EXHIBIT 10.1


 




 





 


SENIOR CREDIT AGREEMENT


 


 


dated as of October 1, 2007


 


among


 


HEARTLAND GRAIN FUELS, L.P.,

as Borrower,


 


THE LENDERS REFERRED TO HEREIN,


 


WESTLB AG, NEW YORK BRANCH,

as Administrative Agent for the Lenders,


 


WESTLB AG, NEW YORK BRANCH,

as Collateral Agent for the Senior Secured Parties,


 


WESTLB AG, NEW YORK BRANCH,

as Issuing Bank with respect to the Letters of Credit,


 


and


 


WESTLB AG, NEW YORK BRANCH,

as Lead
Arranger, Sole Bookrunner and Syndication Agent


 




 





 

















 


TABLE OF CONTENTS


 


	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  I DEFINITIONS AND INTERPRETATION

  	
  1

  
	
   

  	
   

  	
   

  
	
  Section 1.01

  	
  Defined Terms

  	
  1

  
	
  Section 1.02

  	
  Principles of Interpretation

  	
  1

  
	
  Section 1.03

  	
  UCC Terms

  	
  3

  
	
  Section 1.04

  	
  Accounting and Financial Determinations

  	
  3

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  II COMMITMENTS AND FUNDING

  	
  3

  
	
   

  	
   

  	
   

  
	
  Section 2.01

  	
  Construction Loans

  	
  3

  
	
  Section 2.02

  	
  Term Loans

  	
  4

  
	
  Section 2.03

  	
  Working Capital Loans

  	
  4

  
	
  Section 2.04

  	
  Letters of Credit

  	
  5

  
	
  Section 2.05

  	
  Notice of Fundings

  	
  7

  
	
  Section 2.06

  	
  Funding of Loans

  	
  7

  
	
  Section 2.07

  	
  Evidence of Indebtedness

  	
  10

  
	
  Section 2.08

  	
  Termination or Reduction of Commitments

  	
  11

  
	
  Section 2.09

  	
  Additional Plant

  	
  12

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  III REPAYMENTS, PREPAYMENTS, INTEREST AND FEES

  	
  13

  
	
   

  	
   

  	
   

  
	
  Section 3.01

  	
  Repayment of Construction Loan Fundings

  	
  13

  
	
  Section 3.02

  	
  Repayment of Term Loan Fundings

  	
  13

  
	
  Section 3.03

  	
  Repayment of Working Capital Loan Fundings

  	
  14

  
	
  Section 3.04

  	
  Interest Payment Dates

  	
  15

  
	
  Section 3.05

  	
  Interest Rates

  	
  15

  
	
  Section 3.06

  	
  Default Interest Rate

  	
  17

  
	
  Section 3.07

  	
  Interest Rate Determination

  	
  17

  
	
  Section 3.08

  	
  Computation of Interest and Fees

  	
  17

  
	
  Section 3.09

  	
  Optional Prepayment

  	
  18

  
	
  Section 3.10

  	
  Mandatory Prepayment

  	
  19

  
	
  Section 3.11

  	
  Time and Place of Payments

  	
  21

  
	
  Section 3.12

  	
  Fundings and Payments Generally

  	
  22

  
	
  Section 3.13

  	
  Fees

  	
  22

  
	
  Section 3.14

  	
  Pro Rata Treatment

  	
  23

  
	
  Section 3.15

  	
  Sharing of Payments

  	
  24

  
	
  Section 3.16

  	
  Termination of Interest Rate Protection Agreement in
  Connection with Any Prepayment

  	
  25

  



 


ii

















 


	
  ARTICLE
  IV EURODOLLAR RATE AND TAX PROVISIONS

  	
  25

  
	
   

  	
   

  	
   

  
	
  Section 4.01

  	
  Eurodollar Rate Lending Unlawful

  	
  25

  
	
  Section 4.02

  	
  Inability to Determine Eurodollar Rates

  	
  26

  
	
  Section 4.03

  	
  Increased Eurodollar Loan Costs

  	
  26

  
	
  Section 4.04

  	
  Obligation to Mitigate

  	
  27

  
	
  Section 4.05

  	
  Funding Losses

  	
  28

  
	
  Section 4.06

  	
  Increased Capital Costs

  	
  28

  
	
  Section 4.07

  	
  Taxes

  	
  28

  
	
  Section 4.08

  	
  Replacement of Lender

  	
  30

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  V REPRESENTATIONS AND WARRANTIES

  	
  31

  
	
   

  	
   

  	
   

  
	
  Section 5.01

  	
  Organization; Power; Compliance with Law and
  Contractual Obligations

  	
  31

  
	
  Section 5.02

  	
  Due Authorization; Non-Contravention

  	
  31

  
	
  Section 5.03

  	
  Governmental Approvals

  	
  32

  
	
  Section 5.04

  	
  Investment Company Act

  	
  33

  
	
  Section 5.05

  	
  Validity

  	
  33

  
	
  Section 5.06

  	
  Financial Information

  	
  34

  
	
  Section 5.07

  	
  No Material Adverse Effect

  	
  34

  
	
  Section 5.08

  	
  Project Compliance

  	
  34

  
	
  Section 5.09

  	
  Litigation

  	
  34

  
	
  Section 5.10

  	
  Sole Purpose Nature; Business

  	
  34

  
	
  Section 5.11

  	
  Contracts

  	
  34

  
	
  Section 5.12

  	
  Collateral

  	
  36

  
	
  Section 5.13

  	
  Ownership of Properties

  	
  37

  
	
  Section 5.14

  	
  Taxes

  	
  38

  
	
  Section 5.15

  	
  Patents, Trademarks, Etc.

  	
  39

  
	
  Section 5.16

  	
  ERISA Plans

  	
  39

  
	
  Section 5.17

  	
  Property Rights, Utilities, Supplies Etc.

  	
  39

  
	
  Section 5.18

  	
  No Defaults

  	
  39

  
	
  Section 5.19

  	
  Environmental Warranties

  	
  40

  
	
  Section 5.20

  	
  Regulations T, U and X

  	
  41

  
	
  Section 5.21

  	
  Accuracy of Information

  	
  41

  
	
  Section 5.22

  	
  Indebtedness

  	
  42

  
	
  Section 5.23

  	
  Separateness

  	
  42

  
	
  Section 5.24

  	
  Required LP and GP Provisions

  	
  42

  
	
  Section 5.25

  	
  Subsidiaries

  	
  42

  
	
  Section 5.26

  	
  Foreign Assets Control Regulations, Etc.

  	
  42

  
	
  Section 5.27

  	
  Solvency

  	
  43

  
	
  Section 5.28

  	
  Legal Name and Place of Business

  	
  43

  
	
  Section 5.29

  	
  No Brokers

  	
  43

  
	
  Section 5.30

  	
  Insurance

  	
  43

  
	
  Section 5.31

  	
  Accounts

  	
  43

  



 


iii

















 


	
  ARTICLE
  VI CONDITIONS PRECEDENT

  	
  44

  
	
   

  	
   

  	
   

  
	
  Section 6.01

  	
  Conditions to Closing and First Funding of
  Construction Loans

  	
  44

  
	
  Section 6.02

  	
  Conditions to All Construction Loan Fundings

  	
  55

  
	
  Section 6.03

  	
  Conditions to Term Loan Funding

  	
  58

  
	
  Section 6.04

  	
  Conditions to Working Capital Loan Fundings

  	
  60

  
	
  Section 6.05

  	
  Conditions to All Fundings and Issuances

  	
  60

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  VII COVENANTS

  	
  63

  
	
   

  	
   

  	
   

  
	
  Section 7.01

  	
  Affirmative Covenants

  	
  63

  
	
  Section 7.02

  	
  Negative Covenants

  	
  74

  
	
  Section 7.03

  	
  Reporting Requirements

  	
  82

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  VIII DEFAULT AND ENFORCEMENT

  	
  88

  
	
   

  	
   

  	
   

  
	
  Section 8.01

  	
  Events of Default

  	
  88

  
	
  Section 8.02

  	
  Action Upon Bankruptcy

  	
  95

  
	
  Section 8.03

  	
  Action Upon Other Event of Default

  	
  95

  
	
  Section 8.04

  	
  Application of Proceeds

  	
  96

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  IX THE AGENTS

  	
  96

  
	
   

  	
   

  	
   

  
	
  Section 9.01

  	
  Appointment and Authority

  	
  96

  
	
  Section 9.02

  	
  Rights as a Lender or Interest Rate Protection
  Provider

  	
  98

  
	
  Section 9.03

  	
  Exculpatory Provisions

  	
  98

  
	
  Section 9.04

  	
  Reliance by Agents

  	
  100

  
	
  Section 9.05

  	
  Delegation of Duties

  	
  101

  
	
  Section 9.06

  	
  Resignation or Removal of Agent

  	
  101

  
	
  Section 9.07

  	
  No Amendment to Duties of Agent Without Consent

  	
  102

  
	
  Section 9.08

  	
  Non-Reliance on Agent and Other Lenders

  	
  102

  
	
  Section 9.09

  	
  No Lead Arranger or Bookrunner Duties

  	
  103

  
	
  Section 9.10

  	
  Collateral Agent May File Proofs of Claim

  	
  103

  
	
  Section 9.11

  	
  Collateral Matters

  	
  104

  
	
  Section 9.12

  	
  Copies

  	
  104

  
	
  Section 9.13

  	
  No Liability for Clean-up of Hazardous Materials

  	
  105

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  X MISCELLANEOUS PROVISIONS

  	
  105

  
	
   

  	
   

  	
   

  
	
  Section 10.01

  	
  Amendments, Etc.

  	
  105

  
	
  Section 10.02

  	
  Applicable Law; Jurisdiction; Etc.

  	
  107

  
	
  Section 10.03

  	
  Assignments

  	
  109

  
	
  Section 10.04

  	
  Benefits of Agreement

  	
  113

  
	
  Section 10.05

  	
  Consultants

  	
  113

  
	
  Section 10.06

  	
  Costs and Expenses

  	
  114

  
	
  Section 10.07

  	
  Counterparts; Effectiveness

  	
  114

  



 


iv

















 


	
  Section 10.08

  	
  Indemnification by the Borrower

  	
  114

  
	
  Section 10.09

  	
  Interest Rate Limitation

  	
  116

  
	
  Section 10.10

  	
  No Waiver; Cumulative Remedies

  	
  116

  
	
  Section 10.11

  	
  Notices and Other Communications

  	
  117

  
	
  Section 10.12

  	
  Patriot Act Notice

  	
  120

  
	
  Section 10.13

  	
  Payments Set Aside

  	
  120

  
	
  Section 10.14

  	
  Right of Setoff

  	
  120

  
	
  Section 10.15

  	
  Severability

  	
  121

  
	
  Section 10.16

  	
  Survival

  	
  121

  
	
  Section 10.17

  	
  Treatment of Certain Information; Confidentiality

  	
  121

  
	
  Section 10.18

  	
  Waiver of Consequential Damages, Etc.

  	
  123

  
	
  Section 10.19

  	
  Waiver of Litigation Payments

  	
  123

  



 


	
  SCHEDULES

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule 2.01

  	
   

  	
  Commitments

  
	
  Schedule 5.03

  	
   

  	
  Necessary Project
  Approvals

  
	
  Part A

  	
   

  	
  First Funding Project
  Approvals

  
	
  Part B

  	
   

  	
  Deferred Approvals

  
	
  Schedule 5.11

  	
   

  	
  Existing Contracts

  
	
  Part A

  	
   

  	
  Necessary Project
  Contracts

  
	
  Part B

  	
   

  	
  Deferred Contracts

  
	
  Schedule 5.12(c)

  	
   

  	
  Schedule of Security
  Filings

  
	
  Schedule 5.13

  	
   

  	
  Description of Sites

  
	
  Schedule 5.14

  	
   

  	
  Tax Returns Not Filed
  or Taxes Not Paid

  
	
  Schedule 5.16

  	
   

  	
  Prior Plans or Multiemployer
  Plans of Borrower and its ERISA Affiliates

  
	
  Schedule 5.24(a)

  	
   

  	
  Required LP Provisions

  
	
  Schedule 5.24(b)

  	
   

  	
  Required GP Provisions

  
	
  Schedule 5.24(c)

  	
   

  	
  Required LP Pledgor LLC
  Provisions

  
	
  Schedule 5.28

  	
   

  	
  Prior Legal Names of
  Borrower

  
	
  Schedule 5.29

  	
   

  	
  Finder’s, Advisory,
  Broker’s or Investment Banking Fees

  
	
  Schedule 6.01(w)(i)

  	
   

  	
  Construction Budget

  
	
  Schedule 6.01(w)(ii)

  	
   

  	
  Construction Schedule
  for the Aberdeen II Plant

  
	
  Schedule 6.01(w)(iii)

  	
   

  	
  Operating Budget for
  Existing Plants

  
	
  Schedule 6.02(a)(v)

  	
   

  	
  Drawdown Schedule

  
	
  Schedule 7.01(h)

  	
   

  	
  Insurance

  
	
  Schedule 10.11(a)

  	
   

  	
  Notice Information

  



 


v

















 


EXHIBITS


 


	
  Exhibit A

  	
   

  	
  Defined Terms

  
	
  Exhibit B

  	
   

  	
  Form of Construction Notes

  
	
  Exhibit C

  	
   

  	
  Form of Term
  Notes

  
	
  Exhibit D

  	
   

  	
  Form of Working
  Capital Notes

  
	
  Exhibit E

  	
   

  	
  Form of
  Construction Loan Funding Notice

  
	
  Exhibit F

  	
   

  	
  Form of
  Conversion Date Funding Notice

  
	
  Exhibit G

  	
   

  	
  Form of Working
  Capital Loan Funding Notice

  
	
  Exhibit H

  	
   

  	
  Lender
  Statement—Section 881(c)(3)(A) of the Code

  
	
  Exhibit I

  	
   

  	
  Form of
  Insurance Consultant’s Certificate

  
	
  Exhibit J-1

  	
   

  	
  Form of
  Independent Engineer’s Closing Certificate

  
	
  Exhibit J-2

  	
   

  	
  Form of
  Independent Engineer’s Certificate

  
	
  Exhibit K

  	
   

  	
  Financial Model

  
	
  Exhibit L

  	
   

  	
  Form of
  Operating Statement

  
	
  Exhibit M

  	
   

  	
  Form of Blocked Account
  Agreement

  
	
  Exhibit N

  	
   

  	
  Form of
  Borrowing Base Certificate

  
	
  Exhibit O

  	
   

  	
  Form of Interest
  Period Notice

  
	
  Exhibit P

  	
   

  	
  Form of Debt
  Service LC Waiver Letter

  
	
  Exhibit Q-1

  	
   

  	
  Form of Final
  Completion Certificate by Independent Engineer

  
	
  Exhibit Q-2

  	
   

  	
  Form of Final
  Completion Certificate by Borrower

  
	
  Exhibit R

  	
   

  	
  Form of Lender
  Assignment Agreement

  
	
  Exhibit S

  	
   

  	
  Form of Lien
  Waiver Statement

  
	
  Exhibit T

  	
   

  	
  Form of Issuance
  Request

  



 


vi
















 


This SENIOR CREDIT
AGREEMENT (this “Agreement”), dated as of October 1, 2007, is by
and among HEARTLAND GRAIN FUELS, L.P., a Delaware limited partnership (“Borrower”),
each of the Lenders from time to time party hereto, WESTLB AG, NEW YORK BRANCH,
as administrative agent for the Lenders, WESTLB AG, NEW YORK BRANCH, as
collateral agent for the Senior Secured Parties, WESTLB AG, NEW YORK BRANCH, as
Issuing Bank with respect to the Letters of Credit and WESTLB AG, NEW YORK
BRANCH, as lead arranger, sole bookrunner and syndication agent.


 


RECITALS


 


WHEREAS, the Borrower has
requested that the Lenders establish a credit facility the proceeds of which
are to be used to (a) pay in full existing debt secured by the Borrower’s
two (2) operating ethanol plants, one such plant being located in Huron, South
Dakota, producing approximately thirty (30) million gallons-per-year of
denatured ethanol, together with distillers grains, and the other such plant
being located in Aberdeen, South Dakota, producing approximately nine (9)
million gallons-per-year of denatured ethanol, together with distillers grains,
(b) finance the ownership, development, engineering, construction, testing
and operation of an expansion plant located on the same site as the existing
plant in Aberdeen, South Dakota, designed to produce an additional
approximately forty (40) million gallons-per-year of denatured ethanol,
together with distillers grains, (c) fund certain reserves, (d) pay
interest during construction and certain fees and expenses associated with this
Agreement and the Loans, in each case as further described herein and (e)
provide working capital to the Borrower; and


 


WHEREAS, the Lenders are
willing to make such a credit facility available to the Borrower upon and
subject to the terms and conditions hereinafter set forth;


 


NOW, THEREFORE, the
parties hereto agree as follows:


 


ARTICLE
I


 


DEFINITIONS AND INTERPRETATION


 


Section
1.01    Defined Terms. Capitalized
terms used in this Agreement, including its preamble and recitals, shall,
except as otherwise defined herein or where the context otherwise requires,
have the meanings provided in Exhibit A.


 


Section
1.02    Principles of
Interpretation. (a)  Unless
otherwise defined or the context otherwise requires, terms for which meanings
are provided in this Agreement 


 

















 


shall have the same meanings when used in each other Financing Document
and each other notice or other communication delivered from time to time in
connection with any Financing Document.


 


(b)   Unless
the context requires otherwise, any reference in this Agreement to any
Transaction Document shall mean such Transaction Document and all schedules,
exhibits and attachments thereto.


 


(c)   All
agreements, contracts or documents defined or referred to herein shall mean
such agreements, contracts or documents as the same may from time to time be
supplemented, amended or replaced or the terms thereof waived or modified to
the extent permitted by, and in accordance with, the terms thereof and this
Agreement, and shall disregard any supplement, amendment, replacement, waiver
or modification made in violation of this Agreement.


 


(d)   Any
reference in any Financing Document relating to a Default or an Event of
Default that has occurred and is continuing (or words of similar effect) shall
be understood to mean that such Default or Event of Default, as the case may
be, has not been cured or remedied to the satisfaction of, or has not been
waived by, the Required Lenders.


 


(e)   The
term “knowledge” in relation to the Borrower, and any other similar expression,
shall mean knowledge of the Borrower after due inquiry.


 


(f)    Defined
terms in this Agreement shall include in the singular number the plural and in
the plural number the singular.


 


(g)   The
words “herein,” “hereof” and “hereunder” and words of similar import when used
in this Agreement shall, unless otherwise expressly specified, refer to this
Agreement as a whole and not to any particular provision of this Agreement and
all references to Articles, Sections, Exhibits and Schedules shall be
references to Articles, Sections, Exhibits and Schedules of this Agreement,
unless otherwise specified.


 


(h)   The
words “include,” “includes” and “including” are not limiting.


 


(i)    The
word “or” is not exclusive.


 


(j)    Any
reference to any Person shall include its permitted successors and permitted
assigns in the capacity indicated, and in the case of any Governmental
Authority, any Person succeeding to its functions and capacities.


 


2

















 


Section
1.03    UCC Terms. Unless
otherwise defined herein, terms used herein that are defined in the UCC shall
have the respective meanings given to those terms in the UCC.


 


Section
1.04    Accounting and Financial
Determinations. Unless otherwise specified, all accounting terms used in
any Financing Document shall be interpreted, all accounting determinations and
computations hereunder or thereunder shall be made, and all financial
statements required to be delivered hereunder or thereunder shall be prepared,
in accordance with GAAP.


 


ARTICLE
II


 


COMMITMENTS AND FUNDING


 


On the terms, subject to
the conditions and relying upon the representations and warranties herein set
forth:


 


Section
2.01    Construction Loans.


 


(a)   Each
Construction/Term Lender agrees, severally and not jointly, on the terms and
conditions of this Agreement, to make loans (each such loan, a “Construction
Loan”) to the Borrower for Project Costs and for the purposes set forth in
Section 4.01(b)(ii) of the Accounts Agreement, from time to time but not more
frequently than once each calendar month (except for Loans made on the
Conversion Date), until the Construction Loan Maturity Date in an aggregate
principal amount not in excess of the Construction Loan Commitment of such
Construction/Term Lender; provided, that the aggregate principal amount
of the Construction Loans shall not exceed the Aggregate Construction Loan
Commitment.


 


(b)   The
aggregate principal amount of the Construction Loans shall not exceed the
Aggregate Construction Loan Commitment. The aggregate principal amount of the
Construction Loans made by each Lender shall not exceed the Construction Loan
Commitment of such Lender.


 


(c)   Proceeds
of each Construction Loan shall be deposited into the Construction Account
(except as set forth in Section 4.01(a)(iii) of the Accounts Agreement),
applied solely in accordance with this Agreement and the Accounts Agreement and
used solely for the payment of Project Costs and for the purposes set forth in
Sections 4.01(b)(ii).


 


(d)   Construction
Loans repaid or prepaid may not be reborrowed.


 


3

















 


Section
2.02    Term Loans. (a)  Each
Construction/Term Lender agrees, severally and not jointly, on the terms and
conditions of this Agreement, to make loans (each such loan, a “Term Loan”)
to the Borrower for the repayment of the Construction Loans, on the Conversion
Date, in an aggregate principal amount not in excess of such Construction/Term
Lender’s Term Loan Commitment; provided, however, that the
aggregate principal amount of the Term Loans shall not exceed the Aggregate
Term Loan Commitment or the aggregate outstanding Construction Loans (including
each Construction Loan made on the Conversion Date).


 


(b)   Proceeds
of the Term Loans shall be used solely for the payment of amounts due in
respect of the Construction Loans (including all Construction Loans made on the
Conversion Date).


 


(c)   Term
Loans repaid or prepaid may not be reborrowed.


 


Section
2.03    Working Capital Loans.
(a)  Each Working Capital Lender agrees, severally and not jointly,
on the terms and conditions of this Agreement, to make loans (each such loan, a
“Working Capital Loan”) to the Borrower for Working Capital Expenses,
from time to time but not more frequently than two (2) times each calendar
month, until the last Business Day immediately preceding the Working Capital
Loan Maturity Date in an aggregate principal amount from time to time
outstanding, together with all participations in Letters of Credit acquired by
such Working Capital Lender pursuant to Section 2.04(c), not in excess
of the Working Capital Loan Commitment of such Lender or of such Lender’s
Working Capital Loan Commitment Percentage of the Working Capital Available
Amount; provided, however, that the aggregate principal amount of
the Working Capital Loans at any one time outstanding, plus the aggregate
Maximum Available Amounts of all issued and outstanding Letters of Credit,
shall not exceed the Working Capital Available Amount.


 


(b)   Each
Funding of Working Capital Loans shall be in the minimum amount of five hundred
thousand Dollars ($500,000) and in integral multiples of one hundred thousand
Dollars ($100,000)  in excess
thereof.


 


(c)   Proceeds
of each Working Capital Loan (other than those resulting from a draw on a
Letter of Credit) for (i) Project Costs relating to the initial start-up and
testing of the Aberdeen II Plant shall be deposited into the Construction
Account, (ii) Operation and Maintenance Expenses shall be deposited into
the Operating Account, and (iii) Maintenance Capital Expenses shall be
deposited into the Maintenance Capital Expense Account, and in each such case
shall be applied solely in accordance with this Agreement and the Accounts
Agreement and shall be used solely for the payment of Working Capital Expenses.
Fundings of Working Capital Loans for Operation and Maintenance Expenses and
for Maintenance Capital Expenses shall be subject to the 


 


4

















 


restrictions with respect to such expenses set forth in this Agreement
and the Accounts Agreement.


 


(d)   Within
the limits set forth in Section 2.03(a), the Borrower may pay or prepay
and reborrow Working Capital Loans.


 


Section
2.04    Letters of Credit. (a)
The Issuing Bank agrees at any time on or after the Closing Date, and from time
to time on the terms and conditions of this Agreement, upon receipt from the
Borrower of an Issuance Request, to issue a Letter of Credit on behalf of the
Borrower on the date and in the amount set forth in such Issuance Request; provided,
that (i) Letters of Credit may only be issued for security for utilities
and railcar leases, in each case related to the Project, (ii) the
aggregate Maximum Available Amounts of all issued and outstanding Letters of
Credit shall not exceed the LC Cap and (iii) the aggregate of, at any
time, the aggregate Maximum Available Amounts of all issued and outstanding
Letters of Credit plus the aggregate outstanding principal amount of all
Working Capital Loans shall not exceed the lesser of the Aggregate Working
Capital Loan Commitment and the Working Capital Available Amount.


 


(b)   The
Borrower shall give the Administrative Agent at least five (5) Business
Days irrevocable prior written notice (such notice, in substantially the form
of Exhibit T, an “Issuance Request”) (effective upon
receipt) specifying the date (which shall be a day that is no later than thirty
(30) days preceding the Working Capital Loan Maturity Date) a Letter of
Credit is requested to be issued, describing in reasonable detail the nature of
the transactions or obligations proposed to be supported thereby (which shall
be of the nature described in Section 2.04(a)(i)) and the Maximum
Available Amount of such Letter of Credit, which shall be no less than two
hundred fifty thousand Dollars ($250,000)). Upon receipt of an Issuance Request,
the Administrative Agent shall promptly advise the Issuing Bank of the contents
thereof.


 


(c)   Each
Working Capital Lender (other than the Issuing Bank) agrees that, upon the
issuance of any Letter of Credit hereunder, it shall automatically acquire a participation
in the Issuing Bank’s liability thereunder in an amount equal to such Lender’s
Working Capital Loan Commitment Percentage of such liability, and each Working
Capital Lender (other than the Issuing Bank) thereby shall absolutely,
unconditionally and irrevocably assume, as primary obligor and not as surety,
and shall be unconditionally obligated to the Issuing Bank to pay and discharge
when due, its Working Capital Loan Commitment Percentage of the Issuing Bank’s
liability under each Letter of Credit.


 


(d)   Upon
receipt from a beneficiary under a Letter of Credit of a demand for payment
thereunder, in proper form to accomplish a draw in accordance with the terms 


 


5

















 


thereof, the Issuing Bank (through the Administrative Agent) shall
promptly notify each other Working Capital Lender and the Borrower of the
amount to be paid by the Issuing Bank as a result of such demand and the date
on which payment is to be made by the Issuing Bank to such beneficiary in
respect of such demand. Immediately following such demand by a beneficiary of
payment under a Letter of Credit, the Administrative Agent shall give each
Working Capital Lender prompt notice of the amount of the actual demand for
payment, specifying such Lender’s Working Capital Loan Commitment Percentage of
the amount of such demand.


 


(e)   Upon
receipt of the notice described in Section 2.04(d), each Working Capital
Lender (other than the Issuing Bank) shall pay, on the proposed funding date of
a draw under the Letter of Credit, the amount of such Lender’s Working Capital
Loan Commitment Percentage of any payment under the Letter of Credit by wire
transfer of immediately available funds to the Administrative Agent for the
account of the Issuing Bank, not later than 11:00 a.m. New York City time. Each
Working Capital Lender’s obligation to make such payments to the Administrative
Agent for the account of the Issuing Bank under this Section 2.04(e),
and the Issuing Bank’s right to receive the same, shall be absolute and
unconditional and shall not be affected by any circumstance whatsoever,
including (i) the failure of any other Working Capital Lender to make its
payment under this Section 2.04(e), (ii) the financial
condition of the Borrower, (iii) the existence of any Default or Event of
Default or (iv) the termination of any Commitments. Each such payment to
the Issuing Bank shall be made without any offset, abatement, withholding or
reduction whatsoever.


 


(f)    To
the extent that any Working Capital Lender fails to pay any amount required to
be paid pursuant to Section 2.04(e) on the date such amounts are
due to be paid, such Working Capital Lender shall pay interest to the Issuing
Bank (through the Administrative Agent) on such amount from and including such due
date to but excluding the date such payment is made at a rate per annum equal
to the greater of the Federal Funds Effective Rate and a rate determined by the
Administrative Agent in accordance with banking industry rules on interbank
compensation plus (in either such case) two percent (2%).


 


(g)   Each
drawing honored by the Issuing Bank under a Letter of Credit shall reduce the
Maximum Available Amount under such Letter of Credit by the amount of such
drawing.


 


(h)   Notwithstanding
anything herein to the contrary (including Section 6.05 (Conditions to All Fundings and Issuances)), any payments
by the Issuing Bank under any Letter of Credit shall automatically be
considered to be a Working Capital Loan to the Borrowers from the Issuing Bank
and the other Working Capital Lenders making payments to the Issuing Bank in
accordance with Section 2.04(e) in an 


 


6

















 


amount equal to such Issuing Bank’s and each such other Working Capital
Lenders’ Working Capital Loan Commitment Percentage of the amount of the
drawing on the Letter of Credit. All such Working Capital Loans shall be repaid
or prepaid by the Borrower in accordance with the provisions of ARTICLE III
(Repayments, Prepayments, Interest and Fees).
Such Working Capital Loan shall initially be made as a Base Rate Loan.


 


(i)    The
issuance of each Letter of Credit shall be subject to, in addition to the
conditions precedent set forth in Section 6.05 (Conditions
to All Fundings and Issuances), the conditions precedent that
(i) such Letter of Credit shall be in such form and contain such terms as
shall be satisfactory to the Issuing Bank consistent with its then-current
practices and procedures with respect to letters of credit of the same type;
(ii) such Letter of Credit shall be issued solely for the purposes set
forth in Section 2.04(a)(i); (iii) the term of each Letter of
Credit shall expire no later than the Working Capital Loan Maturity Date; and
(iv) the Borrower shall have executed and delivered such other instruments and
agreements relating to such Letter of Credit as the Issuing Bank shall have
reasonably requested consistent with its then-current practices and procedures
with Letters of Credit of the same type.


 


Section
2.05    Notice of Fundings. (a)
From time to time, but not more frequently than (i) in the case of
Construction Loans (except for Construction Loans made on the Conversion Date),
once per calendar month, (ii) in the case of Working Capital Loans, two
(2) times per calendar month and (iii) once with respect to Term Loans to
be made on the Conversion Date, the Borrower may propose a Funding by
delivering to the Administrative Agent a properly completed Funding Notice not
later than 11:00 a.m., New York City time, three (3) Business Days
prior to the proposed Funding Date. Each Funding Notice delivered pursuant to
this Section 2.05 shall be irrevocable and shall refer to this Agreement
and specify (v) whether such Funding is requested to be of Eurodollar
Loans and/or Base Rate Loans, (w) the requested Funding Date (which shall
be a Business Day), (x) the amount of such requested Funding, (y) the
type(s) of Loan(s) with respect to which such Funding is requested (and, in the
case of Funding on the Conversion Date, may include Construction Loans, Term
Loans and Working Capital Loans) and (z) the initial Interest Period for the
Loans requested.


 


(b)   The
Administrative Agent shall promptly advise (i) each Construction/Term
Lender of any Construction Loan Funding Notice or the Conversion Date Funding
Notice as applicable and (ii) each Working Capital Lender of any Working
Capital Loan Funding Notice, in each case given pursuant to this Section 2.05, and of each such
Lender’s portion of the requested Funding.


 


Section
2.06    Funding of Loans. (a)  Subject
to Section 2.06(d), each Funding shall consist of Loans made by the
Lenders ratably in accordance with their 


 


7

















 


respective applicable Commitment Percentages and shall consist of
Eurodollar Loans or Base Rate Loans as the Borrower may request, or as
otherwise provided, pursuant to Section 2.05 (Notice of
Fundings); provided, however, that the failure of
any Lender to make any Loan shall not in itself relieve any other Lender of its
obligation to lend hereunder (it being understood, however, that no Lender
shall be responsible for the failure of any other Lender to make any Loan
required to be made by such other Lender).


 


(b)   Subject
to Section 4.04
(Obligation to Mitigate), each Lender
may (without relieving the Borrower of its obligation to repay a Loan in
accordance with the terms of this Agreement and the Notes) at its option
fulfill its Commitment with respect to any such Loan by causing any domestic or
foreign branch or Affiliate of such Lender to make such Loan.


 


(c)   Subject
to Section 2.06(d), (i) each Construction/Term Lender shall make a
Loan in the amount of its applicable Commitment Percentage of each Construction
Loan Funding or Term Loan Funding, as applicable, hereunder on the proposed
Funding Date by (in the case of each Construction Loan Funding) wire transfer
of immediately available funds to the Administrative Agent, not later
than 11:00 a.m., New York City time, and (A) the Administrative Agent
shall in the case of Construction Loans, deposit the amounts so received
(except to the extent applied directly to the payment of Debt Service) into the
Construction Account, (B) in the case of Term Loans, the proceeds of such
Term Loan shall be applied solely to repay outstanding Construction Loans (and
the Lenders shall not be obligated to pay the proceeds of any Term Loan to, or
upon the direction of, the Borrower, and the Borrower shall not be entitled to
receive such proceeds) and (ii) each Working Capital Lender shall make a
Loan in the amount of its applicable Commitment Percentage of each Working
Capital Loan Funding hereunder on the proposed Funding Date by wire transfer of
immediately available funds to the Administrative Agent, not later than 11:00
a.m. New York City time, and the Administrative Agent shall deposit the amounts
so received into the Account specified in the relevant Funding Notice; provided,
in the case of (i) or (ii) above, that if a Funding does not occur on
the proposed Funding Date because any condition precedent to such requested
Funding herein specified has not been met, the Administrative Agent shall
return the amounts so received to the respective Lenders without interest.


 


(d)   Unless
the Administrative Agent has been notified in writing by any Lender prior to a
proposed Funding Date that such Lender will not make available to the
Administrative Agent its portion of the Funding proposed to be made on such
date, the Administrative Agent may assume that such Lender has made such
amounts available to the Administrative Agent on such date and the
Administrative Agent in its sole discretion may, in reliance upon such
assumption, make available to the Borrower a corresponding amount. If such
corresponding amount is not in fact made available to the Administrative Agent
by such Lender and the Administrative Agent has made such 


 


8

















 


amount available to the Borrower, the Administrative Agent shall be
entitled to recover such corresponding amount on demand from such Lender and,
if such Lender pays such amount (together with the interest noted below), then
the amount so paid shall constitute such Lender’s Loan included in such Funding.
If such Lender does not pay such corresponding amount forthwith upon the
Administrative Agent’s demand, the Administrative Agent shall promptly notify
the Borrower and the Borrower shall immediately repay such corresponding amount
to the Administrative Agent. The Administrative Agent shall also be entitled to
recover from such Lender or the Borrower, as the case may be, interest on such
corresponding amount in respect of each day from the date such corresponding
amount was made available by the Administrative Agent to the Borrower to the
date such corresponding amount is recovered by the Administrative Agent, at an
interest rate per annum equal to (i) in the case of a payment made by such
Lender, the greater of the Federal Funds Effective Rate and a rate determined
by the Administrative Agent in accordance with banking industry rules on
interbank compensation and (ii) in the case of a payment made by the
Borrower, the Base Rate plus the Applicable Margin. Nothing herein shall be
deemed to relieve any Lender from its obligation to fulfill its commitment
hereunder. Notwithstanding anything to the contrary in this Agreement or any
other Financing Document, the Administrative Agent may, subject to the rights
of the other Senior Secured Parties under the Security Documents, apply all
funds and proceeds of Collateral available for the payment of any Obligation to
repay any amount owing by any Lender to the Administrative Agent as a result of
such Lender’s failure to fund its applicable share of any Funding. A notice by
the Administrative Agent to any Lender or the Borrower with respect to any
amounts owing under this Section 2.06(d) shall be conclusive, absent
manifest error.


 


(e)   On
the Conversion Date, to the extent required to pay the amounts specified below
(and in accordance with the Conversion Date Funding Notice), and in the
following order of priority, the Administrative Agent shall (x) first, apply
any amounts on deposit in or standing to the credit of the Construction Account
(other than amounts in the Bond Proceeds Sub-Account), and (y) second, (A) in
the case of any prepayment of the Construction Loans, reduce any unused portion
of the Aggregate Construction Loan Commitment (with a corresponding reduction
in the Term Loan Commitments in accordance with Section 2.08(e) (Termination or Reduction of Commitments)), or (B) in all
other cases, disburse to the Administrative Agent any unused portion of the
Aggregate Construction Loan Commitment for application as specified below:


 


(i)                        first,
for deposit into the Debt Service Reserve Account in an amount which, when
taken together with all other amounts then on deposit in or credited to the
Debt Service Reserve Account, equals fifty percent (50%) of the
then-current Debt Service Reserve Required Amount;


 


9

















 


(ii)                     second,
to the Borrower for the payment of any remaining Project Costs;


 


(iii)                  third,
for deposit into the Contingency Reserve Account in an amount such that the
amounts on deposit therein are equal to the Contingency Reserve Required
Amount;


 


(iv)                 fourth, as
a distribution to the Sponsor in an amount not to exceed two million seven
hundred fifty thousand Dollars ($2,750,000) to repay the loan (including
accrued interest) from the Design-Build Contractor to the Sponsor;


 


(v)                    fifth,
upon written notice of either the Borrower or the Administrative Agent, for
deposit into the Debt Service Reserve Account in an amount such that the total
amount on deposit therein is equal to the then-current Debt Service Reserve
Required Amount;


 


(vi)                 sixth, if
the Pre-Conversion Prepayment Target has not been achieved, as a prepayment of
the Construction Loans in accordance with Section 3.10(d)(i) (Mandatory Prepayment) to the extent required to achieve
the Pre-Conversion Prepayment Target; and


 


(vii)              seventh, as a
prepayment of the Construction Loans in accordance with Section 3.10(d)(ii)
(Mandatory Prepayment) and, provided
that no Default or Event of Default has occurred and is continuing, for
distribution to the Pledgor, in amounts such that the ratio of Aggregate
Pre-Conversion Distributions to Aggregate Pre-Conversion Cash Sweeps is equal
to 40:60, provided, that if sufficient amounts are not available at this
priority for prepayment of the Construction Loans in order for such ratio to be
achieved, then all such amounts shall be applied as a prepayment of the
Construction Loans in accordance with Section 3.10(d)(ii) (Mandatory Prepayment).


 


Section
2.07    Evidence of Indebtedness.
(a) Each Loan made by each Lender shall be evidenced by one or more
accounts or records maintained by such Lender and by the Administrative Agent
in the ordinary course of business, including the Register for the recordation
of the Loans maintained by the Administrative Agent in accordance with the
provisions of Section 10.03(c) (Assignments).
The accounts or records maintained by the Administrative Agent and each Lender
shall be conclusive 


 


10

















 


evidence, absent manifest error, of the amount of the Loans made by the
Lenders to the Borrower and the interest and payments thereon. Any failure to
so record or any error in doing so shall not, however, limit or otherwise
affect the obligation of the Borrower hereunder to pay any amount owing with
respect to the Obligations. In the event of any conflict between the accounts
and records maintained by any Lender and the accounts and records of the
Administrative Agent in respect of such matters, the accounts and records of
the Administrative Agent shall control, absent manifest error.


 


(b)   The
Borrower agrees that in addition to the Register and any other accounts and
records maintained pursuant to Section 2.07(a) (Evidence of
Indebtedness), the Loans made by each Lender shall be evidenced
by a Note or Notes duly executed on behalf of the Borrower. Construction Notes
and Working Capital Notes shall be dated the Closing Date (or, if later, the
date of any request therefor by a Lender). Term Notes shall be dated the
Conversion Date (or, if later, the date of any request therefor by a Lender). Each
such Note shall be payable to the order of such Lender in a principal amount
equal to such Lender’s Construction Loan Commitment, Term Loan Commitment or
Working Capital Loan Commitment, as applicable. Each Lender may attach
schedules to its Note and endorse thereon the date, amount and maturity of its
Loan and payments with respect thereto.


 


Section
2.08    Termination or Reduction
of Commitments. (a)  Unless all of the Construction/Term Lenders
agree otherwise in writing, any unused Construction Loan Commitments shall be
terminated on the earlier to occur of the Conversion Date and the Conversion
Date Certain, in each case after giving effect to all Construction Loans, if
any, to be made on such day.


 


(b)   Unless
all of the Construction/Term Lenders agree otherwise in writing, any unused
Term Loan Commitments shall be terminated on the earlier to occur of the
Conversion Date and the Conversion Date Certain, after giving effect to all
Term Loans, if any, to be made on such day.


 


(c)   Unless
all of the Working Capital Lenders agree otherwise in writing, if the
Conversion Date does not occur on or prior to the Conversion Date Certain, all
Working Capital Loan Commitments shall be automatically and permanently
terminated on the Conversion Date Certain.


 


(d)   Upon
any prepayment of the Construction Loans pursuant to Section 3.09 (Optional Prepayment) or Section 3.10 (Mandatory Prepayment), or any reduction in Construction
Loan Commitments, the Term Loan Commitments shall be automatically and
permanently reduced in an amount equal to such prepayment or reduction.


 


11

















 


(e)   Any
unused Construction Loan Commitments, Term Loan Commitments or Working Capital
Loan Commitments shall be terminated upon the occurrence of an Event of Default
if and to the extent required pursuant to Section 8.02 (Action Upon
Bankruptcy) or Section 8.03 (Action Upon
Other Event of Default) in accordance with the terms thereof.


 


(f)    Any
Working Capital Loan Commitments shall be automatically and permanently
terminated in full on the earlier of (i) the date that is ninety
(90) days after the date on which all outstanding Construction Loans and
Terms Loans have been paid in full and (ii) the Final Maturity Date.


 


(g)   Any
Working Capital Loan Commitments may be terminated or reduced, in whole or in
part (in integral multiples of one hundred thousand Dollars ($100,000)), by the
Borrower upon no less than ten (10) days’ prior written notice to the
Administrative Agent; provided, upon any such termination or reduction,
the sum of (x) the amounts on deposit in or standing to the credit of the
Working Capital Reserve Account (not including amounts in the LC Cash
Collateral Sub-Account) plus (y) the Aggregate Working Capital Loan
Commitment is equal to or greater than the Working Capital Reserve Required
Amount.


 


(h)   The
Aggregate Working Capital Loan Commitment and the Working Capital Available
Amount shall be automatically reduced to the extent of, and in the amount of,
any prepayment of the Working Capital Loans that is applied, at the Borrower’s
option, to the Working Capital Reserve Account pursuant to Section
3.09(d)(ii)(C) (Optional Prepayment).


 


(i)    The
Aggregate Working Capital Loan Commitment and the Working Capital Available
Amount shall be automatically reduced to the extent of, and in the amount of,
any prepayment of the Working Capital Loans pursuant to Section 3.10(g)(ii)
or (iv) (Mandatory Prepayment).


 


Section
2.09    Additional Plant. (a)  The
Borrower and the Lenders acknowledge that the Borrower or one of its affiliates
may (but shall not be obligated to), in the future, request that the Lenders consider
making available additional senior loans (i) to finance the ownership,
development, engineering, construction, testing and operation of an expansion
plant located on the same site as the Huron Plant and designed to produce an
additional approximately thirty (30) million gallons-per-year of denatured
ethanol, together with distillers grains, and (ii) to finance up to 65% of the
total capital requirements of an additional ethanol facility to be located in
Indiana, in each case owned and operated by a wholly-owned Subsidiary of
Advanced BioEnergy, LLC, a Delaware limited liability company, and subject to
(x) the satisfaction of all due diligence inquiries of each Lender, (y) the
prior written approval of all of the Lenders, and (z) the execution 


 


12

















 


and delivery of all amendments to the then-existing Financing Documents
and all additional financing documents as the Lenders may require. The Borrower
acknowledges and agrees that this Section 2.09 does not constitute a
commitment or obligation on the part of any Lender to provide funding for any
such additional ethanol facility.


 


ARTICLE
III


 


REPAYMENTS, PREPAYMENTS, INTEREST AND FEES


 


Section
3.01    Repayment of
Construction Loan Fundings. (a) The Borrower unconditionally and
irrevocably promises to pay to the Administrative Agent for the ratable account
of each Construction/Term Lender the aggregate outstanding principal amount of
the Construction Loans in accordance with this Section 3.01.


 


(b)   The
Construction Loans shall be repaid in full on the Conversion Date with the
proceeds of the Term Loans or, if earlier, on the Conversion Date Certain in
accordance with Section 3.01(c).


 


(c)   Unless
all of the Construction/Term Lenders agree otherwise in writing, if the
Conversion Date does not occur on or prior to the Conversion Date Certain, on
the Conversion Date Certain, (1) each outstanding Construction Loan shall
become due and payable, (2) all amounts in any Project Accounts (other
than the Bond Proceeds Sub-Account) shall be promptly applied at the written
instruction of the Administrative Agent to Obligations then outstanding in
accordance with Section 4.2 (Application of Proceeds)
of the Intercreditor Agreement, and (3) the Borrower shall pay all accrued
interest on and repay the entire remaining principal amount of all outstanding
Construction Loans to the Administrative Agent, for the pro  rata
account of the Lenders (based on their respective Construction Loan Commitment
Percentages), together with any and all Fees and other Obligations owed to the
Senior Secured Parties.


 


Section
3.02    Repayment of Term Loan
Fundings. (a)  The Borrower unconditionally and irrevocably
promises to pay to the Administrative Agent for the ratable account of each
Construction/Term Lender the aggregate outstanding principal amount of the Term
Loans, on the Initial Quarterly Payment Date and on each Quarterly Payment Date
thereafter, in the respective amounts set forth below opposite each such
Quarterly Payment Date (which amounts shall be reduced in inverse order of
maturity as a result of any prepayments of the Term Loans made in accordance
with Section 3.09 (Optional Prepayment)
or Section 3.10 (Mandatory Prepayment)
in accordance with the terms set forth therein or as a result of any reduction
in the Term Loan Commitments pursuant to Section 2.08(b) or (e) (Termination or Reduction of Commitments).
The first Quarterly Payment Date in each table below corresponds to Initial
Quarterly Payment Date.


 


13

















 


Term Loans


 


	
  Quarterly Payment 

  Date

  	
   

  	
  Principal Amount

  	
   

  
	
  1

  	
   

  	
  US$

  	
  1,360,500

  	
   

  
	
  2

  	
   

  	
  US$

  	
  1,360,500

  	
   

  
	
  3

  	
   

  	
  US$

  	
  1,360,500

  	
   

  
	
  4

  	
   

  	
  US$

  	
  1,360,500

  	
   

  
	
  5

  	
   

  	
  US$

  	
  1,360,500

  	
   

  
	
  6

  	
   

  	
  US$

  	
  1,360,500

  	
   

  
	
  7

  	
   

  	
  US$

  	
  1,360,500

  	
   

  
	
  8

  	
   

  	
  US$

  	
  1,360,500

  	
   

  
	
  9

  	
   

  	
  US$

  	
  1,360,500

  	
   

  
	
  10

  	
   

  	
  US$

  	
  1,360,500

  	
   

  
	
  11

  	
   

  	
  US$

  	
  1,360,500

  	
   

  
	
  12

  	
   

  	
  US$

  	
  1,360,500

  	
   

  
	
  13

  	
   

  	
  US$

  	
  1,360,500

  	
   

  
	
  14

  	
   

  	
  US$

  	
  1,360,500

  	
   

  
	
  15

  	
   

  	
  US$

  	
  1,360,500

  	
   

  
	
  16

  	
   

  	
  US$

  	
  1,360,500

  	
   

  
	
  17

  	
   

  	
  US$

  	
  1,360,500

  	
   

  
	
  18

  	
   

  	
  US$

  	
  1,360,500

  	
   

  
	
  19

  	
   

  	
  US$

  	
  1,360,500

  	
   

  
	
  20

  	
   

  	
  US$

  	
  1,360,500

  	
   

  
	
  21

  	
   

  	
  US$

  	
  1,360,500

  	
   

  
	
  22

  	
   

  	
  US$

  	
  1,360,500

  	
   

  
	
  23

  	
   

  	
  US$

  	
  1,360,500

  	
   

  
	
  Final Maturity Date

  	
   

  	
  US$

  	
  59,408,500

  	
   

  



 


(b)   Notwithstanding anything to the contrary set
forth in Section 3.02(a), the final principal
repayment installment on the Final Maturity Date shall in any event be in an
amount equal to the aggregate principal amount of all Term Loans outstanding on
such date.


 


Section
3.03    Repayment of Working
Capital Loan Fundings. (a) The Borrower unconditionally and
irrevocably promises to pay to the Administrative Agent for the ratable account
of each Working Capital Lender the aggregate outstanding principal amount of
the Working Capital Loans in accordance with this Section 3.03.


 


14

















 


(b)   The
Working Capital Loans shall be repaid in full on the Working Capital Loan
Maturity Date.


 


(c)   Unless
all of the Working Capital Lenders agree otherwise in writing, if the
Conversion Date does not occur on or prior to the Conversion Date Certain, then
on the Conversion Date Certain, (i) each outstanding Working Capital Loan shall
become due and payable, (ii) all amounts in any Project Accounts shall be
promptly applied to the Obligations then outstanding in accordance with
Section 4.2 (Application of Proceeds) of the
Intercreditor Agreement, and (iii) the Borrower shall pay all accrued interest
on and repay the entire remaining principal amount of all outstanding Working
Capital Loans to the Administrative Agent, for the pro  rata
account of the Lenders (based on their respective Working Capital Loan
Commitment Percentages), together with any and all Fees and other Obligations
owed to the Senior Secured Parties.


 


Section
3.04    Interest Payment Dates.
(a) Interest accrued on each Loan shall be payable, without duplication:


 


(i)                        on the
Maturity Date for such Loan;


 


(ii)                     on each
Interest Payment Date for such Loan; and


 


(iii)                  with respect to
any Loan, on any date when such Loan is prepaid hereunder on the portion so
prepaid.


 


(b)   Interest
accrued on the Loans or other monetary Obligations after the date such amount
is due and payable (whether on the Maturity Date for such Loan, any Quarterly
Payment Date, any Interest Payment Date, upon acceleration or otherwise) shall
be payable upon demand.


 


(c)   Interest
hereunder shall be due and payable in accordance with the terms hereof, before
and after judgment, regardless of whether an Insolvency or Liquidation
Proceeding exists in respect of the Borrower, and, to the fullest extent
permitted by law, the Lenders shall be entitled to receive post-petition
interest during the pendency of an Insolvency or Liquidation Proceeding.


 


Section
3.05    Interest Rates. (a) Pursuant
to each properly delivered Funding Notice and Interest Period Notice,
(i) each Eurodollar Loan shall accrue interest at a rate per annum during
each Interest Period applicable thereto equal to the sum of the Eurodollar Rate
for such Interest Period plus the Applicable Margin and (ii) each Base
Rate Loan shall accrue interest at a rate per annum during each Quarterly
Period equal to the sum of the Base Rate for such Quarterly Period plus the
Applicable Margin.


 


15

















 


(b)   On
or before 11:00 a.m., New York City time, at least three (3) Business
Days prior to the end of each Interest Period for each Eurodollar Loan, and at
least three (3) Business Days prior to the end of any Quarterly Period for
any Base Rate Loans, the Borrower shall deliver to the Administrative Agent an
Interest Period Notice setting forth the Borrower’s election (i) to
continue any such Eurodollar Loan as (or convert any such Base Rate Loan to) a
Eurodollar Loan and setting forth the Borrower’s election with respect to the
duration of the next Interest Period applicable to such continued or converted
Eurodollar Loan, which Interest Period shall be one (1), two (2), three
(3) or six (6) months in length or (ii) to convert any such
Eurodollar Loan to a Base Rate Loan at the end of the then-current Interest
Period; provided, that if an Event of Default has occurred and is continuing,
all Eurodollar Loans shall automatically convert into Base Rate Loans at the
end of the then-current Interest Periods. Upon the waiver or cure of such Event
of Default, the Borrower shall have the option to continue such Loans as Base
Rate Loans and/or to convert such Loans to Eurodollar Loans (by delivery of an
Interest Period Notice), subject to the notice periods set forth above. Notwithstanding
anything to the contrary, any portion of the Loans maturing in less than one
month may not be continued as, or converted to, Eurodollar Loans and will
automatically convert to Base Rate Loans at the end of the then-current
Interest Period.


 


(c)   If
the Borrower fails to deliver an Interest Period Notice in accordance with Section
3.05(b),
(i) with respect to any Eurodollar Loan, such Eurodollar Loan shall
automatically continue as a Eurodollar Loan with an Interest Period of one
(1) month or (ii) with respect to any Base Rate Loan, such Base Rate
Loan shall automatically continue as a Base Rate Loan.


 


(d)   All
Eurodollar Loans shall bear interest from and including the first day of the
applicable Interest Period to (and excluding) the last day of such Interest
Period at the interest rate determined as applicable to such Eurodollar Loan.


 


(e)   Notwithstanding
anything to the contrary, the Borrower shall have, in the aggregate, no more
than eight (8) separate Eurodollar Loans outstanding at any one time prior
to the Conversion Date or five (5) separate Eurodollar Loans outstanding
at any one time after the Conversion Date. For purposes of the foregoing,
(i) Eurodollar Loans having different Interest Periods, regardless of
whether they commence on the same date, shall be considered separate Eurodollar
Loans and (ii)  all Eurodollar Loans having the same Interest Period and
commencing on the same date shall be considered to be a single Eurodollar Loan.


 


(f)    All
Base Rate Loans shall bear interest from and including the first day of each
Quarterly Period (or the day on which Eurodollar Loans are converted to Base
Rate Loans as required under Section 3.05(b) or under ARTICLE IV (Eurodollar Rate and


 


16

















 


Tax Provisions)) to (and including)
the next succeeding Quarterly Payment Date at the interest rate determined as
applicable to such Base Rate Loan.


 


Section
3.06    Default Interest Rate.


 


(a)   If
(i) all or a portion of the principal amount of any Loan is not paid when
due (whether on the Maturity Date for such Loan, by acceleration or otherwise),
such overdue amount shall bear interest at a rate per annum equal to the rate
that would otherwise be applicable thereto plus two percent (2%), or
(ii) any Obligation (other than principal on the Loans) is not paid when
due (whether on the due date thereof, by acceleration or otherwise), such
overdue amount shall bear interest at a rate per annum equal to the rate then
applicable to Base Rate Loans plus two percent (2%), in each case, with
respect to clauses (i) and (ii) above, from the date of such
non-payment until such amount is paid in full (before as well as after judgment).


 


(b)   Upon
the occurrence and during the continuance of any Event of Default (other than
an Event of Default under Section 8.01(a) (Events of
Default - Nonpayment), for which provision is made in Section
3.06(a)), the Borrower shall pay, in addition to the interest then payable
on any Loan, additional interest (before as well as after judgment) on the
Loans at two percent (2%) per annum (the rate in effect plus such two
percent (2%) per annum, the “Default Rate”) until such Event of
Default is cured or waived.


 


Section
3.07    Interest Rate
Determination. The Administrative Agent shall determine the interest rate
applicable to the Loans in accordance with the terms of this Agreement, and
shall give prompt notice to the Borrower and the Lenders of such determination,
and its determination thereof shall be conclusive, absent manifest error.


 


Section
3.08    Computation of Interest
and Fees. (a)  All computations of interest for Base Rate Loans
when the Base Rate is determined by WestLB’s “prime rate” shall be made on the
basis of a year of 365 or 366 days, as the case may be, and actual days
elapsed. All computations of interest for Eurodollar Loans and for Base Rate
Loans when the Base Rate is determined by the Federal Funds Effective Rate
shall be made on the basis of a 360-day year and actual days elapsed.


 


(b)   Interest
shall accrue on each Loan for the day on which the Loan is made, and shall not
accrue on a Loan, or any portion thereof, for the day on which the Loan or such
portion is paid; provided, that any Loan that is repaid on the
same day on which it is made shall bear interest for one (1) day.


 


(c)   Each
determination by the Administrative Agent of an interest rate or fee hereunder
shall be conclusive and binding for all purposes, absent manifest error.


 


17

















 


Section
3.09    Optional Prepayment.
(a)  The Borrower shall have the right at any time, and from time to
time, to prepay the Loans, in whole or in part, upon not fewer than five
(5) Business Days’ prior written notice to the Administrative Agent.


 


(b)   Any
partial prepayment of the Loans shall be in a minimum amount of five hundred
thousand Dollars ($500,000)  and in
integral multiples of one hundred thousand Dollars ($100,000)  in excess thereof.


 


(c)   Each
notice of prepayment given by the Borrower under this Section 3.09 shall specify the
prepayment date and the portion of the principal amount of Loans to be prepaid.
All prepayments under this Section
3.09 shall be made by the Borrower to the Administrative Agent for
the account of the Lenders and shall be accompanied by accrued interest on the
principal amount being prepaid to but excluding the date of payment and by any
additional amounts required to be paid under Section 4.05 (Funding Losses).


 


(d)   Amounts
of principal prepaid under this Section 3.09 shall be applied by
the Administrative Agent:


 


(i)                        in the
case of a prepayment of Construction Loans or Term Loans, to the Construction
Loans or Term Loans, as the case may be, pro  rata among the
Construction/Term Lenders based on their respective outstanding principal
amounts of Construction Loans or Term Loans, as the case may be, on the date of
such prepayment (and then, in the case of the Term Loans, to the remaining
outstanding installments of principal of the Term Loans under Section 3.02(a)
in inverse order of maturity);


 


(ii)                     in the case
of a prepayment of Working Capital Loans:


 


(A)                              first, to the
Working Capital Loans, pro  rata among the Working Capital Lenders
in proportion to their respective principal amounts of outstanding Working
Capital Loans;


 


(B)                                second, to the
LC Cash Collateral Sub-Account in an amount up to the Maximum Available Amounts
under all Letters of Credit then outstanding as cash collateral to secure the
repayment of any Working Capital Loans that may result from a draw on any such
Letter of Credit; and


 


(C)                                third, if all
outstanding Working Capital Loans have been paid in full, and all Letters of
Credit have been cash 


 


18

















 


                                                collateralized
in full in accordance with priority second
above, at Borrower’s option, to reduce the Working Capital Loan Commitment by
depositing an amount equal to such reduction in the Working Capital Reserve
Account.


 


(e)   Amounts
of Construction Loans and Term Loans prepaid pursuant to this Section 3.09 may not be
reborrowed.


 


Section
3.10    Mandatory Prepayment.
(a)  The Borrower shall be required to prepay the Loans:


 


(i)                        upon
receipt by the Borrower of Insurance Proceeds as required pursuant to
Section 12.01(d)(ii) or Section 12.01(e) of the Accounts Agreement;


 


(ii)                     upon receipt
by the Borrower of Condemnation Proceeds, as required pursuant to 12.01(d)(ii)
or 12.01(e) of the Accounts Agreement;


 


(iii)                  upon receipt of
any Project Document Termination Payments, as required pursuant to
Section 13.01(b)(ii)(B) of the Accounts Agreement;


 


(iv)                 upon receipt of
proceeds of any asset disposal (other than proceeds received from the sale of
Products) that are not used for replacement in accordance with
Section 13.01(b)(i)(B) of the Accounts Agreement; and


 


(v)                    upon payment
in full of all outstanding Construction Loans or Term Loans, as the case may
be, prepayment in full of all outstanding Working Capital Loans within ninety
(90) days thereof;


 


(b)   The
Borrower shall be required to prepay the Loans:


 


(i)                        on each
Quarterly Payment Date prior to the Conversion Date as required pursuant to
priorities eleventh and twelfth
of Section 6.01(b) of the Accounts Agreement; and


 


(ii)                     on the
Initial Quarterly Payment Date and each Quarterly Payment Date thereafter as
required pursuant to priorities twelfth, fifteenth and
sixteenth of Section 6.01(c) of the
Accounts Agreement;


 


19

















 


(c)   The
Borrower shall be required to prepay the Loans on the Initial Quarterly Payment
Date and any Quarterly Payment Date thereafter, if the Historical Debt Service Coverage Ratio on such
Quarterly Payment Date is less than 1.5:1.0, as required pursuant to priority seventeenth of Section 6.01(c) of the Accounts Agreement;


 


(d)   The
Borrower shall be required to prepay the Loans:


 


(i)                        on the
Conversion Date as required pursuant to priority sixth of
Section 2.06(e); and


 


(ii)                     on the
Conversion Date, pursuant to priority seventh of
Section 2.06(e);


 


(e)   The
Borrower shall be required to prepay the Working Capital Loans:


 


(i)                        if a
Borrowing Base Certificate demonstrates that the then-outstanding principal
amount of the Working Capital Loans exceeds the then-effective Working Capital
Commitment or the Working Capital Available Amount, within three
(3) Business Days following the delivery of such Borrowing Base
Certificate, prepay the Working Capital Loans in the amount of such excess; and


 


(ii)                     in order to
ensure that there are no outstanding Working Capital Loans for a period of ten
(10) consecutive Business Days in each calendar year;


 


(f)    All
prepayments under this Section 3.10 shall be made by the Borrower to the
Administrative Agent for the account of the applicable Lenders and shall be
accompanied by accrued interest on the principal amount being prepaid to but
excluding the date of payment and by any additional amounts required to be paid
under Section 4.05 (Funding Losses);


 


(g)   Amounts
of principal prepaid under this Section 3.10 (other than pursuant to Section 3.10(d))
shall be allocated by the Administrative Agent:


 


(i)                        first,
to the Construction Loans or Term Loans, as the case may be, pro  rata
among the Construction/Term Lenders based on their respective outstanding
principal amounts of Construction Loans or Term Loans, as the case may be, on
the date of such prepayment (and then, in the case of the Term Loans, to the 


 


20

















 


                                                remaining
outstanding installments of principal of the Term Loans under Section 3.02(a)
in inverse order of maturity);


 


(ii)                     second,
if all outstanding Construction Loans or Term Loans, as the case may be, have
been paid in full, to the Working Capital Loans, pro  rata among
the Working Capital Lenders in proportion to their respective principal amounts
of outstanding Working Capital Loans (and the Aggregate Working Capital Loan
Commitment shall be reduced in each case by an amount equal to the amount so
applied);


 


(iii)                  third, to
the LC Cash Collateral Sub-Account in an amount up to the Maximum Available
Amounts under all Letters of Credit then outstanding  as cash collateral to secure the repayment of
any Working Capital Loans that may result from a draw on any such Letter of
Credit; and


 


(iv)                 fourth, if
all outstanding Working Capital Loans have been paid in full, and all Letters
of Credit have been cash collateralized in full in accordance with priority third above, to the Working Capital Reserve Account (and the
Aggregate Working Capital Loan Commitment shall be reduced by an amount equal
to the amount so applied); and


 


(h)   Amounts
of Construction Loans and Terms Loans prepaid pursuant to this Section 3.10 may not be
reborrowed.


 


Section
3.11    Time and Place of
Payments. (a)  The Borrower shall make each payment (including
any payment of principal or interest on any Loan or any Fees or other
Obligations) hereunder and under any other Financing Document without setoff,
deduction or counterclaim not later than 11:00 a.m., New York City time on
the date when due in Dollars in immediately available funds to the
Administrative Agent at the following account: 
JPMorgan Chase Bank (Swift ID: 
CHASUS33XXX), Account Number: 
920-1-060663, for the Account of WESTLB AG, NY Branch, ABA #021000021,
Ref:  HEARTLAND GRAIN FUELS, L.P. or at
such other office or account as may from time to time be specified by the
Administrative Agent to the Borrower. Funds received after 11:00 a.m. New
York City time shall be deemed to have been received by the Administrative
Agent on the next succeeding Business Day.


 


(b)   The
Administrative Agent shall promptly remit in immediately available funds to
each Senior Secured Party its share, if any, of any payments received by the
Administrative Agent for the account of such Senior Secured Party.


 


21

















 


(c)   Whenever
any payment (including any payment of principal of or interest on any Loan or
any Fees or other Obligations) hereunder or under any other Financing Document
shall become due, or otherwise would occur, on a day that is not a Business
Day, such payment shall (except as otherwise required by the proviso to the
definition of “Interest Period” with respect to Eurodollar Loans) be made on
the immediately succeeding Business Day, and such increase of time shall in
such case be included in the computation of interest or Fees, if applicable.


 


Section
3.12    Fundings and Payments
Generally. (a) Unless the Administrative Agent has received notice
from the Borrower prior to the date on which any payment is due to the
Administrative Agent for the account of the Lenders hereunder that the Borrower
will not make such payment, the Administrative Agent may assume that the
Borrower has made such payment on such date in accordance with this Agreement
and may, in reliance upon such assumption, distribute to the Lenders the amount
due. If the Borrower has not in fact made such payment, then each of the
Lenders severally agrees to repay to the Administrative Agent forthwith on
demand the amount so distributed to such Lender in immediately available funds
with interest thereon, for each day from and including the date such amount is
distributed to it to but excluding the date of payment to the Administrative
Agent, at the greater of (i) the Federal Funds Effective Rate and
(ii) a rate determined by the Administrative Agent in accordance with
banking industry rules on interbank compensation. A notice by the
Administrative Agent to any Lender with respect to any amount owing under this Section
3.12(a) shall be conclusive, absent manifest error.


 


(b)   Nothing
herein shall be deemed to obligate any Lender to obtain funds for any Loan in
any particular place or manner or to constitute a representation by any Lender
that it has obtained or will obtain funds for any Loan in any particular place
or manner.


 


(c)   The
Borrower hereby authorizes each Lender, if and to the extent payment owed to
such Lender is not made when due under this Agreement or under the Notes held
by such Lender, to charge from time to time against any or all of the Borrower’s
accounts with such Lender (other than, in the event that the Accounts Bank or
any bank holding a Local Account is also a Lender, any Project Account or Local
Account) any amount so due.


 


Section
3.13    Fees. (a)  From
and including the date hereof until the Final Maturity Date, the Borrower
agrees to pay to the Administrative Agent, for the account of the Lenders, on
each Quarterly Payment Date, a commitment fee (a “Commitment Fee”) equal
to one-half of one percent (0.50%) per annum on the average daily amount
by which (i) the Aggregate Construction Loan Commitment exceeds the aggregate
outstanding principal amount of Construction Loans and (ii) the Aggregate
Working 


 


22

















 


Capital Loan Commitment exceeds the sum of (x) the aggregate outstanding
principal amount of Working Capital Loans plus (y) the Maximum
Available Amounts of all outstanding Letters of Credit, in each case, during
the calendar quarter or portion thereof then ended. All Commitment Fees shall
be computed on the basis of the actual number of days elapsed in a year of 365
or 366 days, as pro-rated for any partial quarter, as applicable.


 


(b)   Upon
the issuance of each Letter of Credit pursuant to Section 2.04 (Letters of Credit) and until the termination,
cancellation or expiration of such Letter of Credit, the Borrower agrees to pay
to the Administrative Agent, on each Quarterly Payment Date and on the date on
which such Letter of Credit expires, is cancelled or terminates, (i) for
the account of the Working Capital Lenders, an availability fee (the “Letter
of Credit Availability Fee”) at a rate per annum equal to the Working
Capital Applicable Margin for Eurodollar Loans on the average daily Maximum
Available Amount under such Letter of Credit during the calendar quarter or portion
thereof then ended and (ii) only if the Working Capital Loan Commitment
Percentage of the Issuing Bank is less than 100%, for the account of the
Issuing Bank, a fronting fee (the “Letter of Credit Fronting Fee”) equal
to an amount calculated at a rate per annum equal to two tenths of a percent
(0.2%) of the average daily Maximum Available Amount under such Letter of
Credit during the calendar quarter or portion thereof then ended. All Letter of
Credit Availability Fees and Letter of Credit Fronting Fees shall be computed
on the basis of the actual number of days elapsed in a year of 360 days,
as pro-rated for any partial quarter, as applicable.


 


(c)   The
Borrower agrees to pay to the Administrative Agent for the account of the Lead
Arranger, the Lenders and the Agents additional fees in the amounts and at the
times from time to time agreed in writing by the Borrower and the Agents,
including pursuant to the Fee Letters.


 


(d)   All
Fees shall be paid on the dates due, in immediately available funds. Once paid,
none of the Fees shall be refundable under any circumstances.


 


Section
3.14    Pro  Rata Treatment.
(a) Except as otherwise expressly provided herein (including Section
4.01 (Eurodollar Rate Lending Unlawful)), each Funding of Loans and each reduction
of commitments of any type shall be allocated by the Administrative Agent pro rata among the Lenders holding Loans of
such type in accordance with their respective applicable Commitment
Percentages.


 


(b)   Except
as required under Section
3.09 (Optional Prepayment), Section 3.10 (Mandatory
Prepayment) or ARTICLE IV (Eurodollar
Rate and Tax Provisions), (i) each payment or prepayment of
principal of the Loans shall be allocated by the Administrative Agent pro rata among the applicable Lenders in
accordance with the 


 


23

















 


respective principal amounts of their outstanding Loans of the type
being repaid, (ii) each payment of interest on the Loans shall be
allocated by the Administrative Agent pro rata
among the applicable Lenders in accordance with the respective interest amounts
outstanding on their outstanding Loans of the type in respect of which interest
is being paid, and (iii) each payment of fees on the Commitments and/or
the Letters of Credit (other than the Letter of Credit Fronting Fee) shall be
allocated by the Administrative Agent pro rata
among the applicable Lenders in accordance with their respective Commitments of
the type to which such fees relate.


 


(c)   Each
Lender agrees that in computing such Lender’s portion of any Funding to be made
hereunder, the Administrative Agent may, in its discretion, round each Lender’s
percentage of such Funding to the next higher or lower whole Dollar amount in
accordance with market convention.


 


Section
3.15    Sharing of Payments.
(a)  If any Lender obtains any payment or other recovery (whether
voluntary, involuntary, by application of setoff or otherwise) on account of
any Loan (other than pursuant to the terms of ARTICLE IV (Eurodollar Rate and Tax Provisions))
in excess of its pro rata share of payments
then or therewith obtained by all Lenders holding Loans of such type, such
Lender shall purchase from the other Lenders holding Loans of such type such
participations in Loans of such type made by them as shall be necessary to
cause such purchasing Lender to share the excess payment or other recovery
ratably with each of them; provided, however, that if all or any portion of the
excess payment or other recovery is thereafter recovered from such purchasing
Lender, the purchase shall be rescinded and each Lender that has sold a
participation to the purchasing Lender shall repay to the purchasing Lender the
purchase price to the ratable extent of such recovery together with an amount
equal to such selling Lender’s ratable share (according to the proportion of
(x) the amount of such selling Lender’s required repayment to the
purchasing Lender to (y) the total amount so recovered from the purchasing
Lender) of any interest or other amount paid or payable by the purchasing
Lender in respect of the total amount so recovered. The Borrower agrees that
any Lender so purchasing a participation from another Lender pursuant to this Section 3.15 may, to the fullest
extent permitted by law, exercise all of its rights of payment (including
pursuant to Section 10.14 (Right
of Setoff)) with respect to such participation as fully
as if such Lender were the direct creditor of the Borrower in the amount of
such participation.


 


(b)   If
under any applicable bankruptcy, insolvency or other similar Law, any Lender
receives a secured claim in lieu of a setoff to which this Section 3.15 applies, such Lender
shall, to the extent practicable, exercise its rights in respect of such
secured claim in a manner consistent with the rights of the Lenders entitled
under this Section 3.15
to share in the benefits of any recovery on such secured claim.


 


24

















 


Section
3.16    Termination of Interest
Rate Protection Agreement in Connection with Any Prepayment. The Borrower
shall, in connection with any prepayment of Construction Loans or Terms Loans
made by the Borrower pursuant to Section 3.09 (Optional
Prepayment) or Section
3.10 (Mandatory Prepayment),
terminate an aggregate notional amount under the Interest Rate Protection Agreements
equal to the amount (if any) by which the aggregate notional amount under the
Interest Rate Protection Agreements would exceed the aggregate outstanding
principal amount of the Construction Loans or Term Loans, as the case may be,
immediately after giving effect to such prepayment; and in each case, such
termination shall be made within five (5) Business Days of the date of
such prepayment.


 


ARTICLE
IV


 


EURODOLLAR RATE AND TAX PROVISIONS


 


Section
4.01    Eurodollar Rate Lending
Unlawful. (a) If any Lender reasonably determines (which determination
shall, upon notice thereof to the Borrower and the Administrative Agent, be
conclusive and binding on the Borrower absent manifest error) that the
introduction of or any change in or in the interpretation of any Law makes it
unlawful, or any central bank or other Governmental Authority asserts that it
is unlawful, for such Lender to make, maintain or fund any Loan as a Eurodollar
Loan, the obligations of such Lender to make, maintain or fund any Loan as a
Eurodollar Loan shall, upon such determination, forthwith be suspended until
such Lender notifies the Administrative Agent that the circumstances causing
such suspension no longer exist, and all Eurodollar Loans of such Lender shall
automatically convert into Base Rate Loans at the end of the then-current
Interest Periods with respect thereto or sooner, if required by such Law or
assertion. Upon any such conversion the Borrower shall pay any accrued interest
on the amount so converted and, if such conversion occurs on a day other than
the last day of the then-current Interest Period for such affected Eurodollar
Loans, such Lender shall be entitled to make a request for, and the Borrower
shall pay, compensation for breakage costs under Section 4.05 (Funding Losses).


 


(b)   If
such Lender notifies the Borrower that the circumstances giving rise to the
suspension described in Section 4.01(a) no longer apply, the Borrower may elect (by
delivering an Interest Period Notice) to convert the principal amount of any
such Base Rate Loan to a Eurodollar Loan in accordance with this Agreement.


 


(c)   Each
Lender shall be entitled to fund and maintain all or any part of a Loan in any
manner it deems fit, it being understood, however, that for the purposes of
this Agreement all determinations hereunder shall be made as if such Lender had
actually funded and maintained amounts bearing interest at a Eurodollar Rate
through the purchase of deposits having a maturity corresponding to the
applicable Interest 


 


25

















 


Periods and bearing an interest rate equal to the appropriate
Eurodollar Rate for such Interest Periods.


 


Section
4.02    Inability to Determine
Eurodollar Rates. (a) In the event, and on each occasion, the
Administrative Agent shall have determined in good faith that for any
Eurodollar Loan (i) Dollar deposits in the amount of such Loan and with an
Interest Period similar to such Interest Period are not generally available in
the London interbank market, or (ii) the rate at which such Dollar
deposits are being offered will not adequately and fairly reflect the cost to
any Lender of making, maintaining or funding the principal amount of such Loan
during such Interest Period, or (iii) adequate and reasonable means do not
exist for ascertaining LIBOR, the Administrative Agent shall forthwith notify
the Borrower and the Lenders of such determination, whereupon each such
Eurodollar Loan will automatically, on the last day of the then-existing
Interest Period for such Eurodollar Loan, convert into a Base Rate Loan. In the
event of any such determination pursuant to Section 4.02(a)(i) or (iii), any Funding Notice
delivered by the Borrower shall be deemed to be a request for a Base Rate Loan
until the Administrative Agent determines that the circumstances giving rise to
such notice no longer exist. In the event of any determination pursuant to Section 4.02(a)(ii), each affected
Lender shall, and is hereby authorized by the Borrower to, fund its portion of
the Loans as a Base Rate Loan. Each determination by the Administrative Agent
hereunder shall be conclusive, absent manifest error.


 


(b)   Upon
the Administrative Agent’s determination that the condition that was the
subject of a notice under Section 4.02(a) has ceased, the Administrative Agent shall forthwith
notify the Borrower and the Lenders of such determination, whereupon the
Borrower may elect (by delivering an Interest Period Notice) to convert any
such Base Rate Loan to a Eurodollar Loan on the last day of the then-current
Quarterly Period in accordance with this Agreement.


 


Section
4.03    Increased Eurodollar
Loan Costs. If, after the date hereof, the adoption of any applicable Law
or any change therein, or any change in the interpretation or administration
thereof by any Governmental Authority charged with the interpretation or
administration thereof, or compliance by any Lender (or its Eurodollar Office)
with any request or directive (whether or not having the force of law) of any
Governmental Authority would increase the cost (other than with respect to
Taxes, which are addressed in Section 4.07 (Taxes))
to such Lender of, or result in any reduction in the amount of any sum
receivable by such Lender (whether of principal, interest or any other amount)
in respect of, making, maintaining or funding (or of its obligation to make,
maintain or fund) the Loans as Eurodollar Loans, then the Borrower agrees to
pay to the Administrative Agent for the account of such Lender the amount of
any such increase or 


 


26

















 


reduction. Such Lender shall promptly notify the Administrative Agent
and the Borrower in writing of the occurrence of any such event, such notice to
state the additional amount required to compensate fully such Lender for such
increased cost or reduced amount. Such additional amounts shall be payable by
the Borrower directly to such Lender within five (5) Business Days of
delivery of such notice, and such notice and determination shall be binding on
the Borrower, absent manifest error.


 


Section
4.04    Obligation to Mitigate.
(a)  Each Lender agrees that, after it becomes aware of the
occurrence of an event that would entitle it to give notice pursuant to Section 4.01 (Eurodollar Rate Lending Unlawful), Section 4.03 (Increased Eurodollar Loan Costs) or Section
4.06 (Increased Capital Costs)
or to receive additional amounts pursuant to Section 4.07 (Taxes),
such Lender shall use reasonable efforts to make, fund or maintain its affected
Loan through another lending office (i) if as a result thereof the increased
costs would be avoided or materially reduced or the illegality would thereby
cease to exist and (ii) if, in the opinion of such Lender, the making,
funding or maintaining of such Loan through such other lending office would not
be disadvantageous to such Lender, contrary to such Lender’s normal banking
practices or violate any applicable Law.


 


(b)   No
change by a Lender in its Domestic Office or Eurodollar Office made for such
Lender’s convenience shall result in any increased cost to the Borrower.


 


(c)   If
any Lender demands compensation pursuant to Section 4.03 (Increased
Eurodollar Loan Costs) or Section 4.06 (Increased
Capital Costs) with respect to any Eurodollar Loan, the Borrower
may, at any time upon at least three (3) Business Days’ prior notice to
such Lender through the Administrative Agent, elect to convert such Loan to a
Base Rate Loan. Thereafter, unless and until such Lender notifies the Borrower
that the circumstances giving rise to such notice no longer apply, all such
Eurodollar Loans by such Lender shall bear interest as Base Rate Loans. If such
Lender notifies the Borrower that the circumstances giving rise to such notice
no longer apply, the Borrower may elect (by delivering an Interest Period
Notice) to convert the principal amount of each such Base Rate Loan to a
Eurodollar Loan in accordance with this Agreement.


 


(d)   Notwithstanding
anything to the contrary in this ARTICLE IV, no Lender shall be entitled
to compensation under Section 4.03 (Increased Eurodollar Loan
Costs), Section 4.06 (Increased
Capital Costs) or Section 4.07(a) (Taxes -
Payments Free of Taxes) for any amounts incurred or accruing
more than 180 days prior to the giving of notice by such Lender to the Borrower
of additional costs of the type described in such Sections, provided, if
the event giving rise to such compensation has retroactive effect, such 180-day
period shall be extended to include the period of retroactive effect.


 


27

















 


Section
4.05    Funding Losses. In
the event that any Lender incurs any loss or expense (including any loss or
expense incurred by reason of the liquidation or redeployment of deposits or
other funds acquired by such Lender to make, continue or maintain any portion
of the principal amount of any Loan as a Eurodollar Loan, and any customary
administrative fees charged by such Lender in connection with the foregoing) as
a result of (a) any conversion or repayment or prepayment of the principal
amount of any Loans on a date other than the scheduled last day of the Interest
Period applicable thereto, whether pursuant to Section 3.09 (Optional Prepayment), Section 3.10
(Mandatory Prepayment), Section 4.01(a)  Eurodollar Rate Lending Unlawful) or
otherwise, or (b) the Borrower failing to make a Funding in accordance
with any Funding Notice; then, upon the written notice of such Lender to the
Borrower (with a copy to the Administrative Agent), the Borrower shall, within
five (5) Business Days of receipt thereof, pay to the Administrative Agent
for the account of such Lender such amount as will (in the reasonable
determination of such Lender) reimburse such Lender for such loss or expense. Such
written notice and determination shall be binding on the Borrower, absent
manifest error.


 


Section
4.06    Increased Capital Costs.
If after the date hereof any change in, or the introduction, adoption,
effectiveness, interpretation, reinterpretation or phase-in of, any applicable
Law, guideline or request (whether or not having the force of law) of any
Governmental Authority, affects the amount of capital required to be maintained
by any Lender, and such Lender reasonably determines that the rate of return on
its capital as a consequence of its Loan is reduced to a level below that which
such Lender could have achieved but for the occurrence of any such
circumstance, then, in any such case upon notice from time to time by such
Lender to the Borrower, the Borrower shall pay, within five (5) Business
Days after such demand, directly to such Lender additional amounts sufficient
to compensate such Lender for such reduction in rate of return. A statement of
such Lender as to any such additional amount or amounts shall be binding on the
Borrower, absent manifest error.


 


Section
4.07    Taxes.


 


(a)   Payments
Free of Taxes. Any and all payments by or on account of any Obligations
shall be made free and clear of, and without deduction for, any Taxes, unless
required by Law; provided that if the Borrower shall be required to
deduct any Indemnified Taxes from any such payment, then (i) the sum
payable shall be increased as necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section
4.07) the Agent or Lender (as the case may be) receives an amount
equal to the sum it would have received had no such deductions been made,
(ii) the Borrower shall make such deductions and (iii) the Borrower
shall pay the full amount deducted to the relevant Governmental Authority in
accordance with applicable Law.


 


28

















 


(b)   Payment
of Other Taxes by the Borrower. In addition, the Borrower shall timely pay
any Indemnified Taxes arising from any payment made under any Financing
Document or from the execution, delivery or enforcement of, or otherwise with
respect to, any Financing Document and not collected by withholding at the
source as contemplated by Section 4.07(a) to the relevant Governmental
Authority in accordance with applicable Law.


 


(c)   Indemnification
by the Borrower. The Borrower shall indemnify each Agent and each Lender,
within five (5) Business Days after written demand therefor, for the full
amount of any Indemnified Taxes (including Indemnified Taxes imposed or
asserted on or attributable to amounts payable under this Section 4.07) paid by such Agent
or Lender, as the case may be, and any penalties, interest, additions to tax
and reasonable expenses arising therefrom or with respect thereto, whether or
not such Indemnified Taxes were correctly or legally imposed or asserted by the
relevant Governmental Authority. A certificate as to the amount of such payment
or liability delivered to the Borrower by a Lender or Agent, as the case may
be, shall be conclusive, absent manifest error.


 


(d)   Evidence
of Payments. As soon as practicable after any payment of Indemnified Taxes
by the Borrower to a Governmental Authority, the Borrower shall deliver to the
Administrative Agent the original or a certified copy of a receipt issued by
such Governmental Authority evidencing such payment, a copy of the return
reporting such payment or other evidence of such payment reasonably
satisfactory to the Administrative Agent.


 


(e)   Foreign
Lenders. Each Lender (including any Participant and any other Person to
which any Lender transfers its interests in this Agreement as provided under Section
10.03 (Assignments)) that is not a United
States Person (a “Non-U.S. Lender”) shall deliver to the Borrower
and the Administrative Agent two (2) copies of U.S. Internal Revenue
Service Form W-8ECI, Form W-8BEN or Form W-8IMY (with supporting
documentation), or any subsequent versions thereof or successors thereto,
properly completed and duly executed by such Non-U.S. Lender claiming complete
exemption from, or a reduced rate of, U.S. federal withholding tax on all
payments of interest by the Borrower under the Financing Documents if such
Lender is legally entitled to so claim, together with, in the case of a
Non-U.S. Lender that is relying on an exemption pursuant to Section 871(h)
or 881(c) of the Code, a statement substantially in the form of Exhibit H
certifying that such Lender is not a bank described in
Section 881(c)(3)(A) of the Code. Such forms shall be delivered by each
Non-U.S. Lender on or before the date it becomes a party to this Agreement. In
addition, to the extent that it is in a position to legally do so, each
Non-U.S. Lender shall deliver such forms promptly upon the obsolescence or
invalidity of any form previously delivered by such Non-U.S. Lender. Each
Non-U.S. Lender shall promptly notify the Borrower and


 


29
















 


the Administrative Agent at any time it determines that it is no longer
in a position to provide any previously delivered certificate to the Borrower
(or any other form of certification adopted by U.S. taxing authorities for such
purpose). The Borrower shall not be obligated to pay any additional amounts in
respect of U.S. federal income taxes pursuant to this Section 4.07 (or make an
indemnification payment pursuant to this Section 4.07) to any Lender (or any Participant or other
Person to which any Lender transfers its interests in this Agreement as
provided under Section 10.03 (Assignments))
if the obligation to pay such additional amounts (or such indemnification)
would not have arisen but for a failure by such Lender to comply with this Section
4.07(e).


 


Section
4.08    Replacement of Lender.
The Borrower shall be permitted to replace (with one or more replacement
Lenders) any Lender that requests reimbursement for amounts owing pursuant to Section 4.03
(Increased Eurodollar Loan Costs),
Section 4.06 (Increased Capital
Costs) or Section 4.07(a) (Taxes - Payments Free of Taxes); provided, that
(i) such replacement does not conflict with any Law or any determination
of an arbitrator or a court or other Governmental Authority, in each case
applicable to the Borrower or such Lender or to which the Borrower or such
Lender or any of their respective property is subject, (ii) no Default or
Event of Default shall have occurred and be continuing at the time of such
replacement, (iii) prior to any such replacement, the Lender to be
replaced shall not have withdrawn such request for reimbursement, or shall not
have taken any action under Section 4.04 (Obligation To Mitigate) so as to eliminate the need for
payment of amounts owing pursuant to Section 4.03 (Increased Eurodollar Loan Costs), Section 4.06
(Increased Capital Costs) or Section 4.07(a)
(Taxes - Payments Free of Taxes),
(iv) the replacement Lender shall purchase, at par, the Loans and all
other amounts owing to such replaced Lender prior to the date of replacement,
(v) the Borrower shall be liable to such replaced Lender under Section 4.05
(Funding Losses) if any
Eurodollar Loan owing to such replaced Lender is be prepaid (or purchased)
other than on the last day of the Interest Period relating thereto,
(vi) the replacement Lender is an Eligible Assignee, (vii) such
replacement is made in accordance with the provisions of Section 10.03(b)
(Assignments) (provided, that
the Borrower shall be obligated to pay the registration and processing fee),
(viii) until such time as such replacement is consummated, the Borrower
shall pay all additional amounts (if any) required pursuant to Section 4.03
(Increased Eurodollar Loan Costs),
Section 4.06 (Increased Capital
Costs) or Section 4.07(a) (Taxes - Payments Free of Taxes), as the case may be, and
(ix) any such replacement shall not be deemed to be a waiver of any rights
that the Borrower, any Agent or any other Lender may have against the replaced
Lender.


 


30

















 


ARTICLE
V


 


REPRESENTATIONS AND WARRANTIES


 


In order to induce each
Agent, each Lender and each other party hereto (other than the Borrower) to
enter into this Agreement and to induce each Lender to make the Loans
hereunder, the Borrower represents and warrants to each Agent and each Lender
as set forth in this ARTICLE V on the date hereof, on the Closing Date,
on the date of each Funding Notice, on each Funding Date and on the Conversion
Date (except with respect to representations and warranties that expressly
refer to an earlier date).


 


Section
5.01    Organization; Power;
Compliance with Law and Contractual Obligations. The Borrower (a) is a
limited partnership duly formed, validly existing and in good standing under
the laws of the State of Delaware, (b) is duly qualified to do business as
is now being conducted and as is proposed to be conducted and is in good
standing as a foreign limited partnership in each jurisdiction where the nature
of its business requires such qualification (other than any such failure to be
so qualified or in good standing that could not reasonably be expected to have
a Material Adverse Effect), (c) has all requisite limited partnership
power and authority required as of the date this representation is made or
deemed repeated to enter into and perform its obligations under each of the
SNDAs and each Transaction Document to which it is a party and to conduct its
business as currently conducted by it and (d) is in compliance with all
Laws and Contractual Obligations applicable to except for any noncompliance
that could not reasonably be expected to have a Material Adverse Effect.


 


Section
5.02    Due Authorization;
Non-Contravention. The execution, delivery and performance by the Borrower
of each of the SNDAs and each Transaction Document to which it is a party are
within the Borrower’s limited partnership powers, have been duly authorized by
all necessary limited partnership action, and do not:


 


(a)   contravene
the Borrower’s Organic Documents (including the Borrower LP Agreement);


 


(b)   contravene
in any material respect any Law binding on or affecting the Borrower;


 


(c)   contravene
any Contractual Obligation binding on or affecting the Borrower;


 


(d)   require
any consent or approval under the Borrower’s Organic Documents that has not
been obtained;


 


31

















 


(e)   require
any consent or approval under any Contractual Obligation binding on or
affecting the Borrower other than any approvals or consents which have been
obtained; or


 


(f)    result
in, or require the creation or imposition of, any Lien on any of the Borrower’s
properties or Equity Interests other than Permitted Liens.


 


Section
5.03    Governmental Approvals.


 


(a)   As
of the Closing Date:


 


(i)                        all
Governmental Approvals that are required to be obtained by the Borrower in
connection with (A) the due execution, delivery and performance by it of
the Transaction Documents to which it is a party, (B) the ownership, use,
construction and operation of the Project as contemplated by the Transaction
Documents, and (C) the grant by the Borrower and the Pledgors of the Liens
granted under the Security Documents and the validity, perfection and
enforceability thereof (the “Necessary Project Approvals”) are listed in
Schedule 5.03;


 


(ii)                     the Necessary
Project Approvals listed in Part A of Schedule 5.03 have
been obtained, are in full force and effect, are properly in the name of the
appropriate Person, have been validly issued and are final and Non-Appealable;


 


(iii)                  the Necessary
Project Approvals listed in Part B of Schedule 5.03  relate to the Aberdeen II Plant and are not
required under applicable Laws to be obtained prior to the Closing Date
(collectively, the “Deferred Approvals”) and are ministerial in nature
or are of a type that can be obtained, as required, in the normal course of
development and construction of the Aberdeen II Plant; and


 


(iv)                 Part B of Schedule 5.03
specifies the date by which, or stage of construction or operation for which,
each Deferred Approval included therein is required to be obtained.


 


(b)   On
each Funding Date, all Necessary Project Approvals (including all Deferred
Approvals) which as of such Funding Date are required to be obtained have been
obtained, are in full force and effect, are properly in the name of the
appropriate Person, are validly issued and are final and Non-Appealable.


 


32

















 


(c)   The
Borrower may update and correct, with approval of the Administrative Agent, any
reference to a Necessary Project Approval on Schedule 5.03 that has been
replaced in accordance with applicable Law.


 


(d)   The
information set forth in each application (including any updates or supplements
thereto) submitted by or on behalf of the Borrower in connection with each
Necessary Project Approval that has been submitted as of the date this
representation is made or deemed repeated, was accurate and complete at the
time of submission and continues to be accurate and complete, in each case to
the extent required for the issuance or continued effectiveness of such Necessary
Project Approval (except, with respect to continued effectiveness, for
Necessary Project Approvals that are subject to a supplemental filing shown on Part
B of Schedule 5.03 that has not yet been filed), and the
Borrower does not have any knowledge of any event, act, condition or state of
facts inconsistent with such information.


 


(e)   The
Borrower reasonably believes that each Necessary Project Approval that remains
to be obtained will be obtained in a final and Non-Appealable form in the
ordinary course without undue delay or material expense and without
unanticipated expensive or burdensome conditions prior to the time it is
required to be obtained under applicable Law. There is no action, suit,
investigation or proceeding pending or, to the knowledge of the Borrower,
threatened in writing that would reasonably be expected to result in the
material modification, rescission, termination, or suspension of any
Governmental Approval referred to in Schedule 5.03 obtained prior
to the date this representation is made or deemed made.


 


Section
5.04    Investment Company Act.
The Borrower is not, and after giving effect to the Loans and the application
of the proceeds of the Loans as described herein will not be, an “investment
company” or a company “controlled” by an “investment company,” within the
meaning of the Investment Company Act of 1940, as amended.


 


Section
5.05    Validity. Each of
the SNDAs and each Transaction Document to which the Borrower is a party has
been duly authorized, validly executed and delivered, and constitutes the
legal, valid and binding obligations of the Borrower enforceable against the
Borrower and, to the Borrower’s actual knowledge, enforceable against each
other party thereto (other than the Senior Secured Parties), in each case in
accordance with its respective terms, except as the enforceability hereof or
thereof may be limited by (a) bankruptcy, insolvency, reorganization, or
other similar laws affecting the enforcement of creditors’ rights generally and
(b) general equitable principles (whether considered in a proceeding in
equity or at law).


 


33

















 


Section
5.06    Financial Information.
Each of the financial statements of the Borrower delivered pursuant hereto has
been prepared in accordance with GAAP, and fairly presents in all material
respects the financial condition of the Borrower as at the dates thereof and
the results of their operations for the period then ended (subject, in the case
of unaudited financial statements, to changes resulting from audit and normal
year-end adjustments and the absence of footnotes).


 


Section
5.07    No Material Adverse
Effect. Since October 31, 2006, no Material Adverse Effect has occurred and
is continuing.


 


Section
5.08    Project Compliance. (a)
The Project is and will continue to be owned, developed, constructed and
maintained in compliance in all material respects with all applicable Laws and
the requirements of all Necessary Project Approvals (including all Deferred
Approvals).


 


(b)   The
Project is and will continue to be owned, developed, constructed and maintained
in compliance in all material respects with all of the Borrower’s Contractual
Obligations (including the Project Documents).


 


Section
5.09    Litigation. (a) No
material action, suit, proceeding or investigation has been instituted or
threatened in writing against any of the Borrower, the Pledgors or the Project
(including in connection with any Necessary Project Approval); and


 


(b)   to
the knowledge of the Borrower, no action, suit, proceeding or investigation has
been instituted or threatened against any Project Party that, individually or
in the aggregate, has had or could reasonably be expected to have a Material
Adverse Effect.


 


Section
5.10    Sole Purpose Nature;
Business. The Borrower has not conducted and is not conducting any business
or activities other than businesses and activities relating to the ownership,
development, testing, financing, construction, operation and maintenance of the
Project as contemplated by the Transaction Documents.


 


Section
5.11    Contracts.


 


(a)   As
of the Closing Date:


 


(i)                        all
contracts, agreements, instruments, letter agreements, or other documents to
which the Borrower is a party or by which it or any of its properties is bound
as of the date hereof (other than the Financing Documents), including the
Project Documents, and all 


 


34

















 


                                                documents
amending, supplementing, interpreting or otherwise modifying or clarifying such
contracts, agreements, instruments, letter agreements, understandings and other
documents are listed in Schedule 5.11;


 


(ii)                     all
contracts, agreements, instruments, letter agreements, or other documents that
are required to be obtained by the Borrower in connection with the construction
and operation of the Project as contemplated by the Transaction Documents
(collectively, the “Necessary Project Contracts”) are listed in Schedule 5.11;


 


(iii)                  the Necessary
Project Contracts listed in Part A of Schedule 5.11 have
been obtained and are in full force and effect;


 


(iv)                 the Necessary
Project Contracts listed in Part B of Schedule 5.11 relate
to the Aberdeen II Plant and are not required to be obtained prior to the
Closing Date (collectively, the “Deferred Contracts”) and have not yet
been obtained; and


 


(v)                    Part B of
Schedule 5.11 specifies the date by which, or stage of construction
or operation for which, each Deferred Contract included therein is required to
be obtained.


 


(b)   As
of each date this representation and warranty is made or deemed repeated:


 


(i)                        to the
knowledge of the Borrower, all representations, warranties and other factual
statements made by each Project Party in each of the Transaction Documents to
which such Project Party is a party are true and correct as of the date(s) made
or deemed repeated (except with respect to representations and warranties that
expressly refer to an earlier date) other than any such inaccuracies that could
not reasonably be expected to have a Material Adverse Effect;


 


(ii)                     there are no
material contracts, agreements, instruments or documents between the Borrower
and any other Person relating to the Borrower or the Project other than
(i) the Transaction Documents, (ii) the agreements listed in Schedule 5.11,
and (iii) any other agreements permitted by this Agreement;


 


35

















 


(iii)                  there have been
no Change Orders under the Design-Build Agreement, other than in accordance
with Section 7.02(m) (Negative Covenants -
Project Documents); and


 


(iv)                 all conditions
precedent to the obligations of the respective parties under the Project
Documents that have been executed as of the date this representation is made or
deemed repeated have been satisfied or waived by the parties thereto, except
for such conditions precedent that do not and cannot be satisfied until a later
stage of development of the Project, and the Borrower has no reason to believe
that any such condition precedent (other than any condition precedent that can
be waived by the Borrower without any material adverse result) cannot be
satisfied on or prior to the commencement of the appropriate stage of
development of the Project.


 


(c)   On
each Funding Date, all Necessary Project Contracts (including all Deferred
Contracts) which as of such Funding Date are required to be in place, have been
duly executed and delivered and are in full force and effect.


 


Section
5.12    Collateral. (a)  The Collateral includes all of the Equity
Interests in, and all of the tangible and intangible assets of the Borrower
(except for the Bond Funds and the Bond Proceeds Sub-Account).


 


(b)   The
Liens and security interests granted to the Collateral Agent (for the benefit
of the Senior Secured Parties) pursuant to the Security Documents in effect on
each date this representation is made or deemed repeated (i) constitute,
as to personal property included in the Collateral, a valid first-priority
security interest in such personal property and (ii) constitute, as to the
Mortgaged Property included in the Collateral, a valid first-priority Lien of
record in the Mortgaged Property, in each case subject only to Permitted Liens.


 


(c)   The
security interest granted to the Collateral Agent (for the benefit of the
Senior Secured Parties) pursuant to the Security Documents in the Collateral
consisting of personal property will be perfected (i) with respect to any
property that can be perfected by filing, upon the filing of UCC financing
statements in the filing offices identified in Schedule 5.12(c),
(ii) with respect to any Account Collateral or any Blocked Account Collateral
that can be perfected solely by control, upon execution of the Accounts
Agreement or a Blocked Account Agreement and (iii) with respect to any
property (if any) that can be perfected solely by possession, upon the
Collateral Agent receiving possession thereof, and in each case such security
interest will be, as to Collateral perfected under the UCC or otherwise as
aforesaid, superior and prior to the 


 


36

















 


rights of all third Persons, and in each case subject only to Permitted
Liens. After giving effect to the filings, registrations and giving of notice
referred to in this sentence, all such action as is necessary has been taken to
establish and perfect the Collateral Agent’s rights in and to the Collateral
covered by the Security Documents in effect on the date this representation is
made or deemed repeated to the extent the Collateral Agent’s security interest
can be perfected by filing, including any recordation, filing, registration,
giving of notice or other similar action. No filing, recordation, re-filing or
re-recording other than those listed on Schedule 5.12(c) (as the
same may be updated at the written request of the Borrower, with the written
agreement of the Administrative Agent, following any change in applicable Law)
is necessary to perfect (or maintain the perfection of) the interest, title or
Liens of the Security Documents (to the extent the Collateral Agent’s security
interest can be perfected by filing or recording), and on and as of each relevant
date on which this representation and warranty is made or deemed repeated, all
such filings or recordings have been made. The Borrower and the Pledgors have
properly delivered or caused to be delivered to the Collateral Agent, or
provided the Collateral Agent control of, all Collateral relating to assets of
or equity in the Borrower that requires perfection of the Liens and security
interests described above by possession or control. All or substantially all of
the Collateral relating to assets of or equity in the Borrower (other than the
Account Collateral, Blocked Account Collateral, certificates, securities,
investments, chattel paper, books and records and general intangibles),
including the Mortgaged Property, is or will (when acquired) be located on the
Sites.


 


Section
5.13    Ownership of Properties.
(a)  The Borrower (i) has a good and
valid fee ownership interest in the Sites (except for the Leased Premises),
(ii) has a good and valid leasehold interest in the Leased Premises and (iii)
has good and valid easements necessary for the natural gas transmission
pipeline that was constructed pursuant to the Pipeline Construction Agreement.


 


(b)   The
Borrower has a good and valid ownership interest, leasehold interest, license
interest or other right of use in all other property and assets (tangible and
intangible) included in the Collateral relating to assets of or equity in the
Borrower under each Security Document that has been executed as of the date
this representation is made or deemed repeated. Such ownership interests,
leasehold interest, license interest or other rights of use are and will be,
together with any other assets or interests contemplated to be acquired
pursuant to the Construction Budget, sufficient to permit construction and
operation of the Aberdeen II Plant and operation of the Existing Plants,
substantially in accordance with the Project Documents. To the knowledge of
Borrower, none of said properties or assets of or equity in the Borrower are
subject to any other claims of any Person, including any easements, rights of
way or similar agreements affecting the use or occupancy of the Project or the
Sites, except for Permitted Liens.


 


37

















 


(c)   All
Equity Interests in the Borrower are owned by the Pledgors.


 


(d)   The
properties and assets of the Borrower are separately identifiable and are not
commingled with the properties and assets of any other Person and are readily
distinguishable from the property and assets of other Persons.


 


(e)   The
Borrower does not have any leasehold interest in, and is not lessee of, any
real property other than the Leased Premises or other leasehold interests
acquired by the Borrower with the prior written approval of the Administrative
Agent.


 


(f)    There
are no easements, rights of way or similar agreements affecting the use or
occupancy of the Project, the Existing Plants, the Aberdeen II Plant or any
Site other than Permitted Liens.


 


(g)   The
Borrower has not provided any consent pursuant to Section 3 of the Huron Ground
Lease to the creation of any Lien on the Leased Premises covered by such lease.
To the Borrower’s knowledge, the lessor under the Huron Ground Lease has not
created any Liens on the Leased Premises covered by such lease.


 


Section
5.14    Taxes. (a)  Except
as disclosed on Schedule 5.14, the Borrower has (i) filed all
Tax Returns required by law to have been filed by it and (ii) has paid all
Taxes thereby shown to be owing, as and when the same are due and payable,
other than, in the case of this Section 5.14(a)(ii), (A) Taxes
that are subject to a Contest or (B) the nonpayment of immaterial Taxes in
an aggregate amount not in excess of twenty-five thousand Dollars ($25,000) at
any one time outstanding (taking into account any interest and penalties that could
accrue or be applicable to such past-due Taxes), and provided that such Taxes
are no more than forty-five (45) days past due.


 


(b)   The
Borrower
is not and will not be taxable as a corporation for federal, state or local tax
purposes.


 


(c)   The
Borrower is not a party to any tax sharing agreement with any Person (including
any Pledgor or any other Affiliate of the Borrower).


 


(d)   The
Borrower has not agreed to extend the statute of limitations period applicable
to the assessment or collection of any Tax.


 


(e)   The
Borrower is not currently under any governmental audit with respect to any Tax
for any period, there are no claims for additional Tax being pursued by any
Governmental Authority with respect to the business, income or activities of
the Borrower, and the Borrower is not aware of any such claims that have not
yet been asserted but are likely to be asserted by a Governmental Authority.


 


38

















 


Section
5.15    Patents, Trademarks, Etc.
The Borrower has obtained and holds in full force and effect all patents,
trademarks, copyrights and other such rights or adequate licenses therein, free
from unduly burdensome restrictions, that are necessary for the ownership,
construction, operation and maintenance of the Project. Without limiting the
generality of the foregoing, the Borrower has obtained and holds in full force
and effect all necessary licenses and other rights that are necessary for the
operation and maintenance of the Aberdeen I Plant.


 


Section
5.16    ERISA Plans. (a)
Neither the Borrower nor any of its ERISA Affiliates has (or, except as set
forth on Schedule 5.16, within the five year period immediately
preceding the date hereof had) sponsored, maintained, participated in or
incurred any liability in respect of any Plan or Multiemployer Plan. The
Borrower does not have any contingent liability with respect to any
post-retirement benefit under any “welfare plan” (as defined in
Section 3(1) of ERISA), other than liability for continuation coverage
under Part 6 of Title I of ERISA or similar state laws.


 


(b)   Neither
the Borrower nor any ERISA Affiliate has any liability with respect to the
terminated Co-op Retirement Plan (as further described on Schedule 5.16)
and all liability of the Borrower and any ERISA Affiliate with respect to the
Co-op Retirement Plan has been fully satisfied. After due inquiry, neither the
Co-op Retirement Plan, the PBGC, any Plan participant or beneficiary nor any
other Person has initiated any claim or other action against the Borrower or
any ERISA Affiliate with respect to the Plan and, to the knowledge of the
Borrower, no such claim or action is threatened or anticipated. Neither the
Borrower nor any ERISA Affiliate has any intention to establish a Plan or
Multiemployer Plan to replace the Co-op Retirement Plan.


 


Section
5.17    Property Rights,
Utilities, Supplies Etc. (a) All material property interests, utility
services, means of transportation, facilities and other materials necessary for
the development, engineering, construction, testing, start-up, use and
operation of the Project (including, as necessary, gas, roads, rail transport,
electrical, water and sewage services and facilities) are, or will be when
needed, available to the Project, and arrangements in respect thereof have been
made on commercially reasonable terms.


 


(b)   There
are no material supplies, materials or equipment necessary for operation or
maintenance of the Project that are not expected to be available at the Sites
on commercially reasonable terms consistent with the construction schedule and
the Construction Budget, or the Operating Budget, as applicable.


 


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


 


39

















 


Section
5.19    Environmental Warranties.


 


(a)   (i) The
Borrower and its Environmental Affiliates are in compliance in all material
respects with all applicable Environmental Laws, (ii) the Borrower and its
Environmental Affiliates have all Environmental Approvals required to operate
their businesses as presently conducted or as reasonably anticipated to be
conducted and are in compliance in all material respects with the terms and
conditions thereof, (iii)  neither the Borrower nor any of its
Environmental Affiliates has received any written communication (other than any
such communication that the Administrative Agent has agreed in writing is not
materially adverse) from a Governmental Authority that alleges that the
Borrower or any Environmental Affiliate is not in compliance in all material
respects with all Environmental Laws and Environmental Approvals, and
(iv) there are no circumstances that to the knowledge of the Borrower may
prevent or interfere in the future with the Borrower’s compliance in all
material respects with all applicable Environmental Laws and Environmental
Approvals.


 


(b)   There
is no Environmental Claim pending or, to the knowledge of the Borrower,
threatened against the Borrower or the Project. To the knowledge of the
Borrower, there is no Environmental Claim pending or threatened against any
Environmental Affiliate.


 


(c)   There
are no present or past actions, activities, circumstances, conditions, events
or incidents, including the release, emission, discharge, presence or disposal
of any Material of Environmental Concern, that could reasonably be expected to
form the basis of any Environmental Claim against the Borrower or any
Environmental Affiliate or could otherwise reasonably be expected to interfere
with the operation of the Existing Plants or construction or operation of the
Aberdeen II Plant (as applicable).


 


(d)   Without
in any way limiting the generality of the foregoing, (i) there are no
on-site or off-site locations in which the Borrower or, to the knowledge of
Borrower, any Environmental Affiliate has stored, disposed or arranged for the
disposal of Materials of Environmental Concern that could reasonably be
expected to form the basis of an Environmental Claim, (ii) there are no
underground storage tanks located or to be located on property owned or leased
by the Borrower, (iii) there is no asbestos or lead paint contained in or
forming part of any building, building component, structure or office space
owned or leased by the Borrower, and (iv) no polychlorinated biphenyls
(PCBs) are or will be used or stored at any property owned or leased by
the Borrower, except in such form, condition and quantity as could not
reasonably be expected to result in an Environmental Claim.


 


(e)   The
Borrower has not received any letter or request for information under Section 104
of the CERCLA, or comparable state laws, and to the knowledge of the 


 


40

















 


Borrower, none of the operations of the Borrower is the subject of any
investigation by a Governmental Authority evaluating whether any remedial
action is needed to respond to a release or threatened release of any Material
of Environmental Concern at the Project or at any other location, including any
location to which the Borrower has transported, or arranged for the transportation
of, any Material of Environmental Concern with respect to the Project.


 


Section
5.20    Regulations T, U
and X. The Borrower is not engaged in the business of extending credit for
the purpose of purchasing or carrying margin stock, and no proceeds of any Loan
will be used for any purpose that violates, or would be inconsistent with,
F.R.S. Board Regulation T, U or X. Terms for which meanings are provided
in F.R.S. Board Regulation T, U or X or any regulations substituted
therefor, as from time to time in effect, are used in this Section 5.20 with such meanings.


 


Section
5.21    Accuracy of Information.
(a)  All factual information heretofore
or contemporaneously furnished by or on behalf of any of the Borrower or the
Pledgors in this Agreement, in any other Transaction Document or otherwise in
writing to any Senior Secured Party, any Consultant, or counsel for purposes of
or in connection with this Agreement and the other Financing Documents or any
transaction contemplated hereby or thereby (other than projections, budgets and
other “forward-looking” information that have been prepared on a reasonable
basis and in good faith by the Borrower) is, when taken as a whole, true and
accurate in every material respect and such information is not, when taken as a
whole, incomplete by omitting to state any material fact necessary to make such
information not misleading in any material respect.


 


(b)   The
assumptions constituting the basis on which the Borrower prepared the
Construction Budget and the Financial Model that are in effect on each date
this representation is made or deemed repeated, and the numbers set forth
therein, were developed and consistently utilized in good faith and are
reasonable and represent the Borrower’s best judgment as of the date prepared
as to the matters contained therein, based on all information known to the
Borrower.


 


(c)   The
Borrower reasonably believes that (i) the Conversion Date will occur on or
before the Conversion Date Certain and (ii) the cost to complete the Aberdeen
II Plant will not exceed the funds available to the Borrower (including funds
available under this Agreement, the Accounts Agreement, and the Subordinated
Debt.


 


(d)   The
Borrower reasonably believes that the development, engineering, construction,
testing, start-up, use, ownership, operation and maintenance of the Aberdeen II
Plant and the use, ownership, operation and maintenance of the Existing Plants
are economically feasible and technically feasible.


 


41

















 


Section
5.22    Indebtedness. (a)  The Obligations are, after giving effect to
the Financing Documents and the transactions contemplated thereby, the only
outstanding Indebtedness of the Borrower other than Permitted Indebtedness. The
Obligations rank at least pari  passu with all other Indebtedness
of the Borrower.


 


(b)   On
the Closing Date, after giving effect to the Financing Documents and the
transactions contemplated thereby, the Existing Plant Debt, including all
principal, interest and other amounts (if any) outstanding in respect thereof,
will have been repaid in full, and all Liens against assets of the Borrower in
respect of such Existing Plant Debt will have been released.


 


Section
5.23    Separateness. (a)  The Borrower maintains separate bank accounts
and separate books of account from the Pledgors. The separate liabilities of
the Borrower are readily distinguishable from the liabilities of each Affiliate
of the Borrower, including each of the Pledgors.


 


(b)   The
Borrower conducts its business solely in its own name in a manner not
misleading to other Persons as to its identity.


 


(c)   The
Borrower is in compliance with the separateness provisions set forth on Schedule 5.24(a).


 


Section
5.24    Required LP, GP and LLC
Provisions. (a) The Borrower LP Agreement includes each of the terms
(collectively, the “Required LP Provisions”) set forth in Schedule 5.24(a),
(b) the GP Agreement includes each of the terms (collectively, the “Required
GP Provisions”) set forth in Schedule 5.24(b) and the LP
Pledgor LLC Agreement includes each of the terms (collectively, the “Required
LP Pledgor LLC Provisions”) set forth in Schedule 5.24(c).


 


Section
5.25    Subsidiaries. The
Borrower has no Subsidiaries.


 


Section
5.26    Foreign Assets Control
Regulations, Etc. (a)  The use of the
proceeds of the Loans by the Borrower will not violate the Trading with the
Enemy Act, as amended, or any of the foreign assets control regulations of the
United States Treasury Department (31 C.F.R., Subtitle B, Chapter V,
as amended) or any enabling legislation or executive order relating thereto.


 


(b)   The
Borrower:


 


(i)                        is not and
will not become a Person or entity described by Section 1 of Executive
Order 13224 of September 24, 2001 Blocking Property and Prohibiting
Transactions With Persons 


 


42

















 


                                                Who
Commit, Threaten to Commit, or Support Terrorism (12 C.F.R. 595), and the
Borrower does not engage in dealings or transactions with any such Persons or
entities; and


 


(ii)                     is not in
violation of the Patriot Act.


 


Section
5.27    Solvency. The
Borrower is and, upon the incurrence of any Obligations by the Borrower and
after giving effect to the transactions contemplated hereby, will be Solvent.


 


Section
5.28    Legal Name and Place of
Business. (a) The exact legal name and jurisdiction of formation of
the Borrower is:  Heartland Grain Fuels,
L.P., a limited partnership organized and existing under the laws of the State
of Delaware, and, except as set forth on Schedule 5.28, the Borrower has
not had any other legal names in the previous five (5) years.


 


(b)   The
sole places of business of the Borrower are Aberdeen, South Dakota, Huron,
South Dakota and Minneapolis, Minnesota, and the chief executive office of the
Borrower is Minneapolis, Minnesota.


 


Section
5.29    No Brokers. The
Borrower has no obligation to pay any finder’s, advisory, broker’s or
investment banking fee, except for the fees payable pursuant to Section 3.13 (Fees) and the fees set forth in Schedule 5.29.


 


Section
5.30    Insurance. All
insurance required to be obtained and maintained pursuant to the Transaction
Documents by the Borrower is in full force and effect as of each date this
representation is made or deemed repeated and complies with the insurance
requirements set forth on Schedule 7.01(h). All premiums then due and
payable on all such insurance have been paid. To the knowledge of the Borrower,
all insurance required to be obtained and maintained by any Project Party with
respect to the Project to protect, directly or indirectly, against loss or
liability to the Borrower, the Project or any Senior Secured Party (including
in connection with construction obligations of such Project Party), as of the
date this representation is made or deemed repeated, pursuant to any Project
Document has been obtained, is in full force and effect and complies with the
insurance requirements set forth on Schedule 7.01(h) and is
otherwise in all material respects in accordance with such Project Document.


 


Section
5.31    Accounts. (a) The
Borrower does not have, and is not the beneficiary of, any bank account other
than (i) the Project Accounts, (ii) Local Accounts in existence on the
date hereof with respect to which Blocked Account Agreements have been duly
executed and delivered within thirty (30) days after the Closing Date in accordance
with Section 7.01(x) (Blocked Account
Agreements), (iii) other Local 


 


43

















 


Accounts with respect to which Blocked Account Agreements have been
duly executed and delivered, and (iv) the Bond Funds; and (b) as of the
Closing Date and each subsequent date this representation is made or deemed
repeated, the aggregate amount of funds on deposit in or standing to the credit
of such Local Accounts does not exceed two hundred thousand Dollars ($200,000).


 


ARTICLE
VI


 


CONDITIONS PRECEDENT


 


Section
6.01    Conditions to Closing
and First Funding of Construction Loans. In addition to the conditions set
forth in Section 6.02 (Conditions to All
Construction Loan Fundings)  and
Section 6.05 (Conditions to All
Fundings and Issuances), the occurrence of the Closing Date and
the initial release of Construction Loans are subject to the satisfaction of
each of the following conditions precedent:


 


(a)   Delivery
of Financing Documents. The Administrative Agent shall have received each of
the following fully executed documents, each of which shall be originals,
portable document format (“pdf”) or facsimiles (followed promptly by
originals), duly executed and delivered by each party thereto and in form and
substance reasonably satisfactory to each Lender:


 


(i)                        this
Agreement;


 


(ii)                     the original
Construction Notes, duly executed and delivered by an Authorized Officer of the
Borrower in favor of each Construction/Term Lender;


 


(iii)                  the original
Working Capital Notes, duly executed and delivered by an Authorized Officer of
the Borrower in favor of each Working Capital Lender;


 


(iv)                 the Accounts
Agreement;


 


(v)                    the
Intercreditor Agreement;


 


(vi)                 the Security
Agreement;


 


(vii)              the Pledge
Agreement;


 


(viii)           the Mortgages; and


 


(ix)                   the Fee Letters.


 


44

















 


(b)   Project
Documents; Contracts; Consents. (i) The Administrative Agent shall have
received true, correct and complete copies of (A) the SNDAs and each
Project Document, which shall be in form and substance reasonably satisfactory
to the Administrative Agent and the Independent Engineer, and (B) each
other agreement reasonably requested by the Administrative Agent which, if
requested, shall be in form and substance reasonably satisfactory to the Administrative
Agent.


 


(ii)                     The
Administrative Agent shall have received a certificate of an Authorized Officer
of the Borrower certifying as true, correct and complete the list of all
contracts, agreements, instruments, letter agreements, understandings or other
documents to which the Borrower is a party set forth in Schedule 5.11.


 


(iii)                  Unless the
Administrative Agent agrees otherwise in writing, the Administrative Agent
shall have received a Consent, in form and substance reasonably satisfactory to
the Administrative Agent, with respect to each Project Document (other than the
Administrative Services Agreement).


 


(c)   Delivery
of Documents Evidencing Subordinated Debt Documents. The Administrative
Agent shall have received true, correct and complete copies of all Subordinated
Debt Documents, and such Subordinated Debt Documents shall be on terms and
conditions satisfactory to the Administrative Agent.


 


(d)   Officer’s
Certificates. The Administrative Agent shall have received the following
certificates, dated as of the Closing Date, upon which the Administrative Agent
and each Lender may conclusively rely:


 


(i)                        a duly
executed certificate of an Authorized Officer of the Borrower certifying that
(A) all conditions set forth in this Section 6.01 have been satisfied on and as of the Closing
Date and (B) all representations and warranties made by each of the
Borrower and the Pledgors in this Agreement and each other Financing Document
to which the Borrower or such Pledgor is a party are true and correct on and as
of the Closing Date (except with respect to representations and warranties that
expressly refer to an earlier date);


 


(ii)                     a duly
executed certificate of an Authorized Officer of the Borrower certifying that
(A) the copies of each Project Document or other document delivered
pursuant to Section 6.01(b) are true, correct and complete copies of
such document, (B) each such 


 


45

















 


                                                Project
Document or other document is in full force and effect and no term or condition
of any such Project Document or other document has been amended from the form
thereof delivered to the Administrative Agent, (C) each of the conditions
precedent set forth in each Project Document or other document delivered
pursuant to Section 6.01(b) that is required to be satisfied on or
before the Closing Date has been satisfied or waived by the parties thereto
with the prior written consent of the Required Lenders, and with the approval
of the Administrative Agent in the case of any material waiver, and (D) no
material breach, material default or material violation by the Borrower, or to
the knowledge of the Borrower, by any Project Party under any such Project
Document or other document has occurred and is continuing;


 


(iii)                  a duly executed
certificate of an Authorized Officer of the Borrower certifying that
(A) the copies of each Subordinated Debt Document delivered pursuant to Section
6.01(c) are true, correct and complete copies of such document,
(B) each such Subordinated Debt Document is in full force and effect and
no term or condition thereof has been amended from the form thereof delivered
to the Administrative Agent, (C) each of the conditions precedent set
forth in each Subordinated Debt Document delivered pursuant to Section
6.01(b) that is required to be satisfied on or before the Closing Date has
been satisfied or waived by the parties thereto with the prior written consent
of the Required Lenders, and with the approval of the Administrative Agent in
the case of any material waiver, and (D) no material breach, material
default or material violation by the Borrower, or to the knowledge of the
Borrower, by any party to any such Subordinated Debt Document has occurred and
is continuing; and


 


(iv)                 a duly executed
certificate of an Authorized Officer of each Pledgor certifying that all
representations and warranties made by such Pledgor in the Pledge Agreement are
true and correct on and as of the Closing Date (except with respect to
representations and warranties that expressly refer to an earlier date).


 


(e)   Resolutions,
Incumbency, Organic Documents. The Administrative Agent shall have received
from each of the Borrower and the Pledgors a certificate of an Authorized
Officer dated as of the Closing Date, upon which the Administrative Agent and
each Lender may conclusively rely, as to:


 


46

















 


(i)                        satisfactory
resolutions of its general partner, members, managers, shareholders or
directors, as the case may be, then in full force and effect authorizing the
execution, delivery and performance of (A) each Transaction Document to which
it is party, (B) in the case of the Pledgors, the Borrower LP Agreement and (C)
in the case of the Borrower, the SNDAs, and, in each case, the consummation of
the transactions contemplated therein;


 


(ii)                     the
incumbency and signatures of those of its officers and representatives duly
authorized to execute and otherwise act with respect to each Financing Document
to which it is party; and


 


(iii)                  such Person’s
Organic Documents, which shall be in form and substance reasonably satisfactory
to the Administrative Agent and shall include (x) in the case of the Borrower,
the Required LP Provisions, (y) in the case of the GP Pledgor, the Required GP
Provisions and (z) in the case of the LP Pledgor, the Required LP Pledgor LLC
Provisions, and in every case certifying that (A) such documents are in
full force and effect and no term or condition thereof has been amended from
the form attached to such certificate and (B) no material breach, material
default or material violation thereunder has occurred and is continuing.


 


(f)    Authority
to Conduct Business. The Administrative Agent shall have received
satisfactory evidence, including certificates of good standing from the
Secretaries of State of each relevant jurisdiction, dated no more than fifteen
(15) days (or such other time period reasonably acceptable to the
Administrative Agent) prior to the Closing Date, that:


 


(i)                        the
Borrower is duly authorized as a limited partnership to carry on its business,
and is duly formed, validly existing and in good standing in each jurisdiction
in which it is required to be so authorized;


 


(ii)                     the LP
Pledgor is duly authorized as a limited liability company to carry on its
business, and is duly organized, validly existing and in good standing in each
jurisdiction in which it is required to be so authorized; and


 


(iii)                  the GP Pledgor
is duly authorized as a corporation to carry on its business, and is duly
organized, validly existing and in good 


 


47

















 


                                                standing
in each jurisdiction in which it is required to be so authorized.


 


(g)   Opinions
of Counsel. Unless the Administrative Agent agrees otherwise in writing
with respect to any of the items in this Section 6.01(g), the
Administrative Agent shall have received the following legal opinions,
addressed to the Senior Secured Parties, and each in form and substance
reasonably satisfactory to the Administrative Agent:


 


(i)                        the
opinion of Faegre & Benson LLP, Delaware and New York counsel to the Loan
Parties;


 


(ii)                     the opinion
of South Dakota counsel satisfactory to WestLB;


 


(iii)                  the opinion of
Stinson Morrison Hecker LLP, Kansas counsel to the Loan Parties;


 


(iv)                 the opinion of
in-house counsel to the Bond Trustee;


 


(v)                    the opinion of
Briggs and Morgan, P.A., bond counsel to Brown County, South Dakota;


 


(vi)                 the opinion of
in-house counsel to the Design-Build Contractor and the Technology License
Provider;


 


(vii)              the opinion of
counsel to South Dakota Wheat Growers Association;


 


(viii)           the opinion of Carlyle
E. Richards, P.C., counsel to
Dakotaland Feeds, LLC;


 


(ix)                   the opinion of
in-house counsel to Northern Border Pipeline Company;


 


(h)   Lien
Search; Perfection of Security. The Collateral Agent shall have been
granted a first priority perfected security interest in all Collateral relating
to the Borrower and the Project, and the Administrative Agent shall have
received satisfactory copies or evidence, as the case may be, of the following
actions in connection with the perfection of the Security:


 


(i)                        completed
requests for information or lien search reports, dated no more than five
(5) days (or such other time period reasonably acceptable to the
Administrative Agent) before the Closing Date, 


 


48

















 


                                                listing
all effective UCC financing statements, fixture filings or other filings
evidencing a security interest filed in Delaware, South Dakota and any other
jurisdictions reasonably requested by the Administrative Agent that name the
Borrower or any Pledgor as a debtor, together with copies of each such UCC
financing statement, fixture filing or other filings, which shall show no Liens
other than Permitted Liens;


 


(ii)                     UCC financing
statements and other filings and recordations (including fixture filings), in
proper form for filing in all jurisdictions that the  Administrative Agent may deem necessary or desirable in order
to perfect and protect the first priority Liens and security interests created
under the Security Documents covering the Collateral with respect to the
Project described therein, and each such UCC financing statement and other
filing or recordation shall be duly filed on or prior to the Closing Date;


 


(iii)                  mortgage release
and UCC termination statements, in proper form for filing in all jurisdictions
that the Administrative Agent may deem necessary or desirable, terminating the
existing mortgage and all existing UCC financing statements and fixture filings
covering the Collateral relating to the Existing Plant Debt, and such mortgage
release and each such UCC termination statement shall be duly filed on the
Closing Date;


 


(iv)                 the original
certificates representing all Equity Interests in the Borrower shall have been
delivered to the Collateral Agent, in each case together with a duly executed
irrevocable proxy and a duly executed transfer power in the forms attached to
the Pledge Agreement relating to such Equity Interests; and


 


(v)                    with respect
to the Borrower and the Project, evidence of the making (which may be on the
Closing Date) of all other actions, recordings and filings of or with respect
to the Security Documents delivered pursuant to Section 6.01(a) (Conditions to Closing and First Funding of Construction Loans -
Delivery of Financing Documents) that the Administrative Agent
may deem necessary or desirable in order to perfect and protect the
first-priority Liens created thereunder.


 


49

















 


(i)    Financial
Statements. The Administrative Agent shall have received accurate and
complete copies of the unaudited annual financial statements of the Borrower
for the Fiscal Year ended October 31, 2006.


 


(j)    Base
Case Projections. The Administrative Agent shall have received base case
projections with mutually agreed assumptions, demonstrating certain agreed
minimum coverage levels, as certified by the Independent Engineer.


 


(k)   Financing
Documents and Project Documents. The SNDAs, the Borrower LLC Agreement, the
Financing Documents and the Project Documents shall be in full force and
effect.


 


(l)    Governmental
Approvals. The Borrower shall have obtained all Necessary Project Approvals
listed on Part A of Schedule 5.03, and the Administrative
Agent shall have received a duly executed certificate of an Authorized Officer
of the Borrower certifying that (i) attached to such certificate are true,
correct and complete copies of each such Necessary Project Approval,
(ii) each such Necessary Project Approval was duly obtained, is validly
issued, is in full force and effect and is final and Non-Appealable,
(iii) all Necessary Project Approvals required for the Project at a later
date will be obtained in due course prior to the time when needed and without
conditions that would impose material expense on the Project, and (iv) Schedule 5.03
accurately identifies all Necessary Project Approvals necessary for the
Project.


 


(m)  Equator
Principles. The Administrative Agent shall have received all documentation
requested by the Administrative Agent that is necessary to evidence compliance
with, and otherwise required in connection with, the Equator Principles.


 


(n)   Third
Party Approvals. The Administrative Agent shall have received reasonably
satisfactory documentation of any approval by any Person required in connection
with any transaction contemplated by this Agreement or any other Financing
Document that the Administrative Agent has reasonably requested in connection
herewith.


 


(o)   Fees;
Expenses. The Administrative Agent shall have received for its own account,
or for the account of each Senior Secured Party entitled thereto, all fees due
and payable on the Closing Date pursuant to Section 3.13 (Fees),
and all costs and expenses (including costs, fees and expenses of legal counsel
and Consultants) for which invoices have been presented.


 


(p)   Establishment
of Project Accounts. Each of the Project Accounts shall have been
established to the reasonable satisfaction of the Administrative Agent.


 


50

















 


(q)   Insurance.
The Administrative Agent shall have received:


 


(i)                        satisfactory
evidence that the insurance requirements set forth on Schedule 7.01(h)
with respect to the Borrower and the Project have been satisfied, including
binders or certificates evidencing the commitment of insurers to provide each
insurance policy required by Schedule 7.01(h), evidence of the
payment of all premiums then due and owing in respect of such insurance
policies and a certificate of the Insurance Consultant and the Borrower’s
insurance broker (or insurance carrier) certifying that all such insurance
policies are in full force and effect; and


 


(ii)                     a report of
the Insurance Consultant in form and substance reasonably satisfactory to the
Administrative Agent discussing, among other matters that the Administrative
Agent may require, the adequacy of the insurance coverage for the Project,
together with a duly executed certificate of the Insurance Consultant in the
form of Exhibit I, appropriately completed to the satisfaction of
the Administrative Agent.


 


(r)    Independent
Engineer’s Report. The Administrative Agent shall have received a report of
the Independent Engineer with respect to the Project, accompanied by a duly
executed certificate of the Independent Engineer in the form of Exhibit J-1,
each in form and substance reasonably satisfactory to each Lender:


 


(i)                        discussing
the technical and economic viability of the Project (including the Project’s
capability to conform with all air permit limits) and the technical inputs used
in the Financial Model;


 


(ii)                     discussing
the reasonableness of the Construction Budget and the Operating Budget for the
Existing Plants and the feasibility of the Borrower’s approach to construction
and start-up of the Aberdeen II Plant;


 


(iii)                  discussing the
appropriateness of the various Performance Tests and completion undertakings;


 


(iv)                 discussing
operating performance and costs assumptions;


 


(v)                    confirming
that the Environmental Site Assessment Reports comply with the requirements of
this Agreement and that no further Environmental Site Assessment Reports are
required;


 


51

















 


(vi)                 confirming that
the Borrower is in compliance in all material respects with all Environmental
Laws and all Environmental Approvals applicable to the Project and does not
have any known present or contingent liability relating to any Environmental
Approval, Environmental Claim or Environmental Law regarding the Project; and


 


(vii)              confirming that all
Environmental Approvals necessary to construct the Aberdeen II Plant and
operate the Project (other than Environmental Approvals that are Deferred
Approvals) have been obtained, and are validly issued, in full force and
effect, and final and Non-Appealable.


 


(s)   Environmental
Site Assessment Report. The Administrative Agent shall have received an
Environmental Site Assessment Report with respect to the Sites for the Existing
Plants and the Aberdeen II Plant, accompanied by a corresponding reliance
letter (to the extent such report does not permit reliance thereon by the
Senior Secured Parties), each in form and substance satisfactory to the
Administrative Agent.


 


(t)    Ethanol
Market Report. The Administrative Agent shall have received a report of the
Borrower’s Ethanol Market Consultant, in form and substance reasonably
satisfactory to each Lender.


 


(u)   Agricultural
Market Report. The Administrative Agent shall have received a report of the
Agricultural Market Consultant, in form and substance reasonably satisfactory
to each Lender.


 


(v)   Appraisal.
The Administrative Agent shall have received an appraisal with respect to the
Project, in form and substance reasonably satisfactory to the Required Lenders.


 


(w)  Construction
Budget, Construction Schedule and Operating Budget. The Administrative
Agent shall have received (i) the Construction Budget in form and
substance reasonably satisfactory to the Required Lenders, (ii) the
construction schedule in form and substance reasonably satisfactory to the
Required Lenders, (iii) the Operating Budget for the Existing Plants in form
and substance satisfactory to the Required Lenders, and (iv) a certificate
of a Financial Officer of the Borrower certifying as to the reasonableness of
the underlying assumptions and the conclusions on which such budget is based
and demonstrating aggregate Project Costs equal to or less than the amount
provided for in such Construction Budget and Operating Budget.


 


52

















 


(x)    Survey.
The Administrative Agent shall have received a current survey conforming with
ALTA/ACSM 2005 survey standards, including Table A, items 6, 8, 10 and 11(a),
and otherwise acceptable to the Lenders (a “Survey”), of the Sites for
the Existing Plants and the Aberdeen II Plant and for the Leased Premises,
prepared by Helms & Associates, or other registered or licensed surveyor
acceptable to the Lenders and the Title Insurance Company, certified to
the Collateral Agent, the Administrative Agent, the Lenders and such
Title Insurance Company.


 


(y)   Title Insurance.


 


(i)                        The
Administrative Agent shall have received a paid policy or policies of mortgage
title insurance (the “Title Insurance Policy”), in an aggregate
amount equal to the Aggregate Loan Commitment on a Form 2006 extended
coverage lender’s policy, containing such endorsements (including an
endorsement deleting the creditor’s rights exception) as the Administrative
Agent may request and otherwise in form and substance reasonably satisfactory
to the Administrative Agent, from the Title Insurance Company (with
co-insurance or reinsurance in such amounts and with such title insurance
companies as may be required and approved by the Required Lenders), containing
no exception for mechanics’ or materialmen’s Liens and no other exceptions
(printed or otherwise) other than those approved by the Required Lenders, and
insuring that the Collateral Agent has a good, valid and enforceable first Lien
of record on the Mortgaged Property free and clear of all defects and
encumbrances (other than Permitted Liens).


 


(ii)                     The
Title Insurance Policy shall confirm that the Borrower has good,
marketable title to the Sites, and good and valid leasehold interests in the
Leased Premises, in each case subject to no Liens (other than Liens in favor of
the Collateral Agent or other Permitted Liens).


 


(z)    Confidential
Information Memorandum. An Authorized Officer of the Borrower shall have
certified that the information provided by the Company in the Confidential
Information Memorandum, taken as a whole over the life of the Project, is, to
the best knowledge of the Borrower, true, complete, and accurate in all
material respects, as of the date thereof, including the reasonableness of the
underlying assumptions upon which the financial projections contained therein
are based.


 


53

















 


(aa)     Bank
Regulatory Requirements. The Administrative Agent shall have received at
least five (5) Business Days prior to the Closing Date (or such shorter
period as is satisfactory to the Administrative Agent) all documentation and
other information required by bank regulatory authorities under applicable “know
your customer” and anti-money-laundering rules and regulations, including the
Patriot Act.


 


(bb)    Process
Agent. The Administrative Agent shall have received, in form and substance
reasonably satisfactory to the Administrative Agent, acceptances from the
Process Agent for each of the Borrower and the Pledgors appointed under Section
10.02(d) (Applicable Law; Jurisdiction; Etc. – Appointment of
Process Agent and Service of Process) and as required under each
other Financing Document in effect on the Closing Date.


 


(cc)     Financial
Model. The Administrative Agent shall have received a certificate of a
Financial Officer of the Borrower, dated as of the Closing Date, certifying
that the Financial Model attached as Exhibit K has not been amended
or modified and certifying as to the reasonableness of the underlying
assumptions and the conclusions on which the Financial Model is based.


 


(dd)    Auditors.
The Administrative Agent shall have received reasonably satisfactory evidence
of the appointment of the Auditors.


 


(ee)     Equity;
Subordinated Debt. The Administrative Agent shall have received reasonably
satisfactory evidence that (i) an equity contribution in the amount of
thirty-nine million eight thousand six hundred twenty-seven Dollars
($39,008,627) has been fully funded prior to the Closing Date, (ii) an
equity contribution in the amount of three hundred sixty-six thousand Dollars
($366,000) for payments with respect to the Subordinated Debt has been fully
funded, (iii) the Subordinated Debt in an amount of nineteen million
Dollars ($19,000,000) has been funded, and fifteen million five hundred
eighty-three thousand five hundred sixty-two Dollars and fifty cents
($15,583,562.50) of such amount has been deposited into the Bond Proceeds
Sub-Account.


 


(ff)      Notice
to Proceed. The duly executed Notice to Proceed in respect of the Aberdeen
II Plant shall have been validly issued and delivered by the Borrower to the
Design-Build Contractor, and validly accepted by the Design-Build Contractor,
to the satisfaction of the Independent Engineer.


 


(gg)    Existing
Plant Debt Payoff. The Existing Plant Debt shall have been or shall
simultaneously be repaid in full (provided that to the extent the amount
necessary to repay the Existing Plant Debt (including accrued interest) in full
exceeds forty-seven million Dollars ($47,000,000), the LP Pledgor shall have
contributed additional equity to pay the amount of such excess), and the
Administrative Agent shall 


 


54

















 


have received (i) a payoff statement from the lenders of such
debt, in form and substance satisfactory to the Administrative Agent,
confirming such repayment and (ii) evidence satisfactory to the
Administrative Agent that all Liens against assets of the Borrower in respect
of such debt have been released.


 


(hh)    Existing
Plants Complete. Each of the Existing Plants shall be operational and
achieving the guaranteed performance levels in a manner satisfactory to the
Independent Engineer.


 


(ii)   Construction
Notes. Each Construction/Term Lender shall have received a Construction
Note payable to such Lender in the amount of such Lender’s Construction Loan
Commitment, duly executed by the Borrower and otherwise Complying with the
provisions of Section 2.07 (Evidence of Indebtedness).


 


(jj)   Commodity
Risk Management Plan. The Administrative Agent shall have received the
approved Commodity Risk Management Plan.


 


(kk)     Huron
Ground Lease Estoppel Certificate. The Administrative Agent shall have
received from the Borrower an estoppel certificate of the lessor under the
Huron Ground Lease, pursuant to Section 20 thereof, in form and substance
satisfactory to the Administrative Agent.


 


Section
6.02    Conditions to All
Construction Loan Fundings. In addition to the conditions set forth in Section
6.01 (Conditions to Closing and First
Funding of Construction Loans) and Section 6.05 (Conditions to All Fundings and Issuances),
the obligation of each Construction/Term Lender to make available each Funding
of its Construction Loans shall be subject to the fulfillment of the following
conditions precedent:


 


(a)   Funding
Notice. The Administrative Agent shall have received a duly executed
Funding Notice, as required by and in accordance with Section 2.05 (Notice of
Fundings), together with each of the documents described below,
which shall certify that:


 


(i)                        the
Application for Payment with respect to which such Funding is requested,
together with the corresponding Informational Report(s) covering the period
since the preceding Funding (or, in the case of the initial Funding of
Construction Loans, since the date of the Design-Build Agreement), each of
which shall be certified as true and complete by the Borrower and substantiated
by the Independent Engineer;


 


55

















 


(ii)                     absolute and
unconditional sworn Lien Waiver Statements; provided that in the case of
the initial Funding, such Lien Waiver Statements shall evidence receipt of all
payments paid or due and payable by the Borrower to the Design-Build
Contractor, all subcontractors and all other Persons since the date of the
Design-Build Agreement. Such Lien Waiver Statements shall (A) be dated on
or about the date of the Funding Notice and (B) cover all work done and
all sums received through the date of the then last preceding Funding (or, in
the case of the initial Funding, the date of the Design-Build Agreement). Each
such Lien Waiver Statement shall be certified as true and correct and complete
by the Borrower and the Design-Build Contractor and shall be verified by the
Independent Engineer;


 


(iii)                  a list of all
Change Orders not theretofore submitted to the Administrative Agent, together
with a statement by the Borrower that copies of the same have been submitted to
the Independent Engineer prior to the date of such Funding Notice and a list of
all Change Orders to the date of such Funding Notice and a list of all
contemplated Change Orders, together with confirmation that each such Change
Order is in compliance with Section 7.02(m)(iii) (Negative
Covenants – Project Documents);


 


(iv)                 evidence (which
shall include the waiver of Liens required under Section 6.02(a)(ii) (Conditions to All Construction Loan Fundings – Funding Notice)
and a detailed receipt for payment itemized by Line Item in the
Construction Budget) reasonably satisfactory to the Independent Engineer that
the full amount of the proceeds of the then last preceding Funding has been
paid out by the Borrower or the Design-Build Contractor to the Persons with
respect to whom such Funding proceeds were disbursed and otherwise in
accordance with this Agreement; provided that if there has been no such
preceding Funding, such evidence shall confirm receipt of all payments due and
payable by the Borrower to the Design-Build Contractor, all subcontractors and
all other Persons since the date of the Design-Build Agreement;


 


(v)                    a
certification of a Financial Officer of the Borrower confirming that the
requested Funding, when considered on its own and when considered on an
aggregate basis with the cumulative amount of all prior Fundings for the
Aberdeen II Plant, is in compliance with the Drawdown Schedule (or, if
such Funding would be in excess 


 


56

















 


of the Drawdown Schedule, such deviation from the Drawdown Schedule has
been approved by the Independent Engineer and the Administrative Agent);


 


(vi)                 the Borrower is
in compliance with all conditions set forth in this Section 6.02, and each other applicable Section of this
ARTICLE VI, on and as of the proposed Funding Date, before and after
giving effect to such Funding and to the application of the proceeds therefrom;


 


(vii)              all representations
and warranties made by each of the Borrower and the Pledgors in this Agreement
and each of the Financing Documents to which it is a party are true and correct
on and as of such Funding Date (except with respect to representations and
warranties that expressly refer to an earlier date), before and after giving
effect to such Funding and to the application of the proceeds therefrom; and


 


(viii)           since October 31, 2006,
no Material Adverse Effect has occurred and is continuing.


 


(b)   Independent
Engineer’s Certification. The Administrative Agent shall have received an
Independent Engineer’s Certificate in respect of such Funding Notice duly
executed by the Independent Engineer and in the form attached as Exhibit J-2.


 


(c)   Title Insurance.
The Administrative Agent shall have received Lien Waiver Statements for the
Aberdeen II Plant, and the Administrative Agent shall have received a
Title Continuation and an endorsement to the Title Insurance Policy,
which endorsement shall have the effect of (i) updating the date of the
Title Insurance Policy to the date of the requested Funding and (ii)
providing full mechanics’ lien coverage.


 


(d)   Updated
Survey. If the Borrower owns or acquires any land (leasehold, fee or
easement) not shown on the then-current Survey, the Administrative Agent shall
have received an updated Survey of the Site including such new leasehold, fee
or easement areas.


 


(e)   Mechanic’s
Liens. There are no mechanic’s, workmen’s, materialmen’s, construction or
other like Liens encumbering the Collateral (other than Permitted Liens),
regardless of whether such Liens appear as an exception to the
Title Insurance Policy or the Title Continuation.


 


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(f)    Additional
Project Documents. An Authorized Officer of the Borrower shall have
certified that the Borrower has provided to the Administrative Agent copies of
any Additional Project Document entered into by the Borrower since the date of
this Agreement, together with all amendments, supplements, schedules and
exhibits thereto and the Ancillary Documents relating thereto, each of which
(i) shall have been duly authorized, executed and delivered by each Person
party thereto, and (ii) shall be in full force and effect.


 


Section
6.03    Conditions to Term Loan
Funding. In addition to the conditions set forth in Section 6.05 (Conditions to All Fundings and Issuances),
the obligation of each Construction/Term Lender to make its Term Loans shall be
subject to the fulfillment of the following conditions precedent.


 


(a)   Term
Notes. Each Construction/Term Lender shall have received a Term Note,
payable to such Lender in the amount of such Lender’s Term Loan Commitment,
duly executed by the Borrower and otherwise complying with the provisions of Section 2.07 (Evidence of
Indebtedness).


 


(b)   Construction
Loan Payoff. All of the Construction Loans shall have been or shall
simultaneously be repaid with the proceeds of such Term Loans.


 


(c)   Final
Completion Date. The Final Completion Date for the Aberdeen II Plant shall
have occurred.


 


(d)   Final
Completion Certificate. The Administrative Agent shall have received a
Final Completion Certificate for the Aberdeen II Plant, in the form of Exhibit
Q-1 duly executed by the Independent Engineer and a Final Completion
Certificate in the form of Exhibit Q-2 duly executed by the Borrower.


 


(e)   Insurance.
The Administrative Agent shall have received binders or certificates evidencing
the commitment of insurers to provide the insurance policies required by Section
7.01(h) (Affirmative Covenants - Insurance),
together with evidence of the payment of all premiums then due and payable in
respect of such insurance policies and a certificate of the Borrower’s
insurance broker (or insurance carrier) certifying that all such insurance
policies are in full force and effect, and the Administrative Agent shall have
received a certificate of the Insurance Consultant in substantially the form of
Exhibit I with respect thereto.


 


(f)    Security.
The Administrative Agent shall have received evidence that (i) the
Collateral Agent continues to have a perfected first priority security interest
in all right, title and interest of each of the Borrower and the Pledgors in
and to the Collateral prior to all other Liens thereon and subject only to
Permitted Liens, and (ii) all 


 


58

















 


Governmental Approvals that are necessary or desirable in order to
establish, protect, preserve and perfect the Collateral Agent’s Liens have been
duly made or taken and are in full force and effect.


 


(g)   Updated
Operating Budget and Plan. The Administrative Agent shall have received a
copy of the updated Operating Budget which shall include the Existing Plants
and the Aberdeen II Plant, in form and substance reasonably satisfactory to the
Administrative Agent.


 


(h)   Project
Accounts. The Project Accounts shall continue to be maintained in
accordance with this Agreement and the Accounts Agreement and shall contain all
amounts, if any, required to be deposited therein as of the Conversion Date,
including the amounts on deposit in or standing to the credit of each of the
Debt Service Reserve Account, the Working Capital Reserve Account and the
Contingency Reserve Account, which shall be at, or shall be funded on the
Conversion Date up to, a level no less than (i) fifty percent
(50%) of the Debt Service Reserve Required Amount, (ii) the Working
Capital Reserve Required Amount and (iii) the Contingency Reserve Required
Amount, respectively.


 


(i)    Legal
Opinions. The Administrative Agent shall have received legal opinions from
counsel to the Loan Parties, each in form and substance reasonably satisfactory
to the Administrative Agent, addressing those matters relating to the Project,
the Transaction Documents and the transactions contemplated therein, and the
Collateral, as the Administrative Agent may reasonably request.


 


(j)    Title Insurance.
The Administrative Agent shall have received Lien Waiver Statements for the
Aberdeen II Plant, and the Administrative Agent shall have received a
Title Continuation and an endorsement to the Title Insurance Policy,
which endorsement shall have the effect of (i) updating the date of the
Title Insurance Policy to the date of the requested Funding and (ii)
providing full mechanics’ lien coverage.


 


(k)   Final
Survey. The Administrative Agent shall have received a satisfactory final
as-built Survey of the Project demonstrating that the Project has all real
property interests required by the Financing Documents and showing no Liens
other than Permitted Liens.


 


(l)    Mechanic’s
Liens. There are no mechanic’s, workmen’s, materialmen’s, construction or
other like Liens encumbering the Collateral (other than Permitted Liens),
regardless of whether such Liens appear as exceptions to the
Title Insurance Policy or the Title Continuations.


 


59
















 


(m)            Additional
Project Documents. An Authorized Officer of the Borrower shall have
certified that the Borrower has provided to the Administrative Agent copies of
any Additional Project Document entered into by the Borrower since the date of
this Agreement, together with all amendments, supplements, schedules and
exhibits thereto and the Ancillary Documents relating thereto, each of which (i) shall
have been duly authorized, executed and delivered by each Person party thereto,
and (ii) shall be in full force and effect.


 


Section 6.04             Conditions to
Working Capital Loan Fundings. In addition to the conditions set forth in Section 6.05
(Conditions to All Fundings and Issuances),
the obligation of each Working Capital Lender to make available each Funding of
its Working Capital Loans shall be subject to the fulfillment of the following
conditions precedent:


 


(a)          Timing.
The initial Funding of the Construction Loans shall have occurred or shall
occur simultaneously with such Funding of Working Capital Loans.


 


(b)         Funding
Notice. The Administrative Agent shall have received (i) a Working
Capital Loan Funding Notice, as required by and in accordance with Section 2.05
(Notice of Fundings), together with
certified evidence of the Working Capital Expenses then due and payable with
respect to which such Funding has been requested, and (ii) the most recent
Borrowing Base Certificate required to be delivered pursuant to Section 7.03(n)
(Reporting Requirements – Borrowing Base Certificate),
executed by an Authorized Officer of the Borrower, together with supporting
schedules, which certificate shall be in form and substance satisfactory
to the Administrative Agent.


 


Section 6.05             Conditions to All
Fundings and Issuances. The obligation of each Lender to make available
each Funding of its Loans and the issuance of any Letter of Credit shall be
subject to the fulfillment of the following conditions precedent:


 


(a)          Borrower’s
Certifications. The Administrative Agent shall have received a duly
executed certificate of an Authorized Officer of the Borrower certifying that:


 


(i)                        the
Borrower is in compliance with all conditions set forth in this Section 6.05
on and as of the proposed Funding Date and/or Proposed Letter of Credit
Issuance Date, before and after giving effect to such (x) Funding and to the
application of the proceeds therefrom and/or (y) Letter of Credit issuance;


 


(ii)                     all
representations and warranties made by each of the Borrower and the Pledgors in
this Agreement and each of the Financing Documents to which it is a party are
true and correct on and as of


 


60

















 


such
Funding Date and/or Proposed Letter of Credit Issuance Date (except with
respect to representations and warranties that expressly refer to an earlier
date), before and after giving effect to such (x) Funding and to the
application of the proceeds therefrom and/or (y) Letter of Credit issuance;


 


(iii)                  no Default or
Event of Default has occurred and is continuing, or would result from such
Funding and/or Letter of Credit issuance;


 


(iv)                 since October 31,
2006, there has been no event or occurrence that has had, or would reasonably
be expected to have, a Material Adverse Effect; and


 


(v)                    the Borrower
has no reason to believe that the Conversion Date will not occur on or prior to
the Conversion Date Certain.


 


(b)         Government
Approvals. The Administrative Agent shall have received evidence reasonably
satisfactory to it that:


 


(i)                        all
Governmental Approvals required by the proposed Funding Date and/or Proposed
Letter of Credit Issuance Date for operation or development of the Project have
been duly obtained, validly issued, and are in full force and effect, final and
Non-Appealable;


 


(ii)                     all
conditions in any Governmental Approval applicable to the Borrower that are required
to have been satisfied by the date of the applicable Funding and/or Letter of
Credit issuance have been satisfied;


 


(iii)                  such
Governmental Approvals do not contain any condition that the Borrower has any
reason to believe is not capable of being satisfied on or prior to the time
required or that the Borrower has any reason to believe would limit or restrict
the ability of the Project to perform consistently with the projections
set forth in the Financial Model;


 


(iv)                 the Borrower is
in compliance with all material respects with all Governmental Approvals that
have been obtained by it;


 


(v)                    there is no
proceeding pending or, to the knowledge of the Borrower, threatened in writing
that seeks to appeal, rescind,


 


61

















 


terminate, modify, condition, suspend or otherwise alter in any
material respect any such Governmental Approval;


 


(vi)                 to the Borrower’s
knowledge, there exists no impediment that could reasonably be expected to
prevent its obtaining in due course all other Governmental Approvals necessary
for operation of the Existing Plants or development of the Project as and when
the same may be required; and


 


(vii)              the Administrative
Agent shall have received copies of all Governmental Approvals obtained since
the last Borrowing certified by an Authorized Officer of the Borrower as true,
correct, complete and in full force and effect.


 


(c)          No
Default or Event of Default. No Event of Default or Default has occurred
and is continuing, or would result from, such Funding and or Letter of Credit
issuance.


 


(d)         No
Litigation.


 


(i)                        No action,
suit, proceeding or investigation shall have been instituted or, to the
Borrower’s knowledge, threatened in writing against any of the Borrower, the
Pledgors, or the Project; and


 


(ii)                     no action,
suit, proceeding or investigation shall have been instituted or threatened in
writing against any Project Party that, individually or in the aggregate, has
had or could reasonably be expected to have a Material Adverse Effect.


 


(e)          Abandonment,
Taking, Total Loss. (i) No Event of Abandonment or Event of Total Loss
shall have occurred and be continuing with respect to the Project, (ii) no
Event of Taking relating to any Equity Interests in the Borrower shall have
occurred and be continuing, or (iii) no Event of Taking with respect to a
material part of the Project shall have occurred.


 


(f)            Fees;
Expenses. The Administrative Agent shall have received for its own account,
or for the account of each Lender and Agent entitled thereto, all fees due and
payable as of the date of such Funding and/or Letter of Credit issuance
pursuant to Section 3.13
(Fees), and all costs and expenses
(including costs, fees and expenses of legal counsel) for which invoices have
been presented.


 


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(g)         Satisfactory
Legal Form. All documents executed or submitted in accordance with this Section 6.05
with respect to such Funding and/or Letter of Credit issuance by or one behalf
of the Borrower or any other Project Party shall be reasonably satisfactory in form and
substance to the Administrative Agent.


 


(h)         Material
Adverse Effect. Since the Closing Date, no Material Adverse Effect has
occurred and is continuing.


 


(i)             Initial
Funding. The initial Funding of the Construction Loans shall have occurred
or shall simultaneously occur.


 


(j)             Bond
Proceeds. If a withdrawal of funds on deposit in or standing to the credit
of the Bond Proceeds Sub-Account is being simultaneously requested, all of the
conditions in the Accounts Agreement and the relevant Bond Proceeds Withdrawal
Certificate (other than execution of such certificate by the Bond Trustee) to
disbursement of such funds have been satisfied.


 


(k)          South
Dakota Permitting Opinion. For any requested Funding Date after November 15,
2007, the Administrative Agent shall have received a legal opinion, covering
permits required for the Project under South Dakota law, addressed to the
Senior Secured Parties, and in form and substance reasonably satisfactory
to the Administrative Agent.


 


ARTICLE VII


 


COVENANTS


 


Section 7.01             Affirmative
Covenants. The Borrower agrees with each Senior Secured Party that, until
the Security Discharge Date, the Borrower will perform the obligations set
forth in this Section 7.01.


 


(a)          Compliance
with Laws. The Borrower shall comply in all material respects with all Laws
(other than Environmental Laws) applicable to it or to its business or
property.


 


(b)         Environmental
Matters.


 


(i)                        The
Borrower shall (A) comply in all material respects with all Environmental
Laws, (B) keep the Project free of any Lien imposed pursuant to any
Environmental Law, (C) pay or cause to be paid when due and payable by the
Borrower any and all costs required in connection with any Environmental Laws,
including 


 


63

















 


the cost of identifying the nature and extent of the presence of any
Materials of Environmental Concern in, on or about the Project or on any real
property owned or leased by the Borrower or on the Mortgaged Property, and the
cost of delineation, management, remediation, removal, treatment and disposal
of any such Materials of Environmental Concern, and (D) use its best
efforts to ensure that no Environmental Affiliate takes any action or violates
any Environmental Law that could reasonably be expected to result in an
Environmental Claim.


 


(ii)                     The Borrower
shall not use or allow the Project to generate, manufacture, refine, produce,
treat, store, handle, dispose of, transfer, process or transport Materials of
Environmental Concern other than in compliance in all material respects with
Environmental Laws.


 


(c)          Operations
and Maintenance. The Borrower shall own, construct, operate and maintain
(or cause to be operated and maintained) the Aberdeen II Plant, and shall own,
operate and maintain (or cause to be operated and maintained) the Existing
Plants in all material respects in accordance with (i) the terms and
provisions of the Transaction Documents, (ii) all applicable Governmental
Approvals and Laws and (iii) Prudent Ethanol Operating Practice.


 


(d)         Construction
and Completion of Aberdeen II Plant; Maintenance of Properties. (i) The
Borrower shall apply the proceeds of the Loans to the purposes specified in Section 7.01(g) (Affirmative Covenants - Use of Proceeds and Cash Flow)
and in each Funding Notice and shall duly construct and complete, or cause the
construction and completion of, the Aberdeen II Plant, and shall cause the
Final Completion Date to occur, substantially in accordance with (A) the
scope of work and other specifications set forth in the Design-Build Agreement
(including any Change Orders permitted under this Agreement), (B) the
Construction Budget, and (C) exercise of that degree of skill, diligence,
prudence, foresight and care reasonably to be expected of skilled and
experienced contractors in the ethanol industry in the United States of
America, in order to accomplish the desired result consistent with reliability,
safety, performance and expedition taking into account the provisions of the
Project Documents and any relevant manufacturer’s or licensor’s recommendations
or guidelines.


 


(ii)                     The Borrower
shall keep, or cause to be kept, in good working order and condition, ordinary
wear and tear excepted, all of its properties and equipment related to the Project
that are necessary or useful in the proper conduct of its business.


 


64

















 


(iii)                  Except as
required in connection with the construction of the Aberdeen II Plant, the
Borrower shall not permit the Project or any material portion thereof to be
removed, demolished or materially altered, unless such material portion that
has been removed, demolished or materially altered has been replaced or
repaired as permitted under this Agreement.


 


(iv)                 The Borrower
shall continue to engage in business of the same type as now conducted by it
and do or cause to be done all things necessary to preserve and keep in full
force and effect (A) its limited partnership existence and good standing
in the State of Delaware and (B) its material patents, trademarks, trade
names, copyrights, franchises and similar rights.


 


(v)                    The Borrower
shall cause all applicable air emissions tests for the Aberdeen II Plant to be
completed to the satisfaction of the Independent Engineer within the time
periods specified for such tests in the air permit.


 


(e)          Payment
of Obligations. The Borrower shall pay and discharge as the same shall
become due and payable all of its obligations and liabilities, including (i) all
tax liabilities, assessments and governmental charges or levies upon it or its
properties or assets, unless the same (A) are subject to a Contest or (B) are
immaterial Taxes in an aggregate amount not in excess of twenty-five thousand
Dollars ($25,000) at any one time outstanding (taking into account any interest
and penalties that could accrue or be applicable to such past-due Taxes), and
provided that such Taxes are no more than forty-five (45) days past due, (ii) all
of its obligations and liabilities under its Contractual Obligations, except as
are subject to a Contest and (iii) all lawful claims that, if unpaid,
would by law become a Lien upon its properties (other than Permitted Liens),
unless the same are subject to a Contest.


 


(f)            Governmental
Approvals. The Borrower shall maintain in full force and effect, in the
name of the Borrower, each Necessary Project Approval and obtain each Deferred
Approval (each of which shall be reasonably satisfactory to the Administrative
Agent) prior to the time it is required to be obtained hereunder, including as
set forth on Part B of Schedule 5.03, but in any event
no later than the date it is required to be obtained under applicable Law
(other than any such failure to maintain or obtain that could not reasonably be
expected to have a Material Adverse Effect on the Borrower).


 


65

















 


(g)         Use of
Proceeds and Cash Flow.


 


(i)                        All
proceeds of the Construction Loans shall be applied to pay Project Costs and
for the purposes set forth in Sections 4.01(b)(ii) of the Accounts
Agreement. All Loans proceeds shall be applied in accordance with the Funding
Notice pursuant to which such Loans were funded.


 


(ii)                     All proceeds
of the Term Loans shall be applied to repay the Construction Loans.


 


(iii)                  All proceeds of
the Working Capital Loans (other than those resulting from a draw on a Letter
of Credit) shall be applied to pay Working Capital Expenses.


 


(iv)                 All Subordinated
Debt shall be applied in accordance with the “Costs of the Project” (as defined
in the Bond Indenture).


 


(v)                    The Borrower
shall cause all Cash Flow, Insurance Proceeds and Condemnation Proceeds to be
applied in accordance with the Accounts Agreement.


 


(h)         Insurance.
Without cost to any Senior Secured Party, the Borrower shall at all times
obtain and maintain, or cause to be obtained and maintained, the types and
amounts of insurance listed and described on Schedule 7.01(h), in
accordance with the terms and provisions set forth therein for the Project and
the Borrower, and shall obtain and maintain such other insurance as may be
required pursuant to the terms of any Transaction Document. The Borrower shall
cause each such insurance to be in place no less than ten (10) days prior
to the date required, and each required insurance policy shall be renewed or
replaced no less than thirty (30) days prior to the expiration thereof. In
the event the Borrower fails to take out or maintain the full insurance
coverage required by this Section 7.01(h), the Administrative Agent
may (but shall not be obligated to) take out the required policies of
insurance and pay the premiums on the same. All amounts so advanced by the
Administrative Agent shall become an Obligation, and the Borrower shall
forthwith pay such amounts to the Administrative Agent, together with interest
from the date of payment by the Administrative Agent at the Default Rate.


 


(i)             Books
and Records; Inspections. The Borrower shall keep proper books of record
and account in which complete, true and accurate entries in conformity with
GAAP and all requirements of Law shall be made of all financial transactions
and matters involving the assets and business of the Borrower, and shall
maintain such books 


 


66

















 


of
record and account in material conformity with applicable requirements of any
Governmental Authority having regulatory jurisdiction over the Borrower. The
Borrower shall keep books and records separate from the books and records of
any other Person (including any Affiliates of the Borrower) that accurately
reflect all of its business affairs, transactions and the documents and other
instruments that underlie or authorize all of its limited partnership actions. The
Borrower shall permit officers and designated representatives of the Agents,
Lenders and Consultants to visit and inspect any of the properties of the
Borrower (including the Project), to examine its limited partnership, financial
and operating records, and make copies thereof or abstracts therefrom, and to
discuss its affairs, finances and accounts with its partners, directors,
officers and independent public accountants, and with the GP Pledgor and its
directors, officers and independent public accountants, in each case at the
expense of the Borrower (provided that so long as no Default or Event of Default
has occurred and is continuing, such visits or inspections shall be at the
expense of the Borrower only once per fiscal quarter) and at such reasonable
times during normal business hours and as often as may be reasonably
desired, upon reasonable advance notice to the Borrower; provided that
if a Default or Event of Default has occurred and is continuing, any Agent,
Lender or Consultant (or any of their respective officers or designated
representatives) may do any of the foregoing at the expense of the Borrower
at any time during normal business hours and without advance notice.


 


(j)             Operating
Budget.


 


(i)                        The
Borrower shall, with respect to the Existing Plants, not later than the Closing
Date, and, with respect to the Aberdeen II Plant, not later than thirty
(30) days before the Final Completion Date, adopt an operating plan and a
budget setting forth in reasonable detail the projected requirements for
Operation and Maintenance Expenses and Maintenance Capital Expenses for such
plant(s) for the period from such date to the conclusion of the then-current
Fiscal Year and provide a copy of such operating plan and budget at such time
to the Administrative Agent. No less than forty-five (45) days in advance
of the beginning of each Fiscal Year thereafter, the Borrower shall similarly
adopt an operating plan and a budget for the Existing Plants (or, if after the
Conversion Date, the entire Project) setting forth in reasonable detail the
projected requirements for Operation and Maintenance Expenses and Maintenance Capital
Expenses for the ensuing Fiscal Year and provide a copy of such operating plan
and budget at such time to the Administrative Agent. (Each such operating plan
and budget is herein called an “Operating Budget”.)  Each Operating Budget shall be prepared in
accordance with a form approved by 


 


67

















 


the Independent Engineer and shall become effective upon approval,
which shall not be unreasonably withheld, conditioned or delayed, of the
Administrative Agent (acting in consultation with the Consultants). If the
Borrower shall not have adopted an annual Operating Budget before the beginning
of any Fiscal Year or any Operating Budget adopted by the Borrower shall not
have been accepted by the Administrative Agent before the beginning of any
upcoming Fiscal Year, the Operating Budget for the preceding Fiscal Year shall,
until the adoption of an annual Operating Budget, by the Borrower and
acceptance of such Operating Budget, by the Administrative Agent, be deemed to
be in force and effective as the annual Operating Budget for such upcoming
Fiscal Year.


 


(ii)                     Each
Operating Budget delivered to the Administrative Agent pursuant to this Section 7.01(j)
shall be accompanied by a memorandum detailing all material assumptions used in
the preparation of such Operating Budget, shall contain a line item for each
Operating Budget Category, shall specify for each month and for each such
Operating Budget Category the amount budgeted for such category for such month,
and shall clearly distinguish Operation and Maintenance Expenses and
Maintenance Capital Expenses.


 


(k)          Performance
Tests.


 


(i)                        The
Administrative Agent and the Independent Engineer have the right to witness and
verify the Performance Tests. The Borrower shall give the Administrative Agent
and the Independent Engineer notice regarding each proposed Performance Test
within twenty-four (24) hours of the Borrower’s receipt of notice of such
Performance Test from the Design-Build Contractor. If, upon completion of any
Performance Tests, the Borrower believes that such Performance Tests have been
satisfied, the Borrower shall so notify the Administrative Agent and the
Independent Engineer and shall deliver a copy of all test results supporting
such conclusion, accompanied by supporting data and calculations, evidencing
the Borrower’s belief that the Borrower and the Design-Build Contractor have
satisfied their respective obligations with respect to such Performance Tests. If
any such Performance Tests have been satisfactorily completed, the Borrower
shall deliver to the Administrative Agent a report that 


 


68

















 


indicates the preliminary opinions as to the satisfactory achievement
of the Performance Tests (each, a “Performance Test Report”), and the
Independent Engineer will, upon a thorough review of such Performance Test
Report, certify in writing to the Administrative Agent, within five (5) Business
Days of the receipt of such Performance Test Report, the satisfactory
achievement of the Performance Tests or deliver a report to the Administrative
Agent and the Borrower setting forth in reasonable detail any objections of the
Independent Engineer to such Performance Test Report. If any such valid
objections are made, then the Borrower shall be permitted to address such
objections to the reasonable satisfaction of the Independent Engineer or
conduct additional Performance Tests in accordance with this Section 7.01(k).


 


(ii)                     The Borrower
will not approve any performance testing plan under the Design-Build Agreement,
approve the results of any Performance Tests or declare that the Final
Completion Date has occurred without the prior written consent of the
Administrative Agent and the Independent Engineer, which consent will not be
unreasonably withheld, conditioned or delayed.


 


(l)             Project
Documents.


 


(i)                        The
Borrower shall maintain in full force and effect, preserve, protect and defend
its material rights under, and take all actions necessary to prevent
termination or cancellation (except by expiration in accordance with its terms)
of, the SNDAs and each Project Document. The Borrower shall exercise all
material rights, discretion and remedies under each SNDA and each Project
Document, if any, in accordance with its terms and in a manner consistent with
(and subject to) the Borrower’s obligations under the Financing Documents.


 


(ii)                     Promptly upon
execution of any Project Document by the Borrower, the Borrower shall deliver
to the Administrative Agent certified copies of such Project Document and, if
reasonably requested by the Administrative Agent, any Ancillary Documents
related thereto.


 


(iii)                  If any of the
SNDAs and the Project Documents provides that such document will expire prior
to the Final Maturity Date, then, on or 


 


69

















 


prior to the date that is forty-five (45) days (or such shorter
period as shall be satisfactory to the Administrative Agent) prior to the
expiration date of such document, the Borrower shall enter into an agreement replacing
such document, in form and substance, and with a counterparty, reasonably
satisfactory to the Required Lenders.


 


(m)       Preservation
of Title; Acquisition of Additional Property.


 


(i)                        The
Borrower shall preserve and maintain (A) good, marketable and insurable
fee interest in the Sites (except for the Leased Premises) and valid easement
interest to its easement interest in the Sites, (B) good and valid
leasehold interest in the Leased Premises and (C) good, legal and valid
title to all of its other respective material properties and assets, in each
case free and clear of all Liens other than Permitted Liens. If the Borrower at
any time acquires any real property or leasehold or other interest in real
property (including, to the extent reasonably requested by the Administrative
Agent, with respect to any material easement or right-of-way not covered by the
Mortgages), the Borrower shall, promptly upon such acquisition, execute,
deliver and record a supplement to the Mortgage relating to the Plant(s) with respect
to which such real property or leasehold or other interest in real property
relates, reasonably satisfactory in form and substance to the
Administrative Agent, subjecting such real property or leasehold or other
interest to the Lien and security interest created by such Mortgage. If
reasonably requested by the Administrative Agent, the Borrower shall obtain an
appropriate endorsement or supplement to any Title Insurance Policy
insuring the Lien of the Security Documents in such additional property, subject
only to Permitted Liens.


 


(ii)                     Prior to the
acquisition or lease of any such additional real property interests (other than
easements that do not involve soil disturbance), the Borrower shall deliver to
the Administrative Agent an Environmental Site Assessment Report(s) with
respect to such real property (if, in the reasonable determination of the
Administrative Agent, acting in consultation with the Independent Engineer,
such Environmental Site Assessment Report(s) with respect to such real property
interests is warranted), in each case along with a corresponding reliance
letter from the consultant issuing such report(s) (to the extent such report(s)
does not permit 


 


70

















 


reliance thereon by the Senior Secured Parties). Each such
Environmental Site Assessment Report(s) shall be in form and substance
reasonably satisfactory to the Administrative Agent and shall not identify any
material liability associated with the condition of such real property.


 


(n)         Maintenance
of Liens; Creation of Liens on Newly Acquired Property.


 


(i)                        The
Borrower shall take or cause to be taken all action necessary or desirable to
maintain and preserve the Lien of the Security Documents and the first-ranking
priority thereof.


 


(ii)                     The Borrower
shall take all actions required to cause each Additional Project Document to be
or become subject to the Lien of the Security Documents (whether by amendment
to any Security Agreement or otherwise) and shall deliver or cause to be
delivered to the Administrative Agent all Ancillary Documents related thereto.


 


(iii)                  Simultaneously
with the making of any investment in Cash Equivalents, the Borrower shall take
or cause to be taken all actions to require such Cash Equivalent in the Project
Accounts to be or become subject to a first priority perfected Lien in favor of
the Senior Secured Parties.


 


(o)         Certificate
of Formation. The Borrower shall observe all of the separateness and other
provisions and procedures of its certificate of limited partnership and the
Borrower LP Agreement.


 


(p)         Separateness.
The Borrower shall comply at all times with the separateness provisions set
forth on Schedule 5.24(a).


 


(q)         Further
Assurances. Upon written request of the Administrative Agent or the
Required Lenders, the Borrower shall promptly perform or cause to be
performed any and all acts and execute or cause to be executed any and all
documents (including UCC financing statements and UCC continuation statements):


 


(i)                        that are
necessary or advisable for compliance with Section 7.01(n)(i) (Affirmative Covenants - Maintenance of Liens; Creation of Liens on
Newly Acquired Property);


 


71

















 


(ii)                     for the
purposes of ensuring the validity and legality of this Agreement or any other
Financing Document and the rights of the Senior Secured Parties hereunder or
thereunder; and


 


(iii)                  for the purposes
of facilitating the proper exercise of rights and powers granted to the Senior
Secured Parties under this Agreement or any other Financing Document.


 


(r)            First
Priority Ranking. The Borrower shall cause its payment obligations with
respect to the Loans to constitute direct senior secured obligations of the
Borrower and to rank no less than pari passu in priority of payment, in right of
security and in all other respects to all other Indebtedness of the Borrower.


 


(s)          Quarterly
Calculations.


 


(i)                        Not more
than three (3) Business Days prior to each Quarterly Payment Date, the
Borrower shall provide to the Administrative Agent a calculation of the Debt
Service Reserve Required Amount, certified by a Financial Officer of the
Borrower.


 


(ii)                     Not more than
three (3) Business Days prior to each Quarterly Payment Date, the Borrower
shall calculate the Historical Debt Service Coverage Ratio and the Prospective
Debt Service Coverage Ratio, and shall provide written evidence to the Accounts
Bank of such calculations certified by a Financial Officer of the Borrower. Each
such calculation shall be subject to review by the Administrative Agent.


 


(t)            Financial
Model.


 


(i)                        No less
than forty-five (45) days prior to the end of each Fiscal Year (commencing
with the Fiscal Year ended September 30, 2008), the Borrower shall deliver
to the Lenders, the Administrative Agent and the Consultants a proposed updated
Financial Model, together with the underlying assumptions, containing
projections of Cash Flow, Operation and Maintenance Expenses (including each
Operating Budget Category), Maintenance Capital Expenses and Cash Flow
Available for Debt Service, in each case on a quarterly basis, with respect to
the Project for the immediately succeeding Fiscal Year. If the Administrative
Agent does not approve the updated Financial Model proposed by the Borrower
within thirty (30) days 


 


72

















 


following receipt thereof (and, so long as no Default or Event of
Default has occurred and is continuing, after consultation and no less than ten
(10) days of good faith negotiations with the Borrower), the
Administrative Agent may instruct the Consultants to prepare an updated
Financial Model based on the reasonable professional judgment of the
Consultants (and such updated Financial Model prepared by the Consultants shall
be binding on the Lenders and the Borrower).


 


(ii)                     If in any Fiscal
Year (A) the actual Cash Flow for the completed Fiscal Quarters in such
Fiscal Year (or, in the case of the Fiscal Year in which the Closing Date
occurs, the period from the Closing Date to the end of the most recent
completed Fiscal Quarter) (such period, the “Specified Period”) is
ninety percent (90%) or less of the projections for such period set forth
in the then-current Financial Model, or (B) Operation and Maintenance
Expenses and Maintenance Capital Expenses for the Specified Period are, in the aggregate,
ten percent (10%) or more above the projections for such period set forth in
the then-current Financial Model, the Borrower shall, no less than thirty
(30) days prior to the end of the immediately following Fiscal Quarter,
deliver to the Administrative Agent, the Lenders and the Consultants a proposed
updated Financial Model, together with the underlying assumptions, containing
projections of Cash Flow, Operation and Maintenance Expenses (including each
Operating Budget Category), Maintenance Capital Expenses and Cash Flow
Available for Debt Service, in each case on a quarterly basis, with respect to
the Project through the end of the immediately following Fiscal Year; provided
that if (x) the Historical Debt Service Coverage Ratio calculated as of
the most recent Quarterly Payment Date exceeds 4.0x and (y) the Borrower
delivers to the Administrative Agent a certificate certifying that the
Prospective Debt Service Coverage Ratio calculated as of such most recent
Quarterly Payment Date exceeds 4.0x notwithstanding the deviation from the
Financial Model described in item (A) or (B) above, as applicable,
the Borrower shall not be required to deliver an updated Financial Model
pursuant to this Section 7.01(t).


 


(iii)                  If the
Administrative Agent does not approve the updated Financial Model proposed by
the Borrower pursuant to Section 7.01(t)(ii) above within
fifteen (15) days following receipt thereof (and, so long as no Default or
Event of Default has occurred and 


 


73

















 


is continuing, after consultation with the Borrower), the
Administrative Agent may instruct the Consultants to prepare an updated
Financial Model based on the reasonable professional judgment of the
Consultants (and such updated Financial Model prepared by the Consultants shall
be binding on the Lenders and the Borrower).


 


(iv)                 All costs
incurred in connection with the preparation and review of updated Financial
Models under this Section 7.01(t) shall be for the account of the
Borrower.


 


(u)         Interest
Rate Protection Agreement. Within ten (10) Business Days after the
Closing Date, and at all times thereafter, the Borrower shall have in place
Interest Rate Protection Agreements with respect to at least fifty percent
(50%) of the aggregate principal amount of all Loans projected to be
outstanding from time to time; provided, that the Borrower may not
enter into Interest Rate Protection Agreements for notional amounts, in the
aggregate at the time of the execution thereof, in excess of the aggregate
principal amount of Loans outstanding on the date of such transaction.


 


(v)         Commodity
Hedging Programs. On or before the Closing Date, the Borrower shall have
proposed a Commodity Risk Management Plan which shall have been approved by the
Administrative Agent. The Borrower may, from time to time, amend the Commodity
Risk Management Plan; provided that any material changes thereto shall
require the prior written approval of the Administrative Agent, which approval
shall not be unreasonably withheld, conditioned or delayed. The Borrower at all
times shall comply with, and shall ensure that all Commodity Hedging
Arrangements comply with, the Commodity Risk Management Plan.


 


(w)       Debt
Service Reserve. The Borrower shall ensure that the Debt Service Reserve
Account is fully funded to the Debt Service Reserve Required Amount within one (1) year
following the Conversion Date, and thereafter remains fully funded at the Debt
Service Reserve Required Amount.


 


(x)           Blocked
Account Agreements. Within thirty (30) days after the Closing Date, the
Borrower shall duly execute and deliver a Blocked Account Agreement with
respect to each Local Account in existence at such time.


 


Section 7.02             Negative Covenants.
The Borrower agrees with each Senior Secured Party that, until the Security
Discharge Date, the Borrower will perform the obligations set forth in
this Section 7.02.


 


74

















 


(a)          Restrictions
on Indebtedness of the Borrower. The Borrower will not create, incur,
assume or suffer to exist any Indebtedness except:


 


(i)                           the
Obligations;


 


(ii)                                Indebtedness
under the Subordinated Loan Agreement in an aggregate principal amount not to
exceed nineteen million Dollars ($19,000,000), provided that (A) such
Indebtedness is subject to the terms of the Intercreditor Agreement and (B) the
Bond Trustee or any successor or permitted assignee thereof shall have become a
party to the Intercreditor Agreement as, and shall have the obligations of, a
Second Lien Claimholder (as defined in the Intercreditor Agreement) thereunder;


 


(iii)                             Indebtedness
under the Permitted Commodity Hedging Arrangements;


 


(iv)                            accounts
payable to trade creditors incurred in the ordinary course of business and not
more than forty-five (45) days past due; and


 


(v)                               obligations
as lessee under operating leases or leases for the rental of any real or
personal property which are required by GAAP to be capitalized where all such
leases (other than railcar leases) under this Section 7.02(a)(v) do
not, in the aggregate, require the Borrower to make scheduled payments to the
lessors in any Fiscal Year in excess of two hundred thousand Dollars ($200,000)
in the aggregate.


 


(b)         Liens.
The Borrower shall not create, incur, assume or suffer to exist any Lien upon
any of its property, revenues or assets (including its Equity Interests),
whether now owned or hereafter acquired, except:


 


(i)                        Liens in
favor, or for the benefit, of the Collateral Agent pursuant to the Security
Documents;


 


(ii)                     Liens created
under the Bond Collateral Documents; provided that (A) such Liens
only secure Indebtedness permitted under Section 7.02(a)(ii) (Negative Covenants – Restrictions on Indebtedness of the Borrower),
(B) such Liens are subject to the terms of the Intercreditor Agreement,
and (C) the Bond Trustee or any successor or permitted assignee thereof
shall have become a party to the Intercreditor Agreement as, and shall have the



 


75

















 


obligations of, a Second Lien Claimholder (as defined in the
Intercreditor Agreement) thereunder;


 


(iii)                  Liens for taxes,
assessments and other governmental charges that are not yet due or the payment
of which is the subject of a Contest;


 


(iv)                 Liens of
carriers, warehousemen, mechanics and materialmen incurred in the ordinary course
of business for sums not yet due or the payment of which is the subject of a
Contest;


 


(v)                    any Liens
reflected on the Title Insurance Policy or any Title Continuation;


 


(vi)                 Liens arising by
reason of judgments that are subject to a Contest; and


 


(vii)              Until the
Construction Loan Maturity Date, Liens in respect of personal property leases
existing on the Closing Date under which the liability of the Borrower does not
exceed two hundred thousand Dollars ($200,000) in the aggregate.


 


(c)          Permitted
Investments. The Borrower shall not make any investments, loans or advances
(whether by purchase of stocks, bonds, notes or other securities, loans,
extensions of credit, advances or otherwise) except for investments in Cash
Equivalents.


 


(d)         Change
in Business. The Borrower shall not (i) enter into or engage in any
business other than the ownership, operation, maintenance, development,
start-up, testing, use and financing of the Aberdeen II Plant, the ownership,
operation, maintenance, use and financing of the Existing Plants and all
activities reasonably related thereto or (ii) change in any material
respect the scope of the Project from that which is contemplated as of the date
hereof.


 


(e)          Equity
Issuances. The Borrower shall not issue any Equity Interests unless such
Equity Interests are immediately pledged to the Collateral Agent (for the
benefit of the Senior Secured Parties) on a first-priority perfected basis
pursuant to the Pledge Agreement or, if necessary, a supplement thereto or a
pledge and security agreement in substantially the form of the Pledge
Agreement.


 


(f)            Asset
Dispositions. The Borrower shall not sell, lease, assign, transfer or
otherwise dispose of assets of the Project or the Borrower (other than
Products), whether now owned or hereafter acquired, except:


 


76

















 


(i)                        disposal
of assets that are promptly replaced in accordance with the then current
Operating Budget;


 


(ii)                     to the extent
that such assets are uneconomical, obsolete or no longer useful or no longer
usable in connection with the operation or maintenance of the Project; and


 


(iii)                  disposal of
assets with a fair market value, or at a disposal price, of less than one
million Dollars ($1,000,000) in the aggregate during any Fiscal Year; provided,
that such disposal does not, and would not reasonably be expected to, adversely
affect the construction, operation or maintenance of the Project.


 


(g)         Consolidation,
Merger. The Borrower will not (i) directly or indirectly liquidate,
wind up, terminate, reorganize or dissolve itself (or suffer any liquidation,
winding up, termination, reorganization or dissolution) or otherwise wind up;
or (ii) acquire (in one transaction or a series of related
transactions) all or any substantial part of the assets, property or
business of, or any assets that constitute a division or operating unit of, the
business of any Person or otherwise merge or consolidate with or into any other
Person.


 


(h)         Transactions
with Affiliates. The Borrower shall not enter into or cause, suffer or
permit to exist any arrangement or contract with any of its Affiliates or any
other Person that owns, directly or indirectly, any Equity Interest in the
Borrower unless such arrangement or contract (i) is fair and reasonable to
the Borrower and (ii) is an arrangement or contract that is on an arm’s-length
basis and contains terms no less favorable than those that would be entered
into by a prudent Person in the position of the Borrower with a Person that is
not one of its Affiliates.


 


(i)             Accounts.
(i) The Borrower shall not maintain, establish or use any deposit account,
securities account (as each such term is defined in the UCC) or other banking
account other than the Project Accounts and any Local Account with respect to
which a Blocked Account Agreement has been duly executed and delivered within
thiry (30) days after the Closing Date in accordance with Section 7.01(x)
(Blocked Account Agreement).


 


(ii)                     The Borrower
shall not change the name or account number of any of the Project Accounts or Local
Accounts without the prior written consent of the Administrative Agent.


 


(j)             Subsidiaries.
The Borrower shall not create or acquire any Subsidiary or enter into any
partnership or joint venture.


 


77

















 


(k)          ERISA.
The Borrower will not engage in any prohibited transactions under Section 406
of ERISA or under Section 4975 of the Code with respect to any Plan or any
other employee benefit plan subject to ERISA that could reasonably result in a
material liability to the Borrower. The Borrower will not incur any obligation
or liability in respect of any Plan, Multiemployer Plan or employee welfare
benefit plan providing post-retirement welfare benefits (other than a plan
providing continue coverage under Part 6 of Title I of ERISA or
similar state law).


 


(l)             Taxes.
The Borrower shall not make any election to be treated as an association
taxable as a corporation for federal, state or local tax purposes.


 


(m)       Project
Documents.


 


(i)                        Subject to
Section 7.02(m)(iii), the Borrower shall not direct or consent or
agree to any amendment, modification, supplement, waiver or consent in respect
of any provision of any of the SNDAs, the Organic Documents of the Borrower and
the Project Documents (other than any immaterial amendment or modification, in
which case a true, correct and complete copy shall be delivered to the
Administrative Agent) without the prior written consent of the Administrative
Agent, and in the case of any amendment to a Project Document due to the removal
or replacement of a Project Party, the prior written consent of the Required
Lenders.


 


(ii)                     Except for
collateral assignments under the Security Documents and the Bond Collateral
Documents, the Borrower shall not assign any of its rights under any of the SNDAs
and the Project Documents to which it is a party to any Person, or consent to
the assignment of any obligations under any such document by any other party
thereto, without the prior written approval of the Administrative Agent, and in
the case of any assignment of any obligations under any Project Document by a
Project Party, without the prior written approval of the Required Lenders.


 


(iii)                  The Borrower
shall not enter into or approve any Change Orders without the approval of the
Administrative Agent (acting in consultation with the Independent Engineer),
unless each of the following conditions is satisfied:


 


(A)                              the amount of such Change
Order does not exceed (1) five hundred thousand Dollars ($500,000)
individually, or 


 


78

















 


(2) two million Dollars ($2,000,000) together with all prior
Change Orders that have not been approved by the Administrative Agent (for
purposes of this clause (A), the amount of any Change Order shall be the
aggregate amount by which the related Line Items are increased as a result of
such Change Order);


 


(B)                                such Change Order would
not cause the funds available under the Contingency Line Item (and not yet
expended) and the Contingency Reserve Account to be reduced to less than zero;


 


(C)                                such Change Order could
not reasonably be expected to delay the Contract Times beyond the Conversion
Date Certain;


 


(D)                               such Change Order will
not alter in any adverse respect any guaranty, liquidated damages provision or
the standards for any of the Performance Tests;


 


(E)                                 such Change Order
could not reasonably be expected to permit or result in any adverse
modification or impair the enforceability of any warranty under the
Design-Build Agreement;


 


(F)                                 such Change Order
could not reasonably be expected to impair or reduce the value of the Project
or the value of the Collateral or decrease Cash Flow Available for Debt
Service;


 


(G)                                such Change Order could
not reasonably be expected to present a material risk of revocation or material
modification of any Governmental Approval;


 


(H)                               such Change Order could
not reasonably be expected to cause the Borrower or the Project not to comply
or lessen in any material respect the ability of the Borrower or the Project to
comply with any applicable Law; and


 


(I)                                    the Administrative
Agent has received a certificate, duly executed by an Authorized Officer of the
Borrower, confirming that the proposed Change Order will comply 


 


79

















 


with each of the conditions set forth in clauses (A)-(H) above
and, in the case of the condition set forth in clause (A), setting forth (1) the
amount of such proposed Change Order and (2) the amount of all prior
Change Orders that have not been approved by the Administrative Agent.


 


(n)         Subordinated
Debt Agreements. The Borrower shall not enter into any amendment,
modification or supplement of any Subordinated Debt Document unless such
amendment, modification or supplement does not require the consent of the
Administrative Agent pursuant to the Intercreditor Agreement, and the Borrower
shall not enter into any agreement or provide any undertaking or Guarantee with
respect to the Subordinated Debt other than the Subordinated Debt Documents.


 


(o)         Additional
Project Documents. The Borrower shall not enter into any Additional Project
Document except with the prior written approval of the Administrative Agent
(not to be unreasonably withheld, conditioned or delayed).


 


(p)         Suspension
or Abandonment. The Borrower shall not (i) permit or suffer to exist
an Event of Abandonment or (ii) order or consent to any suspension of work
under any Project Document, in each case without the prior written approval of
the Required Lenders.


 


(q)         Use of
Proceeds; Margin Regulations. The Borrower shall not use any proceeds of
any Loan other than in accordance with the provisions of ARTICLE II (Commitments and Funding) and Section 7.01(g) (Affirmative Covenants - Use of Proceeds and Cash Flow). The
Borrower shall not use any part of the proceeds of any Loan to purchase or
carry any Margin Stock (as defined in Regulation U) or to extend credit to
others for the purpose of purchasing or carrying any Margin Stock. The Borrower
shall not use the proceeds of any Loan in a manner that could violate or be
inconsistent with the provisions of Regulations T, U or X.


 


(r)            Environmental
Matters. The Borrower shall not permit (i) any underground storage
tanks to be located on any property owned or leased by the Borrower, (ii) any
asbestos to be contained in or form part of any building, building
component, structure or office space owned or leased by the Borrower, (iii) any
polychlorinated biphenyls (PCBs) to be used or stored at any property
owned or leased by the Borrower or (iv) any other Materials of
Environmental Concern to be used, stored or otherwise be present at any
property owned or leased by the Borrower, other than Materials of Environmental
Concern necessary for the operation of the Project and used in accordance with
all Laws and Prudent Ethanol Operating Practice.


 


80

















 


(s)          Restricted
Payments. Except as otherwise permitted under Section 2.06(e) (Funding of Loans) the Borrower shall not make any
Restricted Payments unless each of the conditions set forth below has been
satisfied:


 


(i)                        the
Conversion Date shall have occurred;


 


(ii)                     such
Restricted Payment is made on, or within thirty (30) days following, a
Quarterly Payment Date (provided that such Restricted Payment is made only from
funds on deposit in or standing to the credit of the Revenue Account or the
Prepayment Holding Account, as the case may be, on such Quarterly Payment
Date);


 


(iii)                  no Default or
Event of Default has occurred and is continuing or would occur as a result of
such Restricted Payment;


 


(iv)                 each of the Debt
Service Reserve Account and the Working Capital Reserve Account is fully funded
to any applicable required level;


 


(v)                    each of the
Historical Debt Service Coverage Ratio
and the Prospective Debt Service
Coverage Ratio, calculated as of such Quarterly Payment Date, is greater
than or equal to 1.5:1.0; and


 


(vi)                 the
Administrative Agent has received a Restricted Payment Certificate, duly
executed by an Authorized Officer of the Borrower, confirming that each of the
conditions set forth in clauses (i) through (vi) of this Section 7.02(s)
have been satisfied on and as of the date such Restricted Payment is requested
to be made, and setting forth a detailed calculation of each of the Historical Debt Service Coverage Ratio and
Prospective Debt Service Coverage Ratio;


 


provided that notwithstanding the
foregoing, Restricted Payments shall be permitted to the extent set forth in
priority twelfth of Section 6.01(b) of
the Accounts Agreement.


 


(t)            Construction
Budget. The Borrower, without the prior written approval of the
Administrative Agent and the Independent Engineer, may not reallocate any
portion of any Line Item except that the Borrower may (i) reallocate
the Contingency Line Item to pay for Change Orders permitted under this
Agreement, or to pay for fees and expenses of advisors and consultants
(including legal counsel) incurred as contemplated by the Transaction Documents
in excess of the amounts then budgeted, up to two 


 


81

















 


hundred thousand
Dollars ($200,000), (ii)  apply cost-savings from any completed Line
Item  (which completion has been confirmed by the Independent Engineer) to
one or more other Line Items, (iii) with the prior written consent of the
Independent Engineer (such consent not to be unreasonably withheld, conditioned
or delayed), reallocate cost savings from a fixed price line item (based
upon an executed contract for that fixed price item) to one or more other Line
Items, or (iv) in addition to the reallocation permitted pursuant to items
(i), (ii), and (iii) above, reallocate amounts from the Contingency
Line Item to other Line Items with the prior written consent of the Independent
Engineer.


 


(u)         Commodity
Hedging Arrangements. The Borrower shall not enter into any Commodity
Hedging Arrangements that:


 


(i)                        are not in
accordance with the Commodity Risk Management Plan; or


 


(ii)                     are for
speculative purposes.


 


(v)         Accounting
Changes. The Borrower shall not make any change in (i) its accounting
policies or reporting practices or (ii) its Fiscal Year without the prior
written consent of the Administrative Agent.


 


(w)       Huron
Expansion Contracts. The Borrower shall not enter or be a party to any
agreement or contract relating to the expansion of the Huron Plant without the
prior written consent of the Administrative Agent.


 


Section 7.03             Reporting
Requirements. The Borrower will furnish to the Administrative Agent, who
shall distribute copies of the following to each Lender:


 


(a)          Quarterly
Financial Statements. As soon as available and in any event within forty-five
(45) days after the end of the first
three Fiscal Quarters of each Fiscal Year, balance sheets and statements of
income and cash flows of the Borrower for such Fiscal Quarter and for the
period commencing at the end of the previous Fiscal Year and ending with the
end of such Fiscal Quarter, prepared in accordance with GAAP.


 


(b)         Annual
Financial Statements. As soon as available and in any event within ninety
(90) days after the end of each Fiscal Year, a copy of the annual audit
report for such Fiscal Year for the Borrower including therein balance sheets
as of the end of such Fiscal Year and statements of income and cash flows of
the Borrower for such Fiscal Year, and accompanied by an unqualified opinion of
the Auditors stating that such financial statements present fairly in all
material respects the financial position of the Borrower for the periods
indicated in conformity with GAAP applied on a basis consistent with prior
periods, which report and opinion shall not be subject to any “going


 


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concern”
or like qualification or exception or any qualification or exception as to the
scope of such audit.


 


(c)          Certificate
of Financial Officer. Concurrently with the delivery of the financial
statements referred to in Section 7.03(a) and (b), a
certificate executed by a Financial Officer of the applicable Loan Party
stating that:


 


(i)                        such
financial statements fairly present in all material respects the financial
condition and results of operations of such Person on the dates and for the
periods indicated in accordance with GAAP subject, in the case of interim
financial statements, to the absence of notes and normally recurring year-end
adjustments;


 


(ii)                     such
Financial Officer has reviewed the terms of the Financing Documents and has
made, or caused to be made under his or her supervision, a review in reasonable
detail of the business and financial condition of such Person during the
accounting period covered by such financial statements; and


 


(iii)                  as a result of
such review such Financial Officer has concluded that no Default or Event of
Default has occurred during the period covered by such financial statements
through and including the date of such certificate or, if any Default or Event
of Default has occurred, specifying the nature and extent thereof and, if
continuing, the action that such Loan Party has taken and proposes to take in
respect thereof.


 


(d)         Auditor’s
Letters. Promptly upon receipt, copies of any detailed audit reports,
management letters or recommendations submitted to the Borrower (or the audit
or finance committee of the Borrower) by the Auditors in connection with the
accounts or books of the Borrower, or any audit of the Borrower.


 


(e)          Notice
of Default or Event of Default. As soon as possible and in any event within
five (5) days after the Borrower obtains or should have obtained knowledge
of any Default or Event of Default, a statement of an Authorized Officer of the
Borrower setting forth details of such Default or Event of Default and the
action that the Borrower has taken and proposes to take with respect thereto.


 


(f)            Notice
of Other Events. Within five (5) days after the Borrower obtains
knowledge thereof, a statement of an Authorized Officer of the Borrower setting
forth details of:


 


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(i)                        any
litigation or governmental proceeding pending or threatened in writing against
any of the Borrower, the Project or the Pledgors;


 


(ii)                     any
litigation or governmental proceeding pending or threatened in writing against
any Project Party that has or could reasonably be expected to have a Material
Adverse Effect;


 


(iii)                  any other event,
act or condition that has or could reasonably be expected to have a Material
Adverse Effect;


 


(iv)                 notification of
any event of force majeure or similar event under a Project Document; or


 


(v)                    notification
of any other change in circumstances that could reasonably be expected to
result in an increase of more than five hundred thousand Dollars ($500,000) in
Project Costs.


 


(g)         Project
Document or Additional Project Document Notice. Promptly after delivery or
receipt thereof, copies of all material notices or documents given or received
by the Borrower, pursuant to any of the SNDAs, the Borrower LP Agreement, the
Project Documents and any Additional Project Document or any documentation
evidencing the Subordinated Debt including:


 


(i)                        any Change
Orders or any written notices or communications related thereto;


 


(ii)                     any written
notice alleging any breach or default thereunder; and


 


(iii)                  any written
notice regarding, or request for consent to, any assignment, termination,
modification, waiver or variation thereof.


 


(h)         Design-Build
Agreement Notice. Within two (2) days following receipt thereof, the
Borrower shall deliver to the Administrative Agent any monthly or other
periodic report provided to the Borrower under the Design-Build Agreement,
which shall be subject to review by the Independent Engineer.


 


(i)             ERISA
Event. As soon as possible and in any event within five (5) days after
the Borrower knows, or has reason to know, that any of the events described
below has occurred, a duly executed certificate of an Authorized Officer of the
Borrower setting forth the details of each such event and the action that the
Borrower proposes to take with respect thereto, together with a copy of any
notice or filing from the PBGC,


 


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Internal Revenue
Service or Department of Labor or that may be required by the PBGC or
other U.S. Governmental Authority with respect to each such event:


 


(i)                        any
Termination Event with respect to any Plan or a Multiemployer Plan has occurred
or will occur that could reasonably be expected to result in any liability to
the Borrower;


 


(ii)                     any condition
exists with respect to a Plan that presents a material risk of termination of a
Plan (other than a standard termination under Section 4041(b) of
ERISA) or imposition of an excise tax or other material liability on the
Borrower;


 


(iii)                  an application
has been filed for a waiver of the minimum funding standard under Section 412
of the Code or Section 302 of ERISA under any Plan;


 


(iv)                 with respect to
any Plan or any other employee benefit plan subject to ERISA, the Borrower or
any Plan fiduciary has engaged in a “prohibited transaction,” as defined in Section 4975
of the Code or as described in Section 406 of ERISA, that is not exempt
under Section 4975 of the Code and Section 408 of ERISA that could
reasonably be expected to result in a material liability to the Borrower;


 


(v)                    there exists
any Unfunded Benefit Liabilities under any Plan;


 


(vi)                 any condition
exists with respect to a Multiemployer Plan that presents a risk of a partial
or complete withdrawal (as described in Section 4203 or 4205 of
ERISA) from a Multiemployer Plan that could reasonably be expected to result in
any liability to the Borrower;


 


(vii)              a “default” (as
defined in Section 4219(c)(5) of ERISA) occurs with respect to
payments to a Multiemployer Plan and such default could reasonably be expected
to result in any liability to the Borrower;


 


(viii)           a Multiemployer Plan is
in “reorganization” (as defined in Section 418 of the Code or Section 4241
of ERISA) or is “insolvent” (as defined in Section 4245 of ERISA);


 


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(ix)                   the Borrower
and/or any ERISA Affiliate has incurred any potential withdrawal liability (as
defined in accordance with Title IV of ERISA); or


 


(x)                      there is an
action brought against the Borrower or any ERISA Affiliate under Section 502
of ERISA with respect to its failure to comply with Section 515 of ERISA
with respect to any Plan or any other employee benefit plan subject to ERISA.


 


(j)             Notice
of PBGC Demand Letter. As soon as possible and in any event within five (5) days
after the receipt by the Borrower of a demand letter from the PBGC notifying
the Borrower of its final decision finding liability and the date by which such
liability must be paid, a copy of such letter, together with a duly executed
certificate of the president or chief financial officer of the Borrower setting
forth the action the Borrower proposes to take with respect thereto.


 


(k)          Notice
of Environmental Event. Promptly and in any event within five (5) days
after the existence of any of the following conditions, a duly executed
certificate of an Authorized Officer of the Borrower specifying in detail the
nature of such condition and, if applicable, the Borrower’s proposed response
thereto:


 


(i)                        receipt by
the Borrower of any written communication from a Governmental Authority or any
written communication from any other Person (other than a privileged
communication from legal counsel to the Borrower) or other source of written
information, including reports prepared by the Borrower, that alleges or
indicates that the Borrower or an Environmental Affiliate is not in compliance
in all material respects with applicable Environmental Laws or Environmental
Approvals and such alleged noncompliance could reasonably be expected to form the
basis of an Environmental Claim against the Borrower;


 


(ii)                     the Borrower
obtains knowledge that there exists any Environmental Claim pending or
threatened in writing against the Borrower or an Environmental Affiliate;


 


(iii)                  the Borrower
obtains knowledge of any release, threatened release, emission, discharge or
disposal of any Material of Environmental Concern or obtains knowledge of any
material non-compliance with any Environmental Law that, in either case, could
reasonably be expected to form the basis of an Environmental Claim against
the Borrower or any Environmental Affiliate; or


 


86

















 


(iv)                 any Removal,
Remedial or Response action taken, or required to be taken, by the Borrower or
any other person in response to any Material of Environmental Concern in, at,
on or under, a part of or about the Borrower’s properties or any other
property or any notice, claim or other information that the Borrower might be
subject to an Environmental Claim.


 


(l)             Materials
of Environmental Concern. The Borrower will maintain and make available for
inspection by the Administrative Agent, the Consultants and, if an Event of
Default has occurred and is continuing, the Lenders, and each of their
respective agents and employees, on reasonable notice during regular business
hours, accurate and complete records of all non-privileged correspondence,
investigations, studies, sampling and testing conducted, and any and all
remedial actions taken, by the Borrower or, to the best of the Borrower’s
knowledge and to the extent obtained by the Borrower, by any Governmental
Authority or other Person in respect of Materials of Environmental Concern that
could reasonably be expected to form the basis of an Environmental Claim
on or affecting the Project.


 


(m)       Deferred
Approvals. Promptly after receipt thereof, copies of each Deferred Approval
obtained by the Borrower, together with such documents relating thereto as any
Lender may request through the Administrative Agent, certified as true,
complete and correct by an Authorized Officer of the Borrower.


 


(n)         Borrowing
Base Certificate. As soon as available, but not later than fifteen
(15) days after the end of each calendar month, the Borrower shall deliver
to the Administrative Agent a Borrowing Base Certificate as of the last Business
Day of the immediately preceding calendar month.


 


(o)         Operating
Statements. Within forty-five (45) days after the end of each Fiscal
Quarter and concurrently with the delivery of the annual financial statements
referred to in Section 7.03(b) (Reporting
Requirements – Annual Financial Statements), the Borrower shall
furnish to the Administrative Agent an Operating Statement regarding the
operation and performance of the Project for each monthly, quarterly and, in
the case of the last quarterly Operating Statement for each year, annual period
substantially in the form of Exhibit L. Such Operating
Statements shall contain (i) line items corresponding to each Operating
Budget Category of the then current Operating Budget showing in reasonable
detail by Operating Budget Category all actual expenses related to the
operation and maintenance of the Project compared to the budgeted expenses for
each such Operating Budget Category for such period, (ii) information
showing the amount of ethanol and other Products produced by the Project during
such period and (iii) information showing (A) the amount of ethanol
sold by the Borrower from the Project to  pursuant to
the Ethanol Marketing Agreement, (B) the amount of 


 


87

















 


Distillers Grains
sold by the Borrower from the Project pursuant to the Co-Product Marketing
Agreement, and (C) the amount, if any, of other sales of ethanol and/or
Distillers Grains sold by the Borrower from the Project, together with an
explanation of any such sale and identification of the purchaser, and (D) the
amount, if any, of other Products sold by the Borrower from the Project,
together with an explanation of any such sale and identification of the
purchaser. The Operating Statements shall be certified as complete and correct
by an Authorized Officer of the Borrower, who also shall certify that, the
expenses reflected therein for the year to date and for each month or quarter
therein did not exceed the provision for such period contained in the Operating
Budget then in effect by more than ten percent (10%) or, if any of such
certifications cannot be given, stating in reasonable detail the necessary
qualifications to such certifications.


 


(p)         Other
Information. Other information reasonably requested by the Administrative
Agent or any Lender (through the Administrative Agent).


 


ARTICLE VIII


 


DEFAULT AND
ENFORCEMENT


 


Section 8.01             Events of Default.
Each of the following events or occurrences described in this Section 8.01 shall constitute
an Event of Default.


 


(a)          Nonpayment.
(i) The Borrower fails to pay any amount of principal of any Loan when the
same becomes due and payable or (ii) the Borrower fails to pay any
interest on any Loan or any fee or other Obligation or amount payable hereunder
or under any other Financing Document within three (3) Business Days after
the same becomes due and payable.


 


(b)         Breach
of Warranty. Any representation or warranty of any Loan Party, any Project
Party or any party (other than a Senior Secured Party) to the Intercreditor
Agreement or Accounts Agreement made or deemed to be repeated in any Financing
Document is incorrect or misleading in any material respect when made or deemed
made.


 


(c)          Non-Performance
of Certain Covenants and Obligations. (i) The Borrower defaults in the
due performance and observance of any of its obligations under Sections 7.01(d)(i),
(ii), (iv)(A) and (v) (Affirmative Covenants –
Construction and Completion of Aberdeen II Plant; Maintenance of Properties),  Section 7.01(g) (Affirmative Covenants – Use of Proceeds and Cash Flow), Section 7.01(h) (Affirmative Covenants – Insurance), Section 7.01(r)
(Affirmative Covenants – First Priority Ranking),
Section 7.01(w) (Affirmative Covenants –
Debt Service Reserve), Section 7.02 


 


88

















 


(Negative Covenants), Section 7.03(e) (Reporting Requirements – Notice of Default or Event of Default)
and Section 7.03(f) (Reporting Requirements
-Notice of Other Events) of this Agreement, or Section 5.02
(Limitation of Liens) or Section 5.07
(Name; Jurisdiction of Organization) of
the Security Agreement;  (ii) the
Borrower or any Pledgor defaults in the due performance and observance of any
of its obligations under Section 5.02 (Limitation of Liens),
Section 5.04 (No Sale of Collateral),
Section 5.05 (No Impairment of Security),
Section 5.06 (Filing of Bankruptcy
Proceedings) or Section 5.09 (Name;
Jurisdiction of Organization) of the Pledge Agreement; or (iii) any
party (other than a Senior Secured Party) to the Accounts Agreement or the
Intercreditor Agreement defaults in the due performance and observance of any
of its obligations under such agreements.


 


(d)         Non-Performance
of Other Covenants and Obligations. Any Loan Party, any Project Party or
any party (other than a Senior Secured Party) to the Intercreditor Agreement or
the Accounts Agreement defaults in the due performance and observance of any
covenant or agreement (other than covenants and agreements referred to in Section 8.01(a) (Events of Default – Nonpayment) or Section 8.01(c) (Events of Default – Non-Performance of Certain Covenants and
Obligations)) contained in any Financing Document, and such
default continues unremedied for a period of thirty (30) days after the
Borrower obtains, or should have obtained, knowledge thereof.


 


(e)          Conversion.
The Conversion Date does not occur on or prior to the Conversion Date Certain.


 


(f)            Cross
Defaults. Any one of the following occurs with respect to the Borrower, any
Pledgor, or any Project Party with respect to Indebtedness (other than the
Obligations and any Indebtedness of any Pledgor arising solely as a result of a
Lien on its assets to secure the debt of any of its Subsidiaries other than the
Borrower):


 


(i)                        a default
occurs in the payment when due (subject to any applicable grace period and
notice requirements), whether by acceleration or otherwise, of such
Indebtedness; or


 


(ii)                     such Person
fails to observe or perform (subject to any applicable grace periods and
notice requirements) any other agreement or condition relating to any such
Indebtedness or contained in any instrument or agreement evidencing, securing
or relating thereto, or any other event occurs, the effect of which default or
other event is to cause, or to permit the holder or holders of such
Indebtedness or the beneficiary or beneficiaries of any Guarantee (or a trustee
or agent on behalf of such holder or holders or beneficiary or beneficiaries)
to cause, with the giving of notice if


 


89
















 


required, such Indebtedness to be demanded or to become due or to be
repurchased, prepaid, defeased or redeemed (automatically or otherwise), or an
offer to repurchase, prepay, defease or redeem such Indebtedness to be made,
prior to its stated maturity, or such Guarantee to become payable or cash
collateral in respect thereof to be demanded; and


 


(A)                              in the case of Section 8.01(f)(i) or
Section 8.01(f)(ii) with respect the Borrower or any Pledgor,
with respect to Indebtedness in an amount greater than or equal to one million
Dollars ($1,000,000) in the aggregate; or


 


(B)                                in the case of Section 8.01(f)(i) or
Section 8.01(f)(ii) with respect to any other Project Party,
has resulted in or could reasonably be expected to result in a Material Adverse
Effect; provided, that such occurrence shall not constitute an Event of
Default with respect to any such other Project Party (other than a Project
Party to the Design-Build Agreement, any License Agreement, the Interconnect
Agreement, the Huron Ground Lease, the Huron Grain Elevator Lease or the
Aberdeen Grain Elevator Lease) if an agreement replacing each Project Document
to which such Project Party is a party, in form and substance, and with a
counterparty, reasonably satisfactory to the Required Lenders, is entered into
(together with all applicable Ancillary Documents) within sixty (60) days
thereof.


 


(g)         Judgments. (i) Any judgment or
order that has or could reasonably be expected to have a Material Adverse
Effect is rendered against any Loan Party or any Project Party; provided,
that such occurrence shall not constitute an Event of Default with respect to
any Project Party (other than a Project Party to the Design-Build Agreement,
any License Agreement, the Interconnect Agreement, the Huron Ground Lease, the
Huron Grain Elevator Lease or the Aberdeen Grain Elevator Lease) if an
agreement replacing each Project Document to which such Project Party is a
party, in form and substance, and with a counterparty, reasonably
satisfactory to the Required Lenders, is entered into (together with all
applicable Ancillary Documents) within sixty (60) days thereof; or (ii) any
judgment or order is rendered against the Borrower or any Pledgor in an amount
in excess of one million Dollars ($1,000,000) in the aggregate.


 


(h)         ERISA Events. (i) Any Termination
Event occurs, (ii) any Plan incurs an “accumulated funding deficiency” (as
defined in Section 412 of the Code or Section 302 of ERISA), (iii) the
Borrower engages in a transaction with respect to any Plan or any 


 


90

















 


other employee benefit plan subject to ERISA that is prohibited under Section 4975
of the Code or Section 406 of ERISA, (iv) the Borrower or any of its
ERISA Affiliates fails to pay when due any amount it has become liable to pay
to the PBGC, any Plan or a trust established under Title IV of ERISA, (v) a
condition exists by reason of which the PBGC would be entitled to obtain a
decree adjudicating that a Plan must be terminated or have a trustee appointed
to administer it, (vi) the Borrower or any of its ERISA Affiliates suffers
a partial or complete withdrawal from a Multiemployer Plan or is in “default”
(as defined in Section 4219(c)(5) of ERISA) with respect to payments
to a Multiemployer Plan, (vii) a proceeding is instituted against the
Borrower to enforce Section 515 of ERISA, (viii) the aggregate amount
of the then “current liability” (as defined in Section 412(l)(7) of
the Code, as amended) of all accrued benefits under such Plan or Plans exceeds
the then current value of the assets allocable to such benefits by more than
five hundred thousand Dollars ($500,000) at such time, or (ix) any other
event or condition occurs or exists with respect to any Plan that would subject
the Borrower to any material tax, material penalty or other material liability.


 


(i)             Bankruptcy, Insolvency. The
Borrower, any Pledgor or any Project Party:


 


(i)                           generally
fails to pay, or admits in writing its inability or unwillingness to pay, debts
as they become due;


 


(ii)                        applies
for, consents to, or acquiesces in, the appointment of a trustee, receiver,
sequestrator or other custodian for such Person or a substantial portion of its
property, or makes a general assignment for the benefit of creditors;


 


(iii)                     in the
absence of such application, consent or acquiescence, permits or suffers to
exist the appointment of a trustee, receiver, sequestrator or other custodian
for such Person or for a substantial part of its property, and such
trustee, receiver, sequestrator or other custodian is not discharged within
sixty (60) days; provided that nothing in the Financing Documents
shall prohibit or restrict any right any Senior Secured Party may have
under applicable Law to appear in any court conducting any relevant proceeding
during such sixty (60) day period to preserve, protect and defend its
rights under the Financing Documents (and such Person shall not object to any
such appearance);


 


(iv)                    permit or
suffer to exist the commencement of any bankruptcy, reorganization, debt
arrangement or other case or proceeding under any bankruptcy or insolvency law,
or any dissolution, winding up or liquidation proceeding, in respect of such
Person 


 


91

















 


and, if any such case or proceeding is not commenced by such Person,
such case or proceeding is consented to or acquiesced in by such Person or
results in the entry of an order for relief or remains for sixty (60) days
undismissed; provided that nothing in the Financing Documents shall
prohibit or restrict any right any Senior Secured Party may have under
applicable Law to appear in any court conducting any such case or proceeding
during such sixty (60) day period to preserve, protect and defend its
rights under the Financing Documents (and such Person shall not object to any
such appearance);


 


(v)                       takes any
action authorizing, or in furtherance of, any of the foregoing; or


 


(vi)                    ceases to be
Solvent;


 


and with
respect to any Project Party, such occurrence has resulted in or could
reasonably be expected to result in a Material Adverse Effect; provided,
that such occurrence shall not constitute an Event of Default with respect to
any Project Party (other than a Project Party to the Design-Build Agreement,
any License Agreement, the Interconnect Agreement, the Huron Ground Lease, the
Huron Grain Elevator Lease or the Aberdeen Grain Elevator Lease) if an
agreement replacing each Project Document to which such Project Party is a
party, in form and substance, and with a counterparty, reasonably
satisfactory to the Required Lenders, is entered into (together with all
applicable Ancillary Documents) within sixty (60) days thereof.


 


(j)             Project Document Defaults; Termination.


 


(i)                           The
Borrower or any other Project Party shall be in material breach of or otherwise
in material default under any Project Document, or the Borrower or any
counterparty thereof to any SNDA shall be in material breach of or otherwise in
material default under such SNDA, and such breach or default has continued (x)
in the case of the Huron Ground Lease, for more than thirty (30) days, or (y)
in the case of any other Project Document or any SNDA, beyond any applicable
grace period expressly provided for in such Project Document (or, if no such
cure period is provided, thirty (30) days); provided, that any such
breach or default by any Project Party under any Project Document (other than
the Design-Build Agreement, the License Agreements, the Interconnect Agreement,
the Huron Ground Lease, the Huron Grain Elevator Lease and the Aberdeen Grain
Elevator Lease) shall not 


 


92

















 


constitute an Event of Default if an agreement replacing such Project
Document, in form and substance, and with a counterparty, reasonably
satisfactory to the Required Lenders, is entered into (together with all
applicable Ancillary Documents) within sixty (60) days thereof.


 


(ii)                        Any
Project Document ceases to be in full force and effect prior to its scheduled
expiration, is repudiated, or its enforceability is challenged or disaffirmed
by or on behalf of the Borrower or any Project Party thereto, or any SNDA
ceases to be in full force and effect prior to its scheduled expiration, is
repudiated, or its enforceability is challenged or disaffirmed by or on behalf
of the Borrower or any counterparty thereof to such SNDA provided, that
such occurrence shall not constitute an Event of Default with respect to any
Project Document (other than the Design-Build Agreement, the License
Agreements, the Interconnect Agreement, the Huron Ground Lease, the Huron Grain
Elevator Lease and the Aberdeen Grain Elevator Lease) if an agreement replacing
such Project Document, in form and substance, and with a counterparty,
reasonably satisfactory to the Required Lenders, is entered into (together with
all applicable Ancillary Documents) within sixty (60) days thereof.


 


(k)          Governmental Approvals. The Borrower
fails to obtain, renew, maintain or comply in all material respects with any
Necessary Project Approval or any Necessary Project Approval is revoked,
canceled, terminated, withdrawn or otherwise ceases to be in full force and
effect, or any Necessary Project Approval is adversely modified without the
consent of the Required Lenders, or a proceeding is commenced which could
reasonably produce any such result.


 


(l)             Unenforceability of Documentation. At
any time after the execution and delivery thereof:


 


(i)                           any
material provision of any Financing Document shall cease to be in full force
and effect;


 


(ii)                        any
Financing Document is revoked or terminated, becomes unlawful or is declared
null and void by a Governmental Authority of competent jurisdiction;


 


(iii)                     any Financing
Document becomes unenforceable, is repudiated or the enforceability thereof is
contested or disaffirmed by or on


 


93

















 


behalf of any party thereto other than the Senior Secured Parties; and


 


(iv)                    any Liens
against any of the Collateral cease to be a first-priority, perfected security
interest in favor of the Collateral Agent, or the enforceability thereof is contested
by any Loan Party or any party (other than a Senior Secured Party) to the
Intercreditor Agreement, or any of the Security Documents ceases to provide the
security intended to be created thereby with the priority purported to be
created thereby.


 


(m)       Environmental Matters. (i) (A) Any
Environmental Claim has occurred with respect to the Borrower, the Project or
any Environmental Affiliate, (B) any release, Threat of Release, emission,
discharge or disposal of any Material of Environmental Concern occurs, and such
event could reasonably be expected to form the basis of an Environmental
Claim against the Borrower, the Project or any Environmental Affiliate, or (C) any
violation or alleged violation of any Environmental Law or Environmental
Approval occurs that would reasonably result in an Environmental Claim against
the Borrower or the Project or, to the extent the Borrower may have
liability, any Environmental Affiliate that, in the case of any of Section 8.01(m)(i)(A),
(B) or (C), could reasonably be expected to result in
liability for the Borrower in an amount greater than two hundred fifty thousand
Dollars ($250,000) for any single claim or five hundred fifty thousand Dollars
($500,000) for all such claims during any twelve (12) month period or could
otherwise reasonably be expected to result in a Material Adverse Effect; provided
that such an occurrence shall not constitute an Event of Default if (x) the
estimated liability associated therewith is reasonably expected to be less than
one million Dollars ($1,000,000) net of any Insurance Proceeds that have
actually been paid to, and received by, the Borrower or the Collateral Agent as
loss payee in connection therewith, or as reduced by taking into account any
amounts that the Borrower demonstrates, to the reasonable satisfaction of the
Administrative Agent, within ten (10) Business Days following such
occurrence, will be available as and when needed, without conditions, from
sources (including Insurance Proceeds and documented voluntary equity contributions
made to the Borrower for the purpose of covering such costs) other than Cash
Flow or Loan proceeds, to cover such costs (and such occurrence could not
otherwise reasonably be expected to result in a Material Adverse Effect) and,
within ninety (90) days of such occurrence, such liability is reduced below the
threshold set forth above this proviso from sources other than Cash Flow or
Loan proceeds, (y) there have been no more than two (2) occurrences
of the nature described in this Section 8.01(m) during the
immediately preceding twelve (12) month period and (z) during such cure
period, the Borrower undertakes any remedial or responsive actions then
required to be undertaken under applicable Law;


 


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(ii)                        the
Borrower or any Environmental Affiliate fails to obtain any Environmental
Approvals necessary for the management, use, control, ownership, or operation
of its business, property or assets, and (A) the absence of such
Environmental Approval could reasonably be expected to have a Material Adverse
Effect or (B) any such Environmental Approval is the subject of an
Environmental Claim, revoked, terminated, or otherwise ceases to be in full
force and effect.


 


(n)         Loss of Collateral. Any portion of the
Collateral (other than a portion that is immaterial) is damaged, seized or
appropriated; provided that such an occurrence shall not constitute an
Event of Default if the Borrower repairs, replaces, rebuilds or refurbishes
such damaged, seized or appropriated Collateral (i) in accordance with Section 12.01(d) of
the Accounts Agreement, or (ii) otherwise with the approval of the
Required Lenders, in consultation with the Independent Engineer (provided
that such approval is obtained within sixty (60) days thereof).


 


(o)         Event of Abandonment. An Event of
Abandonment occurs.


 


(p)         Taking or Total Loss. An Event of
Taking with respect to all or a material portion of the Project or any Equity
Interests in the Borrower occurs, or an Event of Total Loss occurs.


 


(q)         Change of Control. A Change of Control
occurs.


 


Section 8.02             Action Upon
Bankruptcy. If any Event of Default described in Section 8.01(i) (Events of Default – Bankruptcy, Insolvency)
occurs with respect to the Borrower, any outstanding Construction Loan
Commitments, Term Loan Commitments or Working Capital Loan Commitments (if not
theretofore terminated) shall automatically terminate. The outstanding
principal amount of the outstanding Loans and all other Obligations shall
automatically be and become immediately due and payable, without notice, demand
or further act of the Administrative Agent, the Collateral Agent or any other
Senior Secured Party.


 


Section 8.03             Action Upon Other
Event of Default. (a)  If any other Event of Default occurs and is
continuing for any reason, whether voluntary or involuntary, the Administrative
Agent may, or upon the direction of the Required Lenders shall, by written
notice to the Borrower, declare all or any portion of the outstanding principal
amount of the Loans and other Obligations to be due and payable and/or any
outstanding Construction Loan Commitments, Term Loan Commitments or Working
Capital Loan Commitments (if not theretofore terminated) to be terminated,
whereupon the full unpaid amount of such Loans and other Obligations that has
been declared due and payable shall 


 


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be and become
immediately due and payable, without further notice, demand or presentment
and/or, as the case may be, any outstanding Construction Loan Commitments
or Term Loan Commitments shall terminate. During the continuance of an Event of
Default, the Administrative Agent may, or upon the direction of the Required
Lenders shall, instruct the Collateral Agent to exercise any or all remedies
provided for under this Agreement or the other Financing Documents.


 


(b)         Any declaration made pursuant to Section 8.03(a) may,
should the Required Lenders in their sole and absolute discretion so elect, be
rescinded by written notice to the Borrower at any time after the principal of
the Loans has become due and payable, but before any judgment or decree for the
payment of the monies so due, or any part thereof, has been entered; provided
that no such rescission or annulment shall extend to or affect any subsequent
Event of Default or impair any right consequent thereon.


 


Section 8.04             Application of
Proceeds. Any moneys received by the Collateral Agent after the occurrence
and during the continuance of an Event of Default may be held by the
Collateral Agent as Collateral and/or, at the direction of the Administrative
Agent, may be applied in accordance with Section 4.2 of the
Intercreditor Agreement.


 


ARTICLE IX



THE AGENTS


 


Section 9.01             Appointment and
Authority. (a) Each Lender (in its capacity as Lender and on behalf of
itself and its Affiliates as a potential Interest Rate Protection Provider)
hereby irrevocably appoints, designates and authorizes each Agent to take such
action on its behalf under the provisions of this Agreement and each other
Financing Document and to exercise such powers and perform such duties as
are expressly delegated to such Agent by the terms of this Agreement or any
other Financing Document, together with such actions as are reasonably
incidental thereto. The provisions of this ARTICLE IX are solely
for the benefit of the Agents and the Lenders, and neither the Borrower nor any
other Person shall have rights as a third party beneficiary of any of such
provisions.


 


(b)         Each Lender (in its capacity as Lender and on
behalf of itself and its Affiliates as a potential Interest Rate Protection
Provider) hereby appoints WestLB as its Administrative Agent under and for
purposes of each Financing Document to which it is a party. WestLB hereby
accepts this appointment and agrees to act as the Administrative Agent for the
Lenders in accordance with the terms of this Agreement. Each Lender appoints
and authorizes the Administrative Agent to act on behalf of such Lender under 


 


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each Financing Document to which it is a party and, in the absence of
other written instructions from the Required Lenders received from time to time
by the Administrative Agent (with respect to which the Administrative Agent
agrees that it will comply, except as otherwise provided in this Section 9.01 or as otherwise
advised by counsel), to exercise such powers hereunder and thereunder as are
specifically delegated to or required of the Administrative Agent by the terms
hereof and thereof, together with such powers as may be reasonably incidental
thereto. Notwithstanding any provision to the contrary contained elsewhere in
any Financing Document, the Administrative Agent shall not have any duties or
responsibilities except those expressly set forth herein, nor shall the
Administrative Agent have or be deemed to have any fiduciary relationship with
any Lender, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into any Financing Document or
otherwise exist against the Administrative Agent. Without limiting the
generality of the foregoing sentence, the use of the term “agent” in this
Agreement with reference to the Administrative Agent is not intended to connote
any fiduciary or other implied (or express) obligations arising under agency
doctrine of any applicable Law. Instead, such term is used merely as a matter
of market custom, and is intended to create or reflect only an administrative
relationship between independent contracting parties.


 


(c)          Each Lender (in its capacity as Lender and on
behalf of itself and its Affiliates as a potential Interest Rate Protection
Provider) hereby appoints WestLB as its Collateral Agent under and for purposes
of each Financing Document to which it is a party. WestLB hereby accepts this
appointment and agrees to act as the Collateral Agent for the Senior Secured
Parties in accordance with the terms of this Agreement. Each of the Lenders
hereby irrevocably appoints and authorizes the Collateral Agent to act as the
agent of such Lender for purposes of acquiring, holding and enforcing any and
all Liens on Collateral granted by any of the Borrower or the Pledgors to the
Collateral Agent in order to secure any of the Obligations, together with such
powers and discretion as are reasonably incidental thereto. In this connection
any co-agents, sub-agents and attorneys-in-fact appointed by the Collateral
Agent pursuant to Section 9.05 (Delegation of Duties)
for purposes of holding or enforcing any Lien on the Collateral (or any portion
thereof) granted under the Security Documents, or for exercising any rights and
remedies thereunder at the direction of the Collateral Agent, as the case may be,
shall be entitled to the benefits of all provisions of this ARTICLE IX
and ARTICLE X (Miscellaneous Provisions)
(including Section 10.08 (Indemnification by the
Borrower), as though such co-agents, sub-agents and
attorneys-in-fact were the Collateral Agent under the Financing Documents. Notwithstanding
any provision to the contrary contained elsewhere in any Financing Document,
the Collateral Agent shall not have any duties or responsibilities except those
expressly set forth herein or in the other Financing Documents to which the
Collateral Agent is party, nor shall the Collateral Agent have or be deemed to
have any fiduciary relationship with the Borrower or any Senior Secured 


 


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Party, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into any Financing Document or
otherwise exist against the Collateral Agent. Each of the Collateral Agent and
the Administrative Agent shall have the right at any time to seek instructions
from the Required Lenders or, in the case of the Collateral Agent, the
Administrative Agent as to any discretionary actions contemplated hereby or in
any other Financing Document or if this Agreement or any other Financing
Document is silent as to any matter requiring action by the Collateral Agent
and shall be fully protected in accordance with Section 9.03 (Exculpatory Provisions) and Section 9.04 (Reliance by Agents) when acting upon such instructions. Any
action taken by the Collateral Agent or the Administrative Agent under or in
relation to this Agreement and any other Financing Document to which it is
party with requisite authority or on the basis of appropriate instructions
received from the Lenders (or otherwise as duly authorized) shall be binding on
each Lender and, in the case of the Collateral Agent, each Interest Rate
Protection Provider. Without limiting the generality of the foregoing sentence,
the use of the term “agent” in this Agreement with reference to the Collateral
Agent is not intended to connote any fiduciary or other implied (or express)
obligations arising under agency doctrine of any applicable Law. Instead, such
term is used merely as a matter of market custom, and is intended to create or
reflect only an administrative relationship between independent contracting
parties.


 


Section 9.02             Rights as a Lender
or Interest Rate Protection Provider. Each Person serving as Agent
hereunder or under any other Financing Document shall have the same rights and
powers in its capacity as a Lender or Interest Rate Protection Provider, as the
case may be, as any other Lender or Interest Rate Protection Provider, as
the case may be, and may exercise the same as though it were not an
Agent. Each such Person and its Affiliates may accept deposits from, lend
money to, act as the financial advisor for or in any other advisory capacity
for and generally engage in any kind of business with the Borrower or
Affiliates of the Borrower as if such Person were not an Agent hereunder and
without any duty to account therefor to the Lenders, any other Agent or the
Interest Rate Protection Provider.


 


Section 9.03             Exculpatory
Provisions. (a) No Agent nor any of its respective directors,
officers, employees or agents shall have any duties or obligations except those
expressly set forth herein and in the other Financing Documents to which it is
party. Without limiting the generality of the foregoing, no Agent shall:


 


(i)                           be
subject to any fiduciary or other implied duties, regardless of whether a
Default or Event of Default has occurred and is continuing;


 


(ii)                        have any
duty to take any discretionary action or exercise any discretionary powers
except discretionary rights and powers 


 


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expressly contemplated hereby or by the other Financing Documents to
which it is party that such Agent is required to exercise as directed in writing
by the Required Lenders (or such other number or percentage of the Lenders as
shall be expressly provided for herein or in such other Financing Documents); provided that such Agent shall
not be required to take any action that, in its opinion or the opinion of its
counsel, may expose the Agent to liability or that is contrary to any
Financing Document or applicable Law; and provided further that no such
direction given to such Agent that in the sole judgement of such Agent imposes,
or purports to impose, or might reasonably be expected to impose upon such
Agent any obligation or liability not set forth in this Agreement or arising
under this Agreement or other Financing Documents to which it is party shall be
binding upon such Agent unless such Agent, in its sole discretion, accepts such
direction;


 


(iii)                     except as
expressly set forth herein and in the other Financing Documents to which it is
party, have any duty to disclose, or be liable for any failure to disclose, any
information relating to the Borrower or any of its Affiliates that is
communicated to or obtained by the Person serving as an Agent or any of its
Affiliates in any capacity; or


 


(iv)                    be required to
institute any legal proceedings arising out of or in connection with, or
otherwise take steps to enforce, this Agreement or any other Financing Document
other than on the instructions of the Lenders.


 


(b)         No Agent nor any of its respective directors,
officers, employees or agents shall be liable for any action taken or not taken
by it (i) with the prior written consent or at the request of the Required
Lenders (or such other number or percentage of the Lenders as may be
necessary, or as such Agent may reasonably believe in good faith to be
necessary, under the circumstances as provided in Section 9.01 (Appointment and Authority)),
(ii) in connection with any amendment, consent, approval or waiver which
it is permitted under the Financing Documents to enter into, agree to or grant
or (iii) in the absence of its own gross negligence or willful misconduct.
Each Agent shall be deemed not to have knowledge of any Default or Event of
Default unless and until notice describing such Default or Event of Default is
given to such Agent in writing by the Borrower or a Lender.


 


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(c)          No Agent nor any of its respective directors,
officers, employees or agents shall be responsible for or have any duty to
ascertain or inquire into (i) any statement, warranty or representation
made in or in connection with this Agreement or any other Financing Document, (ii) the
contents of any certificate, report, opinion or other document delivered
hereunder or thereunder or in connection herewith or therewith, (iii) the
performance or observance of any of the covenants, agreements or other terms or
conditions set forth herein or therein 
(including the use of proceeds) or the occurrence or continuance of any
Default or Event of Default, (iv) the execution, validity, enforceability,
effectiveness, genuineness or admissibility into evidence of this Agreement,
any other Financing Document or any other agreement, instrument or document, or
the creation, perfection or priority of any Lien or security interest created
or purported to be created by any Security Document (or title to or rights in
any Collateral under any Security Document), or (v) the satisfaction of
any condition set forth in ARTICLE VI (Conditions
Precedent) or elsewhere herein, other than to confirm receipt of
items expressly required to be delivered to any such Agent.


 


(d)         Each Agent may, unless and until it shall have
received directions from the Lenders, take such action or refrain from taking
such action in respect of a Default or Event of Default of which such Agent has
been advised in writing by the Lenders as it shall reasonably deem advisable in
the best interests of the Lenders (but shall not be obligated to do so).


 


(e)          The Collateral Agent may refrain from
acting in accordance with any instructions of the Lenders to institute any
legal proceedings arising out of or in connection with this Agreement or any
other Financing Document until it has been indemnified and/or secured to its
satisfaction against any and all costs, expenses or liabilities (including
legal fees and expenses) which it would or might reasonably be expected to
incur as a result.


 


(f)            No Agent shall be required to advance or
expend any funds or otherwise incur any financial liability in the performance
of its duties or the exercise of its powers or rights hereunder or under any
Financing Document to which it is party unless it has been provided with
security or indemnity reasonably satisfactory to it against any and all
liability or expense which may be incurred by it by reason of taking or
continuing to take such action.


 


Section 9.04             Reliance by Agents.
Each Agent shall be entitled to rely upon, and shall not (nor shall any of its
directors, officers, employees or agents) incur any liability for relying upon,
any notice, request, certificate, consent, statement, instrument, document or
other writing (including any electronic message, internet or intranet website
posting or other distribution) reasonably believed by it to be genuine and to
have been signed, sent or otherwise authenticated by the proper Person. Each
Agent also may rely 


 


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upon any
statement made to it orally or by telephone and reasonably believed by it to
have been made by the proper Person, and shall not incur any liability for
relying thereon. In determining compliance with any condition hereunder to the
making of a Loan that by its terms must be fulfilled to the satisfaction of a
Lender, each Agent may presume that such condition is satisfactory to such
Lender unless such Agent shall have received written notice to the contrary
from such Lender prior to the making of such Loan. Each Agent may consult
with legal counsel (who may be counsel for the Borrower), independent
accountants and other experts reasonably selected by it, and shall not be
liable for any action taken or not taken by it in accordance with the advice of
any such counsel, accountants or experts. Each Agent may at any time and
from time to time solicit written instructions in the form of directions
from the Required Lenders or an order of a court of competent jurisdiction as
to any action that it may be requested or required to take, or that it may propose
to take, in the performance of any of its obligations under this Agreement or
any other Financing Document to which it is party.


 


Section 9.05             Delegation of
Duties. Each Agent may perform any and all of its duties and
exercise any and all its rights and powers hereunder or under any other
Financing Document by or through any one or more sub-agents appointed by such
Agent. Absent gross negligence or willful misconduct in selecting a sub-agent,
no Agent shall be responsible for any action of, or failure to act by, any
sub-agent that has been approved by the Required Lenders. Each Agent and any
such sub-agent may perform any and all of its duties and exercise its
rights and powers by or through their respective Related Parties. The
exculpatory provisions of this ARTICLE IX shall apply to any such
sub-agent and to the Related Parties of such Agent and any such sub-agent, and
shall apply to their respective activities in connection with their acting as
Agent.


 


Section 9.06             Resignation or
Removal of Agent. (a)  Any Agent may resign from the performance
of all its functions and duties hereunder and/or under the other Financing
Documents at any time by giving thirty (30) days’
prior notice to the Borrower and the Lenders. Any Agent may be removed at
any time by the Required Lenders. Such resignation or removal shall take effect
upon the appointment of a successor Agent, in accordance with this Section 9.06.


 


(b)         Upon any notice of resignation by any Agent or
upon the removal of any Agent by the Required Lenders, the Required Lenders
shall appoint a successor Agent hereunder and under each other Financing
Document who shall be a commercial bank having a combined capital and surplus
of at least two hundred fifty million Dollars ($250,000,000). So long as no
Event of Default has occurred and is continuing, such appointment shall be
subject to the Borrower’s approval (such approval not to be unreasonably
withheld, conditioned or delayed).


 


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(c)          If no successor Agent has been appointed by
the Required Lenders within thirty (30) days) after the date such notice
of resignation was given by such Agent or the Required Lenders elected to
remove such Agent, any Senior Secured Party may petition any court of
competent jurisdiction for the appointment of a successor Agent. Such court may thereupon,
after such notice, if any, as it may deem proper, appoint a successor
Agent, as applicable, who shall serve as Agent hereunder and under each other
Financing Document until such time, if any, as the Required Lenders appoint a
successor Agent, as provided above.


 


(d)         Upon the acceptance of a successor’s
appointment as Agent hereunder, such successor shall succeed to and become
vested with all of the rights, powers, privileges and duties of the retiring
(or removed) Agent, and the retiring (or removed) Agent shall be discharged
from all of its duties and obligations hereunder and under the other Financing
Documents. After the retirement or removal of any Agent hereunder and under the
other Financing Documents, the provisions of this ARTICLE IX shall
continue in effect for the benefit of such retiring (or removed) Agent, its sub-agents
and their respective Related Parties in respect of any actions taken or omitted
to be taken by any of them while such Agent was acting as Agent.


 


(e)          If a retiring (or removed) Agent is the
Collateral Agent, such Collateral Agent will promptly transfer any Collateral
in the possession or control of such Collateral Agent to the successor
Collateral Agent and will, subject to payment of its reasonable costs and
expenses (including counsel fees and expenses), execute and deliver such
notices, instructions and assignments as may be reasonably necessary or
desirable to transfer the rights of the Collateral Agent with respect to such
Collateral property to the successor Collateral Agent.


 


Section 9.07             No Amendment to
Duties of Agent Without Consent. No Agent shall be bound by any waiver, amendment,
supplement or modification of this Agreement or any other Financing Document
that affects its rights or duties hereunder or thereunder unless such Agent
shall have given its prior written consent, in its capacity as Agent, thereto.


 


Section 9.08             Non-Reliance on
Agent and Other Lenders. Each Lender acknowledges that it has,
independently and without reliance upon any Agent or any other Lender or any of
their Related Parties and based on such documents and information as it has
deemed appropriate, made its own credit analysis and decision to enter into
this Agreement and make its Loans. Each Lender also acknowledges that it will,
independently and without reliance upon any Agent or any other Lender or any of
their Related Parties and based on such documents and information as it shall
from time to time deem appropriate, continue to make its own decisions in
taking or not taking 


 


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action under
or based upon this Agreement, any other Financing Document or any related
agreement or any document furnished hereunder or thereunder.


 


Section 9.09             No Lead Arranger
or Bookrunner Duties. Anything herein to the contrary notwithstanding, no
lead arranger or bookrunner shall have any powers, duties or responsibilities
under this Agreement or any of the other Financing Documents, except in its
capacity, as applicable, as an Agent or a Lender hereunder.


 


Section 9.10             Collateral Agent May File
Proofs of Claim. (a) In case of the pendency of any Insolvency or
Liquidation Proceeding relative to the Borrower or the Pledgor (including any
event described in Section 8.01(i) (Events of Default – Bankruptcy, Insolvency), the
Collateral Agent (irrespective of whether the principal of any Loan shall then
be due and payable as herein expressed or by declaration or otherwise and
irrespective of whether the Collateral Agent or any other Senior Secured Party
shall have made any demand on the Borrower) shall be entitled and empowered,
but shall not be obligated, by intervention in such proceeding or otherwise:


 


(i)                           to file
and prove a claim for the whole amount of the principal and interest owing and
unpaid in respect of the Loans and all other Obligations that are owing and
unpaid and to file such other documents as may be necessary or advisable
in order to have the claims of the Senior Secured Parties (including any claim
for the reasonable compensation, expenses, disbursements and advances of the
Senior Secured Parties and their respective agents and counsel and all other
amounts due the Senior Secured Parties under Section 3.13 (Fees), Section 10.06
(Costs and Expenses) and Section 10.08
(Indemnification by the Borrower))
allowed in such judicial proceeding; and


 


(ii)                        to collect
and receive any monies or other property payable or deliverable on any such
claims and to distribute the same.


 


(b)         Any custodian, receiver, assignee, trustee,
liquidator, sequestrator or other similar official in any such judicial
proceeding is hereby authorized by each Lender to make such payments to the Collateral
Agent and, in the event that the Collateral Agent consents to the making of
such payments directly to the Lenders, to pay to the Collateral Agent any
amount due for the reasonable compensation, expenses, disbursements and
advances of the Agents and their respective agents and counsel, and any other
amounts due the Agents under Section 3.13
(Fees), Section 10.06 (Costs and Expenses) and Section 10.08 (Indemnification by the Borrower).


 


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(c)          Nothing contained herein shall be deemed to
authorize the Collateral Agent to authorize or consent to or accept or adopt on
behalf of any Lender any plan of reorganization, arrangement, adjustment or
composition affecting the Obligations or the rights of any Lender or to
authorize the Collateral Agent to vote in respect of the claim of any Lender in
any such proceeding.


 


Section 9.11             Collateral Matters.
(a)  The Lenders irrevocably authorize the Collateral Agent to release any
Lien on any property granted to or held by the Collateral Agent under any
Financing Document for the benefit of the Senior Secured Parties (i) upon
the occurrence of the Security Discharge Date, (ii) if approved,
authorized or ratified in writing in accordance with Section 10.01 (Amendments, Etc.) or (iii) as
permitted pursuant to the terms of the Financing Documents (including as
contemplated by Section 7.02(f) (Negative
Covenants — Asset Dispositions)).


 


(b)         Upon request by the Collateral Agent at any
time and from time to time, the Lenders will confirm in writing the Collateral
Agent’s authority to release its interest in particular types or items of
property pursuant to this Section 9.11.
In each case as specified in this Section 9.11,
the Collateral Agent will, at the Borrower’s expense, execute and deliver to
the Borrower or the Pledgor, as the case may be, such documents as such
Person may reasonably request to evidence the release of such item of
Collateral from the assignment and security interest granted under the Security
Documents in accordance with the terms of the Financing Documents and this Section 9.11.


 


(c)          Except for the safe custody of any Collateral
in its possession and the accounting for moneys actually received by it
hereunder or under any of the other Financing Documents to which it is party,
the Collateral Agent shall have no duty as to any Collateral, as to
ascertaining or taking action with respect to calls, conversions, exchanges,
maturities, tenders or other matters relative to any Collateral, whether or not
the Collateral Agent is deemed to have knowledge of such matters, or as to
taking of any necessary steps to preserve rights against any parties or any
other rights pertaining to any Collateral (including the filing of UCC
continuation statements). The Collateral Agent shall be deemed to have
exercised appropriate and due care in the custody and preservation of any
Collateral in its possession if such Collateral is accorded treatment
substantially equal to that which other collateral agents accord similar
property.


 


Section 9.12             Copies. Each
Agent shall give prompt notice to each Lender of each material notice or
request required or permitted to be given to such Agent by the Borrower
pursuant to the terms of this Agreement or any other Financing Document (other
than instructions for the transfer of funds from Project Accounts pursuant to
the Accounts Agreement or if otherwise concurrently delivered to the Lenders by
the Borrower). Each Agent will promptly distribute to each Lender each document
or instrument (including each document or instrument delivered by the Borrower
to such 


 


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Agent pursuant
to ARTICLE V (Representations and
Warranties), ARTICLE VI (Conditions Precedent) and ARTICLE VII (Covenants)) received for its account
and copies of all other communications received by such Agent from the Borrower
for distribution to the Lenders by such Agent in accordance with the terms of
this Agreement or any other Financing Document.


 


Section 9.13             No Liability for
Clean-up of Hazardous Materials. If the Collateral Agent is required to
acquire title to an asset for any reason, or take any managerial action of any
kind in regard thereto, in order to carry out any duty or obligation for the
benefit of another, which in the Collateral Agent’s sole discretion may cause
the Collateral Agent to be considered an “owner or operator” under any
Environmental Laws or otherwise cause the Collateral Agent to incur, or be
exposed to, any environmental liabilities or any liability under any other
federal, state or local law, the Collateral Agent reserves the right, instead
of taking such action, either to resign as Collateral Agent or to arrange for
the transfer of the title or control of the asset to a court-appointed receiver.
The Collateral Agent will not be liable to any Person for any environmental
liabilities or any environmental claims or contribution actions under any
federal, state or local law, rule or regulation by reason of the
Collateral Agent’s action and conduct as authorized, empowered or directed
hereunder or relating to any kind of discharge or release or threatened
discharge or release of any Materials of Environmental Concern into the
environment.


 


ARTICLE X



MISCELLANEOUS PROVISIONS


 


Section 10.01       Amendments, Etc. No
amendment or waiver of any provision of this Agreement or any other Financing
Document, and no consent to any departure by the Borrower, any Pledgor or any
party (other than a Senior Secured Party) to the Intercreditor Agreement or
Accounts Agreement therefrom, shall be effective unless in writing signed by
the Required Lenders (or, if expressly contemplated hereby, the Administrative
Agent) and, in the case of an amendment, the Borrower, such Pledgor or such
party to the Intercreditor Agreement or Accounts Agreement, as the case may be,
and in each such case acknowledged by the Administrative Agent, and each such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given; provided that no such amendment, waiver
or consent shall:


 


(a)          extend or increase the Commitment of any
Lender (or reinstate any Commitment terminated pursuant to Section 8.03(a) (Action Upon Other Event of Default) without the prior
written consent of such Lender (other than any Non-Voting Lender) or extend or
increase the Aggregate Loan Commitment;


 


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(b)         postpone any date scheduled for any payment of
principal or interest under Section 3.01 (Repayment of
Construction Loan Fundings), Section 3.02 (Repayment of Term Loan
Fundings) or Section 3.03 (Repayment of
Working Capital Loan Fundings)  or
Section 3.04 (Interest Payment Dates), or any date fixed by the
Administrative Agent for the payment of fees or other amounts due to the
Lenders (or any of them) hereunder or under any other Financing Document
without the prior written consent of each Lender affected thereby (other than
any Non-Voting Lender);


 


(c)          reduce the principal of, or the rate of
interest specified herein on, any Loan, or any Fees or other amounts (including
the Required Cash Sweep or any other mandatory prepayments under Section 3.10 (Mandatory Prepayment)) payable hereunder or under any
other Financing Document to any Lender without the prior written consent of
each Lender directly affected thereby (other than any Non-Voting Lender); provided that only the prior
written consent of the Required Lenders shall be necessary to amend the
definition of Default Rate or
to waive any obligation of the Borrower to pay interest at the Default Rate;


 


(d)         change the order of application of any
reduction in the Commitments or any prepayment of Loans from the application
thereof set forth in the applicable provisions of Section 2.08 (Termination or Reduction
of Commitments), Section 3.09
(Optional Prepayment) or Section 3.10 (Mandatory Prepayment) in any manner without the prior
written consent of each Lender affected thereby (other than any Non-Voting
Lender);


 


(e)          change any provision of this Section 10.01, the definition
of Required Lenders or any other provision of any Financing Document specifying
the number or percentage of Lenders required to amend, waive or otherwise
modify any rights under any Financing Document (including any such provision
specifying the number or percentage of Lenders required to waive any Event of
Default or forbear from taking any action or pursuing any remedy with respect
to any Event of Default), or make any determination or grant any consent under
any Financing Document, without the prior written consent of each Lender (other
than any Non-Voting Lender);


 


(f)            release (i) the Borrower from all or
substantially all of its obligations (except for obligations that are expressly
covered in clauses (a) - (e) above or (g) – (j) below) under any
Financing Document, (ii) Collateral
with a fair market value, or a disposal price, of more than fifteen million
Dollars ($15,000,000) in any transaction or series of related
transactions, or (iii) the Collateral (as defined in the Pledge
Agreement), without the prior written consent of each Lender (other than any
Non-Voting Lender);


 


(g)         change the Conversion Date Certain without the
prior written consent of each Lender (other than any Non-Voting Lender);


 


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(h)         change any provision that requires ratable
treatment of Lenders in accordance with Section 3.14 (Pro Rata Treatment) without the prior written consent of
each Lender (other than any Non-Voting Lender) that would be denied ratable
treatment by such change;


 


(i)             amend the order of payments set forth in Section 6.01(b) or
(c) of the Accounts Agreement without the prior written consent of each
Lender (other than any Non-Voting Lender);


 


(j)             amend the order of payments set forth in Section 4.2
of the Intercreditor Agreement without the prior written consent of each Lender
(other than any Non-Voting Lender);


 


and provided
further that (i) no
amendment, waiver or consent shall, unless in writing and signed by an Agent in
addition to the Lenders required above, affect the rights or duties of, or any
fees or other amounts payable to, such Agent under this Agreement or any other
Financing Document; and (ii) Section 10.03(h) (Assignments) may not be amended, waived or
otherwise modified without the prior written consent of each Granting Lender
all or any part of whose Loan is being funded by an SPV at the time of
such amendment, waiver or other modification.


 


Notwithstanding the other
provisions of this Section 10.01, the Borrower, the Collateral Agent and the
Administrative Agent may (but shall have no obligation to) amend or
supplement the Financing Documents without the consent of any Lender
solely:  (i) to cure any ambiguity,
defect or inconsistency; (ii) to make any change that would provide any
additional rights or benefits to the Lenders or (iii) to make, complete or
confirm any grant of Collateral permitted or required by this Agreement or any
of the Security Documents or any release of any Collateral that is otherwise
permitted under the terms of this Agreement and the Security Documents.


 


Section 10.02       Applicable Law;
Jurisdiction; Etc. (a) GOVERNING LAW. THIS AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK, UNITED STATES OF AMERICA, WITHOUT REFERENCE TO CONFLICTS OF LAWS (OTHER
THAN SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW).


 


(b)         SUBMISSION TO JURISDICTION. THE
BORROWER IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY,
TO THE NON-EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK
SITTING IN NEW YORK COUNTY AND OF THE UNITED STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF NEW YORK,


 


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AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER FINANCING DOCUMENT,
OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND THE BORROWER IRREVOCABLY
AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT OR, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT. THE
BORROWER AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE
CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE
JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS AGREEMENT OR
IN ANY OTHER FINANCING DOCUMENT SHALL AFFECT ANY RIGHT THAT ANY SENIOR SECURED
PARTY MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO
THIS AGREEMENT OR ANY OTHER FINANCING DOCUMENT AGAINST THE BORROWER OR ITS
PROPERTIES IN THE COURTS OF ANY JURISDICTION.


 


(c)          WAIVER OF VENUE. THE BORROWER
IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE
LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR ANY OTHER FINANCING DOCUMENT IN ANY COURT REFERRED TO IN SECTION 10.02(b). THE
BORROWER HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH
ACTION OR PROCEEDING IN ANY SUCH COURT.


 


(d)         Appointment of Process Agent and Service of
Process. The Borrower hereby irrevocably appoints C T Corporation System,
with an office on the date hereof at 111 Eighth Avenue, New York, New York
10011, as its agent to receive on behalf of itself services of copies of the
summons and complaint and any other process that may be served in any such
action or proceeding in the State of New York. If for any reason the Process
Agent shall cease to act as such for any Person, such Person hereby agrees to
designate a new agent in New York City on the terms and for the purposes of
this Section 10.02 reasonably satisfactory to the
Administrative Agent. Such service may be made by mailing or delivering a
copy of such process to such Person in care of the Process Agent at the Process
Agent’s above address, and the Borrower hereby irrevocably authorizes and
directs the Process Agent to accept such service on its behalf. As an
alternative method of service, the Borrower also irrevocably consents to the
service of any and all process in any such action or proceeding by the air
mailing of 


 


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copies of such process to such Person at its then effective notice
addresses pursuant to Section 10.11 (Notices and
Other Communications). Nothing in this Agreement shall affect
any right that any party may otherwise have to bring any action or
proceeding relating to this Agreement or any other Financing Document in the
courts of any jurisdiction.


 


(e)          Immunity. To the extent that the
Borrower has or hereafter may acquire any immunity from jurisdiction of
any court or from any legal process (whether through service or notice, attachment
prior to judgment, attachment in aid of execution, execution or otherwise) with
respect to itself or its property, the Borrower hereby irrevocably and
unconditionally waives such immunity in respect of its obligations under the
Financing Documents and, without limiting the generality of the foregoing,
agrees that the waivers set forth in this Section 10.02(e) shall have the fullest scope
permitted under the Foreign Sovereign Immunities Act of 1976 of the United
States and are intended to be irrevocable for purposes of such Act.


 


(f)            WAIVER OF JURY TRIAL. EACH PARTY
HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING
DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY
OTHER FINANCING DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY
(WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (i) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (ii) ACKNOWLEDGES
THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS
AGREEMENT AND THE OTHER FINANCING DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL
WAIVERS AND CERTIFICATIONS IN THIS SECTION 10.02.


 


Section 10.03       Assignments. (a) The
provisions of this Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns permitted
hereby, except that the Borrower may not assign or otherwise transfer any
of its rights or obligations hereunder without the prior written consent of
each Agent and Lender, and no Lender may assign or otherwise transfer any
of its rights or obligations hereunder except (i) to an Eligible Assignee
in accordance with Section 10.03(b),
(ii) by way of participation in accordance with Section 10.03(d), (iii) by way of pledge or
assignment of a security interest subject to the restrictions of Section 10.03(f), or (iv) to
an SPV in accordance with the provisions of Section 10.03(h) (and any other attempted
assignment or transfer by any party hereto shall be null and void). Nothing in 


 


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this
Agreement, express or implied, shall be construed to confer upon any Person
(other than the parties hereto, their respective successors and assigns
permitted hereby, Participants to the extent provided in this Section 10.03 and, to the extent expressly
contemplated hereby, the Related Parties of each Agent and Lender) any legal or
equitable right, remedy or claim under or by reason of this Agreement.


 


(b)         Any Lender may at any time after the date
hereof assign to one or more Eligible Assignees all or a portion of its rights
and obligations under this Agreement (including all or a portion of its
Commitment and the Loans at the time owing to it); provided that (i) except
in the case of an assignment of the entire remaining amount of the assigning
Lender’s Commitment and the Loans at the time owing to it or in the case of an
assignment to a Lender or an Affiliate of a Lender or an Approved Fund with
respect to a Lender, the Commitment (which for this purpose includes the Loans
outstanding thereunder) or, if the applicable Commitment is not then in effect,
the principal outstanding balance of the Loans of the assigning Lender subject
to each such assignment, determined as of the date the Lender Assignment
Agreement with respect to such assignment is delivered to the Administrative
Agent or, if “Trade Date” is specified in the
Lender Assignment Agreement, as of the Trade Date, shall not be less than three
million Dollars ($3,000,000) and in integral multiples of one million Dollars
($1,000,000) in excess thereof, unless the Administrative Agent otherwise
consents in writing; (ii) each partial assignment shall be made as an
assignment of a proportionate part of all the assigning Lender’s rights
and obligations under this Agreement with respect to the Loan or the Commitment
assigned; (iii) the parties to each assignment shall execute and deliver
to the Administrative Agent a Lender Assignment Agreement, together with a
processing and recordation fee of two thousand five hundred Dollars ($2,500); provided
that (A) no such fee shall be payable in the case of an assignment to a
Lender, an Affiliate of a Lender or an Approved Fund with respect to a Lender
and (B) in the case of contemporaneous assignments by a Lender to one or
more Approved Funds managed by the same investment advisor (which Approved
Funds are not then Lenders hereunder), only a single such two thousand five
hundred Dollar ($2,500) fee shall be payable for all such contemporaneous
assignments and (iv) the Eligible Assignee, if it is not a Lender prior to
such assignment, shall deliver to the Administrative Agent an administrative
questionnaire. Subject to acceptance and recording thereof by the
Administrative Agent pursuant to Section 10.03(c),
on and after the effective date specified in each Lender Assignment Agreement,
the Eligible Assignee thereunder shall be a party to this Agreement and, to the
extent of the interest assigned by such Lender Assignment Agreement, have the
rights and obligations of a Lender under this Agreement, and the assigning
Lender thereunder shall, to the extent of the interest assigned by such Lender
Assignment Agreement, be released from its obligations under this Agreement
(and, in the case of a Lender Assignment Agreement covering all of the
assigning Lender’s rights and obligations under this Agreement, such 


 


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Lender shall cease to be a party hereto but shall continue to be
entitled to the benefits of Section 4.01 (Eurodollar Rate Lending
Unlawful), Section 4.03
(Increased Eurodollar Loan Costs), Section 4.05 (Funding Losses), Section 10.06 (Costs and Expenses) and Section 10.08 (Indemnification by the Borrower) with respect to facts
and circumstances occurring prior to the effective date of such assignment). Upon
request, the Borrower (at its expense) shall execute and deliver a Note to the
assignee Lender. Any assignment or transfer by a Lender of rights or
obligations under this Agreement that does not comply with this Section 10.03(b) shall
be treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with Section 10.03(d).


 


(c)          The Administrative Agent, acting solely for
this purpose as an agent of the Borrower, shall maintain at the Administrative
Agent’s office a copy of each Lender Assignment Agreement delivered to it and a
register for the recordation of the names and addresses of the Lenders, and the
Commitment of, and principal amount of the Loans owing to, each Lender pursuant
to the terms hereof from time to time (the “Register”). The entries in
the Register shall be conclusive, and the Borrower, the Agents and the Lenders may treat
each Person whose name is recorded in the Register pursuant to the terms hereof
as a Lender hereunder for all purposes of this Agreement, notwithstanding
notice to the contrary. The Register shall be available for inspection by the
Borrower at any reasonable time and from time to time upon reasonable prior
notice. In addition, at any time that a request for a consent for a material or
other substantive change to the Financing Documents is pending, any Lender may request
and receive from the Administrative Agent a copy of the Register.


 


(d)         Any Lender may at any time, without the
consent of, or notice to, the Borrower or any Agent, sell participations to any
Person (each, a “Participant”) in all or a portion of such Lender’s
rights and/or obligations under this Agreement (including all or a portion of
its Commitment and/or the Loans owing to it); provided that (i) such Lender’s obligations under this
Agreement shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations
and (iii) the Borrower, the Agents and the other Lenders shall continue to
deal solely and directly with such Lender in connection with such Lender’s
rights and obligations under this Agreement. Any agreement or instrument
pursuant to which a Lender sells such a participation shall provide that such
Lender shall retain the sole right to enforce this Agreement and to approve any
amendment, modification or waiver of any provision of this Agreement; provided that such agreement or
instrument may provide that such Lender will not, without the consent of
the Participant, agree to any amendment, waiver or other modification described
in the first proviso to Section 10.01
(Amendments, Etc.) that directly
affects such Participant. Subject to Section 10.03(e),
the Borrower agrees that each Participant shall be entitled to the benefits of Section 4.01 (Eurodollar Rate Lending Unlawful), Section 4.03 (Increased Eurodollar Loan Costs)  


 


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and Section 4.05
(Funding Losses), to the same extent
as if it were a Lender and had acquired its interest by assignment pursuant to Section 10.03(b). To the
extent permitted by law, each Participant also shall be entitled to the
benefits of Section 10.14 (Right of Setoff)
as though it were a Lender; provided
such Participant agrees to be subject to Section 3.15 (Sharing of Payments)
as though it were a Lender.


 


(e)          A Participant shall not be entitled to
receive any greater payment under Section 4.01
(Eurodollar Rate Lending Unlawful) or
Section 4.03 (Increased Eurodollar Loan Costs) than the applicable
Lender would have been entitled to receive with respect to the participation
sold to such Participant, unless the sale of the participation to such
participant is made with the prior written consent of the Borrower.


 


(f)            Any Lender may at any time pledge or
assign a security interest in all or any portion of its rights under this
Agreement (including under its Notes, if any) to secure obligations of such
Lender, including any pledge or assignment to secure obligations to a Federal
Reserve Bank; provided
that no such pledge or assignment shall release such Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for such
Lender as a party hereto.


 


(g)         The words “execution,”
“signed,” “signature,” and words of like import in
any Lender Assignment Agreement shall be deemed to include electronic
signatures or the keeping of records in electronic form, each of which shall be
of the same legal effect, validity or enforceability as a manually executed
signature or the use of a paper-based recordkeeping system, as the case may be,
to the extent and as provided for in any applicable Law, including the Federal
Electronic Signatures in Global and National Commerce Act, the New York State
Electronic Signatures and Records Act, or any other similar state laws based on
the Uniform Electronic Transactions Act.


 


(h)         Notwithstanding anything to the contrary
contained herein, any Lender (a “Granting Lender”) may grant to a
special purpose funding vehicle identified as such in writing from time to time
by the Granting Lender to the Administrative Agent and the Borrower (an “SPV”)
the option to provide all or any part of any Loan that such Granting
Lender would otherwise be obligated to make pursuant to this Agreement; provided that (i) nothing
herein shall constitute a commitment by any SPV to fund any Loan, and (ii) if
an SPV elects not to exercise such option or otherwise fails to make all or any
part of such Loan, the Granting Lender shall be obligated to make such
Loan pursuant to the terms hereof or, if it fails to do so, to make such
payment to the Administrative Agent as is required under Section 3.15 (Sharing of Payments). Each party hereto hereby agrees
that (A) neither the grant to any SPV nor the exercise by any SPV of such
option shall increase the costs or expenses or otherwise increase or change the
obligations of the Borrower under this Agreement (including their obligations
under Section 4.03 (Increased Eurodollar Loan Costs), (B) no SPV shall
be liable for any 


 


112

















 


indemnity or similar payment obligation under this Agreement for which
a Lender would be liable, and (C) the Granting Lender shall for all
purposes, including the approval of any amendment, waiver or other modification
of any provision of any Financing Document, remain the lender of record
hereunder. The making of a Loan by an SPV hereunder shall utilize the
Commitment of the Granting Lender to the same extent, and as if, such Loan were
made by such Granting Lender. In furtherance of the foregoing, each party
hereto hereby agrees (which agreement shall survive the termination of this
Agreement) that, prior to the date that is one (1) year and one (1) day
after the payment in full of all outstanding commercial paper or other senior
debt of any SPV, it will not institute against, or join any other Person in
instituting against, such SPV in any Insolvency or Liquidation Proceeding under
the laws of the United States or any State thereof. Notwithstanding anything to
the contrary contained herein, any SPV may (1) with notice to, but
without prior consent of the Administrative Agent and without paying any
processing fee therefor, assign all or any portion of its right to receive
payment with respect to any Loan to the Granting Lender and (2) disclose
on a confidential basis any non-public information relating to its funding of
any Loan to any rating agency, commercial paper dealer or provider of any
surety or Guarantee or credit or liquidity enhancement to such SPV.


 


Section 10.04       Benefits of Agreement.
Except as expressly provided in the last sentence of Section 10.08(b) (Indemnification by Borrower) nothing
in this Agreement or any other Financing Document, express or implied, shall
give to any Person, other than the parties hereto and thereto, and each of
their successors and permitted assigns under this Agreement or any other
Financing Document, any benefit or any legal or equitable right or remedy under
this Agreement.


 


Section 10.05       Consultants. (a) The
Required Lenders acting jointly or the Administrative Agent may, in their sole
discretion, appoint any Consultant for the purposes specified herein. If any of
the Consultants is removed or resigns and thereby ceases to act for purposes of
this Agreement and the other Financing Documents, the Required Lenders acting
jointly or the Administrative Agent, as the case may be, shall designate a
Consultant in replacement.


 


(b)         The Borrower shall reimburse each Consultant
appointed hereunder for the reasonable fees and documented expenses of such
Consultant retained on behalf of the Lenders pursuant to this Section 10.05.


 


(c)          In all cases in which this Agreement provides
for any Consultant to “agree,” “approve,” “certify” or “confirm”
any report or other document or any fact or circumstance, such Consultant may make
the determinations and evaluations required in connection therewith based upon
information provided by the Borrower or other sources reasonably believed by
such Consultant to be knowledgeable and responsible, without 


 


113

















 


independently verifying such information; provided that, notwithstanding the foregoing, such
Consultant shall engage in such independent investigations or findings as it may from
time to time deem necessary in its reasonable discretion to support the
determinations and evaluations required of it.


 


Section 10.06       Costs and Expenses. The
Borrower shall pay (a) all reasonable and documented out-of-pocket
expenses incurred by the Lead Arranger, the Lenders and the Agents (including
all reasonable fees, costs and expenses of counsel for any Agent), in
connection with the preparation, negotiation, syndication, execution and
delivery of this Agreement and the other Financing Documents (whether or not
the transactions contemplated hereby or thereby are consummated); (b) all
reasonable out-of-pocket expenses incurred by the Lenders and the Agents
(including all reasonable fees, costs and expenses of counsel for any Agent),
in connection with any amendments, modifications or waivers of the provisions
of this Agreement and the other Financing Documents (whether or not the
transactions contemplated hereby or thereby are consummated); (c) all
out-of-pocket expenses incurred by the Agents (including all reasonable fees,
costs and expenses of counsel for any Agent), in connection with the
administration of this Agreement and the other Financing Documents (whether or
not the transactions contemplated hereby or thereby are consummated); and (d) all
out-of-pocket expenses incurred by the Agents or any Lender (including all
fees, costs and expenses of counsel for any Senior Secured Party), in
connection with the enforcement or protection of its rights in connection with
this Agreement and the other Financing Documents, including its rights under
this Section 10.06,
including in connection with any workout, restructuring or negotiations in
respect of the Obligations.


 


Section 10.07       Counterparts;
Effectiveness. This Agreement may be executed in counterparts (and by
different parties hereto in different counterparts), each of which shall
constitute an original, but all of which when taken together shall constitute a
single contract. This Agreement shall become effective when it has been
executed by the Administrative Agent and when the Administrative Agent has
received counterparts hereof that, when taken together, bear the signatures of
each of the other parties hereto. Delivery of an executed counterpart of a
signature page of this Agreement by telecopy or portable document format (“pdf”) shall
be effective as delivery of a manually executed counterpart of this
Agreement.


 


Section 10.08       Indemnification by the
Borrower. (a) In addition to the indemnity by the Borrower set forth
in Section 10.11(f) (Notices
and Other Communications), the Borrower hereby agrees to
indemnify each Agent (and any sub-agent thereof), each Lender and each Related
Party of any of the foregoing Persons (each such Person being called an “Indemnitee”)
against, and hold each Indemnitee harmless from, any and all losses, claims,
damages, liabilities and related expenses (including all reasonable fees, costs
and expenses of counsel for any Indemnitee), incurred by any 


 


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Indemnitee or
asserted against any Indemnitee by any third party or by the Borrower arising
out of, in connection with, or as a result of:


 


(i)                           the
execution or delivery of this Agreement, any other Transaction Document or any
agreement or instrument contemplated hereby or thereby, the performance by the
parties hereto or thereto of their respective obligations hereunder or
thereunder or the consummation of the transactions contemplated hereby or
thereby;


 


(ii)                        any Loan
or the use or proposed use of the proceeds therefrom;


 


(iii)                     any actual or
alleged presence, release or threatened release of Materials of Environmental
Concern on or from the Project or any property owned, leased or operated by the
Borrower, or any liability or costs pursuant to an Environmental Law related in
any way to the Project, the Sites or the Borrower;


 


(iv)                    any actual or
prospective claim, litigation, investigation or proceeding relating to any of
the foregoing, whether based on contract, tort or any other theory, whether
brought by a third party, the GP Pledgor or any of its shareholders, directors
or creditors, the Borrower or any of its partners or creditors, and in each
case regardless of whether any Indemnitee is a party thereto and whether or not
any of the transactions contemplated hereunder or under any of the other
Financing Documents is consummated, in all cases, whether or not caused by or
arising, in whole or in part, out of the comparative, contributory or sole
negligence of the Indemnitee; and/or


 


(v)                       any claim,
demand or liability for broker’s or finder’s or placement fees or similar
commissions, whether or not payable by the Borrower, alleged to have been
incurred in connection with such transactions, other than any broker’s or
finder’s fees payable to Persons engaged by the Lenders or the Agents without
the knowledge of the Borrower;


 


provided that such indemnity shall
not, as to any Indemnitee, be available to the extent that such losses, claims,
damages, liabilities or related expenses are determined by a court of competent
jurisdiction by final and Non-Appealable judgment to have resulted from the
gross negligence or willful misconduct of such Indemnitee.


 


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(b)         To the extent that the Borrower for any reason
fails to indefeasibly pay any amount required under Section 10.08(a) to be paid by it to any Agent (or
any sub-agent thereof) or any Related Party of any of the foregoing, each
Lender severally agrees to pay to such Agent (or any such sub-agent), or such
Related Party, as the case may be, such Lender’s ratable share (determined
as of the time that the applicable unreimbursed expense or indemnity payment is
sought) of such unpaid amount; provided that the unreimbursed expense or
indemnified loss, claim, damage, liability or related expense, as the case may be,
was incurred by or asserted against such Agent (or any sub-agent thereof) in
its capacity as such, or against any Related Party of any of the foregoing
acting for such Agent (or any sub-agent thereof) in connection with such
capacity. The obligations of the Lenders to make payments pursuant to this Section 10.08(b) are
several and not joint and shall survive the payment in full of the Obligations
and the termination of this Agreement. The failure of any Lender to make
payments on any date required hereunder shall not relieve any other Lender of
its corresponding obligation to do so on such date, and no Lender shall be
responsible for the failure of any other Lender to do so. The Lenders agree and
acknowledge that the Accounts Bank is an intended third party beneficiary of
this Section 10.08(b).


 


(c)          Except as otherwise provided in ARTICLE VI
(Conditions Precedent), all amounts
due under this Section 10.08 shall be payable not later than ten (10) Business
Days after demand therefor.


 


Section 10.09       Interest Rate Limitation.
Notwithstanding anything to the contrary contained in any Financing Document,
the interest paid or agreed to be paid under the Financing Documents shall not
exceed the maximum rate of non-usurious interest permitted by applicable Law
(the “Maximum Rate”). If any Agent or any Lender shall receive interest
in an amount that exceeds the Maximum Rate, the excess interest shall be
applied to the principal of the Loans or, if it exceeds such unpaid principal,
refunded to the Borrower. In determining whether the interest contracted for,
charged, or received by any Agent or any Lender exceeds the Maximum Rate, such
Person may, to the extent permitted by applicable Law, (a) characterize
any payment that is not principal as an expense, fee, or premium rather than interest,
(b) exclude prepayments and the effects thereof, and (c) amortize,
prorate, allocate, and spread in equal or unequal parts the total amount of
interest throughout the contemplated term of the Obligations hereunder.


 


Section 10.10       No Waiver; Cumulative
Remedies. No failure by any Senior Secured Party to exercise, and no delay
by any such Person in exercising, any right, remedy, power or privilege
hereunder or under any other Financing Document shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, remedy, power
or privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. The rights, remedies,
powers and 


 


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privileges
herein provided, and provided under each other Financing Document, are
cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.


 


Section 10.11       Notices and Other
Communications. (a)  Except in the case of notices and other
communications expressly permitted to be given by telephone (and except as
provided in Section 10.11(b)),
all notices and other communications provided for herein shall be in writing
and shall be delivered by hand or overnight courier service, mailed by
certified or registered mail or sent by telecopier or electronic mail as
follows, and all notices and other communications expressly permitted hereunder
to be given by telephone shall be made to the applicable telephone number, as
follows:


 


(i)                           if to
the Borrower or any Agent, to the address, telecopier number, electronic mail
address or telephone number specified for such Person on Schedule 10.11(a);


 


(ii)                        if to any
Lender, to the address, telecopier number, electronic mail address or telephone
number specified in its administrative questionnaire; and


 


(iii)                     if to any
Interest Rate Protection Provider, to the address, telecopier, number,
electronic mail address or telephone number specified on Schedule 10.11(a).


 


(b)         Notices sent by hand or overnight courier
service, or mailed by certified or registered mail, shall be deemed to have
been given when received; notices sent by telecopier shall be deemed to have
been given when sent (except that, if not given during normal business hours
for the recipient, shall be deemed to have been given at the opening of
business on the next Business Day for the recipient). Notices delivered through
electronic communications to the extent provided in Section 10.11(d) shall be effective as provided in
Section 10.11(d).


 


(c)          Notices and other communications to the
Lenders or any Agent hereunder may be delivered or furnished by electronic
communication (including e-mail and internet or intranet websites) pursuant to
procedures approved by the Administrative Agent, and in the case of notices to
the Collateral Agent, by the Collateral Agent as well; provided that the foregoing shall not apply to notices to any
Lender pursuant to ARTICLE II (Commitments and Funding)
if such Lender has so notified the Administrative Agent. Each of the
Administrative Agent or the Borrower may, in its discretion, agree to accept
notices and other communications to it hereunder by electronic communications
pursuant to procedures approved by it; provided that approval of such procedures may be
limited to particular notices or communications.


 


117

















 


(d)         Unless the Administrative Agent otherwise
prescribes, (i) notices and other communications sent to an e-mail address
shall be deemed received upon the sender’s receipt of an acknowledgement from
the intended recipient (such as by the “return
receipt requested” function, as available, return e-mail or other
written acknowledgement); provided
that if such notice or other communication is not received during the normal
business hours of the recipient, such notice or communication shall be deemed
to have been received at the opening of business on the next Business Day for
the recipient, and (ii) notices or communications posted to an internet or
intranet website shall be deemed received upon the deemed receipt by the
intended recipient at its e-mail address as described in Section 10.11(d)(i) of
notification that such notice or communication is available and identifying the
website address therefor.


 


(e)          Each of the Borrower and the Agents may change
its address, telecopier or telephone number for notices and other
communications hereunder by notice to the other parties hereto. Each Lender may change
its address, telecopier or telephone number for notices and other
communications hereunder by notice to the Borrower and each Agent.


 


(f)            The Agents and the Lenders shall be
entitled to rely and act upon any written notices purportedly given by or on
behalf of the Borrower even if (i) such notices were not made in a manner
specified herein, were incomplete or were not preceded or followed by any other
form of notice specified herein, or (ii) the terms thereof, as
understood by the recipient, varied from any confirmation thereof. The Borrower
shall indemnify each Lender and the Related Parties of each of them from all
losses, costs, expenses and liabilities resulting from the reliance by such
Person on each notice purportedly given by or on behalf of the Borrower. All
telephonic notices to and other telephonic communications with any Agent may be
recorded by such Agent, and each of the parties hereto hereby consents to such
recording.


 


(g)         So long as WestLB is the Administrative Agent,
the Borrower hereby agrees that it will provide to the Administrative Agent all
information, documents and other materials that it is obligated to furnish to
the Administrative Agent pursuant to the Financing Documents, including all
notices, requests, financial statements, financial and other reports,
certificates and other information materials, but excluding any such
communication that (i) relates to the Funding, (ii) relates to the
payment of any principal or other amount due under this Agreement prior to the
scheduled date therefor, (iii) provides notice of any Default or Event of
Default or (iv) is required to be delivered to satisfy any condition
precedent to Funding (all such non-excluded communications being referred to
herein collectively as “Communications”), by transmitting the
Communications in an electronic/soft medium in a format acceptable to the
Administrative Agent to nyc_agency_services@westlb.com. In addition, the
Borrower agrees to continue to provide the Communications to the Administrative
Agent in the 


 


118

















 


manner specified in the Financing Documents but only to the extent
requested by the Administrative Agent.


 


(h)         So long as WestLB is the Administrative Agent,
the Borrower further agrees that the Administrative Agent may make the
Communications available to the Lenders by posting the Communications on http://www.intralinks.com
(or any replacement or successor thereto) or a substantially similar electronic
transmission systems (the “Platform”).


 


(i)             THE PLATFORM IS PROVIDED “AS IS” AND “AS
AVAILABLE”. THE AGENTS DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE
COMMUNICATIONS, OR THE ADEQUACY OF THE PLATFORM AND EXPRESSLY DISCLAIM
LIABILITY FOR ERRORS OR OMISSIONS IN THE COMMUNICATIONS. NO WARRANTY OF ANY
KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF MERCHANTABILITY,
FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR
FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY THE AGENTS IN CONNECTION
WITH THE COMMUNICATIONS OR THE PLATFORM. IN NO EVENT SHALL THE ADMINISTRATIVE
AGENT OR ANY OF ITS AFFILIATES OR ANY OF THEIR RESPECTIVE OFFICERS, DIRECTORS,
EMPLOYEES, AGENTS, ADVISORS OR REPRESENTATIVES (COLLECTIVELY, “AGENT PARTIES”)
HAVE ANY LIABILITY TO THE BORROWER, ANY LENDER OR ANY OTHER PERSON OR ENTITY
FOR DAMAGES OF ANY KIND, INCLUDING DIRECT OR INDIRECT, SPECIAL, INCIDENTAL OR
CONSEQUENTIAL DAMAGES, LOSSES OR EXPENSES (WHETHER IN TORT, CONTRACT OR
OTHERWISE) ARISING OUT OF THE BORROWER’S OR THE ADMINISTRATIVE AGENT’S
TRANSMISSION OF COMMUNICATIONS THROUGH THE INTERNET, EXCEPT TO THE EXTENT THE
LIABILITY OF ANY AGENT PARTY IS FOUND IN A FINAL NON-APPEALABLE JUDGMENT BY A
COURT OF COMPETENT JURISDICTION TO HAVE RESULTED PRIMARILY FROM SUCH AGENT
PARTY’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.


 


(j)             The Administrative Agent agrees that the
receipt of the Communications by the Administrative Agent at its e-mail address
set forth in Schedule 10.11(a) shall constitute effective
delivery of the Communications to the Administrative Agent for purposes of the
Financing Documents. Each Lender agrees that notice to it (as provided in the
next sentence) specifying that the Communications have been posted to the Platform shall
constitute effective delivery of the Communications to such Lender for purposes
of the Financing Documents. Each Lender agrees to notify the Administrative
Agent in writing (including by electronic communication) from time to time of
such


 


119
















 


Lender’s e-mail address to which the foregoing notice may be sent by
electronic transmission and that the foregoing notice may be sent to such
e-mail address.


 


(k)   Notwithstanding
clauses (g) to (j) above, nothing herein shall prejudice the
right of any Agent or Lender to give any notice or other communication pursuant
to any Financing Document in any other manner specified in such Financing
Document.


 


Section
10.12  Patriot Act Notice. Each
Lender and Agent (for itself and not on behalf of any Lender or other Agent)
hereby notifies the Borrower that pursuant to the requirements of the Patriot
Act, it is required to obtain, verify and record information that identifies
the Borrower, which information includes the name and address of the Borrower
and other information that will allow such Lender or Agent, as applicable, to
identify the Borrower in accordance with the Patriot Act.


 


Section
10.13  Payments Set Aside. To
the extent that any payment by or on behalf of the Borrower is made to any
Agent or Lender, or any Agent or Lender exercises its right of setoff, and such
payment or the proceeds of such setoff or any part thereof is subsequently
invalidated, declared to be fraudulent or preferential, set aside or required
(including pursuant to any settlement entered into by such Agent or Lender in
its discretion) to be repaid to a trustee, receiver or any other party, in
connection with any Insolvency or Liquidation Proceeding or otherwise, then
(a) to the extent of such recovery, the Obligation or part thereof originally
intended to be satisfied shall be revived and continued in full force and
effect as if such payment had not been made or such setoff had not occurred,
and (b) each Lender severally agrees to pay to each Agent upon demand its
applicable share (without duplication) of any amount so recovered from or
repaid by such Agent, plus interest thereon from the date of such demand to the
date such payment is made at a rate per
annum equal to the Federal Funds Effective Rate from time to time in
effect. The obligations of the Lenders under Section 10.13(b) shall survive the payment in full of the
Obligations and the termination of this Agreement.


 


Section
10.14  Right of Setoff. Each
Lender and each of its respective Affiliates is hereby authorized at any time
and from time to time during the continuance of an Event of Default, to the
fullest extent permitted by applicable Law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final, in whatever
currency) at any time held and other obligations (in whatever currency) at any
time owing by such Lender or any such Affiliate to or for the credit or the
account of the Borrower against any and all of the obligations of the Borrower
now or hereafter existing under this Agreement or any other Financing Document
to such Lender, irrespective of whether or not such Lender shall have made any
demand under this Agreement or any other Financing Document and although such
obligations of the Borrower may be contingent or unmatured or are owed to a
branch or office of such Lender different from the branch or office holding
such deposit or obligated on such indebtedness. The rights 


 


120

















 


of each Lender and their respective Affiliates under this Section
10.14 are in addition to other rights and remedies (including other rights
of setoff) that such Lender or their respective Affiliates may have. Each
Lender agrees to notify the Borrower and the Administrative Agent promptly
after any such setoff and application; provided that the failure to give
such notice shall not affect the validity of such setoff and application.


 


Section
10.15  Severability. If any
provision of this Agreement or any other Financing Document is held to be
illegal, invalid or unenforceable, (a) the legality, validity and
enforceability of the remaining provisions of this Agreement and the other
Financing Documents shall not be affected or impaired thereby and (b) the
parties shall endeavor in good faith negotiations to replace the illegal,
invalid or unenforceable provisions with valid provisions the economic effect
of which comes as close as possible to that of the illegal, invalid or
unenforceable provisions. The invalidity of a provision in a particular
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.


 


Section
10.16  Survival. Notwithstanding
anything in this Agreement to the contrary, Section 10.06 (Costs and
Expenses) and Section
10.08 (Indemnification by the
Borrower) shall survive any termination of this Agreement. In
addition, each representation and warranty made hereunder and in any other
Financing Document or other document delivered pursuant hereto or thereto or in
connection herewith or therewith shall survive the execution and delivery
hereof and thereof. Such representations and warranties have been or will be
relied upon by each Agent and each Lender, regardless of any investigation made
by any Agent or any Lender or on their behalf and notwithstanding that any Agent
or any Lender may have had notice or knowledge of any Default or Event of
Default at the time of the Funding, and shall continue in full force and effect
as long as any Loan or any other Obligation hereunder or under any other
Financing Document shall remain unpaid or unsatisfied.


 


Section
10.17  Treatment of Certain
Information; Confidentiality. Each of the Agents and the Lenders agrees to
maintain the confidentiality of the Information, except that Information may be
disclosed (a) to its Affiliates and to its Affiliates’ respective
partners, directors, officers, employees, agents, advisors (including legal
counsel and financial advisors) and representatives (it being understood that
the Persons to whom such disclosure is made will be informed of the confidential
nature of such Information and instructed to keep such Information
confidential); (b) to the extent requested or required by any regulatory
authority purporting to have jurisdiction over it; (c) to the extent
required by applicable Law or regulations or by any subpoena or similar legal
process; (d) to any other party to this Agreement; (e) in connection
with the exercise of any remedies hereunder or any suit, action or proceeding
relating to this Agreement or the enforcement of rights hereunder (including
any actual or prospective purchaser of Collateral); (f) subject to an
agreement containing provisions substantially the same as 


 


121

















 


those of this Section 10.17, to (i) any Eligible Assignee
of or Participant in, or any prospective Eligible Assignee of or Participant
in, any of its rights or obligations under this Agreement, (ii) any direct
or indirect contractual counterparty or prospective counterparty (or such
contractual counterparty’s or prospective counterparty’s professional advisor)
to any credit derivative transaction relating to obligations of the Borrower or
(iii) any Person (and any of its officers, directors, employees, agents or
advisors) that may enter into or support, directly or indirectly, or that may
be considering entering into or supporting, directly or indirectly, either
(A) contractual arrangements with such Agent or Lender, or any Affiliates
thereof, pursuant to which all or any portion of the risks, rights, benefits or
obligations under or with respect to any Loan or Financing Document is
transferred to such Person or (B) an actual or proposed securitization or
collateralization of, or similar transaction relating to, all or a part of any
amounts payable to or for the benefit of any Lender under any Financing
Document (including any rating agency); (g) with the consent of the
Borrower; (h) to the extent such Information (i) becomes publicly
available other than as a result of a breach of this Section 10.17 or
(ii) becomes available to any Agent, any Lender or any of their respective
Affiliates on a non-confidential basis from a source other than the Borrower;
(i) to any state, federal or foreign authority or examiner (including the
National Association of Insurance Commissioners or any other similar
organization) regulating any Lender; or (j) to any rating agency when
required by it (it being understood that, prior to any such disclosure, such
rating agency shall undertake to preserve the confidentiality of any
Information relating to the Borrower received by it from such Lender). In
addition, any Agent and the Lenders may disclose the existence of this
Agreement and information about this Agreement to market data collectors,
similar service providers to the lending industry, and service providers to the
Agents and the Lenders in connection with the administration and management of
this Agreement, the other Financing Documents, the Commitments, and the Funding.
For the purposes of this Section 10.17, “Information” means
written information that the Borrower furnishes to any Agent or Lender after
the date hereof (and designated at the time of delivery thereof in writing as
confidential) pursuant to or in connection with any Financing Document,
relating to the assets and business of the Borrower, but does not include any
such information that (i) is or becomes generally available to the public
other than as a result of a breach by such Agent or Lender of its obligations
hereunder, (ii) is or becomes available to such Agent or Lender from a
source other than the Borrower that is not, to the knowledge of such Agent or
Lender, acting in violation of a confidentiality obligation with the Borrower
or (iii) is independently compiled by any Agent or Lender, as evidenced by
their records, without the use of the Information. Any Person required to
maintain the confidentiality of Information as provided in this Section
10.17 shall be considered to have complied with its obligation to do so if
such Person has exercised the same degree of care to maintain the
confidentiality of such Information as such Person would accord to its own
confidential information.


 


122

















 


Section
10.18  Waiver of Consequential
Damages, Etc. Except as otherwise provided in Section 10.08 (Indemnification by the Borrower) for
the benefit of any Indemnitee, to the fullest extent permitted by applicable
Law, the Borrower shall not assert, and the Borrower hereby waives, any claim
against any Indemnitee, on any theory of liability, for special, indirect,
consequential or punitive damages (as opposed to direct or actual damages)
arising out of, in connection with, or as a result of, this Agreement, any
other Financing Document or any agreement or instrument contemplated hereby,
the transactions contemplated hereby or thereby, any Loan or the use of the
proceeds thereof. No Indemnitee shall be liable for any damages arising from
the use by unintended recipients of any information or other materials
distributed by it through telecommunications, electronic or other information
transmission systems in connection with this Agreement or the other Financing
Documents or the transactions contemplated hereby or thereby.


 


Section
10.19  Waiver of Litigation
Payments. To the extent that the Borrower may, in any action, suit or
proceeding brought in any of the courts referred to in Section 10.02(b) (Applicable Law; Jurisdiction; Etc. – Submission to
Jurisdiction) or elsewhere arising out of or in connection with
this Agreement or any other Financing Document to which it is a party, be
entitled to the benefit of any provision of law requiring any Lender or any
Agent in such action, suit or proceeding to post security for the costs of such
Person or to post a bond or to take similar action, the Borrower hereby
irrevocably waives such benefit, in each case to the fullest extent now or in
the future permitted under the laws of New York or, as the case may be, the
jurisdiction in which such court is located.


 


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of page intentionally blank. Next page is signature page.]


 


123

















 


IN WITNESS WHEREOF, the
parties hereto have caused this Senior Credit Agreement to be executed by their
respective officers as of the day and year first above written.


 


	
   

  	
  HEARTLAND GRAIN FUELS, L.P.,

  
	
   

  	
  as Borrower

  
	
   

  	
  By:

  	
  Dakota Fuels, Inc.

  
	
   

  	
  Its:

  	
  General Partner

  



 


 


	
   

  	
  By

  	
  :/s/ Revis L. Stephenson III

  	
   

  
	
   

  	
   

  	
  Name: Revis L. Stephenson III

  
	
   

  	
   

  	
  Title:Chairman

  



 

















 


	
   

  	
  WESTLB AG, NEW YORK BRANCH,

  
	
   

  	
  as Lead Arranger, Sole Bookrunner and Syndication
  Agent

  



 


 


	
   

  	
  By:

  	
  /s/ Michael Pantelogianis

  	
   

  
	
   

  	
   

  	
  Name: Michael Pantelogianis

  
	
   

  	
   

  	
  Title:  
  Director

  



 


 


	
   

  	
  By:

  	
  /s/ Paul Vastola

  	
   

  
	
   

  	
   

  	
  Name:  Paul
  Vastola

  
	
   

  	
   

  	
  Title:   
  Director

  



 


 


	
   

  	
  WESTLB AG, NEW YORK BRANCH,

  
	
   

  	
  as Administrative Agent

  



 


 


	
   

  	
  By:

  	
  /s/ Michael Pantelogianis

  	
   

  
	
   

  	
   

  	
  Name: Michael Pantelogianis

  
	
   

  	
   

  	
  Title:  
  Director

  



 


 


	
   

  	
  By:

  	
  /s/ Paul Vastola

  	
   

  
	
   

  	
   

  	
  Name:  Paul
  Vastola

  
	
   

  	
   

  	
  Title:   
  Director

  



 


 


	
   

  	
  WESTLB AG, NEW YORK BRANCH,

  
	
   

  	
  as Collateral Agent

  



 


 


	
   

  	
  By:

  	
  /s/ Michael Pantelogianis

  	
   

  
	
   

  	
   

  	
  Name: Michael Pantelogianis

  
	
   

  	
   

  	
  Title:   Director

  



 


 


	
   

  	
  By:

  	
  /s/ Paul Vastola

  	
   

  
	
   

  	
   

  	
  Name:  Paul
  Vastola

  
	
   

  	
   

  	
  Title:   
  Director

  



 

















 


	
   

  	
  WESTLB AG, NEW YORK BRANCH,

  
	
   

  	
  as Lender

  



 


 


	
   

  	
  By:

  	
  /s/ Michael Pantelogianis

  	
   

  
	
   

  	
   

  	
  Name: Michael Pantelogianis

  
	
   

  	
   

  	
  Title:  
  Director

  



 


 


	
   

  	
  By:

  	
  /s/ Paul Vastola

  	
   

  
	
   

  	
   

  	
  Name:  Paul
  Vastola

  
	
   

  	
   

  	
  Title:   
  Director

  



 


 


	
   

  	
  WESTLB AG, NEW YORK BRANCH,

  
	
   

  	
  as Issuing Bank

  



 


 


	
   

  	
  By:

  	
  /s/ Michael Pantelogianis

  	
   

  
	
   

  	
   

  	
  Name: Michael Pantelogianis

  
	
   

  	
   

  	
  Title:  
  Director

  



 


 


	
   

  	
  By:

  	
  /s/ Paul Vastola

  	
   

  
	
   

  	
   

  	
  Name:  Paul
  Vastola

  
	
   

  	
   

  	
  Title:   
  Director

  



 

















 


	
   

  	
  MARSHALL FINANCIAL GROUP, LLC,

  
	
   

  	
  as Lender

  



 


 


	
   

  	
  By:

  	
  /s/ James F. Clifford

  	
   

  
	
   

  	
   

  	
  Name: James F. Clifford

  
	
   

  	
   

  	
  Title:   EVP

  



 

















 


	
   

  	
  BANCO SANTANDER, S.A.,

  
	
   

  	
  NEW YORK BRANCH

  
	
   

  	
   

  	
  as Lender

  



 


 


	
   

  	
  By:

  	
  /s/ Ignacio Campillo

  	
   

  
	
   

  	
   

  	
  Name: Ignacio Campillo

  
	
   

  	
   

  	
  Title:  
  Executive Director

  
	
   

  	
   

  	
   

  	
  Grupo Santander

  
					



 


 


	
   

  	
  By:

  	
  /s/ Paul J. Lammey

  	
   

  
	
   

  	
   

  	
  Name: Paul J. Lammey

  
	
   

  	
   

  	
  Title:  
  Executive Director

  
	
   

  	
   

  	
   

  	
  Grupo Santander

  
					



 

















 


	
   

  	
  FARM CREDIT BANK OF TEXAS,

  
	
   

  	
  as Lender

  



 


 


	
   

  	
  By:

  	
  /s/ Horace R. Harrod

  	
   

  
	
   

  	
   

  	
  Name: Horace R. Harrod

  
	
   

  	
   

  	
  Title:   Vice
  President

  



 

















 


	
   

  	
  COÖPERATIEVE CENTRALE RAIFFEISEN-

  
	
   

  	
  BOERENLEENBANK B.A., “RABOBANK

  
	
   

  	
  NEDERLAND”, NEW YORK BRANCH,

  
	
   

  	
  as Lender

  



 


 


	
   

  	
  By:

  	
  /s/ Jeff Bliss

  	
   

  
	
   

  	
   

  	
  Name: Jeff Bliss

  
	
   

  	
   

  	
  Title:   Vice
  President

  



 


 


	
   

  	
  By:

  	
  /s/ Brett Delfino

  	
   

  
	
   

  	
   

  	
  Name: Brett Delfino

  
	
   

  	
   

  	
  Title:  
  Executive Director

  



 

















 


	
   

  	
  NORDKAP BANK AG,

  
	
   

  	
  as Lender

  



 


 


	
   

  	
  By:

  	
  /s/ Niklaus Harler

  	
   

  
	
   

  	
   

  	
  Name: Niklaus Harler

  
	
   

  	
   

  	
  Title:   CEO

  



 


 


	
   

  	
  By:

  	
  /s/ Batchimeg Gadola

  	
   

  
	
   

  	
   

  	
  Name: Batchimeg Gadola

  
	
   

  	
   

  	
  Title:  
  Transactor

  



 

















 


Exhibit A


 


“Aberdeen I Plant”
means the existing ethanol production facility owned by the Borrower and
located in Aberdeen, South Dakota, with a nameplate capacity of
approximately 9 million gallons-per-year of denatured ethanol,
including the respective Site and all buildings, structures, improvements,
easements and other property related thereto.


 


“Aberdeen II License
Agreement” means that certain License Agreement dated as of July 14,
2006, between the Borrower and the Technology License Provider, as amended by
the Consent and Agreement, dated as of October 1, 2007, between the Borrower,
the Technology License Provider and the Collateral Agent.


 


“Aberdeen II Plant”
means the expansion ethanol production facility to be constructed and owned by
the Borrower and located in the same location as the existing Aberdeen plant in
Aberdeen, South Dakota, with a nameplate capacity of
approximately 40 million gallons-per-year of denatured ethanol,
including the Site and all buildings, structures, improvements, easements and
other property related thereto.


 


“Aberdeen Grain
Elevator Lease” means that certain Lease Agreement, dated as of October 1,
2007, between the Borrower and South Dakota Wheat Growers Association, relating
to the grain elevator for the Aberdeen Plants.


 


“Aberdeen Insurance
and Condemnation Proceeds Account” has the meaning provided in
Section 3.01(a)(ix) of the Accounts Agreement.


 


“Aberdeen Mortgage”
means the Mortgage—Collateral Real Estate Mortgage, Security Agreement,
Financing Statement, Fixture Filing and Assignment of Leases, Rents and
Security Deposits, in form and substance reasonably satisfactory to the
Lenders, to be made by the Borrower to the Collateral Agent for the benefit of
the Senior Secured Parties in respect of the Sites for the Aberdeen Plants.


 


“Aberdeen Plants”
means, collectively, the Aberdeen I Plant and the Aberdeen II Plant.


 


“Aberdeen
Subordination, Non-Disturbance and Attornment Agreement” means that certain
Subordination, Non-Disturbance and Attornment Agreement, dated as of October 1,
2007, among COBANK, ACB, a/k/a CoBank, as mortgagee, the Borrower as lessee and
South Dakota Wheat Growers Association as mortgagor, in relation to the
Aberdeen Grain Elevator Lease, including all schedules, exhibits and
attachments thereto.


 


“Acceptable Bank”
means a bank whose long-term unsecured and unguaranteed debt is rated at least “A-”
(or the then-equivalent rating) by S&P or at least “A3” (or the
then-equivalent rating) by Moody’s.


 

















 


“Account Collateral”
has the meaning provided in Section 2.07 (Grant of
First-Priority Security Interest) of the Accounts Agreement.


 


“Account Debtor”
means the Person that is obligated on or under any Account owing to the
Borrower.


 


“Accounts” means
all “accounts” as that term is defined in Section 9-102 of the UCC, now or
hereafter owned by the Borrower.


 


“Accounts Agreement”
means that certain Accounts Agreement dated as of the date hereof among the
Borrower, the Accounts Bank, as accounts bank and securities intermediary, the
Collateral Agent, the Administrative Agent, and the Bond Trustee on behalf of
the Second Lien Claimholders (as defined in the Intercreditor Agreement).


 


“Accounts Bank”
means Amarillo National Bank, not in its individual capacity, but solely as
depositary bank and securities intermediary under the Accounts Agreement, and
includes each other Person that may, from time to time, be appointed as
successor Accounts Bank pursuant to and in accordance with the Accounts
Agreement.


 


“Accounts Bank Fee
Letter” has the meaning provided in Section 1.01 of the Accounts
Agreement.


 


“Additional Project
Document” means each contract, agreement, letter agreement or other
instrument to which the Borrower becomes a party after the date hereof, other
than any document under which the Borrower (a) could not reasonably be
expected to have obligations or liabilities in the aggregate in excess of two
million Dollars ($2,000,000), or be entitled to receive revenues in the
aggregate in excess of two million Dollars ($2,000,000), in either case in
value in any twelve (12) month period and (b) a termination of which
could not reasonably be expected to result in a Material Adverse Effect; provided,
that for the purposes of this definition, any series of related transactions
(other than transactions, including hedging transactions, relating to the sale
of Products or the purchase of corn and natural gas and Interest Rate
Protection Agreements) shall be considered as one transaction, and all
contracts, agreements, letter agreements or other instruments in respect of
such transactions shall be considered as one contract, agreement, letter agreement
or other instrument, as applicable.


 


“Administrative Agent”
means WestLB, not in its individual capacity but solely as administrative agent
for the Lenders hereunder and under the other Financing Documents, and includes
each other Person that may, from time to time, be appointed as successor
Administrative Agent pursuant to Section 9.06 (Resignation
or Removal of Agent).


 


2

















 


“Administrative
Services Agreement” means that certain Administrative Services Agreement,
dated as of October 1, 2007, between the Sponsor and the Borrower.


 


“Affiliate” of any
Person means any other Person that, directly or indirectly, controls, is
controlled by or is under common control with such Person. A Person shall be
deemed to be “controlled by” any other Person if such other Person
(a) possesses, directly or indirectly, power to direct or cause the
direction of the management and policies of such Person whether by contract or
otherwise or (b) owns at least ten percent (10%) of the Equity
Interests in such Person.


 


“Agency Authorization
Letter Agreement” means that certain Agency Agreement, dated
February 12, 2007, among the Borrower, as “Party Y”, Energy Management
& Consulting Services, LLC, as “Party X” and BP Canada Energy Marketing
Corp., pursuant to which Energy Management & Consulting Services, LLC is
authorized to make purchases of natural gas from BP Canada on behalf of the
Borrower pursuant to the Gas Purchase and Sale Agreement.


 


“Agent Parties”
has the meaning provided in Section 10.11(i) (Notices and
Other Communications).


 


“Agents” means,
collectively, the Administrative Agent, the Collateral Agent and the Accounts
Bank.


 


“Aggregate
Construction Loan Commitment” means ninety million seven hundred thousand
Dollars ($90,700,000), as the same may be reduced in accordance with Section 2.08
(Termination or Reduction of Commitments).


 


“Aggregate Loan
Commitment” means ninety-eight million seven hundred thousand Dollars
($98,700,000), as the same may be reduced in accordance with Section 2.08
(Termination or Reduction of Commitments).


 


“Aggregate
Pre-Conversion Cash Sweeps” means the aggregate of all prepayments made
pursuant to priority twelfth of
Section 6.01(b) of the Accounts Agreement and priority seventh of Section 2.06(e) (Funding of
Loans) of this Agreement.


 


“Aggregate
Pre-Conversion Distributions” means the aggregate of all payments made
pursuant to priority tenth, and
subsection (A) of priority twelfth, of
Section 6.01(b) of the Accounts Agreement, and priority seventh of Section 2.06(e) (Funding of
Loans) of this
Agreement.


 


3

















 


“Aggregate Term Loan
Commitment” means ninety million seven hundred thousand Dollars
($90,700,000), as the same may be reduced in accordance with Section 2.08
(Termination or Reduction of Commitments).


 


“Aggregate Working
Capital Loan Commitment” means eight million Dollars ($8,000,000), as the
same may be reduced in accordance with Section 2.08 (Termination or Reduction of Commitments).


 


“Agreement” has
the meaning set forth in the Preamble.


 


“Agricultural Market
Consultant” means Muse, Stancil & Co., or any replacement agricultural
market consultant appointed by the Administrative Agent.


 


“Ancillary Documents”
means, with respect to each Additional Project Document, the following, each of
which shall be in form and substance reasonably satisfactory to the
Administrative Agent and, in the case of items (i), (ii) and (iv), the
Collateral Agent:


 


(i)                                     each
security instrument and agreement necessary or desirable to grant to the
Collateral Agent a first
priority perfected Lien (subject only to Permitted Liens) in such Additional
Project Document and all property interests received by the Borrower in
connection therewith;


 


(ii)                                  all
recorded UCC financing statements and other filings required to perfect such
Lien;


 


(iii)                               if
reasonably requested by the Administrative Agent, opinions of counsel for the
Borrower addressing such matters relating to such document, each applicable
Security Document and Lien as the Administrative Agent may reasonably request;


 


(iv)                              if
reasonably requested by the Administrative Agent, the Borrower shall use its
best efforts to obtain a Consent with respect to such Additional Project
Document from each Project Party thereto, and shall use its best efforts to
obtain an opinion of counsel to such Project Party addressing matters relating
to such Additional Project Document and such Consent as the Administrative
Agent may reasonably request; and


 


(v)                                 certified
evidence of the authorization of such Additional Project Document by the
Borrower.


 


4

















 


“Applicable Margin”
means, with respect to the Construction Loans or Term Loans, the
Construction/Term Applicable Margin and, with respect to the Working Capital
Loans, the Working Capital Applicable Margin.


 


“Application for
Payment” means, with respect to the Aberdeen Design-Build Agreement, an “Application
for Payment” as defined therein, and with respect to the Huron Design-Build
Agreement, such term or any analogous term.


 


“Approved Fund”
means, with respect to any Lender that is a fund that invests in commercial
loans, any other fund that invests in commercial loans and is managed or
advised by the same investment advisor as such Lender or by an Affiliate of
such investment advisor.


 


“Auditors” means
those nationally recognized independent auditors selected by the Borrower and
approved by the Administrative Agent.


 


“Authorized Officer”
means (i) with respect to any Person that is a corporation, the chief
executive officer, the chief operating officer, the president, any vice
president, the treasurer or the chief financial officer of such Person,
(ii) with respect to any Person that is a partnership, an Authorized
Officer of a general partner of such Person, (iii) with respect to any
Person that is a limited liability company, any manager, the president, any
vice president, the treasurer or the chief financial officer of such Person, or
an Authorized Officer of the managing member of such Person, or (iv) with
respect to any Person, such other representative of such Person that is
approved by the Administrative Agent in writing who, in each such case, has
been named as an Authorized Officer on a certificate of incumbency of such
Person delivered to the Administrative Agent and the Accounts Bank on or after
the date hereof.


 


“Base Rate” means,
for any day, a fluctuating rate per annum
equal to the higher of (i) the Federal Funds Effective Rate plus one-half of one percent
(0.50%) and (ii) the rate of interest in effect for such day as
publicly announced from time to time by WestLB as its “prime rate.”  The “prime rate” is a rate set by WestLB based upon various factors
including WestLB’s costs and desired return, general economic conditions and other
factors, and is used as a reference point for pricing some loans, which may be
priced at, above, or below such announced rate. Any change in such rate
announced by WestLB shall take effect at the opening of business on the day
specified in the public announcement of such change.


 


“Base Rate Loan”
means any Loan bearing interest at a rate determined by reference to the Base
Rate and the provisions of Article II (Commitments
and Funding).


 


5

















 


“Blocked Account
Agreement” means an agreement, in substantially the form attached hereto as
Exhibit M (or, if requested by the Borrower, such other form
reasonably satisfactory to the Administrative Agent and the Collateral Agent),
with respect to a Local Account among the Borrower, the bank with whom such
Local Account was opened and the Collateral Agent.


 


“Blocked Account
Collateral” has the meaning set forth in each Blocked Account Agreement.


 


“Bond Collateral
Documents” has the meaning provided in Section 1.01 of the Accounts
Agreement.


 


“Bond Funds” has
the meaning provided in Section 1.01 of the Accounts Agreement.


 


“Bond Indenture”
means that certain Bond Trust Indenture, dated as of October 1, 2007,
between the Issuer and the Bond Trustee pursuant to which the Issuer issues the
Bonds.


 


“Bond Proceeds
Sub-Account” has the meaning provided in Section 3.01(a)(xiii) of the
Accounts Agreement.


 


“Bonds” means
those certain Brown County, South Dakota Subordinate Solid Waste Facilities
Revenue Bonds (Heartland Grain Fuels, L.P. Ethanol Plant Project) Series 2007A
in the amount of $19,000,000.


 


“Bond Trustee”
means Wells Fargo Bank, National Association, not in its individual capacity
but solely in its capacity as trustee of the Bonds under the Bond Indenture,
the other Subordinated Debt Documents, the Accounts Agreement and the
Intercreditor Agreement, and includes each other Person that may, from time to
time, be appointed as successor Bond Trustee pursuant to the Bond Indenture.


 


“Borrower” has the
meaning set forth in the Preamble.


 


“Borrower LP Agreement”
means that certain Amended and Restated Agreement of Limited Partnership, dated
as of October 1, 2007, entered into by the GP Pledgor as general partner, and
the LP Pledgor as limited partner.


 


“Borrowing Base”
means, on any given date, an amount equal to, eighty percent (80%) of the
sum of, without duplication:


 


(i)                                     the
face amount (less reserves, maximum discounts, credits and allowances that may
be taken by or granted to the Account Debtor 


 


6

















 


thereof in connection
therewith) of all Eligible Accounts for the Project that are set forth in the
Borrowing Base Certificate then most recently delivered by the Borrower to the
Administrative Agent; and


 


(ii)                                  the
Value of no more than sixty (60) days of Eligible Inventory for the
Project (less reserves, maximum discounts, credits and allowances that may be
taken by or granted to the Account Debtor thereof in connection therewith) as
set forth in the Borrowing Base Certificate then most recently delivered by the
Borrower to the Administrative Agent.


 


“Borrowing Base
Certificate” means a certificate setting forth the Borrowing Base as of the
date of such certificate, substantially in the form of Exhibit N.


 


“Business Day”
means:


 


(i)                                     any
day that is neither a Saturday or Sunday nor a day on which commercial banks
are authorized or required to be closed in either Minneapolis, Minnesota or New
York, New York; and


 


(ii)                                  relative
to the making, continuing, prepaying or repaying of any Eurodollar Loans, any
day on which dealings in Dollars are carried on in the London interbank market.


 


“Business Interruption
Insurance Proceeds” means all proceeds of any insurance policies required
pursuant to this Agreement or otherwise obtained with respect to the Borrower
or the Project relating to business interruption or delayed start-up.


 


“Capitalized Lease
Liabilities” of any Person means all monetary obligations of such Person
under any leasing or similar arrangement that, in accordance with GAAP, would
be classified as capitalized leases on a balance sheet of such Person or
otherwise disclosed as such in a note to such balance sheet and, for purposes
of the Financing Documents, the amount of such obligations shall be the
capitalized amount thereof, determined in accordance with GAAP.


 


“Cash Equivalents”
means:


 


(a)                                  readily
marketable direct obligations of the government of the United States or any
agency or instrumentality thereof, or obligations unconditionally guaranteed by
the full faith and credit of the 


 


7

















 


government of the United States, in each case maturing
within one (1) year from the date of acquisition thereof;


 


(b)                                 securities
issued by any state of the United States of America or any political
subdivision of any such state or any public instrumentality thereof having
maturities of not more than one (1) year from the date of acquisition
thereof and, at the time of acquisition, having a rating of AA- or higher from
S&P or Aa3 or higher from Moody’s (or, if at any time neither S&P nor
Moody’s shall be rating such obligations, an equivalent rating from another
nationally recognized rating service);


 


(c)                                  investments
in commercial paper maturing within one hundred eighty (180) days from the
date of acquisition thereof and having, at such date of acquisition, a rating
of at least A-1 or P-1 from either S&P or Moody’s (or, if at any time
neither S&P nor Moody’s shall be rating such obligations, an equivalent
rating from another nationally recognized rating service);


 


(d)                                 investments
in certificates of deposit, banker’s acceptances and time deposits maturing
within two hundred and seventy (270) days from the date of acquisition
thereof issued or guaranteed by or placed with, and money market deposit accounts
issued or offered by, the Administrative Agent or any domestic office of any
commercial bank organized under the laws of the United States of America, any
State thereof, any country that is a member of the Organization for Economic
Co-Operation and Development or any political subdivision thereof, that has a
combined capital and surplus and undivided profits of not less than five
hundred million Dollars ($500,000,000);


 


(e)                                  fully
collateralized repurchase agreements with a term of not more
than 30 days for securities described in clause (a) above and
entered into with a financial institution satisfying the criteria of
clause (d) of this definition; and


 


(f)                                    investments
in “money market funds” within the meaning of Rule 2a-7 of the Investment
Company Act of 1940, as amended, substantially all of whose assets are
invested in investments of the type described in clauses (a) through
(e) of this definition.


 


“Cash Flow” means,
for any period, the sum (without duplication) of the following:  (i) all cash paid to the Borrower during
such period in connection with the Ethanol Marketing Agreement, Co-Product
Marketing Agreement and any other sales of 


 


8

















 


Products, (ii) all
interest and investment earnings paid to the Borrower or the Project Accounts
during such period on amounts on deposit in the Project Accounts,
(iii) all cash paid to the Borrower during such period as Business
Interruption Insurance Proceeds, and (iv) all other cash paid to the
Borrower during such period; provided, however, that Cash Flow
shall not include any proceeds of the Loans or any other Indebtedness incurred
by the Borrower; Insurance Proceeds; Condemnation Proceeds; any equity
contributions; proceeds from any disposition of assets of the Project or the
Borrower (other than Products); tax refunds; amounts received, whether by way
of a capital contribution or otherwise, from any holders of Equity Interests of
the Borrower; and any other extraordinary or non-cash income or receipt of the
Borrower under GAAP.


 


“Cash Flow Available
for Debt Service” means, for any period, an amount equal to the amount of
Cash Flow deposited in the Revenue Account during such period minus all
amounts paid during such period pursuant to priorities first
and second of Section 6.01(c) of the
Accounts Agreement.


 


“Casualty Event”
means an event that causes the Project, or any material portion thereof, to be
damaged, destroyed or rendered unfit for normal use for any reason whatsoever.


 


“CERCLA” means the
Comprehensive Environmental Response, Compensation and Liability Act (42 U.S.C.
§ 9604, et seq.), as amended, and rules, regulations, standards guidelines and
publications issued thereunder.


 


“Change of Control”
means any transaction or series of related transactions (including any merger
or consolidation) the result of which is that (i) the Sponsor fails to
maintain, directly, legally or beneficially, one hundred percent (100%) of the
Equity Interests of the LP Pledgor, or (ii) the Pledgors fail to maintain,
directly, legally or beneficially, one hundred percent (100%) of the
Equity Interests of the Borrower (other than any such Equity Interests of the
Independent Member of the LP Pledgor).


 


“Change Order”
means each “Change Order” (if any) as described in the Design-Build Agreement.


 


“Closing Date”
means the date on which all the conditions set forth in Section 6.01 (Conditions to Closing and First Funding of Construction Loans)
have been satisfied or waived.


 


“Code” means the
Internal Revenue Code of 1986, as amended, including the regulations,
technical advice, published rulings and private letter rulings adopted,
proposed, published or otherwise promulgated in connection therewith.


 


9

















 


“Collateral” means
all assets of and Equity Interests in the Borrower, whether now owned or
hereafter acquired, upon which a Lien is purported to be created by any
Security Document then in effect or contemplated to be in effect.


 


“Collateral Agent”
means WestLB, not in its individual capacity but solely in its capacity as
collateral agent for the Senior Secured Parties under the Financing Documents,
and includes each other Person that may, from time to time, be appointed as
successor Collateral Agent pursuant to Section 9.06 (Resignation or Removal of Agent).


 


“Commitment Fee”
has the meaning provided in Section 3.13(a) (Fees).


 


“Commitment Percentage”
means, as to any Lender at any time, such Lender’s Construction Loan Commitment
Percentage, Term Loan Commitment Percentage or Working Capital Loan Commitment
Percentage, as the context may require.


 


“Commitments”
means, with respect to each Lender, as applicable, such Lender’s Construction
Loan Commitment, Term Loan Commitment or Working Capital Loan Commitment, as
the context may require.


 


“Commodity Hedging
Arrangements” means any arrangement to hedge the price of corn purchases,
ethanol sales, Distillers Grains sales or natural gas purchases.


 


“Commodity Risk
Management Plan” means the risk management plan prepared by the Borrower
and approved by the Administrative Agent pursuant to Section 7.01(v) (Affirmative Covenants - Commodity Hedging Programs)
setting forth terms and conditions relating to any Commodity Hedging
Arrangements from time to time proposed to be entered into by the Borrower, including
any updates made to such risk management plan with the approval of the
Administrative Agent.


 


“Communications”
has the meaning provided in Section 10.11(g) (Notices and
Other Communications).


 


“Condemnation Proceeds”
means any amounts and proceeds of any kind (including instruments) payable in
respect of any Event of Taking.


 


“Confidential
Information Memorandum” means the information memorandum, dated
July 2007, together with any updates related thereto, describing the
Project.


 


“Consents” means each
Consent and Agreement entered into among a Project Party, the Borrower, and the
Collateral Agent, each in form and substance reasonably satisfactory to the
Administrative Agent and the Collateral Agent.


 


10

















 


“Construction Account”
has the meaning provided in Section 3.01(a)(i) of the Accounts Agreement.


 


“Construction Budget”
means the budget attached hereto as Schedule 6.01(w)(i) that sets
forth all categories of costs and expenses required in connection with the
development, construction, start-up, and testing of the Aberdeen II Plant,
including all construction costs, all costs under the Design-Build Agreement, all interest,
taxes and other carrying costs related to the Construction Loans, and costs related
to the construction of the facilities described under the Project Documents, as
updated from time to time in accordance with Section 7.02(t) (Negative Covenants - Construction Budget).


 


“Construction Loan”
has the meaning provided in Section 2.01(a).


 


“Construction Loan
Commitment Percentage” means, as to any Lender at any time, the percentage
that such Lender’s Construction Loan Commitment then constitutes of the
Aggregate Construction Loan Commitment.


 


“Construction Loan
Commitments” means, with respect to each Lender, the commitment of such
Lender to make Construction Loans, as set forth opposite the name of such
Lender in Schedule 2.01, as the same may be reduced in accordance
with Section 2.08 (Termination or
Reduction of Commitments).


 


“Construction Loan
Funding Notice” means each request for Funding of Construction Loans in the
form of Exhibit E delivered in accordance with Section 2.05
(Notice of Fundings).


 


“Construction Loan
Maturity Date” means the earlier of (a) the Conversion Date and
(b) the Conversion Date Certain.


 


“Construction Notes”
means the promissory notes of the Borrower, substantially in the form of Exhibit B,
evidencing Construction Loans.


 


“Construction/Term
Applicable Margin” means (a) with respect to the Eurodollar Loans,
three and one-half percent (3.50%) and (b) with respect to the Base Rate
Loans, two and one-half percent (2.50%).


 


“Construction/Term
Lenders” means those Lenders of Construction Loans and Term Loans, as
identified on Schedule 2.01, and each other Person that acquires
the rights and obligations of any such Lender pursuant to Section 10.03
(Assignments).


 


11

















 


“Consultants”
means the Independent Engineer, the Insurance Consultant, the Ethanol Market
Consultant, the Environmental Consultant and the Agricultural Market
Consultant.


 


“Contest” means,
with respect to any matter or claim involving any Person, that such Person is
contesting such matter or claim in good faith and by appropriate proceedings
timely instituted; provided that the following conditions are
satisfied:  (a) such Person has
posted a bond or cash collateral (or other security acceptable to the
Administrative Agent) for the full amount of such claim (or such lower amount
as is acceptable to the Administrative Agent); (b) during the period of
such contest, the enforcement of any contested item is effectively stayed;
(c) none of such Person or any of its officers, directors or employees, or
any Senior Secured Party or its respective officers, directors or employees, is
or would reasonably be expected to become subject to any criminal liability or
sanction in connection with such contested items; and (d) such contest and
any resultant failure to pay or discharge the claimed or assessed amount during
the pendency of such contest does not, and could not reasonably be expected to
(i) result in a Material Adverse Effect or (ii) involve a material
risk of the sale, forfeiture or loss of, or the creation, existence or
imposition of any Lien on, any of the Collateral.


 


“Contingency Line Item”
means the Line Item in the Construction Budget identified as “owner’s
contingency” that is intended to cover the eventuality of unforeseen Project
Costs for the Aberdeen II Plant.


 


“Contingency Reserve
Account” has the meaning provided in Section 3.01(a)(xii) of the
Accounts Agreement.


 


“Contingency Reserve
Required Amount” means:


 


(i)                                     on
any date prior to the Conversion Date, ten million Dollars ($10,000,000) minus
the unused portion of the Contingency Line Item in the Construction Budget; and


 


(ii)                                  on
and after the Conversion Date, two million five hundred thousand Dollars
($2,500,000).


 


“Contingent
Liabilities” means any agreement, undertaking or arrangement by which any
Person guarantees, endorses or otherwise becomes or is contingently liable upon
(by direct or indirect agreement, contingent or otherwise, to provide funds for
payment, to supply funds to, or otherwise to invest in, a debtor, or otherwise
to assure a creditor against loss) the indebtedness, obligation or any other
liability of any other Person (other than by endorsements of instruments in the
course of collection), or guarantees the payment of dividends or other
distributions upon the shares of any other 


 


12

















 


Person. The amount of any
Person’s obligation under any contingent liabilities shall (subject to any
limitation set forth therein) be deemed for purposes of this Agreement to be
the outstanding principal amount of the debt, obligation or other liability
guaranteed thereby; provided, however, that if the maximum amount
of the debt, obligation or other liability guaranteed thereby has not been
established, the amount of such contingent liability shall be the maximum
reasonably anticipated amount of the debt, obligation or other liability; provided,
further, that any agreement to limit the maximum amount of such Person’s
obligation under such contingent liability shall not, of and by itself, be
deemed to establish the maximum reasonably anticipated amount of such debt,
obligation or other liability.


 


“Contract Times”
means the “Contract Times” (as defined in the Design-Build Agreement).


 


“Contractual
Obligation” means, as to any Person, any provision of any security issued
by such Person or of any agreement, instrument or other undertaking to which
such Person is a party or by which it or any of its property is bound.


 


“Conversion Date”
means the Business Day upon which (i) all the conditions precedent set
forth in Section 6.04 (Conditions to Term Loan
Funding) shall have been satisfied (or waived in accordance with
the terms of this Agreement) and (ii) the Construction Loans are converted
to Term Loans.


 


“Conversion Date
Certain” means March 31, 2008.


 


“Conversion Date
Funding Notice” means the request for Funding on the Conversion Date in the
form of Exhibit F delivered in accordance with Section 2.05
(Notice of Fundings).


 


“Co-Product Marketing
Agreement” means that certain Co-Product Marketing Agreement, dated as of
May 9, 2007, between the Borrower and Dakotaland Feeds, LLC.


 


“Dakotaland
Administrative Services Agreement” means that certain Administrative
Services Agreement, dated as of May 1, 2007, between the Borrower and
Dakotaland Feeds, LLC.


 


“DDG” means dried
distillers grains produced by the Borrower at the Project.


 


“Debt Service”
means, for any period, the sum of (i) all fees (including Fees) scheduled
to become due and payable during such period to the Senior Secured Parties,
(ii) interest on the Loans (taking into account any Interest Rate
Protection Agreements) scheduled to become due and payable during such period
to the Senior Secured Parties, 


 


13

















 


(iii) principal
payments of the Loans (excluding the Required Cash Sweep and any other
mandatory prepayments) scheduled to become due and payable during such period
to the Senior Secured Parties and (iv) all payments due by the Borrower
pursuant to Section 4.03 (Increased Eurodollar Loan
Costs) and Section 4.07(a) (Taxes) with
respect to such scheduled principal, interest and fees.


 


“Debt Service LC
Waiver Letter” means, with respect to any Debt Service Reserve Letter of
Credit, a waiver letter from the issuer thereof in substantially the form of Exhibit P.


 


“Debt Service Reserve
Account” has the meaning set forth in Section 3.01(a)(vii) of the
Accounts Agreement.


 


“Debt Service Reserve
Letter of Credit” means an irrevocable, standby letter of credit issued by
an Acceptable Bank in favor of, and in form and substance reasonably
satisfactory to, the Collateral Agent and the Administrative Agent, and in
respect of which a Debt Service LC Waiver Letter in favor of, and satisfactory
to, the Collateral Agent has been delivered.


 


“Debt Service Reserve
Required Amount” means, as of any date, scheduled Debt Service payable in
respect of the succeeding six (6) months.


 


“Default” means
any condition, occurrence or event that, after notice or passage of time or
both, would be an Event of Default.


 


“Default Rate” has
the meaning set forth in Section 3.06 (Default
Interest Rate).


 


“Deferred Approvals”
has the meaning provided in Section 5.03(a)(iii) (Representations
and Warranties - Governmental Approvals).


 


“Deferred Contracts”
has the meaning provided in Section 5.11(a)(iv) (Representations
and Warranties - Contracts).


 


“Design-Build
Agreement” means that certain Agreement Between Owner and Design/Builder on
the Basis of a Stipulated Price, dated as of July 14, 2006, between the
Borrower and Design-Build Contractor, including without limitation the “General
Conditions” (as defined therein), as amended by the Consent and Agreement,
dated as of October 1, 2007, between the Borrower, the Design-Build Contractor
and the Collateral Agent.


 


“Design-Build
Contractor” means ICM, Inc., a Kansas corporation.


 


14

















 


“Distillers Grains”
means DDG, WDG, and any other form of distillers grain products (including
syrup) marketed by the Borrower from time to time.


 


“Dollar” and the
sign “$” mean lawful money of the United States.


 


“Domestic Office”
means, relative to any Lender, the office of such Lender designated on Schedule 2.01
or designated in the Lender Assignment Agreement pursuant to which such Lender
became a Lender hereunder or such other office of a Lender (or any successor or
assign of such Lender) within the United States as may be designated from time
to time by written notice from such Lender, as the case may be, to the Borrower
and the Administrative Agent.


 


“Drawdown Schedule”
means, with respect to the Construction Loans, the schedule set forth on Schedule 6.03(a)(v),
as the same may be amended from time to time with the approval of the
Administrative Agent and the Independent Engineer.


 


“Eligible Accounts”
means all Accounts of the Borrower each of which meets the following
requirements:


 


it arises from either (i) the delivery
of Products by the Borrower, which delivery has been fully performed and, if
applicable, acknowledged and/or accepted by the Account Debtor with respect
thereto, or (ii) the sale or lease of goods by the Borrower, and if it
arises from the sale of goods, such goods have been shipped or delivered to the
Account Debtor thereof;


 


it is a valid, legally enforceable obligation
of the Account Debtor thereunder, and is not subject to any reserve, discount,
credit, allowance (except any reserve, discount, credit or allowance that has
been deducted in computing the net amount thereof), offset, counterclaim or
other defense on such Account Debtor’s part or to any claim on such Account
Debtor’s part denying liability thereunder in whole or in part;


 


it is subject to a perfected Lien in the
Collateral Agent’s favor, for the benefit of the Senior Secured Parties, and is
not subject to any other Lien, except for Permitted Liens;


 


it is evidenced by an invoice (dated no later
than the date of shipment to the Account Debtor or performance and having 


 


15

















 


a due date not more than sixty (60) days after the date of such
invoice) rendered to such Account Debtor, and is not evidenced by any instrument
or chattel paper;


 


it is payable in Dollars;


 


it is not owing by any Governmental
Authority;


 


it is not owing by any Account Debtor
residing, located or having its principal activities or place of business
outside the United States, unless the sale of goods giving rise to such Account
is credit enhanced by means of a letter of credit, bankers’ acceptance or other
credit support that is satisfactory to the Administrative Agent and, if
required by the Administrative Agent, has been delivered to the Administrative
Agent and is directly drawable by the Administrative Agent;


 


it is not owing by any Account Debtor
involved in any Insolvency or Liquidation Proceeding or with respect to which
any Borrower has received notice of an imminent Insolvency or Liquidation
Proceeding or a material impairment of the financial condition of such Account
Debtor;


 


it is not owing by any Affiliate of the
Borrower, other than pursuant to a Project Document between the Borrower and an
Affiliate thereof;


 


it is not unpaid more than sixty
(60) days after the invoice date;


 


it is not owing by an Account Debtor that has
amounts outstanding more than sixty (60) days after the due date of any
invoice;


 


it is not an Account arising in a transaction
where goods are sold on consignment or are sold pursuant to a sale on approval,
a bill and hold, or any other terms by reason of which the payment by the
Account Debtor may be conditional; and


 


it is not an Account as to which the
Administrative Agent, at any time or times hereafter, determines, in its
reasonable judgment and in good faith, that the prospect of payment or 


 


16

















 


performance by the Account Debtor thereof is or will be impaired in any
material respect.


 


An Account of the Borrower that is at any time an Eligible Account, but
which subsequently fails to meet any of the foregoing requirements, shall
immediately cease to be an Eligible Account; provided, that if such an
ineligible Account subsequently meets all of the foregoing requirements, it
shall again be deemed an Eligible Account.


 


“Eligible Assignee”
means (a) any Lender, (b) an Affiliate of any Lender, (c) any
Person that a Lender merges into, consolidates with or is consolidated into,
(d) any Person that acquires substantially all of the assets of a Lender,
(e) an Approved Fund, and (f) any other Person (other than a natural
person) approved by the Administrative Agent (such approval not to be
unreasonably withheld or delayed).


 


“Eligible Inventory”
means the Inventory of the Borrower that meets each of the following
requirements:


 


(i)                                     in
the case of Inventory consisting of corn or other grain feedstock, or
denaturant, such corn or other grain feedstock or denaturant that is readily
usable for the operation of the Project in the ordinary course of business;


 


(ii)                                  in
the case of Inventory consisting of Products, such Products that are readily
marketable by the Project in the ordinary course of business;


 


(iii)                               in
the case of goods held for sale, the value thereof is adjusted to its
then-current market value;


 


(iv)                              it
is owned by the Borrower and is subject to a perfected Lien in the Collateral
Agent’s favor, for the benefit of the Senior Secured Parties, and is not
subject to any other Lien, except for Permitted Liens;


 


(v)                                 it
is not consigned Inventory;


 


(vi)                              it
is located only at the Sites or at such other location as is approved in
writing by the Administrative Agent; and


 


(vii)                           the
Administrative Agent, in its reasonable judgment and in good faith, has not
determined that it is unacceptable or should be price-adjusted in any material
respect due to age, type, quality, category and/or quantity.


 


17

















 


Any of the Inventory of the Borrower that is at any time Eligible
Inventory, but which subsequently fails to meet any of the foregoing
requirements, shall immediately cease to be Eligible Inventory; provided
that if such ineligible Inventory subsequently meets all of the foregoing
requirements, it shall again be deemed Eligible Inventory.


 


“Energy Management
Agreement” means that certain Energy Management Agreement, dated as of
February 1, 2007, between Energy Management & Consulting Services, LLC
and the Borrower.


 


“Environmental
Affiliate” means any Person, only to the extent of, and only with respect
to matters or actions of such Person for which, the Borrower could reasonably
be expected to have liability as a result of the Borrower retaining, assuming,
accepting or otherwise being subject to liability for Environmental Claims
relating to such Person, whether the source of the Borrower’s obligation is by
contract or operation of Law.


 


“Environmental
Approvals” means any Governmental Approvals required under applicable
Environmental Laws.


 


“Environmental Claim”
means any written notice, claim, demand or similar written communication by any
Person alleging potential liability or requiring or demanding regulatory
compliance or remedial or responsive measures (including potential liability
for investigatory costs, cleanup, remediation and mitigation costs,
governmental response costs, natural resources damages, property damages,
personal injuries, fines or penalties) in each such case (x) either
(i) with respect to environmental contamination-related liabilities or
obligations with respect to which the Borrower could reasonably be expected to
be responsible that are, or could reasonably be expected to be, in excess of
two hundred thousand Dollars ($200,000) in the aggregate, or (ii) that has
or could reasonably be expected to result in a Material Adverse Effect and
(y) arising out of, based on or resulting from (i) the presence,
release or threatened release into the environment, of any Materials of
Environmental Concern at any location, whether or not owned by such Person;
(ii) circumstances forming the basis of any violation, or alleged
violation, of any Environmental Laws or Environmental Approvals; or
(iii) personal injury or damage to property as a result of exposure to
Materials of Environmental Concern.


 


“Environmental
Consultant” means R.W. Beck, Inc., or any replacement environmental
consultant appointed by the Administrative Agent with the approval of the
Required Lenders.


 


“Environmental Laws”
means all Laws applicable to the Project relating to pollution or protection of
human health, safety or the environment (including ambient air,


 


18
















 


surface water, ground
water, land surface or subsurface strata), including Laws relating to
emissions, discharges, releases or threatened releases of Materials of
Environmental Concern, or otherwise applicable to the Project relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport, management, remediation or handling of Materials of Environmental
Concern.


 


“Environmental Site
Assessment Report” means, a Phase I environmental site assessment report
prepared by an environmental consulting firm reasonably acceptable to the
Administrative Agent, which report shall comply with ASTM standard 1527-05
(with such modifications thereto as may reasonably be requested by the Borrower
and are reasonably acceptable to the Administrative Agent), and a Phase II
environmental site assessment reasonably acceptable to the Administrative
Agent, addressing any recognized environmental conditions or other areas of
concern identified in the relevant Phase I report if in the reasonable determination
of the Administrative Agent, acting in consultation with the Independent
Engineer, a Phase II assessment is warranted.


 


“Equator Principles”
means The Equator Principles – An Industry Framework for Financial Institutions
to Manage Environmental and Social Issues in Project Financing (commonly
referred to as “The Equator Principles”).


 


“Equity Interests”
means, with respect to any Person, all of the shares of capital stock of (or
other ownership or profit interests in) such Person, all of the warrants,
options or other rights for the purchase or acquisition from such Person of
shares of capital stock of (or other ownership or profit interests in) such
Person, all of the securities convertible into or exchangeable for shares of
capital stock of (or other ownership or profit interests in) such Person or
warrants, rights or options for the purchase or acquisition from such Person of
such shares (or such other interests), and all of the other ownership or profit
interests in such Person (including partnership, member or trust interests
therein), whether voting or nonvoting, and whether or not such shares,
warrants, options, rights or other interests are outstanding on any date of
determination, in each such case including all voting rights and economic rights
related thereto.


 


“ERISA” means the
Employee Retirement Income Security Act of 1974, as amended, and any
successor statute of similar import, together with the regulations thereunder,
in each case as in effect from time to time. References to sections of ERISA
also refer to any successor sections.


 


“ERISA Affiliate”
means any Person, trade or business that, together with the Borrower, is or was
treated as a single employer under Section 414 of the Code or
Section 4001 of ERISA.


 


19

















 


“Ethanol Market
Consultant” means Muse, Stancil & Co., or any replacement ethanol
market consultant appointed by the Administrative Agent.


 


“Ethanol Marketing
Agreement” means that certain Ethanol Marketing Agreement dated as of
November 30, 2000, between the Borrower and Williams Ethanol Services,
Inc. D/B/A  Williams Bio-Energy, N/K/A
Aventine Renewable Energy, Inc., as amended March 31, 2003 and
December 1, 2006.


 


“Eurodollar Loan”
means any Loan bearing interest at a rate determined by reference to the
Eurodollar Rate and the provisions of Article II (Commitments
and Funding) and Article III (Repayments,
Prepayments, Interest and Fees).


 


“Eurodollar Office”
means, relative to any Lender, the office of such Lender designated as such on Schedule 2.01
or designated in the Lender Assignment Agreement pursuant to which such Lender
became a Lender hereunder or such other office of a Lender as designated from
time to time by notice from such Lender to the Borrower and the Administrative
Agent pursuant to Section 4.04 (Obligation to Mitigate)
that shall be making or maintaining Eurodollar Loans of such Lender hereunder.


 


“Eurodollar Rate”
means, for any Interest Period with respect to any Eurodollar Loan, an interest
rate per annum equal to the rate per annum obtained by dividing (x) LIBOR
for such Interest Period and such Eurodollar Loan, by (y) a percentage
equal to (i) 100% minus (ii) the Eurodollar Reserve Percentage for
such Interest Period.


 


“Eurodollar Reserve
Percentage” means, for any day during any Interest Period, the reserve
percentage (expressed as a decimal, carried out to five decimal places) in
effect on such day, whether or not applicable to any Lender, under regulations
issued from time to time by the F.R.S. Board for determining the maximum
reserve requirement (including any emergency, supplemental or other marginal
reserve requirement) with respect to eurocurrency funding (currently referred
to as “Eurocurrency Liabilities”). The Eurodollar Rate for each outstanding
Eurodollar Loan shall be adjusted automatically as of the effective date of any
change in the Eurodollar Reserve Percentage.


 


“Event of Abandonment”
means any of the following shall have occurred: (i) the abandonment by the
Borrower of the development, construction, operation or maintenance of the
Project for a period of more than sixty (60) consecutive days (other than
as a result of force majeure, an Event of Taking or a Casualty Event),
(ii) the suspension of all or substantially all of the Borrower’s
activities with respect to the Project, other than as the result of a force
majeure, Event of Taking  or Casualty
Event, for a period of more than sixty (60) consecutive days, or
(iii) any written 


 


20

















 


acknowledgement by the
Borrower of a final decision to take any of the foregoing actions.


 


“Event of Default”
means any one of the events specified in Section 8.01 (Events of Default).


 


“Event of Taking”
means any taking, exercise of rights of eminent domain, public improvement,
inverse condemnation, condemnation or similar action of or proceeding by any
Governmental Authority relating to any material part of the Project with, any
Equity Interests of the Borrower, or any other assets thereof.


 


“Event of Total Loss”
means the occurrence of a Casualty Event affecting all or substantially all of
the Project or the assets of the Borrower.


 


“Excluded Taxes”
means, with respect to any Agent or any Lender or any other recipient of any
payment to be made by or on account of any Obligation of the Borrower
hereunder, (a) income or franchise Taxes imposed on (or measured by) such
Agent’s, Lender’s or other recipient’s net income by the United States, or by
the jurisdiction under the laws of which such recipient is organized or in
which its principal office is located or, in the case of any Lender, in which
its applicable office is located, or (b) any branch profits Tax imposed by
the United States, or any similar Tax imposed by any other jurisdiction
described in clause (a) above or (c) any United States withholding
Tax to the extent that it is imposed on amounts payable to such Agent or such
Lender at the time such Agent or such Lender becomes a party to this Agreement.


 


“Existing Plant Debt”
means all outstanding payment obligations of the Borrower pursuant to
(i) that certain Master Loan Agreement by and between Dakota Fuels, Inc.
and CoBank, ACB, dated October 27, 2005; (ii) that certain Revolving
Term Loan Revolver by and between Dakota Fuels, Inc. and CoBank, ACB dated October 27,
2005; (iii) that certain Multiple Advance Term Loan Supplement by and
between Dakota Fuels, Inc. and CoBank, ACB dated October 27, 2005;
(iv) that certain Master Loan Agreement by and between Borrower and Dakota
Fuels, Inc. dated October 27, 2005; (v) that certain Revolving Term
Loan Revolver by and between Borrower and Dakota Fuels, Inc. dated
October 27, 2005; (vi) that certain Multiple Advance Term Loan
Supplement by and between Borrower and Dakota Fuels, Inc. dated October 27,
2005; (vii) that certain Credit Agreement by and between the LP Pledgor
and Kruse Investment Company, Inc. dated February 12, 2007 and
(viii) that certain Subordinated Promissory Note, dated February 12, 2007,
of the Borrower payable to the order of the LP Pledgor.


 


“Existing Plants”
means, collectively, the Aberdeen I Plant and the Huron Plant.


 


21

















 


“Extraordinary
Proceeds Account” has the meaning provided in Section 3.01(a)(xi) of
the Accounts Agreement.


 


“F.R.S. Board” means
the Board of Governors of the Federal Reserve System or any successor thereto.


 


“Federal Funds
Effective Rate” means, for any day, the rate per annum (rounded upwards, if
necessary, to the nearest 1/100 of 1%) equal to the weighted average
of the rates on overnight federal funds transactions with members of the
Federal Reserve System arranged by federal funds brokers on such day, as
published on the next succeeding Business Day by the Federal Reserve Bank of
New York, or, if such rate is not so published for any day that is a Business
Day, the average of the quotations for such day for such transactions received
by the Administrative Agent from three federal funds brokers of recognized
standing selected by the Administrative Agent.


 


“Fee Letters”
means (i) that certain Fee Letter among the Administrative Agent, the
Collateral Agent and the Borrower, (ii) the Accounts Bank Fee Letter and
(iii) that certain Fee Letter between the Lead Arranger and the Borrower,
each dated as of the date hereof and setting forth certain fees that will, from
time to time, become due and payable with respect to the Loans and to the
Agents.


 


“Fees” means,
collectively, each of the fees payable by the Borrower for the account of any
Lender or Agent pursuant to Section 3.13 (Fees).


 


“Final Completion
Certificate” means (a) a certificate of the Independent Engineer, in
substantially the form of Exhibit Q-1, or (b) a certificate of
the Borrower, in substantially the form of Exhibit Q-2, in each
case confirming that the Final Completion Date has occurred.


 


“Final Completion Date”
means, with respect to the Aberdeen II Plant, the date (which shall occur
on or before the Conversion Date Certain) on which the following conditions
have been satisfied, as certified by each of the Borrower and the Independent
Engineer in a Final Completion Certificate completed to the reasonable
satisfaction of the Administrative Agent:


 


construction of such Plant shall have been
completed (other than punch list items) and such Plant shall be ready to grind
corn and begin operation for its intended use as an ethanol production
facility, and such Plant shall not have adversely impacted the ability of the
Existing Plants to perform at or above levels included in the performance
assumption for the Existing Plants in the Financial Model;


 


22

















 


the Performance Test shall have been
completed and shall have demonstrated that such Plant has achieved the
Performance Criteria, while meeting air emissions requirements;


 


training shall have been completed for all
required personnel for such Plant in accordance with the Design-Build
Agreement;


 


the Borrower shall have received a plant
operation manual and plant maintenance manual, associated documents, training
manuals, final safety plans, and all materials and documents provided by the
Design-Build Contractor and other manufacturers, suppliers and vendors for such
Plant, and in each case, shall have been verified by the Independent Engineer;


 


the Borrower shall have received final
construction drawings for such Plant;


 


all construction costs for such Plant shall
have been fully paid and the Administrative Agent shall have received
reasonably satisfactory evidence that there are no mechanic’s, workmen’s,
materialmen’s or other similar Liens or other claims on any part of such Plant,
the relevant Site, or other assets relating to the work or services of such
Plant provided by the Design-Build Contractor or any of their subcontractors;


 


the Design-Build Contractor and each
subcontractor for such Plant shall have provided all satisfactory Lien waivers;


 


all Necessary Project Approvals required to
be obtained at such time with respect to such Plant shall have been obtained;


 


insurance required pursuant to Schedule 7.01(h)
and, with respect to the Borrower, any Project Document shall be in place, as
confirmed by the Insurance Consultant; and


 


an updated survey for such Plant’s Site has
been prepared and is in form and substance satisfactory to the Independent
Engineer.


 


23

















 


 “Final Maturity Date” means, with
respect to the Term Loans, the earlier to occur of (a) the date that
occurs six (6) years after the Conversion Date and (b) the date that
occurs eight (8) years after the Closing Date.


 


“Financial Model”
means the pro forma financial statements and projections of revenue and
expenses and cash flows with respect to the Borrower and the Project for the
period from September 1, 2007 through the Fiscal Year ended
December 31, 2022, attached hereto as Exhibit K, as the same
may be updated by the Borrower with the prior written approval of the
Administrative Agent.


 


“Financial Officer”
means, with respect to any Person, the controller, treasurer or chief financial
officer of such Person.


 


“Financing Documents”
means:


 


(i)                                     this
Agreement;


 


(ii)                                  the
Accounts Agreement;


 


(iii)                               the
Intercreditor Agreement;


 


(iv)                              the
Notes;


 


(v)                                 the
Security Documents;


 


(vi)                              the
Interest Rate Protection Agreements;


 


(vii)                           the Fee
Letters;


 


(viii)                        the other
financing and security agreements, documents and instruments delivered in
connection with this Agreement; and


 


(ix)                                each
other document designated as a Financing Document by the Borrower and the
Administrative Agent.


 


“Fiscal Quarter”
means any quarter of a Fiscal Year.


 


“Fiscal Year”
means any period of twelve (12) consecutive calendar months ending on
September 30.


 


“Funding” means
the incurrence of each Construction Loan, Term Loan or Working Capital Loan
(other than a Working Capital Loan resulting from a draw on a Letter of Credit)
made by the Lenders on a single date.


 


24

















 


“Funding Date”
means, with respect to each Funding, the date on which funds are disbursed by
the Administrative Agent, on behalf of the relevant Lenders, to the Borrower in
accordance with Section 2.06 (Funding
of Loans).


 


“Funding Notice”
means (i) in the case of a request for a Funding of Construction Loans, a
Construction Loan Funding Notice, (ii) in the case of a request for a
Funding of Term Loans, the Conversion Date Funding Notice, and (iii) in
the case of a request for Funding of Working Capital Loans, a Working Capital
Loan Funding Notice.


 


“GAAP” means
generally accepted accounting principles in effect from time to time in the
United States, applied on a consistent basis.


 


“Gas Purchase and Sale
Agreement” means that certain Base Contract for Sale and Purchase of
Natural Gas, dated October 1, 2006, between BP Canada Energy Marketing
Corp. and the Borrower, together with any transaction confirmations related
thereto.


 


“Governmental Approval”
means any authorization, consent, approval, license, lease, ruling, permit,
certification, exemption, filing for registration by or with any Governmental
Authority.


 


“Governmental
Authority” means any nation, state, sovereign, or government, any federal,
regional, state, local or political subdivision and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.


 


“GP Agreement”
means the Restated Certificate of Incorporation of Dakota Fuels, Inc., a
Delaware corporation.


 


“GP Pledgor” means
Dakota Fuels, Inc., a Delaware corporation.


 


“Grain Origination
Agreement” means that certain Grain Origination Agreement dated
November 8, 2006, between the Borrower and South Dakota Wheat Growers Association,
as amended by the Amendment to Grain Origination Agreement dated as of October
1, 2007.


 


“Granting Lender”
has the meaning provided in Section 10.03(h) (Assignments).


 


“Guarantee” means,
as to any Person, (a) any obligation, contingent or otherwise, of such
Person guaranteeing or having the economic effect of guaranteeing any
Indebtedness or other obligation payable or performable by another Person (the “primary
obligor”) in any manner, whether directly or indirectly, and including any
obligation of such Person, direct or indirect, (i) to purchase or pay (or
advance or supply 


 


25

















 


funds for the purchase or
payment of) such Indebtedness or other obligation, (ii) to purchase or
lease property, securities or services for the purpose of assuring the obligee
in respect of such Indebtedness or other obligation of the payment or
performance of such Indebtedness or other obligation, (iii) to maintain
working capital, equity capital or any other financial statement condition or
liquidity or level of income or cash flow of the primary obligor so as to
enable the primary obligor to pay such Indebtedness or other obligation, or
(iv) entered into for the purpose of assuring in any other manner the
obligee in respect of such Indebtedness or other obligation of the payment or
performance thereof or to protect such obligee against loss in respect thereof
(in whole or in part), or (b) any Lien on any assets of such Person
securing any Indebtedness or other obligation of any other Person, whether or
not such Indebtedness or other obligation is assumed by such Person (or any
right, contingent or otherwise, of any holder of such Indebtedness to obtain
any such Lien).


 


“Historical Debt
Service Coverage Ratio” or “HDSCR” means, as of any Quarterly
Payment Date, for the four (4) Fiscal Quarters immediately preceding (and
not including the then-current Fiscal Quarter) such Quarterly Payment Date (or,
if less than four (4) Fiscal Quarters have elapsed since the Conversion
Date, for such number of full Fiscal Quarters that has elapsed since the
Conversion Date), the ratio of (i) Cash Flow Available for Debt Service
during such period to (ii) Debt Service during such period.


 


“Huron Grain Elevator
Lease” means that certain Lease Agreement, dated as of October 1, 2007,
between the Borrower and South Dakota Wheat Growers Association, relating to
the grain elevator for the Huron Plant.


 


“Huron Grain Receiving
Area Lease” means that certain Lease Agreement, dated as of
August 1, 2003, between the Borrower as lessor and South Dakota Wheat
Growers Association as lessee, for the construction, installation and operation
of the Corn System as defined therein, as amended by the Addendum to Lease Agreement,
dated November 6, 2006.


 


“Huron Ground Lease”
means that certain Ground Lease, effective May 1, 1998, between the
Borrower as Lessee and Farmland Industries, Inc. as Lessor, as assigned to Land
O’Lakes Farmland Feed LLC (n/k/a Land O’Lakes Purina Feed LLC) pursuant to an
Assignment and Assumption of Ground Lease dated July 16, 2004, and as
amended by the First Amendment to Lease dated as of February 10, 2006,
between Land O’Lakes Purina Feed, LLC and the Borrower.


 


“Huron Insurance and
Condemnation Proceeds Account” has the meaning provided in
Section 3.01(a)(x) of the Accounts Agreement.


 


26

















 


“Huron License
Agreement” means that certain Agreement for Engineering Services, dated as
of September 20, 2005, between the Borrower as owner and Design-Build
Contractor as engineer (including without limitation Exhibit F (License of
Proprietary Property of Engineer) thereof), as amended by the Consent and
Agreement, dated as of October 1, 2007, between the Borrower, the Technology
License Provider and the Collateral Agent.


 


“Huron Mortgage”
means the Mortgage—One Hundred Eighty Day Redemption, Collateral Real Estate
Mortgage, Security Agreement, Financing Statement, Fixture Filing and
Assignment of Leases, Rents and Security Deposits, in form and substance
reasonably satisfactory to the Lenders, to be made by the Borrower to the
Collateral Agent for the benefit of the Senior Secured Parties in respect of
the Sites for the Huron Plants.


 


“Huron Plant”
means the existing ethanol production facility owned by the Borrower and
located in Huron, South Dakota, with a nameplate capacity of
approximately 30 million gallons-per-year of denatured ethanol,
including the Site and all buildings, structures, improvements, easements and
other property related thereto.


 


“Huron Subordination,
Non-Disturbance and Attornment Agreement” means that certain Subordination,
Non-Disturbance and Attornment Agreement, dated as of October 1, 2007, among
COBANK, ACB, a/k/a CoBank, as mortgagee, the Borrower as lessee and South
Dakota Wheat Growers Association as mortgagor, in relation to the Huron Grain
Elevator Lease, including all schedules, exhibits and attachments thereto.


 


“Indebtedness”
means, as to any Person at a particular time, without duplication, all of the
following, whether or not included as indebtedness or liabilities in accordance
with GAAP:


 


(a)                                  all
obligations of such Person for or in respect of moneys borrowed or raised,
whether or not for cash by whatever means (including acceptances, deposits,
discounting, letters of credit, factoring, and any other form of financing
which is recognized in accordance with GAAP in such Person’s financial
statements as being in the nature of a borrowing or is treated as “off-balance
sheet” financing);


 


(b)                                 all
obligations of such Person evidenced by bonds, debentures, notes, loan
agreements or other similar instruments;


 


(c)                                  all
obligations of such Person for the deferred purchase price of property or
services;


 


27

















 


(d)                                 all
obligations of such Person under conditional sale or other title retention
agreements relating to property or assets 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 or are
otherwise limited in recourse);


 


(e)                                  the
maximum amount of all direct or contingent obligations of such Person arising
under letters of credit (including standby and commercial), bankers’
acceptances, bank guaranties, surety bonds and similar instruments;


 


(f)                                    all
Capitalized Lease Liabilities;


 


(g)                                 net
obligations of such Person under any Swap Contract;


 


(h)                                 all
obligations of such Person to purchase, redeem, retire, defease or otherwise
make any payment in respect of any Equity Interests in such Person or any other
Person or any warrants, rights or options to acquire such Equity Interests,
valued, in the case of redeemable preferred interests, at the greater of its
voluntary or involuntary liquidation preference plus accrued and unpaid
dividends; and


 


(i)                                     all
Guarantees of such Person in respect of any of the foregoing.


 


For all purposes hereof, the Indebtedness of any Person shall include
the Indebtedness of any partnership or joint venture (other than a joint
venture that is itself a corporation or limited liability company) in which
such Person is a general partner or a joint venturer, unless such Indebtedness
is expressly made non-recourse to such Person. The amount of any net obligation
under any Swap Contract on any date shall be deemed to be the Swap Termination
Value thereof as of such date.


 


“Indemnified Taxes”
means Taxes other than Excluded Taxes.


 


“Indemnitee” has
the meaning provided in Section 10.08 (Indemnification
by the Borrower).


 


“Independent Director”
means a Person, who is not at the time of initial appointment as the
Independent Director or at any time while serving as the Independent Director
and has not been at any time during the five (5) years preceding such
initial appointment:


 


28

















 


(i)            a direct or indirect
owner of any Equity Interest in, director (with the exception of serving as the
Independent Director), officer, employee, member, partner, shareholder, manager
or contractor, bankruptcy trustee, attorney or counsel of the Borrower, any
partner of the Borrower or any Affiliate of any of them;


 


(ii)           a creditor, customer,
supplier, or other person who derives any of its purchases or revenues from its
activities with the Borrower, any partner of the Borrower, or any Affiliate of
any of them (with the exception of its activity of serving as the Independent
Director);


 


(iii)          a Person controlling or
under common control with the Borrower, any partner of the Borrower or any
Affiliate of any of them or any Person excluded from serving as Independent
Director under clause (i) or (ii) of this definition;


 


(iv)          a member of the
immediate family by blood or marriage of any Person excluded from being an
Independent Director under clause (i) or (ii) of this definition; or


 


(v)           a Person who received,
or a member or employee of a firm or business that received, fees or other
income from the Borrower or any Affiliate thereof in the aggregate in excess of
five percent (5%) of the gross income, for any applicable year, of such
Person (with the exception of fees received for its activity of serving as the
Independent Director).


 


“Independent Engineer”
means R.W. Beck, Inc., or any replacement independent engineer appointed by the
Administrative Agent and, so long as no Default or Event of Default has
occurred and is continuing, reasonably acceptable to Borrower (which acceptance
shall not be unreasonably withheld or delayed).


 


“Independent Engineer’s
Certificate” means a certificate of the Independent Engineer in
substantially the form of Exhibit J-2.


 


“Information” has
the meaning provided in Section 10.17 (Treatment of
Certain Information; Confidentiality).


 


“Informational Report”
means a progress report provided by the Design-Build Contractor in a form
satisfactory to the Independent Engineer demonstrating, among other things,
progress of construction of the Aberdeen II Plant during the period covered by
the relevant Application for Payment.


 


29

















 


“Initial Quarterly
Payment Date” means the first Quarterly Payment Date following the
Conversion Date.


 


“Insolvency or
Liquidation Proceeding” has the meaning provided in the Intercreditor
Agreement.


 


“Insurance Consultant”
means Moore-McNeil, LLC, or any replacement insurance consultant appointed by
the Administrative Agent.


 


“Insurance Proceeds”
means all proceeds of any insurance policies required pursuant to this
Agreement or otherwise obtained with respect to the Borrower or the Project
that are paid or payable to or for the account of the Borrower, or the
Collateral Agent as loss payee, or additional insured (other than Business
Interruption Insurance Proceeds and proceeds of insurance policies relating to
third party liability).


 


“Interconnect
Agreement” means that certain Interconnect Agreement, dated March 7,
2007, between the Borrower and Northern Border Pipeline Company, as amended by
that certain Amendment to Interconnect Agreement dated August 16, 2007.


 


“Intercreditor
Agreement” means that certain Intercreditor Agreement dated as of the date
hereof among the Borrower, the Sponsor, the Pledgors, the Collateral Agent as
First Lien Agent for the First Lien Claimholders and the Bond Trustee as Second
Lien Agent (as defined therein).


 


“Interest Payment Date”
means (i) with respect to Eurodollar Loans, the last day of each
applicable Interest Period (and, if such Interest Period exceeds three months,
on the day three months after such Eurodollar Loan is made or continued) or, if
applicable, any date on which such Eurodollar Loan is converted to a Base Rate
Loan and (ii) with respect to Base Rate Loans, on each Quarterly Payment
Date or, if applicable, any date on which such Base Rate Loan is converted to a
Eurodollar Loan.


 


“Interest Period”
means, with respect to any Eurodollar Loan, the period beginning on (and
including) the date on which such Eurodollar Loan is made pursuant to Section 2.06
(Funding of Loans) or the date on
which each successive interest period for each such Eurodollar Loan is
determined pursuant to Section 3.05 (Interest
Rates) and ending on (and including) the day that numerically
corresponds to such date one (1), two (2), three (3) or six
(6) months thereafter, in either case as the Borrower may select in the
relevant Funding Notice or Interest Period Notice; provided, however,
that (i) if such Interest Period would otherwise end on a day that is not
a Business Day, such Interest Period shall end on the next following Business
Day (unless such next following Business Day is in a different calendar month,
in which case such Interest Period shall end on the next preceding Business
Day), (ii) any Interest Period that begins on the last 


 


30

















 


Business Day of a month
(or on a day for which there is no numerically corresponding day in the month
at the end of such Interest Period) shall end on the last Business Day of the
month at the end of such Interest Period, (iii) the Borrower may not
select any Interest Period that ends after any Quarterly Payment Date unless,
after giving effect to such selection, the aggregate outstanding principal
amount of Eurodollar Loans having Interest Periods which end on or prior to
such Quarterly Payment Date shall be at least equal to the aggregate principal
amount of Eurodollar Loans due and payable on or prior to such Quarterly
Payment Date, and (iv) no Interest Period may end later than the Maturity
Date for the relevant type of Loan.


 


“Interest Period
Notice” means a notice in substantially the form attached hereto as Exhibit O,
executed by an Authorized Officer of the Borrower.


 


“Interest Rate
Protection Agreement” means each interest rate swap, collar, put, or cap,
or other interest rate protection arrangement, with a Qualified Counterparty,
in each such case that is reasonably satisfactory to the Administrative Agent
and is entered into in accordance with Section 7.01(u) (Affirmative Covenants - Interest Rate Protection Agreement).


 


“Interest Rate
Protection Provider” means a Qualified Counterparty that is party to an
Interest Rate Protection Agreement.


 


“Inventory” means
inventory, as that term is defined in the UCC, now or hereafter owned by the
Borrower, including all products, goods, materials and supplies produced,
purchased or acquired by the Borrower for the purpose of sale or use in the
Borrower’s operations in the ordinary course of business.


 


“Issuance Request”
means has the meaning provided in Section 2.04(b) (Letters of
Credit).


 


“Issuer” means
Brown County, South Dakota.


 


“Issuing Bank” means
WestLB.


 


“Law” means, with
respect to any Governmental Authority, any constitutional provision, law,
statute, rule, regulation, ordinance, treaty, order, decree, judgment,
decision, common law, holding, injunction, Governmental Approval or requirement
of such Governmental Authority. Unless the context clearly requires otherwise,
the term “Law” shall include each of the foregoing (and each provision
thereof) as in effect at the time in question, including any amendments,
supplements, replacements, or other modifications thereto or thereof, and
whether or not in effect as of the date of this Agreement.


 


31

















 


“LC Cap” means
three million Dollars ($3,000,000).


 


“LC Cash Collateral
Sub-Account” has the meaning provided in Section 3.01(a)(xiv) of the
Accounts Agreement.


 


“Lead Arranger”
means WestLB in its capacity as sole lead arranger, bookrunner and syndication
agent hereunder.


 


“Leased Premises”
means those certain leased premises described in the Huron Ground Lease, the
Huron Grain Elevator Lease and the Aberdeen Grain Elevator Lease.


 


“Lender Assignment
Agreement” means a Lender Assignment Agreement, substantially in the form
of Exhibit R.


 


“Lenders” means
the persons identified as “Lenders” and listed on the signature pages of this
Agreement and each other Person that acquires the rights and obligations of a
Lender hereunder pursuant to Section 10.03 (Assignments).


 


“Letter of Credit”
means each letter of credit issued by the Issuing Bank pursuant to Section 2.04
(Letters of Credit).


 


“Letter of Credit
Availability Fee” has the meaning provided in Section 3.13(b) (Fees).


 


“Letter of Credit
Fronting Fee” has the meaning provided in Section 3.13(b) (Fees).


 


“LIBOR” means, for
any Interest Period for any Eurodollar Loan:


 


(a)                          the
rate per annum equal to the rate determined by the Administrative Agent to be
the offered rate that appears on the page of the Telerate screen (or any
successor thereto) that displays an average British Bankers Association
Interest Settlement Rate for deposits in Dollars (for delivery on the first day
of such Interest Period) with a term equivalent to such Interest Period,
determined as of approximately 11:00 a.m. (London time) two
(2) Business Days prior to the first day of such Interest Period; or


 


(b)                         if
the rate referenced in the preceding clause (a) does not appear on such
page or service or such page or service is not available, the rate per annum
equal to the rate determined by the Administrative Agent to be the offered rate
on such other page or other service that displays an 


 


32

















 


average British Bankers Association Interest
Settlement Rate for deposits in Dollars (for delivery on the first day of such
Interest Period) with a term equivalent to such Interest Period, determined as
of approximately 11:00 a.m. (London time) two (2) Business Days prior
to the first day of such Interest Period; or


 


(c)                          if
the rates referenced in the preceding clauses (a) and (b) are not
available, the rate per annum determined by the Administrative Agent as the
rate of interest at which deposits in Dollars for delivery on the first day of
such Interest Period in same day funds in the approximate amount of the
Eurodollar Loan being made, continued or converted and with a term equivalent
to such Interest Period would be offered by WestLB to major banks in the London
interbank eurodollar market at their request at approximately 4:00 p.m.
(London time) two (2) Business Days prior to the first day of such
Interest Period.


 


“License
Agreements” means, collectively, the Aberdeen II License Agreement and the
Huron License Agreement.


 


“Lien”
means any security interest, mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, bailment, conditional sales or title
retention agreement, lien (statutory or otherwise), charge against or interest
in property, in each case of any kind, to secure payment of a debt or
performance of an obligation.


 


“Lien Waiver Statement”
means, in connection with the construction of the Aberdeen II Plant, a
statement evidencing receipt of payment by, in each case in respect of such
Plant, the Design-Build Contractor, all subcontractors, all contractors
performing the Owners Scope and all other Persons who were paid from the proceeds
of the then last preceding Funding, (i) in the form attached hereto as Exhibit S
or (ii) in form and substance satisfactory to each of the Administrative
Agent and the Independent Engineer.


 


“Line Item” means
a line item of cost or expense set forth in the Construction Budget.


 


“Liquidated Damages
Account” has the meaning set forth in Section 3.01(a)(ii) of the
Accounts Agreement.


 


“Loan Parties”
means, collectively, the Borrower and the Pledgors.


 


“Loans” means,
collectively, the Construction Loans, the Term Loans and the Working Capital
Loans.


 


33

















 


“Local Account”
means any local bank account (other than the Project Accounts and the Bond
Funds) in the name of the Borrower.


 


“LP Pledgor” means
ABE Heartland, LLC, a Delaware limited liability company.


 


“LP Pledgor LLC
Agreement” means that certain Amended and Restated Limited Liability
Company Agreement of ABE Heartland LLC, dated as of October 1, 2007, entered
into by Advanced BioEnergy, LLC as founding member, and C T Corporation
Staffing, Inc., a Delaware corporation, as independent member.


 


“Maintenance Capital
Expense Account” has the meaning set forth in Section 3.01(a)(v) of
the Accounts Agreement.


 


“Maintenance Capital
Expenses” means all expenditures by the Borrower for regularly scheduled
(or reasonably anticipated) major maintenance of the Project, Prudent Ethanol
Operating Practice and vendor and supplier requirements constituting major
maintenance (including teardowns, overhauls, capital improvements, replacements
and/or refurbishments of major components of the Project).


 


“Mandatory Prepayment”
means a prepayment in accordance with Section 3.10 (Mandatory Prepayment).


 


“Material Adverse
Effect” means any event, development or circumstance that has had or could
reasonably be expected to have a material adverse effect on (i) the
business, assets, property, condition (financial or otherwise), prospects, or
operations of the Borrower or the Project, taken as a whole, (ii) the
ability of the Borrower, any Pledgor, any Project Party or any party (other
than a Senior Secured Party) to the Intercreditor Agreement or Accounts
Agreement to perform its material obligations under any Transaction Document to
which it is a party, (iii) creation, perfection or priority of the Liens
granted, or purported to be granted, in favor, or for the benefit, of the
Collateral Agent pursuant to the Security Documents or (iv) the rights or
remedies of any Senior Secured Party under any Financing Document.


 


 “Materials of Environmental Concern”
means chemicals, pollutants, contaminants, wastes, toxic substances and
hazardous substances, any toxic mold, radon gas or other naturally occurring
toxic or hazardous substance or organism and any material that is regulated in
any way, or for which liability is imposed, pursuant to an Environmental Law.


 


“Maturity Date”
means, as the context may require, (a) with respect to the Construction
Loans, the Construction Loan Maturity Date (b) with respect to the Term 


 


34

















 


Loans, the Final Maturity
Date and (c) with respect to the Working Capital Loans, the Working
Capital Loan Maturity Date.


 


“Maximum Available
Amount” means, with respect to any Letter of Credit at any time, the
maximum amount the beneficiary of such Letter of Credit may draw thereunder at
such time, as such amount may be reduced from time to time pursuant to the
terms of such Letter of Credit.


 


“Maximum Rate” has
the meaning provided in Section 10.09 (Interest
Rate Limitation).


 


“Moody’s” means
Moody’s Investors Service Inc., and any successor thereto that is a nationally
recognized rating agency.


 


“Mortgaged Property”
means all real property right, title and interest of the Borrower that is
subject to the Mortgages in favor of the Collateral Agent.


 


“Mortgages” means
the Aberdeen Mortgage and the Huron Mortgage.


 


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


 


“Necessary Project
Approvals” has the meaning set forth in Section 5.03(a)(i) (Representations and Warranties - Governmental Approvals).


 


“Necessary Project
Contracts” has the meaning set forth in Section 5.11(a)(ii) (Representations and Warranties - Contracts).


 


“Non-Appealable”
means, with respect to any specified time period allowing an appeal of any
ruling under any constitutional provision, Law, statute, rule, regulation,
ordinance, treaty, order, decree, judgment, decision, certificate, holding or
injunction that such specified time period has elapsed without an appeal having
been brought.


 


“Non-U.S. Lender”
has the meaning set forth in Section 4.07(e) (Taxes -
Foreign Lenders).


 


“Non-Voting Lender”
means any Lender who (a) is also a Loan Party, a Project Party, a party
(other than a Senior Secured Party) to the Intercreditor Agreement or Accounts
Agreement, or any Affiliate or Subsidiary thereof, or (b) has sold a
participation in the Loan held by it to any such Person.


 


“Notes” means the
Construction Notes, the Term Notes and the Working Capital Notes, including any
promissory notes issued by the Borrower in connection with 


 


35

















 


assignments of any Loan
of a Lender, in each case substantially in the form of Exhibit B, Exhibit C
or Exhibit D as they may be amended, restated, supplemented or
otherwise modified from time to time.


 


“Notice to Proceed”
means the “Notice to Proceed” as defined in, and issued in accordance with the
terms of, the Design-Build Agreement.


 


“Obligations”
means and includes all loans, advances, debts, liabilities, Indebtedness and
obligations, howsoever arising, owed to the Agents, the Lenders or any other
Senior Secured Party of every kind and description (whether or not evidenced by
any note or instrument and whether or not for the payment of money), direct or
indirect (including those acquired by assumption), absolute or contingent, due
or to become due, now existing or hereafter arising and including interest and
fees that accrue after the commencement by or against the Borrower of any Insolvency
or Liquidation Proceeding naming the Borrower as the debtor in such proceeding,
regardless of whether such interest and fees are allowed claims in such
proceeding, pursuant to the terms of this Agreement or any of the other
Financing Documents (including the Interest Rate Protection Agreements),
including all principal, interest, fees, charges, expenses, attorneys’ fees,
costs and expenses, accountants’ fees and Consultants’ fees payable by the
Borrower hereunder or thereunder.


 


“Operating Account”
has the meaning provided in Section 3.01(a)(iv) of the Accounts Agreement.


 


“Operating Budget”
has the meaning set forth in Section 7.01(j) (Affirmative
Covenants - Operating Budgets).


 


“Operating Budget
Category” means, at any time with respect to each Operating Budget, each
line item set forth in such Operating Budget in effect at such time.


 


“Operating Statement”
means an operating statement with respect to the Project, in substantially the
form of Exhibit L.


 


“Operation and
Maintenance Expenses” means, for any period, the sum without duplication of
all (i) reasonable and necessary expenses of administering, managing and
operating, and generating Products for sale from, the Project and maintaining
it in good repair and operating condition, (ii)  costs associated with the
supply and transportation of all corn, natural gas, electricity and other
supplies and raw materials to the Project and distribution and sale of Products
from the Project that the Borrower is obligated to pay, (iii) all
reasonable and necessary insurance costs (other than insurance premiums that
are paid as Project Costs), (iv) property, sales and franchise 


 


36

















 


taxes to the extent that
the Borrower is liable to pay such taxes to the taxing authority (other than
taxes imposed on or measured by income or receipts) to which the Project, may
be subject (or payment in lieu of such taxes to which the Project may be
subject), (v) reasonable and necessary costs and fees incurred in
connection with obtaining and maintaining in effect the Necessary Project
Approvals, (vi) reasonable and arm’s-length legal, accounting and other
professional fees attendant to any of the foregoing items during such period,
(vii) the reasonable costs of administration and enforcement of the
Transaction Documents, (viii) costs incurred pursuant to the Permitted
Commodity Hedging Arrangements, and (ix) all other costs and expenses
included in the then-current Operating Budget. In no event shall Project Costs
or Maintenance Capital Expenses be considered Operation and Maintenance
Expenses.


 


“Organic Documents”
means, with respect to any Person that is a corporation, its certificate of
incorporation, its by-laws and all shareholder agreements, voting trusts and
similar arrangements applicable to any of its authorized shares of capital
stock; with respect to any Person that is a limited liability company, its
certificate of formation or articles of organization and its limited liability
agreement and, with respect to a limited partnership, its certificate of
limited partnership and its agreement of limited partnership.


 


“Owners Scope”
means, with respect to the Aberdeen II Plant, any work needed to
complete such Plant other than work that is solely the responsibility of the
Design-Build Contractor, including without limitation all work described
in Article 8 of the “General Conditions” (as defined in the Design-Build
Agreement) and Article 8 of such agreement, in each case of the
Design-Build Agreement.


 


“Participant” has
the meaning provided in Section 10.03(d) (Assignments).


 


“Patriot Act”
means United States Public Law 107-56, Uniting and Strengthening America
by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism
(USA PATRIOT ACT) of 2001, and the rules and regulations promulgated
thereunder from time to time in effect.


 


“PBGC” means the
Pension Benefit Guaranty Corporation and any entity succeeding to any or all of
its functions under ERISA.


 


“Performance Criteria”
means the “Performance Criteria” set forth in Exhibit A of the
Design-Build Agreement.


 


“Performance Test”
means the seven-day performance test described in Section 4.01.B.3 and
Exhibit A of the Design-Build Agreement; conducted pursuant to performance
test protocols that are acceptable to the Independent Engineer.


 


37

















 


“Performance Test
Report” has the meaning provided in Section 7.01(k) (Affirmative Covenants - Performance Tests).


 


“Permitted Commodity
Hedging Arrangements” means those Commodity Hedging Arrangements entered
into by the Borrower in accordance with Section 7.02(u) (Negative Covenants - Commodity Hedging Arrangements).


 


“Permitted
Indebtedness” means Indebtedness identified in Section 7.02(a) (Negative Covenants - Restrictions on Indebtedness of the Borrower).


 


“Permitted Liens”
means Liens identified in Section 7.02(b) (Negative
Covenants - Liens).


 


“Permitted Tax
Distribution” means, with respect to any distributee that is required to
pay tax as a result of its direct or indirect ownership of the Borrower, an
amount equal to forty percent (40%) of such distributee’s estimated share
of the taxable income of the Borrower (after netting or otherwise taking
account of a distributee’s shares of the income, loss, deduction and credit
associated with the distributee’s interest in the Borrower) that the
distributee is reasonably expected to have to report for income tax purposes
for the Fiscal Quarter distributed to the extent necessary to fund a
distributee’s timely payment to a Governmental Authority of tax liability
(including estimated payments thereof) and subject to correction as described
below.


 


“Person” means any
natural person, corporation, partnership, limited liability company, firm,
association, trust, government, governmental agency or any other entity,
whether acting in an individual, fiduciary or other capacity.


 


“Pipeline Construction
Agreement” means that certain Agreement for Engineering and Pipeline
Construction Services, dated January 11, 2007, between the Borrower and
Montana Dakota Utilities Co., a division of MDU Resources Group, Inc.


 


“Plan” means an
employee pension benefit plan (as defined in Section 3(3) of ERISA)
subject to Title IV of ERISA or Section 412 of the Code that is
sponsored or maintained by the Borrower or any ERISA Affiliate, or in respect
of which the Borrower or any ERISA Affiliate has any obligation to contribution
or Liability.


 


“Plants” means,
collectively, the Aberdeen Plants and the Huron Plant.


 


“Platform” has the
meaning provided in Section 10.11(h) (No Waiver;
Cumulative Remedies).


 


“Pledge Agreement”
means the Pledge and Security Agreement, dated as of the date hereof among the
Borrower, the Pledgors and the Collateral Agent, pursuant to 


 


38

















 


which the Pledgors pledge
one hundred percent (100%) of the Equity Interests in the Borrower to the
Collateral Agent.


 


“Pledgors” means,
collectively, the GP Pledgor and the LP Pledgor.


 


“Pre-Conversion
Prepayment Target” shall mean when the aggregate amount of (x) prepayments
pursuant to priority eleventh of
Section 6.01(b) of the Accounts Agreement, priority fifteenth
of Section 6.01(c) of the Accounts Agreement, and (y) reductions in
the Aggregate Construction Loan Commitment pursuant to priority fifth of Section 2.06(e) (Funding of
Loans), has reached twenty-nine million Dollars ($29,000,000),
as confirmed by the Administrative Agent.


 


“Prepayment Holding
Account” has the meaning set forth in Section  3.01(a)(viii) of the
Accounts Agreement.


 


“Primary Swap Obligations”
means, with respect to any Interest Rate Protection Agreement, all scheduled
obligations due and payable by any Person party to such Interest Rate
Protection Agreement (after giving effect to any netting applicable thereto)
and all payments of Swap Termination Value due and payable by any Person party
to such Interest Rate Protection Agreement, but excluding any amounts owed in
respect of Taxes, expenses and indemnification obligation which do not
constitute payments of Swap Termination Value.


 


“Process Agent”
means any Person appointed as agent by the Borrower, the Pledgor or any party
to the Intercreditor Agreement or Accounts Agreement, to the extent required
under the Financing Documents, to receive on behalf of itself and its property
services of copies of summons and complaint or any other process which may be
served in connection with any action or proceeding before any court arising out
of or relating to this Agreement or any other Financing Document to which it is
a party, including CT Corporation System.


 


“Products” means
ethanol, Distillers Grains, and any other co-product or by-product produced in
connection with the production of ethanol at the Project.


 


“Project” means,
at all times, the Existing Plants, the Aberdeen II Plant and all auxiliary
and other facilities constructed or to be constructed by or on behalf of the
Borrower pursuant to the Project Documents relating to each such Plant or
otherwise, together with all fixtures and improvements thereto and each Site
and all other real property, easements and rights-of-way held by or on behalf
of the Borrower and all rights to use easements and rights-of-way of others.


 


39

















 


“Project Accounts”
has the meaning provided in Section 1.01 of the Accounts Agreement.


 


“Project Costs”
means, the following costs and expenses incurred by the Borrower in connection
with the Aberdeen II Plant prior to the Final Completion Date and set forth in
the Construction Budget or otherwise approved in writing by the Required
Lenders (in consultation with the Independent Engineer):


 


(i)                                     costs
incurred by the Borrower under the Design-Build Agreement, and other costs
related to the acquisition, site preparation, design, engineering,
construction, installation, start-up, and testing of the Aberdeen II Plant;


 


(ii)                                  fees
and expenses incurred by or on behalf of the Borrower in connection with the
development of the Aberdeen II Plant and the consummation of the transactions
contemplated by this Agreement, including financial, accounting, legal,
surveying and consulting fees, and the costs of preliminary engineering;


 


(iii)                               (A)
interest and Fees on the Construction Loans and (B) interest on the
Subordinated Debt for the Aberdeen II Plant until March 31, 2008;


 


(iv)                              financing
fees and expenses in connection with the Loans and the fees, costs and expenses
of the Agents’ counsel, any Interest Rate Protection Provider’s counsel and the
Consultants;


 


(v)                                 insurance
premiums with respect to the Title Insurance Policy for the Project and
the insurance for the Project required pursuant to Section 7.01(h) (Affirmative Covenants - Insurance);


 


(vi)                              costs
of corn and natural gas utilized for commissioning, Performance Tests for, and
operation of, the Aberdeen II Plant prior to the Final Completion Date;


 


(vii)                           up to
forty-seven million Dollars ($47,000,000) to repay the Existing Plant Debt;


 


(viii)                        amounts
required to fund the Debt Service Reserve Account up to the amount in the
Construction Budget; and


 


(ix)                                all
other costs and expenses included in the Construction Budget.


 


40

















 


“Project Documents”
means:


 


	
   

  	
  (i)

  	
  the Design-Build Agreement;

  
	
   

  	
   

  	
   

  
	
   

  	
  (ii)

  	
  the Aberdeen II License Agreement;

  
	
   

  	
   

  	
   

  
	
   

  	
  (iii)

  	
  the Huron License Agreement;

  
	
   

  	
   

  	
   

  
	
   

  	
  (iv)

  	
  the Grain Origination Agreement;

  
	
   

  	
   

  	
   

  
	
   

  	
  (v)

  	
  the Pipeline Construction Agreement;

  
	
   

  	
   

  	
   

  
	
   

  	
  (vi)

  	
  the Interconnect Agreement;

  
	
   

  	
   

  	
   

  
	
   

  	
  (vii)

  	
  the Energy Management Agreement;

  
	
   

  	
   

  	
   

  
	
   

  	
  (viii)

  	
  the Gas Purchase and Sale Agreement;

  
	
   

  	
   

  	
   

  
	
   

  	
  (ix)

  	
  the Agency Authorization Letter Agreement;

  
	
   

  	
   

  	
   

  
	
   

  	
  (x)

  	
  the Ethanol Marketing Agreement;

  
	
   

  	
   

  	
   

  
	
   

  	
  (xi)

  	
  the Co-Product Marketing Agreement;

  
	
   

  	
   

  	
   

  
	
   

  	
  (xii)

  	
  the Dakotaland Administrative Services
  Agreement;

  
	
   

  	
   

  	
   

  
	
   

  	
  (xiii)

  	
  the Water Supply Contract;

  
	
   

  	
   

  	
   

  
	
   

  	
  (xiv)

  	
  the Huron Ground Lease;

  
	
   

  	
   

  	
   

  
	
   

  	
  (xv)

  	
  the Huron Grain Receiving Area Lease;

  
	
   

  	
   

  	
   

  
	
   

  	
  (xvi)

  	
  the Huron Grain Elevator Lease;

  
	
   

  	
   

  	
   

  
	
   

  	
  (xvii)

  	
  the Aberdeen Grain Elevator Lease;

  
	
   

  	
   

  	
   

  
	
   

  	
  (xviii)

  	
  the Administrative Services Agreement;

  
	
   

  	
   

  	
   

  
	
   

  	
  (xix)

  	
  each Additional Project Document; and

  
	
   

  	
   

  	
   

  
	
   

  	
  (xx)

  	
  any replacement agreement for any such
  agreement.

  



 


41

















 


“Project Document
Termination Payments” means all payments that are required to be paid to or
for the account of the Borrower as a result of the termination of any Project
Document.


 


“Project Party”
means each Person (other than the Borrower or the Pledgors) who is a party to a
Project Document.


 


“Proposed Letter of
Credit Issuance Date” means, with respect to a Letter of Credit, the
proposed date of issuance of such Letter of Credit set forth in the respective
Issuance Request.


 


“Prospective Debt
Service Coverage Ratio” or “PDSCR” means, for any Quarterly Payment
Date, for the Fiscal Quarter including such Quarterly Payment Date and the
three (3) Fiscal Quarters immediately following such Quarterly Payment
Date, the ratio of (i) Cash Flow Available for Debt Service projected for
such period to (ii) Debt Service projected for such period, in each case
based on the then-current Operating Budget approved in accordance with Section 7.01(j)
(Affirmative Covenants - Operating Budgets),
as the same has been updated (if necessary) to reflect the then-current
projections for commodity prices, and approved by the Administrative Agent,
acting reasonably.


 


“Prudent Ethanol
Operating Practice” means those reasonable practices, methods and acts that
(i) are commonly used in the region where the Project is located to
manage, operate and maintain ethanol production, distribution, equipment and
associated facilities of the size and type that comprise the Project safely,
reliably, and efficiently and in compliance with applicable Laws, manufacturers’
warranties and manufacturers’ and licensor’s recommendations and guidelines,
and (ii) in the exercise of reasonable judgment, skill, diligence,
foresight and care are expected of an ethanol plant operator, in order to
efficiently accomplish the desired result consistent with safety standards,
applicable Laws, manufacturers’ warranties, manufacturers’ recommendations and,
in the case of the Project, the Project Documents. Prudent Ethanol Operating
Practice does not necessarily mean one particular practice, method, equipment
specifications or standard in all cases, but is instead intended to encompass a
broad range of acceptable practices, methods, equipment specifications and
standards.


 


“Qualified
Counterparty” means any of the following: 
(i) any Person who is a Lender, the Administrative Agent, or the
Collateral Agent on the date the relevant Interest Rate Protection Agreement is
entered into or (ii) any Affiliate of any Person listed in
clause (i).


 


“Quarterly Payment
Date” means each of March 31, June 30, September 30 and
December 31.


 


42

















 


“Quarterly Period”
means each three (3) month period beginning on (and including) the day
immediately following a Quarterly Payment Date and ending on (and including)
the next Quarterly Payment Date.


 


“RCRA” means the
Resource Conservation and Recovery Act (42 U.S.C. § 6901 et seq.), as
amended, and all rules, regulations, standards, guidelines, and publications
issued thereunder.


 


“Register” has the
meaning set forth in Section 10.03(c) (Assignments).


 


“Related Parties”
means, with respect to any Person, such Person’s Affiliates and the partners,
directors, officers, employees, agents and advisors of such Person and of such
Person’s Affiliates.


 


“Removal,” “Remedial”
and “Response” actions shall include the types of activities covered by
CERCLA, RCRA, and other comparable Environmental Laws, and whether the
activities are those which might be taken by a Governmental Authority or those
which a Governmental Authority or any other Person might seek to require of
potentially responsible parties, liable parties, waste generators, handlers,
distributors, processors, users, disposers, storers, treaters, owners,
operators, transporters, recyclers, reusers, disposers, or other Persons under “removal,”
“remedial,” or other “response” actions.


 


“Reportable Event”
means a “reportable event” within the meaning of Section 4043(c) of ERISA.


 


“Required Cash Sweep”
means each mandatory prepayment of the Loans made pursuant to Section 3.10
(Mandatory Prepayment).


 


“Required GP
Provisions” has the meaning provided in Section 5.24 (Representations and Warranties - Required LP, GP and LLC Provisions).


 


“Required Lenders”
means (a) at any time prior to the Conversion Date, Lenders (excluding all
Non-Voting Lenders) holding Commitments in excess of fifty percent (50.00%) of
the Construction Loan Commitments and the Working Capital Loan Commitments
(excluding the Construction Loan Commitments and the Working Capital Loan
Commitments of all Non-Voting Lenders) and (b) at any time after the
Conversion Date, Lenders (excluding all Non-Voting Lenders) holding Loans and
Commitments in excess of fifty percent (50.00%) of an amount equal to
(x) the then aggregate outstanding principal amount of the Loans plus
(y) the undisbursed amount of the Aggregate Working Capital Loan
Commitment (excluding the principal amounts of any Loans made by, and any
Working Capital Loan Commitments of, any Non-Voting Lenders).


 


43

















 


“Required LP Pledgor
LLC Provisions” has the meaning provided in Section 5.24 (Representations and Warranties - Required LP, GP and LLC Provisions).


 


“Required LP
Provisions” has the meaning provided in Section 5.24 (Representations and Warranties - Required LP, GP and LLC Provisions).


 


“Required Working
Capital Lenders” means Lenders (excluding all Non-Voting Lenders) holding
in excess of fifty percent (50.00%) of an amount equal to (x) the then
aggregate outstanding principal amount of the Working Capital Loans plus
(y) the undisbursed amount of the Aggregate Working Capital Loan
Commitment (excluding the principal amounts of any Working Capital Loans made
by, and any Working Capital Loan Commitments of, any Non-Voting Lenders).


 


“Restricted Payment
Certificate” has the meaning provided in the Accounts Agreement.


 


“Restricted Payments”
means any (a) dividend or other distribution (whether in cash, securities
or other property), or any payment (whether in cash, securities or other
property), including any sinking fund or similar deposit, on account of the
purchase, redemption, retirement, defeasance, acquisition, cancellation or
termination of any Equity Interests of the Borrower, or on account of any
return of capital to any holder of any such Equity Interest in, or any other
Affiliate of, the Borrower, or any option, warrant or other right to acquire
any such dividend or other distribution or payment, (b) any payment of
fees (other than corporate overhead, costs, expenses or any other payments
pursuant to the Administrative Services Agreement) for any management,
consultancy or administrative services, to any Person who owns, directly or
indirectly, any Equity Interest in the Borrower, or any Affiliate of any such
Person, or (c) any payment of indemnification obligations pursuant to the
Borrower LP Agreement; provided that any Permitted Tax Distributions
shall not constitute Restricted Payments.


 


“Revenue Account”
has the meaning set forth in Section 3.01(a)(iii) of the Accounts
Agreement.


 


“S&P” means
Standard & Poor’s Rating Services, a Division of the McGraw-Hill Companies
Inc.


 


“Securities
Intermediary” means Amarillo National Bank, not in its individual capacity,
but solely as securities intermediary under the Accounts Agreement, and
includes each other Person that may, from time to time, be appointed as
successor Securities Intermediary pursuant to and in accordance with the
Accounts Agreement.


 


44

















 


“Security” means
the security created in favor of the Collateral Agent pursuant to the Security
Documents.


 


“Security Agreement”
means the Assignment and Security Agreement dated as of the date hereof to be
made by the Borrower in favor of the Collateral Agent.


 


“Security Discharge
Date” means the date on which (i) all outstanding Commitments and
Interest Rate Protection Agreements have been terminated and (ii) all
amounts payable in respect of the Obligations have been irrevocably and
indefeasibly paid in full in cash (other than obligations under the Financing
Documents that by their terms survive and with respect to which no claim has
been made by the Senior Secured Parties).


 


“Security Documents”
means:


 


(i)                                     the
Mortgages;


 


(ii)                                  this
Agreement (to the extent that it relates to the Project Accounts);


 


(iii)                               the
Accounts Agreement;


 


(iv)                              the
Consents;


 


(v)                                 the
Pledge Agreement;


 


(vi)                              the
Security Agreement;


 


(vii)                           the
Blocked Account Agreements;


 


(viii)                        any other
document designated as a Security Document by the Borrower and the
Administrative Agent; and


 


(ix)                                any
fixture filings, financing statements, notices, authorization letters, or other
certificates filed, recorded or delivered in connection with the foregoing.


 


“Senior Secured
Parties” means the Lenders, the Agents and any Interest Rate Protection
Provider.


 


“Site” means, with
respect to each Plant, those certain parcels described on Schedule 5.13
with respect to such Plant.


 


45

















 


“SNDAs” means each
of the Aberdeen Subordination, Non-Disturbance and Attornment Agreement and the
Huron Subordination, Non-Disturbance and Attornment Agreement.


 


“Solvent” means,
with respect to any Person, that as of the date of determination both (i)
(A) the then fair saleable value of the property of such Person is
(y) greater than the total amount of liabilities (including Contingent
Liabilities but excluding amounts payable under intercompany loans or
promissory notes) of such Person and (z) not less than the amount that
will be required to pay the probable liabilities on such Person’s then existing
debts as they become absolute and matured considering all financing
alternatives and potential asset sales reasonably available to such Person; (B) such
Person’s capital is not unreasonably small in relation to its business or any
contemplated or undertaken transaction; and (C) such Person does not
intend to incur, or reasonably believe that it will incur, debts beyond its
ability to pay such debts as they become due; and (ii) such Person is “solvent”
within the meaning given that term and similar terms under applicable Laws
relating to fraudulent transfers and conveyances. For purposes of this
definition, the amount of any Contingent Liability at any time shall be
computed as the amount that, in light of all of the facts and circumstances
existing at such time, represents the amount that can reasonably be expected to
become an actual or matured liability.


 


“Specified Period”
has the meaning set forth in Section 7.01(t) (Affirmative
Covenants - Financial Model).


 


“Sponsor” means
Advanced BioEnergy, LLC, a Delaware limited liability company.


 


“SPV” has the
meaning provided in Section 10.03(h) (Assignments).


 


“Stated Amount”
has the meaning specified for such term in any Debt Service Reserve Letter of
Credit.


 


“Subordinated Debt”
means the payment obligations of the Borrower pursuant to the Subordinated Loan
Agreement.


 


“Subordinated Debt
Documents” means (i) the Bond Indenture,
(ii) the Subordinated Loan Agreement, (iii) the bond resolution
adopted by the Issuer on August 8, 2007 that became effective on September 3,
2007, relating to the Bonds, (iv) each of the Bonds, (v) each of
the Bond Collateral Documents, (vi) that certain Tax Exemption Agreement and
Certificate relating to the Bonds, dated as of October 1, 2007, among the
Borrower, the Bond Trustee, the Issuer and the Accounts
Bank, (vii) that certain Bond Purchase Agreement, dated October
2, 2007, among the Issuer, Dougherty 


 


46

















 


& Company LLC as
Underwriter and the Borrower, (viii) that certain Continuing Disclosure
Agreement, dated as of October 1, 2007, between the Bond Trustee, as
dissemination agent, and the Borrower, (ix) that certain Environmental and
ADA Indemnification Agreement by the Borrower in favor of the Bond Trustee,
(x) each other document executed on or prior to the date hereof in
connection with the Bonds or the Subordinated Debt and (xi) each document
executed after the date hereof in connection with the Bonds or the Subordinated
Debt in compliance with the Intercreditor Agreement.


 


“Subordinated Loan
Agreement” means that certain Loan Agreement relating to the Bonds, dated
as of October 1, 2007, between the Issuer and the Borrower, as assigned by
the Issuer to the Bond Trustee (except with respect to the “Unassigned Rights”
(as defined in the Bond Indenture)) pursuant to the Bond Indenture.


 


“Subsidiary” of
any Person means a corporation, partnership, joint venture, limited liability
company or other business entity of which a majority of the shares of
securities or other Equity Interests having ordinary voting power for the
election of directors or other governing body (other than securities or
interests having such power only by reason of the happening of a contingency)
are at the time beneficially owned, or the management of which is otherwise
controlled, directly, or indirectly through one or more intermediaries, or
both, by such Person.


 


“Survey” has the
meaning provided in Section 6.01(x) (Conditions
to Closing and First Funding of Construction Loans - Survey).


 


“Swap Contract”
means (a) any and all rate swap transactions, basis swaps, credit
derivative transactions, forward rate transactions, commodity swaps, commodity
options, forward commodity contracts, equity or equity index swaps or options,
bond or bond price or bond index swaps or options or forward bond or forward
bond price or forward bond index transactions, interest rate options, forward
foreign exchange transactions, cap transactions, floor transactions, collar
transactions, currency swap transactions, cross-currency rate swap
transactions, currency options, spot contracts, or any other similar
transactions or any combination of any of the foregoing (including any options
to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any master agreement, (b) any and all
transactions of any kind, and the related confirmations, which are subject to
the terms and conditions of, or governed by, any form of master agreement
published by the International Swaps and Derivatives Association, Inc., any
International Foreign Exchange Master Agreement, or any other master agreement,
including any such obligations or liabilities under any such master agreement
and (c) for the avoidance of doubt, includes the Permitted Commodity
Hedging Arrangements and any Interest Rate Protection Agreements and excludes
any contract for the physical sale or purchase of any commodity.


 


47

















 


“Swap Termination
Value” means, in respect of any one or more Swap Contracts (including any
Permitted Commodity Hedging Arrangements or any Interest Rate Protection
Agreements), after taking into account the effect of any legally enforceable
netting agreement relating to such Swap Contracts, (a) for any date on or
after the date such Swap Contracts have been closed out and termination
value(s) determined in accordance therewith, such termination value(s), and
(b) for any date prior to the date referenced in clause (a), the
amount(s) determined as the mark-to-market value(s) for such Swap Contracts, in
accordance with the terms of the applicable Swap Contract, or, if no provision
is made therein, as determined based upon one or more mid-market or other
readily available quotations provided by any recognized dealer in such Swap
Contracts (which may include a Lender or any Affiliate of a Lender).


 


“Tax” or “Taxes”
means any present or future taxes (including income, gross receipts, license,
payroll, employment, excise, severance, stamp, documentary, occupation,
premium, windfall profits, environmental, capital stock, franchise, profits,
withholding, social security (or similar), unemployment, disability, real
property, personal property, sales, use, transfer, registration, value-added,
ad valorem, alternative or add-on minimum, estimated, or other tax of any kind
whatsoever), levies, imposts, duties, fees or charges (including any interest,
penalty, or addition thereof) imposed by any government or any governmental
agency or instrumentality or any international or multinational agency or
commission.


 


“Tax Return” means
all returns, declarations, reports, claims for refund and information returns
and statements of any Person required to be filed with respect to, or in
respect of, any Taxes, including any schedule or attachment thereto and any
amendment thereof.


 


“Technology License
Provider” means ICM, Inc., a Kansas corporation.


 


“Termination Event”
means (i) a Reportable Event with respect to any Plan, (ii) the
initiation of any action by the Borrower, any ERISA Affiliate or any Plan
fiduciary to terminate any Plan (other than a standard termination under
Section 4041(b) of ERISA) or the treatment of an amendment to any Plan as
a termination under Section 4041(e) of ERISA, (iii) the institution
of proceedings by the PBGC under Section 4042 of ERISA to terminate any
Plan or to appoint a trustee to administer any Plan, (iv) the withdrawal
of the Borrower or any ERISA Affiliate from any Multiemployer Plan during a
plan year in which the Borrower or such ERISA Affiliate was a “substantial
employer” as defined in Section 4001(a)(2) of ERISA or the cessation of
operations which results in the termination of employment of twenty percent
(20%) of any Multiemployer Plan participants who are employees of the
Borrower or any ERISA Affiliate, (v) the partial or complete withdrawal of
the Borrower or any ERISA Affiliate from any Multiemployer Plan, or
(vi) the Borrower or any ERISA Affiliate is in default 


 


48

















 


(as defined in
Section 4219(c)(5) of ERISA) with respect to payments to any Multiemployer
Plan.


 


“Term Loan” has
the meaning provided in Section 2.02(a) (Term Loans).


 


“Term Loan Commitment”
means, with respect to each Lender, the commitment of such Lender to make Term
Loans, as set forth opposite the name of such Lender in Schedule 2.01,
as the same may be reduced in accordance with Section 2.08 (Termination or Reduction of Commitments).


 


“Term Loan Commitment
Percentage” means, as to any Lender at any time, the percentage that such
Lender’s Term Loan Commitment then constitutes of the Aggregate Term Loan
Commitment.


 


“Term Notes” means
the promissory notes of the Borrower, substantially in the form of Exhibit C,
evidencing Term Loans.


 


“Threat of Release”
shall mean “threat of release” as used in CERCLA.


 


“Title Continuation”
means a written notice issued by the Title Insurance Company (including
their local title insurance abstractors) confirming the status of title as set
forth in the Title Insurance Policy, which indicates that, since the last
preceding Funding Date (or, if the current Funding is on the Closing Date,
since the date hereof), there has been no change in the title of title to the
Mortgaged Property and no Liens or survey exceptions (in the case of any
updated or “as-built” survey that has been issued) not theretofore approved by
the Required Lenders, which written notice shall contain no recorded mechanic’s
liens except as approved by the Required Lenders or as otherwise subject to a
Contest.


 


“Title Insurance
Company” means Old Republic National Title Insurance Company,
or such other title insurance company or companies reasonably satisfactory to
the Administrative Agent.


 


“Title Insurance
Policy” has the meaning provided in Section 6.01(y) (Conditions to Closing and First Funding - Title Insurance).


 


“Transaction Documents”
means, collectively, the Financing Documents and the Project Documents.


 


“Unfunded Benefit
Liabilities” means, with respect to any Plan at any time, the amount (if
any) by which (i) the present value of all accrued benefits calculated on
an accumulated benefit obligation basis and based upon the actuarial
assumptions used for accounting purposes (i.e., those determined
in accordance with FASB statement No. 35 


 


49

















 


and used in preparing the
Plan’s financial statements) exceeds (ii) the fair market value of all
Plan assets allocable to such benefits, determined as of the then most recent
actuarial valuation report for such Plan.


 


“Uniform Commercial
Code” or “UCC” means the Uniform Commercial Code as in effect
from time to time in the State of New York; provided, however, in
the event that, by reason of mandatory provisions of law, any or all of the
perfection or priority of the security interest in any Collateral is governed
by the Uniform Commercial Code as in effect in a jurisdiction other than
the State of New York, the term “UCC” shall mean the
Uniform Commercial Code as in effect in such other jurisdiction for
purposes of provisions relating to such perfection or priority and for purposes
of definitions related to such provisions.


 


“United States” or
“U.S.” means the United States of America, its fifty States and the District
of Columbia.


 


“United States Person”
means a “United States person” as defined in Section 7701(a)(30) of the
Code.


 


“Value” means,
with respect to any inventory or other goods, the cost thereof to the Borrower,
calculated on a first-in first-out basis in accordance with GAAP.


 


“Warranty Period”
means, with respect to the Aberdeen II Plant, the period commencing on the
Conversion Date and terminating on the date that is twelve (12) months
from the Conversion Date; provided, that if any warranty work is
performed, then the “Warranty Period” shall extend until the later of
(i) twelve (12) months from the date of completion of such warranty
work and (ii) the expiration of the original Warranty Period, but in no
event shall such Warranty Period extend beyond twenty-four (24) months
after the Conversion Date.


 


“Water Supply Contract”
means that certain Construction and Water Supply Contract, dated as of
January 31, 2007, between the WEB Water Development Association, Inc., and
the Borrower and Advanced BioEnergy, LLC jointly, including the Water Supply
Contract attached as Exhibit A thereof and incorporated therein by
reference.


 


“WDG” means wet
distillers grains produced by the Borrower at the Project.


 


“WestLB” means
WestLB AG, New York Branch.


 


50

















 


“Working Capital
Applicable Margin” means (a) with respect to the Eurodollar Loans,
three and one-half percent (3.50%) and (b) with respect to the Base
Rate Loans, two and one-half percent (2.50%).


 


“Working Capital Available
Amount” means up to eight million Dollars ($8,000,000); provided
that the Working Capital Available Amount shall at no time exceed the Borrowing
Base, as certified from time to time by the Borrower.


 


“Working Capital
Expenses” means, collectively, costs of goods prior to the Conversion Date,
Operation and Maintenance Expenses, Maintenance Capital Expenses, margin calls,
Project Costs relating to the initial start-up and testing of the Aberdeen II
Plant, breakage costs or other termination payments under any Permitted
Commodity Hedging Arrangement.


 


“Working Capital
Lenders” means those Lenders of Working Capital Loans, as identified on Schedule 2.01,
and each other Person that acquires the rights and obligations of any such
Lender pursuant to Section 10.03 (Assignments).


 


“Working Capital Loan”
has the meaning provided in Section 2.03(a) (Working
Capital Loans).


 


“Working Capital Loan
Commitment” means, with respect to each Working Capital Lender, the
commitment of such Working Capital Lender to make Working Capital Loans, as set
forth opposite the name of such Working Capital Lender in Schedule 2.01,
as the same may be reduced in accordance with Section 2.08 (Termination or Reduction of Commitments).


 


“Working Capital Loan
Commitment Percentage” means, as to any Working Capital Lender at any time,
the percentage that such Working Capital Lender’s Working Capital Loan
Commitment then constitutes of the Aggregate Working Capital Loan Commitment.


 


“Working Capital Loan
Funding Notice” means each request for Funding of Working Capital Loans in
the form of Exhibit G delivered in accordance with Section 2.05
(Notice of Fundings).


 


“Working Capital Loan
Maturity Date” means the date that occurs five (5) years after the
Closing Date.


 


“Working Capital Notes”
means the promissory notes of the Borrower, substantially in the form of Exhibit D,
evidencing Working Capital Loans.


 


51

















 


“Working Capital
Reserve Account” has the meaning set forth in Section 3.01(a)(vi) of
the Accounts Agreement.


 


“Working Capital
Reserve Required Amount” means the amount necessary such that the sum of
(i) the Working Capital Loan Commitment and (ii) the amount on
deposit in the Working Capital Reserve Account equals eight million Dollars ($8,000,000).


 


52
















 


EXHIBIT B


to Senior
Credit Agreement


 


[FORM OF CONSTRUCTION NOTE]


 


Construction Note


 


	
               $[__________]

  	
   

  	
  [__________________]

  



 


October ____, 2007


 


FOR VALUE RECEIVED, HEARTLAND GRAIN FUELS, L.P. (the “Borrower”),
HEREBY PROMISES TO PAY to the order of [__________________], a [_________________] (the “Lender”), at its offices located at [__________________], the
principal sum of [__________]
Dollars ($[__________])
or, if less, the aggregate unpaid principal amount of the Construction  Loans made by the Lender to the Borrower under the Senior Credit
Agreement, dated as of October 1, 2007 (as amended, restated, supplemented
or otherwise modified from time to time, the “Senior Credit Agreement”)
among the Borrower, each of the Lenders from time to time party hereto, WESTLB
AG, NEW YORK BRANCH, as Administrative Agent for the Lenders, WESTLB AG, NEW
YORK BRANCH, as Collateral Agent for the Senior Secured Parties, WESTLB AG, NEW
YORK BRANCH, as Issuing Bank, and WESTLB AG, NEW YORK BRANCH, as lead arranger,
sole bookrunner and syndication agent.  Capitalized
terms used herein but not otherwise defined herein shall have the respective
meanings set forth in the Senior Credit Agreement.


 


The Borrower also promises to pay (i) interest on the unpaid
principal amount hereof from the date hereof until paid in full at the rates
and at the times provided in the Senior Credit Agreement and (ii) fees at
such times and at such rates and amounts as specified in the Senior Credit
Agreement.


 


Principal, interest and fees are payable in lawful money of the United
States of America and in immediately available funds, at the times and in the
amounts provided in the Senior Credit Agreement.


 


This Construction  Note is
entitled to the benefits and is subject to the terms and conditions of the Senior
Credit Agreement, and is entitled to the benefits of the security provided
under the Security Documents.  As
provided in the Senior Credit Agreement, this Construction  Note
is subject to mandatory prepayment and voluntary prepayment, in whole or in
part.  The Borrower agrees to make
prepayment of principal on the dates and in the amounts specified in the Senior
Credit Agreement.


 


B-1

















 


The Senior Credit Agreement, among other things, contains provisions
for acceleration of the maturity hereof upon the happening of certain stated
events.


 


The Lender is hereby authorized, at its option, either (i) to
endorse on the schedule attached hereto (or on a continuation of such schedule attached
to this Construction  Note and made
a part hereof) an appropriate notation evidencing the date and amount of the Construction  Loans evidenced hereby and the date and amount of each
principal payment in respect thereof, or (ii) to record such Construction  Loans and such payments in its books and records.  Such schedule or such books and records,
as the case may be, shall constitute prima facie evidence of the accuracy of
the information contained therein, but in no event shall any failure by the
Lender to endorse or record pursuant to clauses (i) and (ii) be
deemed to relieve any Borrower from any of its obligations.


The Borrower hereby waives presentment, demand, protest or notice of
any kind in connection with this Construction  Note.  All amounts payable under this Construction  Note are payable without relief from valuation and
appraisement Laws.


 


The Borrower agrees to pay all costs and expenses, including without
limitation attorneys’ fees, incurred in connection with the enforcement of this
Construction  Note, in accordance with and to
the extent provided by the Senior Credit Agreement.


 


B-2

















 


THIS CONSTRUCTION NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, UNITED STATES OF AMERICA,
WITHOUT REFERENCE TO CONFLICTS OF LAWS (OTHER THAN SECTION 5-1401 OF THE
NEW YORK GENERAL OBLIGATIONS LAW).


 


 


	
   

  	
  HEARTLAND GRAIN FUELS, L.P.,

  
	
   

  	
  a Delaware limited partnership

  	
   

  
	
   

  	
  By:

  	
  Dakota Fuels, Inc.

  	
   

  
	
   

  	
  Its:

  	
  General Partner

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
					



 


B-3

















 


Schedule to

Construction  Note


 


LOANS, MATURITIES
AND PAYMENTS OF PRINCIPAL


 


	
  Date

  	
   

  	
  Amount of 

  Loan

  	
   

  	
  Maturity

  of Loan

  	
   

  	
  Amount of 

  Principal Paid 

  or Prepaid

  	
   

  	
  Unpaid 

  Principal 

  Balance

  	
   

  	
  Notation 

  Made By

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


B-4

















 


EXHIBIT C


to Senior
Credit Agreement


 


[FORM OF TERM NOTE]


 


Term Note


 


	
  $[__________]

  	
   

  	
  [__________________]

  



[__________], [____]   


 


FOR VALUE RECEIVED, HEARTLAND GRAIN FUELS, L.P. (the “Borrower”),
HEREBY PROMISES TO PAY to the order of [__________________], a [_________________] (the “Lender”), at its offices located at [__________________], the
principal sum of [__________]
Dollars ($[__________])
or, if less, the aggregate unpaid principal amount of the Term  Loans made by the Lender to the Borrower under the Senior
Credit Agreement, dated as of October 1, 2007 (as amended, restated,
supplemented or otherwise modified from time to time, the “Senior Credit
Agreement”) among the Borrower, each of the Lenders from time to time party
hereto, WESTLB AG, NEW YORK BRANCH, as Administrative Agent for the Lenders,
WESTLB AG, NEW YORK BRANCH, as Collateral Agent for the Senior Secured Parties,
WESTLB AG, NEW YORK BRANCH, as Issuing Bank, and WESTLB AG, NEW YORK BRANCH, as
lead arranger, sole bookrunner and syndication agent.  Capitalized terms used herein but not
otherwise defined herein shall have the respective meanings set forth in the
Senior Credit Agreement.


 


The Borrower also promises to pay (i) interest on the unpaid
principal amount hereof from the date hereof until paid in full at the rates
and at the times provided in the Senior Credit Agreement and (ii) fees at
such times and at such rates and amounts as specified in the Senior Credit
Agreement.


 


Principal, interest and fees are payable in lawful money of the United
States of America and in immediately available funds, at the times and in the
amounts provided in the Senior Credit Agreement.


 


This Term  Note is entitled to the benefits
and is subject to the terms and conditions of the Senior Credit Agreement, and
is entitled to the benefits of the security provided under the Security
Documents.  As provided in the Senior
Credit Agreement, this Term  Note is
subject to mandatory prepayment and voluntary prepayment, in whole or in
part.  The Borrower agrees to make
prepayment of principal on the dates and in the amounts specified in the Senior
Credit Agreement.


 


C-1

















 


The Senior Credit Agreement, among other things, contains provisions
for acceleration of the maturity hereof upon the happening of certain stated
events.


 


The Lender is hereby authorized, at its option, either (i) to
endorse on the schedule attached hereto (or on a continuation of such schedule attached
to this Term  Note and made a part hereof) an
appropriate notation evidencing the date and amount of the Term  Loans evidenced hereby and the date and amount of each
principal payment in respect thereof, or (ii) to record such Term  Loans and such payments in its books and records.  Such schedule or such books and records,
as the case may be, shall constitute prima facie evidence of the accuracy of
the information contained therein, but in no event shall any failure by the
Lender to endorse or record pursuant to clauses (i) and (ii) be
deemed to relieve any Borrower from any of its obligations.


 


The Borrower hereby waives presentment, demand, protest or notice of
any kind in connection with this Term  Note.  All amounts payable under this Term  Note are payable without relief from valuation and
appraisement Laws.


 


The Borrower agrees to pay all costs and expenses, including without
limitation attorneys’ fees, incurred in connection with the interpretation or
enforcement of this Term  Note, in
accordance with and to the extent provided by the Senior Credit Agreement.


 


C-2

















 


THIS TERM NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK, UNITED STATES OF AMERICA, WITHOUT REFERENCE
TO CONFLICTS OF LAWS (OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL
OBLIGATIONS LAW).


 


 


	
   

  	
  HEARTLAND GRAIN FUELS, L.P.,

  
	
   

  	
  a Delaware limited partnership

  	
   

  
	
   

  	
  By: Dakota Fuels, Inc.

  	
   

  
	
   

  	
  Its: General Partner

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  



 


C-3

















 


Schedule to

Term  Note


 


LOANS, MATURITIES
AND PAYMENTS OF PRINCIPAL


 


	
  Date

  	
   

  	
  Amount of 

  Loan

  	
   

  	
  Maturity

  of Loan

  	
   

  	
  Amount of 

  Principal Paid

  or Prepaid

  	
   

  	
  Unpaid 

  Principal 

  Balance

  	
   

  	
  Notation 

  Made By

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


C-4

















 


EXHIBIT D


to Senior
Credit Agreement


 


[FORM OF WORKING CAPITAL NOTE]


 


Working Capital Note


 


	
  $[__________]

  	
   

  	
  [__________________]    

  



 


October _____, 2007


 


FOR VALUE RECEIVED, HEARTLAND GRAIN FUELS, L.P. (the “Borrower”),
HEREBY PROMISES TO PAY to the order of [__________________], a [_________________] (the “Lender”), at its offices located at [__________________], the
principal sum of [__________]
Dollars ($[__________])
or, if less, the aggregate unpaid principal amount of the Working Capital  Loans made by the Lender to the Borrower under the Senior
Credit Agreement, dated as of October 1, 2007 (as amended, restated,
supplemented or otherwise modified from time to time, the “Senior Credit
Agreement”) among the Borrower, each of the Lenders from time to time party
hereto, WESTLB AG, NEW YORK BRANCH, as Administrative Agent for the Lenders,
WESTLB AG, NEW YORK BRANCH, as Collateral Agent for the Senior Secured Parties,
WESTLB AG, NEW YORK BRANCH, as Issuing Bank, and WESTLB AG, NEW YORK BRANCH, as
lead arranger, sole bookrunner and syndication agent.  Capitalized terms used herein but not
otherwise defined herein shall have the respective meanings set forth in the
Senior Credit Agreement.


 


The Borrower also promises to pay (i) interest on the unpaid
principal amount hereof from the date hereof until paid in full at the rates
and at the times provided in the Senior Credit Agreement and (ii) fees at
such times and at such rates and amounts as specified in the Senior Credit
Agreement.


 


Principal, interest and fees are payable in lawful money of the United
States of America and in immediately available funds, at the times and in the
amounts provided in the Senior Credit Agreement.


 


This Working Capital  Note is
entitled to the benefits and is subject to the terms and conditions of the
Senior Credit Agreement, and is entitled to the benefits of the security
provided under the Security Documents. 
As provided in the Senior Credit Agreement, this Working Capital  Note is subject to mandatory prepayment and voluntary
prepayment, in whole or in part.  The
Borrower agrees to make prepayment of principal on the dates and in the amounts
specified in the Senior Credit Agreement.


 


D-1

















 


The Senior Credit Agreement, among other things, contains provisions
for acceleration of the maturity hereof upon the happening of certain stated events.


 


The Lender is hereby authorized, at its option, either (i) to
endorse on the schedule attached hereto (or on a continuation of such schedule attached
to this Working Capital  Note and made
a part hereof) an appropriate notation evidencing the date and amount of the
Working Capital  Loans evidenced hereby and the
date and amount of each principal payment in respect thereof, or (ii) to
record such Working Capital  Loans and such
payments in its books and records.  Such schedule or
such books and records, as the case may be, shall constitute prima facie
evidence of the accuracy of the information contained therein, but in no event
shall any failure by the Lender to endorse or record pursuant to clauses (i) and
(ii) be deemed to relieve any Borrower from any of its obligations.


 


The Borrower hereby waives presentment, demand, protest or notice of
any kind in connection with this Working Capital  Note.  All amounts payable under this Working
Capital  Note are payable without relief from
valuation and appraisement Laws.


 


The Borrower agrees to pay all costs and expenses, including without
limitation attorneys’ fees, incurred in connection with the enforcement of this
Working Capital  Note, in accordance with and to
the extent provided by the Senior Credit Agreement.


 


D-2

















 


THIS WORKING CAPITAL NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, UNITED STATES OF AMERICA,
WITHOUT REFERENCE TO CONFLICTS OF LAWS (OTHER THAN SECTION 5-1401 OF THE
NEW YORK GENERAL OBLIGATIONS LAW).


 


 


	
   

  	
  HEARTLAND GRAIN FUELS, L.P.,

  
	
   

  	
  a Delaware limited partnership

  	
   

  
	
   

  	
  By: Dakota Fuels, Inc.

  	
   

  
	
   

  	
  Its: General Partner

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  



 


D-3

















 


Schedule to

Working Capital  Note


 


LOANS, MATURITIES
AND PAYMENTS OF PRINCIPAL


 


 


	
  Date

  	
   

  	
  Amount of 

  Loan

  	
   

  	
  Maturity

  of Loan

  	
   

  	
  Amount of 

  Principal Paid

  or Prepaid

  	
   

  	
  Unpaid 

  Principal 

  Balance

  	
   

  	
  Notation 

  Made By

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


D-4