Document:

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Exhibit 10.8

FIRST SUPPLEMENT

TO THE MASTER LOAN AGREEMENT

(CONSTRUCTION AND TERM LOAN)

     THIS FIRST SUPPLEMENT TO THE MASTER LOAN AGREEMENT (this “First Supplement”), dated as of
September 26, 2006, is between F & M BANK-IOWA (the “Lender”) and CENTRAL IOWA ENERGY, LLC, an
Iowa limited liability company (the “Borrower”), and supplements and incorporates all of the
provisions of that certain Master Loan Agreement, dated as of even date herewith, between the
Lender and the Borrower (as the same may be amended, modified, supplemented, extended or restated
from time to time, the “MLA”).

     1. Definitions. As used in this First Supplement, the following terms shall have the
following meanings. Capitalized terms used and not otherwise defined in this First Supplement
shall have the meanings attributed to such terms in the MLA. Terms not defined in either this
Supplement or the MLA shall have the meanings attributed to such terms in the Uniform Commercial
Code, as enacted in the State of Iowa and as amended from time to time.

“Construction Letters of Credit” shall have the meaning specified in Section 6(b).

“Construction Letter of Credit Liabilities” means, at any time, the aggregate
maximum amount available to be drawn under all outstanding Construction Letters of Credit
(in each case, determined without regard to whether any conditions to drawing could then be
met) and all unreimbursed drawings under Construction Letters of Credit.

“Draw Request” means a request for an advance against the Construction Note prior to
the Conversion Date, submitted by the Borrower to the Lender and the Disbursing Agent, in
accordance with the terms and conditions of the Disbursing Agreement.

“Sworn Construction Statement” means a sworn construction statement, sworn to by the
Borrower and the General Contractor, and of a form and substance acceptable to the Lender, a
sample of which is attached hereto as Exhibit A.

     2. The Construction Loan. On the terms and conditions set forth in the MLA and this
First Supplement, Lender agrees to make a Construction Loan to the Borrower (the “Construction
Loan”), by means of multiple advances in an amount not to exceed the lesser of (i) $27,000,000.00
or (ii) an amount equal to 55% of the Project Costs (the “Construction Loan Commitment”). Under
the Construction Loan, amounts borrowed and repaid or prepaid may not be re-borrowed.

     3. Purpose. Advances under the Construction Loan may be used to fund the payment of
Project Costs, including closing costs and fees associated with the Construction Loan. The
Borrower agrees that the proceeds of the Construction Loan are to be used only for the purposes set
forth in this Section 3.

     4. Construction Loan Interest Rate. Subject to the provisions of Section 2.08 of the
MLA and Sections 9 and 12 of this First Supplement, the Construction Loan shall bear

 

 

interest at a rate equal to the LIBOR Rate plus 325 basis points. The computation of interest,
amortization, maturity and other terms and conditions of the Construction Loan shall be as provided
in the Construction Note, provided, however, in no event shall the applicable rate exceed the
Maximum Rate.

     5. Construction Loan Payments. The Borrower will pay interest on the Construction
Loan (i) quarterly in arrears on the first day of each January, April, July and October (each such
date a “Quarterly Payment Date”), commencing on the first Quarterly Payment Date following the date
on which the first Advance is made on the Construction Loan, and continuing on each Quarterly
Payment Date thereafter until the Conversion Date. If any Quarterly Payment Date is not a Business
Day, then the interest payment then due shall be paid on the next Business Day and shall continue
to accrue interest until paid. On the Conversion Date, all outstanding accrued interest shall be
paid in full.

     6. Construction Loan Term. The Construction Loan shall run for a period beginning on
the Closing Date and ending on the Conversion Date. On the Conversion Date, the amount of the then
unpaid principal balance of the Construction Loan and any and all other amounts due and owing
hereunder or under any other Construction Loan Document relating to this Construction Loan shall be
due and payable, except for that part, if any, of the Construction Loan which is converted into a
Term Loan pursuant to the terms of the MLA and this First Supplement and a Term Revolving Loan
pursuant to the Second Supplement to the Master Loan Agreement.

     7. Disbursement of Construction Loan.

          (a) Deposit Account. Disbursements of the Construction Loan will be made by the
Lender in the manner provided in the Disbursing Agreement. Subject to Section 13(c) below, all
disbursements will be made by wire transferring such funds to the Disbursing Account established
pursuant to the Disbursing Agreement in the amount of each Draw Request which is approved pursuant
to the Disbursing Agreement. All Construction Loan funds will be considered to have been advanced
to and received by the Borrower upon, and interest on such funds will be payable by the Borrower
from and after, their deposit in such deposit account.

          (b) Letter of Credit Commitment to Issue. The Borrower may request Advances by the
Lender, and the Lender, subject to the terms and conditions of the MLA and this First Supplement,
may, in its sole discretion, issue letters of credit under the Construction Loan for any Borrower’s
account (such letters of credit, being hereinafter referred to collectively as the “Construction
Letters of Credit”); provided, however, that:

               (i) the aggregate amount of outstanding Construction Letter of Credit Liabilities under the
Construction Loan shall not at any time exceed the amount of $3,000,000.00;

               (ii) the sum of the outstanding Construction Letters of Credit plus the outstanding
Construction Advances shall not at any time exceed the Construction Loan;

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               (iii) the expiration date of a Construction Letter of Credit advanced under the Construction
Loan shall be no latter than the Conversion Date.

     Any Construction Letter of Credit issued under this Section 7 is subject to the provisions of
Section 2.06 of the MLA.

          (c) Lender’s Application of Loan Proceeds. Notwithstanding the provisions of Section
6(a), above, the Lender may elect, upon ten (10) days’ notice to the Borrower, to use the
Construction Loan funds to pay, as and when due, any Construction Loan fees owing to Lender,
interest on the Construction Loan, release charges under prior mortgages on the Property, and legal
fees and disbursements of the Lender’s attorneys which are payable by the Borrower, unless Borrower
causes such amount(s) to be paid within said ten (10) days. Such payments may be made, at the
option of the Lender, by debiting or charging the Construction Loan funds in the amount of such
payments.

          (d) Cost Information. All disbursements will be based upon a detailed breakdown of
the Project Costs as set forth in the Sworn Construction Statement attached as Exhibit A to the
MLA. In the event that the Borrower becomes aware of any change in the approved Project Costs,
which would increase the total cost in excess of $50,000.00 above the amount shown on the attached
Sworn Construction Statement, the Borrower shall immediately notify the Lender in writing and
promptly submit to the Lender for its approval a revised Sworn Construction Statement. No further
disbursements need be made by the Disbursing Agent unless and until the revised Sworn Construction
Statement is approved. The Lender reserves the right to approve or disapprove any revised Sworn
Construction Statement in its reasonable discretion.

          (e) Loan in Balance, Deposit of Funds by Borrower. The Borrower shall keep the Loan
in balance as provided in this Section. If the Lender at any time reasonably determines that the
amount of the undisbursed Construction Loan proceeds will not be sufficient to fully pay for all
costs required to complete the construction of the Project in accordance with the approved Plans
and Specifications and for all Project Costs to be incurred by the Borrower, whether such
deficiency is attributable to changes in the work of construction or in the Plans and
Specifications or to any other cause, the Lender may make written demand on the Borrower to deposit
in an escrow fund to be established with the Lender an amount equal to the amount of the shortage
reasonably determined by the Lender. The Borrower shall then deposit the required funds with the
Lender within ten (10) days after the date of the Lender’s written demand. No further
disbursements shall be made by the Disbursing Agent until those funds are deposited by the Borrower
in the escrow fund. Whenever the Lender has any such funds on deposit in such escrow fund, it
shall make all future advances for Project Costs from the escrow fund before making any further
advances under the Loan.

          (f) Additional Security. The Borrower irrevocably assigns to the Lender and grants to
the Lender a security interest in, as additional security for the performance of the Borrower’s
obligations under the MLA and this First Supplement and the Related Documents, its interest in all
funds held by the Disbursing Agent, whether or not disbursed, all funds deposited by the Borrower
with the Lender under this First Supplement, all governmental permits obtained for the lawful
construction of the Project, and all reserves, deferred payments, deposits, refunds,

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cost savings, and payments of any kind relating to the construction of the Project. Upon any
default of the Borrower, the Lender may use any of the foregoing for any purpose for which the
Borrower could have used them under this First Supplement or with respect to the construction or
financing of the Project. The Lender will also have all other rights and remedies as to any of the
foregoing which are provided under applicable law or in equity.

          (g) Conditions Precedent to Construction Advances. The Lender’s obligation to make
Construction Advances under the Construction Note shall be subject to the terms, conditions and
covenants set forth in the MLA and this First Supplement, including, without limitation, the
following further conditions precedent:

               (i) Representations and Warranties. The representations and warranties set forth in
the MLA and this First Supplement are true and correct in all material respects as of the date of
the request for any Advance, except as disclosed in writing to the Lender, to the same extent and
with the same effect as if made at and as of the date thereof;

               (ii) Draw Request. The Borrower has submitted to the Lender and the Disbursing Agent
a Draw Request for each such Advance, which such Draw Request shall comply with the requirements
contained in this the MLA, this Supplement and the Disbursing Agreement;

               (iii) Compliance With Disbursing Agreement. All of the terms and conditions of the
Disbursing Agreement have been satisfied with respect to each such Advance;

               (iv) Sworn Construction Statement. The Borrower shall furnish to the Lender an updated
Sworn Construction Statement setting forth the Contractor(s) providing services or materials with
respect to specific portions of the construction of the Project and setting forth the amounts
actually incurred and paid, or to be incurred, in completing construction of the Project. Such
updated Sworn Construction Statement shall be sworn to by the Borrower and the General Contractor
to be a true, complete and accurate account of all costs actually incurred and an accurate estimate
of all costs to be incurred in the future;

               (v) No Defaults. The Borrower is not in default under the terms of the MLA, the
Related Documents or any other agreement to which the Borrower is a party and which relates to the
construction of the Project;

               (vi) Loan in Balance. The Loan is in balance, as required by the provisions of
Section 6(e), above;

               (vii) Government Action. No license, permit, permission or authority necessary for
the construction of the Project has been revoked or challenged by or before any Governmental
Authority; and

          (h) Suspension of Construction. If the Lender in reasonably good faith determines
that any work or materials do not conform to the approved Plans and Specifications or sound
building practice, or otherwise departs from any of the requirements of the MLA and

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this Supplement, the Lender may require the work to be stopped and withhold disbursements
until the matter is corrected. In such event, the Borrower will promptly correct the work to the
Lender’s satisfaction. Provided Lender’s actions were reasonable, in good faith, and the work or
materials did not conform to the approved Plans and Specifications or sound building practice, no
such action by the Lender will affect the Borrower’s obligation to complete the Project on or
before the Completion Date.

          (i) Inspections. The Borrower and the Inspecting Engineer shall be responsible for
making inspections of the Project during the course of construction and shall determine to their
own satisfaction that the work done or materials supplied by the Contractors to whom payment is to
be made out of each Advance has been properly done or supplied in accordance with the applicable
contracts with such Contractors. If any work done or materials supplied by a Contractor are not
satisfactory to the Borrower or the Inspecting Engineer, the Borrower will immediately notify the
Lender in writing of such fact. It is expressly understood and agreed that the Lender or its
authorized representative may conduct such inspections of the Project as it may deem necessary for
the protection of the Lender’s interest, and, specifically, an architectural or engineering firm
acceptable to the Lender may, at the option of the Lender and at the expense of the Borrower,
conduct such periodic inspections of the Project, prepare such written progress reports during the
period of construction, prepare such written reports upon completion of the Project and sign such
Draw Requests, as the Lender may reasonably request, provided that no inspection shall unreasonably
delay progress on the Project. Any inspections which may be made of the Project by the Lender or
its representative will be made, and all certificates issued by the Lender’s representative will be
issued, solely for the benefit and protection of the Lender, and that Borrower will not rely
thereon. The Lender is under no duty to supervise or inspect construction or examine any books and
records. Any inspection or examination by the Lender is for the sole purpose of protecting the
Lender’s security and preserving the Lender’s rights under the MLA and this First Supplement. No
default of the Borrower will be waived by any inspection by the Lender. In no event will any
inspection by the Lender be a representation that there has been or will be compliance with the
Plans or Specifications or that the construction is free from defective materials or workmanship.

          (j) No Waiver. Any waiver by the Lender of any condition of disbursement must be
expressly made in writing. The making of a disbursement prior to fulfillment of one or more
conditions thereof shall not be construed as a waiver of such conditions, and the Lender reserves
the right to require their fulfillment prior to making any subsequent disbursements.

     8. Conversion of Construction Loan Into Term Loan. Subject to the terms and
conditions contained in the MLA and this First Supplement, a portion of the Construction Loan may
be converted into a Term Loan.

          (a) Conditions Precedent. In addition to the terms and conditions of disbursement set
forth in the MLA and this First Supplement and as incorporated from the Disbursing Agreement, the
Lender shall not be obligated to convert any part of the Construction Loan into a Term Loan unless
and until:

               (i) Completion of Project. The Project shall have been completed per the Plans and
Specifications and a Completion Certificate shall have been obtained;

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               (ii) Amount of Term Loan. The maximum amount of the Construction Loan which is
converted to a Term Loan shall be the lesser of the following: (A) $27,000,000.00 less the amount
of $5,000,000.00 that is converted to a Term Revolving Loan; or (B) 55% of the Project Costs less
the amount of $5,000,000.00 that is converted to a Term Revolving Loan. The Term Loan shall be
payable in full on the Maturity Date.

               (iii) Construction Loan Exceeds Term Loan. In the event that the amount of the
Construction Loan advanced by Lender exceeds the maximum amount of the Term Loan to be made by the
Lender, including after conversion of those portions of the Construction Loan which are eligible
for conversion into the Term Revolving Loan pursuant to the MLA and any applicable additional
supplement, the Borrower shall immediately repay the amount of the Construction Loan which is not
being converted into a Term Loan;

               (iv) Representations and Warranties. The representations and warranties set forth in
the MLA and this First Supplement are true and correct in all material respects as of the
Conversion Date to the same extent and with the same effect as if made at and as of the date
thereof;

               (v) No Defaults. The Borrower is not in default under the terms of the MLA, this
First Supplement, the Related Documents or any other agreement to which the Borrower is a party and
which relates to the construction or operation of the Project.;

               (vi) Government Action. No license, permit, permission or authority necessary for the
construction, operation or use of the Project has been revoked or challenged by or before any
Governmental Authority; and

               (vii) Marketing Agreements. The Borrower has executed marketing agreements for all
biodiesel and feedstocks to be produced at the Project and provided Lender with collateral
assignments of all such agreements in form and content which is reasonably satisfactory to Lender
and its counsel and acknowledged by the non-Borrower party to all such agreements.

          (b) Term Loan Interest Rate. Subject to the provisions of Section 2.07 and 2.08 of
the MLA and Section 9 of this First Supplement, the portion of the Term Loan that has not been
converted to a Fixed Rate Loan pursuant to Section 8(e) of this First Supplement shall bear
interest at a rate equal to the LIBOR Rate plus 325 basis points. The computation of interest,
amortization, maturity and other terms and conditions of the Term Loan shall be as provided in the
Construction Note, provided, however, in no event shall the applicable rate exceed the Maximum
Rate.

          (c) Term Loan Payments. Beginning on the first (1st) day of the month
following the month in which the Conversion Date occurs, and continuing on the first
(1st) day of each succeeding month thereafter until the Maturity Date, the Borrower
shall make equal monthly payments of principal and accrued interest in such amounts as will be
required to fully amortize the entire outstanding principal of the Term Note, together with accrued
interest thereon, over a period not to exceed ten (10) years from the Conversion Date. The amount
of

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said monthly payments shall be recalculated and, if necessary, adjusted to account for
changes in the effective rate of interest hereunder and to maintain said ten (10) year
amortization. Following the Conversion Date, and in addition to all other payments of principal
and interest required under the MLA, the Borrower shall annually remit to Lender the Excess Cash
Flow Payment pursuant to Section 11 of this First Supplement.

          (d) Term Loan Term. The Term Loan term shall run for a period beginning on the
Conversion Date and ending on the Maturity Date.

          (e) Conversion to Fixed Rate Loan. Pursuant to Section 2.05 of the MLA, on the
Conversion Date, the Borrower shall have the right to convert up to fifty percent (50%) of the
outstanding principal balance of the Term Loan into a Fixed Rate Loan, with the consent of the
Lender which shall not be unreasonably withheld, which shall bear interest at a rate equal to the
rate listed in the “Government Agency and Similar Issues” section of the Wall Street Journal for
the Federal Farm Credit Bank or the Federal Home Loan Bank having a maturity approximately equal to
the Maturity Date, or another rate as agreed upon by the Lender and Borrower, which is in effect
at the time of conversion plus 300 basis points. Borrower agrees that the portion of the
outstanding principal balance of the Term Loan that is eligible to be converted into a Fixed Rate
Loan shall not exceed an amount equal to fifty percent (50%) of the total amount of the Term Loan
as provided in Section 8(a)(ii) of this First Supplement. Borrower shall provide written notice to
Lender at least 30 days prior to the Conversion Date of its intention to convert any portion of the
Term Loan to a Fixed Rate Loan. Such written notice shall specify the specific dollar amount that
Borrower is electing to convert to a Fixed Rate Loan. Any amount subject to a fixed rate of
interest pursuant to this Section shall not be subject to any adjustments under Section 2.07 of the
MLA.

          (f) Renewal. Lender agrees that at the Maturity Date Borrower may request in writing
that Lender renew the Term Loan for a period of up to five (5) years on such terms and conditions
as the Lender and Borrower may agree upon in writing. Nothing in this Agreement shall commit the
Lender to renew, extend or extend any other accommodations to the Borrower regarding the Term Loan.

     9. Default Interest. In addition to the rights and remedies set forth in the MLA:
(i) if the Borrower fails to make any payment to Lender when due, then at Lender’s option in each
instance, such obligation or payment shall bear interest from the date due to the date paid at 2%
per annum in excess of the rate of interest that would otherwise be applicable to such obligation
or payment; (ii) upon the occurrence and during the continuance of an Event of Default beyond any
applicable cure period, if any, at Lender’s option in each instance, the unpaid balances of the
Loans shall bear interest from the date of the Event of Default or such later date as Lender shall
elect at 2% per annum in excess of the rate(s) of interest that would otherwise be in effect on the
Loans under the terms of the Construction Note; (iii) after the maturity of the Loans, whether by
reason of acceleration or otherwise, the unpaid principal balance of the Loans (including without
limitation, principal, interest, fees and expenses) shall automatically bear interest at 2% per
annum in excess of the rate of interest that would otherwise be in effect on the Loans under the
terms of the Construction Note. Interest payable at the Default Rate shall be payable from time to
time on demand or, if not sooner demanded, on the last day of each calendar month.

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     10. Late Charge. If any payment of principal or interest due under this Supplement or
the Construction Note is not paid within ten (10) days of the due date thereof, the Borrower shall
pay, in addition to such amount, a late charge equal to five percent (5%) of the amount of such
payment.

     11. Excess Cash Flow. In addition to all other payments of principal and interest
required under the MLA, the Supplements and the Notes, the Borrower shall annually remit to Lender
an amount equal to 50% of the Borrower’s Excess Cash Flow, calculated based upon the immediately
preceding fiscal year end audited financial statements, on or before 120 days after the end of each
fiscal year of the Borrower (the “Excess Cash Flow Payment”); provided, however, that the total
Excess Cash Flow Payments required hereunder shall not exceed $2,500,000.00 in any fiscal year.
Such payment shall be applied to the outstanding principal of the Term Loan or the Term Revolving
Loan at the Lender’s discretion. Any Excess Cash Flow Payment shall not be considered to be a
prepayment with respect to which a prepayment premium would apply under Section 2.10 of the MLA.
Notwithstanding the foregoing, the Excess Cash Flow Payment is not required when the Tangible
Owner’s Equity from the immediately preceding fiscal year end is great than 70%.

     12. Changes in Law Rendering Certain LIBOR Rate Loans Unlawful. In the event that any
change in any applicable law (including the adoption of any new applicable law) or any change in
the interpretation of any applicable law by any judicial, governmental or other regulatory body
charged with the interpretation, implementation or administration thereof, should make it (or in
the good-faith judgment of the Lender should raise a substantial question as to whether it is)
unlawful for the Lender to make, maintain or fund LIBOR Rate Loans, then: (a) the Lender shall
promptly notify each of the other parties hereto; and (b) the obligation of the Lender to make
LIBOR rate loans of such type shall, upon the effectiveness of such event, be suspended for the
duration of such unlawfulness. During the period of any suspension, Lender shall make loans to
Borrower that are deemed lawful and that as closely as possible reflect the terms of the MLA.

     13. Maximum Amount Limitation. Anything in the MLA, this First Supplement, or the
other Loan Documents to the contrary notwithstanding, Borrower shall not be required to pay
unearned interest on the Construction Note or any of the Loan Obligations, or ever be required to
pay interest on the Construction Note or any of the Loan Obligations at a rate in excess of the
Maximum Rate, if any. If the effective rate of interest which would otherwise be payable under the
MLA, this First Supplement, the Construction Note, or any of the other Loan Documents would exceed
the Maximum Rate, if any, then the rate of interest which would otherwise be contracted for,
charged, or received under the MLA, this First Supplement, the Construction Note, or any of the
other Loan Documents shall be reduced to the Maximum Rate, if any. If any unearned interest or
discount or property that is deemed to constitute interest (including, without limitation, to the
extent that any of the fees payable by Borrower for the Loan Obligations to the Lender under the
MLA, this First Supplement, the Construction Note, or any of the other Loan Documents are deemed to
constitute interest) is contracted for, charged, or received in excess of the Maximum Rate, if any,
then such interest in excess of the Maximum Rate shall be deemed a mistake and canceled, shall not
be collected or collectible, and if paid nonetheless, shall, at the

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option of the holder of the Construction Note, be either refunded to the Borrower, or credited on
the principal of the Construction Note. It is further agreed that, without limitation of the
foregoing and to the extent permitted by applicable law, all calculations of the rate of interest
or discount contracted for, charged or received by the Lender under the Construction Note, or under
any of the Loan Documents, that are made for the purpose of determining whether such rate exceeds
the Maximum Rate applicable to the Lender, if any, shall be made, to the extent permitted by
applicable laws (now or hereafter enacted), by amortizing, prorating and spreading during the
period of the full terms of the Advances evidenced by the Construction Note, and any renewals
thereof all interest at any time contracted for, charged or received by Lender in connection
therewith. This section shall control every other provision of all agreements among the parties to
the MLA pertaining to the transactions contemplated by or contained in the Loan Documents, and the
terms of this section shall be deemed to be incorporated in every Loan Document and communication
related thereto.

     14. Construction of Project. As a further condition to the Lender’s funding of
Project Costs pursuant to the terms of the MLA and this First Supplement, the Borrower will:

               (i) diligently proceed with construction of the Project in accordance with the Plans and
Specifications and in accordance with all applicable laws and ordinance and will complete the
Project on or before the Completion Date;

               (ii) use the proceeds of all Advances solely to pay the Project Costs as specified in the
Project Sources and Uses Statement;

               (iii) use its best efforts to require the Contractor(s) to comply with all rules, regulations,
ordinances and laws relating to work on the Project;

               (iv) obtain the Lender’s prior written approval of any change in the Plans and Specifications
for the Project approved by the Lender which might materially adversely affect the value of the
Lender’s security, and has a cost of $50,000.00 or greater. The Lender will have a reasonable time
to evaluate any requests for its approval of any changes referred to in this paragraph. The Lender
may approve or disapprove changes in its discretion, subject to the foregoing provisions of this
Section 14(iv). If it reasonably appears to the Lender that any change may increase the Project
Costs, the Lender may require the Borrower to deposit additional funds with the Lender pursuant to
the provisions of this The MLA and this in an amount sufficient to cover the increased costs as a
condition to giving its approval;

               (v) comply with and keep in effect all necessary permits and approvals obtained from any
Governmental Authority relating to the lawful construction of the Project. The Borrower will
comply with all applicable existing and future laws, regulations, orders, and requirements of any
Governmental Authority, judicial, or legal authorities having jurisdiction over the Real Property
or Project, and with all recorded restrictions affecting the Real Property;

               (vi) furnish to the Lender from time to time on request by the Lender, in a form acceptable to
the Lender, correct lists of all contractors and subcontractors employed in connection with
construction of the Project and true and correct copies of all executed contracts and subcontracts.
The Lender may contact any contractor or subcontractor to verify any facts

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disclosed in the lists, Borrower must consent to the disclosure of such information by the
contractors and subcontractors to Lender or its agents upon Lender’s request, and Borrower must
assist Lender or its agents in obtaining such information upon Lender’s request;

               (vii) upon completion of the building foundation of the Project, deliver to the Lender an
“as-built” survey of the Real Property which: (a) sets forth the location and exterior lines and
egress and other improvements completed on the Real Property and demonstrates compliance with all
applicable setback requirements; (b) demonstrates that the Project is entirely within the exterior
boundaries of the Real Property and any building restriction lines and does not encroach upon any
easements or rights-of-way; and (c) contains such other information as the Lender may reasonably
request;

               (viii) not purchase any materials, equipment, fixtures, or articles of personal property
placed in the Project prior to the Completion Date under any security agreement or other agreement
where the seller reserves or purports to reserve title or the right of removal or repossession, or
the right to consider them personal property after their incorporation in the work of construction,
unless authorized by the Lender in writing;

               (ix) provide the Lender and its representatives with access to the Real Property and the
Project at any reasonable time and upon reasonable notice to enter the Real Property and inspect
the work or construction and all materials, plans, specifications, and other matters relating to
the construction. The Lender will also have the right to, at any reasonable time and upon
reasonable notice, examine, copy, and audit the books, records, accounting data, and other
documents of the Borrower and its contractors relating to the Real Property or construction of the
Project;

               (x) pay and discharge all claims and liens for labor done and materials and services furnished
in connection with the construction of the Project. The Borrower will have the right to contest in
good faith any claim or lien, provided that it does so diligently and without prejudice to the
Lender or the ability to obtain title insurance in the manner required by the MLA, this First
Supplement and the Disbursing Agreement. Upon the Lender’s request, the Borrower will promptly
provide a bond, cash deposit, or other security reasonably satisfactory to the Lender to protect
the Lender’s interest and security should the contest be unsuccessful;

               (xi) at the Lender’s request and expense, post signs on the Real Property for the purpose of
identifying the Lender as the “Lender.” At the request of the Lender, or the participating local
community banks, the Borrower will use its best efforts to identify the Lender as the lender in
publicity concerning the Project;

               (xii) maintain in force until full payment of the Loan all insurance required by law, public
liability insurance, and property insurance. The policies must be approved by the Lender as to
amounts, form, risk coverage, deductibles, insurer, and loss payable and cancellation provision.
The Lender’s approval, however, will not be a representation of the solvency of any insurer or the
sufficiency of any amount of insurance;

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               (xiii) cooperate at all times with the Lender in bringing about the timely completion of the
Project, and resolve all disputes arising during the work of construction in a manner which will
allow work to proceed expeditiously. With respect to such disputes, the Borrower will have the
right to contest in good faith claims resulting in disputes, provided that it does so diligently
and without prejudice to the Lender. Upon the Lender’s request, the Borrower will promptly provide
a bond, cash deposit, or other security reasonably satisfactory to the Lender to protect the
Lender’s interest and security should the contest be unsuccessful;

               (xiv) pay the Lender’s and the Disbursing Agent’s reasonable out-of-pocket costs and expenses
incurred in connection with the making or disbursement of the Loans or in the exercise of any of
its rights or remedies under the MLA, this First Supplement and the Disbursing Agreement, including
but not limited to title insurance and escrow charges, disbursing agent fees, recording charges,
and mortgage taxes, reasonable legal fees and disbursements, and reasonable fees and costs for
services which are not customarily performed by the Lender’s salaried employees and are not
specifically covered by the fees charged to originate the Loan, if any. The provision of this
paragraph will survive the termination of the MLA, this First Supplement and the repayment of the
Loan;

               (xv) keep true and correct financial books and records on a cash basis for the construction of
the Project and maintain adequate reserves for all contingencies. If required by the Lender, the
Borrower will submit to the Lender at such times as it requires (which will in no event be more
often than monthly) a statement which accurately shows the application of all funds expended to
date for construction of the Project and the source of those funds as well as the Borrower’s best
estimate of the funds needed to complete the Project and the source of those funds. The Borrower
will promptly supply the Lender with any financial statements or other information concerning its
affairs and properties as the Lender may reasonably request, and will promptly notify the Lender of
any material adverse change in its financial condition or in the physical condition of the Property
or Project;

               (xvi) comply with the requirements of any commitment or agreement entered into by Borrower
with any Governmental Authority to assist the construction or financing of the Real Property and/or
Project and with the terms of all applicable laws, regulations, and requirements governing such
assistance;

               (xvii) indemnify and hold the Lender harmless from and against all liabilities, claims,
damages, reasonable costs, and reasonable expenses (including but not limited to reasonable legal
fees and disbursements) arising out of or resulting from any defective workmanship or materials
occurring in the construction of the Project. Upon demand by the Lender, the Borrower will defend
any action or proceeding brought against the Lender alleging any defective workmanship or
materials, or the Lender may elect to conduct its own defense at the reasonable expense of the
Borrower. The provisions of this paragraph will survive the termination of the MLA, this First
Supplement and the repayment of the Loan; and

               (xviii) obtain and deliver to the Lender copies of all necessary occupancy certificates
relating to the Project.

11

 

     15. Security. The Borrower’s obligations hereunder and, to the extent related
thereto, the MLA, shall be secured as provided in the MLA.

     IN WITNESS WHEREOF, the parties have caused this First Supplement to the Master Loan Agreement
to be executed by their duly authorized officers as of the date shown above.

CENTRAL IOWA ENERGY, LLC

an Iowa limited liability company

	 	 	 	 	 
	 	 	 
	By: 	/s/ James Johnston
 	 	 
	 	Name:  	James Johnston 
	 	Title:  	Chairman 	 
	 

F & M BANK-IOWA, a bank chartered under

the laws of Iowa

	 	 	 	 	 
	 	 	 	 	 
	By:  	/s/ Daniel J. Hassman
 	 
	 	Name:  	Daniel J. Hassman 	 	 
	 	Its:	 President 	 	 
	 

12

 

EXHIBIT A

SWORN CONSTRUCTION STATEMENT

SWORN CONSTRUCTION STATEMENT

	 	 	 
	OWNER:

	 	Central Iowa Energy
	PROPERTY AT:

	 	324 E. 28th St. N
	 

	 	Newton, IA 50208

 

IMPORTANT NOTICE: This statement must be complete as to names of all persons and companies
furnishing labor and/or material
on the premises herein. Any increase in cost, from changes in construction or otherwise, must be
forthwith reported to the
DISBURSING AGENT with additional deposits to cover such increase in cost.
 

 

			
	*	 	Note: 5% of COMPLETED WORK to RETAINAGE

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	ITEMS	 	 	TOTAL COST	 	 	 	AMT COMPLETED*	 	 	 	BALANCE	 	 	 	 	 	 
	10
	 	Engr/P Mgmt/Intellectual Propert	 	 	$	2,504,100.00	 	 	 	$	1,627,655.00	 	 	 	$	876,445.00	 	 	 	 	 	 
	20
	 	Mobilize/Temp Serv/Gem Actvty	 	 	$	1,695,000.00	 	 	 	$	847,500.00	 	 	 	$	847,500.00	 	 	 	 	 	 
	30
	 	Site Work, Excate & Backfill	 	 	$	1,074,470.00	 	 	 	$	967,023.00	 	 	 	$	107,447.00	 	 	 	 	 	 
	40
	 	Roads	 	 	$	150,280.00	 	 	 	$	127,738.00	 	 	 	$	22,542.00	 	 	 	 	 	 
	40
	 	Rail Installation	 	 	$	959,100.00	 	 	 	 	—	 	 	 	$	959,100.00	 	 	 	 	 	 
	60
	 	Cast-In-Place-Concrete	 	 	$	870,000.00	 	 	 	$	826,500.00	 	 	 	$	43,500.00	 	 	 	 	 	 
	70
	 	Masonry Work	 	 	$	61,000.00	 	 	 	$	30,500.00	 	 	 	$	30,500.00	 	 	 	 	 	 
	80
	 	Precast Concrete	 	 	$	376,000.00	 	 	 	$	357,200.00	 	 	 	$	18,800.00	 	 	 	 	 	 
	90
	 	Bldg Structural Steel w/paint	 	 	$	1,220,700.00	 	 	 	$	1,098,630.00	 	 	 	$	122,070.00	 	 	 	 	 	 
	100
	 	Pre-Engrd Bldg-Siding/INsulatn	 	 	$	1,059,000.00	 	 	 	$	804,840.00	 	 	 	$	254,160.00	 	 	 	 	 	 
	110
	 	Pipe Racks & Towers	 	 	$	540,000.00	 	 	 	$	432,000.00	 	 	 	$	108,000.00	 	 	 	 	 	 
	120
	 	Doors/Windows/Rollups/Louvers	 	 	$	160,800.00	 	 	 	$	99,696.00	 	 	 	$	61,104.00	 	 	 	 	 	 
	130
	 	Office (Allowance)	 	 	$	517,500.00	 	 	 	$	41,400.00	 	 	 	$	476,100.00	 	 	 	 	 	 
	140
	 	Lab Furnshings & Equipment	 	 	$	285,000.00	 	 	 	 	—	 	 	 	$	285,000.00	 	 	 	 	 	 
	150
	 	Truck Scale	 	 	$	65,050.00	 	 	 	 	—	 	 	 	$	65,050.00	 	 	 	 	 	 
	160
	 	Storage Tanks	 	 	$	2,535,000.00	 	 	 	$	126,750.00	 	 	 	$	2,408,250.00	 	 	 	 	 	 
	170
	 	Fire Protection System	 	 	$	237,000.00	 	 	 	$	26,070.00	 	 	 	$	210,930.00	 	 	 	 	 	 
	180
	 	Rail Tank Car Load/Unload	 	 	$	695,500.00	 	 	 	 	—	 	 	 	 	 	 	 	 	 	 	 
	190
	 	Mech Specialty Equip/Intrmnts	 	 	$	2,960,800.00	 	 	 	$	799,416.00	 	 	 	 	 	 	 	 	 	 	 
	200
	 	Transesterifictn Equip/Boiler	 	 	$	6,920,000.00	 	 	 	$	6,020,400.00	 	 	 	 	 	 	 	 	 	 	 
	210
	 	Process Piping/Mech System	 	 	$	8,865,000.00	 	 	 	$	2,216,250.00	 	 	 	 	 	 	 	 	 	 	 
	220
	 	Electrical Wiring & Cntrl Sys	 	 	$	4,297,200.00	 	 	 	$	2,062,656.00	 	 	 	 	 	 	 	 	 	 	 
	230
	 	Chg Order #1 Concrete Floors	 	 	$	27,500.00	 	 	 	$	27,500.00	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	SUBTOTAL	 	 	$	38,076,000.00	 	 	 	$	18,539,724.00	 	 	 	$	19,536,276.00	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

 

 

	 	 	 	 	 	 	 
	 

	 	STATE OF Iowa)	 	 	 	 
	>

	 	 	 	SS.
	 	 
	 

	 	COUNTY OF Carroll)	 	 	 	 

The undersigned being first duly sworn, each for himself, as General Contractor and Borrower,
deposes and says that the foregoing
are the names of all parties having contracts or subcontracts for specified portions of the work on
said property and building or
material entering into the construction thereof, and the amounts due and to become due to each of
said parties, that the items
mentioned include all labor and material required to complete said buildings according to plans and
specifications, that there are
no other contracts outstanding; and that there is not due or to become due to any person for
material, labor or other work of any
kind done upon said building other than as above stated.

The udersigned further deposes and says that no increase in the cost of construction will be made
under any circumstances
without furnishing information on same to the DISBURSING AGENT with additional deposits to cover
such increase; that, in the
event of any such increase, no orders or claims will be made to said company until such information
and additional deposits shall
have been completed; that the purpose of said statement is to induce said company to pay out the
proceeds of a loan of
$27,000,000.00 secured by a leasehold mortgage on said property; and that, upon payment of the
specific unpaid items listed
herein, the undersigned General Contractor hereby agrees to waive all claims of priority to said
leasehold mortgage and
both parties herein will save said company harmless as to any claims of priority of lien for any
labor or material, furnished or
to be furnished, for completion of construction

	 	 	 	 	 
	/s/ Pat C. Lappe
 

General Contractor

	 	 
	 	 
	 
	 	 	 	 
	/s/ James Johnston
 

CENTRAL IOWA ENERGY, LLC

	 	 
	 	 

The foregoing instrument was acknowledged before me this  7th  day of September,
2006.

	 	 	 	 	 
	by 	 	/s/ Lori Goetzinger
	 	 
	 	 	 
	 	 
	NOTARY STAMP:
	 	 

	 	 	 	 	 
	
SEAL
	 	LORI GOETZINGER

Commission Number 176433

MY COMMISSION EXPIRES

10-12-09
	 	 

Before me this 15th day of September, 2006, signed James Johnston.

	 	 	 	 	 	 	 
	/s/ Susan St. Clair
 

	 	SEAL	 	SUSAN D. ST. CLAIR	 	 
	Notary Public
State of Iowa
	 	 	 	Commission Number 152058

MY COMMISSION EXPIRES

June 29, 2007
	 	 

14exv10w9

 

Exhibit 10.9

SECOND SUPPLEMENT

TO THE MASTER LOAN AGREEMENT

(TERM REVOLVING LOAN)

     THIS SECOND SUPPLEMENT TO THE MASTER LOAN AGREEMENT (this “Second Supplement”), dated as
of September 26, 2006, is between F & M BANK-IOWA, a bank chartered under the laws of Iowa (the
“Lender”) and CENTRAL IOWA ENERGY, LLC, an Iowa limited liability company (the “Borrower”), and
supplements and incorporates all of the provisions of that certain Master Loan Agreement, dated as
of even date herewith, between the Lender and the Borrower (as the same may be amended, modified,
supplemented, extended or restated from time to time, the “MLA”).

     1. Definitions. As used in this Second Supplement, the following terms shall have the
following meanings. Capitalized terms used and not otherwise defined in this Second Supplement
shall have the meanings attributed to such terms in the MLA. Terms not defined in either this
Second Supplement or the MLA shall have the meanings attributed to such terms in the Uniform
Commercial Code, as enacted in the State of Iowa and as amended from time to time.

“Availability Date” shall have the meaning specified in Section 6 of this Second
Supplement.

“Maximum Rate” shall have the meaning specified in Section 8 of this Second
Supplement.

“Monthly Payment Date” means the first (1st) day of each calendar month.

“Outstanding Credit” means, at any time of determination, the aggregate amount of
Advances then outstanding.

“Outstanding Revolving Advance” means the total Outstanding Credit under this Second
Supplement and the Term Revolving Note.

“Request for Advance” shall have the meaning specified in Section 7(a) of this
Second Supplement.

“Revolving Advance” means an advance under this Second Supplement and the Revolving
Note.

“Term Revolving Note” means that certain promissory note to be executed and
delivered to the Lender by the Borrower on the Conversion Date pursuant to the terms and
conditions provided for in this Second Supplement and the MLA.

“Term Revolving Loan Commitment” shall have the meaning specified in Section 3 of
this Second Supplement.

 

 

“Term Revolving Loan Termination Date” shall have the meaning specified in Section 3
of this Second Supplement.

“Unused Commitment Fee” shall have the meaning specified in Section 7(d) of this
Second Supplement.

     2. Conversion of Construction Loan into Term Revolving Loan. Pursuant to the terms
and conditions contained in the MLA and this Second Supplement, on the Conversion Date a portion of
the Construction Loan shall be converted into a Term Revolving Loan to be used for cash and
inventory management purposes.

          (a) Conditions Precedent. In addition to the terms and conditions set forth in the
MLA, this Second Supplement and as incorporated from the Disbursing Agreement, the Lender shall not
be obligated to convert any part of the Construction Loan into a Term Revolving Loan unless and
until:

                         (i) Amount of Term Revolving Loan. The maximum amount of the Construction Loan that
is converted into a Term Revolving Loan shall be $5,000,000.00;

                         (ii) Completion Certificate. The Lender shall have received a Completion Certificate
in a form and substance satisfactory to the Lender in its sole discretion;

                         (iii) No Defaults. There shall have been no Events of Default under the MLA or any of
the Loan Documents prior to the Conversion Date;

                         (iv) Representations and Warranties. The representations and warranties contained in
the MLA and this Second Supplement are correct on and as of the Conversion Date, except to the
extent that they relate solely to an earlier date; and

                         (v) Marketing Agreements. The Borrower has executed marketing agreements for all
biodiesel and glycerin to be produced at the Project and provided Lender with collateral
assignments of all such agreements in form and content which is satisfactory to Lender and its
counsel and acknowledged by the non-Borrower party to all such agreements.

     3. Term Revolving Loan Commitment. Lender agrees, on the terms and conditions set
forth in the MLA and this Second Supplement, to convert $5,000,000.00 of the Construction Loan into
a Term Revolving Loan on the Conversion Date, and to make one or more advances to the Borrower,
during the period beginning on the Conversion Date and ending on the Business Day immediately
preceding the Maturity Date (as hereinafter defined in this Section 3) (the “Term Revolving Loan
Termination Date”), in an aggregate principal amount outstanding at any one time not to exceed
$5,000,000.00 (the “Term Revolving Loan Commitment”). The Term Revolving Loan Commitment shall
expire at 12:00 noon Central time on the Maturity Date. Under the Term Revolving Loan Commitment
amounts borrowed and repaid or prepaid may be reborrowed at any time prior to and including the
Term Revolving Loan Termination Date provided, however, that at no time shall the sum of the
Outstanding Revolving Advances exceed $5,000,000.00.

2

 

     4. Purpose. Advances under the Loan may be used for cash and inventory management
purposes of the Borrower and its subsidiaries, including closing costs and fees associated with the
Term Revolving Loan. The Borrower agrees that the proceeds of the Loan are to be used only for the
purposes set forth in this Section 4.

     5. Repayment of the Term Revolving Loan. The Borrower will pay interest on the Term
Revolving Loan on the first (1st) day of each month, commencing on the first
(1st) Monthly Payment Date following the date on which the first Advance is made on the
Term Revolving Loan, and continuing on each Monthly Payment Date thereafter until the Term
Revolving Loan Maturity Date. On the Term Revolving Loan Maturity Date, the amount of the then
unpaid principal balance of the Term Revolving Loan and any and all other amounts due and owing
hereunder or under any other Loan Document relating to the Term Revolving Loan shall be due and
payable. If any Payment Date is not a Business Day, then the principal installment then due shall
be paid on the next Business Day and shall continue to accrue interest until paid.

     6. Availability. Subject to the provisions of the MLA and this Second Supplement,
during the period commencing on the date on which all conditions precedent to the initial advance
under the Term Revolving Loan are satisfied (the “Availability Date”) and ending on the Term
Revolving Loan Termination Date, advances under the Term Revolving Loan will be made as provided in
this Second Supplement.

     7. Making the Advances. 

          (a) Revolving Advances. Each Revolving Advance shall be made, on notice from the
Borrower (a “Request for Advance”) to the Lender delivered before 12:00 Noon (Minneapolis,
Minnesota time) on a Business Day which is at least three (3) Business Days prior to the date of
such Revolving Advance specifying the amount of such Revolving Advance, provided that, no
Revolving Advance shall be made while an Event of Default exists or if the interest rate for such
LIBOR Rate Loan would exceed the Maximum Rate. Any Request for Advance applicable to a Revolving
Advance received after 12:00 Noon (Minneapolis, Minnesota time) shall be deemed to have been
received and be effective on the next Business Day. The amount so requested from the Lender shall,
subject to the terms and conditions of this Second Supplement, be made available to the Borrower
by: (i) depositing the same, in same day funds, in an account of the Borrower; or (ii) wire
transferring such funds to a Person or Persons designated by the Borrower in writing.

          (b) Requests for Advances Irrevocable. Each Request for Advance shall be irrevocable
and binding on the Borrower and the Borrower shall indemnify the Lender against any loss or expense
it may incur as a result of any failure to borrow any Advance after a Request for Advance
(including any failure resulting from the failure to fulfill on or before the date specified for
such Advance the applicable conditions set forth in this Section 7 of this Second Supplement and
the MLA), including, without limitation, any loss (including loss of anticipated profits) or
expense incurred by reason of the liquidation or reemployment of deposits or other funds acquired
by the Lender to fund such Advance when such Advance, as a result of such failure, is not made on
such date.

3

 

          (c) Minimum Amounts. Each Revolving Advance shall be in a minimum amount equal to
$50,000.00.

          (d) Unused Commitment Fee. In addition to the fees payable on the Closing Date,
Borrower agrees to pay to the Lender an Unused Commitment Fee on the average daily unused portion
of such Lender’s commitment under the Term Revolving Loan from the Conversion Date until the Term
Revolving Loan Maturity Date at the rate of 0.35% per annum, payable in arrears in quarterly
installments payable on the first (1st) day of each third month after the Conversion
Date.

          (e) Conditions Precedent to All Advances. The Lender’s obligation to make each
Advance under the Term Revolving Note shall be subject to the terms, conditions and covenants set
forth in the MLA and this Second Supplement, including, without limitation, the following further
conditions precedent:

                         (i) Representations and Warranties. The representations and warranties set forth in
the MLA and this Second Supplement are true and correct in all material respects as of the date of
the request for any Advance, except as disclosed in writing to the Lender, to the same extent and
with the same effect as if made at and as of the date thereof except as disclosed in writing to the
Lender;

                         (ii) No Defaults. The Borrower is not in default under the terms of the MLA, this
Second Supplement, the Related Documents or any other Material Contracts to which the Borrower is a
party and which relates to the construction of the Project or the operation of the Borrower’s
business; and

                         (iii) Government Action. No license, permit, permission or authority necessary for
the construction or operation of the Project has been revoked or challenged by or before any
Governmental Authority.

     8. Interest Rate. Subject to the provisions of Section 2.07 and 2.08 of the MLA and
Sections 9 and 12 of this Second Supplement, the Term Revolving Loan shall bear interest at a rate
equal to the LIBOR Rate plus 325 basis points. The computation of interest, amortization, maturity
and other terms and conditions of the Term Revolving Loan shall be as provided in the Term
Revolving Note, provided, however, in no event shall the applicable rate exceed the maximum
nonusurious interest rate, if any, that at any time, or from time to time, may be contracted for,
taken, reserved, charged, or received under applicable state or federal laws (the “Maximum Rate”).

     9. Default Interest. In addition to the rights and remedies set forth in the MLA:
(i) if the Borrower fails to make any payment to Lender when due, then at Lender’s option in each
instance, such obligation or payment shall bear interest from the date due to the date paid at 2%
per annum in excess of the rate of interest that would otherwise be applicable to such obligation
or payment; (ii) upon the occurrence and during the continuance of an Event of Default beyond any
applicable cure period, if any, at Lender’s option in each instance, the unpaid balances of the
Term Revolving Loan shall bear interest from the date of the Event of Default or such later date as
Lender shall elect at 2% per annum in excess of the rate(s) of interest that would otherwise be

4

 

in effect on the Term Revolving Loan under the terms of the Term Revolving Note; (iii) after the
maturity of the Term Revolving Loan, whether by reason of acceleration or otherwise, the unpaid
principal balance of the Term Revolving Loan (including without limitation, principal, interest,
fees and expenses) shall automatically bear interest at 2% per annum in excess of the rate of
interest that would otherwise be in effect on the Term Revolving Loan under the terms of the Term
Revolving Note. Interest payable at the Default Rate shall be payable from time to time on demand
or, if not sooner demanded, on the last day of each calendar month.

     10. Late Charge. If any payment of principal or interest due under this Second
Supplement or the Term Revolving Note is not paid within ten (10) days of the due date thereof, the
Borrower shall, in addition to such amount, pay a late charge equal to five percent (5%) of the
amount of such payment.

     11. Excess Cash Flow. In addition to all other payments of principal and interest
required under the MLA, the Supplements and the Notes, the Borrower shall annually remit to Lender
an amount equal to 50% of the Borrower’s Excess Cash Flow, calculated based upon the immediately
preceding fiscal year end audited financial statements, on or before 120 days after the end of each
fiscal year of the Borrower (the “Excess Cash Flow Payment”); provided, however, that the total
Excess Cash Flow Payments required hereunder shall not exceed $2,500,000.00 in any fiscal year.
Such payment shall be applied to the outstanding principal of the Term Loan or the Term Revolving
Loan at the Lender’s discretion. Any Excess Cash Flow Payment shall not be considered to be a
prepayment with respect to which a prepayment premium would apply under Section 2.10 of the MLA.
Notwithstanding the foregoing, the Excess Cash Flow Payment is not required when the Tangible
Owner’s Equity from the immediately preceding fiscal year end is greater than 70%.

     12. Changes in Law Rendering Certain LIBOR Rate Loans Unlawful. In the event that any
change in any applicable law (including the adoption of any new applicable law) or any change in
the interpretation of any applicable law by any judicial, governmental or other regulatory body
charged with the interpretation, implementation or administration thereof, should make it (or in
the good-faith judgment of the Lender should raise a substantial question as to whether it is)
unlawful for the Lender to make, maintain or fund LIBOR Rate Loans, then: (a) the Lender shall
promptly notify each of the other parties hereto; and (b) the obligation of the Lender to make
LIBOR rate loans of such type shall, upon the effectiveness of such event, be suspended for the
duration of such unlawfulness. During the period of any suspension, Lender shall make loans to
Borrower that are deemed lawful and that as closely as possible reflect the terms of the MLA.

     13. Maximum Amount Limitation. Anything in the MLA, this Second Supplement, or the
other Loan Documents to the contrary notwithstanding, Borrower shall not be required to pay
unearned interest on the Term Revolving Note or any of the Loan Obligations, or ever be required to
pay interest on the Term Revolving Note or any of the Loan Obligations at a rate in excess of the
Maximum Rate, if any. If the effective rate of interest which would otherwise be payable under the
MLA, this Supplement, the Term Revolving Note, or any of the other Loan Documents would exceed the
Maximum Rate, if any, then the rate of interest which would otherwise be contracted for, charged,
or received under the MLA, this Supplement, the Term

5

 

Revolving Note, or any of the other Loan Documents shall be reduced to the Maximum Rate, if any.
If any unearned interest or discount or property that is deemed to constitute interest (including,
without limitation, to the extent that any of the fees payable by Borrower for the Loan Obligations
to the Lender under the MLA, this Supplement, the Term Revolving Note, or any of the other Loan
Documents are deemed to constitute interest) is contracted for, charged, or received in excess of
the Maximum Rate, if any, then such interest in excess of the Maximum Rate shall be deemed a
mistake and canceled, shall not be collected or collectible, and if paid nonetheless, shall, at the
option of the holder of the Term Revolving Note, be either refunded to the Borrower, or credited on
the principal of the Term Revolving Note. It is further agreed that, without limitation of the
foregoing and to the extent permitted by applicable law, all calculations of the rate of interest
or discount contracted for, charged or received by the Lender under the Term Revolving Note, or
under any of the Loan Documents, that are made for the purpose of determining whether such rate
exceeds the Maximum Rate applicable to the Lender, if any, shall be made, to the extent permitted
by applicable laws (now or hereafter enacted), by amortizing, prorating and spreading during the
period of the full terms of the Advances evidenced by the Term Revolving Note, and any renewals
thereof all interest at any time contracted for, charged or received by Lender in connection
therewith. This section shall control every other provision of all agreements among the parties to
the MLA pertaining to the transactions contemplated by or contained in the Loan Documents, and the
terms of this section shall be deemed to be incorporated in every Loan Document and communication
related thereto.

     14. Security. The Borrower’s obligations hereunder and, to the extent related
thereto, the MLA, shall be secured as provided in the MLA.

     IN WITNESS WHEREOF, the parties have caused this Second Supplement to the Master Loan
Agreement to be executed by their duly authorized officers as of the date shown above.

	 	 	 	 	 	 	 
	 	 	CENTRAL IOWA ENERGY, LLC

an Iowa limited liability company	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ James Johnston	 	 
	 

	 	 	 	 	 	 
	 	 	Name: James Johnston

Title: Chairman	 	 
	 
	 	 	 	 	 	 
	 	 	F & M BANK-IOWA, a bank chartered under the laws of Iowa	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Daniel J. Hassman	 	 
	 

	 	 	 	 	 	 
	 	 	Name: Daniel J. Hassman

Its: President	 	 

6

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