conduct or operation of the business and affairs
            of any Credit Party or the Project. Any term or condition of the
            Loan Documents which permits Administrative Agent or any Lender to
            disburse funds, whether from the proceeds of the Loan, Borrower’s
            Deposit or otherwise, or to take or refrain from taking any action
            with respect to any Credit Party, the Collateral or any other collateral
            for repayment of the Loan, shall be deemed to be solely to permit
            Administrative Agent or a Lender to audit and review the management,
            operation and conduct of the business and affairs of any Credit Party,
            and to maintain and preserve the security given by Borrower to Administrative
            Agent or a Lender for the Loan, for the sole benefit of the Secured
            Parties, and may not be relied upon by any other Person. Further,
            neither Administrative Agent nor any Lender shall have assumed, nor
            be deemed or construed to have assumed, and by its execution and
            acceptance of this Loan Agreement hereby expressly disclaims any
            liability or responsibility for any aspect of Borrower’s business
    or affairs, including the management 
    



  69 










	 	or operation of the Project, the payment
          or performance of any Indebtedness, or other obligation of any Credit
          Party, and no term or condition of the Loan Documents shall be construed
          otherwise. 

               (c)       No
            Agency.      Nothing herein shall be construed
            as making or constituting Administrative Agent or any Lender as the
            agent of any Credit Party in making payments pursuant to any construction
            contracts or subcontracts entered into by any Credit Party for construction
            of the Improvements or otherwise, except to the extent, if any, the
            attorney-in-fact powers are construed to create an agency. The purpose
            of all requirements of Administrative Agent and Lenders hereunder
            is solely to allow Administrative Agent or any Lender to check and
            require documentation (including lien waivers) sufficient to protect
            Administrative Agent, Lenders and the Loan contemplated hereby. Borrower
            shall have no right to rely on any procedures required by Administrative
            Agent or any Lender, nor any approvals given by Administrative Agent
            or any Lender. Borrower hereby acknowledges that Borrower has sole
            responsibility for constructing the Improvements, managing and operating
            the Project, and conducting all other aspects of its business and
            affairs. Borrower has solely, on Borrower’s own behalf, selected
            or approved each contractor, each subcontractor and each materialman,
            neither Administrative Agent nor any Lender having any responsibility
            for any such persons or entities or for the quality of their materials
            or workmanship. 
             Section 8.5     Casualty;
            Condemnation.      
                 (a)        If
          the Casualty is covered by insurance, Borrower shall immediately make
          proof of loss and collect all insurance proceeds, all such proceeds
          to be payable to Administrative Agent or as Administrative Agent shall
          direct. If an Event of Default exists, or if Borrower shall not be
          proceeding, in Administrative Agent’s good faith opinion, to collect
          such insurance proceeds, then Administrative Agent may, but shall not
          be obligated to, make proof of loss, and is authorized but not obligated
          to settle any claim with respect thereto, and to collect the proceeds
          thereof. Borrower shall not accept any settlement of an insurance claim
          for $50,000 or more without the prior written consent of Administrative
          Agent, which consent shall not be unreasonably withheld or delayed. 
                       (b)        Administrative
          Agent shall make the net insurance proceeds received by it (after reimbursement
          of Administrative Agent’s out-of-pocket costs of collecting and disbursing
          the same) available to Borrower to pay the cost of restoration, repair,
          replacement and rebuilding of Tangible Collateral, subject to the following
    conditions: 
      
	          	          	 
	 	 	          (i)        There
          shall be no Event of Default in existence at the time of any disbursement
          of the insurance proceeds; 

                 (ii)        Administrative
          Agent shall have determined, in its reasonable discretion, that the
          cost of restoration, repair, replacement and rebuilding is and will
          be equal to or less than the amount of insurance proceeds and other
          funds deposited by Borrower with Administrative Agent 

    


 70 










	 	 	          (iii)        Administrative
          Agent shall have determined, in its sole discretion, that the restoration,
          repair, replacement and rebuilding can be completed in accordance with
          plans and specifications approved by Administrative Agent (such approval
          not to be unreasonably withheld), in accordance with codes and ordinances
          and in accordance with the terms, and within the time requirements
          in order to prevent termination, of the Construction Contracts and
          Operating Contracts, and in any event not less than six months prior
          to the Maturity Date; 

                 (iv)        All
          funds shall be disbursed, at Administrative Agent’s option, in accordance
          with Administrative Agent’s customary disbursement procedures for construction
          loans; and 

                 (v)        The
          Casualty shall have occurred more than 12 months prior to the Maturity
          Date. 
    
	          	          	 
	 	If any of these conditions shall
          not be satisfied, then Administrative Agent shall have the right to
          use the insurance proceeds to prepay the Loan in accordance with the
          Loan Documents. If any insurance proceeds shall remain after completion
          of the restoration, repair and rebuilding of Tangible Collateral, they
          shall be disbursed to Borrower, or at Administrative Agent’s discretion,
          used to prepay the Loan in accordance with the Loan Documents. 
                 (c)        If
          any portion of the Collateral shall be subject to Condemnation, Borrower
          shall diligently pursue any negotiation and prosecute any proceeding
          in connection with the Condemnation at Borrower’s expense. If an Event
          of Default shall be in existence, or if Borrower, in Administrative
          Agent’s reasonable opinion, shall not be diligently negotiating or
          prosecuting the claim, Administrative Agent is authorized, but not
          required, to negotiate and prosecute the claim and appear at any hearing
          for itself and on behalf of Borrower and to compromise or settle all
          compensation for the Condemnation, Administrative Agent shall not be
          liable to Borrower for any failure by Administrative Agent to collect
          or to exercise diligence in collecting any such compensation except
          for any liability arising solely from the gross negligence or willful
          misconduct of Administrative Agent. Borrower shall not compromise or
          settle any claim resulting from the Condemnation if such settlement
          shall result in payment of $50,000 or more without Administrative
          Agent’s written consent, which consent shall not be unreasonably withheld
          or delayed. All awards shall be paid to Administrative Agent. 
                       (d)        Administrative
          Agent shall make the net proceeds of any Condemnation received by it
          (after reimbursement of Administrative Agent’s out-of-pocket costs
          of collecting and disbursing the same) available to Borrower for restoration,
    repair and rebuilding of Collateral, subject to the following conditions: 
      
	 	 	 
	 	 	          (i)        There
          shall be no Event of Default in existence at the time of any disbursement
          of the condemnation proceeds; 

                 (ii)        Administrative
          Agent shall have determined, in its reasonable discretion, that the
    cost of restoration, repair, replacement and rebuilding is and 
    



  71 










	 	 	will be equal to or less than the
          amount of condemnation proceeds and other funds deposited by Borrower
          with Administrative Agent. 

                 (iii)        Administrative
          Agent shall have determined, in its sole discretion, that the restoration,
          repair, replacement and rebuilding can be completed in accordance with
          plans and specifications approved by Administrative Agent (such approval
          not to be unreasonably withheld), in accordance with codes and ordinances
          and in accordance with the terms, and within the time requirements
          in order to prevent termination, of the Construction Contracts and
          Operating Contracts, and in any event not less than six months prior
          to the Maturity Date; 

                 (iv)        All
          funds shall be disbursed, at Administrative Agent’s option, in accordance
          with Administrative Agent’s customary disbursement procedures for construction
          loans; and 

                 (v)        The
          Condemnation shall have occurred more than 12 months prior to the Maturity
          Date. 
    
	          	          	 
	 	If any of these conditions
          shall not be satisfied, then Administrative Agent shall have the right
          to use the condemnation proceeds to prepay the Loan in accordance with
          the Loan Documents. If any condemnation proceeds shall remain after
          completion of the restoration, repair, replacement and rebuilding of
          the Collateral, they shall be disbursed to Borrower, or at Administrative
          Agent’s discretion, used to prepay the Loan in accordance with the
    Loan Documents. 
      
	 	 	 
	ARTICLE IX. EVENTS OF DEFAULT
            AND REMEDIES 

                 Section
          9.1       Events
          of Default.      The occurrence of any of
          the following events shall constitute an “Event of Default” under this
    Loan Agreement: 
      
	 
	 	          (a)       Failure
            to Pay.      Borrower or any other Credit
            Party shall fail to pay when due (i) any principal or interest under
            any Loan Document when and as the same shall become due and payable
            and (ii) any fee or other amount (other than principal or interest)
            under any Loan Document when and as the same shall become due and
            payable, and in each such case such failure shall continue unremedied
            for a period of five days. 
                       (b)       Failure
            to Perform.      Any Credit Party shall
            default in the performance or observance of (i) any covenant or agreement
            on its part to be performed or observed under Section
            5.1, 5.2, 5.3, 5.6, 5.9, 5.10,
            and Article VI (and
            such default does not constitute an Event of Default described under
            any other clause of this Section), and (ii) any other provision of
            this Loan Agreement, the Note or any of the other Loan Documents
            (and such default does not constitute an Event of Default described
            under any other clause of this Section), and such default shall continue
            unremedied for 10 Business Days (A) after written notice thereof
            shall have been given by Administrative Agent to Borrower, or (B)
            from Borrower’s receipt of any notice or knowledge of such default
    from any other source. 
      



  72 










	          	          (c)       Breach
            of Warranty.      Any representation or
            warranty made by any Credit Party contained in this Loan Agreement,
            the Note or any of the other Loan Documents shall at any time prove
            to have been incorrect in any material respect when made or shall
            become so at any time prior to repayment in full of all Obligations. 

                 (d)       Default
            Under Other Merrill Lynch Agreement.     
            A default or event of default by any Credit Party shall occur under
            the terms of any other agreement, instrument or document with or
            intended for the benefit of Administrative Agent, MLPF&S or any
            of their Affiliates, and any required notice shall have been given
            and required passage of time shall have elapsed. 

                 (e)       Bankruptcy
            Event.      Any Bankruptcy Event shall occur. 

                 (f)        [Reserved.] 

                 (g)       Default
            Under Other Agreements.      Any event shall
            occur which results in any default of any material agreement involving
            any Credit Party or any agreement evidencing any indebtedness of
            any Credit Party of $50,000 or more other than a default of any
            agreement involving or evidencing trade payables to the extent the
            same is being diligently contested in good faith by appropriate proceedings. 

                 (h)       Collateral
            Impairment or Lapse in Insurance Coverage.     
            The loss, theft or destruction of any Collateral that is not fully
            covered by insurance, the occurrence of any material deterioration
            or impairment of any Collateral outside ordinary wear and tear or
            any material decline or depreciation in the value or market price
            thereof, which causes any Collateral, in the reasonable opinion of
            Administrative Agent, to become unsatisfactory as to value or character;
            or any levy, attachment, seizure or confiscation of more than a de
            minimis portion of the Collateral which is not released within 10
            Business Days; or the failure to maintain insurance in accordance
            with Section 5.9.      

                 (i)       Contested
            Obligation.      (i) Any of the Loan Documents
            shall for any reason cease to be, or is asserted by any Credit Party
            not to be, a legal, valid and binding obligation of any Credit Party
            thereto, enforceable in accordance with its terms; or (ii) the validity,
            perfection or priority of Administrative Agent’s first Lien and security
            interest (subject to the Permitted Exceptions) on any of the Collateral
            is contested by any Person; or (iii) any Credit Party shall or shall
            attempt to repudiate, revoke, contest or dispute, in whole or in
            part, such Credit Party’s obligations under any Loan Document. 

                 (j)       Judgments.     
          A judgment shall be entered against any Credit Party in excess of $50,000,
          and the judgment is not paid in full and discharged, or stayed and
          bonded to the satisfaction of Administrative Agent, prior to the deadline
          for filing an appeal to such judgment or such earlier date that the
          judgment creditor is entitled to assert a lien against such Credit
          Party’s assets as a result of such judgment. 

                 (k)       Change
            in Control/Change in Management.      (i)
            Any direct or indirect sale, conveyance, assignment or other transfer
            of or grant of a security interest in any ownership interest of any
            Credit Party which results, or if any rights related thereto were
            exercised would result, in any change in the identity of the individuals
    or entities 
    



  73 










	 	previously in control of any Credit
          Party; or (ii) the owner(s) of the controlling equity interest of any
          Credit Party on the date hereof shall cease to own and control such
          Credit Party; or (iii) a competent management and operations company
          shall for any reason cease to manage and operate the Project and such
          company is not replaced by another company reasonably acceptable to
          Administrative Agent within 45 days. 

                 (l)       Withdrawal,
            Death, etc.      The incapacity, death,
            withdrawal, dissolution, or the filing for dissolution of: (i) any
            Credit Party; or (ii) any controlling shareholder, partner, or member
            of any Credit Party. 

                 (m)       Construction.     
          The construction of the Improvements is (i) at any time discontinued
          for an unscheduled period of 10 or more consecutive days other than
          by reason of an event of Force Majeure, (ii) not resumed within 90
          days after the date of any event of Force Majeure, or (iii) not completed
          by March 31, 2008, or Borrower is unable to satisfy any condition precedent
          to Borrower’s right to receive Advances hereunder for a period in excess
          of 30 days after Administrative Agent’s refusal to make any further
          Advances. 
    
	          	 
	          Section
          9.2     Remedies.     
          Upon the occurrence and during the continuance of any Event of Default,
          Administrative Agent and Lenders may at their sole option do any one
          or more or all of the following, at such time and in such order as
    Administrative Agent may in its sole discretion choose: 
      
	 	 
	 	          (a)       Termination.     
          Administrative Agent or Lenders may without notice terminate their
          obligation to extend any credit to or for the benefit of Borrower (it
          being understood, however, that upon the occurrence of any Bankruptcy
          Event all such obligations shall automatically terminate without any
          action on the part of Administrative Agent or Lenders). 

                 (b)       Acceleration.     
          Administrative Agent or Lenders may declare the principal of and interest
          and any premium on the Note, and all other Obligations, to be forthwith
          due and payable, whereupon all such amounts shall be immediately due
          and payable, without presentment, demand for payment, protest and notice
          of protest, notice of dishonor, notice of acceleration, notice of intent
          to accelerate or other notice or formality of any kind, all of which
          are hereby expressly waived; provided, however, that upon the occurrence
          of any Bankruptcy Event all such principal, interest, premium and other
          Obligations shall automatically become due and payable without any
          action on the part of Administrative Agent or any Lender. The acceleration
          of any obligations shall not limit, negate, or cancel the Prepayment
          Premium, which shall for all purposes be included within the Obligations. 

                 (c)       Exercise
            Other Rights.      Administrative Agent
            or any Lender may exercise any or all of the remedies of a secured
            party under Legal Requirements and in equity, including under the
            UCC, and any or all of its other rights and remedies under the Loan
    Documents. 
    


 74 










	          	          (d)       Possession.     
          Administrative Agent may require Borrower or any other Credit Party
          to make the Collateral and the records pertaining to the Collateral
          available to Administrative Agent at a place designated by Administrative
          Agent which is reasonably convenient to Borrower, or may take possession
          of the Collateral and the records pertaining to the Collateral without
          the use of any judicial process and without any prior notice to Borrower
          to the extent permitted by Legal Requirements. Administrative Agent’s
          sole duty with respect to the custody, safe-keeping, and physical preservation
          of any Collateral in its possession, under Section 9.207 of the UCC
          or otherwise, shall be to deal with such Collateral in the same manner
          as Administrative Agent deals with similar property for its own account. 

                 (e)       Sale.     
          Administrative Agent may sell any or all of the Collateral at public
          or private sale (in addition to and separate from a sale pursuant to
          the Mortgage) upon such terms and conditions as Administrative Agent
          may reasonably deem proper, whether for cash, on credit, or for future
          delivery, in bulk or in lots. Administrative Agent may purchase any
          Collateral at any such sale free of Borrower’s right of redemption,
          if any, which Borrower expressly waives to the extent not prohibited
          by Legal Requirements. The net proceeds of any such public or private
          sale and all other amounts actually collected or received by Administrative
          Agent pursuant hereto, after deducting all costs and expenses incurred
          at any time in the collection of the Obligations and in the protection,
          collection and sale of the Collateral, will be applied to the payment
          of the Obligations and to Obligations owing to any Eligible Swap Counterparty
          in respect of any Swap Contracts permitted, but not required, by the
          terms of this Loan Agreement, with any remaining proceeds paid to Borrower
          or whoever else may be entitled thereto, and with Borrower and each
          other Credit Party remaining jointly and severally liable for any amount
          remaining unpaid after such application. Neither Administrative Agent
          nor any Lender has any obligation to repair, refurbish or otherwise
          prepare the Collateral for sale, lease or other use or disposition
          as authorized herein. If Administrative Agent sells any Collateral
          upon credit, Borrower will receive credit against the Obligations only
          for cash payments made by the purchaser to Administrative Agent. If
          the purchaser fails to pay the purchase price, then Administrative
          Agent may resell the Collateral, to the extent permitted by Legal Requirements. 

                 (f)       Delivery
            of Cash, Checks, Etc.      Administrative
            Agent may require Borrower or any other Credit Party to forthwith,
            upon receipt, transmit and deliver to Administrative Agent, in the
            form received, all cash, checks, drafts and other instruments for
            the payment of money (properly endorsed, where required, so that
            such items may be collected by Administrative Agent) which may be
            received by Borrower at any time in full or partial payment of any
            Collateral, and require that Borrower not commingle any such items
            which may be so received by Borrower with any other of its funds
            or property but instead hold them separate and apart and in trust
            for Administrative Agent until delivery is made to Administrative
            Agent. 

                 (g)       Notification
            of Account Debtors.      Administrative
            Agent may notify any account debtor of Borrower or any other Credit
            Party that its Account or Chattel Paper has been assigned to Administrative
            Agent for the benefit of Secured Parties and direct such account
    debtor to make payment directly to Administrative Agent of all amounts 
    



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	          	due or becoming due with respect
          to such Account or Chattel Paper; and Administrative Agent may enforce
          payment and collect, by legal proceedings or otherwise, such Account
          or Chattel Paper. 

                 (h)         Control
            of Collateral.      Administrative Agent
            may otherwise take control in any lawful manner of any cash or non-cash
            items of payment or proceeds of Collateral and of any rejected, returned,
            stopped in transit or repossessed goods included in the Collateral
            and endorse Borrower’s name on any item of payment on or proceeds
            of the Collateral. 

     



           Section 9.3       Set-Off.     
    Administrative Agent and each Lender shall have the further right upon the
    occurrence and during the continuance of an Event of Default to set-off,
    appropriate and apply toward payment of any of the Obligations, in such order
    of application as Administrative Agent and such Lender may from time to time
    and at any time elect, any cash, credit, deposits, accounts, financial assets,
    investment property, securities and any other property of Borrower which
    is in transit to or in the possession, custody or control of Administrative
    Agent or such Lender, MLPF&S or any agent, bailee,
or Affiliate of such Lender or MLPF&S. Borrower hereby collaterally assigns
and grants to Administrative Agent, for itself and the benefit of each Lender,
a continuing security interest in all such property as Collateral and as additional
security for the Obligations. Upon the occurrence and during the continuance
of an Event of Default, Administrative Agent shall have all rights in such property
available to collateral assignees and secured parties under all Legal Requirements,
including the UCC.


          Section 9.4       Power of Attorney.       Effective upon the occurrence and during the continuance of an Event of
Default, Borrower hereby irrevocably appoints Administrative Agent as its attorney-in-fact, with full power of substitution, in its place and stead and in its name or in the name of Administrative Agent, to from time to time in Administrative
Agent’s sole discretion take any action and to execute any instrument which Administrative Agent may deem necessary or advisable to accomplish the purposes of this Loan Agreement and the other Loan Documents, including to receive, endorse and
collect all checks, drafts and other instruments for the payment of money made payable to Borrower included in the Collateral. The powers of attorney granted to Administrative Agent in this Loan Agreement are coupled with an interest and are
irrevocable until the Obligations have been indefeasibly paid in full and fully satisfied and all obligations of Administrative Agent and Lenders under this Loan Agreement have been terminated. 


          Section 9.5       Remedies are Severable and Cumulative.       All rights and remedies of Administrative Agent and
Lenders herein are severable and cumulative and in addition to all other rights and remedies available in the Note, the other Loan Documents, at law or in equity, and any one or more of such rights and remedies may be exercised simultaneously or
successively. 


          Section 9.6       No Marshalling.       Neither Administrative Agent nor any Lender shall be under any duty or obligation
to (a) preserve, protect or marshal the Collateral; (b) preserve or protect the rights of any Credit Party or any other Person claiming an interest in the Collateral; (c) realize upon the Collateral in any particular order or manner, (d) seek
repayment of any Obligations from any particular source; (e) proceed or not proceed against any Credit Party pursuant to any guaranty or security agreement or against any Credit Party under the Loan 


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Documents, with or without also realizing on the Collateral; (f) permit any substitution or exchange of all or any part of the Collateral; or (g) release any part of the Collateral from the Loan Agreement or any of the other Loan
Documents, whether or not such substitution or release would leave Administrative Agent and Lenders adequately secured. 


          Section 9.7       Notices.      To the fullest extent permitted by Legal Requirements, Borrower hereby irrevocably waives
and releases Administrative Agent and Lenders of and from any and all liabilities and penalties for failure of Administrative Agent or any Lender to comply with any statutory or other requirement imposed upon Administrative Agent or any Lender
relating to notices of sale, holding of sale or reporting of any sale, and Borrower waives all rights of redemption or reinstatement from any such sale.  Except as otherwise required by Legal Requirements, any notices required under Legal
Requirements shall be reasonably and properly given to Borrower if given by any of the methods provided herein at least five Business Days prior to taking action. Administrative Agent or any Lender shall have the right to postpone or adjourn any
sale or other disposition of Collateral at any time without giving notice of any such postponed or adjourned date.  In the event Administrative Agent or any Lender seeks to take possession of any or all of the Collateral by court process, Borrower
further irrevocably waives to the fullest extent permitted by law any bonds and any surety or security relating thereto required by any statute, court rule or otherwise as an incident to such possession, and any demand for possession prior to the
commencement of any suit or action. 


          Section 9.8       Application of Funds.       During the existence of an Event of Default (including after the maturity
of the Note), any amounts received on account of the Obligations shall be applied by Administrative Agent in the following order: 

	          	          First,
          to payment of that portion of the Obligations constituting fees, indemnities,
          expenses and other amounts (other than principal and interest) payable
          to Administrative Agent, in its capacity as such (including fees, charges
          and disbursements of counsel to Administrative Agent); 

                 Second,
          to payment of that portion of the Obligations constituting accrued
          and unpaid interest on the Loan and other Obligations; 

                 Third,
          to payment of that portion of the Obligations constituting unpaid principal
          of the Loan; 

                 Fourth,
          to payment of that portion of the Obligations constituting obligations
          owing to any Eligible Swap Counterparty in respect of any Swap Contracts
          permitted, but not required, by the terms of this Loan Agreement; and 

                 Last,
          the balance, if any, after all of the Obligations have been indefeasibly
    paid in full, to Borrower or as otherwise required by Legal Requirements. 
    


           Section 9.9       Completion of the Improvements.       Administrative Agent and Lenders shall have the right, upon the
occurrence of a Default or an Event of Default, in addition to any rights or remedies available to any of them under this Loan Agreement and all other Loan Documents, to enter into possession of the Collateral and perform any and all work and labor
necessary to complete the Improvements in accordance with the Plans. All amounts so expended 


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by Administrative Agent or any Lender shall be deemed to have been disbursed to Borrower as Loan proceeds and secured by the Mortgage. For this purpose, Borrower hereby constitutes and appoints (which appointment is coupled with
an interest and is therefore irrevocable) Administrative Agent as Borrower’s true and lawful attorney-in-fact, with full power of substitution to complete the Improvements in the name of Borrower, and hereby empowers Administrative Agent, acting as
Borrower’s attorney-in-fact, as follows:  to use any funds of Borrower, including any balance which may be held in escrow, any Borrower’s Deposit and any funds which may remain unadvanced under the Note, for the purpose of completing the
Improvements; to make such additions and changes and corrections in the Plans which shall be necessary or desirable to complete the Improvements; to continue, amend, or terminate all or any existing Construction Contracts or subcontracts; to employ
such contractors, subcontractors, agents, design professionals and inspectors as shall be required for said purposes; to pay, settle or compromise all existing bills and claims which are or may be payable with respect to any Construction Contract,
Property Contract, or Operating Contract, may be or become Liens, or may be necessary or desirable for the Completion of the Improvements or the clearing of title; to execute all applications, certificates, and other documents in the name of
Borrower which may be required by any Construction Contract, Property Contract, or Operating Contract; and to do any and every act with respect to the construction of the Improvements which Borrower could do in Borrower’s own behalf. Administrative
Agent, acting as Borrower’s attorney-in-fact, shall also have power to prosecute and defend all actions or proceedings in connection with the Collateral and to take such action and require such performance as is deemed necessary. In no event shall
Administrative Agent have any obligation to take any action pursuant to its rights as attorney-in-fact. The power of attorney under this Section shall terminate upon payment of the Obligations in full or upon foreclosure (or conveyance in lieu of
foreclosure) of all of the Collateral.  Administrative Agent shall incur no liability if any action taken by it as attorney-in-fact as permitted above shall prove to be inadequate, invalid, or in poor judgment, so long as Administrative Agent did
not act with gross negligence or willful misconduct. Borrower agrees to indemnify and hold harmless Administrative Agent from and against any loss, cost, liability, or expense (including reasonable attorneys’ fees) incurred in connection with any such action (excluding
Administrative Agent’s gross negligence or willful wrongful act). The foregoing indemnity shall apply with respect to matters which in whole or in part are caused by or arise out of the negligence (but not gross negligence) (whether sole,
comparative, or contributory) of Administrative Agent, but shall not apply to matters to the extent such matters are caused by or arise out of the gross negligence or willful wrongful act of Administrative Agent.



          Section 9.10       Receiver.       Administrative Agent and Lenders shall be entitled, without notice or consent, and
completely without regard to the adequacy of any security for the Obligations, to the appointment of a receiver of the Collateral, all operations related thereto, and the rents and profits derived therefrom. This appointment shall be in addition to
any other rights, relief or remedies afforded Administrative Agent and Lenders. Such receiver, in addition to any other rights to which he shall be entitled, shall be authorized to sell, foreclose or complete foreclosure on the Collateral for the
benefit of Administrative Agent and Lenders, pursuant to provisions of Legal Requirements. 


          Section 9.11       Right to Perform Obligations.      If Borrower shall fail to do any act or thing which it has
covenanted to do under this Loan Agreement or any of the Loan Documents, or any 


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representation or warranty on the part of Borrower contained in this Loan Agreement or any of the Loan Documents shall be breached, Administrative Agent may, in its sole discretion, after five Business Days written notice is sent
to Borrower (or such lesser notice, including no notice, as is reasonable under the circumstances), do the same or cause it to be done or remedy any such breach, and may expend its funds for such purpose.  Any and all reasonable amounts so expended
by Administrative Agent or any Lender shall be repayable to Administrative Agent or such Lender by Borrower upon demand, with interest at the Default Rate during the period from and including the date funds are so expended by Administrative Agent or
such Lender to the date of repayment, and all such amounts shall be additional Obligations.  The payment or performance by Administrative Agent or any Lender of any of Borrower’s obligations hereunder shall not relieve Borrower of said obligations
or of the consequences of having failed to pay or perform the same, and shall not waive or be deemed a cure of any Default or Event of Default. 


ARTICLE X. ADMINISTRATIVE AGENT 


          Section
10.1   Appointment
and Duties of Administrative Agent. 

	          	          (a)        The
          parties hereto agree that Merrill Lynch Capital, a division of Merrill
          Lynch Business Financial Services Inc., shall act, subject to the terms
          and conditions of this Section 10.1,
          as Administrative Agent and to the extent set forth herein each Lender
          hereby irrevocably appoints, authorizes, empowers and directs Administrative
          Agent to take such action on its behalf and to exercise such powers
          as are specifically delegated to Administrative Agent herein or are
          reasonably incidental thereto in connection with the administration
          of and the enforcement of any rights or remedies with respect to this
          Loan Agreement, the Note and the other Loan Documents. It is expressly
          understood and agreed that the obligations of Administrative Agent
          under the Loan Documents are only those expressly set forth in this
          Loan Agreement. Administrative Agent shall use reasonable diligence
          to examine the face of each document received by it hereunder to determine
          whether such documents, on their face, appear to be what they purport
          to be. However, Administrative Agent shall not be under any duty to
          examine into and pass upon the validity or genuineness of any documents
          received by it hereunder and Administrative Agent shall be entitled
          to assume that any of the same which appears regular on its face is
          genuine and valid and what it purports to be. 

                 (b)        Except
          as otherwise set forth in Section 11.19,
          Administrative Agent shall act pursuant to the instructions of Required
          Lenders in all matters relating to the Loan Documents. 

     



           Section
    10.2     Discretion
    and Liability of Administrative Agent.       Subject
    to Sections 10.1(b), 10.3,
    and 10.5, Administrative
    Agent shall be entitled to use its  discretion with respect to exercising
    or refraining from exercising any rights which may be vested in it under
    any of the Loan Documents or otherwise, or with respect to taking or refraining
    from taking any action or actions which it may be able to  take under any
    of the Loan Documents. Neither Administrative Agent nor any of its directors,
    officers, employees, agents or representatives shall be liable for any action
    taken or omitted by it hereunder or in connection herewith, except for its
     own gross negligence or willful misconduct. Administrative Agent shall incur
    no liability under, or in respect of this Loan Agreement or the other Loan
    Documents by acting upon a notice, 


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certificate, warranty or other paper or instrument reasonably believed by it to be genuine or authentic or to be signed by the proper party or parties, or with respect to anything which it may do or refrain from doing in the
reasonable exercise of its judgment, or which may seem to it to be necessary or desirable in the premises. 

	          	Section 10.3     Event
            of Default.      

                 (a)         Administrative
          Agent shall be entitled to assume that no Default or event which would
          constitute a Default after notice or lapse of time, or both, has occurred
          and is continuing, unless Administrative Agent has actual knowledge
          of such facts or has received notice from Borrower or a Credit Party
          or from a Lender in writing that such Person considers that a Default
          or event which would constitute a Default after notice or lapse of
          time, or both, has occurred and is continuing and which specifies the
          nature thereof. 

                 (b)         In
          the event that Administrative Agent shall acquire actual knowledge
          of any Default or event which would constitute a Default after notice
          or lapse of time, or both, or shall have received notice from Borrower,
          a Credit Party or a Lender as provided in Section
          10.3(a), Administrative Agent shall promptly
          notify (either orally, confirmed in writing, or in writing) Lenders
          of such Default or event and shall take such action and assert such
          rights as are contemplated under this Loan Agreement and in an emergency,
          or if requested in writing by Required Lenders shall, take such action
          and assert such rights as are contemplated under this Loan Agreement.
          To the extent not otherwise paid by Borrower, Administrative Agent
          shall be indemnified pro rata by Lenders against any liability or expenses
          (except for any liability or expenses caused by Administrative Agent’s
          gross negligence or willful misconduct), including, but not limited
          to, travel expenses and external counsel fees and expenses, incurred
          in connection with taking such action as Administrative Agent, and
          not as a Lender. Administrative Agent may refrain from acting in accordance
          with any instructions from Required Lenders until it shall have been
          indemnified to its satisfaction against any and all costs and expenses
          which it will or may expend or incur in complying with such instructions. 

    


           Section
    10.4     Consultation.     
    When acting in connection with this Loan Agreement, or the other Loan Documents,
     Administrative Agent may, with the consent of Required Lenders, engage and
    pay for the advice and services of any lawyers, accountants, surveyors, appraisers
    or other experts whose advice or services may to it appear necessary, expedient
    or  desirable and Administrative Agent shall be entitled to fully rely upon
any opinion or such advice so obtained. 


          Section
10.5     Communications
to and from Administrative Agent.       When any notice,
approval, consent, waiver or  other communication or action is required or may
be delivered by Lenders hereunder or the other Loan Documents, action by Administrative
Agent (upon the direction, approval or consent of each Lender, all Lenders or
Required Lenders, as applicable  pursuant to the requirements set forth in this
Loan Agreement) shall be effective for all purposes hereunder. Borrower and other
Credit Parties may rely on any communication from Administrative Agent hereunder
or the other Loan Documents, and need  not inquire into the propriety of or authorization
for such communication. Upon receipt by Administrative Agent from Borrower, any
other Credit Party or any Lender of any communication it will, in turn, 


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promptly forward such communication to Lenders; provided, however, that Administrative Agent shall not be liable for any costs, expenses or losses arising from any failure to so forward any such communication unless caused by the
gross negligence or willful misconduct of Administrative Agent. 


          Section 10.6       Limitations of Agency.       Notwithstanding anything in the Loan Documents, expressed or implied, it
is agreed by the parties hereto, that Administrative Agent will act under the Loan Documents as Administrative Agent solely for Lenders and only to the extent specifically set forth herein, and will, under no circumstances, be considered to be an
agent or fiduciary of any nature whatsoever in respect to any other Person.  Administrative Agent, in its individual capacity, may generally engage in any business with Borrower and other Credit Parties or any of their Affiliates as if it was not
Administrative Agent. 

	          	Section 10.7    No
            Representations or Warranty.      

                 (a)         No
          Lender (including Administrative Agent) makes to any other Lender any
          representation or any warranty, expressed or implied, or assumes any
          responsibility with respect to the Loan or the execution, construction
          or enforceability of the Loan Documents or any instrument or agreement
          executed by Borrower, other Credit Parties or any other Person in connection
          therewith. 

                 (b)         Administrative
          Agent takes no responsibility for the accuracy or completeness of any
          information concerning Borrower and other Credit Parties distributed
          by Administrative Agent in connection with the Loan nor for the truth
          of any representation or warranty given or made herein, nor for the
          validity, effectiveness, adequacy or enforceability of this Loan Agreement
          or any of the other Loan Documents. 

     



           Section
    10.8     Lender
    Credit Decision.       Each Lender acknowledges
    that it has independent of and without reliance  upon any other Lender (including
    Administrative Agent) or any information provided by any other Lender (including
    Administrative Agent) and based on the financial statements of Borrower and
    other Credit Parties and such other documents and  information as it has
    deemed appropriate, made its own credit analysis and decision to enter into
    this Loan Agreement. Each Lender also acknowledges that it will, independent
    of and without reliance upon any other Lender (including Administrative
    Agent) and based on such documents and information as it shall deem appropriate
    at that time, continue to make its own credit decisions in taking or not
    taking action under this Loan Agreement and any other documents relating
thereto. 


          Section
10.9     Indemnity.     
Notwithstanding any of the provisions hereof, to the extent Administrative Agent
has  not been so indemnified by Borrower, Lenders shall severally, pro rata in
respect of their respective Commitments, indemnify Administrative Agent against
any and all losses, costs, liabilities, damages or expenses, including but not
limited to,  reasonable travel expenses and external counsel’s reasonable fees
and expenses, arising from, or in connection with, its performance as Administrative
Agent hereunder and not caused by its gross negligence or willful misconduct. 


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          Section 10.10       Resignation.      Administrative Agent may resign as such at any time upon at least 30 days’ prior
notice to Borrower and Lenders, provided that such resignation shall not take effect until a successor agent has been appointed. In the event of a resignation by Administrative Agent, Lenders (in consultation with Borrower, provided no Default or
Event of Default has occurred and is continuing) shall promptly appoint a successor agent from among Lenders. 


          Section 10.11       Disbursements and Distributions.       On the date of each Loan advance, Administrative Agent shall
disburse each Lender’s pro rata portion of the Loan to or at the direction of Borrower pursuant to this Loan Agreement, to the extent received by Administrative Agent from such Lender. Administrative Agent shall be responsible for promptly
distributing, on the Business Day immediately following the date received by Administrative Agent, each Lender’s share of all net amounts received by Administrative Agent under any of the Loan Documents pursuant to this Loan Agreement. Each Lender
shall be responsible for designating by written notice to Administrative Agent the account to which such distribution shall be deposited. 


          Section 10.12       Limitation of Suits.       All rights of action and claims under this Loan Agreement and the other
Loan Documents of Lenders shall be prosecuted and enforced only by Administrative Agent. Lenders agree that they shall not independently institute any proceedings, judicial or otherwise, to enforce their rights against Borrower under this Loan
Agreement or the other Loan Documents.  However, notwithstanding anything contained in this Section 10.12, Lenders shall always retain their ability to retain independent counsel and to
protect their rights under this Loan Agreement and the other Loan Documents. 


          Section 10.13       Right of Setoff.      Subject to the provisions of Section
2.14 hereof, upon the occurrence and during the continuation of any Event of Default, Lenders each are hereby authorized at any time and from time to time, without notice to Borrower (any such notice being expressly
waived by Borrower), to setoff and apply any and all deposits (general or special, time or demand, provisional or final, whether or not such setoff results in any loss of interest or other penalty, and including without limitation all certificates
of deposit) at any time held by Lenders and all of the indebtedness arising in connection with this Loan Agreement irrespective of whether or not such Lender will have made any demand under this Loan Agreement, the Note or any other Loan Document.
Borrower also hereby grants to each of Lenders a Lien in and hereby transfers, assigns, sets over and conveys to each of Lenders, as security for payment of the Loan, all such deposits, funds or property of Borrower or indebtedness of any Lender to
Borrower. Should the right of any Lender to realize funds in any manner set forth hereinabove be challenged and any application of such funds be reversed, whether by court order or otherwise, Lenders shall make restitution or refund to Borrower pro
rata in accordance with their respective portions of the Loan.  Each Lender agrees to promptly notify Borrower and Administrative Agent after any such setoff and application, provided that the failure to give such notice will not affect the validity
of such setoff and application.  The rights of Administrative Agent and Lenders under this Section 10.13 are in addition to other rights and remedies (including without limitation other
rights of setoff) which Administrative Agent or Lenders may have.  Nothing contained herein shall affect the right of any Lender to exercise, and retain the benefits of exercising, any such right with respect to any other indebtedness or obligation
of Borrower to such Lender. 


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ARTICLE XI. MISCELLANEOUS 


          Section 11.1       Non-Waiver.      No failure or delay on the part of Administrative Agent or any Lender in exercising
any right, power or remedy pursuant to this Loan Agreement, the Note or any of the other Loan Documents shall operate as a waiver thereof, and no single or partial exercise of any such right, power or remedy shall preclude any other or further
exercise thereof, or the exercise of any other right, power or remedy. Neither any waiver of any provision of this Loan Agreement, the Note or any of the other Loan Documents, nor any consent to any departure by Borrower therefrom, shall be
effective unless the same shall be in writing and signed by Administrative Agent or Required Lenders, and any waiver in writing by Administrative Agent or Required Lenders shall be effective
only in the specific instance and for the specific purpose for which given.  Except as otherwise expressly provided herein, no notice to or demand on Borrower shall in any case entitle Borrower to any other or further notice or demand in similar or
other circumstances. 


          Section 11.2       Disclosure.       Borrower hereby irrevocably authorizes Administrative Agent, each Lender and each of
their respective Affiliates, to at any time (whether or not an Event of Default shall have occurred) obtain from and disclose to each other any and all financial and other information about Borrower. Borrower further irrevocably authorizes
Administrative Agent and each Lender to contact, investigate, inquire and obtain references and other information on Borrower from credit reporting services and agencies, former or current creditors, and other Persons and sources (including any
Affiliate of Administrative Agent or such Lender) and to provide to any references, credit reporting services and agencies, creditors and other Persons and sources (including Affiliates of Administrative Agent or such Lender) all financial, credit
and other information obtained by Administrative Agent or such Lender relating to Borrower. 


          Section 11.3       Communications.       Delivery of an agreement, instrument or other document may, at the discretion of
Administrative Agent or any Lender, be by electronic transmission. Except as required by law or otherwise provided herein or in a writing executed by the party to be bound, all notices, demands, requests, accountings, listings, statements, advices
or other communications to be given under the Loan Documents shall be in writing, and shall be served either personally, by deposit with a reputable overnight courier with charges prepaid, or by deposit in the United States mail by certified mail
return receipt required. Notices may be addressed to Borrower as set forth at its address shown in the preamble hereto, or to such other address designated in writing by Borrower, or to any office to which billing or account statements are sent; to
Administrative Agent at its address shown in the preamble hereto, or at such other address designated in writing by Administrative Agent; and to each Lender at its address designated in writing by such Lender or Administrative Agent.  Any such
communication shall be deemed to have been given upon and received by, in the case of personal delivery the date of delivery, one Business Day after deposit with an overnight courier, two Business Days after deposit in the United States by certified
mail (return receipt required), or receipt of electronic transmission (which shall be presumed to be three hours after the time of transmission unless an error message is received by the sender), except that any notice of change of address shall not
be effective until actually received. Any documents, agreements, reports, notices, instruments, or other items required to be delivered under the Loan Documents to the Administrative Agent and the Independent Consultant
shall not be effective until both 


83 












Administrative Agent and the Independent Consultant shall have received such documents, agreements, reports, notices, instruments or such other items. 


          Section 11.4       Costs and Expenses.       Borrower agrees to pay on demand all reasonable fees, costs and expenses of
Administrative Agent and Lenders in connection (a) with the preparation, execution, delivery, administration, amendment and enforcement of this Loan Agreement, the Note, the other Loan Documents and any other documents to be delivered hereunder and
thereunder (including the appraisal and inspection reports required to be paid by it hereunder) and any amendment, modification or supplement hereto or thereto, including the reasonable fees and out-of-pocket expenses of counsel for Administrative
Agent and Lenders, and any special counsel associated with them, and with respect thereto and the filing of any document or instrument in connection with any of the foregoing, (b) with respect to reasonable fees and out-of-pocket expenses of counsel
for advising Administrative Agent and Lenders as to their respective rights and responsibilities under the Loan Documents and the transactions contemplated thereby after a Default or Event of Default, or both, shall have occurred, (c) with any
filing or recording of any document or instrument, and (d) with respect to any assignment of any portion of the Obligations or the granting of any participation in the Obligations, the reasonable fees and out-of-pocket expenses (not to exceed
$10,000) of counsel for the Administrative Agent, and any special counsel associated with them. 


          Section 11.5       Taxes and Fees.       Unless otherwise prohibited by Legal Requirements, should any tax (other than a
tax based upon the net income of any Lender) or recording or filing fee become payable in respect of any Loan Document, any of the Collateral, any of the Obligations or any amendment, modification or supplement hereof or thereof, Borrower agrees to
pay such taxes (or reimburse Administrative Agent therefor upon demand for reimbursement), together with any interest or penalties thereon, and agrees to hold Administrative Agent harmless with respect thereto. 


          Section 11.6       Further Assurances.      Borrower agrees to do such further acts and things and to execute and deliver
to Administrative Agent and Lenders such additional agreements, instruments and documents as Administrative Agent may reasonably require or deem advisable to effectuate the purposes of this Loan Agreement, the Note or any of the other Loan
Documents, or to establish, perfect and maintain Administrative Agent’s security interests and Liens upon the Collateral, including to cause third parties to execute and deliver waivers, releases, consents, or subordinations as deemed appropriate by
Administrative Agent. 


          Section 11.7       Binding Effect.       This Loan Agreement, the Note and the other Loan Documents shall be binding
upon, and shall inure to the benefit of, Administrative Agent and each Lender, Borrower and their respective successors and assigns. Borrower shall not assign any of its rights or delegate any of its obligations under this Loan Agreement, the Note
or any of the other Loan Documents without the prior written consent of Administrative Agent and each of Lenders. Unless otherwise expressly agreed to in a writing signed by Administrative Agent and each of Lenders, no such consent shall in any
event relieve Borrower of any of its obligations under this Loan Agreement, the Note or any of the other Loan Documents. 


          Section 11.8       Interpretation; Construction.       (a) Captions and section and paragraph headings in this Loan
Agreement are inserted only as a matter of convenience, and shall not 


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affect the interpretation hereof; (b) no provision of this Loan Agreement shall be construed against a particular Person or in favor of another Person merely because of which Person (or its representative) drafted or supplied the
wording for such provision; and (c) where the context requires: (i) use of the singular or plural incorporates the other, and (ii) pronouns and modifiers in the masculine, feminine or neuter gender shall be deemed to refer to or include the other
genders. 


          Section 11.9 GOVERNING LAW.  THIS LOAN AGREEMENT, THE NOTE AND, UNLESS OTHERWISE EXPRESSLY PROVIDED
THEREIN, EACH OF THE OTHER LOAN DOCUMENTS, SHALL BE GOVERNED IN ALL RESPECTS BY THE LAWS OF THE STATE OF ILLINOIS, NOT INCLUDING ITS CONFLICT OF LAW PROVISIONS; PROVIDED THAT THE LAWS OF THE STATE WHERE REAL PROPERTY COLLATERAL IS LOCATED SHALL
GOVERN WITH RESPECT TO THE CREATION, PERFECTION AND ENFORCEMENT OF RIGHTS, SECURITY INTERESTS, REMEDIES AND LIENS AGAINST THE REAL PROPERTY COLLATERAL. 


          Section 11.10       Severability of Provisions.       Whenever possible, each provision of this Loan Agreement, the Note
and the other Loan Documents shall be interpreted in such manner as to be effective and valid under Legal Requirements. Any provision of this Loan Agreement, the Note or any of the other Loan Documents which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective only to the extent of such prohibition or unenforceability without invalidating the remaining provisions of this Loan Agreement, the Note and the other Loan Documents or affecting the
validity or enforceability of such provision in any other jurisdiction. 


          Section 11.11       Term.       This Loan Agreement shall become effective when accepted by Administrative Agent at its
office in Chicago, Illinois, and subject to the terms hereof, shall continue in effect so long thereafter as there shall be any moneys owing hereunder or under the Note, or there shall be any other Obligations outstanding.  Borrower hereby waives
notice of acceptance of this Loan Agreement by Administrative Agent. 


          Section 11.12       Exhibits.       The exhibits to this Loan Agreement are hereby incorporated and made a part hereof
and are an integral part of this Loan Agreement. 


          Section 11.13       Counterparts; Facsimiles.      This Loan Agreement may be executed in one or more counterparts which,
when taken together, constitute one and the same agreement. Signatures transmitted by facsimile or other electronic means shall be effective as originals. 


          Section 11.14     JURISDICTION; WAIVER.  BORROWER ACKNOWLEDGES THAT THIS LOAN AGREEMENT IS BEING
ACCEPTED BY ADMINISTRATIVE AGENT AND LENDERS IN PARTIAL CONSIDERATION OF ADMINISTRATIVE AGENT’S AND EACH LENDER’S RIGHT AND OPTION, IN ITS SOLE DISCRETION, TO ENFORCE THE LOAN DOCUMENTS IN EITHER THE STATE OF ILLINOIS OR IN ANY OTHER JURISDICTION
WHERE BORROWER OR ANY COLLATERAL MAY BE LOCATED.  BORROWER IRREVOCABLY SUBMITS ITSELF TO JURISDICTION IN THE STATE OF ILLINOIS AND VENUE IN ANY STATE OR 


85 












FEDERAL COURT IN THE COUNTY OF COOK FOR SUCH PURPOSES, AND BORROWER WAIVES ANY AND ALL RIGHTS TO CONTEST SAID JURISDICTION AND VENUE AND THE CONVENIENCE OF ANY SUCH FORUM, AND ANY AND ALL RIGHTS TO REMOVE SUCH ACTION FROM STATE
TO FEDERAL COURT. BORROWER FURTHER WAIVES ANY RIGHTS TO COMMENCE ANY ACTION AGAINST ADMINISTRATIVE AGENT OR ANY LENDER IN ANY JURISDICTION EXCEPT IN THE COUNTY OF COOK AND STATE OF ILLINOIS.  BORROWER AGREES THAT ALL SUCH SERVICE OF PROCESS SHALL BE
MADE BY MAIL OR MESSENGER DIRECTED TO IT IN THE SAME MANNER AS PROVIDED FOR NOTICES TO BORROWER IN THIS LOAN AGREEMENT AND THAT SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED UPON THE EARLIER OF ACTUAL RECEIPT OR THREE DAYS AFTER THE SAME SHALL
HAVE BEEN POSTED TO BORROWER OR BORROWER’S AGENT.  NOTHING CONTAINED HEREIN SHALL AFFECT THE RIGHT OF ADMINISTRATIVE AGENT OR ANY LENDER TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR AFFECT THE RIGHT OF ADMINISTRATIVE AGENT OR ANY
LENDER TO BRING ANY ACTION OR PROCEEDING AGAINST BORROWER OR ITS PROPERTY IN THE COURTS OF ANY OTHER JURISDICTION.  BORROWER WAIVES, TO THE EXTENT PERMITTED BY LAW, ANY BOND OR SURETY OR SECURITY UPON SUCH BOND WHICH MIGHT, BUT FOR THIS WAIVER, BE
REQUIRED OF ADMINISTRATIVE AGENT OR ANY LENDER. 


          Section 11.15 JURY WAIVER.  ADMINISTRATIVE AGENT, LENDERS AND BORROWER HEREBY EACH EXPRESSLY WAIVE
ANY AND ALL RIGHTS TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY EITHER OF THE PARTIES AGAINST THE OTHER PARTY WITH RESPECT TO ANY MATTER RELATING TO, ARISING OUT OF OR IN ANY WAY CONNECTED WITH THE LOAN, THE OBLIGATIONS,
THIS LOAN AGREEMENT, ANY OF THE OTHER LOAN DOCUMENTS AND/OR ANY OF THE TRANSACTIONS WHICH ARE THE SUBJECT MATTER OF THIS LOAN AGREEMENT. 


          Section 11.16       Survival.       All representations, warranties, agreements and covenants contained in the Loan
Documents shall survive the signing and delivery of the Loan Documents, and all of the waivers made and indemnification obligations undertaken by Borrower shall survive the termination, discharge or cancellation of the Loan Documents. 


          Section 11.17       Borrower’s Acknowledgments.       Borrower acknowledges that Borrower: (a) has had ample opportunity
to consult with counsel and such other parties as deemed advisable prior to signing and delivering this Loan Agreement and the other Loan Documents; (b)  understands the provisions of this Loan Agreement and the other Loan Documents, including all
waivers contained therein; and (c) signs and delivers this Loan Agreement and the other Loan Documents freely and voluntarily, without duress or coercion. 


          Section 11.18       Customer Identification – USA Patriot Act Notice; OFAC and Bank Secrecy Act.      Administrative Agent and Lenders hereby notify Borrower and each other Credit Party that pursuant to the requirements of the USA Patriot Act, and Administrative Agent’s and each Lender’s
policies and practices, Administrative Agent and each Lender is required to obtain, 


86 












verify and record certain information and documentation that identifies Borrower and each other Credit Party, which information includes the name and address of Borrower and each other Credit Party and such other information that
will allow Administrative Agent and each Lender to identify Borrower and each other Credit Party in accordance with the USA Patriot Act.  In addition, Borrower shall (a) ensure that no Person who owns a controlling interest in or otherwise controls
Borrower or any Subsidiary of Borrower is or shall be listed on the Specially Designated Nationals and Blocked Person List or other similar lists maintained by the Office of Foreign Assets Control (“OFAC”), the Department of the Treasury or included in any Executive Orders, (b) not use or permit the use of the proceeds of the Loan, or any funds invested in the Project, to violate any of the foreign asset control regulations of OFAC or
any enabling statute or Executive Order relating thereto, the Bank Secrecy Act, the Money Laundering Act of 1986, or any other Legal Requirement related to money laundering, all as amended from time to time, and (c) comply, and cause its
Subsidiaries to comply, in all material respects with all Legal Requirements. 

	          	Section 11.19       Amendment.      

                 (a)        Neither
          this Loan Agreement nor any other Loan Document, nor any provision
          hereof or thereof, including without limitation this Section
          11.19, may be amended, modified, waived,
          discharged or terminated, or any consent related thereto granted, orally,
          but only by an instrument in writing signed by Borrower and Required
          Lenders except as may be expressly provided in such provision hereunder
          or under any Loan Document; provided, however, that no such amendment,
          modification, waiver, discharge, termination or consent shall, without
          the consent of each Lender directly affected thereby (i) extend any
          Maturity Date, extend the time of payment for or reduce the amount
          of any scheduled principal repayment, or reduce the rate or extend
          the time of payment of interest on the Loan or Note (except that Administrative
          Agent may, in its sole discretion, without the consent of any of the
          Lenders, waive (A) the applicability of up to two Late Charges during
          the term of the Loan and (B) the applicability of the Default Rate
          increase for up to 30 days, provided that Administrative Agent shall
          not grant such waiver more than two times during the term of this Loan
          Agreement) or reduce the principal amount thereof, (ii) release any
          material amount of Collateral for the Loan (except as expressly provided
          in the Loan Documents), (iii) amend, modify or waive any provision
          of this Section 11.19,
          (iv) change the percentage specified in the definition of Required
          Lenders, (v) consent to the assignment or transfer by Borrower of any
          of its rights or obligations under this Loan Agreement or the other
          Loan Documents, (vi) amend, modify or waive any provision in this Loan
          Agreement or in any other Loan Document to the extent providing for
          payments or prepayments on the Note to be applied pro rata among Lenders,
          or (vii) release any Credit Party from its guaranty (except as set
          forth in its guaranty); provided, further, that no such amendment,
          modification, waiver, discharge, termination or consent shall (A) increase
          the Commitment of any Lender over the amount thereof then in effect
          without the consent of such Lender or (B) without the consent of Administrative
          Agent, amend, modify or waive any provision relating to the rights
          or obligations of Administrative Agent. 

                 (b)        This
          Loan Agreement shall be binding upon and inure to the benefit of Borrower,
    other Credit Parties, Administrative Agent and Lenders, and their respective 
    



  87 










	          	successors and assigns, except
          that Borrower and other Credit Parties shall not have the right to
          assign their rights hereunder or any interest herein without the prior
          written consent of Administrative Agent and all Lenders. 

       Section 11.20       Assignments
            and Participations.      

                 (a)        Each
          Lender shall have the right to assign all or any portion of its portion
          of the Loan outstanding under this Loan Agreement or the Note to any
          Eligible Assignee, so long as, at least five Business Days prior to
          the effectiveness of such assignment (except in the case of a Related
          Lender Assignment, which shall be governed by the provisions of Section
          11.20(b) below) (i) an Assignment and
          Acceptance with respect to such assignment is delivered to Administrative
          Agent, (ii) the assigning Lender or the assignee pays to Administrative
          Agent a transfer fee in an amount equal to $3,500.00 (the “Assignment
          Fee”), and (iii) except in the case of
          an assignment of the entire remaining amount of the assigning Lender’s
          Commitment or its portion of the Loan, the amount of the Commitment
          or the portion of the Loan subject to each such assignment (determined
          as of the date the applicable Assignment and Acceptance is delivered
          to Administrative Agent) shall not be less than $2,500,000 unless
          the Administrative Agent otherwise consents, at which time such Eligible
          Assignee shall become entitled to the benefits, and subject to the
          requirements and obligations, of this Loan Agreement and the other
          Loan Documents.

                 (b)        A
          Lender may effect a Related Lender Assignment without paying the Assignment
          Fee and without delivering an Assignment and Acceptance to Administrative
          Agent or to any other Person; provided, however, that (i) Borrower
          and Administrative Agent may continue to deal solely and directly with
          such assigning Lender until the date that is five Business Days after
          an Assignment and Acceptance has been delivered to Administrative Agent
          for recordation in the Register, (ii) the failure of such assigning
          Lender to deliver an Assignment and Acceptance to Administrative Agent
          shall not affect the legality, validity, or binding effect of such
          assignment as between such assigning Lender and such assignee, and
          (iii) an Assignment and Acceptance between the assigning Lender and
          an Affiliate of such Lender or Approved Fund of such Lender shall be
          effective as of the date specified in such Assignment and Acceptance,
          once recorded on the Related Party Register (as defined below). Subject
          to the provisions of this Section 11.20,
          Borrower agrees that each assignee party to a Related Lender Assignment
          shall be entitled to the benefits, and subject to the requirements
          and obligations, of this Loan Agreement and the other Loan Documents
          to the same extent as if it had consummated such assignment and acceptance
          by delivery of an Assignment and Acceptance to Administrative Agent. 

                 (c)        Administrative
          Agent shall, on behalf of and acting solely for this purpose as the
          non-fiduciary agent of Borrower, maintain, or cause to be maintained
          at Administrative Agent’s office where Borrower makes payments due
          hereunder, a copy of each Assignment and Acceptance delivered to and
          accepted by it and a register (the “Register”)
          for the recordation of the names and addresses of Lenders and the Commitments
          of, and portion of the principal amount of the Loan (and stated interest
          thereon) (the “Registered Loans”).
    In the case of any Related Lender Assignment, 
    



  88 










	          	Lender making such Related Lender
          Assignment shall, on behalf of and acting solely for this purpose as
          the non-fiduciary agent of Borrower, maintain a comparable register
          (the “Related Party Register”).
          The entries in the Register (or, in the case of a Related Lender Assignment,
          the Related Party Register) shall be conclusive and binding for all
          purposes, absent manifest error. Borrower, Administrative Agent and
          Lenders shall treat each Person whose name is recorded in the Register
          (and any Lender that makes a Related Lender Assignment shall treat
          each Person whose name is recorded in the Related Party Register) as
          a Lender hereunder for all purposes of this Loan Agreement, including,
          without limitation, the right to receive payments of principal and
          interest hereunder. The Register and the Related Party Register shall
          be available for inspection by Borrower at any reasonable time and
          from time to time upon reasonable prior notice. A Registered Loan may
          be assigned or sold in whole or in part only by registration of such
          assignment or sale on the Register or the Related Party Register. Any
          assignment or sale of all or part of such Registered Loan may be effected
          only by registration of such assignment or sale on the Register or
          the Related Party Register. Within 30 days (five Business Days in the
          event of a Related Lender Assignment) after its receipt of a completed
          Assignment and Acceptance executed by an assigning Lender and an assignee,
          and the Assignment Fee if required by the provisions of this Section
          11.20, Administrative Agent or a Lender,
          as the case may be, shall record the information contained therein
          in the Register or the Related Party Register. 

                 (d)        Each
          Lender may sell participations to one or more banks or other entities
          in or to all or a portion of its rights and obligations under this
          Loan Agreement and the other Loan Documents (including, without limitation,
          all or a portion of its Commitment or Advances made by it under the
          Loan); provided, that (i) such Lender’s obligations under this Loan
          Agreement (including without limitation, its Commitment) and the other
          Loan Documents shall remain unchanged; (ii) such Lender shall remain
          solely responsible to the other parties hereto for the performance
          of such obligations, and Borrower, Administrative Agent and other Lenders
          shall continue to deal solely and directly with such Lender in connection
          with such Lender’s rights and obligations under this Loan Agreement
          and the other Loan Documents; and (iii) a participant shall not be
          entitled to require such Lender to take or omit to take any action
          hereunder except that a participant that is an Affiliate or Approved
          Fund of the participating Lender may require such Lender to obtain
          such participant’s approval before such participating Lender approves
          any (A) action directly effecting an extension of the maturity dates
          or decrease in the principal amount of the Loan, (B) action directly
          effecting an extension of the due dates or a decrease in the rate of
          interest payable on the Loan or the fees payable under this Loan Agreement,
          or (C) actions directly effecting a release of all or a substantial
          portion of the collateral or any Credit Party (except as set forth
          in this Loan Agreement or any other Loan Document). 

                 (e)        In
          the event that any Lender sells participations in a Registered Loan,
          such Lender shall, on behalf of and acting solely for this purpose
          as a non-fiduciary agent of Borrower, maintain a register on which
          it enters the name of all participants in the Registered Loans held
          by it and the principal amount (and stated interest thereon) of the
          portion of the Registered Loan which is the subject of the participation
          (the “Participant Register”).
    A Registered Loan may be participated in whole or in part only by 
    



  89 










	          	registration of such participation
          on the Participant Register (and each registered note shall expressly
          so provide). Any participation of such Registered Loan may be effected
          only by the registration of such participation on the Participant Register.
          The Participant Register shall be available for inspection by Borrower
          at any reasonable time and from time to time upon reasonable prior
          notice. Further, any Lender shall have the right, without notice or
          the payment of an Assignment Fee, to encumber or hypothecate its interest
          to any funding source or participant (collectively, for purposes of
          this paragraph, a “Funding Source”)
          as long as such Funding Source maintains a “blind” status and such
          Lender continues to act in its capacity as a Lender hereunder notwithstanding
          the Funding Source. 

                 (f)        Except
          to the extent set forth in Section 11.20(d) above,
          neither any participant of a Registered Loan nor any Funding Source
          shall be entitled to the benefits, or subject to the requirements and
          obligations, of this Loan Agreement, and Borrower and Administrative
          Agent may continue to deal solely and directly with the participating,
    encumbering or hypothecating Lender. 
    


           Section 11.21 INTEGRATION.
      THIS LOAN AGREEMENT, TOGETHER WITH THE OTHER LOAN DOCUMENTS, CONSTITUTES
      THE ENTIRE UNDERSTANDING AND REPRESENTS THE FULL AND FINAL AGREEMENT BETWEEN
      THE PARTIES WITH RESPECT TO THE SUBJECT MATTER HEREOF, AND MAY NOT BE CONTRADICTED
      BY EVIDENCE OF PRIOR WRITTEN AGREEMENTS OR PRIOR, CONTEMPORANEOUS OR SUBSEQUENT
      ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS
      OF THE PARTIES. WITHOUT LIMITING THE FOREGOING, BORROWER ACKNOWLEDGES THAT:
      (I) NO PROMISE OR COMMITMENT HAS BEEN MADE TO IT BY ADMINISTRATIVE AGENT,
      ANY LENDER, MLPF&S OR ANY
OF THEIR RESPECTIVE EMPLOYEES, AGENTS OR REPRESENTATIVES TO MAKE ANY LOAN ON
      ANY TERMS OTHER THAN AS EXPRESSLY SET FORTH HEREIN, OR TO MAKE ANY OTHER
      LOAN OR OTHERWISE EXTEND ANY OTHER CREDIT TO BORROWER OR ANY OTHER PARTY;
      AND (II) EXCEPT AS OTHERWISE EXPRESSLY PROVIDED HEREIN, THIS LOAN AGREEMENT
      SUPERSEDES AND REPLACES ANY AND ALL PROPOSALS, LETTERS OF INTENT AND APPROVAL
      AND COMMITMENT LETTERS FROM ADMINISTRATIVE AGENT OR ANY LENDER TO BORROWER,
      NONE OF WHICH SHALL BE CONSIDERED A LOAN DOCUMENT. NO AMENDMENT OR MODIFICATION
      OF ANY OF THE LOAN DOCUMENTS TO WHICH BORROWER IS A PARTY SHALL BE EFFECTIVE
      UNLESS IN A WRITING SIGNED BY ADMINISTRATIVE AGENT, REQUIRED LENDERS OR
ALL LENDERS AND BORROWER. 


[Remainder of Page Intentionally Left Blank.] 


90 












This Loan Agreement and the other Loan Documents are executed under seal and are intended to take effect as sealed instruments. 

 

	 	 	BORROWER: 

          

          LEVELLAND/HOCKLEY COUNTY 

          ETHANOL, LLC 

          

          

          

    
	 	By: 	
       

      	 
	 	 	James P. Halbert 

       Vice President 


Accepted at Chicago, Illinois: 


ADMINISTRATIVE AGENT AND LENDERS: 


MERRILL LYNCH CAPITAL, 

a
division of Merrill Lynch Business Financial Services Inc., 

as Administrative
Agent and a Lender 

	
By: 
  	 
  	 

  
	 

  	 
  	
Steve Coley 
  
	 

  	 
  	
Vice President, Group Credit Manager 
  




Construction and Term Loan Agreement – Signature Page 












EXHIBIT A 

TO


LOAN AGREEMENT 


Description of Land 


METES AND BOUNDS DESCRIPTION of a portion of Tracts 22 and 23, William Tubbs Subdivision, Public School Land, Block A, Hockley County, Texas, according to the map, plat and/or dedication deed thereof recorded in Volume 1, Page 5
of the Plat Records of Hockley County, Texas, being further described as follows: 


BEGINNING at a 1⁄2” iron rod with cap set in the North right-of-way line of Cactus Drive as recorded in Volume 36, Page 419, Deed Records of Hockley County, Texas, for the Southeast corner of this tract which bears N.
00o53’52” E., a distance of 50.00 feet from a 3⁄4” iron pipe found at the Southeast corner of said Tract 23, William Tubbs Subdivision; 


THENCE N. 89o14’ W., along said North right-of-way line, a distance of 3280.49 feet to a 1⁄2” iron rod with cap set in the East right-of-way line of F.M. Road 2646 as recorded in Volume 216, Page 112, Deed Records of
Hockley County, Texas, for the Southwest corner of this tract; 


THENCE Northwesterly, along said East right-of-way line around a curve to the left, said curve having a radius of 3869.83 feet, a central angle of 11o03’29”, a chord bearing of N. 00o59’46” W. and a chord distance of
745.71 feet to a 1⁄2” iron road with cap set for a point of intersection; 


THENCE N. 06o31’30” W., continuing along said East right-of-way line, a distance of 614.10 feet to a 1⁄2” iron rod with cap set at a point of intersection; 


THENCE Northwesterly, continuing along said East right-of-way line around a curve to the right, said curve having a radius of 3769.83 feet, a central angle of 07o18’32”, a chord bearing of N. 02o52’15” W. and a chord
distance of 480.57 feet to a 1⁄2” iron rod with cap set for a point of intersection; 


THENCE N. 00o45’04” E., continuing along said East right-of-way line, a distance of 1052.61 feet to a 1⁄2” iron rod with cap set in the North line of Tract 22, William Tubbs Subdivision and the South line of the South
Plains & Santa Fe Railroad right-of-way, for the Northwest corner of this tract; 


THENCE S. 89o14’56” E., along the South line of the South Plains & Santa Fe Railroad right-of-way as recorded in Volume 15, Page 77 of the Deed Records of Hockley County, Texas and the North line of said Tract 22, at
940.97 feet pass a 3⁄4” iron pipe found at the Northeast corner of said Tract 22 and the Northwest corner of Tract 23, William Tubbs Subdivision, continuing along the South line of the South Plains & Santa Fe Railroad right-of-way and the
North line of said Tract 23 for a total distance of 3418.75 feet to a 1⁄2” iron rod with cap set for the Northwest corner of Tract 24, William Tubbs Subdivision and the Northeast corner of said Tract 23 being the northeast corner of this tract;














THENCE S. 00o53’52” W., along the West line of said Tract 24, and the East line of said Tract 23, a distance of 2887.65 feet to the Point of Beginning. 


Construction and Term Loan Agreement – Signature Page 













EXHIBIT B 

TO 

LOAN AGREEMENT 



Form of Compliance Certificate 



[See Attached] 


















EXHIBIT C 

TO 

LOAN AGREEMENT 



Form of Draw Request 



[Letterhead of Borrower] 



Date: ___________, 20_____ 


Merrill Lynch Capital (“Administrative Agent”) 

222 North LaSalle Street 

Chicago, IL 60601 


          Reference is made to that certain Construction and Term Loan Agreement (“Loan Agreement”) among Levelland/Hockley County Ethanol, LLC (“Borrower”), certain lenders party thereto from time to time and Administrative Agent, dated as of September 27, 2006. The terms
used and not otherwise defined in this Draw Request shall have the same meanings as provided therefor in the Loan Agreement. 

	
A. 
  	 
  	
GENERAL.      
  	 
  	 

  	 
  	 

  
	 

  	 
  	
1
  	
. 
  	 
  	
Construction Costs to be paid pursuant 
  	 
  	 

  	 
  	 

  
	 

  	 
  	 

  	 

  	 
  	
to this Draw Request (after deducting retainage) 
  	 
  	
$ 
  
	 

  	 
  	
2
  	
. 
  	 
  	
Advance amount requested 
  	 
  	
$ 
  	 
  	 

  
	 

  	 
  	
3
  	
. 
  	 
  	
Construction draw cut-off date 
  	 
  	 

  	 
  	
, 20 
  
	 

  	 
  	
4
  	
. 
  	 
  	
Requested funding date (must be at least 15 
  	 
  	 

  	 
  	 

  
	 

  	 
  	 

  	 

  	 
  	
Business Days from date of submission 
  	 
  	 

  	 
  	 

  
	 

  	 
  	 

  	 

  	 
  	
to Administrative Agent) 
  	 
  	 

  	 
  	
, 20 
  
	
B. 
  	 
  	
FUNDS AVAILABLE TO FUND REQUESTED ADVANCE.      
  	 
  	 

  	 
  	 

  
	 

  	 
  	
1
  	
. 
  	 
  	
Total Commitments 
  	 
  	
$ 
  	 
  	 

  
	 

  	 
  	
2
  	
. 
  	 
  	
Plus Borrower’s Deposit (not disbursed) 
  	 
  	
+$ 
  	 
  	 

  
	 

  	 
  	
3
  	
. 
  	 
  	
Plus Special Account deposits: 
  	 
  	
+$ 
  	 
  	 

  
	 

  	 
  	
4
  	
. 
  	 
  	
Less all prior Loan Advances 
  	 
  	
-$ 
  	 
  	 

  
	 

  	 
  	
5
  	
. 
  	 
  	
Equals amount available for 
  	 
  	 

  	 
  	 

  
	 

  	 
  	 

  	 

  	 
  	
additional Advances 
  	 
  	
$ 
  	 
  	 

  















	 	 	
6
  	
. 
  	 
  	
Less Borrower’s Deposit balance 
  	 
  	
-$ 
  
	 

  
	 	 	
7
  	
. 
  	 
  	
Less Borrower’s Equity to be paid 
  	 
  	 

  
	 	 	 

  	 

  	 
  	
pursuant to this Draw Request 
  	 
  	
-$ 
  
	 

  
	 	 	
8
  	
. 
  	 
  	
Less Special Account deposits to be paid 
  	 
  	 

  
	 	 	 

  	 

  	 
  	
pursuant to this Draw Request 
  	 
  	
-$ 
  
	 

  
	 	 	
9
  	
. 
  	 
  	
Equals Advance amount available for this 
  	 
  	 

  
	 	 	 

  	 

  	 
  	
Draw Request 
  	 
  	
$ 
  
	 	 	 	 	 	 	 	 
	 The amount on line B9
        must be greater than the amount on line A2. The Construction Account and
        Borrower’s Deposit must be exhausted before Loan proceeds may be advanced.
        Borrower’s Equity and Special Account deposits must be paid before Loan
        proceeds are advanced to the extent contemplated in the Loan Agreement,
    Budget, and terms for a Special Account. 

	 	 	 	 	 	 	 	 
	C.  	 	RUNNING TOTAL OF AMOUNT
        SPENT ON CONSTRUCTION OF IMPROVEMENTS  TO
    DATE.       
	 	 	 	 	 	 	 	 
	 	 	
1
  	
. 
  	 
  	
Amount of total Construction Costs 
  	 
  	 

  
	 	 	 

  	 

  	 
  	
(in the Budget). 
  	 
  	
$ 
  
	 

  
	 	 	
2
  	
. 
  	 
  	
Less amount of initial Advance and Borrower’s 
  	 
  	 

  
	 	 	 

  	 

  	 
  	
Equity used for Construction Costs 
  	 
  	
-$ 
  
	 

  
	 	 	
3
  	
. 
  	 
  	
Less total amount included in prior Draw 
  	 
  	 

  
	 	 	 

  	 

  	 
  	
Requests from all sources (including 
  	 
  	 

  
	 	 	 

  	 

  	 
  	
amounts provided by Borrower and 
  	 
  	 

  
	 	 	 

  	 

  	 
  	
prior Advances). 
  	 
  	
-$ 
  
	 

  
	 	 	
4
  	
. 
  	 
  	
Equals unpaid Construction Costs 
  	 
  	
$ 
  
	 

  
	 	 	
5
  	
. 
  	 
  	
Less amount of this Draw Request (A1) 
  	 
  	
-$ 
  
	 

  
	 	 	
6
  	
. 
  	 
  	
Equals balance of Construction Costs 
  	 
  	 

  
	 	 	 

  	 

  	 
  	
after this Draw Request 
  	 
  	
$ 
  
	 	 	 	 	 	 
	 	D.	 	 	 	REPRESENTATIONS
        AND WARRANTIES.      Borrower
    hereby represents, warrants, and certifies to Lender as follows: 

	 	 	 	 	 	 
	 	 	1	.
	 	Loan Agreement.      The
        authorized representative of Borrower executing this Draw Request on
        behalf of Borrower (herein referred to as “Authorized
        Representative”) has read the Loan Agreement
        and other pertinent Loan Documents and understands the Advance procedures
        and requirements, including (without limitation) the Draw Request procedures
        and the conditions precedent to an Advance. Authorized Representative
        has made such examination and investigation as is necessary to enable
        Borrower to represent, warrant, and certify as to the matters set forth
    in this Draw Request. 





 

 












	    	2. 	Prior Advances.   All
          prior Advances to Borrower have been applied to the payment of obligations
          of Borrower for materials, labor and other costs incurred in connection
        with the construction of the Improvements, and for no other purpose. 

	          	       	 
	 	3.	 Draw
            Request and Attachments Constituting Complete Draw Package.   Attached
            to this Draw Request is a fully completed set of all the documents
            required by the Loan Agreement for the requested Advance specified
            in item A1 above, including a disbursement report that shows the amount
            of Construction Costs under this Draw Request allocable to each Allocation
            and the amount from each Allocation payable by Loan proceeds and other
            sources (identifying such other sources), and reflects the retainage
            for such Construction Costs. This Draw Request is accompanied by a
            transmittal letter to Administrative Agent which lists all of the attachments
          to this Draw Request which collectively comprise the draw package. 

	 	 	 
	 	4.  	Approval of Certificates for Payment.   Borrower
        expressly approves the attached Contractor certificates for payment. 

	 	 	 
	 	5.  	Down Date Endorsement.   Borrower
          expressly represents that Administrative Agent will receive a title down
          date endorsement dated within two days prior to the Advance showing no
          liens or notices of liens against the Property (as defined in the Mortgage)
        recorded after the Mortgage was recorded. 

	 	 	 
	 	6. 	Requested Advance to Pay Costs Incurred
            on or Before Construction Draw Cut-off Date.   The
            requested Advance represents items owed by Borrower for labor, materials,
            and other costs incurred on or before the construction draw cut-off
          date specified in item A2 above. 

	 	 	 
	 	7. 	Disbursement of Proceeds of Requested
            Advance.   Borrower
            will use the proceeds of the requested Advance solely for the purpose
            of paying obligations owed by Borrower for labor, materials, and other
            costs incurred in connection with such construction as shown on the
          Budget and this Draw Request, and for no other purpose. 

	 	 	 
	 	8. 	Representation of Full Payment.   Upon
          disbursement by Borrower of the proceeds of the requested Advance, all
          obligations for labor, materials, and other costs incurred by Borrower
          in connection with such construction and which are due and payable on
          or before the construction draw cut-off date referred to in item A2 above
        will be fully and promptly paid and satisfied. 

	 	 	 
	 	9.  	Compliance with Conditions Precedent.   All
          covenants, agreements, and conditions required by the terms of the Loan
          Agreement to be performed or complied with by Borrower as conditions
          precedent to the funding of the requested Advance have been performed
        and complied with. 

	 	  	 
	 	10. 	Confirmation of Representations, Etc. As
          of the date hereof, the representations and warranties contained in the
        Loan Agreement are true and correct in all material 



 











	          	       	respects and no Event of Default and/or event which,
          with the lapse of time or giving of notice, or both, would constitute
    an Event of Default, exists. 





          This Draw Request is given for the purpose of inducing Administrative Agent and Lenders to disburse the requested Advance. Borrower recognizes that Administrative Agent and Lenders are relying upon
this Draw Request and the accuracy of the attachments in making such Advance. 


          DATED: ______________, 20___. 

	 	BORROWER:  

      

      LEVELLAND/HOCKLEY COUNTY ETHANOL, 

      LLC, a Texas limited liability company 
	 	 	 
	 	By: 	

	 	 	Name: 
    

	 	 	Title: 
    




 

 













EXHIBIT D TO 


LOAN AGREEMENT 


Affidavit of Commencement 


          BEFORE ME, the undersigned authority, on this day personally appeared ____________________________________________, the ___________________________ of LEVELLAND/HOCKLEY COUNTY ETHANOL,
LLC, a Texas limited liability company (“Owner”), and ____________________________________, the ________________________ of ______________________________________
(“Contractor”), known to me to be the persons (collectively, “Affiants”) whose names are subscribed below, and who, being by me
first duly sworn, did each on his or her oath state as follows: 

	1.	Owner. The name and address of Owner are:
	 	 
	 	 	Levelland/Hockley County Ethanol, LLC	 
	 	 	1012 Austin Street	 
	 	 	Levelland, Texas 79336	 
	 	 	 
	2.	Contractor. The name and address of Contractor are:
	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 
	3.	Property. Owner is the owner of the real property (the “Land”) situated in Hockley County, Texas, more particularly described as follows:
	 	 
	See Exhibit A attached hereto and incorporated herein by reference for all purposes.
	 	 
	4.	Improvements. The improvements (which shall include all improvements by contractor, “Improvements”), which are being, or will be, constructed on the Land are generally described as follows:
	 	 


	 
	 
	 
	 





	 	 
	5.	Original Contractors. The name and address of each original contractor (other than Contractor) with Owner, presently known, after diligent inquiry, to the Affiants, Owner or Contractor, that is furnishing, or will furnish, labor, service, or materials (including specifically fabricated materials), for the construction of the Improvements, and the nature of such labor, service or materials (including specifically fabricated materials), are as stated on Exhibit B attached hereto and incorporated herein by reference for all purposes.
	 	 













          6.           Commencement
Date.   Work,
as contemplated by Texas Property Code
§53.124(c)(4), on the Improvements actually commenced on (and not before)
_______________, 20___ at approximately ___________ o’clock __.m.


          7.           Affidavit.   This
Affidavit of Commencement has been jointly made by Owner and Contractor by and
through an authorized representative of  each, the same being the Affiants, and
may be recorded by any person with the County Clerk of the county in which the
Land is located, whereupon it shall be deemed to have been jointly filed by Owner
and Contractor. 


          DATED this ____ day of _____________, 20___. 


  	 	AFFIANTS:               

              

           

	 	

	 	Print Name: 	, 
      

      

	 	who is an authorized representative 
	 	of Owner 
	 	 
	 	 
	 	

	 	Print Name: 	,  

          

	 	who is an authorized representative 
	 	of Contractor 
	 	 
	           SUBSCRIBED
      AND SWORN BEFORE ME, on this the _____ day of _______________, 20___. 
	 	 
	[SEAL]	

	 	Notary Public, State of Texas  
	My Commission Expires: 	 

	
	 	 Printed or Typed Name of Notary  


 















EXHIBIT E 

TO 

LOAN AGREEMENT 



Affidavit of Completion 


          BEFORE ME, the undersigned authority, on this day personally appeared ________________________________________ (“Affiant”), the
____________________ of LEVELLAND/HOCKLEY COUNTY ETHANOL, LLC, a Texas limited liability company (“Owner”), known to me to be the person whose name is subscribed below, and who,
being by me first duly sworn, did his oath state as follows: 

 

	           1.           Owner.   The
        name and address of Owner are:  
	  
	  	Levelland/Hockley County
        Ethanol, LLC  
	  	1012 Austin Street  
	  	Levelland, Texas 79336  
	  


          2.           Contractor.   The
    name and address of the original contractor (“Contractor”)
    are: 


          3.           Improvements.   Certain
improvements (“Improvements”)
were furnished under an  original contract (“Contract”)
between Owner and Contractor, which Improvements are located on the Real Property
generally described as follows: 

	 	
	 
	 	
	 
	 	
	 
	 	
	 


          4.           Real
      Property.   Owner
      is the owner of the real property (“Real Property”)
       situated in ________________ County, Texas, on which the Improvements
      were constructed and are located, which Real Property is more particularly
      described as follows: 


          See Exhibit A attached hereto and incorporated herein by reference for all purposes. 


          5.           Completion.    The
Improvements under the Contract between Owner and Contractor have been completed
within the meaning of Texas Property Code §53.106(e),
and the date of such completion was  _________________, 20___ (“Date
of Completion”). 


          6.           Affiant.  The
Affiant is an authorized representative of Owner and has been duly authorized
to execute this Affidavit of Completion and  cause it to be recorded with the
County Clerk of the county in which the Real Property is situated. 













NOTICE: A CLAIMANT MAY NOT HAVE A LIEN 

ON RETAINED FUNDS UNLESS THE CLAIMANT FILES 

THE AFFIDAVIT CLAIMING A LIEN NOT LATER THAN 

THE 30TH DAY AFTER THE DATE OF COMPLETION. 


DATED as of the _____ day of __________________, 20___. 

 

	 	AFFIANTS:  

      

         

	 	

	 	Print Name: 	,  

        

	 	who is an authorized representative 
	 	of Owner 
	 	 
	           SUBSCRIBED
        AND SWORN BEFORE ME, on this the _____ day of _______________, 20___. 
	 	 
	[SEAL]	

	 	Notary Public, State of Texas  
	My Commission Expires: 	

	 	Printed or Typed Name of Notary 
	
	 	   

















EXHIBIT F 

TO 

LOAN AGREEMENT 



Budget 



[See Attached]