Document:

exv10w12

 

Exhibit 10.12

REDEVELOPMENT CONTRACT

     This Redevelopment Contract is made and entered into as of the 31ST day of October,
2003, by and between the Community Redevelopment Authority of the City of Central City, Nebraska
(“Authority”), and Platte Valley Fuel Ethanol, L.L.C., a Nebraska limited liability company
(“Redeveloper”).

WITNESSETH:

     WHEREAS, Authority is a duly organized and existing community redevelopment authority, a body
politic and corporate under the laws of the State of Nebraska, with lawful power and authority to
enter into this Redevelopment Contract, acting by and through its Chair or Vice Chair and Members;

     WHEREAS, the City of Central City, Nebraska (the “City”), in furtherance of the purposes and
pursuant to the provisions of Section 2 of Article VIII of the Nebraska Constitution and Sections
18-2101 to 18-2154, Reissue Revised Statutes of Nebraska, 1997, as amended (collectively the
“Act”), and pursuant to Resolution No. 1398 of the City dated May 20,2003, has designated an area
in the City as blighted and substandard; and

     WHEREAS, pursuant to Section 18-2119 of the Act, Authority has solicited proposals for
redevelopment of the blighted and substandard area and Redeveloper submitted a redevelopment
contract proposal;

     WHEREAS, Authority and Redeveloper desire to enter into this Redevelopment Contract for
acquisition and redevelopment of a parcel in the blighted and substandard area;

     NOW, THEREFORE, in consideration of the Redevelopment Area and the mutual covenants and
agreements herein set forth, Authority and Redeveloper do hereby covenant, agree and bind
themselves as follows:

ARTICLE I

DEFINITIONS AND INTERPRETATION

Section 1.01 Terms Defined in this Redevelopment Contract.

     Unless the context otherwise requires, the following terms shall have the following meanings
for all purposes of this Redevelopment Contract, such definitions to be equally applicable to both
the singular and plural forms and masculine, feminine and neuter gender of any of the terms
defined:

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     “Act” means Section 2 of Article VIII of the Nebraska Constitution, Sections 18-2101
through 18-2154, Reissue Revised Statutes of Nebraska, 1997, as amended, and acts amendatory
thereof and supplemental thereto.

     “Authority” means the Community Redevelopment Authority of the City of Central City,
Nebraska.

     “Certificate of Completion” means a certificate, executed by a Manager or other duly
authorized officer of Redeveloper, representing and warranting that the Project is substantially
complete.

     “City” means the City of Central City, Nebraska.

     “Governing Body” means the Mayor and City Council of the City.

     “Holder” means the holders of TIF Indebtedness issued by the Authority from time to time
outstanding.

     “Liquidated Damages Amount” means the amounts to be repaid to Authority by Redeveloper
pursuant to Section 6.02 of this Redevelopment Contract.

     “Project” means the improvements to the Redevelopment Area, as further described in Exhibit
B attached hereto and incorporated herein by reference and, as used herein, shall include the
Redevelopment Area real estate.

     “Project Cost Certification” means a statement prepared and signed by an independent
certified public accountant verifying the payment of Project Costs identified on Exhibit D.

     “Project Costs” means only costs or expenses incurred by Redeveloper to acquire, construct
and equip the Project pursuant to the Act as identified on Exhibit D.

     “Redeveloper” means Platte Valley Fuel Ethanol, L.L.C., a Nebraska limited liability
company.

     “Redevelopment Area” means that certain real property to be annexed to the City of Central
City, Merrick County, Nebraska, which has been declared blighted and substandard by the City
pursuant to the Act, and which is more particularly described on Exhibit A attached hereto and
incorporated herein by this reference.

     “Redevelopment Contract” means this redevelopment contract between Authority and Redeveloper
dated October 31, 2003, with respect to the Project.

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     “Redevelopment Plan” means the Redevelopment Plan for the Redevelopment Area, prepared by the
Authority and approved by the City pursuant to the Act, as amended from time to time, a true and
correct copy of which is attached hereto as Exhibit B.

     “Resolution” means the Resolution of the Authority dated October 24, 2003, as supplemented
from time to time, approving this Redevelopment Contract.

     “TIF Indebtedness” means any bonds, notes, loans, and advances of money or other
indebtedness, including interest and premiums, if any, thereon, incurred by the Authority
pursuant to Article III hereof and secured in whole or in part by TIF Revenues.

     “TIF Revenues” means incremental ad valorem taxes generated by the Project which are
allocated to and paid to the Authority pursuant to the Act.

Section 1.02 Construction and Interpretation.

     The provisions of this Redevelopment Contract shall be construed and interpreted in
accordance with the following provisions:

     (a) Wherever in this Redevelopment Contract it is provided that any person may do or perform
any act or thing the word “may” shall be deemed permissive and not mandatory and it shall be
construed that such person shall have the right, but shall not be obligated, to do and perform any
such act or thing.

     (b) The phrase “at any time” shall be construed as meaning “at any time or from time to time,”

     (c) The word “including” shall be construed as meaning “including, but not limited
to.”

     (d) The words “will” and “shall” shall each be construed as mandatory.

     (e) The words “herein”, “hereof,” “hereunder,” “hereinafter” and words of similar import shall
refer to the Redevelopment Contract as a whole rather than to any particular paragraph, section or
subsection, unless the context specifically refers thereto.

     (f) Forms of words in the singular, plural, masculine, feminine or neuter shall be construed
to include the other forms as the context may require.

     (g) The captions to the sections of this Redevelopment Contract are for convenience only and
shall not be deemed part of the text of the respective sections and shall not vary by implication
or otherwise any of the provisions hereof.

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ARTICLE II

REPRESENTATIONS

Section 2.01 Representations of Authority.

     Authority makes the following representations and findings:

     (a) Authority is a duly organized and validly existing community redevelopment authority under
the Act.

     (b) The Redevelopment Plan has been duly approved and adopted by the City pursuant to Section
18-2109 through 18-2117 of the Act, and is hereby approved by the
Authority.

     (c) The Authority has requested proposals for redevelopment of the Redevelopment Area
pursuant to section 18-2119 of the Act, and deems it to be in the public interest and in
furtherance of the purposes of the Act to accept the proposal submitted by Redeveloper as specified
herein.

     (d) The Redevelopment Project will achieve the public purposes of the Act by, among other
things, increasing employment, improving public infrastructure, increasing the tax base, and
lessening conditions of blight and substandard in the Redevelopment Area.

     (e) (1) The Redevelopment Plan is feasible and in conformity with the general plan for the
development of the City as a whole and the plan is in conformity with the legislative declarations
and determinations set forth in the Act, and

          (2) (i) the Project would not be economically feasible without the use of tax-increment
financing,

               (ii) the Project would not occur in the Redevelopment Area without the use of tax-increment
financing, and

               (iii) the costs and benefits of the Project, including costs and benefits to other affected
political subdivisions, the economy of the community, and the demand for public and private
services have been analyzed by the City and have been found to be in the long- term best interest
of the community impacted by the Project.

     (f) The Authority and the City have determined that the proposed land uses and building
requirements in the Redevelopment Area are designed with the general purpose of accomplishing, in
conformance with the general plan, a coordinated, adjusted, and harmonious development of the City
and its environs which will, in accordance with present and future needs, promote health, safety,
morals, order, convenience, prosperity, and the general welfare, as well as efficiency and economy
in the process of development; including, among other things, adequate provision for traffic,
vehicular parking, the promotion of safety from fire, panic, and other dangers, adequate provision
for light and air, the promotion of the healthful and convenient distribution of population, the

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provision of adequate transportation, water, sewerage, and other public utilities, schools, parks,
recreational and community facilities, and other public requirements, the promotion of sound
design and arrangement, the wise and efficient expenditure of public funds, and the prevention of
the recurrence of insanitary or unsafe dwelling accommodations, or conditions of blight.

Section 2.02 Representations of Redeveloper.

     The Redeveloper makes the following representations:

     (a) The Redeveloper is a Nebraska limited liability company, having the power to enter into
this Redevelopment Contract and perform all obligations contained herein and by proper action has
been duly authorized to execute and deliver this Redevelopment Contract.

     (b) The execution and delivery of the Redevelopment Contract and the consummation of the
transactions therein contemplated will not conflict with or constitute a breach of or default under
any bond, debenture, note or other evidence of indebtedness or any contract, loan agreement or
lease to which Redeveloper is a party or by which it is bound, or result in the creation or
imposition of any lien, charge or encumbrance of any nature upon any of the property or assets of
the Redeveloper contrary to the terms of any instrument or agreement.

     (c) There is no litigation pending or to the best of its knowledge threatened against
Redeveloper affecting its ability to carry out the acquisition, construction, equipping and
furnishing of the Project or the carrying into effect of this Redevelopment Contract or, except as
disclosed in writing to the Authority, as to any other matter materially affecting the ability of
Redeveloper to perform its obligations hereunder.

     (d) Any financial statements of the Redeveloper or its Members delivered to the Authority
prior to the date hereof are true and correct in all respects and fairly present the financial
condition of the Redeveloper and the Project as of the dates thereof; no materially adverse change
has occurred in the financial condition reflected therein since the respective dates thereof; and
no additional borrowings have been made by the Redeveloper since the date thereof except in the
ordinary course of business, other than the borrowing contemplated hereby or borrowings disclosed
to or approved by the Authority.

ARTICLE III

OBLIGATIONS OF THE AUTHORITY

Section 3.01 Division of Taxes

     In accordance with Section 18-2147 of the Act, the Authority hereby provides that any ad
valorem tax on real property in the Project for the benefit of any public body be divided for a
period

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of fifteen years after the effective date of this provision as set forth in this section. The
effective date of this provision shall be January 1, 2004.

     (a) That proportion of the ad valorem tax which is produced by levy at the rate fixed
each year by or for each public body upon the Redevelopment Project Valuation (as defined in the
Act) shall be paid into the funds of each such public body in the same proportion as all other
taxes collected by or for the bodies; and

          That proportion of the ad valorem tax on real property in the Redevelopment Area in excess of
such amount, if any, shall be allocated to, is pledged to, and, when collected, paid into a
special fund of the Authority to pay the principal of, the interest on, and any premiums due in
connection with the bonds, loans, notes or advances of money to, or indebtedness incurred by,
whether funded, refunded, assumed, or otherwise, such Authority for financing or refinancing, in
whole or in part, such Project. When such bonds, loans, notes, advances of money, or indebtedness,
including interest and premium due have been paid, the Authority shall so notify the County
Assessor and County Treasurer and all ad valorem taxes upon real property in such Project shall be
paid into the funds of the respective public bodies.

Section 3.02 Issuance of TIF Indebtedness

     Authority shall incur TIF Indebtedness in the form and principal amount and bearing interest
and being subject to such terms and conditions as are specified on the attached Exhibit C. The TIF
Indebtedness shall be issued as described in the resolution authorizing the issuance thereof and
as described on the attached Exhibit C, The Authority shall, from time to time and subject to the
provisions of the Act, issue additional Series B TIF Indebtedness secured by the TIF Revenues for
the purpose of funding additional Project Costs, if projected TIF Revenues are projected to be
sufficient to pay principal and interest on such additional TIF Indebtedness. Bonds or Notes
representing the TIF Indebtedness, or a portion thereof, shall be delivered to the purchaser
thereof upon receipt of payment therefore and a purchase agreement in a form satisfactory to the
Authority. The Authority shall have the obligation to purchase any TIF Indebtedness or to locate a
purchaser for any TIF Indebtedness for the two thirds of additional proceeds being granted to the
City. The Redeveloper shall have the obligation to purchase any TIF Indebtedness or to locate a
purchaser for any TIF indebtedness for the one third of additional proceeds being granted to the
Redeveloper. Proceeds of the TIF Indebtedness shall be deposited in a special account of the
Authority created for such purpose.

Section 3.03 Pledge of TIF Revenues

     The Authority hereby pledges the TIF Revenues as security for the TIF Indebtedness. All TIF
Indebtedness issued pursuant to this Redevelopment Contact shall be secured on a parity basis,
except as specifically provided herein.

     The pledge of TIF Revenues as security for the Series B Bonds shall be subordinate and
subject to the pledge as security for the Series A Bonds.

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Section 3.04 Grant of Proceeds of Bonds

     Authority will grant to Redeveloper $2,580,000 of the proceeds of the TIF Indebtedness
incurred as described on Exhibit C. An additional amount of proceeds in the amount of $361,000 to
pay interest payable on such TIF Indebtedness in 2004 and 2005 shall be retained by the Authority
and applied for such purpose. All other proceeds shall be granted to the City to be utilized in
connection with public improvements at the Project or, in lieu of the sale of Bonds necessary to
fund such grant, such Bonds may be issued to the City.

     Notwithstanding the foregoing, the amount of the grant to Redeveloper shall not exceed the
amount of Project Costs certified pursuant to Section 4.02. The grant shall be paid to the
Redeveloper upon receipt of requisitions for Project Costs which include supporting documentation
requested by Authority and shall, if requested by Redeveloper, be made in one or more advances.

     The
proceeds of any additional TIF Indebtedness issued as provided in Section 3.02 shall be
granted one third to Redeveloper (subject to certification of additional Project Costs), and two
thirds to the City to be used for public improvements at the Project.

Section 3.05 Creation of Fund

     Authority will create a special fund to collect and hold the TIF Revenues. Such special fund
shall be used for no purpose other than to pay TIF Indebtedness issued pursuant to Sections 3.02
and 3.03 above.

ARTICLE IV

OBLIGATIONS OF REDEVELOPER

Section 4.01 Construction of Project: Insurance

     (a) Redeveloper will complete the Project and install all improvements, buildings, fixtures,
equipment and furnishings necessary to operate the Project. Redeveloper shall be solely responsible
for obtaining all permits and approvals necessary to acquire, construct and equip the Project.
Until construction of the Project has been completed, Redeveloper shall make reports in such detail
and at such times as may be reasonably requested by the Authority as to the actual progress of
Redeveloper with respect to construction of the Project. Promptly after completion by the
Redeveloper of the Project, the Redeveloper shall furnish to the Authority a Certificate of
Completion. The certification by the Redeveloper shall be a conclusive determination of
satisfaction of the agreements and covenants in this Redevelopment Contract with respect to the
obligations of Redeveloper and its successors and assigns to construct the Project. As used herein,
the term “completion” shall mean substantial completion of
the Project.

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     (b) Any contractor chosen by the Redeveloper or the Redeveloper itself shall be required to
obtain and keep in force at all times until completion of construction, policies of Insurance
including coverage for
contractors’ general liability and completed operations and a
penal bond as required by the Act. The Authority and the Redeveloper shall be named as additional
insureds. Any contractor chosen by the Redeveloper or the Redeveloper itself, as an owner, shall
be required to purchase and maintain property insurance upon the Project to the full insurable
value thereof. This insurance shall insure against the perils of fire and extended coverage and
shall include “All Risk” insurance for physical loss or damage. The contractor or the Redeveloper,
as the case may be, shall furnish the Authority with a Certificate of Insurance evidencing
policies as required above. Such certificates shall state that the insurance companies shall give
the Authority prior written notice in the event of cancellation of or material change in any of
the policies.

Section 4.02 Cost Certification

     Redeveloper shall submit to Authority a certification of Project Costs, on or before the date
of submission of the Certificate of Completion, acceptable to Authority, which shall contain
detail and documentation showing the payment of Project Costs specified on the attached Exhibit D
in an amount at least equal to the grant to Redeveloper pursuant to Section 3.04.

Section 4.03
Redeveloper to Operate Project.

     Redeveloper will operate the Project for not less than 15 years from the effective date of
the provision specified in Section 3.01 of this Redevelopment Contract. The Project shall be
operated in accordance with the provisions of this Redevelopment Contract.

Section 4.04 Authority Costs.

     Redeveloper shall pay, on the date of execution by Redeveloper of this Agreement, legal fees
and costs of study in the amount of $80,000 incurred by the Authority for special counsel in
connection with this Redevelopment Contract and the issuance of the TIF Indebtedness, and shall
timely pay all fees and costs of the Authority in connection with the Bonds and all fees and costs
of any trustee, paying agent or registrar with respect thereto.

Section 4.05 No Discrimination

     Redeveloper agrees and covenants for itself, its successors and assigns that as long as any
TIF Indebtedness is outstanding, it will not discriminate against any person or group of persons on
account of race, sex, color, religion, national origin, ancestry, disability, marital status or
receipt of public assistance in connection with the Project. Redeveloper, for itself and its
successors and assigns, agrees that during the construction of the Project, Redeveloper will not
discriminate against any employee or applicant for employment because of race, religion, sex,
color, national origin, ancestry, disability, marital status or receipt of public assistance.
Redeveloper will comply with all applicable federal, state and local
laws related to the Project.

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Section 4.06 Pay Real Estate Taxes

     Redeveloper intends to create a taxable real property valuation of the Redevelopment Area and
Project of Six Million Dollars ($6,000,000.00) no later than January 1,2004 and Twenty Million
Dollars ($20,000,000) no later than January 1, 2005. During the period that any TIF Indebtedness
is outstanding, Redeveloper will (1) not protest a real estate property valuation on the
Redevelopment Area of Twenty Million Dollars ($20,000,000.00) or less after substantial completion
or occupancy; (2) not convey the Redevelopment Area or structures thereon to any entity which
would be exempt from the payment of real estate taxes or cause the nonpayment of such real estate
taxes; and (3) cause all real estate taxes and assessments levied on the Redevelopment Area and
Project to be paid prior to the time such become delinquent during the term that any Bonds are
outstanding. All real estate taxes levied in the year 2018 shall be paid by Redeveloper on or
before December 31,2018.

Section 4.07 Payment in Lieu of Taxes.

     Redeveloper agrees to make payments in lieu of taxes, immediately upon receipt of notice from
Authority, if for any reason at any time TIF Revenues received by the Authority are not sufficient
to pay principal and interest on the TIF Indebtedness when due. This payment in lieu of tax
obligation shall be represented by a guaranty, note or other evidence of indebtedness and shall be
secured by a deed of trust and security agreement on the Redevelopment Area and Project in favor of
the Authority, which such mortgage or deed of trust shall be subordinate to the mortgages or deeds
of trust described in Section 5.02. The Series A Bonds shall have priority over the Series B Bonds
with respect to such guaranty or other obligation and any security therefor.

Section 4.08 No Assignment or Conveyance.

     Redeveloper shall not convey, assign or transfer the Redevelopment Area, the Project or any
interest therein prior to the termination of the 15 year period commencing on the effective date
specified in Section 3.01 hereof, without the prior written consent of the Authority, which the
Authority shall grant or deny within fifteen (15) days of receipt of written request from
Redeveloper, which consent shall not be unreasonably withheld, and which the Authority may make
subject to any terms or conditions it deems appropriate, except for the following conveyances,
which shall be permitted without consent of Authority:

          (a) any conveyance as security for indebtedness incurred by Redeveloper for Project Costs or
any subsequent physical improvements to the Redevelopment Area, provided that any such conveyance
shall be subject to the obligations of the Redeveloper pursuant to this Redevelopment Contract;

          (b) any conveyance to any person or entity which owns more than 50% of the voting equity
interests of Redeveloper (if Redeveloper’s a corporation, partnership, limited liability company or
other entity) or with respect to which Redeveloper owns more than 50% of the voting

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equity interests, provided that any such successor owner of the Project agrees to assume
all obligations of the Redeveloper and be bound by all terms and conditions of this Redevelopment
Contract;

          (c) if Redeveloper is a corporation, partnership or limited liability company, any merger,
consolidation, split off, split-up, spin off or other reorganization of Redeveloper which does not
result in a substantial change of control or management of the Redeveloper, provided that any such
successor owner of the Project agrees to assume all obligations of the Redeveloper and be bound by
all terms and conditions of this Redevelopment Contract.

ARTICLE V

FINANCING REDEVELOPMENT PROJECT; ENCUMBRANCES

Section 5.01 Financing

     Redeveloper shall pay all Project Costs and any and all other costs related to the
Redevelopment Area and the Project which are in excess of the amounts paid from the proceeds of the
TIF Indebtedness granted to Redeveloper. Prior to issuance of the TIF Indebtedness, Redeveloper
shall provide Authority with evidence satisfactory to the Authority that private funds have been
committed to the Redevelopment Project in amounts sufficient to complete the Redevelopment Project.
Redeveloper shall timely pay all costs, expenses, fees, charges and other amounts associated with
the Project.

Section 5.02 Encumbrances

     Redeveloper shall not create any lien, encumbrance or mortgage on the Project or the
Redevelopment Area without the prior written consent of the Authority except encumbrances which
secure indebtedness incurred to acquire, construct, equip and operate the Project or for any other
physical improvements to the Redevelopment Area. Without limiting the generality of the foregoing,
the Redeveloper may secure indebtedness incurred for such purposes in the amount of not to exceed
$38,000,000 in the aggregate in connection with the initial acquisition, construction, equipping
and operation of the Project with mortgages, deeds of trust and security agreements (and
refinancings, substitutions and replacements thereof) which have priority over the security for the
Project granted pursuant to Section 4.07 of this Agreement.

ARTICLE VI

DEFAULT, REMEDIES; INDEMNIFICATION

Section 6.01 General Remedies of Authority and Redeveloper.

     Subject to the further provisions of this Article VI, in the event of any failure to perform
or breach of this Redevelopment Contract or any of its terms or conditions, by any party hereto or
any

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successor to such party, such party, or successor, shall, upon written notice from the
other, proceed immediately to commence such actions as may be reasonably designed to cure or
remedy such failure to perform or breach which cure or remedy shall be accomplished within a
reasonable time by the diligent pursuit of corrective action. In case such action is not
taken, or diligently pursued, or the failure to perform or breach shall not be cured or
remedied within a reasonable time, this Redevelopment Contract shall be in default and the
aggrieved party may institute such proceedings as may be necessary or desirable to enforce its
rights under this Redevelopment Contract, including, but not limited to, proceedings to compel
specific performance by the party failing to perform or in breach of its obligations.

Section 6.02 Additional Remedies of Authority. 

In the event that:

     (a) The Redeveloper, or successor in interest, fails to commence construction of the Project
(which, for purposes of this paragraph shall mean expenditure or binding commitments to incur
expenditures) of an amount equal to at least ten percent (10%) of the total projected cost of the
Project by September 1,2003;

     (b) The Redeveloper, or successor in interest, shall fail to complete the construction of the
Project on or before June 30,2004, or shall abandon construction work for any period of 90 days;

     (c) The Redeveloper, or successor in interest, shall fail to pay real estate taxes or
assessments on the Redevelopment Area or any part thereof or payments in lieu of taxes pursuant
to Section 4.07 when due, and such taxes or assessments or payments in lieu of taxes shall not
have been paid, or provisions satisfactory to the Authority made for such payment within 30
days following written notice from Authority; or

     (d) There is, in violation of Section 4.08 of this Redevelopment Contract, transfer of
the Redevelopment Area or any part thereof and such failure or action by the Redeveloper has not
been cured within 30 days following written notice from Authority, then the Redeveloper shall be in
default of this Redevelopment Contract.

     In the event of such failure to perform, breach or default occurs and is not cured in the
period herein provided, the parties agree that the damages caused to the Authority would be
difficult to determine with certainty and that a reasonable estimation of the amount of damages
that could be incurred is the amount of the grant to Redeveloper
pursuant to Section 3.05 of
this Redevelopment Contract, less any reductions in the principal amount of the TIF
Indebtedness, plus interest on such amounts as provided herein (the “Liquidated Damages
Amount”). The Liquidated Damages Amount shall be paid by Redeveloper to Authority within 30
days of demand from Authority.

     Interest shall accrue on the Liquidated Damages Amount at the rate of one percent (1 %)
over the prime rate as published and modified in the Wall Street Journal from time to time and
interest

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shall commence from the date that the Authority gives notice to the Redeveloper demanding
payment.

     Payment of the Liquidated Damages Amount shall not relieve Redeveloper of its obligation to pay
real estate taxes or assessments or payments in lieu of taxes with respect to the Project.

Section 6.03 Remedies in the Event of Other Redeveloper Defaults

     In the event the Redeveloper fails to perform any other provisions of this Redevelopment Contract
(other than those specific provisions contained in Section 6.02), the Redeveloper shall be in
default. In such an instance, the Authority may seek to enforce the terms of this Redevelopment
Contract or exercise any other remedies that may be provided in this Redevelopment Contract or by
applicable law; provided, however, that the default covered by this Section shall not give rise to
a right of rescission or termination of this Redevelopment Contract, and shall not be covered by
the Liquidated Damages Amount.

Section 6.04 Enforced Delay Beyond Party’s Control

     For the purposes of any of the provisions of this Redevelopment Contract, neither the Authority nor
the Redeveloper, as the case maybe, nor any successor in interest, shall be considered in breach of
or default in its obligations with respect to the conveyance or preparation of the Redevelopment
Area for redevelopment, or the beginning and completion of construction of the Project, or progress
in respect thereto, in the event of enforced delay in the performance of such obligations due to
unforeseeable causes beyond its control and without its fault or negligence, including, but not
restricted to, acts of God, or of the public enemy, acts of the Government, acts of the other
party, fires, floods, epidemics, quarantine restrictions, strikes, freight embargoes, and unusually
severe weather or delays in subcontractors due to such causes; it being the purpose and intent of
this provision that in the event of the occurrence of any such enforced delay, the time or times
for performance of the obligations of the Authority or of the Redeveloper with respect to
construction of the Project, as the case may be, shall be extended for the period of the enforced
delay: Provided, that the party seeking the benefit of the provisions of this section
shall, within thirty (30) days after the beginning of any such enforced delay, have first notified
the other party thereof in writing, and of the cause or causes thereof and requested an extension
for the period of the enforced delay.

Section 6.05 Limitation of Liability: Indemnification.

     Notwithstanding anything in this Article VI or this Redevelopment Contract to the contrary, neither
Authority, City, nor their officers, directors, employees, agents or their governing bodies shall
have any pecuniary obligation or monetary liability under this Redevelopment Contract. The sole
obligation of the City and the Authority under this Redevelopment Contract shall be the issuance of
the TIF Indebtedness and granting the proceeds thereof to Redeveloper as set forth in Article III.
The obligation of the Authority on any TIF Indebtedness shall be limited solely to the TIF Revenues

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pledged as security for such TIP Indebtedness. Specifically, but without limitation, neither
City nor Authority shall be liable for any costs, liabilities, actions, demands, or damages for
failure of any representations, warranties or obligations hereunder. The Redeveloper releases the
Authority and the City from, and agrees that the Authority and the City shall not be liable for,
and agrees to indemnify and hold the Authority and the City harmless from any liability for any
loss or damage to property or any injury to or death of any person that may be occasioned by any
cause whatsoever pertaining to the Project.

     The Redeveloper will indemnify and hold each of the Authority and the City and their directors,
officers, agents, employees and member of their governing bodies free and harmless from any loss,
claim, damage, demand, tax, penalty, liability, disbursement, expense, including litigation
expenses, attorneys’ fees and expenses, or court costs arising out of any damage or injury, actual
or claimed, of whatsoever kind or character, to property (including loss of use thereof) or
persons, occurring or allegedly occurring in, on or about the Project during the term of this
Redevelopment Contract or arising out of any action or inaction of Redeveloper, whether or not
related to the Project, or resulting from or in any way connected with specified events, including
the management of the Project, or in any way related to the enforcement of this Redevelopment
Contract or any other cause pertaining to the Project.

ARTICLE VII

MISCELLANEOUS

Section 7.01 Notice Recording

     This Redevelopment Contract or a notice memorandum of this Redevelopment Contract shall be recorded
with the County Register of Deeds in which the Redevelopment Area is located.

Section 7.02 Governing Law

     This Redevelopment Contract shall be governed by the laws of the State of Nebraska, including but
not limited to the Act.

Section 7.03 Binding Effect: Amendment

     This Redevelopment Contract shall be binding on the parties hereto and their respective successors
and assigns. This Redevelopment Contract shall run with the Redevelopment Area. The Redevelopment
Contract shall not be amended except by a writing signed by the party to be bound.

     IN WITNESS WHEREOF, Authority and Redeveloper have signed this Redevelopment Contract as of the
date and year first above written.

COMMUNITY REDEVELOPMENT

13

 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	ATTEST:	 	 	 	 	 	 	 	 	 	AUTHORITY OF THE CITY OF	 	 
	 	 	 	 	 	 	 	 	 	 	CENTRAL CITY, NEBRASKA	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	/s/ Chris Anderson

	 	 	 	 	 	 	 	 	 	By:
	 	/s/ Janet L. Placke	 	 
	 	 	 	 	 	 	 	 	 
	Secretary

	 	 	 	 	 	 	 	 	 	 	 	Its Chair	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	STATE OF NEBRASKA

	 	 	)	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	)	 	 	ss.	 	 	 	 	 	 	 	 
	COUNTY OF MERRICK

	 	 	)	 	 	 	 	 	 	 	 	 	 	 

     The foregoing instrument was acknowledged before me this 8th day of
December, 2003, by Janet L. Placke and Chris Anderson, Chair and Secretary,
respectively, of the Community Redevelopment Authority of the City of Central City, Nebraska, on
behalf of the Authority.

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	(SEAL)	 	 	 	 	 	/s/ Clifford F. Mesner	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
		 	 	 	 	 	Notary Public	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	PLATTE VALLEY FUEL ETHANOL, L.L.C.,	 	 
	 	 	 	 	 	 	 	 	 	 	Redeveloper	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	By:
	 	/s/ Ron Fagen	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	Fagen, Inc. as initial investor, initial
member and as current sole manager.
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	STATE OF MINNESOTA

	 	 	)	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	)	 	 	ss.	 	 	 	 	 	 	 	 
	COUNTY OF YELLOW MEDICINE

	 	 	)	 	 	 	 	 	 	 	 	 	 	 

     The foregoing instrument was acknowledged before me this 2nd day of December 2003,
by *SEE BELOW, Manager of Platte Valley Fuel Ethanol, L.L.C., on behalf of the limited
liability company.

	 	 	 	 	 
	 	 	 
	 	                                             /s/ Kevin Stroup
 	 
	 	Notary Public 	 
	 	 	 
	 

 

*Ron Fagen, CEO and President of Fagen, Inc., as initial investor, initial member and as
current sole

14

 

EXHIBIT A

DESCRIPTION OP REDEVELOPMENT AREA

     A tract of land comprising a part of the Southwest Quarter (SW1/4), part of the Southeast Quarter
(SE1/4) and all of Tax Lot One (1) in Section Eleven (11), Township Thirteen (13) North,
Range Six (6) West of the 6th P.M., Merrick County, Nebraska, more particularly
described as follows:

     First to ascertain the actual point of beginning, start at the Northwest corner of said Southeast
Quarter (SE1/4); thence Southerly along and upon the West line of said Southeast Quarter
(SE1/4) for a distance of Fifty (50.00) feet to the point of beginning; thence
continuing Southerly along and upon the West line of said Southeast Quarter (SE1/4) for a distance
of Five (5.00) feet; thence deflecting left 89o09’16” and running Easterly along and
upon the South line of Deeded Road right-of-way for a distance of One Thousand Three Hundred
Forty-Eight and Ninety-Four Hundredths (1348.94) feet; thence deflecting left 90o39’34”
and running Northerly along and upon the West line of Tax Lot One (1) for a distance of Fifteen
(15.00) feet to the Northwest corner of said Tax Lot One (1); thence Easterly along and upon the
South line of Deeded Road right-of-way also being the North line of said Tax Lot One (1) for a
distance of Two Hundred Sixty (260.00) feet; thence Southerly along and upon the East line of said
Tax Lot One (1) for a distance of Three Hundred Sixteen (316.00) feet; thence Westerly along and
upon the South line of said Tax Lot One (1) and extending for a total distance of Two Hundred
Seventy-One (271.00) feet; thence deflecting left 90°10’06” and running Southerly for a distance of
Seven Hundred Forty-Nine and Eighty-Seven Hundredths (749.87) feet; thence deflecting right 90°
16’40” and running Westerly for a distance of One Thousand One Hundred Ninety-One and Ninety-Six
Hundredths (1191.96) feet to a point on the Northeast right-of-way line of the Union Pacific
Railroad; thence Northwesterly along and upon the Northeast right-of-way line of said Union Pacific
railroad for a distance of Seven Hundred One and Ninety-Two Hundredths (701.92) feet; thence
Northeasterly along and upon the Northeast right-of-way line of said Union Pacific Railroad for a
distance of One Hundred (100,00) feet; thence Northwesterly along and upon the Northeast
right-of-way line of said Union Pacific Railroad for a distance of Five Hundred Seventy-Eight and
Ten Hundredth (578.10) feet to a point on the South right-of-way line of Deeded Road; thence
Easterly along and upon the South right-of-way line of Deeded Road for a distance of Five Hundred
Seventy-Seven and Thirty-One Hundredths (577.31) feet to the point of beginning and containing
39.63 acres, more or less.

15

 

EXHIBIT B

DESCRIPTION OF PROJECT

     An ethanol production facility, including all necessary receiving, storage, processing, pollution
control, waste handling, and shipping buildings, equipment and furnishings and ancillary facilities
sufficient to produce approximately 40 million gallons of anhydrous ethanol annually.

16

 

EXHIBIT C

TIF INDEBTEDNESS

SERIES A

	 	 	 	 	 
	1.

	 	Principal Amount:
	 	$2,941,000.00 
	 
	 	 	 	 
	2.

	 	Payments:
	 	Interest only on each June 1 and
December 1 in 2004 and 2005 . Thereafter,
principal and interest semiannually, in
amounts sufficient to fully pay the TIF
Indebtedness in full on or before
December 31, 2018, as set forth in the
Resolution of the Authority.
	 
	 	 	 	 
	3.

	 	Interest Rate:
	 	Not to exceed ten percent (10%) per
annum, as set by the Resolution of the
Authority.
	 
	 	 	 	 
	4.

	 	Maturity Date:
	 	On or before December 31, 2018.
	 
	 	 	 	 
	5.

	 	Security:
	 	First pledge of TIF Revenues and
subordinate pledge of assets of
Redeveloper.
	 
	 	 	 	 
	 

	 	 	 	SERIES B
	 
	 	 	 	 
	1.

	 	Principal Amount:
	 	$728,488.80 initially, with possible
subsequent amounts pursuant to Section
3.02.
	 
	 	 	 	 
	2.

	 	Payments:
	 	Interest only payable (or
compounding) on June 1 and December 1 in
2004 and 2005. Thereafter, principal
and interest payable (or compounding)
semi-annually, in amounts sufficient to
fully pay the TIF Indebtedness in full on
or before December 31, 2018 as set forth
in the Resolution of the Authority.
	 
	 	 	 	 
	3.

	 	Interest Rate:
	 	Not to exceed ten percent (10%) per
annum, as set by the Resolution of the
Authority.
	 
	 	 	 	 
	4.

	 	Maturity Date:
	 	On or before December 31, 2018.
	 
	 	 	 	 
	5.

	 	Security:
	 	Pledge of TIP Revenues subordinate
to pledge as security for the Series A
Bonds and subordinate (to Series A Bonds
and other permitted indebtedness) of
assets of Redeveloper.

17

 

EXHIBIT D

PROJECT COSTS

All Project Costs payable from the proceeds of TIF Indebtedness pursuant to the Act including:

	1.	 	Redevelopment Area Acquisition cost
	 
	2.	 	Site work and site preparation
	 
	3.	 	Utility extensions, installation of gas, water, sewer and electrical lines and equipment
	 
	4.	 	Construction of roadways and rail service lines
	 
	5.	 	Pollution control equipment

18

 

EXHIBIT E

REDEVELOPMENT PLAN

DESCRIPTION OF PROJECT AND

DEVELOPERS REDEVELOPMENT PLAN FOR

PLATTE VALLEY FUEL ETHANOL, L.L.C., FACILITY

OVERVIEW:

     This Plan is intended to redevelop an area that has been annexed to the City of Central City,
Merrick County, Nebraska, which has been declared blighted and substandard within the meaning of
the Community Development Law of the State of Nebraska. This property will be used to develop an
agricultural production facility, within the meaning of Section 17-405.01 of the Nebraska Revised
Statutes.

     The Developer will rehabilitate the real estate shown on Exhibit A to the Redevelopment Contract by
constructing a 40,000,000 gallon ethanol production facility on the real estate

     The Developer will not develop the project in the redevelopment area or elsewhere without the
benefit of tax increment financing. The costs of the project are simply too great to be absorbed by
the Developers without the assistance of tax increment financing. All financing for the project is
entirely contingent on the grant set forth in the Redevelopment Contract to which this exhibit is
attached. The Developers propose that the Community Redevelopment Authority Issue a bond to be
repaid from the incremental tax revenues generated by the Redevelopment Project pursuant to Section
18-2147 of the Nebraska Revised Statutes, for a period of 15 years from an effective date of
January 1, 2004. The Developers will use the proceeds of the bond to assist in the construction and
acquisition of the project to include necessary operating capital used in such acquisition.

THE REDEVELOPMENT PLAN:

     1. Relationship of Plan to local objectives for appropriate land use. This Plan
contemplates a change in current land use. The land use will be changed from row crop agricultural,
with one home site to an ethanol production facility. Current zoning allows for the use
contemplated by the Plan. Reutilization of the existing real estate meets existing local objectives
for appropriate land use for the area affected by this Plan.

     2. Relationship of Plan to local objectives for improved traffic flow and public
utilities in Plan area. This Plan contemplates no relocation of the existing access roads.
However, a subdivision plat will be filed with roadways thereon, as shown on attachment E 2 hereto.
This will allow trucks delivering corn and hauling off distillers grains to have those units
totally on site and off of state and county road ways, while waiting to load and unload. There will

19

 

be a slight burden on traffic flow as more than 30 employees will work at the facility on a full
time basis. Additional deliveries and outbound product will cause additional traffic.

     3. Relationship of Plan to local objectives for community facilities. This Plan neither
provides nor requires any additional community facilities. However, it will provide an attractive
expanded industrial facility providing employment to members of the communities of Central City and
Merrick County.

     4. Redevelopment Project boundaries. Attachment E 1, shows the boundaries of the
project. The property is currently improved with one residence with outbuildings.

     5. Proposed land use Plan. Attachment E 2, shows the proposed land use Plan after
redevelopment as an ethanol production facility.

     6. Information on standards for population densities; land coverage; building
intensities; and land coverage after redevelopment. Population density will change for the
area. A 40,000,000 gallon ethanol plant be added to the real estate. Attachment E 3, shows the land
coverage of the various proposed improvements.

     7. Statement regarding change in street layouts. This Plan proposes no change in
street layout. The internal street and driveway layout is shown on attachment E 2.

     8. Site Plan after redevelopment. Attachment E 2, is an accurate site plan of the
Redevelopment Project after redevelopment.

     9. Statement as to the kind and number of additional public facilities or utilities
required to support land use after redevelopment. Electrical service will be provided by
Southern Public Power District, or the City of Central City, as those entities shall determine. The
City or the District will provide sufficient power to the property through a separate agreement
with Platte Valley Fuel Ethanol, L.L.C.

     10. Public cost/benefit analysis. This Plan requires that the Developers will
construct and own an ethanol production facility. The Developers will provide all financing for the
project, beyond the grant provided in the Attached Redevelopment Contract. The Authority will
either find investors for the 2003 A bonds issued by the Authority, or purchase such bonds
outright. Such bonds shall not be backed by the City or the Authority, and will only be repaid from
the increased ad valorem tax stream created by the project rehabilitation, over a 15 year period
commencing January 1, 2004. All ad valorem taxes currently being paid by the facility will continue
to be paid to the normal taxing authorities, including the school district, the City of Central
City, and Merrick County, subject to current valuation adjustment. After the 15-year TIF period,
the increased taxes will also be paid to the normal taxing authorities.

20

 

     11. Tax benefit. Currently the real estate is improved. The real estate taxes from
the property shown on Exhibit A, will continue to be paid to the taxing authorities, incremental
tax revenue will be pledged for the 15-year period. After the 15-year TIF period the additional
estimated tax paid to the taxing entities will be approximately $400,000 annually.

     12. Employees. The project will result in the addition of many employees but it is
estimated that most employees will come from the surrounding area, therefore, no undue stress on
the school system, police or fire protection is contemplated. Current housing in Central City is
adequate for the current employees.

     13. Pledge of Incremental Taxes. Pursuant to Section 18-2147 of the Act, any ad
valorem tax levied upon real property in the Redevelopment Project specified in the Plan, shall be
divided, for the period not to exceed 15 years after the effective date of the provision, which
effective date shall be January 1, 2004.

        a. That portion of the ad valorem tax which is produced by levy at the rate fixed each year by
or for each public body upon the Redevelopment Project valuation shall be paid into the funds of
each such public body in the same proportion as all other taxes collected by or for the bodies; and

        b. That portion of the ad valorem tax on real properly in the Redevelopment Project in excess
of such amount, if any, shall be allocated to and, when collected, paid into a special fund of the
Authority to pay the principal of; the interest on, and any premiums due in connection with the
bonds, loans, notes, or advances on money to, or indebtedness incurred by, whether funded,
refunded, assumed, or otherwise, such Authority for financing or refinancing, in whole or in part,
a Redevelopment Project. When such bonds, loans, notes, advances of money, or indebtedness
including interest and premium due have been paid, the Authority shall so notify the County
Assessor and County Treasurer and all ad valorem taxes upon real property in such Redevelopment
Project shall be paid into the funds of the respective public bodies.

21

 

Attachment E-l

     Attachment E 1, shows the boundaries of the project. The property is currently improved with one
residence with outbuildings.

22

 

	ATTACHMENT E — 1

 

 

Attachment E-2

     Attachment E 2, shows the proposed land use Plan after redevelopment as an ethanol production
facility. Attachment E 2, is an accurate site plan of the Redevelopment Project after
redevelopment.

23

 

	Attachment E — 2

 

 

Attachment E-3

     Attachment E 3, shows the land coverage of the various proposed improvements.

24

 

	Attachment E-3exv10w13

 

Exhibit
10.13

US BIOENERGY CORPORATION

2005 STOCK INCENTIVE PLAN

Adopted by the Board of Directors on January 28, 2005

Approved by the Shareholders on January 28, 2005

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	SECTION 1.
	 	General Purpose of Plan; Definitions	 	 	1	 
	 
	SECTION 2.
	 	Administration	 	 	5	 
	 
	SECTION 3.
	 	Stock Subject to Plan	 	 	7	 
	 
	SECTION 4.
	 	Eligibility	 	 	8	 
	 
	SECTION 5.
	 	Option Awards	 	 	8	 
	 
	SECTION 6.
	 	Stock Appreciation Rights	 	 	11	 
	 
	SECTION 7.
	 	Restricted Stock Awards	 	 	12	 
	 
	SECTION 8.
	 	Deferred Stock Awards	 	 	14	 
	 
	SECTION 9.
	 	Performance Stock	 	 	15	 
	 
	SECTION 10.
	 	Change in Control	 	 	15	 
	 
	SECTION 11.
	 	Dissolution, Liquidation, Merger	 	 	16	 
	 
	SECTION 12.
	 	Substitute Awards	 	 	17	 
	 
	SECTION 13.
	 	General Provisions	 	 	17	 
	 
	SECTION 14.
	 	Amendments and Termination	 	 	20	 
	 
	SECTION 15.
	 	Governing Law	 	 	20	 
	 
	SECTION 16.
	 	Effective Date of Plan	 	 	20	 

 

 

US BIOENERGY CORPORATION

2005 STOCK INCENTIVE PLAN

SECTION 1. General Purpose of Plan; Definitions.

     1.1 General Purpose. The name of this plan is the US BioEnergy Corporation 2005 Stock
Incentive Plan (the “Plan”). The purpose of the Plan is to enable US BioEnergy Corporation (the
“Company”) and its Subsidiaries to retain and attract executives, other employees, members of the
Board of Directors, and Consultants who contribute to the Company’s success by their ability,
ingenuity and industry, and to enable such individuals to participate in the long-term success and
growth of the Company by giving them a proprietary interest in the Company.

     1.2 Definitions. For purposes of the Plan, the following terms shall be defined as
set forth below:

     (a) “Agreement” means an agreement by and between the Company and a Recipient
under the Plan setting forth the terms and conditions of an Award.

     (b) “Award” means the grant of an Option, Restricted Stock, Unrestricted Stock,
Deferred Stock, or Stock Appreciation Right, or any combination thereof, pursuant to the
terms of this Plan.

     (c) “Board” means the Board of Directors of the Company, as it may be comprised
from time to time.

     (d) “Cause” means, except as may otherwise be provided in the terms of the
Award or in a written employment agreement between the Company and the Recipient:

     (i) a material breach of any written employment agreement between the Company
and the Recipient;

     (ii) a material breach of any code of conduct established by the Company;

     (iii) a felony conviction of a Recipient; or

     (iv) the failure of a Recipient to contest prosecution for a felony, or a
Recipient’s willful misconduct, dishonesty, breach of fiduciary duty, or gross
negligence involving the business or reputation of the Company.

     (e) “Change in Control” means, except as may otherwise be provided in the terms
of the Award or in a written employment agreement between the Company and the Recipient, any
of the following:

     (i) Any “person” (as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934) acquires or becomes a “beneficial owner” (as
defined in Rule 13d-3 or any successor rule under the Exchange Act), directly

1

 

or indirectly, of securities of the Company representing 50% or more of the
combined voting power of the Voting Securities, provided, however, that the
following shall not constitute a Change in Control pursuant to this Section
1.2(e)(i):

	 	(A)	 	any acquisition of Voting Securities or Stock
of the Company directly from the Company other than in connection with
a transaction described in Section 1.2(e)(iii) below;
	 
	 	(B)	 	any acquisition or beneficial ownership by the
Company or a Subsidiary;
	 
	 	(C)	 	any acquisition or beneficial ownership by any
employee benefit plan (or related trust) sponsored or maintained by the
Company or one or more of its Subsidiaries;
	 
	 	(D)	 	any acquisition or beneficial ownership by any
corporation with respect to which, immediately following such
acquisition, more than 50% of the combined voting power of the
Company’s then outstanding Voting Securities and the Stock of the
Company is then beneficially owned, directly or indirectly, by all or
substantially all of the persons who beneficially owned Voting
Securities and Stock of the Company immediately prior to such
acquisition in substantially the same proportions as their ownership of
such Voting Securities and Stock, as the case may be, immediately prior
to such acquisition;

     (ii) A majority of the members of the Board of the Company shall not be
Continuing Directors;

     (iii) Approval by the stockholders of the Company of a reorganization, merger
or consolidation of the Company or a statutory exchange of outstanding Voting
Securities of the Company, unless, immediately following such reorganization,
merger, consolidation or exchange, all or substantially all of the persons who were
the beneficial owners, respectively, of Voting Securities and Stock of the Company
immediately prior to such reorganization, merger, consolidation or exchange
beneficially own, directly or indirectly, more than 50% of, respectively, the
combined voting power of the then outstanding voting securities entitled to vote
generally in the election of directors and the then outstanding shares of common
stock, as the case may be, of the corporation resulting from such reorganization,
merger, consolidation or exchange in substantially the same proportions as their
ownership immediately prior to such reorganization, merger, consolidation or
exchange, of the Voting Securities and Stock of the Company, as the case may be; or

     (iv) Approval by the stockholders of the Company of (x) a complete liquidation
or dissolution of the Company or (y) the sale or other disposition of all

2

 

or substantially all of the assets of the Company (in one or a series of
transactions), other than to a corporation with respect to which, immediately
following such sale or other disposition, more than 50% of, respectively, the
combined voting power of the then outstanding voting securities of such corporation
entitled to vote generally in the election of directors and the then outstanding
shares of common stock of such corporation is then beneficially owned, directly or
indirectly, by all or substantially all of the persons who were the beneficial
owners, respectively, of the Voting Securities and Stock of the Company immediately
prior to such sale or other disposition in substantially the same proportions as
their beneficial ownership immediately prior to such sale or other disposition, of
the Voting Securities and Stock of the Company, as the case may be.

     (f) “Code” means the Internal Revenue Code of 1986, as amended from time to
time, or any successor statute.

     (g) “Committee” means the Committee referred to in Section 2.1 of the Plan.

     (h) “Company” means US BioEnergy Corporation, a corporation organized under the
laws of the State of South Dakota (or any successor corporation).

     (i) “Consultant” means any natural person providing bona fide services to the Company
or a Parent Corporation or a Subsidiary of the Company (other than persons either providing
services in connection with the offer or sale of securities in a capital raising transaction
or directly or indirectly promoting or maintaining a market for the Company’s Stock), who is
compensated for such services and who is not an employee of the Company or any Parent
Corporation or Subsidiary of the Company. A Non-Employee Director may serve as a
Consultant.

     (j) “Continuing Directors” means:

     (i) individuals who, on the date hereof, are directors of the Company;

     (ii) individuals elected as directors of the Company subsequent to the date
hereof for whose election proxies shall have been solicited by the Board; or

     (iii) any individual elected or appointed by the Board to fill vacancies on the
Board caused by death or resignation (but not by removal) or to fill newly-created
directorships.

     (k) “Deferred Stock” means an Award made pursuant to Section 8 below of the
right to receive Stock at the end of a specified deferral period or upon the achievement of
specified performance criteria.

     (l) “Disability” means, except as may otherwise be provided in the terms of the
Award Agreement or in a written employment agreement between the Company and the Recipient,
the Recipient:

3

 

     (i) is unable to engage in any substantial gainful activity by reason of any
medically determinable physical or mental impairment which can be expected to result
in death or can be expected to last for a continuous period of not less than 12
months; or

     (ii) is, by reason of any medically determinable physical or mental impairment
which can be expected to result in death or can be expected to last for a continuous
period of not less than 12 months, receiving income replacement benefits for a
period of note less than three months under an accident and health plan covering
employees of the Company.

     (m) “Event” means the actual effective date of (i) a transaction described in
Section 1.2(e)(iii), without regard to the exception contained therein; or (ii) a
transaction described in Section 1.2(e)(iv), without regard to the exception contained
therein.

     (n) “Event Proceeds per Share” means the cash plus the fair market value, as
determined in good faith by the Committee, of the non-cash consideration to be received per
share of Stock by the stockholders of the Company upon the occurrence of the Event.

     (o) “Fair Market Value” of Stock on any given date shall be determined by the
Committee as follows:

     (i) If the Stock is listed for trading on one or more national securities
exchanges, or is traded on the Nasdaq Stock Market (including the Nasdaq Small Cap
Market), the last reported sales price on such national securities exchange or the
Nasdaq Stock Market on the day prior to the date in question, or if such Stock shall
not have been traded on such principal exchange on such date, the last reported
sales price on such principal exchange on the first day prior thereto on which such
Stock was so traded; or

     (ii) If the Stock is not listed for trading on a national securities exchange
or the Nasdaq Stock Market, but is traded in the over-the-counter market, including
the Nasdaq OTC Bulletin Board, the closing bid price for such Stock on the day prior
to the date in question, or if there is no closing bid price for such Stock on such
date, the closing bid price on the first day prior thereto on which such price
existed; or

     (iii) If neither (i) nor (ii) is applicable, by any means fair and reasonable
by the Committee, which determination shall be final and binding on all parties.

     (p) “Incentive Option” means any Award intended to be and designated as an
“Incentive Option” within the meaning of Section 422 of the Code.

     (q) “Non-Employee Director” means a non-employee director within the meaning of
Rule 16b-3(b)(3) under the Securities Exchange Act of 1934.

     (r) “Non-Qualified Option” means any Option that is not an Incentive Option.

4

 

     (s) “Option” means any Award to purchase Stock granted pursuant to Section 5
below.

     (t) “Outside Director” means a Director who: (i) is not a current employee of
the Company or any member of an affiliated group which includes the Company; (ii) is not a
former employee of the Company who receives compensation for prior services (other than
benefits under a tax-qualified retirement plan) during the taxable year; (iii) has not been
an officer of the Company; (iv) does not receive remuneration from the Company, either
directly or indirectly, in any capacity other than as a director, except as otherwise
permitted under Section 162(m) of the Code and regulations thereunder. For this purpose,
remuneration includes any payment in exchange for good or services. The provisions of
Section 162(m) of the Code and regulations promulgated thereunder shall further govern this
definition.

     (u) “Parent Corporation” means any corporation (other than the Company) in an
unbroken chain of corporations ending with the Company if each of the corporations (other
than the Company) owns stock possessing 50% or more of the total combined voting power of
all classes of stock in one of the other corporations in the chain.

     (v) “Recipient” means any eligible person to whom an Award has been granted
under this Plan.

     (w) “Restricted Stock” means an Award of shares of Stock pursuant to Section 7
below that are subject to restrictions as described therein.

     (x) “Stock” means the Class A common stock, $0.01 par value per share, of the
Company.

     (y) “Stock Appreciation Right” means the right, pursuant to an Award granted
under Section 6 below, to surrender to the Company all or a portion of a right in exchange
for an amount equal to the difference between (i) aggregate Fair Market Value, as of the
date the right or such portion thereof is exercised and surrendered, of the shares of Stock
covered by such right or such portion thereof, and (ii) the aggregate Fair Market Value of
such right or such portion thereof on the date such Award was made.

     (z) “Subsidiary” means any corporation (other than the Company), foreign or
domestic, in an unbroken chain of corporations beginning with the Company if each of the
corporations (other than the last corporation in the unbroken chain) owns stock possessing
50% or more of the total combined voting power of all classes of stock in one of the other
corporations in the chain.

     (aa) “Voting Securities” means the Company’s then outstanding securities
entitled to vote generally in the election of directors.

SECTION 2. Administration.

     2.1 Authority. The Plan shall be administered by the Board or by a Committee
appointed by the Board consisting of at least three members of the Board, each of whom shall serve
at the

5

 

pleasure of the Board. If at any time no Committee shall be in office, then the Board shall
exercise the functions of the Committee specified in the Plan. The Board may exercise any or all
of the functions of the Committee specified in the Plan, except that:

     (a) at such time as any Award is subject to the limitations under Section 162(m) of the
Code and regulations promulgated thereunder, the Plan shall be administered by a Committee
consisting solely of two or more members who shall be Outside Directors; and

     (b) at such time as the Company and its affiliates are subject to the limitations under
Section 16-b of the Securities Exchange Act of 1934, and regulations promulgated thereunder,
the Committee shall consist solely of Non-employee Directors.

References in the Plan to the Committee shall also include the Board, unless the context clearly
indicates otherwise.

     2.2 Powers. The Committee shall have the power and authority to grant Awards pursuant
to the terms of the Plan. In particular, the Committee shall have the authority:

     (a) Recipients. To select Recipients to whom Awards may from time to time be
granted hereunder;

     (b) Amount. To determine the number of shares of Stock to be covered by each
such Award granted hereunder;

     (c) Terms and Conditions. To determine the terms and conditions, not
inconsistent with the terms of the Plan, of any Award granted hereunder (including, but not
limited to, any restriction on any Award and/or the Stock relating thereto) provided,
however, that upon the occurrence of an Event, the applicable provisions of Section 9.1 of
the Plan shall govern the acceleration of the vesting of any Award;

     (d) Amendment. To amend the terms of any Award theretofore granted,
prospectively or retroactively, to the extent such amendment is consistent with the terms of
the Plan, but no such amendment shall impair the rights of any Recipient without his or her
consent except to the extent authorized under the Plan;

     (e) Substitution. To substitute new Awards for previously granted Awards,
including previously granted Options having higher exercise prices;

     (f) Determination. To make any other determination and take any other action
that the Committee deems necessary or desirable for the administration of the Plan; and

     (g) Rules. To adopt, alter and repeal such administrative rules, guidelines
and practices governing the Plan as it shall, from time to time, deem advisable; to
interpret the terms and provisions of the Plan and any award issued under the Plan (and any
agreements relating thereto); and to otherwise supervise the administration of the Plan.

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     2.3 Delegation. Except to the extent prohibited by applicable law or the applicable
rules of a stock exchange, the Committee may delegate the authority to exercise the powers
specified in Section 2.2(a), (b), (c) and (d) above to:

     (a) to any officer of the Company, provided, however, that such authority shall not be
exercised by any officer with respect to persons who are either the chief executive officer
of the Company or the four highest paid officers of the Company other than the chief
executive officer; and

     (b) to US Bio Resource Group L.L.C., a South Dakota limited liability company, with
respect to Awards to persons who provide services directly or indirectly to the Company
pursuant to and in accordance with the terms of the Administrative Services Agreement
between such entity and the Company, subject to the limitations on such Awards as set forth
in the Administrative Services Agreement or as otherwise agreed to between the Committee and
US Bio Resource Group L.L.C.

     2.4 Decisions Binding. All decisions made by the Committee (or its delegate to the
extent provided in Section 2.3) pursuant to the provisions of the Plan shall be final and binding
on all persons, including the Company and all Recipients.

SECTION 3. Stock Subject to Plan.

     3.1 Shares Reserved for Issuance. The total number of shares of Stock reserved and
available for distribution under the Plan shall be ten million (10,000,000) shares of Stock of the
Company. Such shares shall consist of authorized and unissued shares of Stock of the Company.

     3.2 Share Counting. If any shares of Stock become available as a result of canceled,
unexercised, lapsed or terminated Awards under this Plan, such shares shall again be available for
distribution in connection with future awards under the Plan. Upon a stock-for-stock exercise of
an Award, the withholding of Stock for the payment of the Option price or the withholding of Stock
for the payment of taxes on an Award, only the net number of shares of Stock issued to the
Recipient shall be used to calculate the number of shares remaining available for distribution
under the Plan.

     3.3 Adjustments. In the event of a corporate transaction involving the Company
(including, without limitation, any merger, reorganization, consolidation, recapitalization, stock
dividend, stock split, other change in corporate structure affecting the Stock, or spin-off or
other distribution of assets to stockholders) or other event affecting any class of Stock which
would be reasonably likely to result in the diminution or enlargement of any of the benefits
intended to be made available under the Plan or an Award, the Committee may, without the consent of
any Recipient, make such adjustment as it determines in its discretion to be appropriate as to the
number and kind of shares of Stock subject to and reserved under this Plan, the purchase price of
each share subject to an outstanding Option and, in order to prevent dilution or enlargement of
rights of Recipients in this Plan, the exercise price of any outstanding Option or Stock
Appreciation Right; and the number and kind of securities issuable upon exercise of an outstanding
Option or payment of an Award; provided that the number of shares of Stock subject to any Award
shall always be a whole number. Additional shares of Stock that may be credited

7

 

pursuant to such adjustment shall be subject to the same restrictions as are applicable to the
Stock with respect to which the adjustment relates.

     3.4 Effect of Award. The grant of an Award pursuant to the Plan shall not limit in
any way the right or power of the Company to make adjustments, reclassifications, reorganizations
or changes of its capital or business structure or to merge, exchange or consolidate or to
dissolve, liquidate or transfer all or any part of its business or assets.

SECTION 4. Eligibility.

     Officers, other employees of the Company and its Subsidiaries, members of the Board, and
Consultants who are responsible for or contribute to the management, growth and/or profitability of
the business of the Company and its Subsidiaries are eligible to be granted Awards under the Plan.
Recipients under the Plan shall be selected from time to time by the Committee, in its sole
discretion or as otherwise provided in Section 2.3, from among those eligible.

SECTION 5. Option Awards.

     5.1 Option Types. Each Option shall be evidenced by a written Agreement, in such form
as the Committee may approve from time to time, which Agreement shall be subject to the provisions
of this Plan and to such other terms and conditions as the Committee may deem appropriate. The
Options granted under the Plan may be of two types: (i) Incentive Options and (ii) Non-Qualified
Options. No Incentive Option may be issued more than 10 years after the earlier of the date the
Plan is adopted by the Board or is approved by the shareholders of the Company.

     5.2 Non-Qualified Options. To the extent that any Option or portion of an Option does
not qualify as an Incentive Option, it shall constitute a separate Non-Qualified Option. A
Non-Qualified Option may be granted to a Recipient, in connection with hiring, retention or
otherwise, prior to the date the Recipient first performs services for the Company or the
Subsidiary, provided that such Option shall not become vested prior to the date the Recipient first
performs such services.

     5.3 Incentive Options; Interpretation. Notwithstanding anything in the Plan to the
contrary, no term of the Plan relating to an Incentive Option shall be interpreted, amended or
altered, nor shall any discretion or authority granted under the Plan be so exercised, so as to
disqualify either the Plan or any Incentive Option under Section 422 of the Code. The preceding
sentence shall not preclude any modification or amendment to an outstanding Incentive Option,
whether or not such modification or amendment results in disqualification of such Options as an
Incentive Option, provided the Recipient consents in writing to the modification or amendment.

     5.4 Terms and Conditions. Options granted under the Plan shall be subject to the
following terms and conditions and shall contain such additional terms and conditions, not
inconsistent with the terms of the Plan, as the Committee shall deem desirable:

     (a) Limitation under Section 162(m) of the Code. At such time as any Option
under this Plan granted by the Committee is subject to the limitations under Section

8

 

162(m) of the Code, no Recipient shall receive grants of Options under this Plan that
exceed 1,000,000 shares of Stock during any fiscal year of the Company.

     (b) Annual Limit on Incentive Options. The aggregate Fair Market Value
(determined as of the time the Option is granted) of the Stock with respect to which an
Incentive Option under this Plan or any other plan of the Company and any Subsidiary or
Parent Corporation is exercisable for the first time by a person during any calendar year
shall not exceed $100,000. To the extent any Option is exercisable in excess of the
foregoing limit in any calendar year, such Option shall be a Non-qualified Stock Option.

     (c) Option Exercise Price. The exercise price per share of Stock purchasable
under an Option shall be determined by the Committee at the time of grant, except that; (i)
the exercise price of an Incentive Option shall not be less than 100% of the Fair Market
Value of the Stock on the date of grant of such Option (except as provided in the next
sentence); and (ii) the exercise price of a Non Qualified Option shall not be less than 50%
of the Fair Market Value of the Stock of the Company as of the date of grant of such Option.
If an employee owns or is deemed to own (by reason of the attribution rules applicable
under Section 424(d) of the Code) more than 10% of the combined voting power of all classes
of capital stock of the Company or any Parent Corporation or Subsidiary and an Incentive
Option is granted to such employee, the Option exercise price shall be no less than 110% of
the Fair Market Value of the Stock on the date of grant of such Option. In the event the
Committee does not fix the exercise price of the Option, the exercise price shall be 100% of
Fair Market Value on the date of grant or as provided in the preceding sentence.

     (d) Option Term. The Committee shall fix the term of each Option, except that
no Incentive Option shall be exercisable more than ten years after the date of grant of such
Option (except as provided in the next sentence). If an employee owns or is deemed to own
(by reason of the attribution rules of Section 424(d) of the Code) more than 10% of the
combined voting power of all classes of capital stock of the Company or any Parent
Corporation or Subsidiary and an Incentive Option is granted to such employee, the term of
such Option shall be no more than five years from the date of grant of such Option. In the
event that the Committee does not fix the term of an Option, the term shall be ten years
from the date the Option is granted or as otherwise provided in the preceding sentence,
subject to earlier termination as otherwise provided herein.

     (e) Exercisability. An Option shall be exercisable in accordance with such
terms and conditions and during such periods as determined by the Committee at or after
grant, subject to the restrictions stated in Section 5.4(b) above. In the event the
Committee does not determine the time at which an Option shall be exercisable, such Option
shall be exercisable in equal installments of 20% of the shares of Stock subject to the
Option on and after the first anniversary of the date of grant of the Option and an
additional 20% of the shares of Stock subject to the Option on and after the second, third,
forth and fifth anniversaries of the date of grant of the Option, subject to earlier
termination as otherwise provided herein.

9

 

     (f) Method of Exercise. An Option may be exercised in whole or in part at any
time during the Option term by giving written notice of exercise to the Company, specifying
the number of shares of Stock to be purchased. Such notice shall be accompanied by payment
in full of the exercise price, either by certified or bank check, or by any other form of
legal consideration deemed sufficient by the Committee and consistent with the Plan’s
purpose and applicable law, including promissory notes or delivery of irrevocable
instructions to a broker acceptable to the Company to promptly deliver to the Company the
amount of sale or loan proceeds to pay the entire exercise price and any tax withholding
resulting from such exercise. As determined by the Committee at the time of grant or
exercise, in its sole discretion, payment in full or in part may also be made by tendering,
by either actual delivery of Stock or attestation, Stock already owned by the Recipient and
valued at Fair Market Value (which, in the case of Stock acquired upon exercise of an
Option, the Committee may, in its discretion, require have been owned for more than six
months on the date of surrender); provided, however, that, in the case of an
Incentive Option, the right to make a payment in the form of already owned shares of Stock
may be authorized only at the time the Option is granted. No Stock shall be issued until
full payment therefor has been made. A Recipient shall generally have the rights to
dividends and other rights of a shareholder with respect to Stock subject to the Option when
the Recipient has given written notice of exercise, has paid in full for such Stock, and, if
requested, has given the representation described in Section 12.1.

     (g) Transferability of Options.

     (i) No Incentive Option shall be transferable by the Recipient otherwise than
by will or by the laws of descent and distribution, and all Incentive Options shall
be exercisable, during the Recipient’s lifetime, only by the Recipient.

     (ii) The Committee may, in its discretion, authorize all or a portion of any
Nonqualified Option to be granted to a Recipient to be on terms which permit
transfer by such Recipient to: (A) the spouse, children or grandchildren of the
Recipient (“Immediate Family Members”), (B) a trust or trusts for the exclusive
benefit of such Immediate Family Members, or (C) a partnership or partnerships in
which such Immediate Family Members are the only partners, provided that: (1) there
may be no consideration for any such transfer, (2) the Option pursuant to which such
Stock is granted must be approved by the Committee, and must expressly provide for
transferability in a manner consistent with this Section 5.4(g)(ii), and (3)
subsequent transfers of a transferred Option shall be prohibited. Following
transfer, any such Option shall continue to be subject to the same terms and
conditions as were applicable immediately prior to transfer, provided that the term
“Recipient” herein shall in such event be deemed to refer to the transferee, except
that the events of termination of employment and the provisions of Sections 5.4(h)
and (i) hereof shall continue to be applied with respect to the original Recipient,
following which the Option shall be exercisable by the transferee only to the
extent, and for the periods specified in such Sections.

10

 

     (iii) Non-Qualified Options may be transferred to the spouse or former spouse
of the Recipient to the extent provided in a domestic relations order issued in
accordance with applicable state law.

     (h) Termination by Death or Disability. Unless the Option Agreement provides
otherwise or the Committee determines, if a Recipient’s employment by the Company or any
Subsidiary or Parent Corporation terminates by reason of death or Disability, the Option may
thereafter be exercised, to the extent it was exercisable at the time of death or Disability
(or on such accelerated basis as the Committee shall determine at or after grant), by the
Recipient or the legal representative of the estate or by the legatee of the Recipient under
the will of the Recipient, but may not be exercised after one year from the date of such
Disability or death or the expiration of the stated term of the Option, whichever period is
shorter. In the event of termination of employment by reason of death or Disability, if an
Incentive Option is exercised after the expiration of the exercise periods that apply for
purposes of Section 422 of the Code, the Option will thereafter be treated as a
Non-Qualified Option.

     (i) Other Termination. Unless the Option Agreement provides otherwise or the
Committee determines:

     (i) if a Recipient’s employment by the Company or any Subsidiary or Parent
Corporation terminates for any reason other than death, Disability or as provided in
Section 5.4(i)(ii), the Option shall immediately terminate; and

     (ii) if the Company or any Subsidiary or Parent Corporation terminates the
Recipient without Cause, the Option may thereafter be exercised to the extent it was
exercisable at the time of such termination for three months from the date of such
termination or the expiration of the stated period of the Option, whichever period
is shorter.

SECTION 6. Stock Appreciation Rights.

     6.1 Grant. An Award of Stock Appreciation Rights may be granted to a Recipient either
alone or in conjunction with all or part of any Option granted under the Plan. The Award shall
designate each class of Stock to which the right shall apply. In the case of a Non-Qualified
Option, such rights may be granted either at or after the time of the grant of such Option. In the
case of an Award in conjunction with an Incentive Option, such Award may be granted only at the
time of the grant of the Option.

     6.2 Exercise. The Recipient may exercise a Stock Appreciation Right by surrendering
the applicable portion of the Award. Upon such exercise and surrender, the Recipient shall be
entitled to receive an amount determined in the manner prescribed in Section 6.3(b). If the Award
of a Stock Appreciation Right is in connection with an Option, that portion of the Option
representing the Stock Appreciation Rights shall be surrendered upon exercise of the right.
Options that have been so surrendered, in whole or in part, shall no longer be exercisable to the
extent the related Stock Appreciation Rights have been exercised.

11

 

     6.3 Terms and Conditions. Stock Appreciation Rights shall be subject to such terms
and conditions, not inconsistent with the provisions of the Plan, as shall be determined from time
to time by the Committee, including the following:

     (a) Award Related to Stock Options. Stock Appreciation Rights granted in
connection with an Option shall be exercisable only at such time or times and to the extent
that the Options to which they relate shall be exercisable in accordance with the provisions
of Section 5 and this Section 6 of the Plan. A Stock Appreciation Right or applicable
portion thereof granted in connection with an Option shall terminate and no longer be
exercisable upon the termination or exercise of the related Option, except that a Stock
Appreciation Right granted with respect to less than the full number of shares covered by a
related Option shall not be reduced until the exercise or termination of the related Option
exceeds the number of shares not covered by the Stock Appreciation Right.

     (b) Payment Upon Exercise. Upon the exercise of a Stock Appreciation Right,
the Recipient shall be entitled to receive up to, but not more than, an amount in cash or
shares of Stock equal in value to the excess of the Fair Market Value of one share of Stock
on the date of exercise over the Fair Market Value on the date of grant of the Award (or, in
the case of an Award in connection with an Option, the exercise price per share specified in
the related Option), multiplied by the number of shares in respect of which the Stock
Appreciation Right shall have been exercised, with the Committee having the right to
determine the form of payment.

     (c) Transferability. Except as provided in the next sentence, Stock
Appreciation Rights shall not be transferable except pursuant to the laws of descent upon
death. Stock Appreciation Rights granted in connection with an Option shall be transferable
only when and to the extent that the underlying Option would be transferable under Section
5.4(g) of the Plan.

     (d) Incentive Stock Option Limitation. A Stock Appreciation Right granted in
connection with an Incentive Option may be exercised only if and when the market price of
the Stock subject to the Incentive Option exceeds the exercise price of such Option.

     (e) Application of Code Section 409A. If and to the extent that any provision
of an Award of Stock Appreciation Rights is required to comply with Section 409A of the
Code, such provision shall be administered and interpreted in a manner consistent with the
requirements of such Section. If and solely to the extent that such provision as currently
written would conflict with Section 409A of the Code, the Committee shall have the
authority, without the consent of the Recipient, to administer the provision and to amend
the Award with respect to that provision to the extent the Committee determines to avoid any
portion of amounts owed to the Recipient being retroactively included in taxable income for
any prior taxable year.

SECTION 7. Restricted Stock Awards.

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     7.1 Grant. An Award of Restricted Stock may be granted either alone or in addition to
other Awards granted under the Plan. The Committee shall determine to whom Restricted Stock will
be granted, the number of shares of Stock to be awarded, the times or other conditions within which
an Award may be subject to forfeiture, and all other conditions of the Award in addition to those
contained in Section 7.4. The Committee may also grant Restricted Stock in which the restrictions
lapse upon the attainment of specified performance goals over a specified performance period. The
provisions of Restricted Stock Awards need not be the same with respect to each Recipient.

     7.2 Award Agreement. The Recipient of an Award of shares of Restricted Stock shall
not have any rights with respect to such Award, unless and until such Recipient has executed an
Agreement evidencing the Award and has delivered a fully executed copy thereof to the Company, and
has otherwise complied with the then applicable terms and conditions.

     7.3 Certificate. Each Recipient shall be issued a stock certificate in respect of
shares of Restricted Stock awarded under the Plan. Such certificate shall be registered in the
name of the Recipient, and shall bear an appropriate legend referring to the terms, conditions, and
restrictions applicable to the Award, substantially in the following form:

     “The transferability of this certificate and the shares of Stock represented
hereby are subject to the terms and conditions (including forfeiture) of the US
BioEnergy Corporation 2005 Stock Incentive Plan and an Agreement entered into
between the registered owner and the Company. Copies of such Plan and Agreement are
on file in the offices of the Secretary of the Company.”

The Committee shall require that the stock certificates evidencing such shares be held in custody
by the Company until the restrictions thereon shall have lapsed, and that, as a condition of any
Restricted Stock Award, the Recipient shall have delivered a stock power, endorsed in blank,
relating to the Stock covered by such Award.

     7.4 Restrictions and Conditions. The shares of Restricted Stock awarded pursuant to
the Plan shall be subject to the following restrictions and conditions:

     (a) Restriction Period. Subject to the provisions of this Plan and the Award
Agreement, during a period set by the Committee commencing with the date of such award (the
“Restriction Period”), the Recipient shall not be permitted to sell, transfer, pledge or
assign shares of Restricted Stock awarded under the Plan. Within these limits, the
Committee may provide for the lapse of such restrictions in installments where deemed
appropriate.

     (b) Rights as Shareholder. Except as provided in Section 7.4(a) and (c), the
Recipient shall have, with respect to the shares of Restricted Stock, all of the rights of a
shareholder of the Company, including the right to vote the shares and the right to receive
any cash dividends. The Committee, in its sole discretion or as otherwise required by
application of Section 409A of the Code, may require the payment of cash dividends to be
deferred and, if the Committee so determines, reinvested in additional shares of Restricted
Stock (to the extent shares are available under Section 3.1). Certificates for

13

 

shares of unrestricted Stock shall be delivered to the Recipient promptly after, and
only after, the period of forfeiture shall have expired without forfeiture in respect of
such shares of Restricted Stock.

     (c) Performance Restrictions. Notwithstanding Section 7.4(b) above, any Award
of Restricted Stock based on the achievement of performance goals shall not be considered
outstanding for any purpose, and no dividends, voting or other rights of a shareholder shall
attach to such shares until such time as the performance goals have been satisfied and the shares are issued to the Recipient without restriction.

     (d) Forfeiture; Waiver. Except to the extent provided in the Award Agreement,
upon termination of employment for any reason during the Restriction Period, all shares
still subject to restriction shall be forfeited by the Recipient. The Committee may, in its
sole discretion, when it finds that a waiver would be in the best interest of the Company,
waive in whole or in part any or all remaining restrictions with respect to the Recipient’s
shares of Restricted Stock.

     (e) Transferability. Subject to the provisions of this Plan and the Award
Agreement, Restricted Stock Awards may not be sold, assigned, transferred, pledged or
otherwise encumbered during the Restriction Period.

     SECTION 8. Deferred Stock Awards.

     8.1 Grant. Deferred Stock may be awarded either alone or in addition to other Awards
granted under the Plan. The Committee shall determine the duration of the period (the “Deferral
Period”) during which, and the conditions under which, receipt of the Stock will be deferred, and
the other terms and conditions of the Award consistent with the terms of the Plan, in addition to
those contained in Section 8.2. The Committee may also condition the receipt of Deferred Stock
upon the attainment of specified performance goals. The provisions of Deferred Stock Awards need
not be the same with respect to each Recipient. Each Award shall be confirmed by, and subject to
the terms of, a Deferred Stock Agreement executed by the Company and the Recipient.

     8.2 Terms and Conditions. The shares of Deferred Stock awarded pursuant to this Plan
shall be subject to the following terms and conditions:

     (a) Transferability. Subject to the provisions of this Plan and the Award
Agreement, Deferred Stock awards may not be sold, assigned, transferred, pledged or
otherwise encumbered during the Deferral Period. At the expiration of the Deferral Period,
share certificates shall be delivered to the Recipient, or his legal representative, in a
number equal to the shares covered by the Deferred Stock Award.

     (b) Rights as Shareholder. An Award of Deferred Stock shall not be considered
outstanding for any purpose, and no dividends, voting or other rights of a shareholder shall
attach to such shares until such time as the Deferral Period has ended and the shares are
issued to the Recipient.

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     (c) Forfeiture; Waiver. Except as provided in the Award Agreement, upon
termination of employment for any reason during the Deferral Period for a given award, the
Recipient shall forfeit the Deferred Stock in question. The Committee may, in its sole
discretion, when it finds that a waiver would be in the best interest of the Company, waive
in whole or in part any or all of the remaining deferral limitations imposed hereunder with
respect to any or all of the Recipient’s Deferred Stock.

     (d) Application of Code Section 409A. If and to the extent that any provision
of an Award of Stock Appreciation Rights is required to comply with Section 409A of the
Code, such provision shall be administered and interpreted in a manner consistent with the
requirements of such Section. If and solely to the extent that such provision as currently
written would conflict with Section 409A of the Code, the Committee shall have the
authority, without the consent of the Recipient, to administer the provision and to amend
the Award with respect to that provision to the extent the Committee determines to avoid any
portion of amounts owed to the Recipient being retroactively included in taxable income for
any prior taxable year.

SECTION 9. Performance Stock.

     9.1 Grant. An Award of Performance Stock may be granted either alone or in addition
to other Awards granted under the Plan. The Committee shall determine to whom Performance Stock
will be granted, the number of shares of Stock to be awarded, the times or other conditions,
including attainment of specified performance goals over a specified performance period upon which
an Award will no longer be subject to forfeiture, and all other conditions of the Award consistent
with the terms of the Plan. The Committee may also grant unrestricted Stock in connection with the
performance of services for or on behalf of the Company. The provisions of Performance Stock
Awards need not be the same with respect to each Recipient.

SECTION 10. Change in Control.

     10.1 No Automatic Acceleration. Unless otherwise provided in an Agreement or by
Committee action with respect to any outstanding Award, no Option shall become exercisable and no
Award shall vest and become due and payable solely as a result of a Change in Control of the
Company. Any such Option shall be exercisable only to the extent it was exercisable immediately
prior to the Change in Control or otherwise becomes exercisable after a Change in Control in
accordance with its terms and conditions. Any Award shall vest and become payable after a Change in
Control in accordance with its terms and conditions.

     10.2 Cash Payment. If a Change in Control of the Company described in Section
1.2(e)(i) occurs, then, so long as a majority of the members of the Board are Continuing Directors,
the Committee, in its sole discretion, and without the consent of the Recipient affected thereby,
may determine that some or all outstanding Awards shall be cancelled as of the effective date of
any such Change in Control and that the Recipient shall receive, with respect to all of the Stock
subject to such cancelled Awards, as of the date of such cancellation, cash in an amount equal to
the Fair Market Value of each Share subject to the Award, except that, with respect to a cancelled
Option or Stock Appreciation Right, the amount shall be equal to the excess of the per

15

 

share Fair Market Value of each such Stock immediately prior to such Change in Control of the
Company over the exercise price per share.

     10.3 Limitation on Change in Control Payments. Notwithstanding anything in Section
10.1 or 10.2 or Section 11 to the contrary, if, with respect to a Recipient, the acceleration of
the exercisability of an Option or the payment of cash in exchange for all or part of an Award as
provided in Section 10.1 or 10.2 or Section 11 (which acceleration or payment could be deemed a
“payment” within the meaning of Section 280G(b)(2) of the Code), together with any other payments
which such Recipient has the right to receive from the Company or any corporation which is a member
of an “affiliated group” (as defined in Section 1504(a) of the Code without regard to Section
1504(b) of the Code) of which the Company is a member, would constitute a “parachute payment” (as
defined in Section 280G(b)(2) of the Code), then, unless otherwise provided in the applicable Award
Agreement, such acceleration of exercisability and payments pursuant to Section 9.1 or 9.2 or
Section 10 shall be reduced to the largest amount as, in the sole judgment of the Committee, will
result in no portion of such payments being subject to the excise tax imposed by Section 4999 of
the Code.

SECTION 11. Dissolution, Liquidation, Merger.

     11.1 Effect on Award. Upon an Event, the Committee may, but shall not be obligated
to, either:

     (a) Substitution of Award. If the Event is a merger, consolidation or
statutory share exchange, make appropriate provision for the protection of outstanding
Awards granted under this Plan by the substitution, in lieu of such Awards, of awards,
including options for the purchase, of appropriate voting common stock (the “Survivor’s
Stock”) of the corporation surviving any such merger or consolidation or, if appropriate,
the parent corporation of the Company or such surviving corporation, or, alternatively, by
the delivery of a number of shares of the Survivor’s Stock which has a Fair Market Value as
of the effective date of such merger, consolidation or statutory share exchange equal to the
Award, except that with respect to an Option, the number of shares of the Survivor’s Stock
shall be the product of: (i) the excess of (x) the Event Proceeds per Share covered by the
Option as of such effective date over (y) the exercise price per share of the Stock subject
to such Option, times (ii) the number of shares of Stock covered by such Option and subject
to the same vesting and exercise provisions of the original Award; or

     (b) Cancellation of Options. With respect to any Option, declare, at least
twenty days prior to the Event, and provide written notice to each Recipient of the
declaration, that each outstanding Option, whether or not then exercisable, shall be
cancelled at the time of, or immediately prior to the occurrence of, the Event (unless it
shall have been exercised prior to the occurrence of the Event); or

     (c) Cash Payment. Cause payment to be made, within twenty days after the
Event, in exchange for each cancelled Award to each Recipient of an Award that is cancelled,
of cash equal to the Fair Market Value for each share of Stock covered by the cancelled
Award, except that with respect to any cancelled Option, cash equal to the

16

 

amount, (if any), by which the Event Proceeds per Share exceeds the exercise price per
share of Stock covered by such Option; or

     (d) Exercise of Options. Accelerate the vesting and exercise of each Option
that has not previously expired or been cancelled pursuant to Section 10.2 and each
Recipient shall have the right, during the period preceding the time of cancellation of the
Option, to exercise the Option as to all or any part of the Stock covered thereby. Each
outstanding Option granted pursuant to this Plan that shall not have been exercised prior to
the Event shall be cancelled at the time of, or immediately prior to, the Event, as provided
in the declaration, and this Plan shall terminate at the time of such cancellation, subject
to the payment obligations of the Company provided in this Section 11.

Notwithstanding the foregoing, no Recipient of an Award shall be entitled to the payment provided
in this Section 11 if such Award shall have expired or been cancelled pursuant to Section 10.2 of
this Plan.

     11.2 Lapse of Repurchase Right. In the event of the proposed dissolution or
liquidation of the Company, the Committee may provide that any option of the Company to repurchase
the Stock covered by an Award described in Section 13.4 and 13.5 shall lapse as to all such Stock,
provided that the proposed dissolution or liquidation takes place at the time and in the manner
provided.

SECTION 12. Substitute Awards.

     12.1 Purpose. Awards may be granted under this Plan from time to time in substitution
for Awards held by employees of other corporations who are about to become employees of the
Company, or any Parent Corporation or Subsidiary thereof, or whose employer is about to become a
Subsidiary of the Company, as the result of a merger or consolidation of the Company or its
Subsidiary with another corporation, the acquisition by the Company or its Subsidiary of all or
substantially all the assets of another corporation or the acquisition by the Company or its
Subsidiary of at least 50% of the issued and outstanding stock of another corporation.

     12.2 Terms and Conditions. The terms and conditions of the substitute Award so
granted may vary from the terms and conditions set forth in this Plan to such extent as the
Committee at the time of the grant may deem appropriate to conform, in whole or in part, to the
provisions of the stock Awards in substitution for which they are granted, but with respect to that
Incentive Options, no such variation shall be permitted that affects the status of any such
substitute Option as an Incentive Option without the consent of the Recipient.

SECTION 13. General Provisions.

     13.1 Compliance With Laws. No Stock will be issued pursuant to the Plan unless in
compliance with applicable legal requirements, including without limitation, those relating to
securities laws and stock exchange listing requirements. The Committee may require each Recipient
receiving Stock pursuant to an Award under the Plan to represent to and agree with the Company in
writing that such person is acquiring the Stock without a view to distribution thereof.

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     13.2 Stop Transfer Order. All certificates for Stock delivered under the Plan shall
be subject to such stop transfer orders and other restrictions as the Committee may deem advisable
under the rules, regulations, and other requirements of the Securities and Exchange Commission, any
stock exchange upon which the Stock is then listed, and any applicable federal or state securities
laws, and the Committee may cause a legend or legends to be put on any such certificates to make
appropriate reference to such restrictions. The issuance of Stock may be effected on a
non-certificated basis to the extent not prohibited by applicable law or the applicable rules of
any stock exchange upon which the Stock is then listed.

     13.3 No Rights to Employment; No Rights as a Shareholder. The adoption of the Plan
shall not confer upon any employee or Consultant of the Company, any Parent Corporation, or any
Subsidiary any right to continued employment or contract with the Company, any Parent Corporation,
or any Subsidiary, as the case may be, nor shall it interfere in any way with the right of the
Company, any Parent Corporation, or any Subsidiary to terminate the employment of any of its
employees or Consultants at any time.

     13.4 Company Call Right. The Committee may, at the time of the grant of an Award,
provide the Company with the right to repurchase Stock acquired under the Plan, pursuant to which
the Recipient shall be required to offer to the Company upon termination of employment for any
reason any Stock that the Recipient acquired under the Plan, with the price being the then Fair
Market Value of the Stock or, in the case of a termination for Cause, an amount equal to the cash
consideration paid for the Stock whichever is lesser, subject to such other terms and conditions as
the Committee may specify at the time of grant.

     13.5 Recipient Put Right. The Committee may, at the time of grant of an Award under
the Plan or by amendment, obligate the Company to repurchase Stock acquired pursuant to the Plan at
the election of the Recipient. In such event, the Company may satisfy the purchase price in cash
or by a combination of not less than 25% cash payment at closing and the remainder by promissory
note payable over a period not to exceed five years, together with reasonable interest in
installments no less often than annually.

     13.6 Forfeiture for Competition. The Committee may, at the time of the grant of an
Award under the Plan, provide the Company with the right to repurchase, or require the forfeiture
of, Stock acquired pursuant to the Plan by any Recipient who, at any time within a period of time
specified by the Committee not to exceed twelve (12) months after the Recipient’s termination of
services with the Company or any Subsidiary or Parent Corporation, directly or indirectly competes
with, or is employed by, a competitor of, the Company or any Subsidiary or Parent Corporation or
solicits employees or customers of the Company or any Subsidiary or Parent Corporation.

     13.7 Restrictions on Stock Transfers. As a further condition to the grant of any
Award or the issuance of Stock to the Recipient, the Recipient agrees to the following:

     (a) Underwriter Lockup Agreement. In the event the Company advises the
Recipient that it plans an underwritten public offering of its Stock in compliance with the
Securities Act of 1933, as amended, and the underwriter(s) seek to impose restrictions under
which certain shareholders may not sell or contract to sell or grant any option to

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buy or otherwise dispose of part or all of their stock purchase rights of the
underlying Stock, the Recipient will not, for a period not to exceed 180 days from the
prospectus, sell or contract to sell or grant an option to buy or otherwise dispose of any
Award granted to Recipient pursuant to the Plan or any of the underlying Stock without the
prior written consent of the underwriter(s) or its representative(s).

     (b) Blue Sky Requirements. In the event the Company makes any public offering
of its securities and determines in its sole discretion that it is necessary to reduce the
number of issued but unexercised stock purchase rights so as to comply with any state’s
securities or Blue Sky law limitations with respect thereto, the Board shall have the right:

     (i) to accelerate the vesting and payment of any Award and the exercisability
of any Option and the date on which such Option must be exercised, provided that the
Company gives the Recipient prior written notice of such acceleration, and

     (ii) to cancel any Option or portion of any Option thereof which the Recipient
does not exercise prior to or contemporaneously with such public offering.

     (c) Legend. The Company may insert a legend on any Stock certificate issued
pursuant to an Award under the Plan to assure compliance with this Section 13.7.

     13.8 Effect of Transfer/Leave of Absence. For purposes of any Incentive Option, the
following events shall not be deemed a termination of employment:

     (a) Transfer. A transfer of an employee from the Company to a Parent
Corporation or a Subsidiary, or a transfer of an employee from a Parent Corporation or a
Subsidiary to the Company or any other Parent Corporation or Subsidiary;

     (b) Leave Less Than 90 Days. A leave of absence, approved in writing by the
Committee, for sickness or for any other purpose, if the period of such leave does not
exceed ninety (90) days (or such longer period as the Committee may approve, in its sole
discretion); and

     (c) Leave More Than 90 Days. A leave of absence in excess of ninety (90) days,
approved in writing by the Committee, but only if the employee’s right to reemployment is
guaranteed either by a statute or by contract, and provided that, in the case of any leave
of absence, the employee returns to work within 30 days after the end of such leave.

     (d) Military Leave. A military leave in which the employee’s right to
reemployment is guaranteed under the provisions of the Uniform Services Employment and
Reemployment Rights Act (USERRA), and regulations promulgated thereunder.

     13.9 Tax Withholding. Each Recipient shall, no later than the date as of which any
part of the value of an Award first becomes includable as compensation in the gross income of the
Recipient for federal income tax purposes, pay to the Company, or make arrangements satisfactory to
the Committee regarding payment of, any federal, state, or local taxes of any kind

19

 

required by law to be withheld with respect to the award. The obligations of the Company
under the Plan shall be conditional on such payment or arrangements and the Company, any Parent
Corporation, and any Subsidiary shall, to the extent permitted by law, have the right to deduct any
such taxes from any payment of any kind otherwise due to the Recipient. If the terms of an Award
so permit, a Recipient may elect by written notice to the Company to satisfy part or all of the
withholding tax requirements associated with the award by:

     (a) Retain Stock. Authorizing the Company to retain from the number of shares
of Stock that would otherwise be deliverable to the Recipient, or

     (b) Delivering of Held Stock. Delivering to the Company from Stock already
owned by the Recipient, that number of shares having an aggregate Fair Market Value equal to
part or all of the tax payable by the Recipient under this Section, and in the event shares
of Stock are withheld, the amount withheld shall not exceed the minimum required federal,
state and FICA withholding amount.

Any such election shall be in accordance with, and subject to, applicable tax and securities laws,
regulations and rulings.

SECTION 14. Amendments and Termination.

     The Board may amend, alter, or discontinue the Plan, but no amendment, alteration, or
discontinuation shall be made: (a) which would impair the rights of a Recipient or Recipient under
an Award theretofore granted and vested, without the Recipient’s or Recipient’s consent; or (b)
which, without the approval of the shareholders of the Company, would cause the Plan no longer to
comply with Rule 16b-3 under the Securities Exchange Act of 1934, Section 422 of the Code, or the
rules of any stock exchange upon which the Stock is then traded, or any other regulatory
requirements. Adjustments made by the Committee pursuant to Section 3 (relating to adjustments of
Stock) and Section 11 shall not be subject to the limitations of this Section 14.

SECTION 15. Governing Law.

     To the extent that federal laws do not otherwise control, this Plan and all determinations
made and actions taken under this Plan shall be governed by the laws of the State of South Dakota,
without regard to the conflicts of law provisions thereof, and construed accordingly.

SECTION 16. Effective Date of Plan.

     The Plan shall be effective on the date it is adopted by the Board. Adoption of the Plan is
subject to the condition of approval by the shareholders of the Company within 12 months before or
after the adoption of the Plan by the Board. Any Incentive Option granted after adoption of the
Plan by the Board will be treated as a Non-Qualified Option if shareholder approval is not obtained
within such 12-month period.

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