Document:

EXIBIT 10.1 TO SOY ENERGY, LLC FORM 10-Q FOR THE QUARTER ENDED 04-30-2010

Exhibit 10.1

	
  

 
	
 APPENDIX
 1

 
	
  

 
	
 ASSET PURCHASE AGREEMENT

 
	
  

 
	
 DATED AS OF APRIL 2, 2010

 
	
  

 
	
 BY AND BETWEEN

 
	
  

 
	
 OSM—REO FF, LLC

 
	
  

 
	
 AND

 
	
  

 
	
 SOY ENERGY, LLC

	
  

 
	
 

 

TABLE
OF CONTENTS

	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 Page

 
	
 RECITALS

 	
  

 	
 1.

 
	
 ARTICLE 1 Definitions

 	
  

 	
 1.

 
	
  

 	
 1.1 Definitions

 	
  

 	
 1.

 
	
  

 	
 1.2 Other Definitions and Interpretive Matters

 	
  

 	
 7.

 
	
 ARTICLE 2 Purchase and Sale

 	
  

 	
 8.

 
	
  

 	
 2.1 Purchase and Sale

 	
  

 	
 8.

 
	
  

 	
 2.2 Excluded Assets

 	
  

 	
 8.

 
	
  

 	
 2.3 Assumed Liabilities

 	
  

 	
 9.

 
	
  

 	
 2.4 Excluded Liabilities

 	
  

 	
 9.

 
	
  

 	
 2.5 Assignments

 	
  

 	
 9.

 
	
  

 	
 2.6 Further Assurances

 	
  

 	
 11.

 
	
  

 	
 2.7 Escrow Deposit

 	
  

 	
 11.

 
	
 ARTICLE 3 Purchase Price

 	
  

 	
 12.

 
	
  

 	
 3.1 Purchase Price

 	
  

 	
 12.

 
	
  

 	
 3.2 Discharge of Assumed Liabilities After Closing

 	
  

 	
 12.

 
	
  

 	
 3.3 Allocation of Purchase Price

 	
  

 	
 12.

 
	
 ARTICLE 4 Closing

 	
  

 	
 12.

 
	
  

 	
 4.1 Closing Date

 	
  

 	
 12.

 
	
  

 	
 4.2 Buyer’s Deliveries

 	
  

 	
 12.

 
	
 ARTICLE 5 Representations and Warranties of Seller

 	
  

 	
 14.

 
	
  

 	
 5.1 Organization and Good Standing

 	
  

 	
 14.

 
	
  

 	
 5.2 Authority; Validity

 	
  

 	
 14.

 
	
  

 	
 5.3 No Conflict

 	
  

 	
 14.

 
	
  

 	
 5.4 Owned Real Property

 	
  

 	
 15.

 
	
  

 	
 5.5 Title; Liens and Encumbrances

 	
  

 	
 15.

 
	
  

 	
 5.6 Litigation

 	
  

 	
 15.

 
	
  

 	
 5.7 Employment Matters

 	
  

 	
 15.

 
	
  

 	
 5.8 Assigned Contracts

 	
  

 	
 15.

 
	
  

 	
 5.9 Brokers or Finders

 	
  

 	
 15.

 
	
 ARTICLE 6 Representations and Warranties of Buyer

 	
  

 	
 15.

 
	
  

 	
 6.1 Organization and Good Standing

 	
  

 	
 15.

 
	
  

 	
 6.2 Authority; Validity

 	
  

 	
 15.

 
	
  

 	
 6.3 No Conflict

 	
  

 	
 16.

 
	
  

 	
 6.4 Availability of Funds

 	
  

 	
 16.

 
	
  

 	
 6.5 Litigation

 	
  

 	
 16.

 
	
  

 	
 6.6 Brokers or Finders

 	
  

 	
 16.

 
	
 ARTICLE 7 Action Prior to the Closing Date

 	
  

 	
 16.

 
	
  

 	
 7.1 Operations Prior to the Closing Date

 	
  

 	
 16.

 
	
  

 	
 7.2 Governmental Consents; Commercially Reasonable
 Efforts

 	
  

 	
 16.

 
	
  

 	
 7.3 Operating Permits

 	
  

 	
 18.

 
	
  

 	
 7.4 Due Diligence

 	
  

 	
 18.

 
	
  

 	
 7.5 Preparation of the Proxy Statement; Unitholder
 Meeting

 	
  

 	
 19.

 
	
 ARTICLE 8 Additional Agreements

 	
  

 	
 20.

 
	
  

 	
 8.1 Taxes

 	
  

 	
 20.

 
	
  

 	
 8.2 Payments Received

 	
  

 	
 21.

 

i

	
  

 	
  

 	
  

 	
  

 
	
  

 	
 8.3 No Other Representations or Warranties

 	
  

 	
 21.

 
	
  

 	
 8.4 Acquired Assets “AS IS”; Buyer’s Acknowledgment
 Regarding Same

 	
  

 	
 22.

 
	
  

 	
 8.5 Mobilization, Utilities

 	
  

 	
 22.

 
	
  

 	
 8.6 Reserve; Certain Insurance Matters

 	
  

 	
 23.

 
	
 ARTICLE 9 Conditions Precedent to Obligations of
 Buyer to Close

 	
  

 	
 24.

 
	
  

 	
 9.1 Accuracy of Representations

 	
  

 	
 25.

 
	
  

 	
 9.2 Seller’s Performance

 	
  

 	
 25.

 
	
  

 	
 9.3 Seller’s Deliveries

 	
  

 	
 25.

 
	
  

 	
 9.4 Due Diligence

 	
  

 	
 25.

 
	
  

 	
 9.5 Title Policy and Objections

 	
  

 	
 25.

 
	
  

 	
 9.6 Lien Search Results

 	
  

 	
 26.

 
	
  

 	
 9.7 Damage to Acquired Assets

 	
  

 	
 26.

 
	
  

 	
 9.8 Financing

 	
  

 	
 26.

 
	
  

 	
 9.9 Buyer Unitholder Approval

 	
  

 	
 26.

 
	
  

 	
 9.10 No Order

 	
  

 	
 26.

 
	
  

 	
 9.11 Governmental Authorizations

 	
  

 	
 26.

 
	
  

 	
 9.12 Consents

 	
  

 	
 26.

 
	
  

 	
 9.13 IDED

 	
  

 	
 26.

 
	
  

 	
 9.14 Seller’s Cure Rights

 	
  

 	
 26.

 
	
 ARTICLE 10 Conditions Precedent to the Obligation of
 Seller to Close

 	
  

 	
 27.

 
	
  

 	
 10.1 Accuracy of Representations

 	
  

 	
 27.

 
	
  

 	
 10.2 Buyer’s Performance

 	
  

 	
 27.

 
	
  

 	
 10.3 Buyer’s Deliveries

 	
  

 	
 27.

 
	
  

 	
 10.4 No Order

 	
  

 	
 27.

 
	
  

 	
 10.5 Governmental Authorizations

 	
  

 	
 27.

 
	
  

 	
 10.6 Consents

 	
  

 	
 27.

 
	
  

 	
 10.7 Financing

 	
  

 	
 27.

 
	
  

 	
 10.8 IDED

 	
  

 	
 27.

 
	
  

 	
 10.9 Buyer’s Cure Rights

 	
  

 	
 28.

 
	
 ARTICLE 11 Limited Exclusivity

 	
  

 	
 28.

 
	
  

 	
 11.1 Buyer’s Limited Exclusive Window

 	
  

 	
 28.

 
	
  

 	
 11.2 Seller’s Safe Harbor

 	
  

 	
 28.

 
	
 ARTICLE 12 Termination

 	
  

 	
 29.

 
	
  

 	
 12.1 Termination Events

 	
  

 	
 29.

 
	
  

 	
 12.2 Effect of Termination

 	
  

 	
 31.

 
	
  

 	
 12.3 Expenses in the Event of Termination

 	
  

 	
 31.

 
	
  

 	
 12.4 Rights and Remedies

 	
  

 	
 31.

 
	
 ARTICLE 13 General Provisions

 	
  

 	
 31.

 
	
  

 	
 13.1 Survival

 	
  

 	
 31.

 
	
  

 	
 13.2 Public Announcements

 	
  

 	
 31.

 
	
  

 	
 13.3 Notices

 	
  

 	
 32.

 
	
  

 	
 13.4 Waiver

 	
  

 	
 33.

 
	
  

 	
 13.5 Entire Agreement; Amendment

 	
  

 	
 33.

 
	
  

 	
 13.6 Assignment

 	
  

 	
 33.

 
	
  

 	
 13.7 Severability

 	
  

 	
 33.

 
	
  

 	
 13.8 Expenses

 	
  

 	
 33.

 
	
  

 	
 13.9 Governing Law; Consent to Jurisdiction and
 Venue; Jury Trial Waiver

 	
  

 	
 33.

 
	
  

 	
 13.10 Counterparts

 	
  

 	
 34.

 
	
  

 	
 13.11 Parties in Interest; No Third Party
 Beneficiaries

 	
  

 	
 34.

 
	
  

 	
 13.12 Non-Recourse

 	
  

 	
 34.

 

ii

	
  

 	
  

 	
  

 
	
 SCHEDULES AND EXHIBITS

 
	
  

 	
 Schedules and Exhibits Cover Page

 	
  

 
	
  

 	
 Schedule 1.1(a)

 	
 Assigned Contracts

 
	
  

 	
 Schedule 1.1(b)

 	
 Unpermitted Liens

 
	
  

 	
 Schedule 1.1(c)

 	
 Permitted Encumbrances

 
	
  

 	
 Schedule 2.1(a)

 	
 Facility Description

 
	
  

 	
 Schedule 2.1(b)

 	
 Certain Equipment

 
	
  

 	
 Schedule 2.1(f)

 	
 Additional Designated Assets

 
	
  

 	
 Schedule 3.1(c)

 	
 Pre-Paid Expenses

 
	
  

 	
 Schedule 3.3

 	
 Allocation of Purchase Price

 
	
  

 	
 Schedule 4.3(a)

 	
 Certain Transaction Documents

 
	
  

 	
 Schedule 5.4(a)

 	
 Owned Real Property

 
	
  

 	
 Schedule 5.4(b)

 	
 Certain Proceedings

 
	
  

 	
 Schedule 7.2(a)

 	
 Certain Permits

 
	
  

 	
 Schedule 8.6(a)

 	
 Facility Repairs

 
	
  

 	
 Schedule 8.6(b)

 	
 Environmental Investigatory and Corrective Actions

 
	
  

 	
 Exhibit A

 	
 Bankruptcy Order

 
	
  

 	
 Exhibit B

 	
 Hold-Back Escrow Agreement

 
	
  

 	
 Exhibit C

 	
 Certain Loan Documents

 

iii

ASSET PURCHASE AGREEMENT

          THIS
ASSET PURCHASE AGREEMENT (this “Agreement”) is
made as of April 2, 2010 (the “Effective Date”), by and among OSM—REO FF, LLC, a Minnesota limited
liability company (“Seller”), and Soy
Energy, LLC, an Iowa limited liability company (“Buyer”).
Capitalized terms used herein and not otherwise defined herein have the
meanings set forth in Article 1.

Recitals

          WHEREAS,
Freedom Fuels, LLC, an Iowa limited liability company (“Freedom Fuels”)
was engaged in the business of producing biodiesel and its co-products at its
biodiesel production facility located at Mason City, Iowa; 

          WHEREAS,
Freedom Fuels filed a voluntary petition for relief (the “Filing”) under
Chapter 11 of the United States Bankruptcy Code (the “Bankruptcy Code”)
in the United States Bankruptcy Court for the Northern District of Iowa (the “Bankruptcy
Court”), case number 09-02468-wle11 (the “Bankruptcy Case”);

          WHEREAS,
Freedom Fuels assigned to Seller certain assets pursuant to an order (the “Bankruptcy
Order”) issued by the Bankruptcy Court on or about November 20, 2009, a
copy of which is attached hereto as Exhibit A;

          WHEREAS,
Seller desires to sell to Buyer, and Buyer desires to purchase from Seller,
certain assets conveyed to Seller pursuant to the Bankruptcy Order, and Seller
further has agreed to assume certain liabilities relating to said assets, upon
the terms and conditions hereinafter set forth.

          NOW,
THEREFORE, in consideration of the premises and the mutual promises herein
made, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties hereto agree as
follows:

ARTICLE 1

DEFINITIONS

                    1.1          
Definitions. For purposes of this Agreement, the following terms have
the meanings specified or referenced below.

          “Acquired
Assets” has the meaning set forth in Section 2.1.

          “Action”
means any legal action, suit or arbitration, or any inquiry, proceeding
(including any civil, criminal, administrative or appellate proceeding),
hearing, audit or investigation, brought, conducted or heard by or before any
court or other Governmental Authority.

          “Additional
Designated Assets” means those assets conveyed to Seller pursuant to the
Bankruptcy Order that the Parties have designated in Schedule 2.1(f) to
be purchased hereunder by Buyer.

          “Affiliate”
of any particular Person means any other Person or Persons controlling,
controlled by, or under common control with such particular Person, where “control”
means the possession, directly or indirectly, of the power to direct the
management and policies of a Person whether through the ownership of voting
securities, contract, or otherwise.

          “Agreement”
has the meaning set forth in the introductory paragraph.

1

          “Assigned
Contracts” means the Contracts listed or described in Schedule 1.1(a),
as the same may be modified or supplemented from time to time by written
agreement of the Parties.

          “Assumed
Liabilities” has the meaning set forth in Section 2.3.

          “Bankruptcy
Case” has the meaning set forth in the recitals.

          “Bankruptcy
Code” means Title 11 of the United States Code, Sections 101 et
seq.

          “Bankruptcy
Order” has the meaning set forth in the recitals.

          “Business
Day” means any day of the year on which national banking institutions in
New York are open to the public for conducting business and are not required or
authorized by law to close.

          “Buyer”
has the meaning set forth in the introductory paragraph. 

          “Buyer
Unitholder Approval” means the affirmative vote (in person or by proxy) of
the holders of a majority of the outstanding membership units of Buyer
representing a quorum in favor of the adoption of this Agreement and the
transactions contemplated hereby.

          “Buyer
Unitholder Meeting” means the special meeting held by Buyer in accordance
with the terms of its governance requirements for the purpose of obtaining the
Buyer Unitholder Approval.

          “Closing”
has the meaning set forth in Section 4.1.

          “Closing
Date” means the date and time as of which the Closing occurs as set forth
in Section 4.1.

          “Closing
Deadline” means the date forty five (45) days after the Expiration Date.

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

          “Confidentiality
Arrangements” has the meaning set forth in Section 2.5(b).

          “Contract”
means any agreement, contract, obligation, promise, license, note, lease or
undertaking (whether written or oral) that is legally binding.

          “Deed”
means (i) a quitclaim deed, in form and substance reasonably acceptable to
Buyer and Seller, transferring title to the Owned Real Property, or (ii) if
reasonably required by the Title Company to issue a Title Commitment for
insurable title to the Owned Real Property pursuant to Section 9.5, such
other form of special or limited warranty deed as may be acceptable to Seller,
provided that such acceptance of said special or limited warranty deed, if
required, will not be unreasonably withheld by Seller.

          “Deposit
Escrow Agent” means such escrow agent as is mutually acceptable to Buyer
and Seller.

          “Deposit
Escrow Agreement” means the Deposit and Escrow Agreement of even date
herewith among Buyer, Seller and Deposit Escrow Agent, as contemplated by Section
2.7.

2

          “Documents”
means all books, records, files, invoices, Inventory records, product
specifications, advertising materials, employment records, customer lists, cost
and pricing information, supplier lists, business plans, catalogs, customer
literature, quality control records and manuals, research and development
files, records and laboratory books, plans, blueprints, specifications, studies,
surveys, maps, drawings, analysis, reports, training materials, ownership and
operating manuals, credit records of customers, correspondence with
Governmental Authorities and modeling, testing and monitoring data and
reporting, notifications and plans relating to environmental health and safety
matters (including, in each case, all data and other information stored on
discs, tapes or other media).

          “Due
Diligence Expiration Date” has the meaning set forth in Section 12.1(b).

          “Effective
Date” has the meaning set forth in the introductory paragraph of this
Agreement.

          “Encumbrance”
means any charge, lien, claim, mortgage, lease, sublease, hypothecation, deed
of trust, pledge, security interest, option, right of use or possession, right
of first offer or first refusal, easement, servitude, restrictive covenant,
encroachment, encumbrance, judgment, conditional sale or other similar
restriction of any kind or nature. 

          “Environmental
Condition” means that certain release of hydrochloric acid and resulting
conditions at the Facility (including any release or threatened release of
chloride or other substances to soil and/or groundwater and damage to a
concrete containment basin) as more fully described in that certain report of
Geotechnical Services, Inc., entitled “Hydrochloric Acid Containment Basin
Investigation Freedom Fuels, 4172 19th Street SW, Mason City, Iowa,” and dated
August 28, 2009.

          “Equipment”
means all furniture, trade fixtures, equipment, computers, machinery, vehicles,
apparatus, appliances, implements, signage, supplies and all other tangible
personal property of every kind and description owned by Seller, including
spare parts, for use in or relating to the Facility, as more fully set forth in
Schedule 2.1(b); provided, that the term “Equipment” as
used herein shall not include any of the plant equipment identified in Schedule
2.1(a) and included in the term “Facility” as used herein.

          “Excluded
Assets” has the meaning set forth in Section 2.2.

          “Excluded
Liabilities” has the meaning set forth in Section 2.4.

          “Expiration
Date” means the earlier of the following: (i) the date one hundred (100)
days after the Effective Date, or (ii) the date three (3) business days after
the date on which Buyer Unitholder Approval is obtained pursuant to Section
7.5.

          “Facility”
means the biodiesel production plant located on the Owned Real Property,
including all buildings, structures, fixtures, and Improvements located on such
Owned Real Property, and further including all tanks, piping, racks, controls,
and other plant equipment located in or associated with said plant, all as more
specifically identified in Schedule 2.1(a). 

          “Filing”
has the meaning set forth in the recitals.

          “Governmental
Authority” means any United States federal, state or local or any foreign
government, governmental authority or regulatory or administrative authority or
any court, tribunal or judicial body having jurisdiction.

          “Governmental
Authorization” means any approval, consent, license, permit, waiver or
other authorization issued, granted or otherwise made available by or under the
authority of any Governmental Authority.

3

          “Hold-Back
Escrow Agent” means such escrow agent as is mutually acceptable to Buyer
and Seller.

          “Hold-Back
Escrow Agreement” means the Hold-Back Escrow Agreement among Buyer, Seller
and Hold-Back Escrow Agent, which agreement shall be substantially in the form
of Exhibit B attached hereto.

          “Improvements”
means all of the structures, parking areas, landscaping, buildings and
improvements (in each case if any) situated on the Owned Real Property.

          “Inventory”
means (i) all finished biodiesel stored at the Facility; (ii) all
Work in Progress; (iii) all finished biodiesel produced at the Facility
and in transit to a third party; (iv) all grain and grain-product inputs
stored at the Facility; (v) all grain and grain-product inputs stored at
third-party facilities, but only to the extent such grain or grain-product
inputs are exclusively for use at the Facility; (vi) all bi-products or
co-products, located at the Facility or in transit, or in storage for transit,
to a third party, created in connection with the production of biodiesel at the
Facility; and (vii) all chemicals and other production inputs other than
grain or grain products located at the Facility or in transit to, or in storage
for transit to, the Facility.

          “Legal
Requirement” means any federal, state, provincial, local, municipal,
foreign, international, multinational, or other administrative Order,
constitution, law, ordinance, principle of common law, regulation, statute or
treaty.

          “Liability”
means any debt, losses, claim, damage, demand, fine, judgment, penalty,
deficiency, liability or obligation (whether known or unknown, asserted or
unasserted, absolute or contingent, accrued or unaccrued, liquidated or
unliquidated, or due or to become due).

          “Loan
Documents” means a credit or loan agreement by and between Buyer and Seller
or an Affiliate of Seller, as agent, and other banks named therein, and all
other documents and instruments contemplated thereby, including such
intercreditor agreements as may be required by the lenders to Buyer. The Loan
Documents shall include those documents attached hereto in Exhibit C in
substantially the form set forth therein.

          “Material
Adverse Effect” means a material adverse change in or material adverse
effect on the Facility or other Acquired Assets (excluding the Excluded Assets
and the Excluded Liabilities), in each case taken as a whole, but excluding (a)
any change or effect to the extent that it results from or arises out of (i)
the Filing; (ii) the execution and delivery of this Agreement or the
announcement thereof or the pendency or consummation of the transactions
contemplated hereby; (iii) geopolitical conditions or any outbreak or
escalation of hostilities or acts of terrorism or war; (iv) changes in (or
proposals to change) Legal Requirements or accounting regulations or
principles; (v) any action contemplated by this Agreement or taken at the
request of Buyer; (vi) changes in prices or costs of commodities or supplies;
(vii) failure of Seller to meet any internal or published projections,
forecasts, estimates or predictions in respect of financial or operating
metrics; or (viii) any motion, application, pleading or Order filed under or in
connection with the Bankruptcy Case; and (b) any change or effect generally
applicable to (i) the industries and markets in which the Facility has operated
or proposes to operate or (ii) economic or political conditions or the
securities or financial markets in any country or region; provided, however, that in
the cases of clauses (b)(i) and (b)(ii), only to the extent such change or
effect does not affect the Facility or its anticipated operation or any other
Acquired Assets, taken as a whole, in a disproportionate manner relative to the
other participants in the industries and markets in which the Facility has
operated or proposes to operate.

4

          “Order”
means any award, writ, injunction, judgment, order or decree entered, issued,
made, or rendered by any Governmental Authority.

          “Owned
Real Property” means the real property legally described in Schedule
5.3(a) and any Improvements located thereon, including the Facility.

          “Party”
or “Parties” means, individually or collectively, Buyer and Seller.

          “Periodic
Taxes” has the meaning set forth in Section 8.1(b).

          “Permits”
means those licenses, permits, variances, exceptions, consents, certificates,
approvals, clearances and Orders issued by a Governmental Authority, together
with any pending applications therefor or in connection therewith.

          “Permitted
Encumbrances” means any of the following: (i) any utility easements,
leases, or reservations, or other similar rights of others in, or minor defects
and irregularities in, title that do not impair the intended use of the subject
property or assets; (ii) any Encumbrance or privilege vested in any lessor,
licensor or permittor for rent or other obligations solely related to the
period after Closing; (iii) any licenses of or other grants of rights to use
intellectual property entered into in the ordinary course of business that do
not materially impair the ownership or use of the Acquired Assets; (iv) any
encumbrances, title exceptions or other imperfections of title caused by or
resulting from the acts of Buyer or any of its Affiliates, employees, officers,
directors, agents, contractors, invitees or licensees; (v) any liens for Taxes
not yet due and payable; (vi) any liens, claims, or other encumbrances relating
to or arising from any goods or services requested directly or indirectly by
Buyer or any of its Affiliates, employees, officers, directors, agents,
contractors, invitees or licensees; and (vii) Encumbrances set forth on Schedule
1.1(c). Permitted Encumbrances shall not include any Unpermitted Liens.

          “Person”
means any individual, corporation (including any non-profit corporation),
partnership, limited liability company, joint venture, estate, trust,
association, organization or other entity or Governmental Authority.

          “Potentially
Confidential Information” has the meaning set forth in Section
2.5(b).

          “Pre-Paid
Expenses” has the meaning set forth in Section 3.1(c).

          “Proceeding”
means any action, arbitration, audit, hearing, investigation, litigation, or
suit (whether civil, criminal, administrative or investigative) commenced,
brought, conducted, or heard by or before, or otherwise involving, any
Governmental Authority.

          “Proxy
Statement” refers to the proxy statement to be filed with the SEC by Buyer
pursuant to Section 7.5.

          “Purchase
Price” has the meaning set forth in Section 3.1.

          “Representative”
means, with respect to a particular Person, any director, officer, employee,
agent, consultant, advisor or other representative of such Person, including
legal counsel, accountants and financial advisors. 

          “SEC”
means the United States Securities and Exchange Commission.

          “Seller”
has the meaning set forth in the introductory paragraph.

5

          “Seller’s
Knowledge” means, with respect to any matter in question, the actual
knowledge (excluding, among other things, constructive and imputed knowledge)
of Melanie Tanone with respect to such matter, without making any independent
investigation or inquiry or verification. Such words signify only that no
information has come to their attention in connection with the transaction
contemplated by this Agreement that has given them actual knowledge that
statements regarding the matter are not accurate in any material respect. 

          “Tax”
or “Taxes” (and with correlative meaning, “Taxable” and “Taxing”)
means (i) any federal, state, provincial, local, foreign or other
income, alternative, minimum, add-on minimum, accumulated earnings, personal
holding company, franchise, capital stock, net worth, capital, profits,
intangibles, windfall profits, gross receipts, value added, sales, use, goods
and services, excise, customs duties, transfer, conveyance, mortgage,
registration, stamp, documentary, recording, premium, severance, environmental
(including taxes under Section 59A of the Code), natural resources, real
property, personal property, ad valorem, intangibles, rent, occupancy, license,
occupational, employment, unemployment insurance, social security, disability,
workers’ compensation, payroll, health care, withholding, estimated or other
similar tax, duty, levy or other governmental charge or assessment or
deficiency thereof (including all interest and penalties thereon and additions
thereto whether disputed or not) and (ii) any transferee or successor liability
(by law, contract or otherwise) in respect of any items described in clause (i)
above.

          “Tax
Return” means any return, declaration, report, claim for refund,
information return or other document (including any related or supporting
estimates, elections, schedules, statements, or information) filed or required
to be filed in connection with the determination, assessment or collection of
any Tax or the administration of any laws, regulations or administrative
requirements relating to any Tax.

          “Title
Commitment” has the meaning set forth in Section 9.5. 

          “Title
Company” has the meaning set forth in Section 9.5.

          “Title
Policy” has the meaning set forth in Section 9.5.

          “Transaction
Documents” means this Agreement and any other agreements, instruments or
documents entered into pursuant to this Agreement.

          “Transfer
Taxes” has the meaning set forth in Section 8.1(a).

          “Unitholder
Approval Deadline” has the meaning set forth in Section 7.5(f).

          “Unpermitted
Liens” means (i) the liens on and security interests in Acquired Assets
listed or described in Schedule 1.1(b), and/or (ii) any Encumbrances to
which Buyer makes timely Objection under Section 9.5 as long as said
Objection is not waived by Buyer or cured by Seller in accordance with Section
9.5.

          “Work in
Progress” means all unfinished biodiesel (or biodiesel components) still
involved in the production process (i.e., not finished biodiesel) and located
in production devices, piping or elsewhere within the Facility, as well as all
grains and grain products still involved in the production process (i.e.,
not yet ready to be marketed), located anywhere and intended for use in
operation of the Facility.

6

                    1.2          Other
Definitions and Interpretive Matters

	
  

 	
  

 
	
  

 	
                         (a)          
Unless otherwise expressly provided, for purposes of this Agreement, the
following rules of interpretation shall apply:

 

	
  

 	
  

 
	
  

 	
                             (i)          Calculation
 of Time Period. When calculating the period of time before which, within
 which or following which any act is to be done or step taken pursuant to this
 Agreement, the date that is the reference date in calculating such period
 shall be excluded. If the last day of such period is a day other than a
 Business Day, the period in question shall end on the next succeeding
 Business Day.

 
	
  

 	
  

 
	
  

 	
                             (ii)        
Dollars. Any reference in this Agreement to $means U.S. dollars.

 
	
  

 	
  

 
	
  

 	
                             (iii)        Exhibits/Schedules.
 All Exhibits and Schedules attached or annexed hereto or referred to herein
 are hereby incorporated in and made a part of this Agreement as if set forth
 in full herein. Any capitalized terms used in any Schedule or Exhibit but not
 otherwise defined therein shall be defined as set forth in this Agreement.

 
	
  

 	
  

 
	
  

 	
                             (iv)        Gender
 and Number. Any reference in this Agreement to gender includes all
 genders, and words imparting the singular number only include the plural and
 vice versa.

 
	
  

 	
  

 
	
  

 	
                             (v)         Headings.
 The provision of a table of contents, the division of this Agreement into
 Articles, Sections and other subdivisions and the insertion of headings are
 for convenience of reference only and shall not affect or be utilized in the
 construction or interpretation of this Agreement. All references in this
 Agreement to any “Section” or “Article” are to the
 corresponding Section or Article of this Agreement unless otherwise
 specified.

 
	
  

 	
  

 
	
  

 	
                             (vi)        Herein.
 Words such as “herein,” “hereof” and “hereunder” refer
 to this Agreement as a whole and not merely to a subdivision in which such
 words appear, unless the context otherwise requires.

 
	
  

 	
  

 
	
  

 	
                             (vii)       Including.
 The word “including” or any variation thereof means “including,
 without limitation,” and shall not be construed to limit any general
 statement that it follows to the specific or similar items or matters
 immediately following it.

 

	
  

 	
  

 
	
  

 	
                         (b)          
No Strict Construction. Buyer, on the one hand, and Seller, on the other
hand, participated jointly in the negotiation and drafting of this Agreement,
and, in the event an ambiguity or question of intent or interpretation arises,
this Agreement shall be construed as jointly drafted by Buyer, on the one hand,
and Seller, on the other hand, and no presumption or burden of proof shall
arise favoring or disfavoring any Party by virtue of the authorship of any
provision of this Agreement. Without limitation as to the foregoing, no rule of
strict construction construing ambiguities against the draftsperson shall be
applied against any Person with respect to this Agreement.

7

ARTICLE 2

PURCHASE AND SALE

                    2.1          
Purchase and Sale. Upon the terms and subject to the conditions of this
Agreement, on the Closing Date, Seller shall sell, transfer, assign, convey and
deliver, or cause to be sold, transferred, assigned, conveyed and delivered,
free and clear of any Encumbrances (except for Permitted Encumbrances and
subject to Article 8), to Buyer, and Buyer shall purchase, all right,
title and interest of Seller in, to or under the following (collectively, the “Acquired
Assets”):

	
  

 	
  

 
	
  

 	
                          (a)          
 the Facility;

 
	
  

 	
  

 
	
  

 	
                          (b)          
 the Equipment;

 
	
  

 	
  

 
	
  

 	
                          (c)          
 the Inventory; 

 
	
  

 	
  

 
	
  

 	
                          (d)          
 subject to Section 2.5, the Assigned Contracts;

 
	
  

 	
  

 
	
  

 	
                          (e)          
 the Owned Real Property, together with all of the Improvements; 

 
	
  

 	
  

 
	
  

 	
                          (f)          
 the Additional Designated Assets; 

 
	
  

 	
  

 
	
  

 	
                          (g)          
 to the extent reasonably practicable and permitted by applicable Legal
 Requirements, all domain names, telephone, telex and telephone facsimile
 numbers and other directory listings relating to the Facility;

 
	
  

 	
  

 
	
  

 	
                          (h)          
 to the extent available and permitted by applicable Legal Requirements, all
 Documents that relate primarily to any of the Acquired Assets specified in
 this Section 2.1, provided that Seller may retain copies
 of such Documents; and 

 
	
  

 	
  

 
	
  

 	
                          (i)          
 subject to Section 2.5 and Article 7, (i) all Permits held by
 Seller relating to the Facility that can be transferred to Buyer under
 applicable Legal Requirements with or without Governmental Authority
 approval, and (ii) such transferable Permits that were issued to an owner of
 the Facility and are either assigned to Seller pursuant to the Bankruptcy
 Order or are in the process of transfer to Seller pursuant to a request
 pending with a Governmental Authority (collectively, such Permits referenced
 in clauses (i) and (ii) of this paragraph herein are referred to as the
 “Transferable Permits”).

 

                    2.2          
Excluded Assets. The Acquired Assets shall not include any other assets
of Seller (such assets other than the Acquired Assets, collectively, the “Excluded
Assets”). Without limiting the generality of the foregoing, the Acquired
Assets shall not include, and the Excluded Assets will include, the following:

	
  

 	
  

 
	
  

 	
                          (a)          
 the Purchase Price delivered to Seller pursuant to this Agreement;

 
	
  

 	
  

 
	
  

 	
                          (b)          
 all cash and cash equivalents of Seller, including checks, commercial paper,
 treasury bills, certificates of deposit and other bank deposits;

 
	
  

 	
  

 
	
  

 	
                          (c)          
 any rights, claims or causes of action of Seller under this Agreement or any
 other Transaction Document; and

 

8

	
  

 	
  

 
	
  

 	
                          (d)          
 any other assets acquired by Seller pursuant to the Bankruptcy Order that are
 not expressly identified as “Acquired Assets” in Section 2.1.

 

                    2.3          
Assumed Liabilities. Upon the terms and subject to the conditions of
this Agreement, on the Closing Date, Buyer shall assume and agree to discharge,
when due (in accordance with their respective terms and subject to the
respective conditions thereof), only the following Liabilities (collectively,
the “Assumed Liabilities”) and no others: 

	
  

 	
  

 
	
  

 	
                          (a)          
 all executory obligations for future performance under the Assigned Contracts
 for the period commencing on the Closing Date, and all other Liabilities
 under the Assigned Contracts and Transferable Permits relating to events or
 circumstances first arising and accruing after the Closing Date; 

 
	
  

 	
  

 
	
  

 	
                          (b)          
 all obligations relating to any Confidentiality Arrangements and Potentially
 Confidential Information relating to the Acquired Assets to the extent
 provided in Section 2.5; and 

 
	
  

 	
  

 
	
  

 	
                          (c)          
 Seller’s Liability for Taxes to the extent provided in Section 8.1.

 

Buyer agrees to indemnify and hold Seller harmless from any and all
claims, costs or other Liabilities, including reasonable attorneys’ fees,
arising with respect to the Assumed Liabilities or any and all Liabilities
arising from ownership of the Acquired Assets, operation of the Facility, and
incidents and occurrences after the Closing Date.

                    2.4          
Excluded Liabilities. Notwithstanding any provision in this Agreement to
the contrary, Buyer shall not assume and shall not be obligated to assume or be
obliged to pay, perform or otherwise discharge any Liability of Seller other
than the Assumed Liabilities (such Liabilities other than Assumed Liabilities,
collectively, the “Excluded Liabilities”).

                    2.5          
Assignments

	
  

 	
  

 
	
  

 	
                          (a)          
 Seller shall transfer and assign all Assigned Contracts and Transferable
 Permits to Buyer, and Buyer shall assume all Assigned Contracts and
 Transferable Permits from Seller, as of the Closing Date. The costs and
 responsibility for obtaining any consents from third parties required
 therefor shall be borne by Buyer, it being understood and agreed that subject
 to the further terms of this Section 2.5 and Article 7, Seller
 shall provide reasonable cooperation in connection therewith as required by
 this Agreement. Notwithstanding any other provision of this Agreement to the
 contrary, this Agreement shall not constitute an agreement to assign any
 Assigned Contract or Permit if an attempted assignment without the consent of
 a third party (including any Governmental Authority, which consent has not
 been obtained prior to the Closing), would constitute a breach of any
 obligation, violation of any applicable law or regulation, or in any way
 adversely affect the rights of Buyer or Seller thereunder.

 

9

	
  

 	
  

 
	
  

 	
                          (b)          
 The Acquired Assets (including the Facility, Equipment and Assigned
 Contracts) include agreements, plans, specifications, information, data,
 designs, software, processes, work product, and other materials that may be
 proprietary, confidential and/or otherwise non-public (herein collectively
 referred to as “Potentially Confidential Information,”) and said
 Potentially Confidential Information may be subject to confidentiality,
 licensing, trade secret, copyright, and/or other intellectual-property
 limitations, restrictions or agreements with third parties (herein
 collectively referred to as “Confidentiality Arrangements”) that may
 be applicable to the Acquired Assets or to assignment of said Acquired Assets
 to Buyer as contemplated by this Agreement. Buyer acknowledges that Seller
 has disclosed to Buyer that such Confidentiality Arrangements may be
 applicable to the Acquired Assets or the assignment thereof, but Seller is
 not aware of the scope, terms, conditions, existence or other elements, if any,
 of such Confidentiality Arrangements (including any limitations or
 restrictions with regard to Seller’s right, title and interest, if any,
 regarding Potentially Confidential Information), and Buyer further
 acknowledges that the Closing of the transactions contemplated by this
 Agreement shall represent Buyer’s agreement that it has assumed any and all
 Liabilities with respect to Potentially Confidential Information and
 Confidentiality Arrangements arising from or related to any or all of the
 Acquired Assets. The Parties further acknowledge and agree that it shall be
 Buyer’s sole obligation to obtain any necessary approvals, consents or other
 agreements from any and all Persons with respect to any Potentially
 Confidential Information or Confidentiality Arrangements, provided that
 Seller shall reasonably cooperate with Buyer in endeavoring to obtain such
 approvals, consents or other agreements (including reasonably cooperating
 with Buyer in connection with any actions required of Buyer pursuant to the
 immediately following sentence in this Section 2.5(b)), but Seller
 shall not be required to make any expenditure or incur any obligation on its
 own or on behalf of Buyer. Without limiting the generality of the foregoing
 provisions of this Section 2.5, before Seller delivers to Buyer any of
 the Assigned Contracts in connection with the due-diligence investigation
 contemplated by Section 7.4, Buyer shall first deliver to Seller, in a
 form reasonably satisfactory to Buyer, (i) a written agreement with respect
 to each such Assigned Contract, executed by the parties thereto, authorizing
 Seller to deliver said Assigned Contract to Buyer regardless of any
 Confidentiality Arrangements, and providing Buyer with the right to receive
 such Assigned Contract and any Potentially Confidential Information contained
 therein or relating thereto, and (ii) proof of Buyer’s compliance with any
 terms or conditions applicable to Seller’s delivery to Buyer of such Assigned
 Contract; except
 that if, with respect to any Assigned Contract, Buyer provides Seller with
 written confirmation, signed by all parties to said Assigned Contract, that
 there are no Confidentiality Arrangements applicable to said Assigned
 Contract and that Seller may deliver and assign said Assigned Contract to
 Buyer without any further action on the part of Seller, Buyer or any other
 Person, Seller thereafter shall deliver said Assigned Contract to Buyer in
 connection with the due-diligence process under Section 7.4 and assign
 said Assigned Contract to Buyer in accordance with this Article 2.

 
	
  

 	
  

 
	
  

 	
                          (c)          
 With respect to Assigned Contracts:

 

	
  

 	
  

 
	
  

 	
                             (i)          Buyer agrees to use
 commercially reasonable efforts to enter into novation agreements whereby
 Buyer will assume, and Seller will be released from, all obligations under
 the Assigned Contracts.

 
	
  

 	
  

 
	
  

 	
                             (ii)         If with respect to any
 Assigned Contract any required consent is not obtained or such assignment is
 not attainable, then such Assigned Contract shall not be transferred
 hereunder and, subject to the satisfaction or waiver of the other conditions
 to Closing, the Closing shall proceed with respect to the remaining Acquired
 Assets without any reduction in the Purchase Price, and Seller shall
 reasonably cooperate with Buyer in endeavoring to obtain such consent for a
 period of 180 days after the Closing Date, provided, however, that if
 any such consent is not obtained within said 180 day period, Seller shall
 have no further obligations with respect to obtaining such consent, and the
 absence of such consent and/or inability to transfer such Assigned Contract
 to Buyer shall not be considered a breach of this Agreement, and Buyer shall
 have no further rights or remedies with respect to such Assigned Contract
 (including any claim that this Agreement has been breached or is invalid due
 failure of consideration, mistake or other grounds). Nothing in this Section
 2.5(c)(ii) shall require Seller to make any expenditure or incur any
 obligation on its own or on behalf of Buyer.

 

10

	
  

 	
  

 
	
  

 	
                          (d)          
 With respect to Transferable Permits, Buyer, on the one hand, and Seller, on
 the other hand, shall take all reasonable actions to provide or submit any
 notifications, forms, requests, applications or other reasonably necessary
 documents in order to notify, or obtain consents, approvals or waivers from
 any applicable Governmental Authorities or other Person, necessary to
 facilitate the transfer of any Transferable Permits to Buyer. If any
 Transferable Permit is not able to be so transferred on or before the
 Closing, and Buyer needs such Transferable Permit to conduct or operate the
 Facility, Buyer shall use its commercially reasonable efforts and make every
 good faith attempt (and Seller shall reasonably cooperate with Buyer) to
 obtain a substantially equivalent Permit, and Seller shall provide any
 consent from Seller reasonably necessary to authorize the use by Buyer of
 such Permit. If within 180 days after the Closing Date, Buyer has not
 obtained any such Transferable Permit or a substantially equivalent Permit,
 Seller shall have no further obligations under this paragraph, and the
 inability of Buyer to obtain such Transferable Permit or a substantially
 equivalent Permit shall not be considered a breach of this Agreement, and
 Buyer shall have no further rights or remedies with respect to such
 Transferable Permit or a substantially equivalent Permit (including any claim
 that this Agreement has been breached or is invalid for failure of
 consideration, mistake or other grounds), provided, however, that nothing in this
 paragraph shall modify or affect any obligations of Buyer under the Loan
 Documents to obtain any and all necessary approvals, clearances consents or
 other authorizations (including any Permits) from any applicable Governmental
 Authority and/or to comply with any and all applicable Legal Requirements.
 Nothing in this Section 2.5(c) shall require Seller to make any
 expenditure or incur any obligation on its own or on behalf of Buyer.

 

                    2.6          
Further Assurances. In furtherance and not in limitation to the rights
and obligations set forth in Section 7.2, at the Closing, and at all
times thereafter as may be necessary, but subject to the terms of Section
2.5 and Article 7, Seller shall execute and deliver to Buyer such
other instruments of transfer as shall be reasonably necessary or appropriate
to vest in Buyer all of Seller’s right, title and interest in and to the
Acquired Assets and to comply with the purposes and intent of this Agreement
and such other instruments as shall be reasonably necessary or appropriate to
evidence the assignment by Seller and assumption by Buyer of the Assigned
Contracts and to effectuate the transfer of the Transferable Permits, and
Seller, on the one hand, and Buyer, on the other hand, shall use its reasonable
efforts to take, or cause to be taken, all appropriate action, do or cause to
be done all things necessary, proper or advisable under applicable law, and
execute and deliver such documents and other papers, as may be required to
consummate the transactions contemplated by this Agreement.

                    2.7          
Escrow Deposit. Provided that this Agreement has not been terminated on
or prior to the Expiration Date pursuant to Article 12, Seller, on the
Expiration Date, shall deposit the amount of $250,000 (the “Deposit”) with
the Deposit Escrow Agent, pursuant to the terms of the Deposit Escrow
Agreement, as earnest money in connection with this Agreement. From and after
the Expiration Date, if the Agreement has not been terminated by either Party
on or prior to said Expiration Date, the Deposit shall be non-refundable to
Buyer in all circumstances. The Deposit shall be held in escrow and
subsequently released to Seller on the Closing Date or earlier termination of
this Agreement pursuant to the terms of the Deposit Escrow Agreement, except that
if the transactions contemplated herein are closed on or before the Closing
Deadline, then the Deposit shall be credited toward the Purchase Price to the
extent set forth in Section 3.1. 

11

ARTICLE 3

PURCHASE PRICE

                    3.1          Purchase
Price. The purchase price (the “Purchase Price”) for the purchase,
sale, assignment and conveyance of Seller’s right, title and interest in, to
and under the Acquired Assets shall consist of: 

	
  

 	
  

 
	
  

 	
                          (a)          the
 assumption by Buyer at Closing of the Assumed Liabilities; and 

 
	
  

 	
  

 
	
  

 	
                          (b)          the
 payment to Seller of $10,000,000 in cash at Closing by wire transfer or other
 immediately available funds to such account or accounts as shall be specified
 by Seller, provided, the
 foregoing cash payment shall be reduced at Closing by the amount of the Hold
 Back deposited by Buyer with the Deposit Escrow Agent pursuant to Section
 8.6, and provided further, that
 as long as the Closing occurs by the Closing Deadline, then Seller shall
 receive a credit up to the amount of the Deposit against said $10,000,000,
 but only to the extent that at Closing Seller actually receives such Deposit
 and there are no other claims pending against such Deposit; and 

 
	
  

 	
  

 
	
  

 	
                          (c)          the
 payment to Seller of an amount equal to any prepaid charges and expenses of
 Seller set forth on Schedule 3.1(c) (the “Pre-Paid Expenses”)
 incurred by Seller, to the extent Buyer will receive after the Closing Date
 the goods and/or services for which such expenses have been incurred. 

 

                    3.2
          Discharge of Assumed Liabilities After Closing. Buyer shall pay, perform
or satisfy the Assumed Liabilities from time to time and as such Assumed
Liabilities become due and payable or are required to be performed or satisfied
in accordance with their respective terms. 

                    3.3
          Allocation of Purchase Price. The Purchase Price will be allocated among
the Acquired Assets as set forth in Schedule 3.3 (which Schedule 3.3
may be updated and otherwise modified from time to time by mutual written
agreement of Buyer and Seller). 

ARTICLE 4

CLOSING

                    4.1          Closing
Date. Upon the terms and subject to the conditions hereof, the closing of
the sale of the Acquired Assets and the assumption of the Assumed Liabilities
contemplated hereby (the “Closing”) shall take place at the office of
Leonard, Street and Deinard, Minneapolis, Minnesota or such other place as
mutually agreed to by the Parties, and such Closing shall occur no later than
the third (3rd) Business Day following the date on which the conditions set
forth in Article 9 and Article 10 have been satisfied or (if
permissible) waived (other than the conditions which by their nature are to be
satisfied at the Closing, provided, however,
that in no event shall the Closing occur later than the Closing
Deadline unless Buyer and Seller mutually agree to such later date. The date
and time at which the Closing actually occurs is hereinafter referred to as the
“Closing Date.” 

                    4.2          Buyer’s
Deliveries. At the Closing, Buyer shall deliver or cause to be delivered to
Seller: 

	
  

 	
  

 
	
  

 	
                          (a)          the
 Purchase Price; 

 
	
  

 	
  

 
	
  

 	
                          (b)          the
 Bill of Sale, and Assignment and Assumption Agreement, each of which shall be
 in the form set forth in Schedule 4.3(a) hereto, duly executed by
 Buyer; 

 

12

	
  

 	
  

 
	
  

 	
                          (c)          each
 other Transaction Document to which Buyer is a party, duly executed by Buyer;
 

 
	
  

 	
  

 
	
  

 	
                          (d)          the
 certificates of Buyer to be received by Seller pursuant to Sections 10.1
 and 10.2; 

 
	
  

 	
  

 
	
  

 	
                          (e)          a
 copy of Buyer’s certificate of formation or organization, certified as of a
 recent date by the Secretary of State of the State of Iowa; 

 
	
  

 	
  

 
	
  

 	
                          (f)          a
 certificate of existence of Buyer issued as of a recent date by the Secretary
 of State of the State of Iowa; 

 
	
  

 	
  

 
	
  

 	
                          (g)          a
 certificate of any authorized manager or member of Buyer, dated the Closing
 Date, in form and substance reasonably satisfactory to Seller, as to (i)
 there having been no amendments to the certificate of formation or
 organization of Buyer since the date of the certified certificate of
 formation delivered pursuant to Section 4.2(f); (ii) complete copies
 of Buyer’s operating agreement, member control agreement, limited liability
 company agreement, bylaws and/or other similar governing documents; (iii)
 Buyer’s authorization to execute and perform its obligations under the
 Transaction Documents to which Buyer is a party; and (iv) incumbency and
 signatures of the managers or members executing the Transaction Documents; 

 
	
  

 	
  

 
	
  

 	
                          (h)         a
 duly executed closing statement, in form and substance reasonably satisfactory
 to Seller; and 

 
	
  

 	
  

 
	
  

 	
                          (i)          such
 other assignments, other good and sufficient instruments of assumption and transfer
 or other documents, in form reasonably satisfactory to Seller, as Seller may
 reasonably request to transfer and assign the Assumed Liabilities to Buyer. 

 
	
  

 	
  

 
	
                     4.3          Seller’s
 Deliveries. At the Closing, Seller shall deliver or cause to be delivered
 to Buyer: 

 
	
  

 	
  

 
	
  

 	
                          (a)          the
 Bill of Sale, Assignment and Assumption Agreement, and Deed, each of which
 shall be in the form set forth in Schedule 4.3(a) hereto, duly
 executed by Seller; 

 
	
  

 	
  

 
	
  

 	
                          (b)          each
 other Transaction Documents required by this Agreement to which Seller is a
 party, duly executed by Seller; 

 
	
  

 	
  

 
	
  

 	
                          (c)          title
 certificates, to the extent that Seller is in possession of the same, for each
 Acquired Asset, the ownership of which is evidenced thereby, and a release or
 termination of each of the Unpermitted Liens, to be delivered following the
 consummation of transactions contemplated to close contemporaneously with the
 Closing; provided that Seller
 shall reasonably cooperate with Buyer to obtain title certificates not in
 Seller’s possession and to transfer the same to Buyer, and provided further that nothing in this Section
 4.3(c) shall require Seller to make any expenditure or incur any obligation
 on its own or on behalf of Buyer. 

 
	
  

 	
  

 
	
  

 	
                          (d)          the
 certificates of Seller to be received by Buyer pursuant to Sections 9.1
 and 9.2; 

 
	
  

 	
  

 
	
  

 	
                          (e)          a
 copy of Seller’s certificate of formation, certified as of a recent date by
 the Secretary of State of the State of Minnesota; 

 

13

	
  

 	
  

 
	
  

 	
                          (f)          a
 certificate of good standing of Seller issued as of a recent date by the
 Secretary of State of the State of Minnesota; 

 
	
  

 	
  

 
	
  

 	
                          (g)          a
 certificate of any authorized manager or member of Seller, dated the Closing
 Date, in form and substance reasonably satisfactory to Buyer, as to (i) there
 having been no amendments to the certificate of formation of Seller since the
 date of the certified certificate of formation delivered pursuant to Section
 4.3(d); (ii) Seller’s authorization to execute and perform its
 obligations under the Transaction Documents to which Seller is a party; and
 (iii) incumbency and signatures of the managers or members executing the
 Transaction Documents; 

 
	
  

 	
  

 
	
  

 	
                          (h)         a
 duly executed closing statement, in form and substance reasonably satisfactory
 to Buyer; and 

 
	
  

 	
  

 
	
  

 	
                          (i)          such
 other bills of sale, deeds, endorsements, assignments and other good and
 sufficient instruments of conveyance and transfer, in form reasonably
 satisfactory to Buyer, as Buyer may reasonably request to vest in Buyer all
 the right, title and interest of Seller in, to or under any or all the
 Acquired Assets, together with keys and security codes to locks on any and
 all doors to the Improvements on the Owed Real Property. 

 

ARTICLE 5 

REPRESENTATIONS AND WARRANTIES OF SELLER

          Seller
represents and warrants to Buyer as follows: 

                    5.1          Organization
and Good Standing. Seller is an entity duly organized and validly existing
under the laws of the jurisdiction of its organization. 

                    5.2          Authority;
Validity. Seller has the requisite limited liability company power and
authority necessary to enter into and perform its obligations under this
Agreement and the other Transaction Documents to which Seller is a party and to
consummate the transactions contemplated hereby and thereby, and the execution,
delivery and performance of this Agreement and such other Transaction Documents
by Seller and the consummation by Seller of the transactions contemplated
herein and therein has been duly and validly authorized by all requisite limited
liability company action. This Agreement has been duly and validly executed and
delivered by Seller and each other Transaction Document required to be executed
and delivered by Seller at the Closing will be duly and validly executed and
delivered by Seller at the Closing. This Agreement and the other Transaction
Documents constitute, with respect to Seller, the legal, valid and binding
obligations of Seller, enforceable against Seller in accordance with their
respective terms, except as such enforceability is limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws now or hereafter in
effect relating to creditors’ rights generally or general principles of equity.

                    5.3          No
Conflict. The execution and delivery of this Agreement and the other
Transaction Documents and the consummation of the transactions provided for
herein and therein will not result in the breach of any of the terms and
provisions of, or constitute a default under, or conflict with, or cause any
acceleration of any obligation of Seller under (a) any agreement, indenture, or
other instrument to which it is bound, (b) the certificate of formation or
organization, operating agreement, member control agreement, limited liability
company agreement, bylaws or other similar governing documents of Seller, (c)
any Order or (d) any Legal Requirement. 

14

                    
5.4          Owned Real
Property. 

	
  

 	
  

 
	
  

 	
                          (a)          Schedule
 5.4(a) lists, as of the Effective Date, all real property acquired by
 Seller pursuant to the Bankruptcy Order. 

 
	
  

 	
  

 
	
  

 	
                          (b)          Except
 as set forth on Schedule 5.4 (b), Seller has not received written
 notice of any (i) condemnation, eminent domain, expropriation or similar
 Proceeding applicable to the Owned Real Property, (ii) Proceeding to change
 the zoning classification of any portion of the Owned Real Property or (iii)
 imposition of any special assessments for public betterments affecting the
 Owned Real Property, which in the case of each of clauses (i), (ii) and (iii)
 would have, individually or in the aggregate, a Material Adverse Effect. 

 
	
  

 	
  

 
	
                     5.5         
Title; Liens and Encumbrances. 

 
	
  

 	
  

 
	
  

 	
          (a)          Seller
 has not (i) granted any lien or security interest on or in any Acquired Asset
 or (ii) assigned any rights under the Bankruptcy Order. 

 
	
  

 	
  

 
	
  

 	
          (b)          Seller
 owns and has title to each of the Acquired Assets pursuant to the terms of
 the Bankruptcy Order, a copy of which is attached hereto as Exhibit A.
 

 

                    5.6
        Litigation. Except for the Bankruptcy Case or any actions, pleadings,
Orders or Proceedings in connection with said Bankruptcy Case, including the
Bankruptcy Order: (a) there are no Proceedings pending, or to the Seller’s
Knowledge, threatened, against the Seller with respect to the Acquired Assets;
(b) to the Seller’s Knowledge, there are no Proceedings pending or threatened
against the Acquired Assets; (c) no judgments have been filed of record with
any Governmental Authority against Seller with respect to the Acquired Assets;
and (d) to the Seller’s Knowledge, no judgments have been filed of record with
any Governmental Authority against the Acquired Assets. 

                    5.7
        Employment Matters. Seller does not have any employees. Seller has no
written or oral employee benefit plans. 

                    5.8
        Assigned Contracts. To Seller’s Knowledge, no party to any Assigned
Contract other than Freedom Fuels is in material breach or default thereunder,
except for any breaches or defaults that would not, individually or in the
aggregate, have a Material Adverse Effect. 

                    5.9
        Brokers or Finders. Neither Seller nor any Person acting on behalf of
Seller has paid or become obligated to pay any fee or commission to any broker,
finder, investment banker, agent or intermediary for or on account of the
transactions contemplated by this Agreement for which Buyer is or will become
liable, and Seller shall hold harmless and indemnify Buyer from any claims with
respect to any such fees or commissions. 

ARTICLE 6 

REPRESENTATIONS AND WARRANTIES OF BUYER

          Buyer
represents and warrants to Seller as follows: 

                    6.1
        Organization and Good Standing. Buyer is a limited liability company,
duly organized and validly existing under the laws of the State of Iowa. 

                    6.2
        Authority; Validity. Buyer has the requisite limited liability power and
authority necessary to enter into and perform its obligations under this Agreement
and the other Transaction Documents to which it is a party and to consummate
the transactions contemplated hereby and thereby. The execution, delivery and
performance of this Agreement by Buyer have been duly and validly authorized by
all requisite limited liability company actions in respect thereof. The
consummation by Buyer of the transactions contemplated herein have been duly
and validly authorized by all requisite limited liability company actions in
respect thereof, provided that
the Closing of said transactions by Buyer is subject to Buyer Unitholder
Approval in accordance with Section 7.5(f). This Agreement has been duly
and validly executed and delivered by Buyer and each other Transaction Document
to which Buyer is a party will be duly and validly executed and delivered by
Buyer at the Closing. This Agreement and the other Transaction Documents to
which Buyer is a party constitute the legal, valid and binding obligation of
Buyer, enforceable against Buyer in accordance with their respective terms,
except as such enforceability is limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws now or hereafter in effect relating
to creditors’ rights generally or general principles of equity.

15

                    6.3
          No Conflict. The execution and delivery of this Agreement and the other
Transaction Documents, and the consummation of the transactions as provided for
herein and therein, will not result in the breach of any of the terms and
provisions of, or constitute a default under, or conflict with, or cause any
acceleration of any obligation of Buyer under (a) any agreement, indenture, or
other instrument to which it is bound, (b) the certificate of formation or
organization, operating agreement, member control agreement, limited liability
company agreement, bylaws or other similar governing documents of Buyer, (c)
any Order or (d) any Legal Requirement. 

                    6.4
          Availability of Funds. Buyer at the Closing will have at least
$4,000,000.00 in immediately available funds, exclusive of amounts available to
be borrowed under the Loan Documents, to consummate the transactions
contemplated by this Agreement and the other Transaction Documents. 

                    6.5
          Litigation. There are no Proceedings pending or, to the knowledge of
Buyer, threatened, that would affect Buyer’s ability to perform its obligations
under this Agreement or any other Transaction Documents or to consummate the
transactions contemplated hereby or thereby. 

                    6.6
          Brokers or Finders. Neither Buyer nor any Person acting on behalf of
Buyer has paid or become obligated to pay any fee or commission to any broker,
finder, investment banker, agent or intermediary for or on account of the
transactions contemplated by this Agreement for which Seller is or will become
liable, and Buyer shall hold harmless and indemnify Seller from any claims with
respect to any such fees or commissions. 

ARTICLE 7

ACTION PRIOR TO THE CLOSING DATE

                    7.1
          Operations Prior to the Closing Date. Seller covenants and agrees that,
after the Effective Date and prior to the Closing Date, Seller agrees that it
will not sell, lease, transfer or dispose of any Acquired Assets, grant any new
mortgage or security interest on any Acquired Assets in addition to the
Permitted Encumbrances and/or Unpermitted Liens, or modify or amend any
Assigned Contract except as may be approved in writing by Buyer. 

                    7.2
          Governmental Consents; Commercially Reasonable Efforts. 

	
  

 	
  

 
	
  

 	
                          (a)          To
 Seller’s Knowledge, in order for Buyer to operate the Facility, Buyer will be
 required to have the Permits identified in Schedule 7.2(a) transferred
 to Buyer by Governmental Authorities or otherwise issued by Governmental
 Authorities in Buyer’s name, which transfer or issuance will be in the
 discretion of such Governmental Authorities having jurisdiction with respect
 to such Permits, and Seller makes no representation or warranty that Buyer
 will be able to obtain the approval of such Governmental Authorities with
 respect to such transfer or issuance. Further, Seller makes no representation
 or warranty as to whether any Permits in addition to or substitution for said
 Permits identified in Schedule 7.2(a) may be required by any
 Governmental Authority and/or under any Legal Requirement.

 

16

	
  

 	
  

 
	
  

 	
                          (b)          Subject
 to Section 2.5, Seller, on the one hand, and Buyer, on the other hand,
 shall use all commercially reasonable efforts to take, or cause to be taken,
 all actions, and to do, or cause to be done, and to assist and cooperate with
 the other in doing, all things necessary, proper or advisable to consummate
 and make effective, in the most expeditious manner practicable, the
 transactions contemplated hereby, including using all commercially reasonable
 efforts to accomplish the following: (i) the taking of all reasonable acts
 necessary to cause the conditions precedent set forth in Article 9 and
 Article 10 to be satisfied; (ii) the obtaining of all necessary
 Governmental Authorizations (including those referenced in paragraph (a)
 immediately above) and the making of all necessary registrations,
 declarations and filings (including registrations, declarations and filings
 with Governmental Authorities, if any) and the taking of all reasonable steps
 as may be necessary to avoid any Proceeding by any Governmental Authority;
 (iii) the defending of any Proceedings challenging this Agreement or the
 consummation of the transaction contemplated hereby, including seeking to
 have any stay or temporary restraining order entered by any court or other
 Governmental Authority vacated or reversed; (iv) subject to the provisions of
 Section 2.5 and Section 2.6, the taking of all reasonable acts
 necessary to effectuate the transfer of the Assigned Contracts and
 Transferable Permits; and (v) the execution or delivery of any additional
 instruments necessary to consummate the transactions contemplated hereby and
 to fully carry out the purposes of this Agreement. 

 
	
  

 	
  

 
	
  

 	
                          (c)          With
 the exception of any communication or filing involving Buyer and the SEC, to
 which this Section 7.2(c) shall not apply and which instead shall be
 governed by Section 7.5 (including without limitation, the filing of
 the Proxy Statement and periodic reports on Forms 10-K, 10-Q and 8-K,
 including for purposes of making public any private member communication),
 the parties agree as follows: (i) Seller, on the one hand, and Buyer, on the
 other hand, (x) shall promptly inform each other of any communication from
 any Governmental Authority concerning this Agreement, the transactions
 contemplated hereby, and any filing, notification or request for approval,
 and (y) shall permit the other to review in advance any proposed written or
 material oral communication or information submitted to any such Governmental
 Authority in response thereto; (ii) none of Parties shall agree to
 participate in any meeting with any Governmental Authority in respect of any
 filings, investigation or other inquiry with respect to this Agreement or the
 transactions contemplated hereby, unless such Party consults with the other
 Parties in advance (unless such consultation is not permitted by applicable
 Legal Requirements) and, to the extent permitted by any such Governmental
 Authority, gives the other Party the opportunity to attend and participate
 thereat, in each case to the maximum extent practicable; and (iii) subject to
 any restrictions under applicable Legal Requirements, Buyer, on the one hand,
 and Seller, on the other hand, shall furnish the other with copies of all
 correspondence, filings and communications (and memoranda setting forth the
 substance thereof) between it and its Affiliates and their respective
 Representatives on the one hand, and the Governmental Authority or members of
 its staff on the other hand, with respect to this Agreement, the transactions
 contemplated hereby (excluding documents and communications which are subject
 to preexisting confidentiality agreements or to the attorney-client privilege
 or work-product doctrine) or any such filing, notification or request for
 approval. Each Party also shall furnish the other Party with such necessary
 information and assistance as such other Party and its Affiliates may
 reasonably request in connection with their preparation of necessary filings,
 registration or submissions of information to the Governmental Authority in
 connection with this Agreement, the transactions contemplated hereby and any
 such filing, notification or request for approval. No Party shall be required
 by this Section 7.2 to provide any communication or information, or
 take any other action, that would violate any Legal Requirement or
 confidentiality agreement or that would cause the loss of any protections
 provided by the attorney-client privilege or work-product doctrine.

 

17

                    7.3          Operating
Permits. As soon as practicable following the Effective Date, Buyer shall
file all applications and undertake all activities reasonably necessary to
obtain from any Governmental Authority with jurisdiction over the Facility or
the operations thereof, any and all such approvals, consents, or other
authorizations or Permits necessary for Buyer or any agents or affiliates
thereof to produce biodiesel or any co-products, bi-products or wastes associated
with such biodiesel production or otherwise to operate the Facility. 

                    7.4          Due
Diligence. From the Effective Date until the earlier of the Due Diligence
Expiration Date or the termination of this Agreement: 

	
  

 	
  

 
	
  

 	
                         (a)          Seller
 shall furnish to Buyer and its authorized Representatives such additional
 information relating to the Facility or other Acquired Assets as Buyer shall
 reasonably request and shall permit Buyer to make reasonable investigations
 of the Facility and the other Acquired Assets and have reasonable access to
 the Facility to complete its due diligence, provided
 that Buyer shall be obligated to obtain all consents or approvals required
 by, and otherwise comply with the terms of, Section 2.5(b), and
 Seller’s duties under this Section 7.4 shall be subject to Buyer’s
 compliance with said Section 2.5(b). Without limiting the generality
 of the foregoing, Seller shall furnish Buyer, with respect to the Owned Real
 Property, any existing surveys, legal descriptions and title policies that
 are in the possession of Seller. 

 
	
  

 	
  

 
	
  

 	
                         (b)          Buyer
 shall furnish to Seller and its authorized Representatives such additional
 information relating to Buyer as Seller shall reasonably request and shall
 permit Seller to make reasonable investigations of Buyer’s financial records
 and other documentation and information in Buyer’s possession that may be
 relevant to the transactions contemplated herein. 

 
	
  

 	
  

 
	
  

 	
                         (c)          Each
 Party and its officers, directors, employees, agents and representatives
 (including legal, accounting and financial advisors) shall treat all
 documentation and information received pursuant to the due-diligence
 investigation contemplated in this Section 7.4 as strictly
 confidential, and shall not disclose such documentation or information to any
 Person, other than said Party’s officers, directors, employees, agents and/or
 representatives in connection with the evaluation thereof and consummation of
 the transactions contemplated herein, except to the extent (a) such
 disclosure is required by any law, rule or regulation, or by any Governmental
 Authority, (b) such documentation and information is or becomes generally
 available to the public other than as a result of a disclosure by the Party
 receiving such documentation and information hereunder or by any of its
 officers, directors, employees, agents and/or representatives, (c) such
 documentation and information was obtained by the Party receiving the same
 hereunder, or by any of its officers, directors, employees, agents and/or
 representatives, on a non-confidential basis before or after said receipt
 pursuant to this Agreement, from someone other than the Party delivering such
 documentation and information hereunder or its officers, directors,
 employees, agents and/or representatives. In the event that the transactions
 contemplated herein are not consummated and this Agreement is terminated, the
 Party receiving such confidential documentation and information hereunder and
 its officers, directors, employees, agents and/or representatives shall, upon
 the request of the disclosing Party, return to the disclosing Party or
 destroy all materials received pursuant to this Section 7.4. 

 
	
  

 	
  

 
	
  

 	
                         (d)          Subject
 to Section 9.5, Buyer shall cooperate with Seller in all reasonable
 respects in connection with Seller obtaining the Title Commitment and
 documentation related thereto; provided
 that Seller shall not be required to provide an updated survey of the Owned
 Real Estate, but Seller shall, to the extent required by the Title Company to
 issue the Title Policy, reasonably cooperate with Buyer in obtaining an
 update of the existing survey of the Owned Real Estate, and provided further that nothing in this Section
 7.4(d) shall require Seller to make any expenditure or incur any
 obligation on its own or on behalf of Buyer.

 

18

	
  

 	
  

 
	
  

 	
           7.5          Preparation
 of the Proxy Statement; Unitholder Meeting. 

 
	
  

 	
  

 
	
  

 	
                          (a)          As
 soon as practicable following the date of this Agreement, but in no event
 later than thirty (30) days after the Effective Date, Buyer shall prepare and
 file the Proxy Statement with the SEC. Seller shall have a reasonable
 opportunity to review the Proxy Statement and any supplement thereto prior to
 the filing or submission thereof to the SEC. 

 
	
  

 	
  

 
	
  

 	
                          (b)          Buyer,
 after filing the Proxy Statement, shall as promptly as practical provide to
 or file with the SEC, to the extent required by applicable Legal
 Requirements, any additional information with respect to or any supplement or
 amendment to the Proxy Statement as required by the SEC, or take such other
 action as is required by the SEC in connection with the filing of the Proxy
 Statement. 

 
	
  

 	
  

 
	
  

 	
                          (c)          If
 at any time prior to the Buyer Unitholder Meeting (as defined below), any
 information relating to Seller or Buyer, or any of their respective
 Affiliates, directors or officers, or any of transactions contemplated by
 this Agreement, is discovered by Buyer such that Buyer determines that, under
 applicable Legal Requirements, said information must be set forth in an
 amendment or supplement to the Proxy Statement, Buyer (i) shall promptly
 notify Seller of such determination, and (ii) as soon as practical after such
 discovery, shall promptly file with the SEC an amendment or supplement
 describing such information, and, to the extent required by applicable Legal
 Requirements, disseminate such information to the unitholders of Buyer. 

 
	
  

 	
  

 
	
  

 	
                          (d)          Buyer,
 as soon as practical following receipt of notification from the SEC that it
 has no further comments on the Proxy Statement, and subject to compliance
 with SEC requirements and the requirements of Buyer’s operating agreement and
 applicable Legal Requirements, shall establish a record date for, duly call,
 give notice of, convene and hold a special meeting of its unitholders (the “Buyer
 Unitholder Meeting”) for the purpose of obtaining the Buyer Unitholder
 Approval. Buyer, through its Board of Directors, subject to the fiduciary
 duties of said Board, shall recommend to Buyer’s unitholders approval of the
 transactions contemplated herein in accordance with the terms of this
 Agreement. 

 
	
  

 	
  

 
	
  

 	
                          (e)          Buyer
 shall promptly notify Seller in writing when (i) Buyer has received
 notification from the SEC that it has no further comments on the Proxy
 Statement, and (ii) the Buyer Unitholder Approval has been obtained or has
 been denied at the Buyer Unitholder Meeting. 

 
	
  

 	
  

 
	
  

 	
                          (f)          Notwithstanding
 anything else provided in this Agreement, and regardless of any actions or
 efforts taken by Buyer or by any other party (including the SEC, the Board of
 Directors of Buyer, or the unitholders of Buyer), if for any reason Buyer
 Unitholder Approval has not been obtained by Buyer on or before the date one
 hundred (100) days after the Effective Date (the “Unitholder Approval
 Deadline”), then Seller shall have the right to terminate this Agreement
 pursuant to Article 12. In the event that Seller exercises any such
 termination right at any time after the expiration of the Unitholder Approval
 Deadline, Seller thereafter shall have no further obligations under this
 Agreement, provided, that
 Seller shall be entitled to have the Deposit disbursed immediately to it
 under the Deposit Escrow Agreement and Section 2.7 notwithstanding the
 exercise of such termination right. 

 

19

ARTICLE 8

ADDITIONAL AGREEMENTS

	
  

 	
  

 
	
  

 	
           8.1          Taxes.
 Solely in the event of and following the Closing: 

 
	
  

 	
  

 
	
  

 	
                          (a)          Seller
 shall be responsible for paying, when due, any and all sales, use, property
 transfer, documentary, stamp, registration, recording or similar Tax payable
 in connection with the sale or transfer of the Acquired Assets (“Transfer
 Taxes”), provided that the actual amount of such Transfer Taxes and any
 out-of-pocket expenses incurred in connection with the preparation and filing
 of any Tax Returns in connection with such Transfer Taxes shall be shared
 equally by Seller and Buyer. After Seller has paid such Transfer Taxes and
 any costs of preparing the applicable Tax Returns, Seller shall invoice Buyer
 for Buyer’s share of such amounts, and Buyer shall promptly reimburse Seller
 for Buyer’s share of the same. Seller and Buyer shall use reasonable efforts
 and cooperate in good faith to exempt the sale and transfer of the Acquired
 Assets from any such Transfer Taxes. Seller shall prepare and file all
 necessary Tax Returns or other documents with respect to all such Transfer
 Taxes. In the event any such Tax Return requires execution by Buyer, Seller
 shall prepare and deliver to Buyer a copy of such Tax Return at least five
 days before the due date thereof, and Buyer shall, subject to its review and
 approval of such Tax Return, promptly execute such Tax Return and deliver it
 to Seller, which shall cause it to be filed. 

 
	
  

 	
  

 
	
  

 	
                          (b)          All
 real and personal property Taxes, similar ad valorem obligations levied with
 respect to the Acquired Assets and other similar obligations (“Periodic
 Taxes”) payable in the year 2010 (regardless of the year for which such
 Periodic Taxes have been or are assessed) shall be prorated between Buyer and
 Seller as of the Closing Date. Buyer shall be responsible for preparing and
 filing any and all Tax Returns required to be filed after the Closing Date
 with respect to Periodic Taxes; provided,
 however, that such Tax Returns
 shall, to the extent they relate to a taxable period included in the period
 ending with and including the Closing Date, be subject to the review and
 approval of Seller, which approval shall not be unreasonably withheld or
 delayed. All Periodic Taxes payable after the year 2010 (regardless of the
 year for which such Periodic Taxes have been or are assessed) shall be borne
 by Buyer. 

 
	
  

 	
  

 
	
  

 	
                          (c)          Without
 limiting the generality of the foregoing clause (b), Seller shall pay its
 allocable share of the fiscal year 2009/2010 real estate Taxes due in fiscal
 year 2010/2011, prorated through the Closing Date, and any unpaid real estate
 Taxes payable in prior years. Buyer shall pay all subsequent real estate
 Taxes. Seller shall pay on the Closing Date any installments of any special
 assessments which are a lien on the Property as of the Closing Date to the
 extent such special-assessment installments are actually due prior to the
 Closing Date. Buyer shall pay all other special assessments or installments
 not payable by Seller. 

 
	
  

 	
  

 
	
  

 	
                          (d)          Buyer
 and Seller agree to furnish or cause to be furnished to each other, upon
 request, as promptly as practicable, such information and assistance relating
 to the Facility and the other Acquired Assets (including access to books and
 records) as is reasonably necessary for the filing of all Tax Returns, the
 making of any election relating to Taxes, the preparation for any audit by
 any taxing authority and the prosecution or defense of any claims, suit or
 proceeding relating to any Tax; provided,
 however, that neither Buyer nor
 any Seller shall be required to disclose the contents of its income Tax
 Returns to any Person. Any expenses incurred in furnishing such information
 or assistance pursuant to this Section 8.1(c) shall be borne by the
 Party requesting it. 

 

20

                    8.2          Payments
Received. Seller and its Affiliates, on the one hand, and Buyer, on the
other hand, each agree that, after the Closing, each will hold and will
promptly transfer and deliver to the other, from time to time as and when
received by them, any cash, checks with appropriate endorsements (using their
best efforts not to convert such checks into cash) or other property that they
may receive on or after the Closing which properly belongs to the other and
will account to the other for all such receipts. 

                    8.3          No
Other Representations or Warranties. 

	
  

 	
  

 
	
  

 	
                         (a)          Buyer
 acknowledges that, except for the representations and warranties contained in
 Article 5, neither Seller nor any other Person on behalf of Seller
 makes in this Agreement, or has made verbally or in writing in any other
 instrument or document other than the Agreement, any express or implied
 representation or warranty with respect to Seller or any of the Acquired
 Assets (including representations and warranties as to title to or the
 condition of the Facility or any other Acquired Assets or as to any
 Confidentiality Arrangements or Potentially Confidential Information with
 respect to the Assigned Contracts or any other Acquired Assets) or with
 respect to any information provided by or on behalf of Seller to Buyer.
 Buyer’s acceptance of the Deed pursuant to Article 4 of this Agreement
 shall constitute Buyer’s acknowledgement and agreement (i) that neither
 Seller nor any Person on behalf of Seller has made any written or verbal
 warranty or representation of any kind with respect to the Acquired Assets,
 Assumed Liabilities or Excluded Liabilities; (ii) that Buyer has not relied
 upon any written or verbal representation or warranty made by Seller or any
 other Person on behalf of Seller with respect to the Acquired Assets, Assumed
 Liabilities or Excluded Liabilities; (iii) that Buyer has had such
 opportunity as it considers adequate to inspect and examine the Facility and
 other Acquired Assets, and Buyer in fact has conducted such inspections and
 examinations and such other due diligence as it considers reasonable and
 necessary; and (iv) that based upon said inspections, examinations and other
 due diligence, Buyer has determined that the Acquired Assets in their
 condition as of the Closing (which condition shall be “AS IS,” “WHERE IS” and
 “WITH ALL FAULTS” pursuant to Section 8.4) is fit for and compatible
 with Buyer’s intended use and purposes. 

 
	
  

 	
  

 
	
  

 	
                         (b)          In
 connection with investigation by Buyer, Buyer has received or may receive
 from Seller certain projections, forward-looking statements and other
 forecasts and certain business plan information. Buyer acknowledges that
 there are uncertainties inherent in attempting to make such estimates,
 projections and other forecasts and plans, that Buyer is familiar with such
 uncertainties, that Buyer is taking full responsibility for making its own
 evaluation of the adequacy and accuracy of all estimates, projections and
 other forecasts and plans so furnished to it (including the reasonableness of
 the assumptions underlying such estimates, projections, forecasts or plans),
 and that Buyer shall have no claim against anyone with respect thereto.
 Accordingly, Buyer acknowledges that Seller make no representation or
 warranty with respect to such estimates, projections, forecasts or plans
 (including the reasonableness of the assumptions underlying such estimates,
 projections, forecasts or plans). 

 

21

                    8.4          Acquired
Assets “AS IS”; Buyer’s Acknowledgment Regarding Same. Buyer agrees,
warrants and represents that (a) subject to the representations, warranties,
terms and conditions contained in this Agreement, Buyer is purchasing the
Acquired Assets on an “AS IS,” “WHERE IS” and “WITH ALL FAULTS” basis as of the
Closing Date based solely on Buyer’s own investigation of the Acquired Assets
and (b) except as set forth in this Agreement, neither Seller nor any broker or
other Representative of Seller has made any warranties, representations or
guarantees, express, implied or statutory, written or oral, respecting the
Acquired Assets, any part of the Acquired Assets, the financial performance of
the Acquired Assets, or the physical or environmental condition of the Acquired
Assets. Buyer further acknowledges that the consideration for the Acquired
Assets specified in this Agreement has been agreed upon by Seller and Buyer
after good-faith arms-length negotiation in light of Buyer’s agreement to
purchase the Acquired Assets “AS IS,” “WHERE IS,” and “WITH ALL FAULTS”. Buyer
agrees, warrants and represents that, except as set forth in this Agreement,
Buyer has relied, and shall rely, solely upon its own investigation of all such
matters, and that Buyer assumes all risks with respect thereto. EXCEPT AS SET
FORTH IN THIS AGREEMENT, SELLER MAKES NO EXPRESS WARRANTY, NO WARRANTY OF
MERCHANTABILITY, NO WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE, AND NO
IMPLIED OR STATUTORY WARRANTY WHATSOEVER WITH RESPECT TO ANY REAL OR PERSONAL
PROPERTY OR ANY FIXTURES OR THE ACQUIRED ASSETS. 

                    8.5          Mobilization,
Utilities. Buyer hereby acknowledges that the Facility is not in operation
as of the Effective Date, and that prior to commencement of operation of the
Facility various costs and expenses with respect to mobilization, evaluation
and/or start-up may need to be incurred, including, for example, charges
relating to utilities, Equipment or components of the Facility to confirm that
the same are available and in working order. Buyer shall pay all such
mobilization, evaluation and/or start-up costs and expenses regardless of
whether the same are incurred before or after the Closing Date; provided, however, that no such
mobilization, evaluation and/or start-up costs and expenses for which Buyer
will be responsible shall be incurred prior to the Closing Date unless
requested, or consented to, by Buyer; and provided
further that to the extent that any utility charges have been
incurred by Seller prior to the Closing Date for purposes of “mothballing” the
Facility, Seller shall be responsible for such utility charges. 

22

                    8.6          Reserve;
Certain Insurance Matters. 

	
  

 	
                         (a)          On
 the Closing Date, Buyer shall establish a cash reserve in the amount of
 $250,000 or such lesser amount as is established under subparagraph (b)
 immediately below (the “Hold Back”). Buyer shall deposit the Hold Back on the
 Closing Date with the Hold-Back Escrow Agent in cash payable by wire transfer
 or other immediately available funds which shall be governed by the terms of
 this Section 8.6 and the Hold-Back Escrow Agreement. Interest shall be
 payable on the Hold Back as set forth in the Hold-Back Escrow Agreement. The
 Hold Back shall not be included as part of the Deposit required by Section
 2.7. 

 
	
  

 	
  

 
	
  

 	
                         (b)          The
Hold Back shall be used solely for the purposes set forth in, and in
accordance with, this Section 8.6, Schedule 8.6(a) identifying
certain Facility repairs, and Schedule 8.6(b) identifying certain
environmental investigatory and corrective actions with respect to the
Environmental Condition and the Facility. Within one hundred twenty (120)
days after the Effective Date, the Parties shall mutually agree on the scope
of work to be completed under Schedule 8.6(a) referenced below. Within
sixty (60) days after the Effective Date, the Parties shall mutually agree on
the scope of work to be completed under Schedule 8.6(b) referenced
below. Each of said agreements shall include necessary line-item details for
the work to be performed, time schedules, budgets, and Hold-Back draw
procedures; provided, however, that the scopes of work, time schedules
and budgets shall be based on reasonable and customary industry standards
with respect to the Facility repairs and environmental investigatory and
corrective actions contemplated by Schedules 8.6(a) and (b)
(collectively, the “Work”); and provided further that the budgets in
aggregate for the Work shall not exceed $250,000. If the Parties are not able
to mutually agree on the Work (including the time schedules and budgets)
required by this subparagraph (b) within sixty (60) days of the Effective
Date for the Work contemplated by Schedule 8.6(b) or within one
hundred twenty (120) days of the Effective Date for the Work contemplated by Schedule
8.6(a), and Closing hereunder has not yet occurred on or before either of
these applicable deadlines, then this Agreement shall terminate unless the
Parties otherwise agree on protocols and procedures for implementing this Section
8.6. 

 
	
  

 	
  

 
	
  

 	
                         (c)          Buyer
 shall complete the Work as contemplated by Schedule 8.6(a) and Schedule
 8.6(b), in each case in accordance with the scopes of work and time
 schedules referenced in subparagraph (b) immediately above and in compliance
 with all applicable Legal Requirements. Buyer shall be solely responsible for
 completing the Work, and Seller shall have no responsibility for said Work
 except for providing funds in connection therewith pursuant to the Hold Back
 and, if applicable, the Insurance Funds (defined below), in accordance with
 this Section 8.6. Buyer, at its expense (provided said expense
 shall include Buyer’s access to the Hold Back and if applicable, Insurance
 Funds as set forth in this Section 8.6), shall be responsible for
 completing the Work regardless of the cost thereof, including if such cost
 exceeds the amounts budgeted pursuant to subparagraph (b) above and/or
 exceeds the amounts in the Hold-Back and, if applicable, the Insurance Funds.

 
	
  

 	
  

 
	
  

 	
                         (d)          Upon
 the mutual agreement and direction of the Parties, as more fully set forth in
 the Hold-Back Escrow Agreement, the Hold-Back Escrow Agent shall directly
 disburse funds, on behalf of Buyer, to third parties for payment of the Work
 that they have performed on behalf of Buyer in accordance with this Section
 8.6, up to a maximum amount equal to the (i) the Hold Back, and (ii) if
 applicable under subparagraph (f) below, the Insurance Funds, provided that
 such payment shall be subject to the following: (i) such Work has satisfied
 the requirements of Schedule 8.6(a) and Schedule 8.6(b), as
 applicable, including the scopes of work and time schedules established in
 connection therewith; (ii) the Work is completed in compliance with
 applicable Legal Requirements; (iii) the payments are for reasonable,
 out-of-pocket expenses actually incurred by Buyer to third parties to
 complete the Work and (iv) Buyer has satisfied the protocols and procedures
 governing the Hold-Back Escrow Agreement, including those procedures
 requiring Borrower to provide evidence, in a form reasonably satisfactory to
 Seller, of the amounts actually due to such third parties for the Work. 

 

23

	
  

 	
  

 
	
  

 	
                         (e)          Buyer
 shall make all requests for payment to third parties pursuant to subparagraph
 (d) of this Section 8.6 no later than the first annual anniversary of
 the Closing Date (the “Payment Deadline”). In the event that amounts paid
 under said subparagraph (d) for the Work performed are less than the amount
 of the Hold Back, then the undistributed balance of the Hold Back shall be
 paid to Seller no later than five (5) business days after the expiration of
 the Payment Deadline.

 
	
  

 	
  

 
	
  

 	
                         (f)          Seller
 shall utilize commercially reasonable efforts to obtain any reimbursement or
 other recovery (“Insurance Funds”) contractually available to Seller
 from the Chubb Group of Insurance Companies (“Chubb”) under that
 certain energy industries insurance policy number 3584-88-77-CHI to the
 extent said policy is applicable to the environmental investigatory and
 corrective actions required under Schedule 8.6(b). The parties
 acknowledge that there is no pending claim with Chubb for said Insurance
 Funds, if any, and no determination has been made by Seller as to whether
 there is a basis for such claim. If Seller obtains any such Insurance Funds
 with respect to said environmental investigatory and corrective actions, then
 Seller shall promptly convey to Buyer such Insurance Funds less any actual
 costs incurred by Seller in obtaining said Insurance Funds, but only to the
 extent that the amount of the Hold Back paid pursuant to subparagraph (d) of this
 Section 8.6 is less than the reasonable, out-of-pocket costs actually
 incurred by Buyer for the Work. Buyer shall reasonably cooperate with Seller
 in connection with Seller’s efforts to obtain Insurance Funds under this
 subparagraph (f), including providing Seller with documentation and other
 information reasonably requested by Seller with respect to any Work performed
 by Buyer and any costs incurred in connection with such Work.

 
	
  

 	
  

 
	
  

 	
                         (g)          In
no event shall the aggregate funds disbursed on behalf of Buyer under this
Section 8.6 in respect of the Hold Back and if applicable, the Insurance
Funds exceed the reasonable, out-of-pocket costs actually incurred by Buyer
in completing the Work. 

 
	
  

 	
  

 
	
  

 	
                         (h)          Buyer
 shall promptly certify in writing to Seller when the Work required under this
 Section 8.6 has been completed.

 
	
  

 	
  

 
	
  

 	
                         (i)          Seller
 shall have the right, but not the duty, to inspect said Work from time to
 time as it is being performed by Buyer, and within thirty (30) days after
 Buyer has provided the certification of completion required under
 subparagraph (h) immediately above. Buyer shall provide Seller with such
 reports and other information with regard to the status of the completion of
 the Work, and of the costs incurred in connection therewith, as Seller
 reasonably requests from time to time. 

 

ARTICLE
9
CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER TO CLOSE

          The
obligations of Buyer to consummate the transactions contemplated by this
Agreement are subject to the satisfaction or waiver, at or prior to the Closing
or such earlier date as set forth below, of each of the following conditions.
To the extent that the deadline for satisfaction of any of the conditions set forth
below is on a date prior to the Closing Deadline, Buyer shall be deemed to have
waived such condition as a condition precedent to Closing if it does not object
in writing, delivered to Seller, on or before the applicable deadline: 

24

                    9.1       Accuracy
of Representations. Each of the representations and warranties of Seller
contained in Article 5 shall be true and correct in all material
respects as of the date of this Agreement and as of the Closing Date as though
made on and as of the Closing Date, and Buyer shall have received a certificate
of Seller to such effect signed by a duly authorized officer thereof.

                    9.2       Seller’s
Performance. Seller shall have performed and complied with in all material
respects the covenants and agreements that Seller is required to perform or
comply with pursuant to this Agreement at or prior to the Closing, and Buyer
shall have received a certificate of Seller to such effect signed by a duly
authorized officer thereof.

                    9.3       Seller’s
Deliveries. Each of the deliveries required to be made to Buyer pursuant to
Section 4.3 shall have been so delivered.

                    9.4       Due
Diligence. Buyer shall not have terminated this Agreement, on or before the
Due Diligence Expiration Date, in accordance with Section 12.1(b) hereof
as a result of its due diligence investigation pursuant to Section 7.4(a).

                    9.5       Title
Policy and Objections. Buyer’s Objections (as defined herein), if any,
shall have been satisfied or waived pursuant to this Section 9.5:

	
  

 	
  

 
	
  

 	
                       (a)          Seller
 shall provide to Buyer, by no later than forty-five (45) days after the
 Effective Date, from First American Title Insurance Company or such other
 title company mutually agreed upon by the Parties (the “Title Company”),
 a commitment (the “Title Commitment”) for an owner’s title insurance
 policy on the Owned Real Property (the “Title Policy”) in form and
 substance reasonably acceptable to Buyer, insuring Buyer as having fee simple
 title to the Owned Real Property, subject only to Permitted Encumbrances that
 Buyer has not objected to or waived pursuant to Section 9.5(c). 

 
	
  

 	
  

 
	
  

 	
                       (b)          Seller
 shall, to the extent required by the Title Company to issue the Title Policy,
 reasonably cooperate with Buyer in obtaining an update of the existing survey
 of the Owned Real Property, provided in connection therewith Seller
 shall not be required to make any expenditure or incur any obligation on its
 own or on behalf of Buyer, and Buyer shall be responsible for obtaining any
 such survey update. 

 
	
  

 	
  

 
	
  

 	
                       (c)          Buyer
 shall have twenty (20) days after receipt of the Title Commitment to provide
 Seller with written notice (the “Objections”) specifying any
 Encumbrances to which Buyer objects and any other alleged defects in the
 title to the Owned Real Property. Buyer’s failure to provide such Objections
 within said twenty (20)-day limit shall constitute a waiver of Objections
 with respect to any matters disclosed in the Title Commitment. Seller, in its
 sole discretion, may undertake to cure any Objections timely delivered by
 Buyer in accordance with this Section 9.5, but Seller shall have no
 obligation to do so. Seller also may elect, in its sole discretion, not to
 cure any Objections, in which event Seller may elect to terminate this
 Agreement in accordance with Article 12. If Seller commences to cure
 any Objection, such election shall not preclude Seller from thereafter, at
 any time, ceasing such cure and terminating this Agreement pursuant to Article
 12. If, in connection with any Objections from Buyer, Seller provides
 notice of termination in accordance with Article 12, Buyer may
 thereafter waive any or all Objections, and Seller then may not exercise its
 termination rights relating to said waived Objection if Buyer provides Seller
 with written notice of its waiver of said Objection within three (3) business
 days after receiving Seller’s notice of termination, provided that if Buyer at
 any time elects to waive less than all of its Objections, nothing shall
 prevent Seller from exercising its termination rights under Article 12
 with respect to any Objection not waived by Buyer. In the event that Buyer
 makes any timely Objections hereunder, and Seller exercises its cure rights
 with respect thereto and does not terminate this Agreement in connection
 therewith, the Title Policy shall be revised, to the reasonable satisfaction
 of Buyer and Seller, to incorporate any such cure completed or caused by
 Seller.

 

25

	
  

 	
  

 
	
  

 	
                       (d)          The
 Title Company at Closing shall issue a Title Policy without any material
 revisions to the Title Commitment except for such revisions made in
 accordance with subparagraph (c) immediately above to reflect any cure
 completed or caused by Seller in response to timely Objections from Buyer.

 

                    9.6        Lien
Search Results. Buyer shall have received, at its sole expense, results of
UCC, tax, lien, judgment and pending suit searches, confirming the absence of
Encumbrances on the Acquired Assets (other than Permitted Encumbrances and the
Unpermitted Liens) that would have a Material Adverse Effect; provided,
however, that nothing in this Section 9.6 shall affect the
representations and warranties of Seller set forth herein.

                    9.7        Damage
to Acquired Assets. There shall not have occurred any damage, loss,
destruction or condemnation of Acquired Assets that would have a Material
Adverse Effect.

                    9.8        Financing.
Seller and Buyer shall have entered into the Loan Documents, and all conditions
precedent contained in the Loan Documents shall have been satisfied or waived
such that the lender(s) under the Loan Documents shall be obligated to advance
on the Closing Date $6,000,000 for Buyer to consummate the transactions
contemplated by this Agreement.

                    9.9        Buyer
Unitholder Approval. Buyer shall have obtained the Buyer Unitholder
Approval in accordance with Section 7.5(f).

                    9.10       No
Order. No Governmental Authority shall have enacted, issued, promulgated or
entered any Order which is in effect and which has the effect of making illegal
or otherwise prohibiting the consummation of the transactions contemplated by this
Agreement.

                    9.11       Governmental
Authorizations. Any Governmental Authorizations necessary for consummation
of the transactions contemplated by this Agreement shall have been obtained by
the Due Diligence Expiration Date.

                    9.12       Consents.
Any consents or approvals required of any third parties, including any Persons
participating in the transactions contemplated by the Loan Documents, have been
obtained by Buyer, provided, that all such third-party
consents or approvals, other than the Buyer Unitholder Approval (which shall be
subject to the Unitholder Approval Deadline) and other than those from any of
the lenders under the Loan Documents, shall have been obtained by the Due
Diligence Expiration Date.

                    9.13        IDED.
A lien waiver shall have been obtained by Seller, by the Due Diligence
Expiration Date, from the Iowa Department of Economic Development (“IDED”)
confirming that IDED’s claim in the Bankruptcy Case has been satisfied, waived
or otherwise resolved. 

                    9.14        Seller’s
Cure Rights. In the event that Buyer elects not to close the transactions
contemplated by this Agreement because any condition precedent under this Article
9 has not been satisfied, and such condition has not been waived, Buyer
shall provide Seller with a written notice specifying each such condition
precedent that Buyer asserts has not been satisfied. Upon receipt of such
written notice, Seller in its sole discretion shall have the right, but not the
obligation, to cure any such unsatisfied condition, but only to the extent that
Seller can actually cure such unsatisfied condition. In the event that Seller
has completed said cure and caused such conditions to be satisfied in
accordance with this Article 9 within twenty (20) days after receiving
such written notice from Buyer (or such shorter cure period as applicable to Sections
9.1—9.3 under Article 12), then Buyer shall be required to close the
transactions herein contemplated; provided, however, that in the event
that any condition shall have been cured by Seller before the termination of
the applicable cure-period, then at the election of Buyer, the Closing Date
shall be extended by the number of days actually elapsed before the completion
of said cure.  

26

ARTICLE 10

CONDITIONS PRECEDENT TO THE OBLIGATION OF SELLER TO CLOSE 

          Seller’s
obligation to consummate the transactions contemplated by this Agreement is
subject to the satisfaction or waiver, at or prior to the Closing, of each of
the following conditions:

                    10.1     Accuracy
of Representations. Each of the representations and warranties of Buyer
contained in Article 6 shall be true and correct in all material
respects as of the date of this Agreement and as of the Closing Date as though
made on and as of the Closing Date, and Seller shall have received a
certificate of Buyer to such effect signed by a duly authorized officer
thereof.

                    10.2     Buyer’s
Performance. Buyer shall have performed and complied with in all material
respects the covenants and agreements that Buyer is required to perform or
comply with pursuant to this Agreement at or prior to the Closing, and Seller
shall have received a certificate of Buyer to such effect signed by a duly
authorized officer thereof.

                    10.3     Buyer’s
Deliveries. Each of the deliveries required to be made to Seller pursuant
to Section 4.2 shall have been so delivered. 

                    10.4     Due
Diligence. Seller shall be satisfied with the results of its due diligence
investigation pursuant to Section 7.4(b), including any due diligence
relating to Buyer’s compliance with the requirements of the Loan Documents, and
Seller shall have received any consents or approvals of any Persons necessary for
execution of the Loan Documents and consummation of the transactions
contemplated by said Loan Documents, including any consents and approvals from
any and all participants in the loan to be made pursuant to the Loan Documents.

                    10.5     No
Order. No Governmental Authority shall have enacted, issued, promulgated or
entered any Order which is in effect and which has the effect of making illegal
or otherwise prohibiting the consummation of the transactions contemplated by
this Agreement.

                    10.6     Governmental
Authorizations. Any Governmental Authorizations necessary for consummation
of the transactions contemplated by this Agreement shall have been obtained.

                    10.7     Consents.
Any consents or approvals required of any third parties, including any Persons
participating in the transactions contemplated by the Loan Documents, have been
provided.

                    10.8     Financing.
Seller and Buyer shall have entered into the Loan Documents, and all conditions
precedent contained in the Loan Documents shall have been satisfied or waived
such that the lender(s) under the Loan Documents shall be obligated to advance
on the Closing Date $6,000,000 for Buyer to consummate the transactions
contemplated by this Agreement.

27

                    10.9     IDED.
A lien waiver shall have been obtained from the Iowa Department of Economic
Development (“IDED”) confirming that IDED’s claim in the Bankruptcy Case
has been satisfied, waived or otherwise resolved.

                    10.10   Buyer’s
Cure Rights. In the event that Seller elects not to close the transactions
contemplated by this Agreement because any condition precedent under this
Article 10 has not been satisfied, and such condition has not been waived,
Seller shall provide Buyer with a written notice specifying each such condition
precedent that Seller asserts has not been satisfied. Upon receipt of such
written notice, Buyer in its sole discretion shall have the right, but not the
obligation, to cure any such unsatisfied condition, but only to the extent that
Buyer can actually cure such unsatisfied condition. In the event that Buyer has
completed said cure and caused such conditions to be satisfied in accordance
with this Article 10 within twenty (20) days after receiving such
written notice from Seller (or such shorter cure period as applicable to Sections
10.1—10.3 under Article 12), then Seller shall be required to close
the transactions herein contemplated; provided, however, that in the event that
any condition shall have been cured by Buyer before the termination of the
applicable cure-period, then at the election of Seller, the Closing Date shall
be extended by the number of days actually elapsed before the completion of
said cure. 

ARTICLE 11

LIMITED EXCLUSIVITY 

                    11.1     Buyer’s
Limited Exclusive Window. Unless this Agreement has been earlier terminated
by either Party in accordance with Article 12, Seller shall not enter
into any written or oral agreement or written or oral understanding to sell,
agree in writing to sell, or sell the Acquired Assets to any party other than
Buyer, including by way of merger, consolidation or other business combination
of Seller with such party (hereinafter a “Third-Party Sale”), from the
period commencing on the Effective Date and ending at 12:00 midnight Central
time on the Expiration Date (such period hereinafter shall be referred to as
the “Buyer’s Window”); provided, that in the event that Buyer, in
accordance with Section 7.5, on or before the Expiration Date: (a)
notifies Seller that Buyer has obtained Buyer Unitholder Approval before
expiration of the Unitholder Approval Deadline, and (b) makes the Deposit in
compliance with Section 2.7, then the ending date for Buyer’s Window
shall be extended until 12:00 midnight Central time on the Closing Deadline.

                    11.2     Seller’s
Safe Harbor. The Parties acknowledge and agree that the purpose and effect
of Section 11.1 is to provide Buyer with a limited exclusive opportunity
to consummate the transactions contemplated by this Agreement during the
Buyer’s Window if all of the terms and conditions of this Agreement are
satisfied, and that this Article 11 is not intended to impose “no-shop”
obligations or restrictions upon Seller. Without limiting the generality of the
immediately proceeding sentence, nothing in this Article 11 is intended
to limit, restrict or prohibit, and shall not act to limit, restrict or
prohibit, the ability or right of Seller or any of its owners, directors,
officers, employees, representatives or agents from taking any action, directly
or indirectly, to: (A) participate, initiate, engage or otherwise enter in or
entertain (including by way of furnishing or disclosing information with
respect to the Acquired Assets or providing access to the Acquired Assets for
purposes of inspection or evaluation) any communications or negotiations with
any third party concerning any sale and purchase or other form of acquisition
of the Acquired Assets or any portion thereof (including by way of merger,
consolidation or other business combination involving the Seller), or
participate, initiate, engage or otherwise enter in or entertain inquiries or
proposals concerning, or which could reasonably be expected to lead to, any of the
foregoing (collectively, hereinafter a “Potential Acquisition Transaction”);
or (B) negotiate or perform any other activity intended or designed to
facilitate the efforts of any third party relating to a Potential Acquisition
Transaction; provided, that Seller may not enter into any agreement or
understanding requiring the Seller to abandon, terminate or fail to consummate
the sale of the Acquired Assets to Buyer during Buyer’s Window as contemplated
by this Agreement.

28

ARTICLE 12

TERMINATION 

                    12.1     Termination Events. Anything contained in this Agreement to the contrary
notwithstanding, this Agreement may be terminated at any time prior to the
Closing Date:

	
  

 	
  

 
	
  

 	
                     (a)          by
 either Seller or Buyer:

 

	
  

 	
  

 
	
  

 	
                     (i)          if
 a Governmental Authority issues a final, non-appealable ruling or Order
 prohibiting the transactions contemplated hereby;

 
	
  

 	
  

 
	
  

 	
                     (ii)         by
 mutual written consent of Seller and Buyer; 

 
	
  

 	
  

 
	
  

 	
                     (iii)        if
 the Parties fail to timely agree on the protocols and procedures required by Section
 8.6(b) to implement the actions contemplated by Schedules 8.6(a) and
 (b);

 
	
  

 	
  

 
	
  

 	
                     (iv)        by
 written notice to the other Party following the Closing Deadline if the
 Closing shall not have occurred on or before the Closing Deadline through no
 fault of (i) Buyer, in the case of notice from Buyer, or (ii) Seller, in the
 case of notice from Seller; provided, however, that any such
 termination notice by either Party shall be subject to the cure rights set
 forth in Article 9 or Article 10, as applicable;

 
	
  

 	
  

 
	
  

 	
                     (v)         by
 giving written notice at any time in the event that, on or after the
 Effective Date (but prior to the Closing Date), either house of the United
 States Congress votes to reject that certain federal tax program commonly
 known as the “Biodiesel Credit” or “Blender’s Credit” or if any bill
 containing such credit is vetoed by the United States President and such veto
 is not overridden by Congress with the result that the bill is not enacted
 into law

 

	
  

 	
  

 
	
  

 	
                     (b)          by
 Buyer giving timely written notice to Seller on the date thirty (30) days
 after the Effective Date (the “Due Diligence Expiration Date”) if
 Buyer is not satisfied in its sole discretion with the results of its due
 diligence regarding the Acquired Assets pursuant to Section 7.4(a), provided
 that if Buyer does not give such notice to Seller on or before the Due Diligence
 Expiration Date, Buyer will be deemed to have waived its right to terminate
 this Agreement pursuant to this Section 12.1(b);

 
	
  

 	
  

 
	
  

 	
                     (c)          by
 Buyer giving timely written notice to Seller on or before the Unitholder
 Approval Deadline if the Buyer Unitholder Approval shall not have been
 obtained pursuant to Section 7.5(f), provided that if Buyer
 does not give such notice to Seller on or before such Unitholder Approval
 Deadline, Buyer will be deemed to have waived its right to terminate this
 Agreement pursuant to this Section 12.1(c);

 
	
  

 	
  

 
	
  

 	
                     (d)          by
 Buyer giving timely written notice in the event of any breach by Seller of
 any of Seller’s agreements, covenants, representations or warranties
 contained herein (provided such breach would result in the
 failure of a condition set forth in Section 9.1, Section 9.2 or
 Section 9.3 to be satisfied) and the failure of Seller to cure such
 breach within fourteen (14) days after delivery of written notice from Buyer
 specifying particularly such breach; provided, that such breach is capable of
 being cured and Seller, in its sole discretion, elects to cure such breach;
 and provided
 further, however, that in the event that any
 breach shall have been cured before the expiration of the fourteen (14) day
 cure-period, at the election of Buyer the Closing Date shall be extended by
 the number of days actually elapsed before the cure of such breach; 

 

 29

	
  

 	
  

 
	
  

 	
                     (e)          by
 Buyer giving timely written notice in the event that a condition set forth in
 Sections 9.4 – 9.13 has not been satisfied, unless such condition has
 been waived, and the failure of Seller to cure such unsatisfied condition
 within twenty (20) days after delivery of written notice from Buyer specifying
 particularly such condition; provided, that such unsatisfied
 condition is capable of being cured and Seller, in its sole discretion,
 elects to cure such condition in accordance with Section 9.14; and provided
 further, however, that in the event that any such
 unsatisfied condition shall have been cured before the expiration of the
 twenty (20) day cure-period, at the election of Buyer the Closing Date shall
 be extended by the number of days actually elapsed before the cure of such
 condition;

 
	
  

 	
  

 
	
  

 	
                     (f)          by
 Seller in the event of any breach by Buyer of any of Buyer’s agreements,
 covenants, representations or warranties contained herein (provided
 such breach would result in the failure of a condition set forth in Section
 10.1, Section 10.2 or Section 10.3 to be satisfied) and the
 failure of Buyer to cure such breach within fourteen (14) days after delivery
 of notice from Seller specifying particularly such breach; provided,
 that such breach is capable of being cured and Buyer, in its sole discretion,
 elects to cure such breach; and provided further, however, that in the event
 that any breach shall have been cured before the expiration of the fourteen
 (14) day cure-period, at the election of Seller the Closing Date shall be
 extended by the number of days actually elapsed before the cure of such
 breach;

 
	
  

 	
  

 
	
  

 	
                     (g)          by
 Seller giving written notice at any time after expiration of the Unitholder
 Approval Deadline, pursuant to Section 7.5(f), if the Buyer does not
 provide written notification to Seller that the Buyer Unitholder Approval has
 been obtained by such applicable deadline in accordance with Section 7.5;

 
	
  

 	
  

 
	
  

 	
                     (h)          by
 Seller giving written notice at any time after the Expiration Date, if
 either (a) the Buyer does not provide written notification to Seller by the
 Expiration Date that the Buyer Unitholder Approval has been obtained before
 expiration of the Unitholder Approval Deadline under Section 7.5(f),
 and/or (b) the failure of Buyer to make the Deposit as required by Section
 2.7 on or before the Expiration Date; 

 
	
  

 	
  

 
	
  

 	
                     (i)          by
 Seller giving written notice in the event that Seller elects to terminate the
 Agreement in accordance with Section 9.5 after receiving any
 Objections from Buyer, provided that Buyer has not made a
 timely waiver of its Objections pursuant to Section 9.5; and

 
	
  

 	
  

 
	
  

 	
                     (j)          by
 Seller giving timely written notice in the event that a condition precedent
 set forth in Sections 10.4 – 10.9 has not been satisfied, unless such
 condition has been waived, and the failure of Seller to cure such condition
 within twenty (20) days after delivery of written notice from Buyer
 specifying particularly such condition; provided, that such condition is capable
 of being cured and Buyer, in its sole discretion, elects to cure such
 condition in accordance with Section 10.10; and provided further, however,
 that in the event that any breach shall have been cured before the expiration
 of the twenty (20) day cure-period, at the election of Seller the Closing
 Date shall be extended by the number of days actually elapsed before the cure
 of such breach.

 

30

                    12.2     Effect
of Termination. In the event of termination of this Agreement by Buyer or
Seller pursuant to this Article 12, except as otherwise provided in
this Section 12.2 or Section 12.3, all rights and obligations of
the Parties under this Agreement shall terminate without any liability of any
Party to any other Party; provided, however, that nothing herein
shall relieve any Party from liability for breach of this Agreement prior to
such termination or limit the rights and remedies of either Party at law or in
equity. The provisions of this Section 12.2 and Section 2.7 and,
to the extent applicable, Articles 1, 11 and 13, shall expressly
survive the expiration or termination of this Agreement. The termination or
expiration of this Agreement shall have no affect on the Deposit Escrow
Agreement, and following such expiration or termination of this Agreement, the
Deposit shall be distributed to Seller in accordance with the provisions of the
Deposit Escrow Agreement regardless of the reason for such termination or
expiration and regardless of the party that exercise its termination rights
hereunder. 

                    12.3     Expenses
in the Event of Termination. Without limiting the general provisions of Section
12.2, if this Agreement is terminated by Buyer or Seller pursuant to this Article 12,
then each Party shall be responsible for all of its own costs and expenses,
including any professional fees, incurred in connection with this Agreement or
the transactions herein contemplated.

                    12.4     Rights
and Remedies. Unless otherwise provided herein, any and all rights and
remedies conferred in this Agreement upon a Party will be deemed cumulative
with and not exclusive of any other right or remedy conferred hereby or by law
or equity upon such Party, and the exercise by a Party of any one remedy will
not preclude the exercise of any other right or remedy. Without limiting the
generality of the foregoing sentence, the Parties also acknowledge and agree as
follows. A Party’s exercise of any rights provided herein to terminate this
Agreement shall not constitute an election of remedies that will preclude it
from exercising any and all other rights and remedies provided hereby or by law
or equity. Irreparable harm for which monetary damages would not be an adequate
remedy would occur in the event of any breach of this Agreement, and
accordingly, in addition to any other rights and remedies to which the Parties
are entitled, each Party shall be entitled seek injunctive relief to prevent a
breach of this Agreement and to specifically enforce the terms hereof. To the
extent the terms of Article 11 are contrary to this Section 12.4, Article 11 shall be controlling. 

ARTICLE 13

GENERAL PROVISIONS

                    13.1     Survival.
Except as provided in this Section 13.1, all representations and
warranties contained herein or in any certificated deliveries hereunder, and
all covenants and agreements contained herein, shall survive the execution and
delivery of this Agreement and the consummation of the transactions
contemplated hereby until the second annual anniversary of the Closing Date, except that
the representations, warranties, covenants and agreements made in Section 8.6
shall survive until the second annual anniversary after the date on which Buyer
has completed the Work as certified pursuant to Section 8.6(h). Any
claim by any Party for any breach of any representation or warranty provided
herein, or of any covenants or agreements contained herein, or for any other
default under or breach of this Agreement, shall be brought on or before the
second annual anniversary of the Closing Date, or in the case of any claim
under Section 8.6, the second annual anniversary of the date on which
the Work required therein has been completed; provided, however, that this
Section 13.1 shall not be applicable to the Loan Documents or to any of
the obligations, rights or remedies provided in such Loan Documents.

                    13.2     Public
Announcements. Unless otherwise required by applicable Legal Requirement or
by obligations of Buyer or Seller or their respective Affiliates pursuant to
any listing agreement with or rules of any securities exchange, Buyer, on the
one hand, and Seller, on the other hand, shall consult with each other before
issuing any other press release or otherwise making any public statement with
respect to this Agreement, the transactions contemplated hereby or the
activities and operations of the other and shall not issue any such release or
make any such statement without the prior written consent of the other (such
consent not to be unreasonably withheld or delayed).

31

                    13.3     Notices.
All notices, consents, waivers and other communications under this Agreement
must be in writing and shall be deemed to have been duly given when (a)
delivered by hand (with written confirmation of receipt), (b) sent by facsimile
or electronic mail (with written confirmation of receipt), (c) received by the
addressee, if sent by a delivery service (prepaid, receipt requested) or (d)
received by the addressee, if sent by registered or certified mail (postage
prepaid, return receipt requested), in each case to the appropriate addresses,
representatives (if applicable) and facsimile numbers set forth below (or to
such other addresses, representatives and facsimile numbers as a Party may designate
by notice to the other Parties):

	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (i)

 	
 If to
 Seller:

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 OSM—REO FF,
 LLC 

 
	
  

 	
  

 	
  

 	
 225 South
 Sixth Street, Suite 2800

 
	
  

 	
  

 	
  

 	
 Minneapolis,
 MN 55402

 
	
  

 	
  

 	
  

 	
 Attn: Steph
 Lunde 

 
	
  

 	
  

 	
  

 	
 Telephone:
 (612) 376-1486

 
	
  

 	
  

 	
  

 	
 Facsimile:
 (612) 692-5107

 
	
  

 	
  

 	
  

 	
 Email: Stephanie.Lunde@osm-mail.com

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 with a copy
 (which shall not constitute notice) to:

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 Leonard,
 Street and Deinard

 
	
  

 	
  

 	
  

 	
 150 South
 Fifth Street, Suite 2300

 
	
  

 	
  

 	
  

 	
 Minneapolis,
 MN 55402 

 
	
  

 	
  

 	
  

 	
 Attn:
 Timothy Ring, Esq.

 
	
  

 	
  

 	
  

 	
 Email:
 timothy.ring@leonard.com

 
	
  

 	
  

 	
  

 	
 Facsimile:
 (612)335-1657

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (ii)

 	
 If to Buyer:

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 Soy Energy,
 LLC

 
	
  

 	
  

 	
  

 	
 Attn: Chuck
 Sand

 
	
  

 	
  

 	
  

 	
 4765 Highway
 143

 
	
  

 	
  

 	
  

 	
 P.O. Box 648

 
	
  

 	
  

 	
  

 	
 Marcus, Iowa
 50135

 
	
  

 	
  

 	
  

 	
 Telephone:
 (712) 376-4135

 
	
  

 	
  

 	
  

 	
 Email:
 csand@sandsofiowa.com

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 AND

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 Soy Energy,
 LLC

 
	
  

 	
  

 	
  

 	
 Attn: Rick
 Davis

 
	
  

 	
  

 	
  

 	
 4832 G
 Avenue

 
	
  

 	
  

 	
  

 	
 P.O. Box 663

 
	
  

 	
  

 	
  

 	
 Marcus, Iowa
 50135

 
	
  

 	
  

 	
  

 	
 Telephone:
 (712) 376-2081

 
	
  

 	
  

 	
  

 	
 Email:
 rdavis@midlands.net

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 with a copy
 (which shall not constitute notice) to:

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 BrownWinick

 
	
  

 	
  

 	
  

 	
 666 Grand
 Avenue, Suite 2000

 
	
  

 	
  

 	
  

 	
 Des Moines,
 IA 50309

 
	
  

 	
  

 	
  

 	
 Attn: Thomas
 Johnson, Esq.

 
	
  

 	
  

 	
  

 	
 Email:
 johnson@brownwinick.com

 
	
  

 	
  

 	
  

 	
 Facsimile:
 (515) 323-8514

 

32

                    13.4     Waiver.
Neither the failure nor any delay by any Party in exercising any right, power,
or privilege under this Agreement or the documents referred to in this
Agreement shall operate as a waiver of such right, power or privilege, and no
single or partial exercise of any such right, power, or privilege shall
preclude any other or further exercise of such right, power, or privilege or
the exercise of any other right, power, or privilege. To the maximum extent
permitted by applicable law, (a) no waiver that may be given by a Party
shall be applicable except in the specific instance for which it is given, and
(b) no notice to or demand on one Party shall be deemed to be a waiver of
any right of the Party giving such notice or demand to take further action
without notice or demand.

                    13.5     Entire
Agreement; Amendment. This Agreement (including the Schedules and the
Exhibits) and the other Transaction Documents supersede all prior agreements
between Buyer, on the one hand, and Seller, on the other hand, with respect to
its subject matter and constitute a complete and exclusive statement of the
terms of the agreements between Buyer, on the one hand, and Seller, on the
other hand, with respect to their subject matter. This Agreement may not be
amended except by a written agreement executed by all of the Parties.

                    13.6     Assignment.
This Agreement, and the rights, interests and obligations hereunder, shall not
be assigned by any Party by operation of law or otherwise without the express
written consent of the other Parties (which consent may be granted or withheld
in the sole discretion of such other Party).

                    13.7     Severability.
The provisions of this Agreement shall be deemed severable, and the invalidity
or unenforceability of any provision shall not affect the validity or
enforceability of the other provisions hereof. If any provision of this
Agreement, or the application thereof to any Person or any circumstance, is
invalid or unenforceable, (a) a suitable and equitable provision shall be
substituted therefor in order to carry out, so far as may be valid and
enforceable, the intent and purpose of such invalid or unenforceable provision
and (b) the remainder of this Agreement and the application of such provision
to other Persons or circumstances shall not be affected by such invalidity or
unenforceability.

                    13.8     Expenses.
Whether or not the transactions contemplated by this Agreement are consummated,
the Parties shall bear their own respective expenses (including all
compensation and expenses of counsel, financial advisors, consultants,
actuaries and independent accountants) incurred in connection with this
Agreement and the transactions contemplated hereby.

                    13.9     Governing
Law; Consent to Jurisdiction and Venue; Jury Trial Waiver.

	
  

 	
  

 
	
  

 	
                         (a)          This
 Agreement shall be governed by, and construed in accordance with, the laws of
 the State of Minnesota applicable to contracts made and to be performed
 entirely in such state without regard to principles of conflicts or choice of
 laws or any other law that would make the laws of any other jurisdiction
 other than the State of Minnesota applicable hereto.

 
	
  

 	
  

 
	
  

 	
                         (b)          All
 Actions and Proceedings arising out of or relating to this Agreement shall be
 heard and determined in a Minnesota state court or a federal court sitting in
 the state of State Minnesota, and the Parties hereby irrevocably submit to
 the exclusive jurisdiction and venue of such courts in any such Action or
 Proceeding and irrevocably waive the defense of an inconvenient forum to the
 maintenance of any such Action or Proceeding. The Parties consent to service
 of process by mail (in accordance with Section 13.3) or any other
 manner permitted by law.

 

33

	
  

 	
  

 
	
  

 	
                         (c)          THE
 PARTIES HEREBY IRREVOCABLY WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,
 PROCEEDING OR COUNTERCLAIM (WHETHER BASED IN CONTRACT, TORT OR OTHERWISE)
 ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE ACTIONS OF SELLER OR
 BUYER OR THEIR RESPECTIVE REPRESENTATIVES IN THE NEGOTIATION OR PERFORMANCE
 HEREOF.

 

                    13.10     Counterparts.
This Agreement and any amendment hereto may be executed in one or more
counterparts, each of which shall be deemed to be an original of this Agreement
or such amendment and all of which, when taken together, shall be deemed to
constitute one and the same instrument. Notwithstanding anything herein to the
contrary, delivery of an executed counterpart of a signature page to this
Agreement or any amendment hereto by telecopier, facsimile or email attachment
shall be effective as delivery of a manually executed counterpart of this
Agreement or such amendment, as applicable.

                    13.11     Parties
in Interest; No Third Party Beneficiaries. This Agreement shall inure to
the benefit of and be binding upon the Parties and their respective successors
and permitted assigns. This Agreement is for the sole benefit of the Parties
and their permitted assigns, and nothing herein, express or implied, is
intended to or shall confer upon any other Person any legal or equitable
benefit, claim, cause of action, remedy or right of any kind.

                    13.12     Non-Recourse.
No past, present or future director, officer, employee, incorporator, member,
partner or equity holder of Seller shall have any liability for any obligations
or liabilities of Seller under this Agreement or any other Transaction
Document, for any claim based on, in respect of, or by reason of the
transactions contemplated hereby and thereby, and no past, present or future
director, officer, employee, incorporator, member, partner or equity holder of
Buyer shall have any liability for any obligations or liabilities of Buyer
under this Agreement or any other Transaction Document, for any claim based on,
in respect of, or by reason of the transactions contemplated hereby and
thereby.

[Signature pages follow]

34

          IN
WITNESS WHEREOF, the Parties have caused this
Agreement to be executed and delivered by their duly authorized
representatives, all as of the Effective Date.

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 OSM-REO FF, LLC

 	
  

 
	
  

 
	
  

 	
 By: 

 	
 /s/ Stephanie
 Lunde

 	
  

 
	
  

 	
  

 	

 

 	
  

 
	
  

 	
 Name: Stephanie
 Lunde

 	
  

 
	
  

 	

 

 	
  

 
	
  

 	
 Its: Vice
 President

 	
  

 
	
  

 	

 

 	
  

 

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 SOY ENERGY, LLC

 	
  

 
	
  

 
	
  

 	
 By: 

 	
 /s/ Charles
 Sand

 	
  

 
	
  

 	
  

 	

 

 	
  

 
	
  

 	
 Name: Charles Sand

 	
  

 
	
  

 	

 

 	
  

 
	
  

 	
 Title: Chairman

 	
  

 
	
  

 	

 

 	
  

 

35EXIBIT 10.2 TO SOY ENERGY, LLC FORM 10-Q FOR THE QUARTER ENDED 04-30-2010

Exhibit 10.2

LOAN AGREEMENT

          This
Agreement is made as of April 2, 2010, by and between SOY ENERGY, LLC, an Iowa
limited liability company (the “Borrower”), and OSM-REO FF, LLC, a Minnesota
limited liability company (the “Lender”).

RECITALS

          A.          The Borrower
intends to acquire a biodiesel facility located in Mason City, Iowa along with
certain other tangible and intangible assets pursuant to the provisions of that
certain Asset Purchase Agreement dated of even date herewith by and among the
Borrower and OSM-REO FF, LLC, as the seller,
the “Acquisition Agreement” (the acquisition under the Acquisition Agreement
is the “Acquisition”).

          B.          The
Borrower has requested loans from the Lender for the purpose of financing a portion of the Acquisition and expenses related
thereto and the Lender has agreed to provide such financing upon the
terms and subject to the conditions of this Agreement.

          NOW,
THEREFORE, in consideration of the premises and other good and valuable consideration the receipt and sufficiency of
which is hereby acknowledged, the Borrower and the Lender agree as
follows:

ARTICLE I

DEFINITIONS

          Section
1.01 Defined Terms. As used in this Agreement, the following terms shall
have the meanings set out respectively after each (such meanings
to be equally applicable to both the singular and plural forms of the terms
defined):

          “Acquisition”
- As defined in the first recital above.

          “Acquisition
Agreement” - As defined in the first recital above.

          “Acquisition
Documents” – The Acquisition Agreement, the Holdback Reserve Agreement and any other agreements, instruments or
documents executed and delivered in connection with the Acquisition.

          “Acquisition
Loan” – The loan in the amount of the Commitment to be made by the
Lender pursuant to the terms of this Agreement.

          “Acquisition
Note” – The Promissory Note of the Borrower, in form and substance
acceptable to Lender, evidencing the Acquisition Loan to be made hereunder,
together with any amendment thereto.

          “Additional
Improvements” – The improvements to be constructed on the Land in accordance with the Plans and Specifications and
the Construction Contract for the purpose of allowing the Project to
accept varied feedstock.

          “Additional
Improvements Escrow” – An amount equal to not less than $8,000,000 to be deposited by Borrower with Title
and disbursed in accordance with the Additional Improvements Escrow
Agreement to pay Project Costs.

          “Additional
Improvements Escrow Agreement” – The Additional Improvements Escrow Agreement in form and substance acceptable
to Lender among the Borrower, the Lender and Title providing for the deposit
into escrow of not less than $8,000,000 for the purpose of funding
construction of the Additional Improvements.

          “Affiliate”
– of any Person shall mean (a) any Person which, directly or indirectly, is in control of, is controlled by,
or is under common control with such Person, or (b) any Person who is a
director or officer (i) of such Person, (ii) of any subsidiary of such Person
or (iii) of any Person described in clause (a) above. For purposes of this definition, control of a Person shall mean the
power, direct or indirect, (x) to vote 50% or more of the securities having ordinary voting power for the election of
directors of such Person, or (y) to direct or cause the direction of the
management and policies of such Person whether by contract or otherwise.

          “Agreement”
– This Loan Agreement as it may be amended, modified, supplemented, restated or
replaced from time to time.

          
“Anti-Terrorism Laws” – any Laws relating to terrorism or money laundering,
including Executive Order No. 13224, the USA Patriot Act, the Laws comprising
or implementing the Bank Secrecy Act, and the Laws administered by the United
States Treasury Department’s Office of
Foreign Assets Control (as any of the foregoing Laws may from time to
time be amended, renewed, extended, or replaced).

          “Appraisal”
– An appraisal of the market value of the completed Project (a) addressed to
the Lender, (b) prepared by an appraiser approved by the Lender, and (c) conforming to all laws applicable to the Lender and
otherwise in a form satisfactory to the
Lender, and (d) concluding that, upon completion of the Additional Improvements
the market value of the Project will be not less than $12,000,000.

          “Assignment
of Construction Contract” – The Assignment of Construction Contract,
in form and substance acceptable to Lender, which assigns to the Lender, as additional security for repayment of the Note, the
Borrower’s interest in the Construction Contract, together with any
amendment thereto.

          “Assignment
of Project Engineer’s Contract” – The Assignment of Project Engineer’s Contract,
in form and substance acceptable to Lender, which assigns to the Lender, as
additional security for payment of the Note, the Borrower’s interest in the
Architect’s Contract and the Plans and Specifications, together with any
amendment thereto.

          “Borrowed
Money Indebtedness” - (a) the Obligations; (b) Subordinated Loan; (c) Working Capital Loan; and (d) other Indebtedness
for borrowed money, which collectively,
with all other Borrowed Money Indebtedness shall not to exceed $16,000,000
at any time outstanding in the aggregate.

           “Blocked
Person” - As defined in Section 4.24 hereof.

          “Business
Day” – Any day other than Saturday or Sunday or a legal holiday on which
commercial banks are authorized or required by law to be closed for business in
Mason City, Iowa.

           “Borrower”
– Soy Energy, LLC, an Iowa limited liability company.

          “CERCLA” –
The Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended, 42 U.S.C. § § 9601 et seq.

          “City”
– The City of Mason City, Iowa. 

          “Closing
Date” – As defined by Section 2.02.

          “Code”
– The Internal Revenue Code of 1986, as amended from time to time and the
regulations promulgated thereunder.

          “Collateral”
– All property that is pledged as collateral for the Loans pursuant to any
of the Security Documents.

          “Commitment”
– The commitment of the Lender hereunder to make the Acquisition
Loan in a maximum principal amount of Six Million and 00/100 Dollars ($6,000,000).

          “Commitment
Termination Date” – July 21, 2010, or the date of the termination of
the Commitment pursuant to Article VII hereof, whichever date occurs earlier.

          “Commencement
Date” – The date that is 180 days after the Closing Date. 

          “Completion
Date” – July 31, 2011.

          “Consent”
– All filings and all licenses, permits, consents, approvals, authorizations, qualifications and orders of
Governmental Bodies and other third parties, domestic or foreign,
necessary to carry on the Borrower’s business, including, without limitation, any Consents required under all
applicable federal, state or other applicable law.

          
“Contractor” – Any person, including the General Contractor and all Subcontractors,
who shall be engaged to work on, or to furnish materials and supplies for, the
Additional Improvements.

          “Construction
Contract” – The construction contract to be executed between the Borrower and the General Contractor, pursuant to
which the General Contractor shall be obligated to construct the
Additional Improvements in accordance with the Plans and Specifications for a
fixed price or maximum cost, not to exceed $8,000,000.

          “Debt
Service Reserve” – An amount equal to not less than $150,000 to be funded with proceeds of the Acquisition Loan, deposited
with Lender and disbursed in accordance with the Debt Service Reserve
Agreement.

          “Debt
Service Reserve Agreement” – The Debt Service Reserve and Security Agreement
in form and substance acceptable to Lender between Borrower and Lender.

          “Debt
to Equity Ratio” – With respect to any fiscal period, the ratio of (i) Indebtedness
to (ii) Equity.

          “Default” –
An event which with notice, lapse of time, or both would become an Event of
Default.

          “Default
Rate” – As defined in the Note.

          “Depository
Institution” – Farmers State Bank of Marcus, Iowa, or such other financial
institution as may be approved by Lender from time to time.

          “Dollar”
and the sign “$” shall mean the lawful money of the United States of America.

          “Earnings
Before Interest and Taxes” – For any period the sum of (i) net income (or loss)
of the Borrower for such period (excluding extraordinary gains [and losses]),
plus (ii) all interest expense of the
Borrower for such period, plus, (iii) all charges against income of the
Borrower for such period for federal, state and local taxes actually paid, all
as determined in accordance with GAAP.

          “EBITDA”
– For any period the sum of (i) Earnings Before Interest and Taxes for such period, plus (ii) depreciation expenses for
such period, plus (iii) amortization expenses for such period, all as
determined in accordance with GAAP.

          “Effective
Date” – the “Effective Date” as defined in the Acquisition Agreement. 

          “Environmental
Complaint” – As defined in Section 5.09(d) hereof.

          “Environmental
Indemnity” – The Environmental Indemnification Agreement, in form and substance acceptable to Lender, from the
Borrower to the Lender, together with any amendment thereto.

          “Environmental
Laws” – All federal, state and local environmental, land use, zoning, health,
chemical use, safety and sanitation laws, statutes, ordinances and codes relating to the protection of the environment
and/or governing the use, storage, treatment, generation,
transportation, processing, handling, production or disposal of Hazardous Substances and the rules, regulations, policies,
guidelines, interpretations, decisions, orders and directives of federal, state and local governmental agencies
and authorities with respect thereto.

          “Equity”
- The sum of the unrestricted and unencumbered (other than to the Lender) cash and unencumbered (other than to the
Lender) readily marketable securities of the Borrower, less overdrafts.

          “ERISA” –
The Employee Retirement Income Security Act of 1974, as amended from time to
time and the rules and regulations promulgated thereunder.

          “Event of
Default” – One of the events of default specified in Section 7.01 hereof.

          “Executive
Order No. 13224” – The Executive Order No. 13224 on Terrorist Financing,
effective September 24, 2001, as the same has been, or shall hereafter be,
renewed, extended, amended or replaced.

          “Financing
Statements” – UCC financing statements naming the Borrower as debtor
and the Lender as secured party and describing the Collateral as the personal
property and fixtures described as Collateral for the Loans in any of the
Security Documents.

          “Fixed
Charge Coverage Ratio” – With respect to any fiscal period, the ratio of (a)
Borrower EBITDA to (b) payments required to be made with respect to any
Indebtedness.

          “GAAP” –
Generally accepted accounting principles in the United States of America in
effect from time to time.

          “General
Contractor” – Ball Industrial Services, LLC, the general contractor hired by
Borrower to complete the Additional Improvements pursuant to the Construction Contract, or such other General Contractor
approved by Lender, provided that Lender shall not unreasonably withhold
condition or delay such approval.

          “Governmental
Body” – Any nation or government, any state or other political subdivision
thereof or any entity exercising the legislative, judicial, regulatory or
administrative functions of or pertaining to a government, including the City.

          “Hazardous
Discharge” – As defined in Section 5.09(d).

          “Hazardous
Substance” – Any flammable explosives, radon, radioactive materials,
asbestos, urea formaldehyde foam insulation, polychlorinated biphenyls,
petroleum and petroleum products, methane, hazardous materials, Hazardous
Wastes, hazardous or Toxic Substances or
related materials as defined in CERCLA, the Hazardous Materials
Transportation Act, as amended (49 U.S.C. Sections 1801, et seq.), RCRA or any other applicable Environmental Law and
in the regulations adopted pursuant thereto.

          “Hazardous
Wastes” - All waste materials subject to regulation under CERCLA, RCRA or applicable state law, and any other
applicable federal and state laws now in force or hereafter enacted
relating to hazardous waste disposal.

          “Holdback
Reserve Agreement” – The Holdback Reserve Agreement executed by and
among the Borrower and OSM-REO FF, LLC in connection with the Acquisition.

          “Improvements”
– all improvements located or to be constructed on the Land, including but not limited to the existing biodiesel
facility and the Additional Improvements.

          “Indebtedness”
of a Person at a particular date shall mean all obligations of such Person
which in accordance with GAAP would be classified upon a balance sheet as liabilities (except capital stock and surplus
earned or otherwise) and in any event, without limitation by reason of
enumeration, shall include all indebtedness, debt and other similar monetary obligations of such Person whether direct
or guaranteed, and all premiums, if any,
due at the required prepayment dates of such indebtedness, and all other indebtedness
secured by a Lien on assets owned by such Person, whether or not such indebtedness actually shall have been created,
assumed or incurred by such Person. Any indebtedness of such Person
resulting from the acquisition by such Person of any assets subject to any Lien
shall be deemed, for the purposes hereof, to be the equivalent of the creation,
assumption and incurring of the indebtedness secured thereby, whether or not
actually so created, assumed or incurred.

          “Initial
Loan” – The loan in the original principal amount of $77,595 deemed made
by Lender to Borrower as of the Closing Date and evidenced by the Initial Note.

          “Initial
Note” – The Promissory Note to be made by the Borrower in favor of Lender as of the Closing Date, in form and
substance acceptable to Lender, in the original principal amount of
$77,595.

          “Inspecting
Architect/Engineer” – The architectural or engineering firm selected by
Lender from time to time to act as the Inspecting Architect/Engineer under this
Agreement.

          “Land”
– The land in Cerro Gordo County, Iowa, on which the Project is located, which
is legally described in the Mortgage.

          “Lender” –
OSM-REO FF, LLC, a Minnesota limited liability company.

          “Lien”
– Any mortgage, deed of trust, pledge, hypothecation, assignment, security interest, lien (whether statutory or otherwise),
charge, claim or encumbrance, or preference,
priority or other security agreement or preferential arrangement held or asserted in respect of any asset of any kind or
nature whatsoever including, without limitation, any conditional sale or
other title retention agreement, any lease having substantially the same
economic effect as any of the foregoing, and the filing of, or agreement to
give, any financing statement under the Uniform Commercial Code or comparable
law of any jurisdiction.

          “Loans” –
The Initial Loan and the Acquisition Loan.

          “Loan
Documents” – This Agreement, the Initial Note, the Acquisition Note, the
Security Documents and any other documents at any time evidencing or securing
one or both of the Loans, as amended.

          “Material
Adverse Effect” A material adverse effect (a) the condition, operations, assets, business or prospects of the applicable
Person or Persons, (b) the Borrower’s ability to pay the Obligations in
accordance with the terms thereof, (c) the value of the Collateral, or the Lender’s Liens on the Collateral or the priority of
any such Lien, or (d) the practical
realization of the benefits of the Lender’s rights and remedies under this Agreement
and the other Loan Documents.

          “Maturity
Date” – As defined in the Acquisition Note.

          “Mortgage”
– The Combination Mortgage, Assignment of Rents, Security Agreement and Fixture Financing Statement, in
form and substance acceptable to Lender, from the Borrower as Mortgagor
to the Lender as Mortgagee, creating a first lien on the Project and a security interest in all of the
personal property located thereon as security for payment of the Note,
together with any amendment thereto.

          “Notes” –
The Initial Note and the Acquisition Note.

          “Obligations”
Any and all loans, advances, debts, liabilities, obligations, covenants and duties owing by the Borrower to the
Lender or to any other direct or indirect
subsidiary or affiliate of the Lender of any kind or nature, present or future (including,
without limitation, any interest accruing thereon after maturity, or after the
filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding relating to the
Borrower, whether or not a claim for post-filing or post-petition
interest is allowed in such proceeding), whether or not evidenced by any note, guaranty or other instrument, whether arising
under any agreement, instrument or
document, (including, without limitation, this Agreement and the other Loan Documents) whether or not for the
payment of money, whether arising by reason of an extension of credit,
opening a letter of credit, loan, equipment lease or guarantee, under any interest or currency swap, future, option or other
similar agreement, or in any other
manner, whether arising out of overdrafts or deposit or other accounts or electronic funds transfers (whether through
automated clearing houses or otherwise) or out of the Lender’s non-receipt of or inability to collect funds or
otherwise not being made whole in connection with depository transfer
check or other similar arrangements, whether
direct or indirect (including those acquired by assignment or participation), absolute
or contingent, joint or several, due or to become due, now existing or
hereafter arising, contractual or tortuous, liquidated or unliquidated,
regardless of how such indebtedness or
liabilities arise or by what agreement or instrument they may be evidenced or
whether evidenced by any agreement or instrument, including, but not limited
to, any and all of the Borrower’s Indebtedness and/or liabilities under this Agreement, the other Loan Documents or under any
other agreement between the Lender and
the Borrower and any amendments, extensions, renewals or increases and all
costs and expenses of the Lender incurred in the documentation,
negotiation, modification, enforcement, collection or otherwise in connection
with any of the foregoing, including but not limited to reasonable attorneys’
fees and expenses and all obligations of the Borrower to the Lender to perform
acts or refrain from taking any action.

          “Organizational
Documents” – The following documents:

	
  

 	
 

	
  

 	
  

 	
  

 
	
  

 	
  

	
  

 	
 (i)

 	
 a copy of the Borrower’s Articles of Organization, duly certified as
 of a current date by the Secretary of State of the State of
 Iowa;

 
	
  

 	
  

	
  

 	
  

 	
  

 
	
  

 	
  

	
  

 	
 (ii)

 	
 a copy of the Borrower’s Operating Agreement, duly certified as of a current
 date by an officer or manager of the Borrower;

 
	
  

 	
  

	
  

 	
  

 	
  

 
	
  

 	
  

	
  

 	
 (iii)

 	
 a Certificate of Existence of the Borrower, duly issued as of a
 current date by the Secretary of State of the State of Iowa;
 and

 
	
  

 	
  

	
  

 	
  

 	
  

 
	
  

 	
  

	
  

 	
 (iv)

 	
 a copy of the resolutions of the Borrower’s board of directors
 authorizing execution, delivery and performance of the Loan
 Documents and the transactions contemplated thereby, duly certified by an
 officer or manager of the Borrower.

 

          “Participant”
Each Person who shall be granted the right by the Lender to participate in the Loans and who shall have
entered into a participation agreement in form and substance
satisfactory to the Lender.

          “Permitted
Indebtedness” – means (a) Borrowed Money Indebtedness, provided that
(i) the Working Capital Loan shall not be deemed Permitted Indebtedness unless subject to the Working Capital Intercreditor
Agreement and (ii) the Subordinated Loan shall not be deemed Permitted Indebtedness unless subject to the
Subordinated Intercreditor Agreement;
(b) current liabilities, other than for borrowed money, incurred in the ordinary course of business; (c) Guarantees
permitted pursuant to Section 6.10; (d) Indebtedness secured by
Permitted Liens; (e) Indebtedness incurred in respect of netting services and
overdraft protection in connection with deposit accounts; (f) Indebtedness incurred in connection with the financing of
insurance premiums in the ordinary course of business; (g) Indebtedness in respect of taxes, assessments or
governmental charges to the extent that payment thereof shall not at the
time be required to be made.

          “Permitted
Lien” – means (a) Liens in favor of the Lender; (b) Liens in favor of the
Subordinate Lender which are subordinate in all respects to any Liens in favor
of Lender; (c) Liens in favor of the Working
Capital Lender, provided that no such Liens in favor of the Working Capital Lender shall be permitted on property which
constitutes Collateral for the Loans; (d) Liens for taxes, assessments
or other governmental charges not delinquent or being contested in good faith
and by appropriate proceedings and with respect
to which proper reserves have been taken by the Borrower; provided, that the Lien
shall have no effect on the priority of the Liens in favor of the Lender or the
value of the assets in which the Lender has
such a Lien and a stay of enforcement of any such Lien shall be in effect; (e)
Liens disclosed in the financial statements referred to in Section 4.06, the existence of which the Lender
has consented to in writing; (f) deposits or pledges to secure
obligations under worker’s compensation, social security or similar laws, or
under unemployment insurance; (g) deposits or pledges to secure bids, tenders,
contracts (other than contracts for the payment of money), leases, statutory
obligations, surety and appeal bonds and
other obligations of like nature arising in the ordinary course of the Borrower’s business; (h) Liens placed upon
fixed assets hereafter acquired to secure a portion of the purchase
price thereof, provided that (x) any such lien shall not encumber any other property of the Borrower and (y)
the aggregate amount of Indebtedness
secured by such Liens incurred as a result of such purchases during any fiscal year shall not exceed the amount provided
for in Section 6.17; (i) other Liens incidental to the conduct of the
Borrower’s business or ownership of its property and assets which were not incurred in connection with
the borrowing of money or the obtaining
of advances or credit, and which do not in the aggregate materially detract
from the Lender’s rights in and to the
Collateral or the value of the Borrower’s property or assets or which do not materially impair the use
thereof in the operation of the Borrower’s
business; and (j) subject to the terms of this Agreement, any Lien on property that
is not Collateral.

          “Person” –
Any individual, sole proprietorship, partnership, corporation, business trust, joint stock company, trust, unincorporated
organization, association, limited liability company, institution,
public benefit corporation, joint venture, entity or government (whether federal, state, county, city, municipal or
otherwise, including any instrumentality, division, agency, body or
department thereof).

          “Plan” – As
defined in Section 4.08 hereof.

          “Plans and
Specifications” – The plans and specifications for the Additional Improvements
prepared and signed by the Project Engineer and approved by the Lender and the
Inspecting Architect/Engineer.

          “Project” –
The Land and the Improvements as they may at any time exist.

          “Project
Costs” – The costs shown on the Total Project Cost Statement prepared in
connection with the Additional Improvements.

          “Project
Engineer” – Ball Engineering, LLC, the engineer retained by the Borrower to design the Plans and Specifications
for the Additional Improvements or such other Project Engineer approved by Lender, provided that Lender shall
not unreasonably withhold condition or delay such approval.

           “Project
Engineer’s Contract” – The agreement between the Borrower and the Architect as
to preparation of the Plans and Specifications and construction of the
Additional Improvements.

          “RCRA”
– The Resource Conservation and Recovery Act, 42 U.S.C. § § 6901 et seq.,
as same may be amended from time to time.

          “Repair
and Replacement Plan” – The plans and specifications, including scopes of work, time schedules and budgets, for the
repairs to the Project and the corrective actions with regard to the environmental conditions identified in the
Reports, which plans and specifications are required under the
Acquisition Agreement.

          “Reports”
shall mean the environmental reports delivered to the Lender and identified
on Schedule 4.09.

          “Security
Agreement” – The Security Agreement in form and substance acceptable
to Lender between Borrower and Lender.

          “Security
Documents” – The Mortgage, Security Agreement, Additional Improvements Escrow Agreement, Debt Service Reserve
Agreement, Financing Statements,
Environmental Indemnity, Assignment of Construction Contract, Assignment of
Architect’s Contract, and any other documents securing the Loans.

          “Subcontractor”
– Any person who contracts with the General Contractor to perform any of the
work or supply any of the materials necessary to complete the Additional
Improvements.

          “Subcontract”
– Any contract between the General Contractor and a Subcontractor.

          “Subordinated Loan Documents” – The documents
evidencing any Subordinated Loan.

          “Subordinated
Intercreditor Agreement” - An Intercreditor and Subordination Agreement among
the Lender, the Borrower and the Subordinated Lender, in form and substance
satisfactory to the Lender in its sole discretion.

          “Subordinated
Loan” – Any Indebtedness of the Borrower to the Subordinated Lender
now existing or hereafter created, incurred or arising, which is subject to the
Subordinated Intercreditor Agreement, which
loan may include, without limitation, a loan from the Small Business Administration; provided that the maximum
principal amount of the Subordinated Loan shall not exceed $4,000,000.

          “Subordinated
Lender” – Any Person providing the Subordinated Loan, which may
include, without limitation, the Small Business Administration.

          “Sworn
Construction Statement” – A sworn construction statement duly executed by the Borrower and the General Contractor showing
all Contractors having contracts or subcontracts for specific portions
of the work on the Additional Improvements and the amounts due or to become due each such Contractor, and including all
so-called “hard” costs of any kind
incurred and to be incurred in constructing the Additional Improvements and fulfilling the obligations of the
General Contractor under the terms of the Construction Contract.

          “Title” –
First American Title Insurance Company.

          “Total
Project Cost Statement” – A total project cost statement duly executed by the
Borrower incorporating the Sworn Construction Statement and setting forth all
costs and expenses of any kind incurred or
to be incurred by the Borrower in connection with the completion of the
Additional Improvements, including all so-called “hard” and “soft” costs.

          “Toxic
Substance” – Any material present on the Land which has been shown to have significant adverse effect on human health or
which is subject to regulation under the Toxic Substances Control Act (TSCA),
15 U.S.C. § § 2601 et seq., applicable state law, or any other applicable federal or state laws now in force or
hereafter enacted relating to toxic substances. “Toxic Substance”
includes but is not limited to asbestos, polychlorinated biphenyls (PCBs) and
lead-based paints.

          “USA
Patriot Act” - The Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and
Obstruct Terrorism Act of 2001, Public Law 107-56, as the same has been, or shall hereafter be, renewed, extended,
amended or replaced.

          “Working
Capital Documents” – The documents evidencing the Working Capital Loan.

          “Working
Capital Lender” – Any Person providing the Working Capital Loan.

          “Working
Capital Loan” – Any Indebtedness of the Borrower to the Working Capital Lender now existing or hereafter created
which is subject to the Working Capital Intercreditor Agreement, which loans may include, without limitation, a
loan from the Small Business Administration.

          “Working
Capital Intercreditor Agreement” - An Intercreditor Agreement among the Lender,
the Borrower and the Working Capital Lender, in form and substance satisfactory to the Lender, which Intercreditor
Agreement shall only provide for the specific requirements set forth on
Schedule 1.01 attached hereto.

          Section
1.02 Certain Matters of Construction. The terms “herein”, “hereof” and “hereunder” and other words of similar import
refer to this Agreement as a whole and not to any particular section,
paragraph or subdivision. Any pronoun used shall be deemed to cover all
genders. Wherever appropriate in the context, terms used herein in the singular
also include the plural and vice versa. All references to statutes and related
regulations shall include any amendments of
same and any successor statutes and regulations. Unless otherwise provided, all
references to any instruments or agreements to which the Lender is a
party, including, without limitation,
references to any of the other Loan Documents, shall include any and all modifications
or amendments thereto and any and all extensions or renewals thereof.

ARTICLE II

COMMITMENT TO MAKE LOANS

Section 2.01 The Loans.

                    (a)     Initial Loan. Subject to and on the Closing Date, borrower
shall execute and deliver to Lender the Initial Note, evidencing Borrower’s
obligation to repay the Initial Loan, which Initial Loan shall be deemed fully
advanced and disbursed as of Closing Date without further action on the part of
Lender. The Initial Note contains terms relating to maturity, interest rate,
payments, acceleration and other matters.

                    (b)     Acquisition Loan. The Lender agrees, on the terms and
subject to the conditions hereinafter set
forth, to make the Acquisition Loan to the Borrower on or before the Commitment
Termination Date in a aggregate principal amount of up to and including the
maximum amount of the Commitment. Lender shall have no obligation to make the
Acquisition Loan after the Commitment
Termination Date. The proceeds of the Acquisition Loan shall be used by the Borrower to pay a portion of cost the
Acquisition of the Project pursuant to the Acquisition Agreement. The
obligation of the Borrower to repay the Acquisition Loan shall be evidenced by
the Acquisition Note which contains terms relating to maturity, interest rate,
payments, acceleration and other matters. Interest shall be payable at the rate
provided therein only on such portions of the Acquisition Loan proceeds as
actually have been disbursed pursuant to this Agreement.

          Section
2.02 Single Advance. The Acquisition Loan shall be advanced in a single advance to Borrower upon satisfaction of the
conditions precedent described in Article III of this Agreement, subject to the terms and conditions of
this Agreement. The date on which the advance is made is sometimes
referred to herein as the “Closing Date.”

          Section
2.03 Note. Against delivery to the Borrower of Six Million Dollars ($6,000,000.00),
the Borrower shall execute and deliver the Acquisition Note to the Lender to
evidence the Borrower’s obligations under the Acquisition Loan. The Acquisition
Note shall represent the Obligations of the
Borrower to pay the Lender the outstanding principal amount of the
Acquisition Loan, plus interest accrued thereon, as set forth in the Note. The
Borrower irrevocably authorizes the Lender
to make or cause to be made a notation on the Lender’s books and
records, at or about the time of the Lender’s receipt of any interest or
principal payment on the Note, an
appropriate notation on the books and records reflecting such payment. The aggregate unpaid amount set forth on the Lender’s
books and records shall be prima facie evidence of the interest or
principal amount thereof owing and unpaid to the Lender, but the failure to record, or any error in so recording
any such amount shall not affect the Obligations of the Borrower hereunder or
under the Note to make payments of principal of and interest on the Note
when due.

          Section
2.04 Voluntary Prepayments. The
Borrower may prepay the Loans in whole or in part at any time, without
premium or penalty.

          Section
2.05 Business Days. If the date for any payment or prepayment hereunder
falls on a day which is not a Business Day, then for all purposes
of this Agreement the payment shall be due on the preceding Business Day.

          Section
2.06 Use of Proceeds. The Borrower shall apply the proceeds of the Loans
to fund the Acquisition and other related expenses.

          Section
2.07 Maturity Date. The Loans will terminate on the Maturity Date unless
terminated earlier pursuant to this Agreement
or the terms of the Initial Note or Acquisition Note, and all principal and interest then outstanding under the Loans
shall be due and payable on such date.

ARTICLE III

CONDITIONS TO ACQUISITION LOAN

          Section
3.01 Conditions Precedent to Acquisition Loan. The obligation of the
Lender to make the Acquisition Loan shall be subject to the
condition precedent that the Lender shall have
received on or before the date of the Acquisition Loan the following, each to
be satisfactory to the Lender in form and substance:

	
  

 	
  

 	
  

 	
  

 
	
  

 	
           (a)     Note. The Note duly executed by the Borrower;

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
           (b)     Additional Improvements Escrow
 Documents. The Additional Improvements Escrow Agreement, duly executed by
 the Borrower, Title and the Lender, including acknowledgement by Title that
 the Additional Improvements Escrow has been funded;

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
           (c)    
 Mortgage. The Mortgage duly executed by the Borrower.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
           (d)   
 Security Documents. The Security Documents, duly executed by each party thereto (other than the Assignment of
 Construction Contract and the Assignment of Project Engineer’s
 Contract, which shall be delivered pursuant to Section 5.22).

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
           (e)    
 Appraisal. The Appraisal.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
           (f)     Equity. Evidence satisfactory to the Lender that the
 Borrower has available for use in
 connection with the operation of the Project not less than $19,000,000 of
 Equity.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
           (g)     ALTA Mortgagee’s Policy of Title
 Insurance. An extended coverage
 ALTA Mortgagee’s Policy of Title Insurance issued by Title (Form 1970
 or Form 1996 with the exclusion for
 creditors rights and arbitration requirements deleted) and containing
 such endorsements as Lender may require including ALTA Form 9
 (Comprehensive), ALTA Form 6.2 (Variable Rate), Survey, Separate Tax Parcel, Subdivision Compliance, and ALTA Form 3.1
 (Zoning). Such Policy shall be in an amount
 equal to the maximum amount of the Commitment, and shall insure the Mortgage as a first lien on a good and marketable fee
 simple title to the Project, subject only to such Permitted Encumbrances (as defined in the
 Acquisition Agreement) and encumbrances that have not been objected to by Borrower (or which objection has
 been cured by Lender or waived by
 Borrower) pursuant to the terms of the Acquisition Agreement. Without limiting the generality of the foregoing, such
 Policy shall insure the Lender against claims for mechanics’ liens,
 rights of parties in possession and matters which would be disclosed by a
 comprehensive survey of the Land.

 

	
  

 	
  

 	
  

 	
  

 
	
  

 	
           (h)     Survey. A survey of the Land dated within ninety (90)
 days of the date of this Agreement prepared and certified by a licensed or
 registered surveyor to the Lender in
 accordance with Minimum Standard Detail Requirements for ALTA/ACSM Land Title
 Surveys (as adopted by the ALTA
 and NSPS in 2005) including Items Nos. 1, 2, 3, 4, 6, 7(a), 8, 9, 10,
 11(b) and 13 of Table A thereof and such other items as the Lender may reasonably require, acceptable to Lender in
 Lender’s sole discretion, which survey shall be “spotted” to show the
 proposed Additional Improvements according to the site plan prepared by the Project Engineer. Upon
 completion of the Additional Improvements the survey shall be
 recertified “as-built.”

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
           (i)     UCC, Judgment and Other Lien Searches. Appropriate searches conducted
 in the offices required by Lender showing no tax liens, bankruptcies,
 judgments or other liens affecting the Borrower or the Project, and Uniform
 Commercial Code searches disclosing no security interests existing against
 the Project including the equipment, fixtures and personality, except
 Permitted Liens.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
           (j)     Phase I. A Phase I Environmental Site
 Assessment certified within ninety (90) days of the date of this
 Agreement, addressed and certified to the Borrower and the Lender and
 performed by Geotechnical Services, Inc. or such other qualified licensed
 engineer in strict conformance with the Standard Practice for Environmental
 Site Assessment Process, ASTM Standard
 E1527-2005 and a findings and conclusions section consistent with
 Section 11.6.1 thereof and any additional investigations and analysis necessary for the consultant to conclude there
 are no Recognized Environmental Conditions (as such term is used in
 Standard E1527) associated with the Project, or such have been remediated in accordance with applicable law, except as
 described in the Reports.

 
	
  

 	
  

 
	
  

 	
           (k)    
 Legal Opinion. A signed copy of a favorable opinion of counsel
 to the Borrower in form and substance acceptable to Lender in Lender’s
 sole discretion.

 
	
  

 	
  

 
	
  

 	
           (l)    
 Acquisition Documents. The Lender shall have received final executed copies
 of the Acquisition Documents as in effect on the Closing Date.

 
	
  

 	
  

 
	
  

 	
           (m)   
 Certificates. The Lender shall have received a copy of the Articles of
 Organization of the Borrower, and all amendments thereto, certified by the
 Secretary of State or other appropriate
 official of its jurisdiction of formation together with copies of its
 Operating Agreement and all agreements of the Borrower’s members certified as
 accurate and complete by the Secretary of the Borrower.

 
	
  

 	
  

 
	
  

 	
           (n)    
 Proceedings of Borrower. The Lender shall have received a copy of the
 resolutions in form and substance reasonably satisfactory to the Lender, of
 the Board of Directors of the Borrower
 authorizing the execution, delivery and performance of this Agreement and the other Loan Documents certified
 by the Secretary of the Borrower; and, such certificate shall state that the
 resolutions thereby ratified have not been amended, modified, revoked
 or rescinded as of the date of such certificate.

 

	
  

 	
  

 	
  

 
	
  

 	
           (o)     
 Incumbency Certificates of the Borrower. The Lender shall have
 received a certificate of
 the Secretary of the Borrower, dated the Closing Date, as to the incumbency and signature of the officers of the
 Borrower executing this Agreement, any certificate or other documents to be delivered by it pursuant hereto,
 together with evidence of the incumbency of such Secretary.

 
	
  

 	
  

 
	
  

 	
           (p)     
 Certificate of Existence. The Lender shall have received a certificate
 of existence for the Borrower dated not more than thirty (30) days prior to
 the Closing Date, issued by the Secretary
 of State or other appropriate official of the Borrower’s jurisdiction of formation and each jurisdiction
 where the conduct of the Borrower’s business activities or the
 ownership of its properties necessitates qualification.

 
	
  

 	
  

 
	
  

 	
           (q)     
 Repair and Replacement Plan. The Repair and Replacement Plan related to the corrective actions with regard to the
 environmental conditions identified in the Reports, mutually
 acceptable to Borrower and Lender pursuant to the terms of the Acquisition
 Agreement.

 
	
  

 	
  

 
	
  

 	
           (r)     
 Closing Certificate. The Lender shall have received a closing
 certificate signed by the President or
 Chairman of the Borrower dated as of the date hereof, stating that (i) all representations and warranties set
 forth in this Agreement and the other Loan Documents are true and correct on and as of such date, (ii) the
 Borrower is on such date in compliance with all the terms and
 provisions set forth in this Agreement and the other Loan Documents and (iii) on such date no Default or Event of Default
 has occurred or is continuing.

 
	
  

 	
  

 
	
  

 	
           (s)     
 Plans and Specifications. The Plans and Specifications, acceptable to Lender
 in Lender’s sole discretion.

 
	
  

 	
  

 
	
  

 	
           (t)     
 Inspecting Architect/Engineer Report. A report of the Inspecting Architect/Engineer approving the Plans and
 Specifications, the Construction Contract and the Sworn Construction
 Statement, acceptable to Lender in Lender’s sole discretion.

 
	
  

 	
  

 
	
  

 	
           (u)     
 Construction Contracts. The Construction Contract and the Project Engineer’s
 Contract, acceptable to Lender in Lender’s sole discretion.

 
	
  

 	
  

 
	
  

 	
           (v)     
 Subcontracts. Copies of such Subcontracts as the Lender may request, together with a letter from each Contractor under
 such Subcontracts permitting the Lender,
 upon its election to complete the Additional Improvements in accordance with the
 provisions of Section 7.02(d) hereof, to acquire the interest of the
 Contractor under such Subcontracts.

 

	
  

 	
  

 
	
  

 	
           (w)     
 Assignments. The Assignment of Construction Contract and Assignment of Project Engineer’s Contract, duly executed by
 Borrower and acknowledged by any other party to the Construction
 Contract or the Project Engineer’s Contract.

 
	
  

 	
  

 
	
  

 	
           (x)     
 Contractor Guaranty. A completion guaranty duly executed
 by General Contractor in favor of Lender
 guarantying completion of the Additional Improvements, in form and
 substance acceptable to Lender.

 
	
  

 	
  

 
	
  

 	
           (y)     
 Sworn Construction Statement. The Sworn Construction
 Statement.

 
	
  

 	
  

 
	
  

 	
           (z)     
 Total Project Cost Statement. The Total Project Cost
 Statement.

 
	
  

 	
  

 
	
  

 	
           (aa)    Site
 Plan. The site plan prepared by the Project Engineer showing the proposed
 Additional Improvements, acceptable to Lender.

 
	
  

 	
  

 
	
  

 	
           (bb)   Contractors. If requested by the Lender, the Lender shall be furnished
 with a statement of the
 Borrower and of any Contractor, in form and substance required by the Lender, setting forth the names, addresses
 and amounts due or to become due as well as the amounts previously
 paid to every Contractor, subcontractor, person, firm or corporation furnishing materials or performing
 labor in connection with the construction of any part of the
 Additional Improvements.

 
	
  

 	
  

 
	
  

 	
           (cc)   Marketing
 Agreement. An agreement between Borrower and a biodiesel marketer pursuant to which the marketer agrees
 to market and sell biodiesel produced at the Project, in form and
 substance acceptable to Lender.

 
	
  

 	
  

 
	
  

 	
           (dd)   Hedging Plan. Evidence of a risk management plan for hedging against fluctuating
 commodities prices, in form and substance acceptable to Lender.

 
	
  

 	
  

 
	
  

 	
           (ee)   No Default. No Default or Event of Default hereunder shall have
 occurred and be continuing and all representations and warranties made by the
 Borrower herein shall continue to be true and correct as of
 such date.

 
	
  

 	
  

 
	
  

 	
           (ff)    Additional Matters. Such additional documents and information
 regarding the Borrower, the
 Borrower’s business and the Project as Lender shall reasonably request, and
 which shall be in form and substance acceptable to Lender.

 

          Section
3.02 No Waiver. The making of the Acquisition Loan prior to fulfillment
of any condition thereof shall not be construed as a waiver of
such condition, and the Lender reserves the right to require fulfillment of any
and all such conditions at any time before or after the date of the Acquisition
Loan.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

          To induce
the Lender to enter into this Agreement and to make Loans hereunder, the Borrower
represents and warrants to the Lender:

          Section
4.01 Formation, Standing, Etc. The Borrower is a limited liability
company duly organized and validly existing under the laws of
Iowa and has all requisite power and authority to carry on its business as now
conducted, to enter into the Loan Documents to which it is a party, to perform
its obligations under such Loan Documents, to operate the Project and to construct the Additional Improvements. The Borrower
is duly qualified and in good standing as a foreign limited liability
company in each jurisdiction in which the character of the properties owned, leased or operated by it or the business
conducted by it makes such qualification necessary. The Borrower has delivered
to the Lender true and complete copies of its Organizational Documents and will promptly notify the Lender of any
amendment or changes thereto. The Borrower’s organizational
identification number is 320840.

          Section
4.02 Authorization and Validity. The execution, delivery and performance
by the Borrower of the Loan
Documents has been duly authorized by all necessary company action by the Borrower, and such Loan Documents
constitute the legal, valid and binding obligations of the Borrower, enforceable against the Borrower in
accordance with their respective terms, subject to limitations as to
enforceability which might result from bankruptcy, insolvency, moratorium and
other similar laws affecting creditors’ rights generally and subject to
limitations on the availability of equitable remedies.

          Section
4.03 Company Name. The Borrower has not been known by any other company
name in the past five (5) years nor has the Borrower been the surviving company
of a merger or consolidation or acquired all
or substantially all of the assets of any Person during the preceding
five (5) years, except in connection the Acquisition.

          Section
4.04 No Conflict; No Default. The execution, delivery and performance by
the Borrower of the Loan Documents to which it is a party, and the operation of
the Project and construction of the
Additional Improvements, will not (a) violate any provision of any law,
statute, rule or regulation or any order, writ, judgment, injunction, decree,
determination or award of any court, governmental agency, arbitrator or
other Governmental Body presently in effect having applicability to the
Borrower, (b) violate or contravene any provisions of the Organizational
Documents, (c) result in a breach of or constitute a default under any
indenture, loan or credit agreement or any other agreement, lease or instrument
to which the Borrower is a party or by which
it or any of its properties may be bound, or (d) result in the creation of any
Lien on any asset of the Borrower except for a Permitted Lien. The Borrower is
not in default under or in violation
of any such law, statute, rule or regulation, order, writ, judgment, injunction, decree, determination or award or any
such indenture, loan or credit agreement or other agreement, lease or
instrument.

          Section
4.05 Government Consent; Compliance With Laws. No order, Consent, approval, license, authorization or validation of,
or filing, recording or registration with, or exemption by, any Governmental Body is required in connection with the
execution, delivery and performance of, or the legality, validity,
binding effect or enforceability of, the Loan Documents. The use of the Project
complies with all applicable zoning and environmental ordinances, regulations
and restrictive covenants affecting the Project and all requirements for such
use have been satisfied.

Section 4.06 Financial Statements and Condition; Solvency.

          (a)     
The Borrower’s financial statements, as heretofore furnished to the Lender,
have been prepared in accordance with GAAP on a consistent basis and fairly
present the financial condition of the Borrower as at such dates and the
results of their operations and changes in financial position for the
respective periods then ended. The Borrower has no obligation, contingent liability, liability for taxes or long
term lease obligation which is not reflected in such financial
statements or in the notes thereto.

          (b)     
As of the date hereof, and immediately prior
to and after giving effect to the Loans
hereunder and the use of the proceeds thereof, (a) the fair value of the
Borrower’s assets is greater than the
amount of its liabilities (including disputed, contingent and unliquidated liabilities)
as such value is established and liabilities evaluated as required under the
Section 548 of the United Stated Bankruptcy Code, as amended, (b) the present
fair saleable value of the Borrower’s assets is not less than the amount that
will be required to pay the probable liability on its debts as they become absolute and matured, (c) the Borrower is able
to realize upon its assets and pay its debts and other liabilities
(including disputed, contingent and unliquidated liabilities) as they mature in the normal course of business,
(d) the Borrower does not intend to, nor believes that it will, incur debts or liabilities beyond
its ability to pay as such debts and liabilities mature, and (e) the
Borrower is not engaged in business or a transaction, and is not about to
engage in business or a transaction, for which its property would constitute
unreasonably small capital.

          Section
4.07 Litigation. There are no actions, suits or proceedings pending or,
to the knowledge of the Borrower, threatened against or affecting the Borrower,
or any of its property before any court or arbitrator, or any governmental
department, board, agency or other Governmental Body.

          Section
4.08 ERISA. (a) the Borrower does not have an employee benefit plan as defined in Section 3(1) of ERISA, whether or not
subject to ERISA (“Plan”); (b) no assets of the Borrower constitute
assets of any such plan under ERISA regulations or rulings; (c) with respect to any such plan that the Borrower sponsors,
participates in or has fiduciary duties with respect to, the Borrower
has materially complied with all federal and state laws, plan documents and funding requirements; (d) the Borrower does not
sponsor, participate in, or have fiduciary duties with respect to any
defined benefit pension plan subject to Title IV of ERISA or any multi-employer pension plan as defined in Section
3(37)(A) of ERISA or any plan providing medical or other welfare benefits to
retirees or other former employees (except as required by federal or state
law); and (e) the Borrower is not (and has not ever been) a member of a group
of trades or businesses (whether or not
incorporated) that is treated as a single employer under Section 414 of the
Internal Revenue Code.

Section 4.09 O.S.H.A. and Environmental Compliance.

                    (a)     
The Borrower has duly complied with, and its facilities, business, assets, property, leaseholds and equipment are in
compliance in all material respects with, the provisions of the Federal Occupational Safety and Health Act, the
Environmental Protection Act, RCRA and all other Environmental Laws;
there have been no outstanding citations, notices or orders of non-compliance
issued to the Borrower or relating to its business, assets, property,
leaseholds or equipment under any such laws, rules or regulations.

                    (b)     
The Borrower has been issued all federal,
state and local licenses, certificates
or permits relating to all applicable Environmental Laws that Borrower is required
to have as of the date of this Agreement.

                    (c)     
Except as specifically disclosed to the Lender in the Reports as identified on Schedule 4.09(c), to Borrower’s knowledge (i)
there are no releases, spills, discharges, leaks or disposal (collectively
referred to as “Releases”) of Hazardous Substances at, upon, under or within
the Land or any premises owned or leased by the Borrower; (ii) there are no
underground storage tanks or polychlorinated
biphenyls on the Land or any premises owned or leased by the Borrower, (iii) neither the Land nor any premise
owned or leased by the Borrower has ever been used as a treatment,
storage or disposal facility of Hazardous Waste; and (iv) no Hazardous Substances are present on the Land or any premises
owned or leased by the Borrower, excepting such quantities as are handled in accordance with all applicable
manufacturer’s instructions and governmental regulations and in proper
storage containers and as are necessary for the operation of the commercial
business of the Borrower or of its tenants.

          Section
4.10 Regulation U. The Borrower is not engaged in the business of
extending credit for the purpose of purchasing or carrying margin
stock (as defined in Regulation U of the Board
of Governors of the Federal Reserve System) and no part of the proceeds of the
Loans will be used to purchase or
carry margin stock or for any other purpose which would violate any of the
margin requirements of the Board of Governors of the Federal Reserve System.

          Section
4.11 Ownership of Property; Liens. Upon the closing of the Acquisition Agreement,
the Borrower will be the owner of the Land and the Project in fee simple and of
all personal property described in the Mortgage delivered herewith, and has no
knowledge of any unrecorded claims, liens, or encumbrances against the Property
or such personal property other than Permitted Liens.

          Section
4.12 Utilities. To Borrower’s knowledge, all utility services necessary
for the proper operation of the Project for
its intended purpose are available at the Project or will be made available to the Project prior to completion
of construction of the Additional Improvements at standard utility rates and hook-up charges, including without
limitation water supply, storm and sanitary sewer facilities, energy and
communications facilities.

          Section
4.13 Taxes. The Borrower’s federal tax identification number is
20-402-6473. The Borrower has
filed all federal, state and local tax returns and other reports required to be
filed and has paid or made provision for the payment of all taxes due and
payable pursuant to such returns and pursuant to any assessments made
against it or any of its property and all other taxes, fees and other charges
imposed on it or any of its property by any Governmental Body (other than taxes, fees or charges the amount or
validity of which is currently being contested in good faith by
appropriate proceedings and with respect to which reserves in accordance with
GAAP have been provided on the books of the Borrower). No tax Liens have been
filed and no material claims are being
asserted with respect to any such taxes, fees or charges. The provision for taxes on the books of the Borrower are
adequate for all years not closed by applicable statutes, and for its current fiscal year, and the Borrower has no
knowledge of any deficiency or additional assessment in connection
therewith no provided for on its books.

          Section
4.14 Trademarks, Patents, Etc. To Borrower’s knowledge, all patents, patent
applications, trademarks, trademark applications, service marks,
service mark applications, copyrights, copyright applications, design rights,
tradenames, assumed names, trade secrets and licenses
owned or utilized by the Borrower are valid and have been duly registered or
filed with the appropriate Governmental Bodies and constitute all of the
intellectual property rights which are necessary for the operation of its
business; to Borrower’s knowledge, there is no objection to or pending
challenge to the validity of any such patent, trademark, copyright, design
right, tradename, trade secret or license and
the Borrower is not aware of any grounds for any challenge. To Borrower’s knowledge, each patent, patent application,
patent license, trademark, trademark application, trademark license,
service mark, service mark application, service mark license, design right, copyright, copyright application and copyright
license owned or held by the Borrower and all trade secrets use by the
Borrower consist of original material or property developed by such Borrower or
was lawfully acquired by such Borrower from the proper and lawful owner
thereof.

          Section
4.15 Investment Company Act. The Borrower is not an “investment company”
or a company “controlled” by an investment company within the
meaning of the Investment Company Act of 1940, as amended.

          Section
4.16 Partnerships and Joint Ventures. The Borrower is not a party to any
partnership or joint venture.

          Section
4.17 Insurance. The Borrower currently maintains the insurance coverages
required to be maintained
under Section 5.03 hereof. The Borrower does not participate in any retrospective
rating plan, fronting arrangement or other self-insurance or risk assumption
arrangement.

          Section
4.18 Indebtedness. The Borrower has no Indebtedness other than Permitted
Indebtedness.

          Section
4.19 Labor Matters. (a) on the date of this Agreement the Borrower is
not a party to any labor
dispute and there are no strikes, slowdowns, stoppages or walkouts relating to any
labor contracts to which the Borrower is subject; and (b) there is no unfair
labor practice complaint pending against the Borrower or, to the best knowledge
of the Borrower, threatened against the
Borrower, before the National Labor Relations Board or similar foreign entity,
and no grievance or arbitration
proceeding arising out of or under any collective bargaining agreement is so pending against the Borrower or, to the best
knowledge of the Borrower, threatened against the Borrower.

          Section
4.20 Agricultural Lien Matters. No processing, packaging or other work
is performed by any party with respect to inventory of the
Borrower which could give rise to a Lien in favor of such party for amounts due
for the processing, packaging or other work performed. Borrower has not received written notice from any unpaid seller,
supplier, cooperative or agent of such party’s intent to preserve the
benefits of any trust created under any statute, law or regulation (or other mandatory provision of state or local law) that
could either (a) create or give rise
to an agricultural lien (as defined in the Uniform Commercial Code), or (b)
create a Lien against, or impose a trust upon, some portion of
Borrower’s inventory (and/or the accounts receivable
derived therefrom) for the benefit of unpaid sellers, any broker acting on
behalf of any seller, or any
cooperative. Borrower is not a “dealer” or a “broker” as defined in any
agricultural lien statute, and, as such, Borrower does not maintain a
license as a “dealer” or “broker” under any such statute.

          Section
4.21 Material Contracts. Except for the agreements set forth on Schedule
4.21, attached hereto, copies of which have been delivered to Lender, and the
Acquisition Documents, there are no (a)
employment agreements covering the management of the Borrower, (b) collective bargaining agreements or other
similar labor agreements covering any employees of the Borrower, (c)
agreements for managerial, consulting or similar services to which the Borrower is a party or by which it is bound, (d)
agreements regarding the Borrower, its assets or operations or any investment
therein to which any of its equity holders is a party or by which it is bound,
(e) real estate leases, intellectual property licenses or other lease or
license agreements to which the Borrower is a party, either as lessor or
lessee, or as licensor or licensee (other than licenses arising from the purchasing by the Borrower of “off the shelf”
products), (f) customer, distribution, marketing or supply agreements to
which the Borrower is a party, (g) third party billing arrangements to which
the Borrower is a party, or (i) any other agreements or instruments to which the Borrower is a party, and the breach,
nonperformance or cancellation of which, or the failure of which to renew, could reasonably be expected to have a
material adverse effect on the Borrower (collectively “Material
Contracts”). Promptly upon execution of any Material Contract, Borrower
shall provide Lender a copy of such Material Contract.

          Section
4.22 Subsidiaries. The Borrower does not own any stock, partnership
interest, limited liability company interests or other equity securities or
ownership in any other business entity.

          Section 4.23
Anti-Terrorism Laws.

	
  

 	
  

 
	
  

 	
           (a)     General. Neither the Borrower nor any Affiliate of the Borrower, is in
 violation of any Anti-Terrorism Law or
 engages in or conspires to engage in any transaction that evades or avoids, or has the purpose of evading or
 avoiding, or attempts to violate, any of the prohibitions set forth in
 any Anti-Terrorism Law.

 

	
  

 	
  

 
	
  

 	
           (b)      
 Executive Order No. 13224.

 

	
  

 	
  

 	
  

 
	
  

 	
  

 	
           (i)
 Neither the Borrower nor any Affiliate of the Borrower, or their respective agents acting or benefiting in any
 capacity in connection with the Loans or other transactions hereunder,
 is any of the following (each a “Blocked Person”):

 

	
  

 	
  

 	
	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

	
  

 	
 (x)

 	
 a Person that is listed in the annex to, or
 is otherwise subject to the
 provisions of, the Executive Order No. 13224;

 
	
  

 
	
  

 	
  

 	
  

	
  

 	
 (xi)

 	
 a Person owned or controlled by, or acting
 for or on behalf of, any Person that is listed in the annex to, or is otherwise subject
 to the provisions of, the Executive Order No. 13224;

 
	
  

 
	
  

 	
  

 	
  

	
  

 	
 (xii)

 	
 a Person or entity with which the Lender is
 prohibited from dealing or otherwise engaging in any
 transaction by any Anti-Terrorism Law;

 
	
  

 
	
  

 	
  

 	
  

	
  

 	
 (xiii)

 	
 a Person or entity that commits, threatens or conspires to commit or supports “terrorism” as defined in the
 Executive Order No. 13224;

 
	
  

 
	
  

 	
  

 	
  

	
  

 	
 (xiv)

 	
 a Person or entity that is named as a “specially designated national”
 on the most current list published by the U.S. Treasury Department Office of Foreign Asset Control at its official
 website or any replacement website or other replacement official publication
 of such list, or

 
	
  

 
	
  

 	
  

 	
	
  

 	
 (xv)

 	
 a Person or entity who is affiliated or
 associated with a Person or entity listed above.

 

	
  

 	
  

 	
  

 
	
  

 	
  

 	
           (ii)
 The Borrower, or to the knowledge of the Borrower, none of its agents
 acting in any capacity in connection with the Loans or other transactions
 hereunder (i) conducts any business or engages in making or receiving any contribution of funds, goods or
 services to or for the benefit of any Blocked Person, or (ii) deals
 in, or otherwise engages in any transaction
 relating to, any property or interests in property blocked pursuant to
 the Executive Order No. 13224.

 

          Section
4.24 Conflicting Agreements. No provision of any mortgage, indenture, contract, agreement, judgment, decree or order
binding on the Borrower or affecting the Collateral conflicts with, or
requires any Consent which has not already been obtained to, or would in any way prevent the execution, delivery
or performance of, the terms of this Agreement or the other Loan
Documents.

          Section
4.25 Application of Certain Laws and Regulations. Neither the Borrower
nor any Affiliate of Borrower is subject to any statute, rule or regulation
which regulates the incurrence of any Indebtedness, including
without limitation, statutes or regulations relative to common or interstate
carriers or to the sale of electricity, gas, steam, water, telephone, telegraph
or other public utility services.

          Section
4.26 Delivery of Acquisition Documents. The Lender has received complete
copies of the Acquisition Documents (including all exhibits,
schedules and disclosure letters referred to therein or delivered pursuant
thereto, if any) and all amendments thereto, waivers relating thereto and other
side letters or agreements affecting the terms thereof. None of such documents and agreements has been amended or
supplemented, nor have any of the provisions thereof been waived, except
pursuant to a written agreement or instrument which has heretofore been
delivered to the Lender.

          Section
4.27 True and Complete Disclosure. All factual information (taken as a
whole) heretofore or contemporaneously
furnished by or on behalf of the Borrower to the Lender (including,
without limitation, all information contained in the Loan Documents) for
purposes of or in connection with this Agreement or any transactions
contemplated herein is, and all other such
factual information (taken as a whole) furnished by or on behalf of the
Borrower to the Lender after the date hereof will be, true and accurate
in all material respects on the date as of which
such information is dated or certified and not incomplete by omitting to state
any material fact necessary to make such information, taken as a whole, not
misleading at such time in light of the circumstances under which such
information was provided. There is no fact known to the Borrower which materially and adversely affects the business, operations,
property, assets, nature of assets, liabilities, condition (financial or
otherwise) or prospects of the Borrower, taken as a whole, which has not been
disclosed herein or in such other documents, certificates and written statements furnished to the Bank for use
in connection with the transactions contemplated hereby.

ARTICLE V

AFFIRMATIVE COVENANTS

          From the
date of this Agreement and thereafter until all obligations of the Borrower to
the Lender have been paid in full, the Borrower will do all of
the following:

5.01 Financial Statements and Reports. Furnish to the Lender:

          (a)     
As soon as available and in any event within 120 days after the end of each fiscal year of the Borrower, the annual
financial statements of the Borrower prepared
in conformity with GAAP, consisting of at least statements of income, cash flow, changes in financial position and member
equity, and a consolidated balance sheet as at the end of such year,
setting forth in each case in comparative form corresponding figures from the
previous annual financial statements audited by independent certified public accountants of recognized standing
selected by the Borrower and reasonably acceptable to the Lender, together with any management letters,
management reports or other
supplementary comments or reports to the Borrower or its board of directors furnished
by such accountants.

          (b)     
As soon as available and in
any event within 30 days after the end of each calendar month, a copy of the unaudited financial statement of the
Borrower prepared in the same manner as the financial statements
referred to in Section 5.01(a), signed by the Borrower’s
chief financial officer or other officer of similar position, consisting of at
least consolidated statements of income, cash flow, changes in financial
position and member equity for the Borrower
for such month and for the period from the beginning of the current
fiscal year to the end of such month, and a consolidated balance sheet of the
Borrower as at the end of such month.

          (c)     
Immediately upon becoming aware of any Default or Event of Default, a notice
describing the nature thereof and what action the Borrower proposes to take
with respect thereto.

          (d)     
Immediately upon becoming
aware of the occurrence thereof, notice of the institution of any litigation,
arbitration or governmental proceeding, or the rendering of a judgment or decision in such litigation or
proceeding, which is material to the Borrower

          (e)     Immediately upon becoming aware of the occurrence
thereof, notice of any breach or default by the Borrower or any other
party under any Material Contract.

          (f)     
As soon as available and in
any event within 30 days after the end of each calendar month, a report
of any and all commodities transactions, including commodities hedging
transactions engaged in by the Borrower during such calendar month.

          (g)     
Promptly upon the mailing or
filing thereof, copies of all reports (including the final form of any
financial statements and reports) and proxy statements mailed to the Borrower’s
members generally, and copies of all registration statements, periodic reports and other documents filed with
the Securities and Exchange Commission (or any successor thereto) or any
national securities exchange.

          (h)     From time to time, such other information regarding
the business, operation and financial condition of the Borrower, as the
Lender may reasonably request.

          Section
5.02 Organizational Existence. Maintain its limited liability company
existence under the laws of
its jurisdiction of organization and its qualification to transact business in
each jurisdiction in which the
character of the properties owned, leased or operated by it or the business
conducted by it makes such qualification necessary.

          Section
5.03 Insurance. Maintain with financially sound and reputable insurance companies such insurance as set forth on Exhibit A
attached hereto, and such other insurance in such amounts and against such hazards as is customary in the case of
reputable companies engaged in the same or similar business and
similarly situated or as the Lender may reasonably request from time to time.

          Section
5.04 Payment of Taxes and Claims. File all tax returns and reports which
are required by law to be filed by it and
pay before they become delinquent all taxes, assessments and governmental charges and levies imposed upon it
or its property and all claims or demands of any kind (including,
without limitation, those of suppliers, mechanics, carriers, warehouses,
landlords and other like Persons); provided that the foregoing items
need not be paid if they are being contested
in good faith by appropriate proceedings, and as long as the Borrower’s title
to its property is not materially adversely affected, its use of such
property in the ordinary course of its
business is not materially interfered with and adequate reserves with respect
thereto have been set aside on the Borrower’s books in accordance with
GAAP.

          Section
5.05 Inspection. Permit Lender or Lender’s agent to visit and inspect
any of its properties, company books and financial records, to examine and to
make copies of its books of accounts and other financial records, and to
discuss the affairs, finances and accounts of the Borrower with, and to be
advised as to the same by, its officers at such reasonable times and intervals as Lender may designate from time to
time. The inspections under this Section 5.05 shall be at the expense of
Lender; provided, however, if the Borrower is in Default, the costs of the
inspections under this Section 5.05 shall be at Borrower’s sole cost and
expense.

          Section
5.06 Maintenance of Properties. Maintain its properties used or useful
in the conduct of its business in good condition, repair and working order, and
supplied with all necessary
equipment, and make all necessary repairs, renewals, replacements, betterments
and improvements thereto, all as may be necessary so that the business
carried on in connection therewith may be properly and advantageously conducted
at all times.

          Section
5.07 Books and Records. Keep adequate and proper records and books of account
in which full and correct entries will be made of its dealings, business and
affairs.

          Section
5.08 Compliance. Comply with all laws, rules, regulations, orders,
writs, judgments, injunctions,
decrees or awards to which it may be subject and not be or become subject
at any time to any law, regulation, or list of any government agency
(including, without limitation, the U.S. Office of Foreign Asset Control list)
that prohibits or limits Lender from making
any advance or extension of credit to the Borrower or from otherwise conducting
business with the Borrower.

          Section
5.09 Environmental Matters.

                                  (a)     
The Borrower shall ensure the Land remains in compliance with all Environmental
Laws and it shall not place or permit to be placed any Hazardous Substances on the Land except as permitted by applicable laws
or appropriate law or appropriate Governmental Bodies.

                                  (b)     
Borrower shall establish and maintain a system to assure and monitor compliance with all applicable
Environmental Laws which systems shall include periodic reviews of such
compliance.

                                  (c)     
The Borrower shall (i) employ in connection with the use of the Land appropriate technology necessary to maintain
compliance with any applicable Environmental Laws and (ii) dispose of
any and all Hazardous Waste generated at the Land only at facilities and with carriers that maintain valid permits under RCRA
and any other applicable Environmental
Laws. The Borrower shall use its best efforts to obtain certificates of
disposal, such as hazardous waste manifest receipts, from all treatment,
transport, storage or disposal facilities or operators employed by the
Borrower in connection with the transport or disposal of any Hazardous Waste
generated at the Land.

                                  (d)     
In the event that the Borrower obtains,
gives or receives notice of any
Release or threat of Release of a reportable quantity of any Hazardous
Substances at the Land (any such event being hereinafter referred to as
a “Hazardous Discharge”) or receives any notice of violation, request for
information or notification that it is potentially responsible for investigation or cleanup of environmental
conditions at the Land, demand letter or complaint, order, citation, or other written notice with
regard to any Hazardous Discharge or violation of Environmental Laws
affecting the Land or any of the Borrower’s interest therein (any of the
foregoing is referred to herein as an “Environmental Complaint”) from any
Person, including any state agency
responsible in whole or in part for environmental matters in the state in which
the Land is located or the United
States Environmental Protection Agency (any such Person or entity hereinafter the “Authority”), then the Borrower
shall, within five (5) Business Days, give written notice of same to the
Lender detailing facts and circumstances of which the Borrower is aware giving
rise to the Hazardous Discharge or Environmental Complaint. Such information is
to be provided to allow the Lender to protect its security interest in the Land
and the Collateral and is not intended to create nor shall it create any
obligation upon the Lender with respect thereto.

                                  (e)     
The Borrower shall promptly forward to the Lender copies of any request for
information, notification or potential liability, demand letter relating to
potential responsibility with respect to the investigation or cleanup of
Hazardous Substances at any other site owned, operated or used by the Borrower
to dispose of Hazardous Substances and shall continue to forward copies of
correspondence between the Borrower and the Authority regarding such claims to
the Lender until the claim is settled. The Borrower shall promptly forward to
the Lender copies of all documents and reports concerning a Hazardous Discharge
at the Land that the Borrower is required to
file under any Environmental Laws. Such information is to be provided solely to allow the Lender to protect the
Lender’s security interest in the Land and the Collateral.

                                  (f)     
The Borrower shall respond promptly to any
Hazardous Discharge or Environmental
Complaint and take all necessary action in order to safeguard the health of any
Person and to avoid subjecting the Collateral or Land to any Lien. If
the Borrower shall fail to respond promptly
to any Hazardous Discharge or Environmental Complaint or the Borrower shall fail to comply with any of the requirements
of any Environmental Laws, the Lender may, but without the obligation to do so, for the sole purpose of protecting
Lender’s interest in Collateral: (A)
give such notices or (B) enter onto the Land (or authorize third parties to
enter on the Land) and take such actions as the Lender (or such third
parties as directed by the Lender) deem
reasonably necessary or advisable, to clean up, remove, mitigate or otherwise
deal with any such Hazardous Discharge or Environmental Complaint. All
reasonable costs and expenses incurred by the Lender (or such third parties) in
the exercise of any such rights, including any sums paid in connection with any judicial or administrative
investigation or proceedings, fines and penalties, together with
interest thereon from the date expended at the Default Rate shall be paid upon
demand by the Borrower, and until paid shall be added to and become a part of
the Obligations secured by the Liens created
by the terms of this Agreement, the Security Documents or any other
agreement between the Lender and the Borrower.

                                  (g)     
Promptly upon the written request of the Lender after a Hazardous
Discharge or Environmental Complaint, the
Borrower shall provide the Lender, at the Borrower’s expense, with an
environmental site assessment or environmental audit report prepared by an
environmental engineering firm acceptable in the reasonable opinion of the Lender,
to assess with a reasonable degree of certainty the existence of a Hazardous
Discharge and the potential costs in connection with abatement, cleanup and
removal of any Hazardous Substances found on,
under, at or within the Land. Any report or investigation of such Hazardous
Discharge proposed and acceptable to an appropriate Authority that is charged
to oversee the cleanup of such Hazardous Discharge shall be acceptable to the
Lender. If such estimates, individually or in the aggregate, exceed $100,000,
the Lender shall have the right to require
the Borrower to post a bond, letter of credit or other security reasonably
satisfactory to the Lender to secure payment of these costs and
expenses.

                                  (h)     
The Borrower shall complete all actions set forth in the Holdback Reserve Agreement in compliance with the time
schedules and other requirements established in said such agreement, all applicable laws and regulations, and the
appropriate requirements of any Governmental Bodies.

                                  (i)     
The Borrower shall defend and indemnify the Lender and hold the Lender and its respective employees, agents,
directors and officers harmless from and against all loss, liability,
damage and expense, claims, costs fines and penalties, including attorneys’
fees, suffered or incurred by the Lender under or on account of any
Environmental Laws, including, without
limitation, the assertion of any Lien thereunder, with respect to any Hazardous
Discharge, the presence of any
Hazardous Substances affecting the Land, whether or not the same originates or emerges from the Land or any
contiguous real estate, including any loss of value of the Land as a result of the foregoing except to the extent such
loss, liability, damage and expense
is attributable to any Hazardous Discharge resulting from actions on the part
of the Lender, provided that this indemnity shall not be applicable to
the presence of any Hazardous Substance on
the Land to the extent that (1) such Hazardous Substance is disclosed in the Reports
at Closing and (2) the Borrower takes all necessary action to clean up, remove,
mitigate or otherwise deal with any such
Hazardous Substances in compliance with the requirements of this Agreement, all applicable laws and
regulations, and the requirements of Governmental Bodies. The Borrower’s obligations under this
Section 5.09 shall arise upon the discovery of the presence of any
Hazardous Substances at the Land, whether or not any federal, state or local environmental agency has taken or threatened any
action in connection with the presence of any Hazardous Substances. The Borrower’s obligation and the indemnifications
hereunder shall survive the termination of this Agreement.

          Section
5.10 Construction of Additional Improvements. (a) Commence construction
of the Additional Improvements
on or before the Commencement Date, (b) diligently proceed with construction
of the Additional Improvements according to the Plans and Specifications and in
accordance with all applicable laws and
ordinances, (c) cause the Additional Improvements to be completed by the
Completion Date, (d) require each Contractor to comply with all rules,
regulations, ordinances and laws bearing on its conduct of work on the Project.

          Section
5.11 Accounts. Maintain all operating accounts (i.e., accounts for
depositing revenues and paying expenses) with the Depository Institution until
all amounts owing to the Lender under this Agreement, the Note and the Security
Documents have been fully repaid.

          Section
5.12 Appraisal. Within forty-five (45) days after written request from
the Lender, provide Lender an updated appraisal of the Project,
the cost of which shall be born by Borrower if at the time of Lender’s notice
there exists any Default or Event of Default.

          Section
5.13 Intentionally Deleted.

          Section
5.14 Conduct of Business and Maintenance of Existence and Assets. (a)
Conduct continuously and operate actively
its business according to good business practices and maintain all of its properties useful or necessary in its
business in good working order and condition (reasonable wear and tear
excepted and except as may be disposed of in accordance with the terms of this Agreement), including, without limitation, all
licenses, patents, copyrights, design rights, tradenames, trade secrets and trademarks and take all actions necessary
to enforce and protect the validity
of any intellectual property right or other right included in the Collateral;
(b) keep in full force and effect
its existence and comply in all material respects with the laws and regulations
governing the conduct of its business
where the failure to do so could reasonably be expected to have a Material Adverse Effect on the Borrower;
and (c) make all such reports and pay all such franchise and other taxes and
license fees and do all such other acts and things as may be lawfully required to maintain its rights, licenses,
leases, powers and franchises under the laws of the United States or any
political subdivision thereof.

          Section
5.15 Violations. Promptly notify the Lender in writing of any violation
of any law, statute, regulation
or ordinance of any Governmental Body, or of any agency thereof, applicable
to the Borrower which could reasonably be expected to have a Material Adverse
Effect on the Borrower.

          Section
5.16 Execution of Supplemental Instruments. Execute and deliver to the
Lender from time to time, upon
demand, such supplemental agreements, statements, assignments and transfers, or instructions or documents relating
to the Collateral, and such other instruments as the Lender may request, in order that the full intent
of this Agreement may be carried into effect.

          Section
5.17 Payment of Indebtedness. Pay, discharge or otherwise satisfy at or
before maturity (subject,
where applicable, to specified grace periods and, in the case of the trade
payables, to normal payment
practices) all of its obligations and liabilities of whatever nature, except
when the failure to do so could not
reasonably be expected to have a Material Adverse Effect or when the amount or validity thereof is currently being
contested in good faith by appropriate proceedings and the Borrower shall have provided for such reserves
as the Lender may reasonably deem proper and necessary, subject at all times to
any applicable subordination agreement in favor of the Lender, the Subordinated
Intercreditor Agreement, and the Working Capital Intercreditor Agreement.

          Section
5.18 Holdback Reserve. Comply at all times with the terms and conditions
of the Holdback Reserve Agreement.

          Section
5.19 Debt Service Reserve. Maintain at all times the Debt Service
Reserve, pursuant to the Debt Service Reserve and Security Agreement and
perform all of Borrower’s obligations under the Debt Service Reserve and
Security Agreement.

          Section
5.20 Additional Improvements Escrow. Maintain at all times the
Additional Improvements Escrow, pursuant to the terms and
conditions of the Additional Improvements Escrow
Agreement and perform all of Borrower’s obligations under the Additional
Improvements Escrow Agreement.

          Section
5.21 Debt to Equity Ratio. Maintain at all times a Debt to Equity Ratio
of 1.0 to 1.0.

          Section
5.22 Additional Deliveries. The Borrower shall deliver to Lender each of
the following, on or before
the earlier of (i) the date that is ninety (90) days after the Closing Date, or
(ii) the date Borrower commences construction of the Additional
Improvements:

          (a)     
Permits. Copies of all building permits and such other licenses and permits
as may be required by any Governmental Body to construct the Additional
Improvements and operate the Project.

          (b)      Builder’s Risk Insurance. Copies of the policies of builder’s risk insurance (including business interruption
insurance) and comprehensive general liability insurance and a certificate of the worker’s compensation insurance as
required under Section 5.03 of this Agreement, with all such insurance
in full force and effect.

          (c)     
Repair and Replacement Plan. The Repair and Replacement Plan related to
the repair of the Project as set forth on Schedule 8.6(a) of the Acquisition
Agreement, mutually acceptable to Borrower
and Lender pursuant to the terms of the Acquisition Agreement.

ARTICLE VI

NEGATIVE COVENANTS

The Borrower agrees that, subject to the terms and conditions of this
Agreement, without the prior written consent of the Lender, it
shall not:

          Section
6.01 Transfers. Voluntarily, involuntarily or by operation of law agree
to, cause, suffer or permit
(i) any sale, transfer, lease, sublease or conveyance of any interest of the Borrower,
legal or equitable, in the Project; (ii) any sale, transfer or encumbrance of
any of the member interests in the Borrower, except for sales, transfers or
encumbrances when aggregated with all other
sales, transfers or encumbrances of membership interests of Borrower during the
previous three months will not result
in the sale, transfer or encumbrance of more than a majority of the outstanding membership interests of
Borrower during such three month period; or (iii) any mortgage, pledge,
encumbrance or Lien to be outstanding against the Project or any portion thereof,
or any security interest to exist therein, except for Permitted Liens. If the
Borrower breaches the foregoing covenant, the
Lender may, at its election, declare all amounts owing under this Agreement, the Note and the Security
Documents to be immediately due and payable, without notice to the
Borrower (which notice the Borrower hereby expressly waives), and upon such declaration all such amounts shall be
immediately due and payable. No transfer, conveyance, lease, sale or
other disposition shall relieve the Borrower from personal liability for its obligations hereunder or under the Note,
whether or not the transferee assumes such obligations. The Lender may, without notice to the Borrower, deal with
any successor owner of all or any portion of the Project in the same
manner as with the Borrower, without in any way discharging the liability of
the Borrower hereunder or under the Note.

          Section
6.02 Modifications to Material Contracts. Without the prior written
consent of the Lender, which
consent shall not be unreasonably withheld, agree or consent to any change in the
terms of any Material Contract.

          Section
6.03 Liens. Not create, incur or suffer to exist any Lien, except for
Permitted Liens.

          Section
6.04 Indebtedness. Not incur, create, assume, permit or suffer to exist,
any Indebtedness except Permitted Indebtedness. Prior to obtaining any Working
Capital Loan Borrower shall deliver to Lender a fully executed copy of the
Working Capital Intercreditor Agreement. Prior to obtaining any Subordinated
Loan Borrower shall deliver to Lender a fully executed copy of the Subordinated
Intercreditor Agreement.

          Section
6.05 Mergers and Acquisitions. Not consolidate with or merge into any
other Person, or permit any other Person to merge into it, or acquire (in a
transaction analogous in purpose or effect
to a consolidation or merger) all or substantially all of the assets or stock
of any other Person.

          Section
6.06 Transactions With Affiliates. Directly or indirectly, purchase,
acquire or lease any property from, or sell, transfer or lease
any property to, or otherwise deal with any Affiliate,
except transactions in the ordinary course of business, on an arm’s length
basis on terms no less favorable than
terms which would have been obtainable from a Person other than an
Affiliate.

          Section
6.07 Fixed Charge Coverage Ratio. Commencing with the calendar month ending on December 31, 2012, allow the Fixed
Charge Coverage Ratio to be less than 1.15 to 1.0, as determined on the last day of each calendar
month both (i) for such calendar month and (ii) for the immediately
preceding twelve month period.

          Section
6.08 Distributions. Make any distributions to members of the Borrower,
or otherwise permit any redemption or return of capital to any member of the
Borrower, except as expressly permitted
pursuant in this Section 6.08. The Borrower may make periodic distributions to
members of the Borrower provided that (i) such distributions are made solely
from earnings of the Borrower and do not constitute a redemption of a member’s
equity interest or return of capital, (ii) immediately prior to and
immediately after such distribution there exists no Default or Event of Default and (iii) immediately prior to and immediately
after such distribution, a minimum of $150,000 remains on deposit in the
Debt Service Reserve.

          Section
6.09 Anti-Terrorism Laws. The Borrower and its Affiliates and agents
shall not (i) conduct any
business or engage in any transaction or dealing with any Blocked Person,
including the making or receiving any contribution of funds, goods or
services to or for the benefit of any Blocked Person, (ii) deal in, or
otherwise engage in any transaction relating to, any property or interests in property blocked pursuant to
Executive Order No. 13224; or (iii) engage in or conspire to engage in
any transaction that evades or avoids, or has the purpose of evading or
avoiding, or attempts to violate, any of the
prohibitions set forth in Executive Order No. 13224, the USA Patriot Act or any other Anti-Terrorism Law. The Borrower
shall deliver to the Lender any certificates or other evidence requested
from time to time by the Lender in its sole discretion, confirming the
Borrower’s compliance with this Section 6.09.

          Section
6.10 Guarantees. Become liable upon the obligations of any Person by assumption, endorsement or guaranty thereof or
otherwise (other than to the Lender) except (a) guarantees made in the ordinary course of business up to an aggregate
amount of $100,000, and (b) the endorsement of checks in the ordinary
course of business.

          Section
6.11 Investments. Except as otherwise specifically consented to in
writing by the Lender,
purchase or acquire obligations or stock of, or any other interest in, any
Person, except (a) obligations issued
or guaranteed by the United States of America or any agency thereof, (b) commercial paper with maturities of not more than
180 days and a published rating of not less than A-1 or P-1 (or the equivalent
rating), (c) certificates of time deposit and bankers’ acceptances having maturities of not more than 180 days and
repurchase agreements backed by United States government securities of a commercial bank if (i) such bank has a
combined capital and surplus of at
least $500,000,000 or such certificates of deposits do not exceed FDIC limits,
or (ii) its debt obligations, or
those of a holding company of which it is a Subsidiary, are rated not less than
A (or the equivalent rating) by a nationally recognized investment
rating agency, and (d) U.S. money market
funds that invest solely in obligations issued or guaranteed by the United
States of America or an agency thereof.

          Section
6.12 Plans. The Borrower will not permit any event to occur or condition
to exist which would permit any Plan to
terminate under any circumstances which would cause the Lien provided for in Section 4068 of ERISA to attach to
any assets of the Borrower; and the Borrower will not permit, as of the most recent valuation date for any Plan
subject to Title IV of ERISA, the present value (determined on the basis
of reasonable assumptions employed by the independent actuary for such Plan and previously furnished in writing to the
Lender) of such Plan’s projected benefit obligations to exceed the fair
market value of such Plan’s assets.

          Section
6.13 Change in Nature of Business. The Borrower will not engage in any material line of business substantially different
from those lines of business carried on by it on the date hereof or any business similarly related to
or which constitutes a reasonable extension thereof.

          Section
6.14 Subsidiaries. The Borrower shall not form any Subsidiary or enter
into any partnership, joint venture or similar arrangement.

          Section
6.15 Negative Pledges. The Borrower will not enter into any agreement,
bond, note or other instrument with or for the benefit of any
Person other than the Lender which would (i)
prohibit the Borrower from granting, or otherwise limit the ability of the
Borrower to grant, to the Lender any Lien on any assets or properties of
the Borrower, or (ii) require the Borrower to grant
a Lien to any other Person if the Borrower grants any Lien to the Lender other
than, in each case, (a) in connection with any document or instrument
governing capital leases and purchase money
expenditures or other Indebtedness permitted by this Agreement, provided that
any such restriction contained
therein relates only to the asset or assets that are the subject thereof and (b)
licenses and contracts providing that
the granting of such Lien in the right, title or interest of the Borrowers
therein would be prohibited and would, in and of itself, cause or result in a
default hereunder enabling another Person party to such license or contract to
enforce any remedy with respect thereto.

          Section
6.16 Fiscal Year and Accounting Changes. Change its fiscal year from an October 31 fiscal year end or make any change (i)
in accounting treatment and reporting practices except as required by
GAAP or (ii) in tax reporting treatment except as required by law.

          Section
6.17 Capital Expenditures. Except for the Additional Improvements,
contract for, purchase or make
any expenditure or commitments for fixed or capital assets (including
capitalized leases) in any fiscal year in an aggregate amount in excess
of $1,000,000.

          Section
6.18 Amendment of Organizational Documents. Amend, modify or waive any term
or material provision of its Organizational Documents unless required by law;
provided, however, the Lender’s consent to
any amendment, modification or waiver shall not be unreasonably withheld.

          Section
6.19 Prepayment of Indebtedness. Except as otherwise permitted pursuant
to Section 6.20, at any time,
directly or indirectly, prepay any Indebtedness (other than to Lender), or repurchase,
redeem, retire or otherwise acquire any Indebtedness of the Borrower.

          Section
6.20 Indebtedness. After and during the continuance of an Event of
Default, directly or indirectly, pay, prepay, repurchase, redeem,
retire or otherwise acquire, or make any payment on account of any principal
of, interest on or premium payable in connection with the repayment or
redemption of the Subordinated Loan, the Working Capital Loan or any other
Permitted Indebtedness.

          Section
6.21 Loans. Make advances, loans or extensions of credit to any Person, including without limitation, any parent,
Subsidiary or Affiliate except, subject to the terms and conditions of
this Agreement (a) with respect to the extension of commercial trade credit in connection with the sale of inventory in the
ordinary course of its business and (b) loans made to ethanol producers to finance the installation of
corn oil extraction units, provided that the maximum principal amount of such loans described in this
subparagraph (b) shall not exceed $6,000,000.

ARTICLE VII

EVENTS OF DEFAULT AND RIGHTS AND REMEDIES

          Section
7.01 Events of Default. Each of the following shall constitute an Event of Default.

	
  

 	
  

 	
  

 
	
  

 	
           (a)     The Borrower shall fail to pay any interest or principal on the Obligations when due, whether at maturity or by reason of
 acceleration pursuant to the terms of this Agreement or the Note;

 
	
  

 	
  

 	
  

 
	
  

 	
           (b)     Any representation or warranty made by the Borrower herein, in
 the Security Documents or in any financial
 statement, certificate or report furnished at any time pursuant to
 this Agreement or the Security Documents shall prove to have been misleading or untrue in any material respect as
 of the time such representation or warranty was made;

 
	
  

 	
  

 	
  

 
	
  

 	
           (c)     The Borrower shall be in default under Sections
 5.19, 5.20, 5.22 or any provision of Article 6 of this Agreement;

 
	
  

 	
  

 	
  

 
	
  

 	
           (d)     The Borrower shall be in default under the Holdback Reserve Agreement.

 
	
  

 	
  

 	
  

 
	
  

 	
           (e)     The Borrower shall fail to (i) furnish financial information when due or when
 requested which is unremedied for a period of fifteen (15) days, or (ii)
 permit the inspection of its books and records;

 
	
  

 	
  

 	
  

 
	
  

 	
           (f)     The Borrower shall fail or neglect to duly observe or perform,
 any of the terms, conditions, covenants or
 agreements required to be observed or performed by the Borrower
 hereunder (other than terms, conditions, covenants or agreements otherwise
 specifically dealt with in this Article VII), except for a failure or neglect
 of the Borrower to perform, keep or observe any term, provision, condition or
 covenant which is cured within thirty (30) days from the occurrence of such
 failure or neglect;

 
	
  

 	
  

 	
  

 
	
  

 	
           (g)     The Borrower shall be in
 default under or in breach of any of the covenants contained in any of the Security Documents and such default
 or breach shall not be cured or
 waived within the period or periods of grace, if any, applicable thereto;

 
	
  

 	
  

 	
  

 
	
  

 	
           (h)     The Project shall be materially damaged or destroyed by fire or
 other casualty and the loss, in the reasonable judgment of the Lender, shall
 not be adequately covered by insurance actually collected or in the process
 of collection or by other funds available to the Borrower;

 
	
  

 	
  

 	
  

 
	
  

 	
           (i)     
 There shall have been a cessation of the making of the Additional Improvements
 for any period after the date of commencement of the making of the Additional
 Improvements in excess of twenty (20) successive calendar days, unless the
 conditions of each of subparagraphs (1) and (2) below shall have been
 satisfied:

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
           (1)     the
 cessation of the making of the Additional Improvements shall have been caused
 by conditions beyond the control of the Borrower, including, without limitation, acts of God or the elements,
 fire, strikes, labor disputes, delays in delivery of any material;

 

	
  

 	
  

 	
  

 
	
  

 	
  

 	
           (2)     from time to time upon the Lender’s request
 therefor during any such cessation of the making of the Additional
 Improvements, the Borrower shall furnish to
 the Lender satisfactory evidence that (notwithstanding such cessation of the making
 of the Additional Improvements) the completion of the Additional Improvements
 can be accomplished on or before the Completion Date plus an extension for
 the number of days of the cessation.

 
	
  

 	
  

 	
  

 
	
  

 	
           (j)     The Borrower shall fail to comply with any requirement of any Governmental Body within thirty (30) days after
 notice in writing of such requirement shall be given to the Borrower by such Governmental Body, subject to any
 rights of the Borrower to contest such requirement as provided in the
 Mortgage or this Agreement;

 
	
  

 	
  

 	
  

 
	
  

 	
           (k)     Any judgment or judgments are
 rendered or judgment Liens filed against the Borrower for an aggregate amount in excess of $150,000 which within
 thirty (30) days of such rendering or filing is not either satisfied,
 stayed or discharged of record; provided,
 however, it will not be a default if the judgment is being contested in good
 faith by appropriate proceedings or
 if adequate reserves with respect thereto have been set aside on the
 Borrower’s books in accordance with GAAP;

 
	
  

 	
  

 	
  

 
	
  

 	
           (l)     A petition in bankruptcy or for reorganization or for an arrangement under any
 bankruptcy or insolvency law or for a custodian, receiver or trustee for any
 of its property shall be filed by the
 Borrower, or a petition in bankruptcy or for reorganization or for an arrangement under any bankruptcy or
 insolvency law or for a custodian, receiver or trustee of any of the
 Borrower’s property shall be filed against the Borrower and shall not be
 dismissed within sixty (60) days, or a custodian, receiver or trustee of any
 property of the Borrower shall be appointed and shall not be discharged within
 sixty (60) days, or the Borrower shall make an assignment for the benefit of
 creditors or generally shall not pay its debts as they become due, or the Borrower shall be adjudged insolvent
 by any state or federal court of
 competent jurisdiction, or an attachment or execution shall be levied against
 any substantial portion of the property of the Borrower and shall not
 be discharged within sixty (60) days;

 
	
  

 	
  

 	
  

 
	
  

 	
           (m)    The Borrower shall admit in writing its inability, or be generally unable, to
 pay its debts as they become due or cease operations of its
 present business;

 
	
  

 	
  

 	
  

 
	
  

 	
           (n)     The Borrower shall be in default under any Material Contract
 and, in the Lender’s reasonable opinion,
 such default cannot be remedied within the grace periods (if any) afforded the Borrower under such documents,
 and, in the Lender’s reasonable opinion, such default will have a
 material adverse effect on the Borrower;

 
	
  

 	
  

 	
  

 
	
  

 	
           (o)     The Borrower shall be dissolved or terminated;

 
	
  

 	
  

 	
  

 
	
  

 	
           (p)     The Borrower, any of its Affiliates shall be in default under
 any other agreement with the Lender
 (whether in connection with the Loans or otherwise) and any required notice
 shall have been given and any time in which to cure the default shall have elapsed.

 

	
  

 	
  

 	
  

 
	
  

 	
           (q)     Any Lien created by the
 Mortgage or any other Security Document for any reason ceases to be or
 is not a valid and perfected Lien having a first priority security interest
 (except as may be otherwise determined by an intercreditor or subordination
 agreement)

 
	
  

 	
  

 	
  

 
	
  

 	
           (r)     An event of default caused
 by or related to Borrower has occurred and been declared under the
 Acquisition Documents which default shall not have been cured or waived
 within any applicable grace period.

 
	
  

 	
  

 	
  

 
	
  

 	
           (s)     Any material provision of
 this Agreement shall, for any reason, cease to be valid and binding on the Borrower, or the
 Borrower shall so claim in writing to the Lender.

 
	
  

 	
  

 	
  

 
	
  

 	
           (t) (i) Any Governmental Body shall (A) revoke, terminate, suspend or adversely modify any license, permit, patent,
 trademark or tradename of the Borrower, the continuation of which is material
 to the continuation of the Borrower’s business or (B) commence
 proceedings to suspend, revoke, terminate or adversely modify any such
 license, permit, trademark, tradename or patent and such proceedings shall
 not be dismissed or discharged within sixty
 (60) days, or (C) schedule or conduct a hearing on the renewal of any
 license, permit, trademark, tradename or patent necessary for the continuation of the Borrower’s business and the
 staff of such Governmental Body issues a report recommending the
 termination, revocation, suspension or material, adverse modification of such
 license, permit, trademark, tradename or patent; (ii) any agreement which is necessary or material to the operation
 of the Borrower’s business shall be revoked or terminated and not
 replaced by a substitute acceptable to the Lender within thirty (30) days
 after the date of such revocation or termination, and such revocation or termination and non-replacement would reasonably
 be expected to have a Material Adverse Effect on the Borrower.

 

	
  

 	
  

 	
  

 
	
  

 	
           (u)     Any
 portion of the Collateral or the Land shall be seized or taken by a Governmental Body, or the Borrower or the title
 and rights of the Borrower which is the owner of any material portion
 of the Collateral or the Land shall have become the subject matter of litigation which might, in the
 opinion of the Lender, upon final determination, result in impairment or loss of the security
 provided by this Agreement or any other Loan Document.

 
	
  

 	
  

 	
  

 
	
  

 	
           (v)     A
 default by Borrower with respect to any Indebtedness of the Borrower other
 than the Obligations.

 
	
  

 	
  

 	
  

 
	
           Section
 7.02 Rights and Remedies. Upon the occurrence of a Default or an Event
 of Default and at any time
 thereafter, the Lender may refuse to make the Acquisition Loan hereunder
 (but the Lender may make the Acquisition Loan after the occurrence of a
 Default or an Event of Default without
 thereby waiving its rights and remedies hereunder). In addition, upon the
 occurrence of an Event of Default the Lender may, at its option, exercise any
 and all of the following rights and remedies (and any other rights and
 remedies available to it):

 
	
  

 	
  

 	
  

 
	
  

 	
           (a)     The
 Lender may terminate the Commitment.

 
	
  

 	
  

 	
  

 
	
  

 	
           (b)     The
 Lender may, by written notice to the Borrower, declare immediately due and payable all unpaid principal of and
 accrued interest on the Note, together with all other sums payable
 hereunder, and the same shall thereupon be immediately due and payable without presentment or other demand,
 protest, notice of dishonor or any other notice of any kind, all of which are hereby expressly waived;
 provided, however, that upon the filing of a petition commencing a
 case naming the Borrower as debtor under the United States Bankruptcy Code, the principal of and all accrued
 interest on the Note shall be
 automatically due and payable without any notice to or demand on the Borrower
 or any other party.

 
	
  

 	
  

 	
  

 
	
  

 	
           (c)     The Lender shall have the right, in addition to
 any other rights provided by law, to enforce its rights and remedies
 under the Security Documents.

 
	
  

 	
  

 	
  

 

	
  

 	
  

 	
  

 
	
  

 	
           (d)     The Lender may enter upon the Land and take
 possession thereof, together with
 the Improvements, and proceed either in its own name or in the name of the
 Borrower, as the attorney-in-fact of the Borrower (which authority is coupled
 with an interest and is irrevocable by the Borrower) to complete or
 cause to be completed the Additional Improvements,
 at the cost and expense of the Borrower. If the Lender elects to complete or cause to be completed the
 Additional Improvements, it may do so according to the Plans and
 Specifications or according to such changes, alterations or modifications in
 and to the Plans and Specifications as the Lender may deem reasonable and
 appropriate; and the Lender may enforce or cancel all contracts let by the
 Borrower relating to construction of the
 Additional Improvements, and/or let other contracts which in the
 Lender’s sole judgment may seem advisable; and the Borrower shall forthwith
 turn over and duly assign to the Lender,
 as the Lender may from time to time require, contracts not already
 assigned to the Lender relating to construction of the Additional Improvements, blueprints, shop drawings, bonds,
 building permits, bills and statements of accounts pertaining to the Additional Improvements, whether paid or
 not, and any other instruments or
 records in the possession of the Borrower pertaining to the Project. The
 Borrower shall be liable under this Agreement to pay to the Lender, on
 demand, any amount or amounts expended by
 the Lender in so completing the Additional Improvements, together with
 any costs, charges, or expense incident thereto or resulting therefrom, all
 of which shall be secured by the Security Documents. In the event that a proceeding is instituted against the Borrower for
 recovery and reimbursement of any moneys expended by the Lender in
 connection with the completion of the Additional Improvements, a statement of such expenditures, verified by the
 affidavit of an officer of the
 Lender, shall be prima facie evidence of the amounts so expended and of the propriety of and necessity for such expenditures;
 and the burden of proving to the contrary shall be upon the Borrower.
 The Lender shall have the right to apply any funds which it agrees to advance hereunder and any funds which the Borrower
 has then on deposit with Title pursuant to the Additional Improvements
 Escrow Agreement to bring about the completion of the Additional Improvements
 and to pay the costs thereof; and if such
 moneys so agreed to be advanced and funds of the Borrower then on deposit
 with Title are insufficient, in the sole judgment of the Lender, to
 complete the Additional Improvements, the
 Borrower agrees to promptly deliver and pay to the Lender such sum or
 sums of money as the Lender may from time to time demand for the purpose of
 completing the Additional Improvements or of paying any liability, charge or
 expense which may have been incurred or
 assumed by the Lender under or in performance of this Agreement, or for the purpose of completing the
 Additional Improvements. It is expressly
 understood and agreed that in no event shall the Lender be obligated or
 liable in any way to complete the Additional Improvements or to pay
 for the costs of construction thereof.

 

          Section
7.03 Assignment and Setoff. The Borrower grants the Lender a lien and security
interest in all of the Borrower’s present and future property now or hereafter
in the possession, control or custody of, or
in transit to, the Lender for any purpose, and the balance of every
present and future account of the Borrower with the Lender, and each present
and future claim of the Borrower against the Lender. Such lien and security
interest secures all present and future
debts, obligations and liabilities of the Borrower to the Lender. In addition
to all other rights and remedies,
when or at any time after an Event of Default has occurred, the Lender may foreclose such lien and security interest, and the
Lender may offset or charge all or any part of the aggregate amount of such debts, obligations and liabilities against
any such property, accounts and claims
without notice, regardless of whether such debts, obligations or liabilities are
matured or unmatured.

ARTICLE VIII

MISCELLANEOUS

          Section
8.01 Inspections. The Borrower and the Project Engineer shall be
responsible for making
inspections of the Additional Improvements during the course of construction and
shall determine to their own satisfaction that the work done or
materials supplied by the Contractors to whom payment is to be made has been
properly done or supplied in accordance with the Construction Contract and the
other applicable contracts with the Contractors. If any work done or materials
supplied by a Contractor are not satisfactory to the Borrower and/or the
Project Engineer and the same is not remedied within fifteen (15) days of the
discovery thereof, the Borrower will
immediately notify the Lender in writing of such fact. It is expressly understood and agreed that the Lender and the
Inspecting Architect/Engineer may conduct such inspections of the Project as either may deem necessary for the
protection of the Lender’s interest,
and that any inspections which may be made of the Project by the Lender or the Inspecting
Architect/Engineer will be made, and all certificates issued by the Inspecting Architect/Engineer will be issued, solely for the
benefit and protection of the Lender, and that the Borrower will not
rely thereon.

          Section
8.02 Indemnification by the Borrower. The Borrower shall bear all loss, expense (including attorneys’ fees) and damage in
connection with, and agrees to indemnify and hold harmless the Lender,
its agents, servants and employees from all claims, demands and judgments made or recovered against the Lender,
its agents, servants and employees, because of bodily injuries,
including death at any time resulting therefrom, and/or because of damages to property of the Lender or otherwise (including
loss of use) from any cause whatsoever, arising out of, incidental to,
or in connection with the Project or the construction of the Additional Improvements, whether or not due to any act of
omission or commission, including negligence of the Borrower or any Contractor of its or their employees, servants or
agents, and whether or not due to any act of omission or commission of the
Lender, its employees, servants or agents except for the gross
negligence and willful misconduct of Lender, its employees, servents and
agents.. The Borrower’s liability hereunder shall not be limited to the extent
of insurance carried by or provided by the
Borrower or subject to any exclusions from coverage in any insurance policy. The
obligations of the Borrower under this Section shall survive the payment of the
Note.

          Section
8.03 Fees and Expenses.

	
  

 	
  

 
	
  

 	
           (a)     Whether or not the Acquisition Loan shall be made hereunder, the Borrower
 agrees to pay all fees of Title and the Inspecting Architect/Engineer,
 appraisal fees, survey fees, recording
 fees, license and permit fees, title insurance and other insurance premiums, and agrees to reimburse the
 Lender upon demand for all reasonable out-of-pocket expenses actually
 incurred by the Lender, including but not limited to reasonably legal expenses and attorneys’ fees incurred in connection
 with the preparation of this
 Agreement and the other documents and instruments contemplated hereby; provided,
 however, the fees and expenses to be paid by Borrower under this paragraph
 8.03(a) shall not exceed $100,000.

 

	
  

 	
  

 
	
  

 	
           (b)     Borrower shall pay or reimburse Lender for all any and all costs and expenses,
 including but not limited to reasonable legal expenses and attorneys’ fees,
 incurred or sustained by the Lender in the exercise of any right or remedy
 available to it under this Agreement or
 otherwise by law or equity (whether or not suit is commenced).

 

          Section
8.04 Notices. All notices or other communications which are required or permitted
hereunder shall be in writing and sufficient if (a) delivered personally or
sent by telecopier, (b) sent by nationally
recognized overnight courier or (c) sent by certified mail, postage
prepaid, return receipt requested, addressed as follows:

	
  

 	
  

 	
  

 
	
 (a)

 	
 If to the
 Lender at:

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 OSM—REO FF,
 LLC

 
	
  

 	
  

 	
 225 South Sixth Street, Suite 2800

 
	
  

 	
  

 	
 Minneapolis,
 MN 55402

 
	
  

 	
  

 	
 Attn: Steph
 Lunde

 
	
  

 	
  

 	
 Telephone:
 (612) 376-1486

 
	
  

 	
  

 	
 Facsimile:
 (612) 692-5107

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 with a copy
 (which shall not constitute notice) to:

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Leonard,
 Street and Deinard

 
	
  

 	
  

 	
 150 South Fifth Street, Suite 2300

 
	
  

 	
  

 	
 Minneapolis,
 MN 55402

 
	
  

 	
  

 	
 Attn:
 Timothy Ring, Esq.

 
	
  

 	
  

 	
 Facsimile:
 (612)335-1657

 
	
  

 	
  

 	
  

 
	
 (b)

 	
 If to the
 Borrower at:

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Soy Energy,
 LLC

 
	
  

 	
  

 	
 Attn: Chuck
 Sand

 
	
  

 	
  

 	
 222 North
 Main Street

 
	
  

 	
  

 	
 Marcus, Iowa
 50135

 
	
  

 	
  

 	
 Telephone:
 (712) 376-2081

 
	
  

 	
  

 	
  

 
	
 with a copy
 (which shall not constitute notice) to:

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 BrownWinick

 
	
  

 	
  

 	
 666 Grand Avenue, Suite 2000

 
	
  

 	
  

 	
 Des Moines,
 IA 50309

 
	
  

 	
  

 	
 Attn: Thomas
 Johnson, Esq.

 
	
  

 	
  

 	
 Facsimile:
 (515) 323-8514

 

or to such other addresses as the party to whom notice
is to be given may have furnished to each other party in writing in accordance
herewith. Any such communication shall be deemed to have been given (i) when delivered if personally
delivered or sent by telecopier during a business day, (ii) on the business day
after dispatch if sent by nationally recognized, overnight courier or if sent by telecopier on other than during a business
day, and (iii) on the third day after dispatch, if sent by mail.

          Section
8.05 Time of Essence. Time is of the essence in the performance of this Agreement.

          Section
8.06 Binding Effect and Assignment. This Agreement shall be binding upon
and inure to the benefit of the
Borrower and the Lender and their respective successors and assigns, except that the Borrower may not
transfer or assign its rights hereunder without the prior written
consent of the Lender.

          Section
8.07 Waivers. No waiver by the Lender of any default hereunder shall
operate as a waiver of any other default or of the same default on a
future occasion. No delay on the part of the Lender in exercising any right or
remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any right or remedy preclude other
or future exercise thereof or the exercise of any other right or remedy.

          Section
8.08 The Lender’s Remedies Cumulative. The rights and remedies hereby specified
are cumulative and not exclusive of any rights or remedies which the Lender
would otherwise have.

          Section
8.09 Governing Law and Entire Agreement. This Agreement shall be
governed by the laws of the State of Minnesota without regard to
conflict of laws principles. This Agreement, the Notes and the Security
Documents contain the entire agreement of the parties regarding the Loans.

          Section
8.10 Counterparts. This Agreement may be executed in any number of counterparts,
each of which, when so executed and delivered, shall be an original, but such
counterparts shall together constitute one and the same instrument.

          Section
8.11 Inconsistency. In the event that any of the terms and provisions of
this Agreement are inconsistent with any of the terms and provisions of
the Note or Security Documents, the terms and provisions of this Agreement
shall govern.

          Section
8.12 Conditions of Acquisition Loan. All conditions of the obligation of
the Lender to make the Acquisition Loan hereunder are imposed solely and
exclusively for the benefit of the Lender,
and no other Person shall have standing to require satisfaction of such
conditions in accordance with their terms or be entitled to assume that
the Lender will refuse to make the Acquisition
Loan in the absence of strict compliance with any or all thereof, and no other
Person shall, under any circumstances, be deemed to be a beneficiary of
such conditions, any or all of which may be
freely waived in whole or in part by the Lender at any time if the Lender, in
its sole discretion, deems it advisable to do so.

          Section
8.13 Amendments. This Agreement and the Loan Documents may not be amended or modified, nor may any of their terms
(including, without limitation, terms affecting the maturity of or rate
of interest on the Note) be modified or waived, except by written instruments signed by the Lender and the Borrower. In any
instance where the consent or approval of the Lender may be given or is required, or where any determination,
judgment or decision is to be rendered
by the Lender under this Agreement or under any Loan Document, the granting, withholding or denial of such consent or approval
and the rendering of such determination, judgment or decision shall be made or exercised by the Lender in its
sole and absolute discretion.

          Section
8.14 Jurisdiction. The Borrower hereby irrevocably agrees that any legal
action or proceedings against it
with respect to this Agreement or any of the Loan Documents (other than the Mortgage) may be brought exclusively in the
courts of the State of Minnesota, or in any United States District Court in the State of Minnesota,
and by the execution and delivery of this Agreement, the Borrower hereby
irrevocably submits to the jurisdiction of each such court and hereby
irrevocably waives any and all objections that the Borrower may have as to
jurisdiction or venue in any of such courts.
The Borrower acknowledges that it has received sufficient consideration for any
inconvenience which may be caused by any legal action brought in the
State of Minnesota, and agrees that the
enforcement of the provisions of this paragraph against the Borrower would not
be unreasonable or unfair under all the circumstances of the Loans or
this Agreement.

          Section
8.15 WAIVER OF JURY TRIAL. THE LENDER AND THE BORROWER HEREBY
VOLUNTARILY, KNOWINGLY AND INTENTIONALLY WAIVE ANY AND ALL RIGHTS TO TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING ARISING UNDER
THIS AGREEMENT, REGARDLESS OF WHETHER SUCH ACTION OR PROCEEDING CONCERNS ANY
CONTRACTUAL OR TORTIOUS OR OTHER CLAIM. THE BORROWER ACKNOWLEDGES THAT THIS
WAIVER OF JURY TRIAL IS A MATERIAL INDUCEMENT TO THE LENDER IN EXTENDING CREDIT
TO THE BORROWER, THAT THE LENDER WOULD NOT HAVE EXTENDED SUCH CREDIT WITHOUT
THIS JURY TRIAL WAIVER, AND THAT THE BORROWER HAS BEEN REPRESENTED BY AN ATTORNEY
OR HAS HAD AN OPPORTUNITY TO CONSULT WITH AN ATTORNEY IN CONNECTION WITH THIS
JURY TRIAL WAIVER AND UNDERSTANDS THE LEGAL EFFECT OF THIS WAIVER.

          Section
8.16 Participations. The Lender may, in its sole discretion, sell in
whole or in part, assign and convey
to one or more Participants undivided participation interests in and to the Loans and the Loan Documents and the Borrower
hereby consents to the same, and the disclosure of all financial
information of the Borrower reasonably necessary to effectuate the same.

          Section
8.17 Rules of Construction. Where any provision of this Agreement refers
to action to be taken by a Person,
or which such Person is prohibited from taking, such provision shall be
applicable whether such action is taken directly or indirectly by such Person.
Except as otherwise indicated, all agreements or instruments herein defined
shall mean agreements as the same may from time to time be supplemented or
amended or the terms thereof waived or modified to the extent permitted, and in
accordance with, the terms thereof. Each representation, covenant and warranty contained in this Agreement shall be
construed (absent an express contrary provision therein) as being independent
of each other representation, covenant and warranty contained herein and
compliance with any one representation, covenant or warranty shall not (absent
such an express contrary provision) be deemed to excuse compliance with any or
all representations, covenants or warranties.

          [The
remainder of this page has been left blank intentionally.]

          IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed
as of the day and year first above written.

	
  

 	
  

 	
  

 
	
  

 	
 BORROWER:

 	
  

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 
	
  

 	
 SOY ENERGY, LLC, an Iowa limited liability 

 
	
  

 	
 Company

 	
  

 
	
  

 	
  

 	
  

 
	
  

 	
 By: /s/ Charles Sand

 	
  

 
	
  

 	

 

 	
  

 
	
  

 	
 Name: Charles Sand

 	
  

 
	
  

 	

 

 	
  

 
	
  

 	
 Its: Chairman

 	
  

 
	
  

 	

 

 	
  

 

	
  

 	
  

 	
  

 
	
  

 	
 LENDER:

 	
  

 
	
  

 	
  

 	
  

 
	
  

 	
 OSM-REO FF, LLC, a Minnesota
 limited 

 
	
  

 	
 liability company

 	
  

 
	
  

 	
  

 	
  

 
	
  

 	
 By: /s/ Stephanie Lunde

 	
  

 
	
  

 	

 

 	
  

 
	
  

 	
 Name: Stephanie Lunde

 	
  

 
	
  

 	

 

 	
  

 
	
  

 	
 Its: Vice President

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