Document:

exv10w8

 

Exhibit 10.8

CONTINUING GUARANTY

THIS CONTINUING GUARANTY (this “Guaranty”) is made as of November 15, 2005, by US BIOENERGY
CORPORATION, a South Dakota corporation (“Guarantor”), for the benefit of AGSTAR FINANCIAL
SERVICES, PCA.

R E C I T A L S

     A. US Bio Albert City, LLC, a subsidiary of the Guarantor, and Lender are parties to that
certain Master Loan Agreement of even date herewith (as amended, restated, supplemented or
otherwise modified from time to time, the “Master Loan Agreement”) pursuant to which the Lender
have agreed to make certain financial accommodations to the Borrower .

     B. To induce the Lender to make the financial accommodations provided to the Borrower pursuant
to the Master Loan Agreement, the Guarantor has agreed to guarantee the obligations of the Borrower
under the Master Loan Agreement, on the terms and conditions set forth in this Guaranty.

          NOW, THEREFORE, in consideration of the foregoing, and intending to be legally bound
hereby, Guarantor hereby agrees as follows:

     Section 1. Rules of Construction. The following rules of construction shall be
applicable for all purposes of this Guaranty and all amendments and supplements hereto except as
otherwise expressly provided or unless the context otherwise requires:

          (a) The terms used herein shall include the plural as well as the singular, and vice versa.

          (b) All references in this Guaranty to designated sections, paragraphs and other subdivisions
are to the designated sections, paragraphs and subdivisions of this Guaranty.

          (c) The terms “herein,” “hereof” and “hereunder” and similar words refer to this Guaranty as a
whole and not to any particular section, paragraph or subdivision.

          (d) The term “person” includes any individual, corporation, limited liability company,
partnership, joint venture, association, trust, sole proprietorship, unincorporated organization
and any government authority or any agency or political subdivision thereof.

          (e) The terms “include,” “including” and similar terms shall be construed as if followed by
the phrase “without being limited to.”

 

 

          (f) Capitalized terms used in this Guaranty, unless otherwise defined herein, shall have the
meanings assigned to them in the Master Loan Agreement.

     Section 2. Obligations. “Obligations” shall mean (i) the payment and performance of
all obligations of the Borrower, whether now existing or hereinafter arising, under the Master Loan
Agreement, any existing or future Supplements thereto, and all other Loan Documents to which the
Borrower is a party, and (ii) the payment of all other indebtedness and the performance of all
other obligations of the Borrower to the Lender of every type and description, whether now existing
or hereafter arising, fixed or contingent, as primary obligor or as guarantor or surety, acquired
directly or by assignment or otherwise, liquidated or unliquidated, regardless of how they arise or
by what agreement or instrument they may be evidenced, including, without limitation, all loans,
advances, and other extensions of credit and all covenants, agreements, and provisions contained in
all loan and other agreements between the Borrower and Lender.

     Section 3. Guaranty Provisions.

          (a) In consideration of loans, advances or disbursements heretofore or hereafter granted by
the Lender to the Borrower pursuant to the Master Loan Agreement, including any existing or future
Supplements thereto, or otherwise and for other good and valuable consideration, the adequacy,
sufficiency and receipt of which are hereby acknowledged, Guarantor hereby absolutely,
unconditionally, irrevocably (except as otherwise expressly provided in Subsection 3(k) below),
completely and immediately guarantees the prompt payment of, when due, whether by acceleration or
otherwise, and the prompt payment and performance of the Obligations;

          (b) Guarantor further agrees to pay to the Lender, upon demand, (i) all losses and reasonable
costs and expenses, including, without limitation, reasonable attorneys’ fees and expenses,
incurred in attempting to cause the Obligations to be paid, performed or otherwise satisfied or in
attempting to protect or preserve any property, personal or real, securing the Obligations and (ii)
all losses and reasonable costs and expenses, including, without limitation, reasonable attorneys’
fees and expenses, incurred in enforcing or endeavoring to enforce this Guaranty and any other Loan
Document to which Guarantor is a party or in attempting to protect or preserve property pledged
under any Loan Document to which Guarantor is a party;

          (c) Guarantor expressly guarantees any sum or sums which become due and owing to the Lender as
a result of any order of a bankruptcy court which requires the Lender to turn over moneys paid by
the Borrower, Guarantor or any other person to the Lender on account of the Obligations. Guarantor
agrees that this Guaranty shall continue to be effective or be reinstated, as the case may be, if
at any time any payment by the Borrower or any other person to the Lender on account of the
Obligations is rescinded or must otherwise be returned or restored upon the insolvency or
bankruptcy of the Borrower or any other obligor, guarantor, endorser or surety of the Obligations,
all as though such payment had not been made;

2

 

          (d) Guarantor assents to all terms and agreements heretofore or hereafter made by the Borrower
or any other guarantor of the Borrower with the Lender;

          (e) Guarantor hereby consents to the following and agrees that its liability will not be
affected or impaired by (i) the exchange, release or surrender of any collateral to the Borrower or
any other person, including any other guarantor, pledgor or grantor, or the waiver, release or
subordination of any security interest, in whole or in part; (ii) the waiver or delay in the
exercise of any of the Lender’s rights or remedies against the Borrower or any other person,
including any other guarantor; (iii) the release of the Borrower or any other person, including any
other person guaranteeing any portion of the Obligations; (iv) the renewal, extension or
modification of the terms of any of the Obligations or any instrument or agreement evidencing the
same, including, without limitation, an increase in the principal amount of the Obligations; and
(v) the acceptance by the Lender of other guaranties;

          (f) Guarantor waives acceptance hereof, notice of acceptance hereof, and notice of
acceleration of and intention to accelerate the Obligations, and waives presentment, demand,
protest, notice of dishonor, notice of default, notice of nonpayment or protest in relation to any
instrument evidencing any of the Obligations, and any other demands and notices required by law
except as such waiver may be expressly prohibited by law;

          (g) This is a guaranty of payment and performance and not of collection. The liability of
Guarantor under this Guaranty shall be absolute, unconditional, direct, complete and immediate and
shall not be contingent upon the pursuit of any remedies against the Borrower or any other
guarantor or person, nor against any security or lien available to the Lender, its successors,
successors-in-title, endorsees or assigns. Guarantor waives any right to require that an action be
brought against the Borrower or any other person or to require that resort be had to any security.
In the event of a default under the Loan Documents, or any of them, the Lender shall have the right
to enforce its rights, powers and remedies under any of the Loan Documents, in any order, and all
rights, powers and remedies available to the Lender in such event shall be nonexclusive and
cumulative of all other rights, powers and remedies provided thereunder or hereunder or by law or
in equity. Accordingly, Guarantor hereby authorizes and empowers the Lender upon acceleration or
maturity of the Obligations or any other Obligation, at its sole discretion, and without notice to
Guarantor, to exercise any right or remedy which the Lender may have or any right or remedy
hereinafter granted which the Lender may have as to any security. Guarantor expressly waives any
right to require any action on the part of the Lender to proceed to collect amounts due under the
Master Loan Agreement or any other Loan Documents.

          (h) Guarantor hereby subordinates any and all indebtedness of the Borrower now or hereafter
owed to Guarantor to all obligations of the Borrower to the Lender, and agrees with the Lender
that, from and after the occurrence of a default or event of default under any of the Loan
Documents and for so long as such default or event of default exists, Guarantor shall not

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demand or
accept any payment of principal or interest from any of the Borrower, shall not claim any offset or
other reduction of Guarantor’s liability hereunder because of any such indebtedness
and shall not take any action to obtain any of the security for the Obligations;
provided, however, that, if the Lender so requests, such indebtedness shall be
collected, enforced and received by Guarantor as trustee for the Lender and be paid over to the
Lender on account of the Obligations of the Borrower to the Lender, but without reducing or
affecting in any manner the liability of Guarantor under the other provisions of this Guaranty;

          (i) Guarantor hereby authorizes the Lender, without notice to Guarantor, to apply all payments
and credits received from the Borrower or from any guarantor or realized from any security in such
manner and in such priority as the Lender in its sole judgment shall see fit to the Obligations
which are the subject of this Guaranty;

          (j) The liability of Guarantor under this Guaranty shall not in any manner be affected by
reason of any action taken or not taken by the Lender, which action or inaction is consented and
agreed to by Guarantor, nor by the partial or complete unenforceability or invalidity of any other
guaranty or surety agreement, pledge, assignment, or other security for any of the Obligations. No
delay in making demand on Guarantor for satisfaction of its liability hereunder shall prejudice the
Lender’s right to enforce such satisfaction. All of the Lender’s rights and remedies shall be
cumulative and any failure of the Lender to exercise any right hereunder shall not be construed as
a waiver of the right to exercise the same or any other right at any time, and from time to time,
thereafter;

          (k) This Guaranty shall be a continuing one and shall be binding upon Guarantor regardless of
how long before or after the date hereof the Obligations are incurred until this Guaranty is
terminated as provided in this Guaranty or is revoked by Guarantor prospectively as to future
transactions, by written notice actually received by the Lender, and such revocation shall not be
effective as to any indebtedness existing or committed for under the Master Loan Agreement or the
other Loan Documents at the time of actual receipt of such notice by the Lender, or as to any
renewals, extensions or refinancings thereof. Guarantor agrees to rely exclusively on the right to
revoke this Guaranty prospectively as to future transactions, in accordance with this Subsection
3(k), if at any time, in the opinion of the directors or officers of Guarantor, the benefits then
being received by Guarantor in connection with this Guaranty are not sufficient to warrant the
continuance of this Guaranty as to future indebtedness. Accordingly, so long as this Guaranty is
not revoked prospectively in accordance with this Subsection 3(k), the Lender may rely conclusively
on a continuing warranty, hereby made, that Guarantor continues to be benefited by this Guaranty
and the Lender and the Lender shall have no duty to inquire into or confirm that the receipt of any
such benefits, and this Guaranty shall be effective and enforceable by the Lender without regard to
the receipt, nature or value of any such benefits; and

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          (l) Until the Obligations are paid finally and in full, or this Guaranty is released as
provided herein, Guarantor hereby irrevocably waives any and all rights it may have to enforce any
of the Lender’s rights or remedies or participate in any security now or hereafter held by the
Lender, and any and all such other rights of subrogation, reimbursement, contribution
or indemnification against the Borrower , or any other person having any manner of liability
for the Borrower’s obligations to the Lender, whether or not arising hereunder, by agreement, at
law or in equity.

     Section 4. Representations and Warranties. Guarantor represents and warrants to the
Lender, on the date hereof and on the date any Advance under the Master Loan Agreement is made, as
follows:

          (a) Organization, Powers, Existence, Etc. Guarantor (i) is duly organized, validly
existing, and in good standing under the laws of its state of incorporation or organization (as
applicable); (ii) is duly qualified to do business and is in good standing in each jurisdiction in
which the transaction of its business makes such qualification necessary; (iii) has all requisite
corporate, limited liability company or partnership (as applicable) and legal power to own and
operate its assets and to carry on its business and to enter into and perform its obligations under
the Loan Documents to which it is a party; and (iv) has duly and lawfully obtained and maintained
all licenses, certificates, permits, authorizations, approvals, and the like which are material to
the conduct of its business, or which may be otherwise required by law.

          (b) Due Authorization; No Violations; Etc. The execution and delivery by Guarantor
of, and the performance by Guarantor of its obligations under, the Loan Documents to which it is a
party have been duly authorized by all requisite corporate, limited liability company or
partnership (as applicable) action on the part of Guarantor and do not and will not (i) violate any
provision of any law, rule or regulation, any judgment, order or ruling of any court or
governmental agency, the articles of incorporation or organization (as applicable) or bylaws,
operating agreement or partnership agreement (as applicable) of Guarantor, or any material
agreement, indenture, mortgage, or other instrument to which Guarantor is a party or by which
Guarantor or any of its properties is bound or (ii) be in conflict with, result in a breach of, or
constitute with the giving of notice or lapse of time, or both, a default or Event of Default under
any such agreement, indenture, mortgage, or other instrument. No action on the part of any
shareholder, member or partner (as applicable) of Guarantor is necessary in connection with the
execution and delivery by Guarantor of, and the performance by Guarantor of its obligations under,
the Loan Documents to which it is a party.

          (c) Governmental Approval. No consent, permission, authorization, order, or license
of any governmental authority is necessary in connection with the execution, delivery, performance,
or enforcement of the Loan Documents to which Guarantor is a party, except such as have been
obtained and are in full force and effect or such as may be required in connection

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with pursuing
remedies under the Security Agreement or Mortgage against the property of Guarantor.

          (d) Binding Agreement. Each of the Loan Documents to which Guarantor is a party is,
or when executed and delivered will be, the legal, valid, and binding obligation of Guarantor,
enforceable in accordance with its terms, subject only to limitations on enforceability
imposed by applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws
affecting creditors’ rights generally.

          (e) Compliance with Laws. Guarantor is in compliance in all material respects with
all federal, state, and local laws, rules, regulations, ordinances, codes, and orders
(collectively, “Laws”), the failure to comply with which could reasonably be expected to have a
material adverse effect on the condition, financial or otherwise, operations, properties, or
business of Guarantor, or on the ability of Guarantor to perform its obligations under the Loan
Documents to which it is a party.

          (f) Environmental Compliance. Without limiting the provisions of Subsection (e)
above, to Guarantor’s actual knowledge, all property owned or leased by Guarantor and all
operations conducted by it are in compliance in all material respects with all Laws relating to
environmental protection, the failure to comply with which could reasonably be expected to have a
material adverse effect on the condition, financial or otherwise, operations, properties, or
business of Guarantor, or on the ability of Guarantor to perform its obligations under the Loan
Documents to which it is a party.

          (g) Litigation. Except as otherwise disclosed in the Master Loan Agreement, there are
no pending legal, arbitration, or governmental actions or proceedings to which Guarantor is a party
or to which any of its property is subject which, if adversely determined, could reasonably be
expected to have a material adverse effect on the condition, financial or otherwise, operations,
properties, or business of Guarantor, or on the ability of Guarantor to perform its obligations
under the Loan Documents to which it is a party, and to the best of Guarantor’s knowledge, no such
actions or proceedings are threatened or contemplated.

          (h) Financial Condition. Guarantor represents and warrants that the liability and
obligations of Guarantor incurred or arising under this Guaranty and of the Borrower incurred or
arising under the Master Loan Agreement may reasonably be expected to benefit substantially
Guarantor directly or indirectly, and Guarantor’s board of directors or members have made that
determination. Guarantor represents and warrants that it has full and complete access to all of
the Loan Documents and other documents relating to the Obligations, has reviewed them and is fully
aware of the meaning and effect of their contents. Guarantor is fully informed of all
circumstances that bear upon the risks of executing this Guaranty which a diligent inquiry would
reveal. Guarantor agrees that the Lender will have no obligation to advise or notify Guarantor of
or provide Guarantor with any data or information.

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          (i) Principal Place of Business. The principal place of business and chief executive
office of Guarantor is at the address of Guarantor shown or referenced in Subsection 8(e) of this
Guaranty.

          (j) Employee Benefit Plans. Guarantor is in compliance in all material respects with
the applicable provisions of the Employee Retirement Income Security Act of 1974, as amended, and
the regulations and published interpretations thereunder.

          (k) Taxes. Guarantor has filed or caused to be filed, all federal, state and local
tax returns that are required to be filed, and has paid all taxes as shown on said returns or on
any assessment received by Guarantor to the extent that such taxes have become due.

          (l) Security Agreement and Mortgage. The Security Agreement and Mortgage create a
valid security interest and lien in the property described therein, subject to no other security
interest or lien which is not permitted by the Master Loan Agreement.

     Section 5. Covenants.

          (a) Compliance With Master Loan Agreement. Guarantor covenants and agrees with the
Lender that so long as this Guaranty shall remain in effect or the Obligations have not been fully
paid or otherwise satisfied, Guarantor, unless the Lender shall otherwise consent in writing, will
comply with the affirmative and negative covenants, and other agreements, contained in the Master
Loan Agreement applicable to Guarantor.

          (b) Reporting Requirements. Guarantor shall furnish to the Lender:

                    (i) as soon as available and in any event within 120 days after the end of each fiscal year of
the Guarantor, a copy of the financial statements (including balance sheet, statements of income
and cash flows, all accompanying notes thereto and any management letter), for such year for the
Borrower, certified, without qualification, in an opinion acceptable to the Lender by an
independent public accountants acceptable to the Lender; and

                    (ii) as soon as available and in any event within 30 days after the end of each fiscal
quarter, balance sheets of the Guarantor as of the end of such fiscal quarter and statement of
income of the Guarantor for the period commencing at the end of the previous fiscal year and ending
with the end of such quarter by an authorized officer of the Guarantor.

     Section 6. Events of Default. The occurrence of any of the following shall constitute
an “Event of Default” hereunder:

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          (a) Representations and Warranties. Any representation or warranty made by Guarantor
herein or in any Loan Document to which it is a party shall prove to have been false or misleading
in any material respect on or as of the date made or deemed made.

          (b) Covenants and Agreements. Guarantor should fail to perform or comply with any
covenant or agreement contained herein.

          (c) Cross-Default. The occurrence of an Event of Default under, or the failure, after
any applicable grace period, on the part of the Borrower, Guarantor or any other party (other than
the Lender) to observe, keep or perform any covenant or agreement contained in the Master Loan
Agreement or any Loan Document other than this Guaranty.

     Section 7. Miscellaneous.

          (a) Governing Law. Except to the extent governed by applicable federal law, this
Guaranty shall be governed by and construed in accordance with the laws of the State of Minnesota
without reference to choice of law doctrine.

          (b) Binding Effect. This Guaranty shall inure to the benefit of and be binding upon
the parties hereto and their respective successors and assigns. Guarantor may not assign any of
its rights or obligations hereunder without the prior written consent of the Lender.

          (c) Severability. If any one or more of the provisions contained herein shall for any
reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality
or unenforceability shall not affect any other provisions of this Guaranty, but this Guaranty shall
be construed as if such invalid, illegal or unenforceable provisions had not been contained herein.

          (d) Non-Waiver; Modification; Election of Remedies. The failure of any party to
insist, in any one or more instances, upon a strict performance of any of the terms and conditions
of this Guaranty, or to exercise or fail to exercise any option or right contained herein, shall
not be construed as a waiver or a relinquishment for the future of such right or option, but the
same shall continue and remain in full force and effect. The continued performance by any party of
this Guaranty with knowledge of the breach of any term or condition hereof shall not be deemed a
waiver of such breach, and no waiver by any party of any provision hereof shall be deemed to have
been made, or operate as an estoppel, unless expressed in writing and signed by such party. No
enforcement of any remedy shall constitute an election of remedies.

          (e) Notices. All notices and other communications provided for under this Guaranty or
any Loan Document shall be in writing and mailed, faxed, or delivered at the addresses set forth
below, or at such other address as such party may specify by written notice to the other parties
hereto:

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	If to the Guarantor:
	 	US BioEnergy Corporation

	 
	 	P.O. Box 381
 111 Main Avenue

	 
	 	Suite 200

	 
	 	Brookings, South Dakota  57006

	 
	 	Telephone:  (605) 696-3150

	 
	 	Facsimile: (605) 606-3153

	 
	 	Attention:  Gordon W. Ommen
	 
	 	 
	with a copy to:
	 	Lindquist & Vennum, P.L.L.P.

	 
	 	4200 IDS Center

	 
	 	80 South Eighth Street

	 
	 	Telephone:  (612) 371-3987

	 
	 	Facsimile:  (612) 371-3207
	 
	 	Attention:  Michael L. Weaver
	 
	 	 
	If to the Lender:
	 	AgStar Financial Services, PCA

	 
	 	1921 Premier Drive

	 
	 	P.O. Box 4249

	 
	 	Mankato, MN 56002-4249

	 
	 	Telephone: (507) 386-4242

	 
	 	Facsimile: (507) 344-5088

	 
	 	Attention: Mark Schmidt
	 
	 	 
	with copies to:
	 	Gray, Plant, Mooty, Mooty, & Bennett, P.A.

	 
	 	1010 West St. Germain

	 
	 	Suite 600

	 
	 	St. Cloud, MN  56301

	 
	 	Telephone:  (320) 252-4414

	 
	 	Facsimile:  (320) 252-4482

	 
	 	Attention:  Phillip L. Kunkel

All notices hereunder shall be delivered as provided in the Master Loan Agreement to the Borrower.

          (f) Regulatory Approvals. Upon any action by the Lender to commence the exercise of
remedies hereunder or under any of the other Loan Documents, Guarantor hereby undertakes and agrees
to cooperate and join with the Lender in any application to any governmental authority with respect
thereto and to provide such assistance in connection therewith as the Lender may reasonably
request, including, without limitation, the consent to or joining in of filings and appearances of
officers and employees of Guarantor before any governmental authority, in each case in support of
any such application made by the Lender, and

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Guarantor shall, directly or indirectly, not oppose
any such action by the Lender before any such governmental authority.

     Section 8. Consent to Jurisdiction. The Guarantor hereby irrevocably submits to
the jurisdiction of any Minnesota State court sitting in Blue Earth County, Minnesota, or Federal
court sitting in Minneapolis, Minnesota, in any action or proceeding arising out of or relating to
this Guaranty or any of the other Loan Documents to which it is a party, and Guarantor hereby
irrevocably agrees that all claims in respect of such action or proceeding may be heard and
determined in such Minnesota State court or in such Federal court. The Guarantor hereby
irrevocably waives, to the fullest extent it may effectively do so, the defense of an inconvenient
forum to the maintenance of such action or proceeding.

     Section 9. Governing Law. THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF MINNESOTA.

     Section 10. Waiver of Jury Trial. THE GUARANTOR, THE LENDERS HEREBY IRREVOCABLY
WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR
RELATING TO ANY LOAN DOCUMENT TO WHICH IT IS A PARTY OR ANY INSTRUMENT OR DOCUMENT DELIVERED
THEREUNDER.

          IN WITNESS WHEREOF, Guarantor, intending to be legally bound hereby, has caused this Guaranty
to be executed and delivered by its duly authorized officers as of the day and year first above
written.

	 	 	 	 	 
	 	US BIOENERGY CORPORATION,

a South Dakota corporation

 	 
	 	By:  	     /s/ CHAD D. HATCH
 	 
	 	 	Chad D. Hatch 	 
	 	 	Its:        Vice President and Chief Financial Officer 	 
	 

10exv10w9

 

Exhibit 10.9

MASTER LOAN AGREEMENT

by and among

SUPERIOR CORN PRODUCTS, LLC

and

AGSTAR FINANCIAL SERVICES, PCA

dated

as of

November 15, 2005

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page
	ARTICLE I. DEFINITIONS AND ACCOUNTING MATTERS
	 	 	1	 
	Section 1.01 Certain Defined Terms
	 	 	1	 
	Section 1.02 Accounting Matters
	 	 	11	 
	Section 1.03 Construction
	 	 	11	 
	 
	 	 	 	 
	ARTICLE II. AMOUNTS AND TERMS OF THE TERM LOANS
	 	 	11	 
	Section 2.01 Supplements
	 	 	11	 
	Section 2.02 Construction Loan
	 	 	11	 
	Section 2.03 Revolving Loan
	 	 	11	 
	Section 2.04 Conversion of Construction Loan Into Term Loan
	 	 	12	 
	Section 2.05 Adjustments to Interest Rate
	 	 	13	 
	Section 2.06 Underwriting/Participation/Facility Fees
	 	 	14	 
	Section 2.07 Default Interest
	 	 	14	 
	Section 2.08 Late Charge
	 	 	15	 
	Section 2.09 Prepayment of Term Loan
	 	 	15	 
	Section 2.10 Changes in Law Rendering Certain LIBOR Rate Loans Unlawful
	 	 	15	 
	Section 2.11 Payments and Computations
	 	 	15	 
	Section 2.12 Maximum Amount Limitation
	 	 	16	 
	Section 2.13 Lender Records
	 	 	17	 
	Section 2.14 Loan Payments
	 	 	17	 
	Section 2.15 Purchase of Equity Interests in AgStar Financial Services, PCA
	 	 	17	 
	Section 2.16 Compensation
	 	 	18	 
	 
	 	 	 	 
	ARTICLE III CONDITIONS PRECEDENT
	 	 	18	 
	Section 3.01 Conditions Precedent to Funding
	 	 	18	 
	 
	 	 	 	 
	ARTICLE IV. REPRESENTATIONS AND WARRANTIES
	 	 	22	 
	Section 4.01 Representations and Warranties of the Borrower
	 	 	22	 
	 
	 	 	 	 
	ARTICLE V. COVENANTS OF THE BORROWER
	 	 	26	 
	Section 5.01 Affirmative Covenants
	 	 	26	 
	Section 5.02 Negative Covenants
	 	 	34	 
	 
	 	 	 	 
	ARTICLE VI. EVENTS OF DEFAULT AND REMEDIES
	 	 	37	 
	Section 6.01 Events of Default
	 	 	37	 
	Section 6.02 Remedies
	 	 	40	 
	Section 6.03 Remedies Cumulative
	 	 	41	 
	 
	 	 	 	 
	ARTICLE VII. MISCELLANEOUS
	 	 	42	 
	Section 7.01 Amendments, etc.
	 	 	42	 
	Section 7.02 Notices, etc.
	 	 	42	 

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	 	 	Page
	Section 7.03 No Waiver; Remedies
	 	 	43	 
	Section 7.04 Costs, Expenses and Taxes
	 	 	43	 
	Section 7.05 Right of Set-off
	 	 	43	 
	Section 7.06 Severability of Provisions
	 	 	44	 
	Section 7.07 Binding Effect; Successors and Assigns; Participations
	 	 	44	 
	Section 7.08 Consent to Jurisdiction
	 	 	45	 
	Section 7.09 Governing Law
	 	 	45	 
	Section 7.10 Execution in Counterparts
	 	 	45	 
	Section 7.11 Survival
	 	 	45	 
	Section 7.12 Waiver of Jury Trial
	 	 	46	 
	Section 7.13 Entire Agreement
	 	 	46	 

LIST OF SCHEDULES AND EXHIBITS

	 	 	 
	Schedule 3.01(d)

	 	Real Property
	Schedule 4.01(a)

	 	Description of Certain Transactions Related to the Borrower’s Stock
	Schedule 4.01(f)

	 	Description of Certain Threatened Actions, etc.
	Schedule 4.01(k)

	 	Location of Inventory and Farm Products; Third Parties in Possession; Crops
	Schedule 4.01(l)

	 	Office Locations; Fictitious Names; Etc.
	Schedule 4.01(p)

	 	Intellectual Property
	Schedule 4.01(t)

	 	Environmental Compliance
	Schedule 5.01(o)

	 	Management
	Schedule 5.02(a)

	 	Description of Certain Liens, Lease Obligations, etc.
	Schedule 5.02(k)

	 	Transactions with Affiliates
	 
	 	 
	Exhibit A

	 	Compliance Certificate
	Exhibit B

	 	Project Sources and Uses Statement
	Exhibit C

	 	Form of Opinion Letter

ii 

 

MASTER LOAN AGREEMENT

     THIS MASTER LOAN AGREEMENT (this “Agreement”), dated as of November 15, 2005, between AGSTAR
FINANCIAL SERVICES, PCA, an United States corporation (“Lender”) and SUPERIOR CORN PRODUCTS, LLC, a
Michigan limited liability company (the “Borrower”).

RECITALS

     A. The Borrower has requested the Lender extend to the Borrower various credit facilities for
the purposes of acquiring, constructing, equipping and furnishing of an ethanol production facility
to be located near Lake Odessa, Barry County, Michigan (the “Project”).

     B. Lender has agreed to make such loans to the Borrower, and in order to reduce the amount of
paperwork associated therewith, Lender and the Borrower would like to enter into a master loan
agreement.

AGREEMENT

     NOW, THEREFORE, in consideration of the foregoing, intending to be legally bound hereby, and
in consideration of Lender making one or more loans to the Borrower, Lender and the Borrower agree
as follows:

ARTICLE I.

DEFINITIONS AND ACCOUNTING MATTERS

     Section 1.01. Certain Defined Terms. As used in this Agreement and in the
Supplements, the following terms shall have the following meanings. Terms not otherwise defined in
this Agreement shall have the meanings attributed to such terms in the Uniform Commercial Code, as
amended from time to time. All references to dollar amounts shall mean amounts in lawful money of
the United States of America.

     “Advances” means the Loans or Letters of Credit provided the Borrower pursuant to this
Agreement and the Supplements to this Agreement. .

“Affiliate” means, as to any Person, any other Person: (a) that directly or
indirectly, through one or more intermediaries, controls or is controlled by, or is under
common control with, such Person; (b) that directly or indirectly beneficially owns or holds
ten percent (10%) or more of any class of voting stock of such Person; or (c) ten percent
(10%) or more of the voting stock of which is directly or indirectly beneficially owned or
held by the Person in question. The term “control” means the possession, directly or
indirectly, of the power to direct or cause direction of the management and policies of a
Person, whether through the ownership of voting securities, by contract, or otherwise;
provided, however, in no event shall the Lender or any Bank be deemed an Affiliate of the
Borrower or any of their subsidiaries.

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“Agreement” means this Agreement, as this Agreement may be amended or modified from
time to time, together with all exhibits and schedules attached to this Agreement from time
to time.

“Allowed Distributions” has the meaning specified in Section 5.02(b).

“Borrower” means Superior Corn Products, LLC, a Michigan limited liability company.

“Borrower’s Equity” means funds of at least 40% of Project Costs consisting of (i)
member cash equity of not less than $19,000,000.00; and (ii) Subordinated Debt.

“Business Day” means any day other than a Saturday, Sunday, or other day on which
commercial banks are authorized to close under the Laws of, or are in fact closed in, the
state where the Lender’s Office is located and, if such day relates to any LIBOR Rate, means
any such day on which dealings in dollar deposits are conducted by and between banks in the
applicable offshore dollar interbank market.

“Capital Expenditures” means, for any period, the sum of all amounts that would, in
accordance with generally accepted accounting principles consistently applied, be included
as additions to property, plant and equipment on a statement of cash flows for the Borrower
during such period, with respect to: (a) the acquisition, construction, improvement,
replacement or betterment of land, buildings, machinery, equipment or of any other fixed
assets or leaseholds; or (b) other capital expenditures and other uses recorded as capital
expenditures having substantially the same effect.

“Closing Date” means November 15, 2005.

“CERCLA” means the Comprehensive Environmental Response, Compensation, and Liability
Act of 1980, as amended.

“Collateral” means and includes, without limitation, all property and assets granted
as collateral security for the Loans or Indebtedness, whether real or personal property,
whether granted directly or indirectly, whether granted now or in the future, and whether
granted in the form of a security interest, mortgage, assignment of rents, deed of trust,
assignment, pledge, chattel mortgage, chattel trust, factor’s lien, equipment trust,
conditional sale, trust receipt, lien, charge, lien or title retention contract, lease or
consignment intended as a security device, or any other security or lien interest
whatsoever, whether created by law, contract or otherwise.

“Commitment” means the respective amounts committed to by Lender under the
Supplements and the Notes.

“Completion Date” means the earlier of (i) March 30, 2007, or (ii) the date a
Completion Certificate is issued for the Project executed by the Borrower, General
Contractor and Inspecting Engineer, whichever shall first occur.

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“Completion Certificate” means a certificate executed by the Borrower, General
Contractor and Inspecting Engineer stating that the Project is completed and that the corn
processing equipment and fixtures are completely operational.

“Compliance Certificate” means a certificate of the Treasurer, or any other officer
reasonably acceptable to the Lender, of the Borrower, substantially in the form attached
hereto as Exhibit A, setting forth the calculations of current financial covenants and
stating: (a) the Financial Statements are true and correct and, other than the unaudited
interim financial statements, have been prepared in accordance with generally accepted
accounting principles consistently applied; (b) whether they have knowledge of the
occurrence of any Event of Default under this Agreement, and if so, stating in reasonable
detail the facts with respect thereto; and (c) reaffirm and ratify the representations and
warranties, as of the date of the certificate, contained in this Agreement.

“Construction Advance” means any Advance for the payment of Project Costs.

“Construction Contracts” means any and all contracts, written or oral, between the
Borrower and any Contractor and any subcontractor and between any of the foregoing and any
other person or entity relating in any way to the construction of the Project, including the
performing of labor or the furnishing of standard or specially fabricated materials in
connection therewith.

“Construction Loan” means the loan from the Lender to the Borrower in the amount of
$36,000,000.00 and pursuant to the terms and conditions provided for in the First Supplement
to this Agreement.

“Construction Note” means that certain promissory note of even date herewith
executed and delivered to the Lender by the Borrower in the amount of $36,000,000.00 and
pursuant to the terms and conditions provided for in the First Supplement to this Agreement.

“Construction Loan Maturity Date” means 60 days after the Completion Date.

“Contractor” means and includes any person or entity, including the General
Contractor, engaged to work on or to furnish materials or supplies for the Project.

“Current Portion of Long Term Debt” means that portion of Funded Debt payable within
one year from the date of such determination, determined in accordance with generally
accepted accounting principles, consistently applied.

“Debt” means: (A) indebtedness for borrowed money or for the deferred purchase
price of property or services; (B) obligations as lessee under leases which shall have been
or should be, in accordance with generally accepted accounting principles, recorded as
capital leases; (C) obligations under direct or indirect guaranties in respect of, and
obligations (contingent or otherwise) to purchase or otherwise acquire, or otherwise to
assure a creditor against loss in respect of, indebtedness or obligations of others of the

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kinds referred to in clause (A) or (B) above or (E) through (G) below; (D) liabilities in
respect of unfunded vested benefits under plans covered by Title IV of ERISA; (E)
indebtedness in respect of mandatory redemption or mandatory dividend rights on equity
interests but excluding dividends payable solely in additional equity interests; (F) all
obligations of a Person, contingent or otherwise, for the payment of money under any
noncompete, consulting or similar agreement entered into with the seller of a company or its
assets or any other similar arrangements providing for the deferred payment of the purchase
price for an acquisition permitted hereby or an acquisition consummated prior to the date
hereof; and (G) all obligations of a Person under any Hedging Agreement.

“Default Rate” means the lesser of: (a) the Maximum Rate; or (b) the rate per annum
which shall from day-to-day be equal to two percent (2%) in excess of the then applicable
rate of interest under any Supplement or Note.

“Disbursing Agent” means Huron Title Company, its successors and assigns.

“Disbursing Agreement” means the Disbursing Agreement, of even date herewith,
executed by the Title Company, the Borrower, and the Lender, and any holder of Subordinated
Debt, as the same may be from time to time amended, modified, or supplemented.

“Distribution” means any dividend, distribution, payment, or transfer of property to
any member of the Borrower.

“Environmental Laws” means all laws and regulations relating to environmental,
health, safety and land use matters applicable to any property.

“EBITDA” means for any period, the total of the following each calculated without
duplication for the Borrower for such period: (i) net income from operations; plus (ii) any
provision for (or less any benefit from) income taxes included in determining such net
income; plus (iii) Interest Expense deducted in determining such net income; plus (iv)
amortization and depreciation expense deducted in determining such net income.

“ERISA” means the Employee Retirement Income Security Act of 1974.

“Events of Default” has the meaning specified in Section 6.01.

“Excess Cash Flow” means EBITDA, less the sum of: (i) required payments in respect
of Funded Debt; (ii) Maintenance Capital Expenditures; and (iii) Allowed Distributions.

“Excess Cash Flow Payment” has the meaning specified in Section 2.04(b).

“Excess Distributions” shall have the meaning specified in Section 5.02(b).

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“Extraordinary Items” means items which are material and significantly different
from the Borrower’s typical business activities, determined in accordance with generally
accepted accounting principles, consistently applied.

“Facility Fee” shall have the meaning specified in Section 2.06.

“Fixed Charge Coverage Ratio” means the ratio of (EBITDA +/- Extraordinary Items)
divided by the sum of Current Portion of Long Term Debt + Interest Expense + Dividends +
Distributions + Tax Distributions + Maintenance Capital Expenditures).

“Food Security Act” means the Food Security Act of 1985, 7 U.S.C. §1631, as amended,
and the regulations promulgated thereunder.

“Funded Debt” means the principal amount of all Debt of the Borrower having a final
maturity of more than one year from the date of origin thereof (or which is renewable or
extendible at the option of the obligor for a period or periods more than one year from the
date of origin) excluding, however, the principal amount due under any Revolving Note or any
other line of credit used by Borrower for working capital purposes, all determined in
accordance with generally accepted accounting principles, consistently applied for the
period in question.

“GAAP” means generally accepted accounting principals, consistently applied.

“General Contractor” means Fagen, Inc., a Minnesota corporation, and its
successors and assigns.

“Governmental Authority” means and includes any and all courts, boards, agencies,
commissions, offices, or authorities of any nature whatsoever for any governmental unit
(federal, state, county, district, municipal, city, or otherwise) whether now or hereafter
in existence.

“Guarantor” means and includes US BioEnergy Corporation, a South Dakota
corporation, together with all other of the guarantors, sureties, and accommodation parties
in connection with any Indebtedness.

Guaranties. The terms “Guaranty” and “Guaranties” shall mean those guaranties given
by the Guarantor, pursuant to which the Guarantor shall guarantee the full and prompt
payment and performance of the Borrower under the Note and this Agreement.

“Income Taxes” means the applicable state, local or federal tax on the net income of
the Borrower.

“Inspecting Engineer” means BBI, Inc., and its successors and permitted assigns.

“Intellectual Property” has the meaning specified in Section 4.01(p).

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“Interest Expense” means for any period, the total interest expense of the Borrower
calculated on a consolidated basis.

“Interest Period” means the period commencing on the date of an Advance and ending
on the numerically corresponding day in the first calendar month thereafter, except that
each such Interest Period which commences on the last Business Day of a calendar month (or
on any day for which there is no numerically corresponding day in the appropriate subsequent
calendar month) shall end on the last Business Day of the appropriate subsequent calendar
month. Notwithstanding the foregoing: (a) each Interest Period which would otherwise end
on a day which is not a Business Day shall end on the next succeeding Business Day or if
such succeeding Business Day falls in the next succeeding calendar month, on the next
preceding Business Day; (b) any Interest Period which would otherwise extend beyond the
Maturity Date shall end on the Maturity Date; and (c) no Interest Period shall have a
duration of less than one (1) month.

“Inventory” means all of the Borrower’s inventory, as such term is defined in the
UCC, whether now owned or hereafter acquired, whether consisting of whole goods, spare parts
or components, supplies or materials, whether acquired, held or furnished for sale, for
lease or under service contracts or for manufacture or processing, and wherever located.

“Lender” means AgStar Financial Services, PCA, and its successors and assigns.

“Letter of Credit” means any letter of credit issued by Lender pursuant to the terms
of this Agreement and any Supplement.

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

“LIBOR Rate” (London Interbank Offered Rate) means the rate (rounded upward to the
nearest sixteenth and adjusted for reserves required on Eurocurrency Liabilities (as
hereinafter defined) for banks subject to FRB Regulation D (as hereinafter defined) or
required by any other federal law or regulation, quoted by the British Bankers Association
(the “BBA”) at 11:00 a.m. London time two Banking Days (as hereinafter defined) before the
commencement of the Interest Period for the offering of U.S. Dollar deposits in the London
interbank market for an Interest Period of one month, as published by Bloomberg or another
major information vendor listed on BBA’s official website. “Banking Day” shall mean a day
on which Lender is open for business, dealings in U.S. dollar deposits are being carried out
in the London interbank market, and banks are open for business in New York City and London,
England. “Eurocurrency Liabilities” has the meaning as set forth in FRB Regulation D. “FRB
Regulation D” means Regulation D as promulgated by the Board of Governors of the Federal
Reserve System, 12 CFR Part 204, as amended from time to time.

“Loan and Carrying Charges” means all commitment fees to the Lender, brokerage fees,
standby fees, interest charges, service fees, attorneys’ fees, contractors’ fees,
developers’

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fees, funding fees, title insurance fees and charges, recording fees, registration taxes,
real estate taxes, special assessments, insurance premiums, utility charges incurred by the
Borrower in the construction of the Project and issuance of the Notes, all costs incurred in
acquisition of the Real Property and any other costs incurred in the development of the
Project.

“Loan Documents” means this Agreement, any and all Supplements to this Agreement,
the Notes, Letters of Credit, the Security Agreement, the Mortgage and all other agreements,
documents, instruments, and certificates of the Borrower delivered to, or in favor of, the
Lender under this Agreement or in connection herewith or therewith, including, without
limitation, all agreements, documents, instruments, certificates and delivered in connection
with the extension of Advances by the Lender.

“Loan Obligations” means all obligations, indebtedness, and liabilities of the
Borrower to the Lender, including the Reimbursement Obligations, arising pursuant to any of
the Loan Documents, whether now existing or hereafter arising, whether direct, indirect,
related, unrelated, fixed, contingent, liquidated, unliquidated, joint, several, or joint
and several, including, without limitation, the obligation of the Borrower to repay the
Advances, interest on the Advances, and all fees, costs, and expenses (including attorneys’
fees and expenses) provided for in the Loan Documents.

“Loan/Loans” means and includes the Construction Loan, the Revolving Loan and any
other financial accommodations extended to the Borrower by the Lender pursuant to the terms
of this Agreement and any Supplements.

“Long Term Debt” means indebtedness that matures more than one year after the date
of determination thereof.

“Long Term Marketing Agreement” means any contract, agreement or understanding of
the Borrower having a term of one year or more after the date of determination thereof
relating to the sale of any raw materials, inventory, products or by-products of the
Borrower.

“Maintenance Capital Expenditures” means all Capital Expenditures made in the
ordinary course of business to maintain existing business operations of the Borrower in any
fiscal year, determined in accordance with generally accepted accounting principles,
consistently applied.

“Material Adverse Effect” means any set of circumstances or events which: (i) has
or could reasonably be expected to have any material adverse effect upon the validity or
enforceability of any Loan Documents or any material term or condition contained therein;
(ii) is or could reasonably be expected to be material and adverse to the condition
(financial or otherwise), business assets, operations, or property of the Borrower; or (iii)
materially impairs or could reasonably be expected to materially impair the ability of the
Borrower to perform the obligations under the Loan Documents.

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“Material Contract” means (i) any contract or any other agreement, written or oral,
or any of the Borrower or its Subsidiaries involving monetary liability of or to any such
person in an amount in excess of $500,000.00 per annum; and (ii) any other contract or
agreement, written or oral, of any of the Borrower or any of its Subsidiaries the failure to
comply with which could reasonably be expected to have a Material Adverse Effect on any of
the Borrower or its Subsidiaries; provided, however, that any contract or agreement which is
terminable by a party other than any of the Borrower or its Subsidiaries without cause upon
notice of 90 days or less shall not be considered a Material Contract.

“Maturity Date” means the fifth anniversary of the Construction Loan Maturity Date.

“Maximum Rate” means the maximum nonusurious interest rate, if any, at any time, or
from time to time, that may be contracted for, taken, reserved, charged or received under
applicable state or federal laws.

“Mortgage” means that certain Mortgage of even date herewith, pursuant to which a
mortgage interest shall be given by the Borrower to the Lender in the Real Property to secure
payment to the Lender of the Loan Obligations.

“Net Income” means net income as determined in accordance with GAAP.

“Note/Notes” means and includes the Construction Note, Revolving Note and any
promissory notes executed and delivered to the Lender by the Borrower pursuant to the terms
of this Agreement and any Supplements as the same may be amended, modified, supplemented,
extended or restated from time to time.

“Ordinary Trade Payable Dispute” means trade accounts payable, in an aggregate
amount not in excess of $100,000.00 with respect to the Borrower, with respect to which:
(a) there exists a bona fide dispute between Borrower and the vendor; (b)
the Borrower is contesting the same in good faith by appropriate proceedings; and (c) the
Borrower has established appropriate reserves on its financial statements.

“Participation Fee” shall have the meaning specified in Section 2.06.

“Person” means any individual, corporation, business trust, association, company,
partnership, joint venture, governmental authority, or other entity.

“Personal Property” means all buildings, structures, equipment, fixtures,
improvements, building supplies and materials and personal property now or hereafter
attached to, located in, placed in or necessary to the use of the improvements on the Real
Property including, but without being limited to, all machinery, fixtures, equipment,
furnishings, and appliances, as well as all renewals, replacements, additions, and
substitutes thereof, and all products and proceeds thereof, and including without limitation
all accounts, instruments, chattel paper, other rights to payment, money, deposit accounts,
insurance proceeds and general intangibles of the Borrower, whether now owned or hereafter
acquired.

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“Plans and Specifications” means the final plans and specifications for the
construction of the Project, to be prepared by the General Contractor, and approved by the
Lender, and all amendments and modifications thereof approved by Lender.

“Project” means any and all buildings, structures, fixtures, and other improvements
made to the Real Property and other uses identified in the Project Sources and Uses
Statement as part of the acquisition and construction of an ethanol production facility in
Lake Odessa, Michigan, for which the Loans to Borrower are being made hereunder.

“Project Costs” means the total of all costs of acquiring the Real Property and
constructing the Project as identified in the Project Sources and Uses Statement, together
with all Loan and Carrying Charges.

“Project Sources and Uses Statement” means the statement attached hereto as Exhibit
B which identifies the sources and uses of monies in a total amount of $60,000,000.00
related to the Project.

“Real Property” means that real property located in the County of Barry County,
State of Michigan, owned by the Borrower, upon which the Project is to be constructed and
which is described in Schedule 3.01(d).

“Reimbursement Obligation” means the obligation of the Borrowers to reimburse the
Lender
for any demand for payment or drawing under a Letter of Credit.

“Related Documents” means and includes without limitation all promissory notes,
credit agreements, loan agreements, supplements, guaranties, security agreements, mortgages,
deeds of trust, assignments and all other instruments, agreements and documents, whether now
or hereafter existing, executed in connection with the Indebtedness.

“Revolving Loan” means any revolving loan provided by the Lender to the Borrower
pursuant to the terms and conditions provided for in this Agreement and in any Revolving Loan
Supplement.

“Revolving Loan Maturity” means the maturity date set forth in any revolving loan
supplement.

“Revolving Note” means that certain promissory note in the amount of $3,500,000.00
executed and delivered to the Lender by the Borrower pursuant to the terms and conditions
provided for in the Second Supplement to this Agreement.

“SARA” means the Superfund Amendment and Reauthorizations Act of 1986, as amended.

“Security Agreement” means and includes, without limitation, any agreements,
promises, covenants, arrangements, understandings, or other agreements, whether created by
law,

9

 

contract, or otherwise, which evidence, govern, represent, or create a Security Interest, as
the same has been and may hereafter be amended or otherwise modified.

“Security Interest” means and includes without limitation any type of collateral
security, whether in the form of a lien, charge, mortgage, assignment of rents, deed of
trust, assignment, pledge, chattel mortgage, chattel trust, factor’s lien, equipment trust,
conditional sale, trust receipt, lien or title retention contract, lease or consignment
intended as a security device, or any other security or lien interest whatsoever, whether
created by law, contract, or otherwise.

“Subordinated Debt” means Debt, in an amount not to exceed $5,000,000.00, obtained
by the Borrower (i) on terms reasonably acceptable to the Lender; (ii) subject to an
intercreditor and subordination agreement in form and substance reasonably acceptable to
Lender; and (iii) subject to the terms and conditions of the Disbursing Agreement.

“Subordinated Debt Distributions” shall have the meaning specified in Section
5.02(b).

“Supplement” has the meaning set forth in Section 2.01 of this Agreement.

“Tangible Net Worth” means the excess of total assets over total liabilities except
Subordinated Debt, total assets and total liabilities each to be determined in accordance
with generally accepted accounting principles consistent with those applied in the
preparation of the financial statements referred to in Section 5.01(c) for the Borrower,
excluding, however, from the determination of total assets: (i) goodwill, organizational
expenses, research and development expenses, trademarks, trade names, copyrights, patents,
patent applications, licenses and rights in any thereof, and other similar intangibles; (ii)
treasury stock; (iii) securities which are not readily marketable; (iv) cash held in a
sinking or other analogous fund established for the purpose of redemption, retirement or
prepayment of capital stock or Debt; (v) any write-up in the book value of any asset
resulting from a revaluation thereof subsequent to the Closing Date; (vi) amortized start-up
costs; and (vii) any items not included in clauses (i) through (vi) above which are treated
as intangibles in conformity with generally accepted accounting principles.

“Tangible Owner’s Equity” means the Tangible Net Worth divided by total assets,
measured annually at the end of each fiscal year, and expressed as a percentage.

“Tax Distributions” has the meaning specified in Section 5.02(b).

     “Term Loan” means any amortizing loan with a maturity of greater than one year
provided by the Lender to the Borrower pursuant to the terms and conditions of this Agreement and
Supplement to this Agreement.

     “Underwriting Fee” shall have the meaning specified in Section 2.06.

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“Working Capital” means current assets of the Borrower less current liabilities of
the Borrower as determined in accordance with GAAP.

     Section 1.02. Accounting Matters. All accounting terms not specifically defined
herein shall be construed in accordance with generally accepted accounting principles consistently
applied, except as otherwise stated herein. To enable the ready and consistent determination of
compliance by the Borrower with its obligations under this Agreement, the Borrower will not change
the manner in which either the last day of its fiscal year or the last days of the first three
fiscal quarters of its fiscal years is calculated.

     Section 1.03. Construction. Wherever herein the singular number is used, the same
shall include the plural where appropriate, and words of any gender shall include each other gender
where appropriate. The headings, captions or arrangements used in any of the Loan Documents are,
unless specified otherwise, for convenience only and shall not be deemed to limit, amplify or
modify the terms of the Loan Documents, nor affect the meaning thereof.

ARTICLE II

AMOUNTS AND TERMS OF THE LOANS

     Section 2.01. Supplements. In the event the Borrower desires to borrow from Lender
and Lender is willing to lend to the Borrower, or in the event Lender and Borrower desire to
consolidate any existing loans hereunder, the parties will enter into a supplement to this
Agreement (each supplement, as it may be amended, modified, supplemented, extended or restated from
time to time, a “Supplement” and, collectively, the “Supplements”). Each Supplement will set forth
Lender’s commitment to make a Loan to the Borrower, the amount of the Loan(s), the purpose of the
Loan(s), the interest rate or rate options applicable to the Loan(s), the repayment terms of the
Loan(s), and any other terms and conditions applicable to the Loan(s). Each Supplement will also
be accompanied by a Note of the Borrower setting forth the Borrower’s obligation to make payments
of interest on the unpaid principal balance of the Loan(s), and fees and premiums, if any, and to
repay the principal balance of the Loan(s). Each Loan will be governed by the terms and conditions
contained in this Agreement and in the Note and the Supplement relating to that Loan.

     Section 2.02. Construction Loan. Subject to the terms and conditions of this
Agreement and in reliance upon the representations and warranties set forth in this Agreement, the
Lender has agreed to lend to Borrower and Borrower has agreed to borrow from Lender the lesser of:
(i) $36,000,000.00; or (ii) 60% of the Project Costs. Such amount shall be loaned by Lender
pursuant to the terms and conditions set forth in this Agreement and the First Supplement to this
Agreement.

     Section 2.03. Revolving Loan. Subject to the terms and conditions of this Agreement
and in reliance upon the representations and warranties set forth in this Agreement, the Lender has
agreed, as of the Closing Date, to lend to Borrower and Borrower has agreed to borrow from Lender
from time to time on a revolving basis an amount not to exceed $3,500,000.00. Such amount shall be
loaned by Lender pursuant to the terms and conditions set forth in this

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Agreement and the Second Supplement to this Agreement. Pursuant to the terms and conditions in
this Agreement, the Lender may extend additional term Revolving Loans to the Borrower. Any such
future term Revolving Loans shall be provided by Lender pursuant to the terms and conditions of a
future term Revolving Loan Supplement.

     Section 2.04. Conversion of Construction Loan Into Term Loan. Pursuant to the terms
and conditions contained in this Agreement, the Lender shall extend a term loan to the Borrower on
the Construction Loan Maturity Date. Any such amount shall be provided by Lender pursuant to
the terms and conditions set forth in this Agreement and a future Supplement to this Agreement
setting forth the terms and conditions of such term loan, provided, however, that (i) all unpaid
principal and all accrued interest on the Term Loan shall be due and payable on the Maturity Date
and (ii) the Borrower shall have the right to convert all or any part of the Term Loan into a fixed
rate loan, with the consent of the Lender, which shall bear interest at a rate equal to the most
recent ten-year fixed rate bonds sold by the Federal Farm Credit Banks Funding Corporation prior to
the Construction Loan Maturity Date, plus 300 basis points. Should the Borrower elect such fixed
rate option, such rate of interest shall not be subject to any adjustments under Section 2.05 of
this Agreement.

          (a) Conditions Precedent. In addition to the terms and conditions of disbursement set
forth in this Agreement and the Disbursing Agreement, the Lender shall not be obligated to extend a
term loan to the Borrower on the Construction Loan Maturity Date unless and until:

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

               (ii) Amount of Term Loan. The maximum amount of the Term Loan shall be the lesser of
the following: (A) $36,000,000.00; or (B) 60% of the Project Costs. On the Borrower’s written
request on or before the Construction Loan Maturity Date, the Construction Loan may be segmented
into two credit facilities: (i) a term revolving loan in an amount not to exceed $8,000,000.00,
with no required amortization; and (ii) a term loan in an amount not to exceed $28,000,000.00, with
a twelve (12) year amortization. Both the term revolving loan and 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 amount of the term loan to be made by the Lender,
the Borrower shall immediately repay the amount of the Construction Loan which is not being
converted into a term loan;

               (iv) Facility Fee. The Borrower shall have paid Lender the Facility Fee which is due
pursuant to Section 2.06;

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

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               (vi) No Defaults. The Borrower is not in default under the terms of this Agreement,
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;

               (vii) 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; and

               (viii) Marketing Agreements. The Borrower has executed marketing agreements for all
ethanol and DDGs 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) Excess Cash Flow. Such term loan shall require that, beginning with the first
calendar quarter following the Construction Loan Maturity Date, and continuing throughout the term
of the Term Loan, the Borrower shall remit to Lender, in addition to all other installments of
principal and interest, an amount equal to 50% of the Borrower’s Excess Cash Flow for the
immediately preceding calendar quarter (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 calendar
year. All Excess Cash Flow Payments shall be applied to the reduction of the outstanding principal
balance of the Revolving Term Loan. No Excess Cash Flow Payments shall be required during any
calendar year should the Tangible Owner’s Equity be greater than 60% at the end of the immediately
preceding fiscal year of the Borrower.

          (c) Principal Payment Suspension. Principal payments may be suspended by prepaying up
to four quarterly term loan principal payments under the Term Loan. At any subsequent time to the
prepayment during the course of the term of the loan Borrower may skip as many quarterly principal
payments as have been prepaid (up to four) as long as all loan covenants are in compliance.
Interest payments will continue to be paid according to the original amortization and due dates.

     Section 2.05. Adjustments to Interest Rate. Notwithstanding any other provision of
this Agreement, the Supplements, the Notes, or the Related Documents, after the Construction Loan
Maturity Date, the rate of interest under any Loan which bears interest on a variable rate, shall
be adjusted according to the following schedule should the Tangible Owner’s Equity of the Borrower,
achieve the levels set forth below:

	 	 	 	 	 
	 

	 	Tangible Owner’s Equity
	 	Interest Rate
	 
	 	 	 	 
	 

	 	Less than 49.99%
	 	Applicable LIBOR Rate plus 325 basis points
	 
	 	 	 	 
	 

	 	50.00%—59.99%
	 	Applicable LIBOR Rate plus 300 basis points
	 
	 	 	 	 
	 

	 	Greater Than 60.00%
	 	Applicable LIBOR Rate plus 275 basis points

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Upon delivery of the monthly financial statements and the Compliance Certificate pursuant to
Section 5.01(c)(iii) for each month that corresponds with each month end, the rate of interest for
any month shall automatically be adjusted in accordance with the Tangible Owner’s Equity set forth
therein and the rates set forth above. Such automatic adjustment to the rate of interest shall
take effect as of the first Business Day of the month in which the Lender received the related
Compliance Certificate. The term “Adjustment Date” shall mean each such Business Day when such
rates, margins or fees change pursuant to the immediately prior sentence or the next following
sentence. If the Borrower fails to deliver such Compliance Certificate which so sets forth the
Tangible Owner’s Equity within the period of time required by Section 5.01(c)(iii) hereof or if any
Event of Default occurs, the rate of interest shall automatically be adjusted to a rate equal to
the applicable LIBOR Rate plus 375 basis points, such automatic adjustments: (a) to take effect as
of the first Business Day after the last day on which the Borrower were required to deliver the
applicable Compliance Certificate in accordance with Section 5.01(c)(iii) hereof or in the case of
an Event of Default, on the date the written notice is given to the Borrower; and (b) to remain in
effect until subsequently adjusted in accordance herewith upon the delivery of such Compliance
Certificate or, in the case of an Event of Default, when such Event of Default has been cured to
the satisfaction of the Lender.

     Section 2.06. Underwriting/Participation/Facility Fees. The Borrower agrees to pay to
the Lender on the Closing Date: (i) a Underwriting Fee of $30,000.00, less any amount of this
underwriting fee already paid by Borrower; and (ii) a Participation Fee of $237,000.00. In
addition, the Borrower shall pay to Lender on or before the Construction Loan Maturity Date, and on
each anniversary of the Construction Loan Maturity Date through the fourth anniversary, an annual
Facility Fee of $15,000.00, provided that in the event the loans are refinanced, accelerated or for
any other reason do not reach the Maturity Date, the Lender shall be entitled to payment of the
total amount of such Facility Fees in an amount not less than $75,000.00.

     Section 2.07. Default Interest. In addition to the rights and remedies set forth
above and notwithstanding any Note: (i) if the Borrower fails to make any payment to Lender when
due (including, without limitation, any purchase of equity of Lender when required), 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 form 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 applicable Note; (iii) after the
maturity of any Loan, whether by reason of acceleration or otherwise, the unpaid principal balance
of the 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 Loan under the terms of the applicable 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.

14

 

     Section 2.08. Late Charge. If any payment of principal or interest due under the
Supplements or the Notes 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.

     Section 2.09. Prepayment of Term Loan. The Borrower may, by notice to the Lender,
prepay the outstanding amount of the Term Loan in whole or in part with accrued interest to the
date of such prepayment on the amount prepaid, without penalty or premium, except as provided in
this Section and Section 2.16. In the event the Term Loan is prepaid, in whole or in part, within
two (2) years following the Closing Date, the Borrower shall pay a prepayment fee equal to the
following specified percentage of the amount of principal prepaid:

	 	 	 	 	 	 	 	 	 
	 

	 	Months 1-12
	 	 	2.00	%	 	 
	 

	 	Months 13-24
	 	 	1.00	%	 	 

Notwithstanding the foregoing, no prepayment fee shall be required if such prepayment is made
pursuant to Section 2.04(b) of this Agreement. Any prepayment does not otherwise affect Borrower’s
obligation to pay any fees due under this Agreement. In addition, in the event any Loan is
converted to a fixed rate loan, the Borrower shall pay the prepayment penalty applicable to that
fixed interest rate, if any.

     Section 2.10. 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 this
Agreement.

     Section 2.11. Payments and Computations.

          (a) Method of Payment. Except as otherwise expressly provided herein, all payments of
principal, interest, and other amounts to be made by the Borrower under the Loan Documents shall be
made to the Lender in U.S. dollars and in immediately available funds, without set-off, deduction,
or counterclaim, not later than 2:00 P.M. (Minneapolis, Minnesota time) on the date on which such
payment shall become due (each such payment made after such time on such due date to be deemed to
have been made on the next succeeding Business Day). The Borrower shall, at the time of making
each such payment, specify to the Lender the sums payable under the Loan Documents to which such
payment is to be applied and in the event that the Borrower fail to so specify or if an Event of
Default exists, the Lender may apply such

15

 

payment and any proceeds of any Collateral to the Loan Obligations in such order and manner as it
may elect in its sole discretion.

          (b) Application of Funds. Lender may apply all payments received by it to the Loan
Obligations in such order and manner as Lender may elect in its sole discretion; provided that any
payments received from any guarantor or from any disposition of any collateral provided by such
guarantor shall only be applied against obligations guaranteed by such guarantor.

          (c) Payments on a Non-Business Day. Whenever any payment under any Loan Document
shall be stated to be due on a day that is not a Business Day, such payment may be made on the next
succeeding Business Day, and such extension of time shall in such case be included in the
computation of the payment of interest and fees, as the case may be.

          (d) Proceeds of Collateral. All proceeds received by the Lender from the sale or
other liquidation of the Collateral when an Event of Default exists shall first be applied as
payment of the accrued and unpaid fees and expenses of the Lender hereunder, including, without
limitation, under Section 7.04 and then to all other unpaid or unreimbursed Loan Obligations
(including reasonable attorneys’ fees and expenses) owing to the Lender and then any remaining
amount of such proceeds shall be applied to the unpaid amounts of Loan Obligations, until all the
Loan Obligations have been paid and satisfied in full or cash collateralized. After all the Loan
Obligations (including without limitation, all contingent Loan Obligations) have been paid and
satisfied in full, all Commitments terminated and all other obligations of the Lender to the
Borrower otherwise satisfied, any proceeds of Collateral shall be delivered to the Person entitled
thereto as directed by the Borrower or as otherwise determined by applicable law or applicable
court order.

          (e) Computations. Except as expressly provided otherwise herein, all computations of
interest and fees shall be made on the basis of actual number of days lapsed over a year of 365 or
366 days, as appropriate. Interest shall accrue from and include the date of borrowing, but
exclude the date of payment.

     Section 2.12. Maximum Amount Limitation. Anything in this Agreement, any Supplement,
any Note, or the other Loan Documents to the contrary notwithstanding, Borrower shall not be
required to pay unearned interest on any Note or any of the Loan Obligations, or ever be required
to pay interest on any 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 this Agreement,
any 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 this Agreement, any
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 this Agreement, any Supplement, any 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

16

 

collectible, and if paid nonetheless, shall, at the option of the holder of such Note, be either
refunded to the Borrower, or credited on the principal of such 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 its
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 Notes, and any renewals
thereof all interest at any time contracted for, charged or received by Lender in connection
therewith. This Section 2.11 shall control every other provision of all agreements among the
parties to this Agreement pertaining to the transactions contemplated by or contained in the Loan
Documents, and the terms of this Section 2.11 shall be deemed to be incorporated in every Loan
Document and communication related thereto.

     Section 2.13. Lender Records. All advances and all payments or prepayments made
thereunder on account of principal or interest may be evidenced by the Lender in accordance with
its usual practice in an account or accounts evidencing such advances and all payments or
prepayments thereunder from time to time and the amounts of principal and interest payable and paid
from time to time thereunder; in any legal action or proceeding in respect of the Notes, the
entries made in such account or accounts shall be prima facie evidence of the
existence and amounts of all advances and all payments or prepayments made thereunder on account of
principal or interest. Lender shall provide monthly statements of such entries to Borrower for the
purpose of confirming the accuracy of such entries.

     Section 2.14. Loan Payments. During the continuance of an Event of Default, the
Lender may deduct any obligations due or any other amounts due and payable by the Borrower under
the Loan Documents from any accounts maintained with the Lender.

     Section 2.15. Purchase of Equity Interests in AgStar Financial Services, PCA. In
addition to (and not in lieu of) the other amounts payable by Borrower under this Agreement or any
Supplement, Borrower shall purchase $1,000.00 of equity interests in AgStar Financial Services,
PCA. The purchase price for the equity interests shall be payable in full on or prior to the date
hereof. Such purchases of equity interests shall comply with AgStar Financial Services, PCA’s
respective by-laws and capital plans applicable to borrowers generally. Borrower hereby
acknowledges receipt of the following information and materials pertaining to AgStar Financial
Services, PCA prior to the execution of this Agreement: (i) copies of the by-laws of AgStar
Financial Services, PCA; (ii) a written description of the terms and conditions under which the
equity interests are issued; (iii) a copy of the most recent annual reports of AgStar Financial
Services, PCA; and (iv) if more recent than the latest annual reports, the latest quarterly reports
of AgStar Financial Services, PCA. AgStar Financial Services, PCA shall possess a statutory
security interest in its equity interests. AgStar Financial Services, PCA reserves the right to
sell participations on a non-patronage basis.

     Borrower acknowledges and agrees that: (a) only the portions of the Loans provided to
Borrower by AgStar Financial Services, PCA are entitled to patronage distributions in accordance
with the bylaws of AgStar Financial Services, PCA and its practices and procedures;

17

 

and (b) any patronage or similar payments to which Borrower is entitled as a result of its
ownership of the equity interests in AgStar Financial Services, PCA will not be based on any of the
Loans not belonging to AgStar Financial Services, PCA or in which AgStar Financial Services, PCA
has granted a participation interest at any time.

     Section 2.16. Compensation. Upon the request of the Lender, the Borrower shall pay to
the Lender such amount or amounts as shall be sufficient (in the reasonable opinion of the Lender)
to compensate it for any loss, cost, or expense (excluding loss of anticipated profits incurred by
it) as a result of: (i) any payment, prepayment, or conversion of a LIBOR rate loan for any reason
on a date other than the last day of the Interest Period for such Loan; or (ii) any failure by the
Borrower for any reason (including, without limitation, the failure of any condition precedent
specified in Section 3.01 to be satisfied) to borrow, extend, or prepay a LIBOR rate loan on the
date for such borrowing, extension, or prepayment specified in the relevant notice of borrowing,
extension or prepayment under this Agreement.

     Such indemnification may include any amount equal to the excess, if any, of: (a) the amount
of interest which would have accrued on the amount so prepaid, or not so borrowed, converted or
extended, for the period from the date of such prepayment or of such failure to borrower, convert
or extend to the last day of the applicable Interest Period (or in the case of a failure to borrow,
convert or extend, the Interest Period that would have commenced on the date of such failure) in
each case at the applicable rate of interest for such loan as provided for herein; over (b) the
amount of interest (as reasonably determined by the Lender) which would have accrued to the Lender
on such amount by placing such amount on deposit for a comparable period with leading banks in the
interbank LIBOR market. The covenants of the Borrower set forth in this Section 2.16 shall survive
the repayment of the Loans and other obligations under the Loan Documents hereunder.

ARTICLE III.

CONDITIONS PRECEDENT

     Section 3.01. Conditions Precedent to Funding. The effectiveness of this Agreement
and obligations of the Lender to make any Advance, are subject to the conditions precedent that the
Lender shall have received the following, in form and substance satisfactory to the Lender:

     (a) This Agreement, duly executed by the Borrower and the Lender;

     (b) The Supplements, duly executed by the Borrower and the Lender;

     (c) The Construction Note and the Revolving Note duly executed by the Borrower;

     (d) The Mortgage, fully executed and notarized, to secure the Loans encumbering on a first
Lien basis the fee interest and/or leasehold interest of the Borrower in the Real Property and the
fixtures thereon described in Schedule 3.01(d);

18

 

     (e) A Security Agreement duly executed by the Borrower and in a form as provided by the Lender
by which security agreement the Lender is granted a security interest by the Borrower in the
Collateral;

     (f) A copy of the Construction Contract(s) and a complete set of the Plans and Specifications,
together with copies of all permits and government approvals relating to the construction and use
of the Project;

     (g) An assignment of contract for each of the Construction Contracts and the Plans and
Specifications, duly executed by the Borrower and pursuant to which the Borrower shall have
assigned to the Lender all of the Borrower’s right, title and interest in and to each such
Construction Contract, and which assignment shall have been consented to and certified in writing
by the other party(ies) to each such Construction Contract;

     (h) Copies of all Material Contracts between Borrower and third parties used in the normal
operations of Borrower, including but not limited to management agreements, marketing agreements,
and corn delivery agreements;

     (i) Assignments of the Material Contracts between Borrower, duly executed by the Borrower and
pursuant to which the Borrower shall have assigned to the Lender all of the Borrower’s right, title
and interest in and to each such contracts, and which assignment shall have been consented to and
certified in writing by the other party(ies) to each such contract;

     (j) Financing Statements in form and content satisfactory to the Lender and in proper form
under the Uniform Commercial Code of all jurisdictions as may be necessary or, in the opinion of
the Lender, desirable to perfect the security interests created by the Security Agreement;

     (k) Copies of UCC, tax and judgment lien search reports listing all financing statements and
other encumbrances which name the Borrower (under its present name and any previous name) and which
are filed in the jurisdictions in which the Borrower is located, organized or maintains collateral,
together with copies of such financing statements (none of which shall cover the collateral
purported to be covered by the Security Agreement);

     (l) Evidence that all other actions necessary or, in the opinion of the Lender, desirable to
enable the Lender to perfect and protect the security interests created by the Security Agreement
have been taken;

     (m) An ALTA mortgagee title insurance policy issued by a title insurance company acceptable to
Lender, with respect to the Real Property, assuring the Lender that the Mortgage creates a valid
and enforceable encumbrance on the Real Property, free and clear of all defects and encumbrances
except Permitted Liens and containing: (i) a comprehensive endorsement (ALTA form 9); (ii) a
zoning endorsement (ALTA form 3.1) specifying an ethanol production facility as a permitted use for
all of the parcels included in the Real Property; and (iii) such endorsements as the Lender shall
reasonably require. All such title insurance policies shall be in form and substance reasonably
satisfactory to the Lender and shall provide for affirmative

19

 

insurance and such reinsurance as the Lender may reasonably request, all of the foregoing in form
and substance reasonably satisfactory to the Lender;

     (n) Maps or plats of the Real Property certified to the Lender and the title insurance company
issuing the policy referred to in Subsection 3.01(n) (the “Title Insurance Company”) in a manner
reasonably satisfactory to each of the Lender and the Title Insurance Company, dated a date
reasonably satisfactory to each of the Lender and the Title Insurance Company by an independent
professional licensed land surveyor, which maps or plats and the surveys on which they are based
shall be sufficient to delete any standard printed survey exception contained in the applicable
title policy and be made in accordance with the Minimum Standard Detail Requirements for Land Title
Surveys jointly established and adopted by the American Land Title Association and the American
Congress on Surveying and Mapping in 1992, and, without limiting the generality of the foregoing,
there shall be surveyed and shown on such maps, plats or surveys the following: (i) the locations
on such sites of all the buildings, structures and other improvements and the established building
setback lines; (ii) the lines of streets abutting the sites and width thereof; (iii) all access and
other easements appurtenant to the sites necessary to use the sites; (iv) all roadways, paths,
driveways, easements, encroachments and overhanging projections and similar encumbrances affecting
the site, whether recorded, apparent from a physical inspection of the sites or otherwise known to
the surveyor; (v) any encroachments on any adjoining property by the building structures and
improvements on the sites; and (vi) if the site is described as being on a filed map, a legend
relating the survey to said map;

     (o) Evidence as to: (i) whether any portion of the Real Property is in an area designated by
the Federal Emergency Management Agency as having special flood or mud slide hazards (a “Flood
Hazard Property”); and (ii) if any portion of the Real Property is a Flood Hazard Property: (A)
whether the community in which such Real Property is located is participating in the National Flood
Insurance Program; (B) the Borrower’s written acknowledgment of receipt of written notification
from the Lender (1) as to the fact that such Real Property is a Flood Hazard Property and (2) as to
whether the community in which each such Flood Hazard Property is located is participating in the
National Flood Insurance Program; and (C) copies of insurance policies or certificates of insurance
of the Borrower evidencing flood insurance satisfactory to the Lender and naming the Lender as sole
loss payee on behalf of the Lender;

     (p) Evidence reasonably satisfactory to the Lender that the Real Property and the contemplated
use of the Real Property, are in compliance in all material respects with all applicable Laws
including without limitation health and Environmental Laws, including, but not limited to all
concentrated animal feedlot operations rules and regulations, erosion control ordinances, storm
drainage control laws, doing business and/or licensing laws, zoning laws (the evidence submitted as
to zoning should include the zoning designation made for the Real Property, the permitted uses of
the Real Property under such zoning designation and zoning requirements as to parking, lot size,
ingress, egress and building setbacks) and laws regarding access and facilities for disabled
persons including, but not limited to, the Federal Architectural Barriers Act, the Fair Housing
Amendments Act of 1988, the Rehabilitation Act of 1973 and the Americans with Disabilities Act of
1990;

20

 

     (q) A certificate of the secretary of the Borrower together with true and correct copies of
the following: (i) the Articles of Organization of the Borrower, including all amendments thereto,
certified by the Office of the Secretary of State of the state of its incorporation and dated
within 30 days prior to the date hereof; (ii) the Operating Agreement of the Borrower, including
all amendments thereto; (iii) the resolutions of the Board of Governors of the Borrower authorizing
the execution, delivery and performance of this Agreement, the other Loan Documents, and all
documentation executed and delivered in connection therewith to which the Borrower is a party; (iv)
certificates of the appropriate government officials of the state of organization of the Borrower
as to its existence and good standing, and certificates of the appropriate government officials in
each state where each corporate Borrower does business and where failure to qualify as a foreign
corporation would have a material adverse effect on the business and financial condition of the
Borrower, as to its good standing and due qualification to do business in such state, each dated
within 30 days prior to the date hereof; and (v) the names of the officers of the Borrower
authorized to sign this Agreement and the other Loan Documents to be executed by each corporate
Borrower, together with a sample of the true signature of each such officer;

     (r) Legal opinion of Lindquist & Vennum, PLLP, legal counsel for the Borrower, in
substantially the form attached hereto as “Exhibit C”;

     (s) The Participation Fee and Underwriting Fee due pursuant to Section 2.06 have been paid;

     (t) An intercreditor and subordination agreement between the Lender and any holder of
Subordinated Debt as to the priority of the Lender’s security interests in the Collateral, rights
to payment following an Event of Default, and as to such other matters as reasonably requested by
the Lender;

     (u) Evidence that the costs and expenses (including, without limitation, attorney’s fees)
referred to in Section 7.04, to the extent incurred and invoiced, shall have been paid in full;

     (v) The results of the Lender’s inspection of the Collateral, and the Lender’s receipt of an
appraisal of the Collateral acceptable to Lender in its sole discretion;

     (w) Satisfactory review by the Lender of any pending litigation relating to the Borrower;

     (x) A Phase I Environmental Assessment in form and substance acceptable to the Lender;

     (y) The Borrower shall have ordered the General Contractor to begin construction of the
Project, and construction shall have commenced;

     (z) A schedule, certified by Borrower as accurate and complete, setting forth: (i) the
necessary licenses, permits and consents required by applicable federal, state, and local
governmental entities required for the lawful construction and operation of the Project; and (ii)

21

 

the deadlines to obtain such licenses, permits and consents so that the Completion Date occurs
as scheduled;

     (aa) Lender shall have received in form and substance acceptable to Lender, an agreement with
an Inspecting Engineer of recognized standing and acceptable to Lender, by which agreement such
Inspecting Engineer agrees to assist Lender in its inspection of the Project during construction,
review and approve requests for Advances on the Construction Loan on behalf of Lender, and provide
such additional services as Lender may reasonably require at the sole expense of Borrower;

     (bb) The Borrower shall have provided commitment to the Lender of its Borrower’s Equity;

     (cc) The Borrower shall have provided to Lender evidence reasonably satisfactory to the Lender
that the Borrower is an eligible Farm Credit System borrower under 12 CFR §613.3010;

     (dd) A Commodity Account Control Agreement for all commodity accounts kept and maintained by
the Borrower;

     (ee) A Deposit Account Control Agreement for all deposit accounts kept and maintained by the
Borrower;

     (ff) The Guarantor shall have executed and delivered to Lender the Guaranty pursuant to which
the Guarantor shall have guaranteed the full and prompt payment and performance by Borrower of the
Notes, Indebtedness, the Supplements and this Agreement; and

     (gg) Evidence that the insurance required by Sections 5.01(j) and 5.01(r)(xii) has been
obtained by the Borrower.

ARTICLE IV.

REPRESENTATIONS AND WARRANTIES

     Section 4.01 Representations and Warranties of the Borrower. The Borrower represents
and warrants as follows:

          (a) Borrower. The Borrower is a limited liability company duly organized and validly
existing and in good standing under the laws of the State of Michigan and is qualified to do
business in all jurisdictions in which the nature of its business makes such qualification
necessary and where failure to so qualify would have a Material Adverse Effect on its respective
financial condition or operations. The Borrower has the power and authority to own and operate its
assets and to carry on its business and to execute, deliver, and perform its obligations under the
Loan Documents to which it is or may become a party. There are no outstanding subscriptions,
options, warrants, calls, or rights (including preemptive rights) to acquire, and no outstanding
securities or instruments convertible into, membership interests (units) of the Borrower, except
for those transactions set forth on Schedule 4.01(a);

22

 

          (b) The Loan Documents. The execution, delivery and performance by the Borrower of
the Loan Documents are within the Borrower’s powers, have been duly authorized by all necessary
action, do not contravene: (i) the articles of organization or operating agreements of the
Borrower; or (ii) any law or any contractual restriction binding on or affecting the Borrower, and
do not result in or require the creation of any lien, security interest or other charge or
encumbrance (other than pursuant to the terms thereof) upon or with respect to any of its
respective properties;

          (c) Governmental Approvals. No consent, permission, authorization, order or license
of any Governmental Authority or of any party to any agreement to which the Borrower is a party or
by which it or any of its respective property may be bound or affected, is necessary in connection
with the project, acquisition or other activity being financed by this Agreement, the execution,
delivery, performance or enforcement of the Loan Documents or the creation and perfection of the
liens and security interest granted thereby, except as such have been obtained and are in full
force and effect or which are required in connection with the exercise of remedies hereunder;

          (d) Enforceability. This Agreement is, and each other Loan Document to which the
Borrower is a party when delivered will be, legal, valid and binding obligations of the Borrower
enforceable against the Borrower in accordance with their respective terms, except as may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws affecting
the enforcement of creditor’s rights generally and by general principles of equity;

          (e) Financial Condition and Operations. The balance sheet of the Borrower , as of
November 10, 2005, and, with respect to the period ended November 10, 2005, the related statement
of cash flow of the Borrower for the fiscal period then ended, copies of which have been furnished
to the Lender, fairly present in all material respects the financial condition of the Borrower as
at such date and the results of the operations of the Borrower for the period ended on such dates,
and since November 10, 2005, there has been no material adverse change in such condition or
operations;

          (f) Litigation. Except as described on Schedule 4.01(f), there is no pending or
threatened action or proceeding affecting the Borrower or any of the transactions contemplated
hereby before any court, governmental agency or arbitrator, which may materially adversely affect
the financial condition or operations of the Borrower. As of the Closing Date, there are no
outstanding judgments against the Borrower;

          (g) Use of Proceeds of Advances, etc. (i) No proceeds of the Loans will be used to
acquire any security in any transaction which is subject to Sections 13 and 14 of the Securities
Exchange Act of 1934 (provided, however, that this provision shall not prohibit Borrower from
investing in certain value added cooperatives for the purposes of carrying out their overall
business operations); (ii) the Borrower is not engaged in the business of extending credit for the
purpose of purchasing or carrying margin stock (within the meaning of Regulation U issued by the
Board of Governors of the Federal Reserve System); and (iii) no

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proceeds of the Loans will be used to purchase or carry any margin stock or to extend credit to
others for the purpose of purchasing or carrying any margin stock;

          (h) Liens. Except as created by the Loan Documents, there is no lien, security
interest or other charge or encumbrance, and no other type of preferential arrangement, upon or
with respect to any of the properties or income of the Borrower, which secures Debt of any Person,
except as described in Schedule 5.02(a);

          (i) Taxes. The Borrower has filed or caused to be filed all federal, state and local
tax returns that are required to be filed and has paid all other taxes, assessments, and
governmental charges or levies upon it and its property, income, profits and assets which are due
and payable, except where the payment of such tax, assessment, government charge or levy is being
contested in good faith and by appropriate proceedings and adequate reserves in compliance with
GAAP have been set aside on the Borrower’s books therefore;

          (j) Solvency. As of and from and after the date of this Agreement, the Borrower: (i)
owns and will own assets the fair saleable value of which are: (A) greater than the total amount of
liabilities (including contingent liabilities); and (B) greater than the amount that will be
required to pay the probable liabilities of its then existing debts as they become absolute and
matured considering all financing alternatives and potential asset sales reasonably available to
it; (ii) has capital that is not unreasonably small in relation to its business as presently
conducted or any contemplated or undertaken transaction; and (iii) does not intend to incur and
does not believe that it will incur debts beyond its ability to pay such debts as they become due;

          (k) Location of Inventory and Farm Products; Third Parties in Possession; Crops. The
Borrower’s inventory and farm products pledged as collateral under the Security Agreement are
located at the places (or, as applicable, jurisdictions) specified in Schedule 4.01(k) for the
Borrower, except to the extent any such inventory and farm products are in transit. Schedule
4.01(k) correctly identifies, as of the date hereof, the landlords or mortgagees, if any, of each
of its locations identified in Schedule 4.01(k) currently leased or owned by the Borrower. Except
for the Persons identified on Schedule 4.01(k), no Person other than the Borrower and the Lender
has possession of any of the Collateral. Except as described in above, none of its Collateral has
been located in any location within the past four months other than as set forth on Schedule
4.01(k) for the Borrower;

          (l) Office Locations; Fictitious Names; Predecessor Companies; Tax I.D. Number. The
Borrower’s chief place of business, its chief executive office, and its jurisdiction of
organization is located at the place identified for the Borrower on Schedule 4.01(l). Within the
last four months it has not had any other chief place of business, chief executive office, or
jurisdiction of organization. Schedule 4.01 (l) also sets forth all other places where the
Borrower keeps its books and records and all other locations where the Borrower has a place of
business. The Borrower does not do business nor has the Borrower done business during the past
five (5) years under any trade-name or fictitious business name except as disclosed on Schedule
4.01(l). Schedule 4.01(l) sets forth an accurate list of all names of all predecessor companies of
the Borrower including the names of any entities it acquired (by stock purchase, asset purchase,
merger or otherwise) and the chief place of business and chief executive office of each such

24

 

predecessor company. For purposes of the foregoing, a “predecessor company” shall mean any Person
whose assets or equity interests are acquired by the Borrower or who was merged with or into the
Borrower within the last four months prior to the date hereof. The Borrower’s United States
Federal Income Tax I.D. Number and state organizational identification number are identified on
Schedule 4.01(l);

          (m) Title to Properties. The Borrower has such title or leasehold interest in and to
the Real Property owned or leased by it as is necessary or desirable to the conduct of its business
and valid and legal title or leasehold interest in and to all of its Personal Property, including
those reflected on the financial statements of the Borrower previously delivered to Lender, except
those which have been disposed of by the Borrower subsequent to the date of such delivered
financial statements which dispositions have been in the ordinary course of business or as
otherwise expressly permitted hereunder;

          (n) Disclosure. All factual information furnished by or on behalf of the Borrower or
its subsidiaries in writing to the Lender (including, without limitation, all factual information
contained in the Loan Documents) for purposes of or in connection with this Agreement, the other
Loan Documents or any transaction contemplated herein or therein is, and all other such factual
information hereafter furnished by or on behalf of the Borrower to the Lender, will be true and
accurate in all material respects on the date as of which such information is dated or certified
and not incomplete by omitting to state any fact necessary to make such information not misleading
in any material respect at such time in light of the circumstances under which such information was
provided;

          (o) Operation of Business. The Borrower possesses all licenses, permits, franchises,
patents, copyrights, trademarks, and tradenames, or rights thereto, necessary to conduct its
business substantially as now conducted and will obtain all such licenses, permits, franchises,
patents, copyrights, trademarks, and tradenames, or rights thereto necessary to conduct its
business as presently proposed to be conducted except those that the failure to so possess could
not reasonably be expected to have a Material Adverse Effect on its financial condition or
operations, and the Borrower is not in violation of any valid rights of others with respect to any
of the foregoing except violations that could not reasonably be expected to have such a Material
Adverse Effect;

          (p) Intellectual Property. The Borrower owns, or has the legal right to use, all
patents, trademarks, tradenames, copyrights, technology, know-how and processes (the “Intellectual
Property”) necessary for it to conduct its business as currently conducted except for those the
failure to own or have such legal right to use could not reasonably be expected to have a Material
Adverse Effect. As of the Closing Date, set forth in Schedule 4.01(p) is a list of all
Intellectual Property registered with the United States Copyright Office or the United States
Patent and Trademark Office and owned by the Borrower or that the Borrower has the right to use.
Except as provided in Schedule 4.01(p), no claim has been asserted and is pending by any Person
challenging or questioning the use of any such Intellectual Property or the validity or
effectiveness of any such Intellectual Property, nor does the Borrower know of any such claim, and,
to the knowledge of the Borrower, the use of such Intellectual Property by the Borrower

25

 

does not infringe on the rights of any Person, except for such claims and infringements that, in
the aggregate, could not reasonably be expected to have a Material Adverse Effect;

          (q) Employee Benefit Plans. The Borrower is in compliance in all material respects
with the applicable provisions of the Employee Retirement Income Security Act of 1974, as amended,
and the regulations and published interpretations thereunder, the failure to comply with which
could have a Material Adverse Effect on the Borrower;

          (r) Investment Company Act. The Borrower is not required to be registered as an
“investment company” within the meaning of the Investment Company Act of 1940, as amended;

          (s) Compliance with Laws. The Borrower is in compliance in all material respects with
all laws, rules, regulations, ordinances, codes, orders, and the like, the failure to comply with
which could have a Material Adverse Effect on the Borrower;

          (t) Environmental Compliance. Borrower, except as set forth in Schedule 4.01(t), is
in material compliance with all applicable Environmental Laws; and

          (u) Material Change. The Borrower has performed all of its material obligations,
other than those obligations for which performance is not yet due, under all Material Contracts
and, to the best knowledge of the Borrower, each other party thereto is in compliance with each
such Material Contract. Each such Material Contract is in full force and effect in accordance with
the terms thereof. The Borrower has made available a true and complete copy of each such Material
Contract for inspection by Lender.

ARTICLE V.

COVENANTS OF THE BORROWER

     Section 5.01. Affirmative Covenants. So long as any Loan Obligations remain unpaid or
the Lender shall have any commitment hereunder, the Borrower shall, unless the Lender shall
otherwise consent in advance in writing:

          (a) Compliance with Laws, etc. Comply in all material respects with all applicable
laws, rules, regulations and orders, such compliance to include, without limitation, (i) all
applicable zoning and land use laws; (ii) all employee benefit and Environmental Laws, and (iii)
paying before the same become delinquent all taxes, assessments and governmental charges imposed
upon it or upon its property except to the extent contested in good faith;

          (b) Visitation Rights; Field Examination. At any reasonable time and from time to
time, permit the Lender or representatives, to (i) examine and make copies of and abstracts from
the records and books of account of the Borrower, and (ii) enter onto the property of the Borrower
to conduct unannounced field examinations and collateral inspections, with such frequency as Lender
in its sole discretion may deem appropriate, and (iii) discuss the affairs, finances, and accounts
of the Borrower with any of Borrower’s officers or directors. Borrower consents to and authorizes
Lender to enter onto the property of Borrower for purposes of

26

 

conducting the examinations, inspections and discussions provided above. Upon and during the
occurrence of an Event of Default or in the event that there are deemed by the Lender to be any
material inconsistencies and/or material noncompliance with respect to any financial or other
reporting on the part of the Borrower, any and all visits and inspections deemed necessary or
desirable on account of such Event of Default, inconsistency and/or noncompliance shall be at the
expense of the Borrower. In addition to the foregoing, at any reasonable time and from time to
time, the Borrower also shall permit the Lender or representatives thereof, at the expense of the
Lender, to examine and make copies of and abstracts from the records and books of account of, and
visit the properties of, the Borrower, and to discuss the affairs, finances and accounts of the
Borrower with any of its respective officers or directors;

          (c) Reporting Requirements. Furnish to the Lender:

               (i) As soon as available, but in no event later than 120 days after the end of each fiscal
year of the Borrower occurring during the term hereof, annual consolidated financial statements of
the Borrower, prepared in accordance with GAAP consistently applied and in a format that
demonstrates any accounting or formatting change that may be required by the various jurisdictions
in which the business of the Borrower is conducted (to the extent not inconsistent with GAAP).
Such financial statements shall: (i) be audited by independent certified public accountants
selected by the Borrower and acceptable to Lender; (ii) be accompanied by a report of such
accountants containing an certified opinion, without qualification, thereon acceptable to Lender;
(iii) be prepared in reasonable detail, and in comparative form; and (iv) include a balance sheet,
a statement of income, a statement of stockholders’, members’ or partner’s equity, a statement of
cash flows, and all notes and schedules relating thereto and any management letter;

               (ii) Beginning with the first (1st) month following the Completion Date, as soon as
available and in any event within 30 days after the end of each month, balance sheets of the
Borrower as of the end of such month and statement of income of the Borrower for the period
commencing at the end of the previous fiscal year and ending with the end of such month, certified
by an authorized officer of the Borrower;

               (iii) As soon as available but in no event later than 30 days after the end of each of the
first three fiscal quarters of each fiscal year of the Borrower occurring during the term hereof,
unaudited quarterly consolidated financial statements of the Borrower, in each case prepared in
accordance with GAAP consistently applied (except for the omission of footnotes and for the effect
of normal year-end audit adjustments) and in a format that demonstrates any accounting or
formatting change that may be required by various jurisdictions in which the business of the
Borrower is conducted (to the extent not inconsistent with GAAP). Each of such financial
statements shall (i) be prepared in reasonable detail and in comparative form, including a
comparison of actual performance to the budget for such quarter and year-to-date, delivered to
Lender under Subsection 5.01(c)(vi) below, and (ii) include a balance sheet, a statement of income
for such quarter and for the period year-to-date, and such other quarterly statements as Lender may
specifically request which quarterly statements shall include any and all supplements thereto.
Such quarterly statements shall be certified by an authorized officer of the Borrower, and
be accompanied by a Compliance Certificate which: (A) states that no Event of

27

 

Default, and no event or condition that but for the passage of time, the giving of notice or both
would constitute an Event of Default, has occurred or is in existence; and (B) shows in detail
satisfactory to the Lender the calculation of, and the Borrower’ compliance with, each of the
covenants contained in Sections 5.01(d), 5.01(e), 5.01(f), and 5.01(g);

               (iv) promptly upon the Lender’s request therefor, copies of all reports and notices which the
Borrower or any of its subsidiaries files under ERISA with the Internal Revenue Service or the
Pension Benefit Guaranty Corporation or the U.S. Department of Labor or which the Borrower or any
its subsidiary receives from such Corporation;

               (v) notwithstanding the foregoing Section 5.01(c)(iv), provide to Lender within 30 days after
it becomes aware of the occurrence of any Reportable Event (as defined in Section 4043 of ERISA)
applicable to the Borrower or any of its Subsidiaries, a statement describing such Reportable Event
and the actions it proposes to take in response to such Reportable Event;

               (vi) by November 1 of each fiscal year of the Borrower, an annual (with monthly break out)
operating and capital assets budget of the Borrower for the immediately succeeding fiscal year
containing, among other things, pro forma financial statements and forecasts for all planned lines
of business;

               (vii) as soon as available but in any event not more than 30 days after the end of each month,
production reports for the immediately preceding calendar month setting forth corn inputs, ethanol output, DDGS output, natural gas usage and CO2 output, together
with such additional production information as requested by Lender;

               (viii) promptly, upon the occurrence of an Event of Default or an event or condition that but
for the passage of time or the giving of notice or both would constitute an Event of Default,
notice of such Event of Default or event;

               (ix) promptly after the receipt thereof, a copy of any management letters or written reports
submitted to the Borrower by its independent certified public accountants with respect to the
business, financial condition or operation of the Borrower;

               (x) promptly after the receipt thereof, a copy of any notice of default under any Long-Term
Marketing Agreement;

               (xi) furnish to the Lender, promptly after transmittal or filing thereof by the Borrower,
copies of all proxy statements, notices and reports as it shall send to its members and copies of
all registration statements (without exhibits) and all reports which it files with the Securities
and Exchange Commission (or any governmental body or agency succeeding to the functions of the
Securities and Exchange Commission), and promptly after the receipt thereof by the Borrower, copies
of all management letters or similar documents submitted to the Borrower by independent certified
public accountants in connection with each annual and any interim audit of the accounts of the
Borrower or of the Borrower and any of its Subsidiaries.

28

 

               (xii) such other information respecting the condition or operations, financial or otherwise,
of the Borrower or any of its respective subsidiaries as the Lender may from time to time
reasonably request;

               (xiii) promptly after the commencement thereof, notice of the commencement of all actions,
suits, or proceedings before any court, arbitrator, or government department, commission, board,
bureau, agency, or instrumentality affecting the Borrower or any of its subsidiaries which, if
determined adversely, could have a Material Adverse Effect on any of the Borrower or its
subsidiaries;

               (xiv) without limiting the provisions of Section 5.01(c)(xiii) above, promptly after receipt
thereof, notice of the receipt of all pleadings, orders, complaints, indictments, or any other
communication alleging a condition that may require the Borrower or any of its subsidiaries to
undertake or to contribute to a cleanup or other response under all laws relating to environmental
protection, or which seek penalties, damages, injunctive relief, or criminal sanctions related to
alleged violations of such laws, or which claim personal injury or property damage to any person as
a result of environmental factors or conditions;

               (xx) promptly after filing, receipt or becoming aware thereof, copies of any filings or
communications sent to and notices or other communications received by the Borrower or any of its
subsidiaries from any Governmental Authority, including, without limitation, the Securities and
Exchange Commission, the FCC, the PUC, or any other state utility commission relating to any
material noncompliance by the Borrower or any of its subsidiaries with any laws or with respect to
any matter or proceeding the effect of which, if adversely determined, could have a Material
Adverse Effect on any of the Borrower of its subsidiaries;

               (xxi) promptly after becoming aware thereof, notice of any matter which has had or could have
a Material Adverse Effect on any of the Borrower or its subsidiaries

          (d)  Working Capital. Achieve and maintain, Working Capital of at least $3.0 million
at the end of the 12th month following the Completion Date. Achieve and maintain
Working Capital of at least $5.0 million at the end of the 24th month following the
Completion Date. Thereafter, continually maintain Working Capital of at least $5.0 million;

          (e) Tangible Net Worth. On the Completion Date, the Borrower’s Tangible Net Worth
shall be not less than $21,500,000.00. After the Completion Date, the Borrower shall maintain
Tangible Net Worth, measured at the end of each fiscal year, in an amount equal to the lesser of:
(i) the Borrower’s Tangible Net Worth at the end of the immediately preceding fiscal year plus
$500,000.00; or (ii) the Borrower’s Tangible Net Worth at the end of the immediately preceding
fiscal year plus the Borrower’s retained earnings at the end of the current fiscal year;

          (f) Tangible Owner’s Equity. Achieve and maintain Tangible Owner’s Equity of at least
40% beginning at the end of the 12th month following the Completion Date and maintained
and measured annually thereafter;

29

 

          (g) Fixed Charge Coverage Ratio. Maintain a Fixed Charge Coverage Ratio of not less
than 1.25 to 1.00, measured initially at the end of the 12th month following the
Completion Date and maintained and measured annually thereafter.

          (h) Liens. There shall be no lien, security interest or other charge or encumbrance,
and no other type of preferential arrangement, upon or with respect to any of the properties or
income of the Borrower, which secures Debt of any Person, except for the security interests of the
Security Agreement or except as described in Schedule 5.02(a);

          (i) Landlord and Mortgagee Waivers. Obtain and furnish to the Lender as soon as
available, waivers, acknowledgments and consents, duly executed by each: (i) real property owner,
landlord and mortgagee having an interest in any of the premises owned or leased by the Borrower or
in which any Collateral of the Borrower is located or to be located (and if no Collateral of
Borrower is located at a parcel of property not owned or leased by a Borrower, no such waivers,
acknowledgments or consents will be required); and (ii) each third party holding any Collateral,
all in form and substance acceptable to the Lender, except as otherwise agreed to by the Lender;

          (j) Insurance. Maintain insurance with financially sound and reputable insurance
companies in such amounts and covering such risks as are usually carried by entities engaged in
similar businesses and owning similar properties in the same general areas in which the Borrower
operates, and make such increases in the type of amount or coverage as Lender may reasonably
request, provided that in any event the Borrower will maintain and cause each of its subsidiaries
to maintain workers’ compensation insurance, property insurance and comprehensive general liability
insurance reasonably satisfactory to the Lender. All such policies insuring any collateral for the
Borrower’s obligations to Lender shall have lender or mortgagee loss payable clauses or
endorsements in form and substance acceptable to Lender. Each insurance policy covering Collateral
shall be in compliance with the requirements of the Security Agreement;

          (k) Property and Insurance Maintenance. Maintain and preserve all of its property and
each and every part and parcel thereof that is necessary to or useful in the proper conduct of its
business in good repair, working order, and condition, ordinary wear and tear excepted, and in
compliance with all applicable laws, and make all alterations, replacements, and improvements
thereto as may from time to time be necessary in order to ensure that its properties remain in good
working order and condition and compliance. The Borrower agrees that upon the occurrence and
continuing existence of an Event of Default, at Lender’s request, which request may not be made
more than once a year, the Borrower will furnish to Lender a report on the condition of the
Borrower’s and any of its subsidiaries’ property prepared by a professional engineer satisfactory
to Lender;

          (l) Keeping Books and Records. Maintain and cause each of its subsidiaries to,
maintain proper books of record and account in which full, true, and correct entries in conformity
with generally accepted accounting principles shall be made of all dealings and transactions in
relation to its business and activities;

30

 

          (m) Food Security Act Compliance. If the Borrower acquires any Collateral which may
have constituted farm products in the possession of the seller or supplier thereof, such Borrower
shall, at its own expense, use its best efforts to take such steps to insure that all Liens (except
the liens granted pursuant hereto) in such acquired Collateral are terminated or released,
including, without limitation, in the case of such farm products produced in a state which has
established a Central Filing System (as defined in the Food Security Act), registering with the
Secretary of State of such state (or such other party or office designated by such state) and
otherwise take such reasonable actions necessary, as prescribed by the Food Security Act, to
purchase farm products free of liens (except the liens granted pursuant hereto); provided, however,
that such Borrower may contest and need not obtain the release or termination of any lien asserted
by any creditor of any seller of such farm products, so long as it shall be contesting the same by
proper proceedings and maintain appropriate accruals and reserves therefor in accordance with the
generally accepted accounting principles. Upon the Lender’s request made, the Borrower agrees to
forward to the Lender promptly after receipt copies of all notices of liens and master lists of
Effective Financing Statements delivered to the Borrower pursuant to the Food Security Act, which
notices and/or lists pertain to any of the Collateral. Upon the Lender’s request, the Borrower
agrees to provide the Lender with the names of Persons who supply the Borrower with such farm
products and such other information as the Lender may reasonably request with respect to such
Persons;

          (n) Warehouse Receipts. If any warehouse receipt or receipts in the nature of a
warehouse receipt is issued in respect of any portion of the Collateral, then the Borrower: (i)
will not permit such warehouse receipt or receipts in the nature thereof to be “negotiable” as such
term is used in Article 7 of the Uniform Commercial Code; and (ii) will deliver all such receipts
to the Lender (or a Person designated by the Lender) within five (5) days of the Lender’s request
and from time to time thereafter. If no Event of Default exists, the Lender agrees to deliver to
such Borrower any receipt so held by the Lender upon such Borrower’s request in connection with
such sale or other disposition of the underlying inventory, if such disposition is in ordinary
course of such Borrower’s business;

          (o) Management of Borrower. Management of the Borrower shall be maintained as set
forth on Schedule 5.01(o) hereto, unless otherwise approved in Lender’s reasonable discretion;

          (p) Compliance with Other Agreements. Borrower will perform in all material respects
all obligations and abide in all material respects by all covenants and agreements contained in the
following agreements: (i) any and all Long Term Marketing Agreements; and (ii) any other Material
Contracts.

          (q) Additional Assurances. Make, execute and deliver to Lender such promissory notes,
mortgages, deeds of trust, financing statements, control agreements, instruments, documents and
other agreements as Lender or its counsel may reasonably request to evidence and secure the Loans
and to perfect all Security Interest; and

          (r) Construction of Project. Borrower shall:

31

 

               (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 $25,000.00 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 5.01(r)(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 Agreement 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 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 Construction Loan Maturity Date under any security agreement or
other agreement where the seller reserves or purports to reserve title or the

32

 

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 this Agreement 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 builder’s risk insurance in such amounts,
form, risk coverage, deductibles, insurer, loss payable and cancellation provision s as required by
the Lender. The Lender’s approval, however, will not be a representation of the solvency of any
insurer or the sufficiency of any amount of insurance;

               (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 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 this 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 this Agreement
and the repayment of the Loan;

33

 

               (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 this Agreement and the
repayment of the Loan; and

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

     Section 5.02. Negative Covenants. So long as any of the Loan Obligations remain
unpaid or the Lender shall have any commitment hereunder, the Borrower will not, without the prior
written consent of the Lender:

          (a) Liens, etc. Create or suffer to exist, or permit any of its subsidiaries to
create or suffer to exist, any lien, security interest or other charge or encumbrance, or any other
type of preferential arrangement, upon or with respect to any of its properties, whether now owned
or hereafter acquired, or assign, or permit any of its subsidiaries to assign, any right to receive
income, in each case to secure any Debt (as defined below) of any Person, other than:

               (i) those described on Schedule 5.02(a) hereto and renewals and extensions on the same or
substantially the same terms and conditions and at no increase in the debt or obligation; or

               (ii) liens or security interests which are subject to an intercreditor and subordination
agreement in form and substance reasonably acceptable to Lender in Lender’s sole discretion; or

34

 

               (iii) the liens or security interests of the Security Agreement; or

               (iv) liens (other than liens relating to environmental liabilities or ERISA) for taxes,
assessments, or other governmental charges that are not more than 30 days overdue or, if the
execution thereof is stayed, which are being contested in good faith by appropriate proceedings
diligently pursued and for which adequate reserves have been established; or

               (v) liens of warehousemen, carriers, landlords, mechanics, materialmen, or other similar
statutory or common law liens securing obligations that are not yet due and are incurred in the
ordinary course of business or, if the execution thereof is stayed, which are being contested in
good faith by appropriate proceedings diligently pursued and for which adequate reserves have been
established in accordance with generally accepted accounting principles; or

               (vi) liens resulting from good faith deposits to secure payments of workmen’s compensation
unemployment insurance, or other social security programs or to secure the performance of tenders,
leases, statutory obligations, surety, customs and appeal bonds, bids or contracts (other than for
payment of Debt); or

               (vii) any attachment or judgment lien not constituting an Event of Default; or

               (viii) liens arising from filing UCC financing statements regarding leases not prohibited by
this Agreement; or

               (ix) customary offset rights of brokers and deposit banks arising under the terms of
securities account agreements and deposit agreements; or

               (x) any real estate easements and easements, covenants and encumbrances that customarily do
not affect the marketable title to real estate or materially impair its use; or

          (b) Distributions, etc. Declare or pay any dividends, purchase or otherwise acquire
for value any of its membership interests (units) now or hereafter outstanding, or make any
distribution of assets to its stockholders, members or general partners as such, or permit any of
its subsidiaries to purchase or otherwise acquire for value any stock, membership interest or
partnership interest of the Borrower, provided, however, the Borrower may: (i) declare and pay
dividends and distributions payable in membership interests (units); (ii) purchase or otherwise
acquire shares of the membership interests (units) of the Borrower with the proceeds received from
the issuance of new membership interests (units); (iii) pay distributions in an amount not to
exceed, in the aggregate, the difference between $5,000,000.00 and the original principal amount of
all Subordinated Debt in place immediately prior to such distribution (the “Subordinated Debt
Distributions”); (iv) pay redemptions, dividends or distributions in an amount not to exceed, in
the aggregate, 20% of the Borrower’s immediately preceding fiscal year’s Net Income

35

 

(“Allowed Distributions”); (v) pay dividends or distributions which are immediately reinvested in
the Borrower (“Reinvestment Distributions”); (vi) complete the transactions reflected on Schedule
4.01(a) and (vi) after payment of the Excess Cash Flow Payment required by Section 2.04(b), if any,
pay additional distributions in an amount reasonably acceptable to Lender (“Excess
Distributions”), provided, however, that immediately prior to the proposed payment of any dividends
or distributions permitted by this Section 5.02(b), or after giving effect thereto, no Default or
Event of Default shall exist; or

          (c) Capital Expenditures. Except for costs identified in the Project Costs and Uses
Statement, make any investment in fixed assets in the aggregate amount of $500,000.00 during any
fiscal year during the term of this Agreement; or

          (d) Consolidation, Merger, Dissolution, Etc. Directly or indirectly, merge or
consolidate with any other Person or permit any other Person to merge into or with or consolidate
with the Borrower or any of its subsidiaries; or

          (e) Indebtedness, etc. Create, incur, assume or suffer to exist any Debt or other
indebtedness, liabilities or obligations, whether matured or unmatured, liquidated or unliquidated,
direct or contingent, joint or several, except: (i) the liabilities of the Borrower to the Lender
hereunder; (ii) trade accounts payable and accrued liabilities (other than Debt) arising in the
ordinary course of the Borrower’s business; (iii) Subordinated Debt; and (iv) the liabilities of
the Borrower described on Schedule 5.02(a); or

          (f) Organization; Name; Chief Executive Office. Change its state of organization,
name or the location of its chief executive office without the prior written consent of the
Lender, except that the principal office shall be moved to the plant site when construction of the
administration office is substantially complete; or

          (g) Loans, Guaranties, etc. Make any loans or advances to (whether in cash, in-kind,
or otherwise) any Person, or directly or indirectly guaranty or otherwise assure a creditor against
loss in respect of any indebtedness, obligations or liabilities (contingent or otherwise) of any
Person; or

          (h) Subsidiaries; Affiliates. Form or otherwise acquire any subsidiary or affiliated
business, or acquire the assets of or acquire any equity or ownership interest in any Person,
unless such subsidiary, affiliate or Person executes and delivers to the Lender: (i) a guaranty of
all of the Loan Obligations, in form and substance acceptable to the Lender in its sole discretion;
(ii) security agreements in form substantially similar to the Security Agreement; and (iii) such
other documents and amendments to this Agreement and the other Loan Documents as the Lender shall
reasonably require; or

          (i) Transfer of Assets. Sell, lease, assign, transfer, or otherwise voluntarily
dispose of any of its assets, or permit any of its subsidiaries to sell, lease, assign, transfer,
or otherwise voluntarily dispose of any of its assets except: (i) dispositions of inventory in the
ordinary course of business; and (ii) dispositions of: (A) obsolete or worn out equipment; (B)
equipment or real property not necessary for the operation of its business; or (C) equipment

36

 

or real property which is replaced with property of equivalent or greater value as the property
which is disposed;

          (j) Lines of Business. Engage in any line or lines of business activity other than
the production of ethanol and DDGS;

          (k) Transactions with Affiliates. Directly or indirectly enter into or permit to
exist any transaction (including the purchase, sale, lease or exchange of any property or the
rendering of any service) with any Affiliate or with any director, officer or employee of the
Borrower or any Affiliate, except (i) transactions listed on Schedule 5.02(k), (ii) transactions in
the ordinary course of and pursuant to the reasonable requirements of the business of the Borrower
or any of its subsidiaries and upon fair and reasonable terms which are fully disclosed to Lender
and are no less favorable to the Borrower or such subsidiary than would be obtained in a comparable
arm’s length transaction with a person or entity that is not an Affiliate, and (iii) payment of
compensation to directors, officers and employees in the ordinary course of business for services
actually rendered in their capacities as directors, officers and employees, provided such
compensation is reasonable and comparable with compensation paid by companies of like nature and
similarly situated. Notwithstanding the foregoing, upon the election of Lender, no payments may be
made with respect to any items set forth in clauses (i) and (ii) of the preceding sentence upon the
occurrence and during the continuation of a Potential Default or an Event of Default; or

          (l) Management Fees and Compensation. Directly or indirectly pay any management,
consulting or other similar fees to any person, except legal or consulting fees paid to persons or
entities that are not Affiliates of the Borrower or its subsidiaries for services actually rendered
and in amounts typically paid by entities engaged in the Borrower’s or such subsidiary’s business.
Not withstanding the foregoing and only with the prior written consent of the Lender, a management
fee of up to 5% of the Borrower’s EBITDA for the immediately proceeding fiscal year may be paid by
the Borrower after the Lender has determined that all applicable covenants will be met after the
distribution of the management fee; or

          (m) Material Control or Management. (i) One or more of the members of the Borrower as
of the date hereof shall fail, in the aggregate, to own, directly or indirectly, 100% of the common
(voting) membership interests in the Borrower, or (ii) there should be any change in the chief
executive officer of the Borrower, unless within 90 days of such event a person reasonably
acceptable to Lender is appointed to such position.

ARTICLE VI.

EVENTS OF DEFAULT AND REMEDIES

     Section 6.01. Events of Default. Each of the following events shall be an “Event of
Default”:

          (a) The Borrower shall fail to pay any installments of principal or interest, fees, expenses,
charges or other amounts payable hereunder or under the other Loan Documents or to make any deposit
of funds required under this Agreement when due; or

37

 

          (b) Any representation or warranty made by the Borrower, or any of its officers or directors
under or in connection with any Loan Document shall prove to have been incorrect in any material
respect when made; or

          (c) The Borrower shall fail to perform or observe any term, covenant or agreement contained in
Sections 5.01(d), (e), (f) or (g) or take any action as prohibited by Section 5.02; or

          (d) The Borrower shall fail to deliver the financial statements or Compliance Certificate
under Section 5.01(c) within 5 days of the date due; or

          (e) The Borrower shall fail to perform or observe any term, covenant or agreement contained in
any Loan Document (other than those listed in clauses (a) through (d) of this Section 6.01) on its
part to be performed or observed (other than the covenants to pay the Loan Obligations) and any
such failure shall remain unremedied for ten (10) days after written notice thereof shall have been
given to the Borrower by the Lender, provided, however, that no Event of Default shall be deemed to
exist if, within said ten (10) day period, Borrower have commenced appropriate action to remedy
such failure and shall diligently and continuously pursue such action until such cure is completed,
unless such cure is or cannot be completed within thirty (30) days after written notice shall have
been given; or

          (f) The Borrower shall fail to pay any indebtedness in an amount in excess of $50,000.00
(either in any individual case or in the aggregate) excluding indebtedness evidenced by the Notes
and excluding Ordinary Trade Payable Disputes, or any interest or premium thereon, when due
(whether by scheduled maturity, required prepayment, acceleration, demand or otherwise) and such
failure shall continue after the applicable grace period, if any, specified in the agreement or
instrument relating to such indebtedness; or any other default under any agreement or instrument
relating to any such indebtedness, or any other event, shall occur and shall continue after the
applicable grace period, if any, specified in such agreement or instrument, if the effect of such
default or event is to accelerate, or to permit the acceleration of, the maturity of such
indebtedness (excluding Ordinary Trade Payable Disputes); or any such indebtedness shall be
declared to be due and payable, or required to be prepaid (other than by a regularly scheduled
required prepayment), prior to the stated maturity thereof (excluding Ordinary Trade Payable
Disputes); or

          (g) The Borrower shall generally not pay its debts as such debts become due, or shall admit in
writing its inability to pay its debts generally, or shall make a general assignment for the
benefit of creditors; or any proceeding shall be instituted by or against the Borrower seeking to
adjudicate it a bankrupt or insolvent, or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief, or composition of it or its debts under any law
relating to bankruptcy, insolvency or reorganization or relief of debtors, or seeking the entry of
an order for relief or the appointment of a receiver, trustee or other similar official for it or
for any substantial part of its property, and, in the case of any such proceeding instituted
against it (but not instituted by it) either such proceeding shall remain undismissed or unstayed
for a period of 30 days or any of the actions sought in such proceeding (including, without

38

 

limitation, the entry of an order for relief against it or the appointment of a receiver, trustee,
custodian or other similar official for it or for any substantial part of its property) shall
occur; or the Borrower shall take any corporate action to authorize any of the actions set forth
above in this subsection; or

          (h) Any one or more judgment(s) or order(s) for the payment of money in excess of $50,000.00
in the aggregate shall be rendered against the Borrower and either: (i) enforcement proceedings
shall have been commenced by any creditor upon such judgment or order; or (ii) there shall be any
period of 10 consecutive days during which a stay of enforcement of such judgment or order, by
reason of a pending appeal or otherwise, shall not be in effect; or

          (i) Any provision of any Loan Document shall for any reason cease to be valid and binding on
the Borrower or the Borrower shall so state in writing; or

          (j) The Mortgage or the Security Agreement shall for any reason, except to the extent
permitted by the terms thereof, cease to create a valid lien, encumbrance or security interest in
any of the property purported to be covered thereby; or

          (k) The termination of any Long Term Marketing Agreement prior to its stated expiration date,
unless such Long Term Marketing Agreement is replaced by another Long Term Marketing Agreement
acceptable to the Lender, within thirty (30) days of the termination of such Long Term Marketing
Agreement; or

          (l) The Borrower dissolves, suspends, or discontinues doing
business; or

          (m) Construction of the Project is halted or abandoned prior to completion for any period of
thirty (30) consecutive days for any cause which is not beyond the reasonable control of the
Borrower, its contractors and subcontractors; or

          (n) The construction of the Project shall be delayed for any reason and for such period that,
in the reasonable judgment of the Lender, the Project will not be completed by the Completion Date.
If such delay is curable and if Borrower has not been given a notice of a similar breach within
the preceding twelve (12) months, it may be cured (and no Event of Default will have occurred) if
Borrower cures the failure within thirty (30) days, which shall include advancing the progress of
the Project to the point that, in the reasonable judgment of the Lender, the Project will be
completed by the Completion Date; pr

          (o) Any event, change or condition not referred to elsewhere in this Section 6.01 should occur
which results in a Material Adverse Effect on the Borrower, any subsidiary or any guarantor of the
Borrower’s obligations hereunder; or

          (p) Any guarantee, suretyship, subordination agreement, maintenance agreement, or other
agreement furnished in connection with the Borrower’s obligations hereunder and under any Note
shall, at any time, cease to be in full force and effect, or shall be revoked or declared null and
void, or the validity or enforceability thereof shall be contested by the guarantor, surety or
other maker thereof, or the Guarantor shall deny any further liability or

39

 

obligations thereunder, or shall fail to perform its obligations thereunder, or any
representation or warranty set forth therein shall be breached, or the Guarantor shall breach or be
in default under the terms of any other agreement with Lender (including any loan agreement or
security agreement); or

          (q) The loss, suspension or revocation of, or failure to renew, any franchise, license,
certificate, permit, authorization, approval or the like now held or hereafter acquired by the
Borrower or any of its subsidiaries, if such loss, suspension, revocation or failure to renew could
reasonably be expected to have a Material Adverse Effect on the Borrower or (ii) any regulatory or
Governmental Authority replaces the management of the Borrower or any of its subsidiaries or
assumes control over the Borrower or such subsidiary; or

          (r) The Borrower should breach or be in default under a Material Contract in any material
respect, including any material breach or default, or any termination shall have occurred, or any
other event which would permit any party other than the Borrower to cause a termination, or any
Material Contract shall have ceased for any reason to be in full force and effect prior to its
stated or optional expiration date.

          (s) The Borrower should terminate, change, amend or restate, without the Lender’s prior
consent any Material Contract, or any material Construction Contract.

          Section 6.02. Remedies. Upon the occurrence of an Event of Default and at any time
while such Event of Default is continuing, the Lender:

          (a) may accelerate the due date of the unpaid principal balance of the Notes, all accrued but
unpaid interest thereon and all other amounts payable under this Agreement making such amounts
immediately due and payable, whereupon the Notes, all such interest and all such amounts shall
become and be forthwith immediately due and payable, without presentment, notice of intent to
accelerate or notice of acceleration, demand, protest or further notice of any kind, all of which
are hereby expressly waived by the Borrower; provided, however, that in the event of an actual or
deemed entry of an order for relief with respect to any of the Borrower under the Federal
Bankruptcy Code, the Notes, all such interest and all such amounts shall automatically become due
and payable, without presentment, demand, protest or any notice of any kind, all of which are
hereby expressly waived by the Borrower;

          (b) may withhold or direct the Disbursing Agent to withhold any one or more Advances in its
discretion, and terminate the Lender’s obligations, if any, under this Agreement to make any
Advances whereupon the commitment and obligations of the Lender to extend credit or to make
Advances hereunder shall terminate, and no disbursement of Loan funds by the Lender will cure any
default of the Borrower, unless the Lender agrees otherwise in writing;

          (c) may, by notice to the Borrower, obtain the appointment of a receiver to take possession of
all Collateral of the Borrower, including, but not limited to all personal property, including all
fixtures and equipment leased, occupied or used by any of the Borrower. Borrower hereby
irrevocably consents to the appointment of such receiver and agrees to cooperate and assist any
such receiver as reasonably requested to facilitate the transfer of

40

 

possession of the Collateral to such receiver and to provide such receiver access to all
books, records, information and documents as requested by such receiver;

          (d) in its discretion, enter the Real Property and take any and all actions necessary in its
judgment to complete construction of the Project, including but not limited to making changes in
Plans and Specifications, work or materials, and entering into, modifying, or terminating any
contractual arrangements, subject to the Lender’s right at any time to discontinue any work without
liability. If the Lender elects to complete the Project, it will not assume any liability to the
Borrower or any other person for completing the Project or for the manner or quality of
construction of the Project, and the Borrower expressly waives any such liability. The Borrower
irrevocably appoints the Lender as its attorney-in-fact, with full power of substitution, to
complete the Project in the Borrower’s name, or the Lender may elect to complete construction in
its own name. In any event, all sums expended by the Lender in completing construction will be
considered to have been disbursed to the Borrower and will be secured by the Mortgage and any other
instruments or documents securing the Loans, and any such sums that cause the principal amount of
the Loans to exceed the face amount of the Notes will be considered to be an additional loan to the
Borrower bearing interest at the rate provided in the Notes and will be secured by the Mortgage
and any other instrument or documents securing the Loans. The Lender will not have any obligation
under the Plans and Specifications prepared for the Project, any studies, data, and drawings with
respect thereto prepared by or for Borrower, or the contracts and agreements relating to the Plans
and Specifications, or the aforesaid studies, data, and drawings, or to the construction of the
Project unless it expressly hereafter agrees in writing. The Lender will have the right to
exercise any rights of the Borrower under those contracts and agreements or with respect to such
Plans and Specifications, studies, data, and drawings upon any default by the Borrower under this
Agreement, and shall have such other rights and remedies with respect thereto as are afforded a
secured creditor under applicable law; and

          (e) may, by notice to the Borrower, require the Borrower to pledge to the Lender as security
for the Loan Obligations an amount in immediately available funds equal to the then outstanding
Letter of Credit Liabilities, such funds to be held in an interest bearing cash collateral account
at the Lender without any right of withdrawal by the Borrower; provided, however, that in the event
of an actual or deemed entry of an order for relief with respect to the Borrower or any of its
subsidiaries under the Federal Bankruptcy Code, the Borrower shall, without notice, pledge to the
Lender as security for the Loan Obligations an amount in immediately available funds equal to the
then outstanding Letter of Credit Liabilities, such funds to be held in such an interest bearing
cash collateral account at the Lender; and

          (f) may exercise all other rights and remedies afforded to the Lender under the Loan Documents
or by applicable law or equity.

     Section 6.03. Remedies Cumulative. Each and every power or remedy herein specifically
given shall be in addition to every other power or remedy, existing or implied, given now or
hereafter existing at law or in equity, and each and every power and remedy herein specifically
given or otherwise so existing may be exercised from time to time and as often and in such order as
may be deemed expedient by Lender, and the exercise or the beginning of the

41

 

exercise of one power or remedy shall not be deemed a waiver of the right to exercise at the same
time or thereafter any other power or remedy. No delay or omission of Lender in the exercise of any
right or power accruing hereunder shall impair any such right or power or be construed to be a
waiver of any default or acquiescence therein.

ARTICLE VII.

MISCELLANEOUS

     Section 7.01. Amendments, etc. No amendment or waiver of any provision of any Loan
Document to which the Borrower is a party, nor any consent to any departure by the Borrower
therefrom, shall in any event be effective unless the same shall be agreed or consented to by the
Lender and the Borrower, and each such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.

     Section 7.02. Notices, etc. All notices and other communications provided for under
any Loan Document shall be in writing and mailed, faxed, or delivered at the addresses set forth
below, or at such other address as such party may specify by written notice to the other parties
hereto:

	 	 	 	 	 
	 

	 	If to the Borrower:
	 	Superior Corn Products, LLC
	 

	 	 	 	111 Main Avenue
	 

	 	 	 	Suite 200
	 

	 	 	 	Brookings, South Dakota 57006
	 

	 	 	 	Telephone: (605) 696-3150
	 

	 	 	 	Fax: (605) 696-3153
	 

	 	 	 	Attention: Gordon W. Ommen
	 
	 	 	 	 
	 

	 	With a copy to:
	 	Lindquist & Vennum P.L.L.P.
	 

	 	 	 	4200 IDS Center
	 

	 	 	 	80 South Eighth Street
	 

	 	 	 	Minneapolis, MN 55402-2205
	 

	 	 	 	Telephone: (612) 371-3211
	 

	 	 	 	Fax: (612) 371-3207
	 

	 	 	 	Attn. Michael Weaver
	 
	 	 	 	 
	 

	 	If to the Lender:
	 	AgStar Financial Services, PCA
	 

	 	 	 	1921 Premier Drive
	 

	 	 	 	P.O. Box 4249
	 

	 	 	 	Mankato, MN 56002-4249
	 

	 	 	 	Telephone: (507) 386-4242
	 

	 	 	 	Facsimile: (507) 344-5088
	 

	 	 	 	Attention: Mark Schmidt

42

 

	 	 	 	 	 
	 

	 	With copy to:
	 	Phillip L. Kunkel
	 

	 	 	 	Gray Plant Mooty
	 

	 	 	 	1010 West St. Germain, Suite 600
	 

	 	 	 	St. Cloud, MN 56301
	 

	 	 	 	Facsimile: (320) 252-4482

All such notices and communications shall have been duly given and shall be effective: (a) when
delivered; (b) when transmitted via facsimile to the number set forth above; (c) the Business Day
following the day on which the same has been delivered prepaid (or pursuant to an invoice
arrangement) to a reputable national overnight air courier service; or (d) the third Business Day
following the day on which the same is sent by certified or registered mail, postage prepaid. Any
confirmation sent by the Lender to the Borrower of any borrowing under this Agreement shall, in the
absence of manifest error, be conclusive and binding for all purposes.

     Section 7.03. No Waiver; Remedies. No failure on the part of the Lender to exercise,
and no delay in exercising, any right under any Loan Document shall operate as a waiver thereof;
nor shall any single or partial exercise of any right under any Loan Document preclude any other or
further exercise thereof or the exercise of any other right. The remedies provided in the Loan
Documents are cumulative and not exclusive of any remedies provided by law.

Section 7.04. Costs, Expenses and Taxes.

          (a) The Borrower agrees, jointly and severally, to pay on demand all costs and expenses in
connection with the preparation, execution, delivery, filing, recording and administration of the
Loan Documents and the other documents to be delivered under the Loan Documents, including, without
limitation, the reasonable fees and out-of-pocket expenses of counsel for the Lender (who may be
in-house counsel), and local counsel who may be retained by said counsel, with respect thereto and
with respect to advising the Lender as to its respective rights and responsibilities under the Loan
Documents, and all costs and expenses (including reasonable counsel fees and expenses) for the
Lender in connection with the filing of the Financing Statements and the enforcement of the Loan
Documents and the other documents to be delivered under the Loan Documents, including, without
limitation, in the context of any bankruptcy proceedings. In addition, the Borrower agrees to pay
on demand the expenses described in Section 5.01(b). In addition, the Borrower shall pay any and
all stamp and other taxes and fees payable or determined to be payable in connection with the
execution, delivery, filing and recording of the Loan Documents and the other documents to be
delivered under the Loan Documents, and agrees to save the Lender harmless from and against any and
all liabilities with respect to or resulting from any delay in paying or omission to pay such taxes
and fees.

          (b) If, due to payments made by the Borrower pursuant to Section 2.06 or due to acceleration
of the maturity of the Advances pursuant to Section 6.01 or due to any other reason, the Lender
receives payments of principal of any Loan other than on the last day of an Interest Period
relating thereto, the Borrower shall pay to the Lender on demand any amounts required to compensate
the Lender for any additional losses, costs or expenses which it may

43

 

incur as a result of such payment, including, without limitation, any loss (including loss of
anticipated profits), cost or expense incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by the Lender to fund or maintain such Loan.

     Section 7.05. Right of Set-off. The Lender is hereby authorized at any time and from
time to time, to the fullest extent permitted by law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held and other indebtedness
at any time owing by the Lender to or for the credit or the account of the Borrower against any and
all of the Loan Obligations, irrespective of whether or not the Lender shall have made any demand
under such Loan Document and although deposits, indebtedness or such obligations may be unmatured
or contingent. The Lender agrees promptly to notify the Borrower after any such set-off and
application, provided that the failure to give such notice shall not affect the validity of such
set-off and application. The rights of the Lender under this Section are in addition to other
rights and remedies (including, without limitation, other rights of set-off) which the Lender may
have.

     Section 7.06. Severability of Provisions. Any provision of this Agreement or of any
other Loan Document which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof or thereof or affecting the validity or
unenforceability of such provision in any other jurisdiction.

     Section 7.07. Binding Effect; Successors and Assigns; Participations.

          (a) This Agreement shall be binding upon and inure to the benefit of the Borrower, the Lender
and their respective successors and assigns, except that the Borrower shall not have the right to
assign or otherwise transfer its rights hereunder or any interest herein without the prior written
consent of the Lenders. Upon the request of Borrower, Lender shall provide copies of all invoices
for costs and expenses to be reimbursed by Borrower under this Agreement or under any of the Loan
Documents.

          (b) Borrower agrees and consents to Lender’s sale or transfer, whether now or later, of one or
more participation interests in the Loans to one or more purchasers, whether related or unrelated
to Lender. Lender may provide, without any limitation whatsoever, to any one or more purchasers,
or potential purchasers, any information or knowledge Lender may have about Borrower or about any
other matter relating to the Loans, and Borrower hereby waives any rights to privacy it may have
with respect to such matters; provided, however, that any information received by any such
purchaser or potential purchaser under this provision which concerns the personal, financial or
other affairs of the Borrower shall be received and kept by the purchaser or potential purchaser in
full confidence and will not be revealed to any other persons, firms or organizations nor used for
any purpose whatsoever other than for determining whether or not to participate in the Loans and in
accord with the rights of Lender if a participation interest is acquired. Borrower additionally
waives any and all notices of sale of participation interests, as well as all notices of any
repurchase of such participation interest. Borrower also agrees that the purchasers of any such
participation interests will be considered as the absolute owners of such interests in the Loans
and will have all the rights granted under the participation agreement or

44

 

agreements governing the sale of such participation interests. Borrower further waives all
rights of offset or counterclaim that it may have now or later against Lender or against any
purchaser of such a participation interest arising out of or by virtue of the participation and
unconditionally agrees that either Lender or such purchaser may enforce Borrower’s obligation under
the Loans irrespective of the failure or insolvency of any holder of any interests in the Loans.
Borrower further agrees that the purchaser of any such participation interests may enforce its
interests irrespective of any personal claims or defenses that Borrower may have against Lender.

     Section 7.08. Consent to Jurisdiction.

          (a) The Borrower hereby irrevocably submits to the jurisdiction of any Minnesota state court
or federal court over any action or proceeding arising out of or relating to this Agreement, the
Note and any instrument, agreement or document related hereto or thereto, and the Borrower hereby
irrevocably agrees that all claims in respect of such action or proceeding may be heard and
determined in such Minnesota state court or federal court. The Borrower hereby irrevocably waives,
to the fullest extent it may effectively do so, the defense of an inconvenient forum to the
maintenance of such action or proceeding. The Borrower irrevocably consents to the service of
copies of the summons and complaint and any other process which may be served in any such action or
proceeding by the mailing of copies of such process to Borrower at its address specified in Section
7.02. The Borrower agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law.

          (b) Nothing in this Section 7.08 shall affect the right of the Lender to serve legal process
in any other manner permitted by law or affect the right of the Lender to bring any action or
proceeding against the Borrower or its property in the courts of other jurisdictions.

     Section 7.09. Governing Law. THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF MINNESOTA.

     Section 7.10. Execution in Counterparts. This Agreement may be executed in any number
of counterparts and on telecopy counterparts, each of which when so executed shall be deemed to be
an original and all of which when taken together shall constitute but one and the same agreement.

     Section 7.11. Survival. All covenants, agreements, representations and warranties
made by the Borrower in the Loan Documents and in the certificates or other instruments delivered
in connection with or pursuant to this Agreement or any other Loan Document shall be considered to
have been relied upon by the other parties hereto and shall survive the execution and delivery of
the Loan Documents and the making of any Advances and issuance of any Letters of Credit, regardless
of any investigation made by any such other party or on its behalf and notwithstanding that Lender
may have had notice or knowledge of any Event of Default or incorrect representation or warranty at
the time any credit is extended hereunder, and shall continue in full force and effect as long as
any Loan Obligations are outstanding and unpaid and so long as the Lender has any unexpired
commitments under this Agreement or the Loan

45

 

Documents. The expense reimbursement, additional cost, capital adequacy and indemnification
provisions of this Agreement shall survive and remain in full force and effect regardless of the
consummation of the transactions contemplated hereby, the repayment of the Loan Obligations or the
termination of this Agreement or any provision hereof.

     Section 7.12. WAIVER OF JURY TRIAL. THE BORROWER AND THE LENDER HEREBY IRREVOCABLY
WAIVE ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR
RELATING TO ANY LOAN DOCUMENT TO WHICH IT IS A PARTY OR ANY INSTRUMENT OR DOCUMENT DELIVERED
THEREUNDER.

     Section 7.13. Entire Agreement. THIS AGREEMENT, THE NOTES, AND THE OTHER LOAN
DOCUMENTS REFERRED TO HEREIN EMBODY THE FINAL, ENTIRE AGREEMENT AMONG THE PARTIES HERETO AND
SUPERSEDE ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS, REPRESENTATIONS, AND UNDERSTANDINGS, WHETHER
WRITTEN OR ORAL, RELATING TO THE SUBJECT MATTER HEREOF AND MAY NOT BE CONTRADICTED OR VARIED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OF THE PARTIES
HERETO. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES THERETO.

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their
respective officers and duly authorized, as of the date first above written.

BORROWER ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS MASTER LOAN AGREEMENT, AND BORROWER
AGREES TO ITS TERMS. THIS AGREEMENT IS DATED AS OF THE DATE FIRST ABOVE STATED.

[SIGNATURE PAGE ON FOLLOWING PAGE]

46

 

SIGNATURE PAGE TO:

MASTER LOAN AGREEMENT

by and among

SUPERIOR CORN PRODUCTS, LLC

and

AGSTAR FINANCIAL SERVICES, PCA

47

 

BORROWER:

SUPERIOR CORN PRODUCTS, LLC, a Michigan limited liability company

	 	 	 
	/s/ CHAD D. HATCH 

By Chad D. Hatch

	 	 
	  Its Vice President and Treasurer
	 	 

LENDER:

	 	 	 
	AGSTAR FINANCIAL SERVICES, PCA
	 	 
	an United States corporation
	 	 
	 
	 	 
	/s/ MARK SCHMIDT 

By Mark Schmidt

	 	 
	  Its Vice President
	 	 

48

 

EXHIBIT A

COMPLIANCE CERTIFICATE

TO:     AGSTAR FINANCIAL SERVICES, PCA (the “Lender”)

     Pursuant to that certain Master Loan Agreement dated November 15, 2005, by and between
SUPERIOR CORN PRODUCTS, LLC, a Michigan limited liability company (the “Borrower”), and the Lender,
and any amendments thereto and extensions thereof (the “Loan Agreement”), the undersigned hereby
represents, warrants and certifies to the Lender as follows:

	 	1.	 	The financial statement(s) attached hereto are complete and correct in all
material respects and fairly present the financial condition of the Borrower as of the
date of said financial statement(s) and the result of its business operations for the
period covered thereby;
	 
	 	2.	 	Repeats and reaffirms to the Lender each and all of the representations and
warranties made by the Borrower in the Loan Agreement and the agreements referred to
therein or related thereto, and represents and warrants to the Lender that each and all
of said warranties and representations are true and correct as of the date hereof,
except as disclosed in writing to the Lender;
	 
	 	3.	 	No Event of Default (as that term is defined in the Loan Agreement), and no
event which with the giving of notice or the passage of time or both would constitute
an Event of Default, has occurred and is continuing as of the date hereof; and
	 
	 	4.	 	All the calculations set forth below are made pursuant to the terms of the Loan
Agreement and are true and accurate as of the date of the attached financial
statements:

	 	 	 	 	 	 	 	 	 
	1.
	 	Section 5.01(d) – Working Capital.	 	 	 	 	 	 
	 
	 	(tested annually)	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	(a)
	 	Required Working Capital	 	(12 months from Completion Date)	 	$	3,000,000.00	 
	 
	 	 	 	(24 months from Completion Date	 	 	 	 
	 
	 	 	 	and continually thereafter)	 	$	5,000.000.00	 
	 
	 	 	 	 	 	 	 	 
	(a)
	 	Current Assets	 	 	 	$	                    	 
	(b)
	 	Current Liabilities	 	 	 	$	                    	 
	 
	 	 	 	 	 	 	 	 
	Line (a) less line (b)	 	 	 	$	                    	 
	 
	 	 	 	 	 	 	 	 
	In Compliance	 	Yes                     	 	No	                    	 
	 
	 	 	 	 	 	 	 	 
	2.
	 	Section 5.01(e) – Tangible Net Worth.	 	 	 	 	 	 
	 
	 	(tested annually)	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	(a)
	 	Required Tangible Net Worth	 	 	 	$	                    	 
	 
	 	 	 	 	 	 	 	 
	(b)
	 	Actual Tangible Net Worth	 	 	 	 	 	 

49

 

	 	 	 	 	 	 	 	 	 
	 
	 	(1)  Total Assets	 	 	 	$	                    	 
	 
	 	(2)  Less Intangible Assets (per definition)	 	 	 	$	                    	 
	 
	 	(3)  Total Tangible Assets	 	 	 	$	                    	 
	 
	 	(4)  Total Liabilities	 	 	 	$	                    	 
	 
	 	(5)  Tangible Net Worth	 	 	 	$	                    	 
	 
	 	(line (4) minus line (5))	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	In Compliance	 	Yes                     	 	No	                    	 
	 
	 	 	 	 	 	 	 	 
	3.
	 	Section 5.01(f) – Owner Equity Ratio	 	 	 	 	 	 
	 
	 	(tested annually)	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	(a)
	 	Tangible Net Worth	 	 	 	$	                    	 
	(b)
	 	Total Assets	 	 	 	$	                    	 
	(c)
	 	Owner Equity Percentage	 	 	 	 	 	 
	 
	 	(percent of line (b) to (c))	 	 	 	 	                    	%
	 
	 	 	 	 	 	 	 	 
	 
	 	Required Percentage of 40%	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	In Compliance	 	Yes                     	 	No	                    	 
	 
	 	 	 	 	 	 	 	 
	4.
	 	Section 5.01(g) – Fixed Charge Ratio	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	(a)
	 	EBITDA	 	 	 	$	                    	 
	(b)
	 	Extraordinary Items	 	 	 	$	                    	 
	(c)
	 	Numerator (sum of lines (a) and (b))	 	 	 	$	                    	 
	 
	 	 	 	 	 	 	 	 
	(d)
	 	Current Portion of Long Term Debt	 	 	 	$	                    	 
	(e)
	 	Interest Expense	 	 	 	$	                    	 
	(f)
	 	Dividends	 	 	 	$	                    	 
	(g)
	 	Tax Distributions	 	 	 	$	                    	 
	(h)
	 	Maintenance Capital Expenditures	 	 	 	$	                    	 
	(i)
	 	Denominator (sum of lines (d) through (h))	 	 	 	$	                    	 
	 
	 	 	 	 	 	 	 	 
	Ratio of line (c) to (i)
	 	 	 	                     to 1.00
	 
	 	 	 	 	 	 	 	 
	Required Ratio of 1.25 to 1.00	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	In Compliance	 	Yes                     	 	No	                    	 

50

 

     IN WITNESS WHEREOF, the undersigned has signed and delivered this Certificate to the Lender as
of the ___ day of                     , ___.

	 	 	 	 	 	 	 
	BORROWER:	 	 
	 
	 	 	 	 	 	 
	SUPERIOR CORN PRODUCTS, LLC	 	 
	a Michigan limited liability company	 	 
	 
	 	 	 	 	 	 
	By
	 	 
	 	 	 	 
	 

	 	 

	 	 
	 

	 	Its	 	 	 	 
	 

	 	 	 	 

	 	 

51

 

EXHIBIT B

PROJECT SOURCE AND USE STATEMENT

US BioEnergy

Sources and Uses of Cash

	 	 	 	 	 
	 	 	Superior Corn	 
	 	 	Lake Odessa, MI	 
	Sources:
	 	 	 	 
	Owner Equity
	 	$	19,000,000	 
	Sub Debt/Mezzanine
	 	$	4,151,000	 
	Construction Loan
	 	$	36,000,000	 
	Grant Income
	 	$	349,000	 
	Low/zero interest loans
	 	$	500,000	 
	 
	 	 	 
	 
	 	$	60,000,000	 
	 
	 	 	 	 
	Uses:
	 	 	 	 
	General Contractor fees
	 	$	46,119,000	 
	Accounting fees
	 	 	 	 
	Consulting fees
	 	$	150,000	 
	Legal fees
	 	$	105,000	 
	Electric
	 	$	900,000	 
	Dues
	 	 	 	 
	Insurance
	 	$	101,000	 
	Real Estate
	 	$	250,000	 
	Site Engineering
	 	 	 	 
	Phase 1 site grading
	 	$	1,000,000	 
	Phase 2 site work 
	 	 	 	 
	Septic
	 	$	140,000	 
	Site improvements and tiling
	 	 	 	 
	Water wells 
	 			 
	Other
	 	$	11,235,000	 
	 
	 	 	 
	 
	 	$	60,000,000	 

52

 

EXHIBIT C

FORM OF OPINION LETTER

November ___, 2005

AgStar Financial Services, PCA

1921 Premier Drive

P.O. Box 4249

Mankato, MN56002-4249

	 	 	 	 	 
	 

	 	Re:
	 	Master Loan Agreement Dated November 15, 2005 by and between Superior Corn
Products, LLC and AgStar Financial Services, PCA

Ladies and Gentlemen:

     We have acted as counsel to Superior Corn Products, LLC, a Michigan limited liability company
(the “Company”), in connection with the negotiation of the Master Loan Agreement dated November 15,
2005 (the “Loan Agreement”) by and between the Company and AgStar Financial Services, PCA (the
“Lender” or “you”) dated as of the date hereof and the consummation of the transactions described
therein. This letter is furnished to satisfy a condition set forth in Section 3.01(r) of the Loan
Agreement. All capitalized terms used in this letter that are not otherwise defined herein have
the meanings assigned to them in the Loan Agreement unless the context requires otherwise.

     In our capacity as counsel to the Company, and for purposes of this opinion, we have examined
the following documents:

     (i) the Loan Agreement;

     (ii) the First Supplement to the Loan Agreement;

     (iii) the Second Supplement to the Loan Agreement;

     (iv) the Construction Note;

     (v) the Revolving Note;

     (vi) the Security Agreement;

     (vii) the Mortgage;

     (viii) the Disbursing Agreement;

     (ix) the Articles of Organization and Operating Agreement, as amended, of the Company;

53

 

     (x) the records of proceedings and actions of the members and Board of Managers of the
Company with respect to the transactions between you and the Company contemplated by the Loan
Agreement;

     (xi) such other documents, agreements and materials as we have deemed necessary and
appropriate to render the opinions set forth in this letter, subject to the limitations,
assumptions and qualifications noted below.

     The documents listed as items (i) through (viii) above are dated as of the first date written
above and are collectively referred to herein as the “Loan Documents.” In addition, we have
examined and relied upon representations and warranties as to matters of fact (other than facts
constituting conclusions of law) contained in and made pursuant to the Loan Documents.

     In addition, we have examined such other resolutions, documents, certificates and records and
have made such investigations of law and fact as we have deemed necessary or appropriate to enable
us to render the opinions expressed herein.

     In reaching the opinions set forth below, we have assumed, and have not independently
verified, the genuineness of all signatures on all documents, the legal capacity and competency for
all purposes relevant hereto of all natural persons, the authenticity of all documents submitted to
us as originals, the conformity to the authentic originals of all documents submitted to us as
copies, the correctness, completeness and accuracy of all facts set forth in all representations,
warranties and certificates referred to or identified in this opinion, and that there are no
documents, agreements or understandings to which the Lender is a party between the Lender, on the
one hand, and the Company on the other hand, other than the Loan Documents, which would have an
effect on the opinions set forth below. In examining documents executed by parties other than the
Company, we have assumed that such parties had the requisite power, right and authority (corporate
or otherwise) to execute, deliver and perform all of their respective obligations thereunder and
have also assumed the due authorization by all requisite corporate action and execution and
delivery of such documents by such parties, and the validity, legality and binding effect of those
documents on those parties. As to questions of fact material to our opinions, we have relied upon
the representations and warranties made in the Loan Documents and upon certificates of officers or
other representatives of the Company and of public officials (“Certificates”). We have not
independently or through third parties verified such representations and warranties or
Certificates, or made any independent investigation as to the existence of agreements, instruments
or other documents, orders, judgments or decrees by which the Company or any of its properties or
assets may be bound.

     In basing the opinions and other matters set forth herein on phrases such as “best of our
knowledge,” “our knowledge,” or “known to us,” such phrases signify that, in the course of our
representation of the Company in matters with respect to which we have been engaged by the Company
to give substantive attention as counsel, no information has come to our attention that would give
us actual knowledge that any such opinion or other matters are not accurate or that any of the
foregoing Certificates and other matters on which we have relied are not accurate and complete.
Except as otherwise stated herein, we have undertaken no independent investigation or verification
of such matters. The phrases “best of our knowledge,” “our knowledge,” “known

54

 

to us” and similar language used herein are intended to be limited to the knowledge of the lawyers
currently employed by our firm who have performed substantive legal services related to the Loan
Documents and have specific knowledge of the substance of this opinion.

     Based on our review of the foregoing, and subject to the assumptions, qualifications and
limitations set forth herein, it is our opinion that:

     1. The Company is a limited liability company duly organized, validly existing, and in good
standing under the laws of the State of Michigan.

     2. The Company has the power to enter into and perform its obligations under the Loan
Documents.

     3. The Company has taken all necessary company action to authorize the execution, delivery,
and performance by the Company of the Loan Documents, and the consummation by the Company of the
transactions set forth in the Loan Documents.

     4. The Loan Documents have been duly and validly executed and delivered by the Company and
constitute legal, valid, binding, and enforceable obligations of the Company.

     5. The execution and delivery by the Company of the Loan Documents do not, and the
consummation by the Company of the transactions contemplated by the Loan Documents and the
compliance by the Company with the provisions of the Loan Documents do not, (a) conflict with or
result in a breach of any provision of the Company’s Articles of Organization, or Operating
Agreement, (b) to our knowledge, conflict with or result in a material violation of any applicable
state or federal law or regulation, (c) to our knowledge, conflict with any order, judgment, or
decree to which the Company are a party or subject or by which any of its properties or assets are
bound, or (d) to our knowledge, conflict with any Material Contract to which the Company is a party
or by which the Company or any of its properties or assets are bound.

     6. To our knowledge, except as expressly disclosed in the Loan Documents, there are no
actions, suits or proceedings pending or threatened in writing against or affecting the Company
before any court or arbitrator or by or before any administrative agency or government authority,
which, if adversely determined, would constitute an material adverse effect on the Company. We do,
however, call your attention to the recently completed private placement of the Company’s sole
member US BioEnergy Corporation pursuant to private placement memorandum dated May 31, 2005, and
the release of the Company’s equity funds (through contributions by US BioEnergy Corporation) for
use in the transactions contemplated by the Loan Documents. We make no opinions herein with
respect to the outcome or impact of those matters.

     The foregoing opinions are subject to the following qualifications (in addition to the
qualifications, exceptions, limitations and assumptions specified above):

55

 

     A. Our opinions as they relate to the legality, validity, binding effect and/or enforceability
of the Loan Documents are subject to the limitations that might result from bankruptcy, insolvency,
reorganization, arrangement, moratorium, fraudulent or preferential transfer, fraudulent
conveyance, and other state and federal laws relating to or affecting the rights or remedies of
creditors generally, now or hereafter, in effect.

     B. Our opinions as they relate to the legality, validity, binding effect and/or enforceability
of the Loan Documents are subject to the qualification that the availability of the remedies of
specific performance or injunctive relief, or any other equitable remedy, is subject to the
discretion of the court before which a proceeding therefor may be brought, equitable defenses and
the application of general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law), including without limitation, concepts of
materiality, reasonableness, good faith, fair dealing and other similar doctrines affecting the
enforcement of agreements generally.

     C. Except as expressly stated herein, no opinion is expressed or implied as to the truth,
accuracy or completeness of any of the representations, warranties or other statements of the
Company or any other person contained in any of the Loan Documents or in any exhibit, schedule or
attachment thereto.

     D. We express or imply no opinion as to what actions the parties to the Loan Documents are
required to or may take or fail to take on or after the date hereof which, if taken or not taken,
would affect or impair the legality, validity, binding effect and/or enforceability of the Loan
Documents or the rights and remedies of the parties thereunder.

     E. With respect to the legality, validity, binding effect and enforceability of the remedies
available to the Lender under the Uniform Commercial Code in force in the State of Minnesota
(“UCC”), we have assumed that the Lender will enforce such remedies in accordance with the UCC and
under such circumstances and in a manner in which it is commercially reasonable to do so. In
addition, because a claimant bears the burden of proof required to support its claim, our opinion
assumes that you will undertake the effort and expense necessary to present your claims in the
prosecution of any remedy accorded you under the Loan Documents.

     F. We express or imply no opinion as to the creation, attachment, perfection or priority of
any security interest, mortgage or other lien which the Lender may claim in any real or personal
property of the Company under any of the Loan Documents or otherwise.

     G. Our opinions as they relate to the legality, validity, binding effect and/or enforceability
of the Loan Documents are subject to the limitations arising from state and federal court decisions
involving statutes, public policy and/or principles of equity holding that (i) purported waivers of
notice, remedies (or the delay in, omission of, or enforcement thereof) or the benefits of
statutory provisions or constitutional or common law rights and broadly or vaguely stated
provisions waiving rights or waivers of unknown future rights or duties imposed by law are or may
be void or unenforceable, (ii) under certain circumstances, provisions declaring that the failure
to exercise or delay in exercising rights or remedies will not operate as

56

 

a waiver of any such right or remedy are invalid, (iii) provisions declaring that the documents may
only be amended or waived in writing may be unenforceable to the extent that an oral agreement or
an implied agreement by trade practice or course of conduct has been created modifying one or more
provisions of the Loan Documents, (iv) the enforcement of public policy is of a paramount public
interest which may prohibit enforcement of certain contractual provisions; (v) the indemnification
and exculpation provisions of the Loan Documents may be unenforceable to the extent that the
enforcement of such provisions is determined to be against public policy; and (vi) certain other
provisions in the Loan Documents, including, without limitation, self-help provisions, provisions
that purport to establish evidentiary standards, provisions requiring the payment of a late payment
or repayment charge, fee, reinvestment charge, premium or penalty, however denominated, are or may
be unenforceable in whole or in part.

     H. Since it is necessary for the Lender to elect its proper remedy in certain instances, no
opinion is expressed or implied that any cumulative remedy provision contained in any of the Loan
Documents is valid or enforceable.

     I. No opinion is expressed or implied as to the legality, validity, binding effect or
enforceability of (i) any power of attorney granted to the Lender in any of the Loan Documents, or
(ii) any document, certificate, agreement or instrument executed or delivered by the Lender
pursuant thereto.

     J. Minnesota Statutes, Section 290.371, subd. 4, provides that any corporation required to
file a Notice of Business Activities Report does not have a cause of action upon which it may bring
suit under Minnesota law unless the corporation has filed a Notice of Business Activities Report
and that the use of the courts of the State of Minnesota for all contracts executed and all causes
of action that arose before the end of any period for which a corporation failed to file a required
report is precluded. We note, however, that a court may excuse the failure to file such a report
under certain circumstances described in the statute. Insofar as the foregoing opinion may relate
to the legality, validity, binding effect and/or enforceability of any agreement under Minnesota
law or in a Minnesota court, we have assumed that any party seeking to enforce the agreement has at
all times been, and will continue at all times to be, exempt from the requirement of filing a
Notice of Business Activities Report or, if not exempt, has duly filed, and will continue to duly
file, all Notice of Business Activities Reports.

     K. In giving this opinion, we advise you that a Minnesota court may not strictly enforce
certain covenants contained in the Loan Documents or allow acceleration of the maturity of the
indebtedness evidenced by the Notes if it concludes that such enforcement or acceleration would be
unreasonable under the then existing circumstances. We do believe, however, that subject to the
limitations expressed elsewhere in this opinion, enforcement or acceleration would be available if
an Event of Default occurs as a result of a material breach of a material covenant contained in the
Loan Documents.

     L. Certain rights, remedies, waivers and indemnities contained in the Loan Documents, in
addition to those specifically enumerated above, may be limited or rendered

57

 

ineffective by applicable Minnesota laws or judicial decisions governing such provisions, but such
laws and judicial decisions do not render the Loan Documents invalid as a whole, and there exist,
in the Loan Documents or pursuant to applicable law, legally adequate remedies for a realization of
the principal benefits intended to be provided by the Loan Documents.

     In addition to the qualifications set forth above, the opinions set forth herein are also
subject to the following qualifications:

     M. We are members of the Bar of the State of Minnesota. The opinions expressed herein are
limited to matters of Minnesota and federal law. We express no opinion with respect to (i) the
laws of any other jurisdiction nor any state or federal law or regulation governing AgStar
Financial Services, PCA or (ii) the impact of such laws on the Loan Documents or the transactions
contemplated thereby. For purposes of this opinion we have assumed that the internal laws (as
opposed to the choice of law rules) of the State of Minnesota and applicable federal law would
apply and have rendered our opinion on that basis. To the extent that the law of another
jurisdiction applies, we have assumed that the law of that jurisdiction would be the same as
Minnesota law. We render no opinion as to the enforceability of any choice of law provision.

     N. We express no opinion with respect to title to any property, nor do we express any opinion
with respect to the existence of encumbrances upon any property or the attachment, validity,
perfection or priority of any liens or security interests.

     O. Except as explicitly addressed in the numbered opinions above, no opinion is expressed
herein as to any of the topics listed under Section 19 “Specific Legal Issues” of the Third-Party
Legal Opinion Report, published in 1991 by the Section of Business Law of the American Bar
Association.

     This opinion is limited to the specific legal issues addressed herein and no opinion is
implied or may be inferred beyond the matters expressly set forth herein. Our opinion is rendered
to you solely for your benefit in connection with consummation of the transactions set forth in the
Loan Documents and may not be quoted in whole or in part, filed publicly or delivered to, or relied
upon by any other person without our prior written consent. Our opinion is based upon the state of
facts and the law existing and in effect on the date hereof, and we assume no obligation to revise,
supplement or update this opinion in any respect at any time subsequent to the date hereof in order
to account for any change in the law (whether or not hereinafter enacted or adopted) or future
facts, events or circumstances affecting any of the transactions contemplated by any of the Loan
Documents.

	 	 	 	 	 
	 	Very truly yours,

LINDQUIST & VENNUM p.l.l.p.

 	 

58

 

Schedule 3.01(d)

Real Property

Land in the Township of Woodland, County of Barry, State of Michigan described as follows:

PARCEL 1: the Southeast 1/4 of the Northeast 1/4 of Section 1, Town 4 North, Range 7 West, EXCEPT the
right-of-way of Pere Marquette Railroad, ALSO EXCEPT commencing at East 1/4 post of the Southeast 1/4
of the Northeast 1/4 of said Section 1, thence North 570 feet, thence West 175 feet, thence South to
the section 1/4 line, thence East on said 1/4 line to the point of beginning. ALSO EXCEPT beginning at
a point on the East line of Section 1, Town 4 North, Range 7 West, distant North 02 degrees, 30
minutes 45 seconds East 570.00 feet from the East 1/4 post of said section 1, thence North 87 degrees
00 minutes 28 seconds West, 334.29 feet parallel with the East and West 1/4 line of said Section 1,
thence North 02 degrees 30 minutes 45 seconds East, 220.00 feet, thence South 87 degrees 00 minutes
28 seconds East, 334.29 feet to said East section line, thence South 02 degrees 30 minutes 45
seconds West, 220.00 feet along said East line to the place of beginning.

PARCEL 2: A parcel of land in the North 1/2 of Section 1, Town 4 North, Range 7 West, Woodland
Township, Barry County, Michigan, described as: Beginning at a point on the North line of the CSX
Railroad right of way distant West, 75 feet from its intersection with the North and South 1/4 line
of said Section 1; thence East along said North line, 1400 feet more or less to the East line of
the Southwest 1/4 of the Northeast fractional 1/4 of said Section 1; thence Northerly, 735 feet along
said East Line; thence West parallel with said North right of way line, 284 feet; thence South at
right angles with said right of way line, 324 feet; thence West, 409 feet; thence South, 254 feet;
thence West, 369 feet; thence Southwesterly, 390 feet more or less to the point of beginning.

59

 

Schedule 4.01(a)

Description of Certain Transactions Related to the Borrowers’ Stock

There are no outstanding subscriptions, options, warrants, calls, or rights (including preemptive
rights) to acquire, and no outstanding securities or instruments convertible into, membership
interests (units) of Superior Corn Products, LLC.

Borrower does set forth the following transactions with respect to capital stock of US BioEnergy
Corporation, the sole member of Borrower:

US BioEnergy Corporation has adopted the US BioEnergy Corporation 2005 Stock Incentive Plan (the
“Plan”). There are 10,000,000 shares of the Company’s Class A common stock reserved for issuance
in respect of awards under the Plan. As of November 15, 2005, there were issued and outstanding
options to purchase an aggregate of 455,000 shares of the Company’s Class A common stock under the
Plan as follows:

	 	 	 	 	 	 	 
	 	 	 	 	Number of Shares of Class A
	Name of Optionee	 	Grant Date of Option	 	Common Stock Underlying Option
	Chad D. Hatch

	 	1/28/2005
	 	 	30,000	 
	O. Wayne Mitchell

	 	1/28/2005
	 	 	30,000	 
	Steven P. Myers

	 	1/28/2005
	 	 	30,000	 
	Roland “Ron” J. Fagen

	 	1/28/2005
	 	 	30,000	 
	Jennifer A. Johnson

	 	1/28/2005
	 	 	30,000	 
	Gordon W. Ommen

	 	1/28/2005
	 	 	30,000	 
	Brian Thome

	 	1/28/2005
	 	 	30,000	 
	Jill L. Wilts

	 	1/28/2005
	 	 	30,000	 
	Jeff Roskam

	 	5/10/2005
	 	 	50,000	 
	Mike Malecha

	 	5/10/2005
	 	 	25,000	 
	Randy Ives

	 	5/10/2005
	 	 	25,000	 
	Jerry Byrnes

	 	5/10/2005
	 	 	25,000	 
	David Dykstra

	 	5/10/2005
	 	 	20,000	 
	Greg Krissek

	 	5/10/2005
	 	 	20,000	 
	Ron Hansen

	 	5/10/2005
	 	 	10,000	 
	Anita Mead

	 	5/10/2005
	 	 	10,000	 
	Kristi Lee

	 	9/26/2005
	 	 	15,000	 
	Virg Garbers

	 	10/11/2005
	 	 	15,000	 
	 

	 	 	 	 	 	 
	Total:

	 	 	 	 	455,000	 
	 

	 	 	 	 	 	 

On October 11, 2005, US BioEnergy Corporation entered into a letter of intent with CHS Inc.
pursuant to which US BioEnergy Corporation may sell between 35 million to 40 million shares of its
Class A common stock to CHS Inc. The letter of intent is not a binding commitment and the
transactions contemplated by the letter of intent are subject in all respects to definitive
agreements.

If US BioEnergy Corporation and CHS Inc. complete the transactions contemplated by the letter of
intent, it is expected that the Administrative Services Agreement currently in place between US
BioEnergy Corporation and US Bio Resource Group, LLC (a holding company owned 50%

60

 

by Capitaline Advisors, LLC, an affiliate of Gordon W. Ommen, and 50% by Global Ethanol, Inc., an
affiliate of Ron Fagen) will be terminated. As part of this termination, US BioEnergy Corporation
would grant options to Gordon Ommen and Ron Fagen to purchase 3,250,000 shares of Class A common
stock each (for a total of 6,500,000 shares covered by the options).

Other than as stated above, there are no outstanding subscriptions, options, warrants, calls, or
rights (including preemptive rights) to acquire, and no outstanding securities or instruments
convertible into, capital stock of US BioEnergy Corporation.

61

 

Schedule 4.01(f)

Description of Certain Threatened Actions, etc.

NONE.

62

 

Schedule 4.01(k)

Location of Inventory and Farm Products; Third Parties in Possession; Crops

7613 Saddlebag Lake Rd

Lake Odessa, MI 48849-9319

63

 

Schedule 4.01(l)

Office Locations; Fictitious Names; Etc.

	 	 	 
	Chief Place of Business

	 	7613 Saddlebag Lake Rd

Lake Odessa, MI 48849-9319
	 
	 	 
	Chief Executive Office

	 	111 Main Avenue, Suite 200

Brookings, SD 57006
	 
	 	 
	Jurisdiction of Organization

	 	Michigan
	 
	 	 
	Location of Books and Records/

	 	7613 Saddlebag Lake Rd
	Place of Business

	 	Lake Odessa, MI 48849-9319
	 
	 	 
	 

	 	111 Main Avenue, Suite 200

Brookings, SD 57006
	 
	Trade Names

	 	Superior Corn, US Bio Superior

Corn
	Predecessor Companies

	 	None
	Federal Income Tax I.D. Number
	 	 
	 
	 	 
	State Organizational Identification Number
	 	 

64

 

Schedule 4.01(p)

Intellectual Property

NONE.

65

 

Schedule 4.01(t)

Environmental Compliance

NONE, except for (1) nominal amounts of Hazardous Substances used in the ordinary course of
business as permissible under the Environmental Indemnity Agreement of even date herewith between
Borrower and Lender and (2) the environmental conditions (if any) set forth in the Environmental
Report referenced in such agreement.

66

 

Schedule 5.01(o)

Management

Management will be maintained in accordance with the Operating Agreement of the Borrower, which
includes the following:

Board of Managers

Gordon W. Ommen

Steven P. Myers

Brian Thome

Jeff Roskam

Officers

	 	 	 
	Name	 	Title
	Gordon W. Ommen

	 	President and Chief Executive Officer
	Michael Malecha

	 	Senior Vice President
	Steven P. Myers

	 	Vice President
	Chad D. Hatch

	 	Vice President and Treasurer
	Brian Thome

	 	Vice President
	John Van Meeter

	 	Assistant Vice President
	Jill Wilts

	 	Secretary

In the event US BioEnergy Corporation completes the transaction described in Schedule 4.01(a) with
CHS Inc., a CHS appointee will be added to the Board of Managers of Borrower.

67

 

Schedule 5.02(a)

Description of Certain Liens, Lease Obligations, etc.

NONE.

68

 

Schedule 5.02(k)

Transactions with Affiliates

All of the membership interest in Superior Corn Products is owned by US BioEnergy Corporation (the
“Parent”). Certain services relating to procurement of inputs, marketing and sale of ethanol and
DDGs, risk management and plant operation are, or will be, performed by the Parent’s wholly-owned
subsidiary, United Bio Energy, LLC. The Company has also entered into a Design-Build Agreement
with Fagen, Inc., an affiliate of the Parent. Roland J. Fagen, a director of the Parent, is the
principal of Fagen, Inc. and other directors of the Parent are employees or officers of Fagen, Inc.
The Company has also entered into an agreement relating to environmental consulting services with
ICM, Inc., of which David Vander Griend, a director of Parent, is the principal. In addition,
members of the Company’s Board of Managers are also officers of or members of the Board of
Directors of the Parent. In addition, affiliates of the Parent may provide management or
administrative services to Borrower.

In connection with the Parent’s acquisition of the Company pursuant to that certain Transaction
Agreement dated as of March 31, 2005 between US BioEnergy Corporation and Superior Corn Products,
LLC, Timothy A. Brodbeck, Kevin L. Brodbeck, Michael J. Windemuller, James E. Zook agreed to
jointly and severally indemnify the Parent and Superior Corn, LLC against all losses and
liabilities asserted against either party, which either individually or in the aggregate exceeds
$50,000. In connection with this indemnification obligation, each of Messrs. Brodbeck, Brodbeck,
Windemuller and Zook pledged to the Parent the shares of its Class A common stock they received in
the merger.

[Below is descriptions of affiliate transactions from the PPM – these are transactions with the
issuer (US Bio Energy Corporation) and do not necessarily impact Superior Corn Products, LLC]

RECENT DEVELOPMENTS

     This Amended and Restated Confidential Private Placement Memorandum amends and restates in its
entirety our Confidential Private Placement Memorandum dated January 31, 2005 (the “Memorandum”)
relating to the offering for sale of up to 100,000,000 shares of our Class A common stock to
accredited investors. The following explains recent developments in our business and our capital
structure that occurred after the distribution of the Memorandum that are now reflected in this
Amended and Restated Confidential Private Placement Memorandum.

Extension of Offering until September 30, 2005

          On April 18, 2005, our Board of Directors extended the duration of this offering. As
extended by our Board on April 18, 2005, we intend to terminate the offering on June 30, 2005, but
we may extend the offering one or more times in our discretion to no later than September 30, 2005
to raise up to the maximum amount offered.

Issuances of Class A Common Stock; Conversion of Class B Common Stock

69

 

     As a result of the Acquisition Transactions described below, we issued 1,500,000 shares
of our Class A common stock on April 30, 2005 and 5,000,000 shares of our Class A common stock on
May 5, 2005. On May 17, 2005, we closed on the options to purchase the land for our proposed
ethanol plant in Lake Odessa, Michigan and as payment for the land, we issued 294,000 shares of our
Class A common stock to the land holders.

     Additionally, on April 18, 2005 and on April 28, 2005, US Bio Resource Group made payments of
$500,000 and $750,000, respectively, under its December 2004 subscription agreement for which we
issued it an additional 1,515,150 shares and 2,272,727 shares of our Class B common stock,
respectively. Immediately following these issuances, US Bio Resource Group had been issued an
aggregate of 14,537,877 shares of our Class B common stock and, upon our receipt of an additional
$3,500,000 in subscription payments from US Bio Resource Group pursuant to its December 2004
subscription agreement, would be issued an additional 10,462,123 shares of Class B common stock.
On May 25, 2005, US Bio Resource Group elected to convert all shares of our Class B common stock
into shares of our Class A common stock. As provided in our articles of incorporation, each share
of Class B common stock is convertible into one share of Class A common stock. Upon its
conversion, US Bio Resource Group was issued 14,537,877 shares of our Class A common stock and,
through its December 2004 subscription agreement, US Bio Resource Group will be issued an
additional 10,462,123 shares of Class A common stock upon our receipt of an additional $3,500,000.

     Our articles of incorporation further provide that shares of our Class B common stock that are
converted may not be reissued. Therefore, following the conversion of Class B common stock into
Class A common stock, we had no shares of Class B common stock issued or outstanding and none are
available for issuance.

Merger Transaction with Superior Corn Products

     On March 31, 2005, we entered into a Transaction Agreement with Superior Corn Products,
LLC (“Superior Corn”) pursuant to which we would acquire Superior Corn by merger. Superior Corn
was a development-stage company organized to develop, own and operate a 45 million gallon per year
dry grind ethanol plant near Lake Odessa, Michigan. The merger was structured as a reverse
triangular merger of Superior Corn into a subsidiary we created for the purpose of this
acquisition, with Superior Corn as the surviving company in the merger. The effect of the reverse
triangular merger is that following the merger Superior Corn is our wholly-owned subsidiary.

     On April 30, 2005, we closed the merger transactions with Superior Corn and in connection with
the closing, we issued 1,500,000 shares of our Class A common stock to the 21 members of Superior
Corn in exchange for all 600 outstanding Superior Corn membership units. As a result, Superior
Corn became our wholly-owned subsidiary and we acquired all of the rights, privileges, properties
and assets of Superior Corn and became responsible for all of the liabilities and obligations of
Superior Corn. In connection with the merger, we adopted an amended and restated operating
agreement of Superior Corn as its sole member. This operating agreement is similar to the one we
have in place with our US Bio Albert City subsidiary.

70

 

     In connection with the transaction agreement relating to the merger, we and Superior Corn each
made certain customary representations and warranties to each other regarding our respective
businesses, capital structures, assets and liabilities. These representations and warranties will
survive the closing date for a period of one year. If there is a claim by a third party that
arises out of a material breach of Superior Corn’s representations or warranties, the members of
Superior Corn’s board of directors are obligated to jointly and severally indemnify us and Superior
Corn against all losses and liabilities asserted against either party, which either individually or
in the aggregate exceeds $50,000. In connection with this indemnification obligation by the
Superior Corn board, each Superior Corn board member pledged to us the shares of our Class A common
stock they received in the merger. Except in cases of fraud or intentional misconduct, our sole
remedy against the members of Superior Corn’s Board is to foreclose on this pledge.

Acquisition Transaction with United Bio Energy, LLC

     Effective May 5, 2005, we closed two transactions resulting in our acquisition of United
Bio Energy, LLC (“UBE”). The acquisition transactions were between us, UBE and UBE’s two members,
ICM Marketing, Inc. (“ICMM”) and Fagen Management, LLC (“Fagen Management”). ICMM and Fagen
Management held 60% and 40%, respectively, of the outstanding voting power of UBE. The primary
business of each of ICMM and Fagen Management was their ownership of UBE. UBE provides
professional and operational services to ethanol plants through its five subsidiaries and currently
provides services to approximately thirteen existing ethanol plants.

     The first of the two transactions resulting in the acquisition of UBE was a merger between us
and ICMM in which we were the surviving company. In connection with the merger, we issued to
ICMM’s three shareholders an aggregate of 3,000,000 shares of our Class A common stock in exchange
for all 800 shares of ICMM common stock outstanding. The three shareholders of ICMM were Dave
Vander Griend, Jeff Roskam and Randy Ives who received 1,650,000, 1,050,000 and 300,000 shares of
our Class A common stock in the merger, respectively, representing their proportionate ownership
interest in ICMM. As a result of the merger with ICMM, we acquired all of the rights, privileges,
properties and assets of ICMM and became responsible for all of the liabilities and obligations of
ICMM.

     The second transaction resulting in the acquisition of UBE was a purchase by us of all of the
membership interest in UBE held by Fagen Management in exchange for 2,000,000 shares of our Class A
common stock. The sole member of Fagen Management is Ron Fagen, our director.

     In connection with the transaction agreement and member assignment agreement relating to the
acquisition of UBE, the parties each made certain customary representations and warranties to each
other regarding their respective businesses, capital structures, assets and liabilities. In the
transaction agreement the parties also provided for indemnification by Ron Fagen, Dave Vander
Griend, Jeff Roskam and Randy Ives of certain liabilities of UBE and/or ICMM. The agreements
regarding the indemnification for these certain liabilities will survive the closing indefinitely.
The other representations and warranties will survive the closing date for a period of one year.
If there is a claim by a third party that arises out of a material breach of the representations or
warranties of UBE or ICMM, the owners of the respective entity are

71

 

obligated to indemnify us against all losses and liabilities asserted against us, which either
individually or in the aggregate exceeds $50,000. The indemnification obligation is pro-rata among
the owners of UBE and ICMM based upon their respective ownership of such entity. Further, the
indemnification obligation is capped at an amount equal to the value received by each owner
(directly or indirectly) in the UBE acquisition transactions. To secure the obligations of the
indemnification, each owner has pledged to us the shares of Class A common stock each received in
the UBE acquisition transactions.

     The effect of our merger with ICMM and our acquisition of UBE membership units from Fagen
Management is that we became the sole member of UBE. In connection with the acquisition
transaction with UBE, we adopted an amended and restated operating agreement of UBE as its sole
member. This operating agreement is similar to the one we have in place with our US Bio Albert
City subsidiary.

     The rights and obligations of UBE and its subsidiaries to third parties did not change as a
result of our acquisition of UBE. One of the liabilities of UBE Fuels and UBE Ingredients is a
revolving loan of up to $15,000,000 from LaSalle Business Credit, LLC (“LaSalle”). As of May 5,
2005, there was approximately $5,850,025 outstanding under the LaSalle loan. Amounts under the
loan are secured by the assets of UBE and each of its subsidiaries and guaranteed by each of the
UBE subsidiaries. ICM, Inc. and Fagen, Inc. also provided LaSalle a joint limited guaranty for up
to $4,000,000 of the loan obligations. ICM, Inc. is controlled by David Vander Griend, our
director, and Fagen, Inc. is controlled by Ron Fagen, our director. In connection with the
acquisition of UBE, we entered into a contribution and repayment agreement with LaSalle that
provides that if UBE makes distributions or dividend payments to us that exceed the amount
necessary to cover the tax liability we may incur as a result of our ownership of UBE, we must pay
to LaSalle such excess amount. LaSalle has similar agreements in place with UBE and each of its
subsidiaries limiting the distributions and dividends that may be received by them to the amount of
their respective tax liabilities.

     On April 28, 2005, our Board of Directors granted ten-year options to purchase 185,000 shares
of our Class A common stock under our 2005 Stock Incentive Plan to management of UBE as incentives
for future performance. All options to UBE management have an exercise price of $1.00 and vest
with respect to 20% of the underlying shares on the first anniversary of the date of grant and each
of the next four anniversaries of the date of grant.

     Effective May 5, 2005, we appointed Jeff Roskam as the President of UBE, a position which he
held prior to our acquisition of UBE. Also effective May 5, 2005, we appointed David Vander Griend
to our Board of Directors, entered into a three-year consulting arrangement with him and granted
him an option to purchase our Class A common stock. Further, with the addition of David Vander
Griend to our Board, Jill Wilts resigned as a member of our Board of Directors. See “Management –
Employment and Consulting Arrangements” for a description of our agreements with Jeff and Dave.

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

72

 

     Since our inception, we have engaged in the transactions described below with our directors,
officers and shareholders owning more than 5% of our voting securities. Although we believe that
these transactions were in our best interests, we cannot assure you that these transactions were
entered into on terms as favorable to us as those that could have been obtained in arms-length
transactions.

     In addition, conflicts of interest exist and may arise in the future because of the
relationships between and among our officers, directors, affiliates and us, and the fact that we
may, from time to time, enter into transactions with our officers, directors and affiliates. These
conflicts of interest are described below. Conflicts of interest could cause our officers and
directors to put their own personal interests ahead of ours. We may not be able to resolve
conflicts of interests, or if resolved, the resolution may be less favorable than if it involved
unaffiliated parties.

     Transactions with related parties and conflicts of interest may adversely affect our business
and the value of your investment.

Our Related Parties

     Our shareholder, US Bio Resource Group, LLC, has two equal members, Capitaline Advisors,
LLC and Global Ethanol, Inc. Gordon Ommen is the sole owner of Capitaline Advisors, LLC. Ron and
Diane Fagen own 91.24% of the voting power of Global Ethanol, Inc., with the remaining voting
power controlled by approximately 8 other shareholders, some of whom are our directors and
executive officers. Ron Fagen is also the sole owner of Fagen, Inc. and Fagen Management, LLC.
David Vander Griend, our director, is the principal owner of ICM, Inc.

Private Placement Issuances of Our Common Stock to Related Parties

     In November 2004, US Bio Resource Group subscribed for 10,000,000 shares of our common
stock at a price of $0.10 per share. On November 2, 2004, November 23, 2004 and December 28, 2004,
US Bio Resource Group made payments on this December 2004 subscription agreement totaling
$1,000,000 and, in consideration for these payments, we issued to US Bio Resource Group an
aggregate of 10,000,000 shares. The proceeds from this private placement were used to capitalize
our company and to pay the expenses associated with its formation, organization and initial
development of the Albert City ethanol plant.

     In December 2004, US Bio Resource Group subscribed for an additional 15,000,000 shares of our
common stock at a per share price of
$0.331/3 per share. In connection with the amendment and
restatement of our Articles of Incorporation in January 2005, each share of common stock sold to US
Bio Resource Group in the November and December 2004 subscriptions was automatically reclassified
as one share of Class B common stock for a total of 25,000,000 shares of our Class B common stock
issuable to US Bio Resource Group.

     On December 28, 2004, April 18, 2005 and April 28, 2005, US Bio Resource Group made payments
on this December 2004 subscription agreement totaling $1,500,000 and, in consideration for these
payments, we issued to US Bio Resource Group an aggregate of 4,537,877 shares of our Class B common
stock. Thus, immediately following the last

73

 

subscription payment on April 28, 2005, we had received $2,500,000 in aggregate subscription
proceeds from US Bio Resource Group and had issued to US Bio Resource Group an aggregate of
14,537,877 shares of our Class B common stock therefor.

     On May 25, 2005, US Bio Resource Group elected to convert all shares of our Class B common
stock into shares of our Class A common stock. As provided in our articles of incorporation, each
share of Class B common stock is convertible into one share of Class A common stock. Upon its
conversion, US Bio Resource Group was issued 14,537,877 shares of our Class A common stock and,
through its December 2004 subscription agreement, US Bio Resource Group will be issued an
additional 10,462,123 shares of Class A common stock upon our receipt of an additional $3,500,000.

Administration of Our 2005 Stock Incentive Plan and Issuances of Options

     In January 2005, we issued each of our seven directors and our Chief Financial Officer,
Chad D. Hatch, a seven-year option to purchase 30,000 shares of Class A common stock at an exercise
price of $1.00 per share in recognition of their services since our inception. Each option vests
and becomes exercisable as to 10,000 shares of Class A common stock on each of the first three
anniversaries of the date of grant. On April 28, 2005, our Board of Directors granted ten-year
options to purchase an aggregate of 185,000 shares of our Class A common stock under our 2005 Stock
Incentive Plan to management of UBE as incentives for future performance. All options to UBE
management have an exercise price of $1.00 and vest with respect to 20% of the underlying shares on
the first anniversary of the date of grant and each of the next four anniversaries of the date of
grant. These options were issued under our 2005 Stock Incentive Plan.

     Pursuant to the terms of the administrative services agreement between us and US Bio Resource
Group, our board has delegated the discretion to determine the persons eligible to receive an
award, the type of award and the number of shares underlying the award and the other terms and
conditions of such awards consistent with the 2005 Stock Incentive Plan, to US Bio Resource Group.
This delegation of authority is with respect to 5,000,000 shares of Class A common stock to be
granted as options or other awards. Our board of directors continues to maintain authority over
the 5,000,000 shares of Class A common stock currently authorized for awards under the 2005 Stock
Incentive Plan and over which US Bio Resource Group has not been delegated any authority. US Bio
Resource Group may issue awards under the 2005 Stock Incentive Plan to persons who render services
to us or on our behalf, who may be employees of Capitaline Advisors, Global Ethanol or Fagen. No
award or option may be granted pursuant to this delegation of authority in consideration for or
arising out of any services related to our capital raising activities to persons who are not our
employees without our prior approval. Of the total number of shares over which US Bio Resource
Group has discretionary authority, up to 4,000,000 shares may be issued as options and the
remainder as other awards under the 2005 Stock Incentive Plan. The costs of such awards are in
addition to the other costs for such administrative services provided by US Bio Resource Group.

     The delegation of authority will automatically terminate and US Bio Resource Group may not
grant any awards pursuant to its delegation of authority from and after the earlier of an initial
public offering of our stock, a change in control of us (as defined in the 2005 Stock Incentive
Plan) or the termination of the administrative services agreement.

74

 

Transactions with Affiliates in Connection with the Acquisition Transactions

     In connection with the Acquisition Transactions, we issued shares of our Class A common
stock to Fagen Management, LLC, which is controlled by Ron Fagen, one of our directors and a
shareholder owning more than 5% of our voting securities. We also entered into a consulting
agreement with David Vander Griend and in connection with that consulting arrangement, granted Dave
an option to purchase 100,000 shares of our Class A common stock. Dave is also the president and
chief executive officer of ICM, Inc. Dave is a former shareholder of ICMM and in connection with
the acquisition of UBE, was appointed as one of our directors. We also entered into a letter
agreement with Jeff Roskam, a former shareholder of ICMM, in connection with his appointment as the
President of UBE relating to severance and change of control arrangements. See
“Management-Employment and Consulting Arrangements” for a description of our agreements with Jeff
and Dave.

     Moreover, as a result of the Acquisition Transactions, we acquired the businesses of Superior
Corn and UBE, each of which had pre-existing relationships with our directors, officers and
shareholders owning more than 5% of our voting securities. These pre-existing relationships will
continue after the Acquisition Transactions and include:

	•	 	the limited guaranty by Fagen, Inc. and ICM, Inc. of debt of
UBE Fuels and UBE Ingredients to LaSalle for a revolving loan
of up to $15,000,000;
	 
	•	 	an agreement between Superior Corn and Fagen, Inc. for the
construction of an ethanol plant near Lake Odessa, Michigan;
and
	 
	•	 	UBE’s clients are ethanol plants, some of which are owned at
least in part by or receive services from our directors,
officers or shareholders owning 5% or more of our voting
securities.

     You should review the description of the Acquisition Transactions in this memorandum to
further understand these relationships. Although we believe that these transactions were in our
best interests, we cannot assure you that these transactions were entered into on terms as
favorable to us as those that could have been obtained in arms-length transactions.

Transactions with US Bio Resource Group and Affiliates

     Transactions with US Bio Resource Group, LLC

     We have entered into an administrative services agreement with US Bio Resource Group, LLC
to provide us management and administrative services relating to the development of our business
and ethanol plants. Under our management services agreement, US Bio Resource Group will assist us
with and advise us on nearly all management and administrative functions of our business, ranging
from accounting matters, billing and collections, business planning, tax matters and maintenance of
business and corporate records to human resource functions. US Bio Resource Group may contract
with Capitaline Advisors, Fagen or its affiliates, or any other third party to provide these
services. With our acquisition of UBE, we expect that we or US Bio Resource Group will utilize UBE
for some of these services. See “Management’s Plan of Operation – UBE Services Business” for more
information regarding the services US Bio Resource Group and UBE will provide to us.

75

 

     Under the administrative services agreement, we will pay US Bio Resource Group an annual
percentage amount of our audited annual earnings before interest, taxes, depreciation and
amortization (before deduction of such annual percentage amount) (“EBITDA”) as soon as practicable
following the end of our fiscal year, but no later than 105 days following the end of each fiscal
year. The following table shows the percentage of EBITDA to be paid to US Bio Resource Group for
the periods noted:

	 	 	 	 	 
	Period	 	EBITDA
	Commencement of agreement through December 31, 2011

	 	 	5	%
	January 1, 2012 through December 31, 2013

	 	 	4	%
	January 1, 2014 through termination of agreement

	 	 	3	%

     We will also pay US Bio Resource Group an annual structure charge in an amount to be
mutually agreed upon each year (payable in equal monthly installments) to compensate US Bio
Resource Group for a portion of its corporate infrastructure expenses. In addition, we will
reimburse US Bio Resource Group for all personnel costs of US Bio Resource Group related to
providing the above services to us, all out-of-pocket expenses and all amounts charged to US Bio
Resource Group by Fagen and Capitaline relating to services provided to us. The agreement also
provides that we will indemnify US Bio Resource Group against claims arising from their services to
us.

     Pursuant to the terms of the administrative services agreement between us and US Bio Resource
Group, our board has delegated the discretion to determine the persons eligible to receive an
award, the type of award and the number of shares underlying the award and the other terms and
conditions of such awards consistent with the 2005 Stock Incentive Plan, to US Bio Resource Group.
See the section entitled “Certain Relationships and Related Party Transactions – Administration of
Our 2005 Stock Incentive Plan and Issuance of Options” for additional information about this
delegation of authority.

     The administrative services agreement has a term ending on December 31, 2016. After this
initial term, the administrative services agreement will automatically be renewed on an annual
basis for successive one year terms, unless earlier terminated upon notice for breach or at such
time as US Bio Resource Group and its affiliates hold less than 5% of the outstanding voting power
of us (as measured on the last day of each fiscal year). Even if the administrative services
agreement is terminated prior to December 31, 2016, we are still obligated to pay US Bio Resource
Group the annual percentage amount based upon EBITDA.

Transactions with Fagen, Inc.

     Master Design-Build Letter Agreement

     We have entered into a master design-build letter agreement with Fagen pursuant to which
Fagen will provide us construction services relating to dry mill fuel grade ethanol plants in the
U.S. Pursuant to this letter agreement, Fagen will design/build ethanol plants, utilizing ICM
technology, for an agreed-upon lump sum base price per 100 mgy gas-fired fuel ethanol plant and
agreed-upon lump sum base price per 50 mgy gas-fired fuel ethanol plant, guaranteed through
December 31, 2007 and subject to a volume discount. Following December 31, 2007,

76

 

Fagen may adjust the lump sum base pricing on design build agreements with us after December
31, 2007 to Fagen’s standard lump sum base price, less the volume discount. We have agreed to use
Fagen as our exclusive developer and design-builder in connection with fuel ethanol plants.

     In connection with the letter agreement, Fagen has the right to provide us with construction
services relating to dry grind fuel grade ethanol plants we wish to have built on terms no less
favorable to us than those we could obtain in arms-length transactions with unrelated third
parties.

     A committee of our board consisting of two directors who are associated with Capitaline
Advisors and one director who is associated with Fagen have the right to review the terms upon
which Fagen proposes to provide us services to determine that they are no less favorable than the
terms we might obtain from unrelated third parties. Our board will review the membership of the
committee from time to time to determine compliance with then-applicable laws relating to approval
of transactions between Fagen and us. As used in the letter agreement, the term “Board” means our
board of directors or, if the board has delegated its authority to the committee described above,
the committee.

     In connection with a transaction, if the Board determines that a proposal for services by a
party other than Fagen would, if consummated in accordance with its terms, result in the services
being provided to us on terms more favorable to us than Fagen’s proposal, we will provide Fagen
notice of this superior proposal and provide it an opportunity to match these terms. If Fagen does
not agree to provide us services on the terms contained in the superior proposal, we may proceed to
engage the party submitting the superior proposal. From time to time, the Board may also conduct a
fee review for services to be provided by Fagen and, based upon that review, it may adjust the
prices for Fagen’s services to us to the average of the fees charged on the comparable or similar
transactions included in the review.

     If we proceed with a party other than Fagen for the engineering or design-build services for
any project, we must reimburse Fagen for its expenses incurred in connection with the project based
upon its standard rate plus all third party costs incurred with respect to the project.

     The letter agreement with Fagen terminate at the close of the first fiscal year following the
letter agreement in which US Bio Resource Group, together with its affiliates, owns or controls
less than 15% of the outstanding voting power of us.

     The parties will enter into definitive design-build agreements acceptable to the parties with
respect to each facility or project to be developed or constructed.

     Administrative Services Agreement

     Pursuant to the terms of the administrative services agreement between us and US Bio
Resource Group, our board has delegated the discretion to determine the persons eligible to receive
an award, the type of award and the number of shares underlying the award and the other terms and
conditions of such awards consistent with the 2005 Stock Incentive Plan, to US Bio Resource Group.
US Bio Resource Group may make awards under the 2005 Stock Incentive Plan to employees of Global
Ethanol or Fagen. See the section entitled “Certain Relationships

77

 

and Related Party Transactions – Administration of Our 2005 Stock Incentive Plan and Issuance
of Options” for additional information about this delegation of authority.

Transactions with Capitaline Advisors, LLC

     Right to Future Financial Services

     We have entered into a letter agreement with Capitaline Advisors pursuant to which it has
a right to provide us financial advisory services in connection with any purchase, acquisition,
sale or disposition of any person or any properties or assets of any person having an aggregate
transaction value in excess of $5,000,000. For such services, we will pay Capitaline Advisors a
fee of 1% of the transaction value, plus its expenses. We have also agreed to engage Capitaline
Advisors for financial advisory services in connection with our preparation for any public
securities offering by us, with the compensation to Capitaline Advisors for such services to be
determined at the time of the offering and subject to a review of the Board, as described below.
Capitaline Advisors may choose to decline to provide us services for any transaction.

     A committee of our board consisting of two directors who are associated with Fagen and one
director who is associated with Capitaline Advisors have the right to review the terms upon which
Capitaline Advisors proposes to provide us services to determine that they are no less favorable
than the terms we might obtain from unrelated third parties. Our board will review the membership
of the committee from time to time to determine compliance with then-applicable laws relating to
approval of transactions between Capitaline Advisors and us. As used in the letter agreement, the
term “Board” means our board of directors or, if the board has delegated its authority to the
committee described above, the committee.

     In connection with a transaction, if the Board determines that a proposal for services by a
party other than Capitaline Advisors would, if consummated in accordance with its terms, result in
the services being provided to us on terms more favorable to us than Capitaline Advisor’s proposal,
we will provide Capitaline Advisors notice of this superior proposal and provide it an opportunity
to match these terms. If Capitaline Advisors does not agree to provide us services on the terms
contained in the superior proposal, we may proceed to engage the party submitting the superior
proposal.

     From time to time, the Board may also conduct a fee review for services to be provided by
Capitaline and, based upon that review, it may adjust the prices for Capitaline Advisor’s services
to us to the average of the fees charged on the comparable or similar transactions included in the
review.

     The provisions of this letter agreement terminate at the close of the first fiscal year
following the letter agreement in which US Bio Resource Group, together with its affiliates, owns
or controls less than 15% of the outstanding voting power of us.

     Administrative Services Agreement

     Pursuant to the terms of the administrative services agreement between us and US Bio
Resource Group, our board has delegated the discretion to determine the persons eligible to receive
an award, the type of award and the number of shares underlying the award and the other terms and
conditions of such awards consistent with the 2005 Stock Incentive Plan, to US Bio

78

 

Resource Group. US Bio Resource Group may make awards under the 2005 Stock Incentive Plan to
employees of Capitaline Advisors. See the section entitled “Certain Relationships and Related
Party Transactions – Administration of Our 2005 Stock Incentive Plan and Issuance of Options” for
additional information about this delegation of authority.

Conflicts of Interest

     In addition to the transactions described above that present conflicts of interest among
the parties, conflicts of interest could arise from the following relationships, among others:

	•	 	Capitaline Renewable Energy II, a private fund created by
Capitaline Advisors for the purpose of investing in this
offering, intends to subscribe for Class A common stock in
this offering. Capitaline Advisors is the investment advisor
for Capitaline Renewable Energy II and therefore, controls
the voting and disposition of the shares of Class A common
stock purchased by Capitaline Renewable Energy II in this
offering. Capitaline Advisors may experience a conflict of
interest in acting in our best interest and in acting in the
best interest of the investors in Capitaline Renewable Energy
II when making decisions regarding the voting and/or
disposition of our Class A common stock.
	 
	•	 	The officers and directors of US BioEnergy also serve as
officers or directors of Fagen, Global Ethanol or Capitaline
Advisors. The demands on the time of these officers and
directors due to their attention to the business of Global
Ethanol or Capitaline may from time to time compete for their
time and attention to our business. In addition, these
officers or directors may experience conflicts in attempting
to act in the best interest of both US BioEnergy, Global
Ethanol, Fagen or Capitaline Advisors.
	 
	•	 	Our directors also serve as directors of other ethanol
producers that currently compete or will compete with us.
While our directors must devote sufficient time to our
business and affairs, our directors may experience conflicts
of interest in allocating their time and attention between us
and other businesses. Our directors may also acquire
financial or other incentives in other businesses, including
ethanol producers.
	 
	•	 	We will reimburse our directors and officers for
out-of-pocket expenses relating to our business. We do not
have a reimbursement policy or guideline for determining what
expenses will be reimbursed. We will review and reimburse all
reasonable expenses that our directors and officers submit to
us.
	 
	•	 	Decisions of our directors and executive officers will affect
our EBITDA and because annual payments to US Bio Resource
Group under the administrative services agreement is based
upon a percentage of EBITDA, these decisions may affect the
amount we pay to US Bio Resource Group.
	 
	•	 	Decisions of our directors and executive officers regarding
various matters, including expenditures that we make for our
business, reserves for accrued expenses, including
compensation of officers, compensation of directors and
reimbursement of out-of-pocket expenses, awards under the
2005 Stock Incentive Plan, loan covenants, capital
improvements and contingencies will affect the amount of cash
available for distribution to shareholders and because of
their significant ownership of our shares, our directors and
executive officers will stand to benefit to a greater degree
from any distribution to shareholders.

79

 

AMENDMENT NO. 1 AND WAIVER TO

MASTER LOAN AGREEMENT

          This Amendment No. 1 and Waiver to Master Loan Agreement (this “Amendment”) is
effective as of July 31, 2006, between US Bio Woodbury, LLC (formerly known as Superior Corn
Products, LLC), a Michigan limited liability company, as borrower (the “Borrower”), and
AgStar Financial Services, PCA, as lender (the “Lender”).

RECITALS

          Each of the parties hereto entered into that certain Master Loan Agreement, dated as of
November 15, 2005, as supplemented by the First Supplement thereto, dated as of November 15, 2005,
and as further supplemented by the Second Supplement thereto, dated as of November 15, 2005 (as so
modified and as may be further amended, restated, supplemented or otherwise modified from time to
time, the “Loan Agreement”).

          The Borrower has requested that the Lender grant certain waivers with respect to certain
provisions of the Loan Agreement, all as more fully described herein, and the Lender has agreed to
grant such waivers upon the terms and conditions set forth herein.

          The Borrower has requested that the Lender amend certain provisions of the Loan Agreement, all
as more fully described herein, and the Lender has agreed to grant such amendments upon the terms
and conditions set forth herein.

AGREEMENT

          NOW, THEREFORE, in consideration of the premises herein contained, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the parties
hereto, the parties hereto hereby agree as follows:

          Section 1. Definitions. Capitalized terms used herein and not otherwise defined
herein shall have the respective meanings assigned thereto in the Loan Agreement.

          Section 2. Waivers. Subject to the terms and conditions set forth herein,

               (a) the Lender hereby waives any Event of Default that has occurred under Section 6.01(d) of
the Loan Agreement as a result of the failure of the Borrower to deliver financial statements or a
Compliance Certificate for the period from the Closing Date through and including the date hereof
under Section 5.01(c) of the Loan Agreement;

               (b) the Lender hereby waives any Event of Default or unmatured Event of Default under Section
6.01(e) of the Loan Agreement as a result of the Borrower’s failure to

1

 

furnish to the Lender the items required to be furnished from the Closing Date through and
including the date hereof pursuant to Section 5.01(c); and

               (c) the Lender hereby waives any Event of Default or unmatured Event of Default under Section
6(c) of that certain Guaranty, dated as of November 15, 2005, between US BioEnergy Corporation, as
guarantor, and the Lender as a result of the failure of the Borrower to observe any covenant or
agreement contained in the Master Loan Agreement or another Loan Document.

          Section 3. Amendments. Subject to the terms and conditions set forth herein, the Loan
Agreement is hereby amended as follows:

               (a) Schedule 4.01(a) of the Loan Agreement is hereby amended and restated in its entirety to
read as set forth on Annex A hereto.

               (b) Schedule 5.01(o) is hereby deleted in its entirety; and the Loan Agreement is hereby
further amended by deleting each reference to Schedule 5.01(o) each time it appears in the Loan
Agreement and each other Loan Document.

               (c) Schedule 5.02(k) of the Loan Agreement is hereby amended and restated in its entirety to
read as set forth on Annex B hereto.

               (d) Section 5.01(o) of the Loan Agreement is hereby amended by amending and restating such
section in its entirety to read as follows:

Borrower shall give notice to the Lender of any change in the Chief
Executive Officer or the Chief Financial Officer of the Borrower
within thirty (30) days of such change.

               (e) Section 5.02(b) of the Loan Agreement is hereby amended by adding to the last sentence of
such section at the end of such sentence, immediately before the semicolon, the following:

; provided, further, that notwithstanding anything to the contrary
contained in this paragraph 5.02(b), the Borrower may pay a
distribution to US BioEnergy Corporation in an amount not to exceed
$23,628,780 with the proceeds of the Refunding Loan (as defined in
the Amended and Restated First Supplement dated as of January 24,
2006, as amended)

               (f) Section 5.02(k) of the Loan Agreement is hereby amended by deleting in its entirety the
phrase “which are fully disclosed to Lender” where such phrase appears in clause (ii) of such
section.

               (g) Section 5.02(l) of the Loan Agreement is hereby amended by amending and restating the
second sentence of such section in its entirety to read as follows:

2

 

Notwithstanding the foregoing, the Borrower may pay management fees
to any of its Affiliates, provided that such management fees are no
less favorable to the Borrower than would be obtained in a
comparable arm’s length transaction with a Person that is not an
Affiliate; or

               (h) Section 5.02(m) of the Loan Agreement is hereby amended by amending and restating such
section in its entirety to read as follows:

US BioEnergy Corporation shall fail to own, directly or indirectly,
100% of the common (voting) membership interests in the Borrower.

               (i) Section 6.01(s) of the Loan Agreement is hereby amended by amending and restating such
section in its entirety to read as follows:

The Borrower should terminate, change, amend or restate any Material
Contract or any material Construction Contract without the Lender’s
prior consent if any such termination, change, amendment or
restatement would be materially adverse to the Lender.

          Section 4. Conditions to Effectiveness of this Amendment. This Amendment shall become
effective as of the date hereof upon the satisfaction of the conditions precedent that the Lender
shall have received, on or before the date hereof, executed counterparts of this Amendment, duly
executed by each of the parties hereto, and an executed Consent of Guarantor in the form attached
hereto as Exhibit A, duly executed by the Guarantor.

          Section 5. Representations and Warranties. The Borrower hereby represents to the
Lender that, after giving effect to this Amendment:

               (a) All of the representations and warranties of the Borrower contained in the Loan Agreement
and in each other Loan Document are true and correct in all material respects as though made on and
as of the date hereof.

               (b) As the date hereof, except as otherwise specifically stated herein, no Event of Default
has occurred and is continuing.

          Section 6. Miscellaneous.

               (a) Effect; Ratification. The amendments set forth herein are effective solely for
the purposes set forth herein and shall be limited precisely as written, and shall not be deemed to
(i) be a consent to, or an acknowledgment of, any amendment, waiver or modification of any other
term or condition of the Loan Agreement or (ii) prejudice any right or remedy which the Lender may
now have or may have in the future under or in connection with the Loan Agreement, as amended
hereby, or any other instrument or agreement referred to therein. Each reference in the Loan
Agreement to “this Agreement,” “herein,” “hereof” and words of like

3

 

import and each reference in the other Loan Documents to the “Loan Agreement,” the “Master
Loan Agreement,” or the Loan Agreement shall mean the Loan Agreement, as amended hereby.

               (b) Loan Documents. This Amendment is a Loan Document executed pursuant to the Loan
Agreement and shall be construed, administered and applied in accordance with the terms and
provisions thereof.

               (c) Counterparts. This Amendment may be executed in any number of counterparts, each
such counterpart constituting an original and all of which when taken together shall constitute one
and the same instrument.

               (d) Severability. Any provision contained in this Amendment which is held to be
inoperative, unenforceable or invalid in any jurisdiction shall, as to that jurisdiction, be
inoperative, unenforceable or invalid without affecting the remaining provisions of this Amendment
in that jurisdiction or the operation, enforceability or validity of such provision in any other
jurisdiction.

               (e) GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF MINNESOTA.

               (f) WAIVER OF JURY TRIAL. THE BORROWER AND THE LENDER HEREBY IRREVOCABLY WAIVE ALL
RIGHTS TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO ANY
LOAN DOCUMENT TO WHICH IT IS A PARTY OR ANY INSTRUMENT OR DOCUMENT DELIVERED THEREUNDER.

(Signature Page Follows)

4

 

     IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed and delivered
by their respective duly authorized officers as of the date first written above.

	 	 	 
	US BIO WOODBURY, LLC (formerly known as 

Superior Corn Products, LLC), as Borrower
	 
	 	 
	 
	 	 
	By:
	 	/s/  CHAD HATCH
	 

	 	 
	Name:
	 	Chad Hatch
	Title:
	 	Vice President
	 
	 	 
	 
	 	 
	AGSTAR FINANCIAL SERVICES, PCA,
	 
	 	 
	as Lender
	 
	 	 
	 
	 	 
	By:
	 	/s/  MARK D. SCHMIDT
	 

	 	 
	Name:
	 	Mark D. Schmidt
	Title:
	 	Vice President

 

 

Annex A

Schedule 4.01(a)

None.

 

 

Annex B

Schedule 5.02(k)

All of the membership interests in US Bio Woodbury, LLC (formerly known as Superior Corn Products,
LLC) are owned by US BioEnergy Corporation (the “Parent”). Certain services relating to
procurement of inputs, marketing and sale of ethanol and DDGs, risk management and plant operation
are, or will be, performed by the Parent’s wholly-owned subsidiary, UBS Services, LLC. The Company
has also entered into a Design-Build Agreement with Fagen, Inc., an affiliate of the Parent.
Roland J. Fagen, a director of the Parent, is the principal of Fagen, Inc. and other directors of
the Parent are employees or officers of Fagen, Inc. The Company has also entered into an agreement
relating to environmental consulting services with ICM, Inc., of which David Vander Griend, a
director of Parent, is the principal. In addition, members of the Company’s Board of Managers are
officers of the Parent or members of the Board of Directors of the Parent. In addition, affiliates
of the Parent may provide management or administrative services to Borrower.

In connection with the Parent’s acquisition of the Company pursuant to that certain Transaction
Agreement dated as of March 31, 2005 between US BioEnergy Corporation and US Bio Woodbury, LLC
(formerly known as Superior Corn Products, LLC), Timothy A. Brodbeck, Kevin L. Brodbeck, Michael J.
Windemuller, James E. Zook agreed to jointly and severally indemnify the Parent and US Bio
Woodbury, LLC (formerly known as Superior Corn Products, LLC) against all losses and liabilities
asserted against either party, which either individually or in the aggregate exceeds $50,000. In
connection with this indemnification obligation, each of Messrs. Brodbeck, Brodbeck, Windemuller
and Zook pledged to the Parent the shares of its Class A common stock they received in the merger.

 

 

EXHIBIT A

Consent of Guarantor

          The undersigned, US BioEnergy Corporation, hereby (i) consents to the modifications to (A) the
Master Loan Agreement dated as of November 15, 2005 pursuant to that certain Amendment No. 1 and
Waiver to Master Loan Agreement effective as of July 31, 2006 between US Bio Woodbury, LLC
(formerly known as Superior Corn Products, LLC) (the “Borrower”) and AgStar Financial
Services, PCA (the “Lender”) and (B) the Amended and Restated First Supplement dated as of
January 24, 2006 pursuant to that certain Amendment No. 1 to Amended and Restated First Supplement
to Master Loan Agreement effective as of July 31, 2006 between the Borrower and the Lender and (ii)
acknowledges and agrees that the obligations of the undersigned contained in that certain
Continuing Guaranty made as of November 15, 2005 by the undersigned for the benefit of the Lender
are, and shall remain, in full force and effect.

	 	 	 
	US BIOENERGY CORPORATION
	 
	 	 
	 
	 	 
	By:
	 	/s/  CHAD HATCH
	 

	 	 
	Name:
	 	Chad Hatch
	 
	 	 
	Title:
	 	VP

 

 

FIRST SUPPLEMENT

TO THE MASTER LOAN AGREEMENT

(CONSTRUCTION LOAN)

THIS FIRST SUPPLEMENT TO THE MASTER LOAN AGREEMENT (this “First Supplement”), dated as of November
15, 2005, is between AGSTAR FINANCIAL SERVICES, PCA (the “Lender”) and SUPERIOR CORN PRODUCTS, LLC,
a Michigan limited liability company (the “Borrower”), and supplements 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 Supplement, the following terms shall have the following
meanings. Capitalized terms used and not otherwise defined in this 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 Minnesota and as amended from time to time.

“Draw Request” means a request for an advance against the Construction Note prior to
the Construction Loan Maturity 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) $36,000,000.00
or (ii) an amount equal to 60% of the Project Costs (the “Construction Loan Commitment”). Under
the Construction Loan, amounts borrowed and repaid or prepaid may not be reborrowed.

     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. Interest Rate. Subject to the provisions of Sections 5 and 7 of this First
Supplement, the Construction Loan shall bear interest at a rate equal to the LIBOR Rate plus 350
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

1

 

event shall the applicable rate exceed the Maximum Rate. Such fixed rate of interest shall not be
subject to any adjustments under Section 2.05 of the MLA.

     5. 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 (including, without limitation,
any purchase of equity of Lender when required), 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 Construction
Loan shall bear interest form 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
Construction Loan under the terms of the Construction Note; (iii) after the maturity of the
Construction Loan, whether by reason of acceleration or otherwise, the unpaid principal balance of
the Construction 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 Construction Loan 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.

     6. 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.

     7. 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.

     8. Payments and Computations.

          (a) Method of Payment. Except as otherwise expressly provided herein, all payments of
principal, interest, and other amounts to be made by the Borrower under the Loan Documents shall be
made to the Lender in U.S. dollars and in immediately available funds, without set-off, deduction,
or counterclaim, not later than 2:00 P.M. (Minneapolis, Minnesota time) on the date on which such
payment shall become due (each such payment made after such time on such due date to be deemed to
have been made on the next succeeding Business Day).

2

 

          (b) Application of Funds. Lender may apply all payments received by it to the
Borrower’s obligations to Lender in such order and manner as Lender may elect in its sole
discretion; provided that any payments received from any guarantor or from any disposition of any
collateral provided by such guarantor shall only be applied against obligations guaranteed by such
guarantor.

          (c) Payments on a Non-Business Day. Whenever any payment under any Loan Document
shall be stated to be due on a day that is not a Business Day, such payment may be made on the next
succeeding Business Day, and such extension of time shall in such case be included in the
computation of the payment of interest and fees, as the case may be.

          (d) Proceeds of Collateral. All proceeds received by the Lender from the sale or
other liquidation of the Collateral when an Event of Default exists shall first be applied as
payment of the accrued and unpaid fees and expenses of the Lender hereunder, including, without
limitation, under Section 7.04 of the MLA and then to all other unpaid or unreimbursed Loan
Obligations (including reasonable attorneys’ fees and expenses) owing to the Lender and then any
remaining amount of such proceeds shall be applied to the unpaid amounts of the Loan Obligations,
until all the Loan Obligations have been paid and satisfied in full or cash collateralized. After
all the Loan Obligations (including without limitation, all contingent Loan Obligations) have been
paid and satisfied in full, all Commitments terminated and all other obligations of the Lender to
the Borrower otherwise satisfied, any proceeds of Collateral shall be delivered to the Person
entitled thereto as directed by the Borrower or as otherwise determined by applicable law or
applicable court order.

          (e) Computations. Except as expressly provided otherwise herein, all computations of
interest and fees shall be made on the basis of actual number of days lapsed over a year of 365 or
366 days, as appropriate. Interest shall accrue from and include the date of borrowing, but
exclude the date of payment.

     7. 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 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

3

 

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.

     8. Lender Records. All advances and all payments or prepayments made thereunder on
account of principal or interest may be evidenced by the Lender in accordance with its usual
practice in an account or accounts evidencing such advances and all payments or prepayments
thereunder from time to time and the amounts of principal and interest payable and paid from time
to time thereunder; in any legal action or proceeding in respect of the Notes, the entries made in
such account or accounts shall be prima facie evidence of the existence and amounts
of all advances and all payments or prepayments made thereunder on account of principal or
interest. Lender shall provide monthly statements of such entries to Borrower for the purpose of
confirming the accuracy of such entries.

     9. Loan Payments. During the continuance of an Event of Default, the Lender may
deduct any obligations due or any other amounts due and payable by the Borrower under the Loan
Documents from any accounts maintained with the Lender.

     10. Compensation. Upon the request of the Lender, the Borrower shall pay to the
Lender such amount or amounts as shall be sufficient (in the reasonable opinion of the Lender) to
compensate it for any loss, cost, or expense (excluding loss of anticipated profits incurred by it)
as a result of: (i) any payment, prepayment, or conversion of a LIBOR rate loan for any reason on a
date other than the last day of the Interest Period for such Loan; or (ii) any failure by the
Borrower for any reason (including, without limitation, the failure of any condition precedent
specified in the MLA or this First Supplement to be satisfied) to borrow, extend, or prepay a LIBOR
rate loan on the date for such borrowing, extension, or prepayment specified in the relevant notice
of borrowing, extension or prepayment under this First Supplement.

     Such indemnification may include any amount equal to the excess, if any, of: (a) the amount
of interest which would have accrued on the amount so prepaid, or not so borrowed, converted or
extended, for the period from the date of such prepayment or of such failure to borrower, convert
or extend to the last day of the applicable Interest Period (or in the case of a failure to borrow,
convert or extend, the Interest Period that would have commenced on the date of such failure) in
each case at the applicable rate of interest for such loan as provided for herein; over (b) the
amount of interest (as reasonably determined by the Lender) which would have accrued to the Lender
on such amount by placing such amount on deposit for a comparable period with leading banks in the
interbank LIBOR market. The covenants of the Borrower set

4

 

forth in this section shall survive the repayment of the Construction Loan and other obligations
under the Loan Documents hereunder.

     11. Construction Loan Term. The Construction Loan shall run for a period
beginning on the Closing Date and ending on the Construction Loan Maturity Date. On the
Construction Loan Maturity 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.

     12. Payment and Calculation. The Borrower will pay interest on the Construction Loan
(i) quarterly in arrears on first day of each January, April, July and October (each such dated 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 Construction Loan Maturity Date. If any Quarterly 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.

     13. 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(b) below, all
disbursements will be made by wire transferring such funds to the deposit account of the
Disbursing Agent 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) Lender’s Application of Loan Proceeds. Notwithstanding the provisions of Section
13(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

5

 

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.

          (c) 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 $25,000.00 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.

          (d) 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 fully to 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.

          (e) 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 this 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, 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.

          (f) Conditions Precedent to Construction Advances. The Lender’s obligation to make
Construction Advances under the Construction Note shall be subject to the

6

 

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) Guaranties. Each of the Guarantors shall have executed and delivered to Lender
the Guaranties;

               (vii) Loan in Balance. The Loan is in balance, as required by the provisions of
Section 13(d), above;

               (viii) 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;

          (g) 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 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,

7

 

no such action by the Lender will affect the Borrower’s obligation to complete the Project on
or before the Completion Date.

          (h) 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 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.

     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;

8

 

               (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 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;

9

 

               (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 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;

               (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 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 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

10

 

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
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.

     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.

	 	 	 
	SUPERIOR CORN PRODUCTS, LLC,

a Michigan limited liability company
	 
	 	 
	By:
	 	/s/ CHAD D. HATCH
	 

	 	 
	Name: Chad D. Hatch
	  Title: Vice President and Treasurer
	 
	 	 
	AGSTAR FINANCIAL SERVICES, PCA

an United States corporation
	 
	 	 
	By:
	 	/s/ MARK SCHMIDT
	 

	 	 
	 

	 	Mark Schmidt
	 

	 	Its Vice President

11

 

EXHIBIT A

SWORN CONSTRUCTION STATEMENT

OWNER: US BioEnergy 

 PROPERTY AT: Lake Odessa, MI

 

			
	 	
    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.	 

 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	ITEMS	 	FURNISH BY	 	TOTAL COST		 	AMT PAID		 	BALANCE	
	 	 	 	 	 	 	 		 	 		 	 	
	
    
    1

    	 	
    General contractor fees	 	
    Fagen, Inc.	 	$	46,119,000	 	 	$	8,297,676	 	 	$	37,821,324	 
	
    
    2

    	 	
    Real Estate	 	
    Mazurek	 	$	250,000	 	 	$	250,000	 	 	$	—	 
	
    
    3

    	 	
    Phase I — site grading	 	
    Davis Construction	 	$	1,000,000	 	 	$	962,373	 	 	$	37,627	 
	
    
    4

    	 	
    Consulting	 	
    CJ Ag Consulting, Christianson & Assoc.	 	$	150,000	 	 	$	85,478	 	 	$	64,522	 
	
    
    5

    	 	
    Insurance-Builders Risk, Operations	 	
    IMA	 	$	101,000	 	 	$	74,135	 	 	$	26,865	 
	
    
    6

    	 	
    Legal fees	 	
    Brown, Winick, Graves, Ba. & Sc	 	$	105,000	 	 	$	19,853	 	 	$	85,147	 
	
    
    7

    	 	
    Electric	 	
    Tri-County Electric Coop	 	$	900,000	 	 	$	621,619	 	 	$	278,381	 
	
    
    8

    	 	
    Septic & drainfield	 	
    Geiger Excavating	 	$	140,000	 	 	$	53,531	 	 	$	86,469	 
	
    
    9

    	 	
    Other	 	 	 	$	11,235,000	 	 	$	75,316	 	 	$	11,159,684	 
	
    
    10

    	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
    
    11

    	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
    
    12

    	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
    
    13

    	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
    
    14

    	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
    
    15

    	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
    
    16

    	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
    
    17

    	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
    
    18

    	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
    
    19

    	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
    
    20

    	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
    
    21

    	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
    
    22

    	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
    
    23

    	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
    
    24

    	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
    
    25

    	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
    
    26

    	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
    
    27

    	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
    
    28

    	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
    
    29

    	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
    
    30

    	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
    
    31

    	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
    
    32

    	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
    
    33

    	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
    
    34

    	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
    
    35

    	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
    
    36

    	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
    
    37

    	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
    
    38

    	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
    
    39

    	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
    
    40

    	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
    
    41

    	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
    
    42

    	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
    
    43

    	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
    
    44

    	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
    
    45

    	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
    
    46

    	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
    
    47

    	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
    
    48

    	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
    
    49

    	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
    
    50

    	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
    
    51

    	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
    
    52

    	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
    
    53

    	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	
    SUBTOTAL	 	$	60,000,000	 	 	$	10,439,981	 	 	$	49,560,019	 

STATE OF SOUTH DAKOTA

SS.

COUNTY OF BROOKINGS

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 nothing 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 undersigned 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
$75,000,000.00 secured by a 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 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/ Chad Hatch

 

US BioEnergy

 

The foregoing instrument was acknowledged before me this
11 day of November, 2005

by Angela M. Burns

 

NOTARY STAMP

		
	 	
    /s/ Angela M. Burns
	 	
     

	 	
    Signature of Notary Public
	 	
    exp. 12/10/09

12

 

AMENDMENT NO. 1 TO

FIRST SUPPLEMENT TO MASTER LOAN AGREEMENT

          This Amendment No. 1 to First Supplement to Master Loan Agreement (this “Amendment”)
is effective as of July 31, 2006, between US Bio Woodbury, LLC (formerly known as Superior Corn
Products, LLC), a Michigan limited liability company, as borrower (the “Borrower”), and
AgStar Financial Services, PCA, as lender (the “Lender”).

RECITALS

          Each of the parties hereto entered into that certain First Supplement to Master Loan
Agreement, dated as of November 15, 2005 (the “Supplement”). Each of the parties hereto is
also a party to that certain Master Loan Agreement, dated as of November 15, 2005, as amended by
Amendment No. 1 thereto, effective as of July 31, 2006 (as so amended and as may be further
amended, restated, supplemented or otherwise modified from time to time, the “Loan
Agreement”).

          The Borrower has requested that the Lender amend certain provisions of the Supplement to
provide for the Refunding Loan (as hereinafter defined), all as more fully described herein, and
the Lender has agreed to grant such amendments upon the terms and conditions set forth herein.

AGREEMENT

          NOW, THEREFORE, in consideration of the premises herein contained, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the parties
hereto, the parties hereto hereby agree as follows:

          Section 1. Definitions. Capitalized terms used herein and not otherwise defined
herein shall have the respective meanings assigned thereto in the Supplement as amended by this
Amendment.

          Section 2. Amendments. Subject to the terms and conditions set forth herein, the
Supplement is hereby amended as follows:

               (a) Section 1 of the Supplement is hereby amended by adding, in appropriate alphabetical
order, the new definition of “Refunding Loan” to such section:

“Refunding Loan” means the loan from the Lender to the
Borrower in the amount of $23,628,780 or such lesser amount as
requested by the Borrower and pursuant to the terms and conditions
of this First Supplement. The Refunding Loan shall be deemed to be
part

1

 

of the Construction Loan for all purposes of this First Supplement
and the MLA.

               (b) Section 2 of the Supplement is hereby amended by adding to the end of such section the
following:

          Notwithstanding anything in the MLA, this First Supplement or
any Related Document to the contrary, the Lender agrees to make the
Refunding Loans to the Borrower on any Business Day from and after
July 31, 2006; provided that notice is given by the Borrower to the
Lender before 12:00 Noon (Minneapolis, MN time) on a Business Day
which is at least three (3) Business Days prior to the date such
Refunding Loan is to be made. Such notice will specify the amount
of the Refunding Loan (which shall not exceed $23,628,780), the
date the Refunding Loan is to be made and the account in which the
proceeds of such Loan are to be deposited. The amount so requested
from the Lender shall be made available to the Borrower subject to
satisfaction of the conditions set forth below in this Section 2
(and no other conditions contained in the MLA, the First Supplement
or any Related Document), by (i) the Lender depositing the same in
same day funds in an account of the Borrower or (ii) the Lender wire
transferring such funds to a Person designated by the Borrower in
writing. The making of the Refunding Loan shall be subject to the
satisfaction of following conditions precedent as of the date the
Refunding Loan is made:

     (a) Representations and Warranties. All of the
representations and warranties of the Borrower contained in the Loan
Agreement and in each other Loan Document shall be true and correct
in all material respects as though made on and as of such date.

     (b) Notice of Borrowing. The Borrower shall have
submitted to the Lender a notice of borrowing for the Refunding Loan
which notice of borrowing shall be executed by the Borrower and
shall contain representations by the Borrower as follows: (1) the
Loan shall be in balance immediately after giving effect to the
making of the Refunding Loan and (2) lien waivers have been obtained
for all Project Costs outstanding as of such date (in excess of
$3,000), as of the date of such notice.

     (c) 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.

2

 

     (d) Loan in Balance. The Loan shall be in balance as
required by the provisions of Section 13(d) of the Supplement.

     (e) 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.

     (c) Section 3 of the Supplement is hereby amended by adding to the first sentence of such
section at the end of such sentence, immediately before the period, the following:

; provided, that the proceeds of the Refunding Loan may be used to
pay a distribution to US BioEnergy Corporation

     (d)
 Section 13(a) of the Supplement is hereby amended by amending and restating such section
in its entirety to read as follows:

Disbursements of the Construction Loan will be made by the Lender in
the manner provided in the Disbursing Agreement; provided, however,
that the disbursement of the proceeds of the Refunding Loan shall
not be subject to the Disbursing Agreement. Subject to Section
13(b) below and other than disbursements of the proceeds of the
Refunding Loan, all disbursements will be made by wire transfer of
such funds to the deposit account of the Disbursing Agent in the
amount of each Draw Request which is approved pursuant to the
Disbursing Agreement. All Construction Loan funds (other than the
proceeds of the Refunding Loan) 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. The proceeds of the Refunding Loan shall
be deposited in the account notified by the Borrower to the Lender.

          Section 3. Conditions to Effectiveness of this Amendment. This Amendment shall become
effective as of the date hereof upon the satisfaction of the conditions precedent that the
Lender shall have received, on or before the date hereof, executed counterparts of this Amendment,
duly executed by each of the parties hereto, and an executed Consent of Guarantor in the form
attached hereto as Exhibit A, duly executed by the Guarantor.

          Section 4. Representations and Warranties. The Borrower hereby represents to the
Lender that, after giving effect to this Amendment:

               (a) All of the representations and warranties of the Borrower contained in the Loan Agreement
and in each other Loan Document are true and correct in all material respects as though made on and
as of the date hereof.

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               (b) As the date hereof, no Event of Default has occurred and is continuing under the Loan
Agreement.

          Section 5. Miscellaneous.

               (a) Effect; Ratification. The amendments set forth herein are effective solely for
the purposes set forth herein and shall be limited precisely as written, and shall not be deemed to
(i) be a consent to, or an acknowledgment of, any amendment, waiver or modification of any other
term or condition of the Supplement or (ii) prejudice any right or remedy which the Lender may now
have or may have in the future under or in connection with the Supplement, as amended hereby, or
any other instrument or agreement referred to therein. Each reference in the Supplement to “this
Supplement,” “this First Supplement,” “this Agreement,” “herein,” “hereof” and words of like import
and each reference in the Loan Agreement and the other Loan Documents to (i) the “Supplement” shall
include the Supplement, as amended hereby and (ii) the “First Supplement” shall mean the
Supplement, as amended hereby.

               (b) Loan Documents. This Amendment is a Loan Document executed pursuant to the Loan
Agreement and shall be construed, administered and applied in accordance with the terms and
provisions thereof.

               (c) Counterparts. This Amendment may be executed in any number of counterparts, each
such counterpart constituting an original and all of which when taken together shall constitute one
and the same instrument.

               (d) Severability. Any provision contained in this Amendment which is held to be
inoperative, unenforceable or invalid in any jurisdiction shall, as to that jurisdiction, be
inoperative, unenforceable or invalid without affecting the remaining provisions of this Amendment
in that jurisdiction or the operation, enforceability or validity of such provision in any other
jurisdiction.

               (e) GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF MINNESOTA.

               (f) WAIVER OF JURY TRIAL. THE BORROWER AND THE LENDER HEREBY IRREVOCABLY WAIVE ALL
RIGHTS TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO ANY
LOAN DOCUMENT TO WHICH IT IS A PARTY OR ANY INSTRUMENT OR DOCUMENT DELIVERED THEREUNDER.

(Signature Page Follows)

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     IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed and delivered
by their respective duly authorized officers as of the date first written above.

	 	 	 
	US BIO WOODBURY, LLC (formerly known as

Superior Corn Products, LLC), as Borrower
	 
	 	 
	 
	 	 
	By:
	 	/s/ CHAD HATCH
	 

	 	 
	Name:
	 	Chad Hatch
	Title:
	 	Vice President
	 
	 	 
	 
	 	 
	AGSTAR FINANCIAL SERVICES, PCA,
	 
	 	 
	as Lender
	 
	 	 
	 
	 	 
	By:
	 	/s/ MARK D. SCHMIDT
	 

	 	 
	Name:
	 	Mark D. Schmidt
	Title:
	 	Vice President

 

 

EXHIBIT A

Consent of Guarantor

          The undersigned, US BioEnergy Corporation, hereby (i) consents to the modifications to (A) the
Master Loan Agreement dated as of November 15, 2005 pursuant to that certain Amendment No. 1 and
Waiver to Master Loan Agreement effective as of July 31, 2006 between US Bio Woodbury, LLC
(formerly known as Superior Corn Products, LLC) (the “Borrower”) and AgStar Financial
Services, PCA (the “Lender”) and (B) the Amended and Restated First Supplement dated as of
January 24, 2006 pursuant to that certain Amendment No. 1 to Amended and Restated First Supplement
to Master Loan Agreement effective as of July 31, 2006 between the Borrower and the Lender and (ii)
acknowledges and agrees that the obligations of the undersigned contained in that certain
Continuing Guaranty made as of November 15, 2005 by the undersigned for the benefit of the Lender
are, and shall remain, in full force and effect.

	 	 	 
	US BIO ENERGY CORPORATION

	 
	 	 
	By:
	 	/s/ CHAD D. HATCH
	 

	 	 
	Name:
	 	Chad Hatch
	 
	 	 
	Title:
	 	VP

 

 

SECOND SUPPLEMENT

TO THE MASTER LOAN AGREEMENT

(REVOLVING LOAN)

THIS SECOND SUPPLEMENT TO THE MASTER LOAN AGREEMENT (this “Second Supplement”), dated as of
November 15, 2005, is between AGSTAR FINANCIAL SERVICES, PCA (the “Lender”) and SUPERIOR CORN
PRODUCTS, LLC, a Michigan limited liability company (the “Borrower”), and supplements 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 Supplement, the following terms shall have the following
meanings. Capitalized terms used and not otherwise defined in this 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 Minnesota and as amended from time to time.

“Availability Date” shall have the meaning specified in Section 5 of this Supplement.

“Eligible Accounts Receivable” means all unpaid Accounts, net of any credits, except
the following shall not in any event be deemed Eligible Accounts:

(a) That portion of Accounts unpaid 30 days or more after the invoice date:

(b) That portion of Accounts that is disputed or subject to a claim of offset or a
contra account;

(c) That portion of Accounts not yet earned by the final delivery of goods or
rendition of services, as applicable, by any Borrower to the customer;

(d) Accounts owed by any unit of government, whether foreign or domestic except
Incentive Payments will be considered a part of Eligible Accounts as defined in this
Agreement;

(e) Accounts owed by an account debtor located outside the United States;

(f) Accounts owed by an account debtor that is insolvent, the subject of bankruptcy
proceedings or has gone out of business;

(g) Accounts owed by a shareholder, Guarantor, Affiliate, officer or employee of any
Borrower;

(h) Accounts not subject to a duly perfected security interest in the Lender’s
favor or which are subject to any lien, security interest or claim in favor of any
Person other than the Lender, including, without limitation, any payment or
performance bond;

1

 

(i) That portion of Accounts that has been restructured, extended, amended or
modified;

(j) That portion of Accounts that constituted advertising, finance charges,
service charges or sales or excise taxes; and

(k) Accounts, or portions thereof, otherwise deemed ineligible by the Lender, in
its sole discretion, exercised reasonably.

“Eligible Inventory” means all inventory held for ultimate sale or lease, or which
has been or will be supplied under contracts of service, or which are raw materials, work in
process, or materials used or consumed in the Borrower’s business and that has been
specifically identified and accepted by the Lender, excluding all of the following
inventory:

	 	(a)	 	Covered by documents of title, instruments, or chattel paper
when these documents, instruments and paper are not owned and held by the
Borrower or are subject to competing claims, liens or encumbrances.
	 
	 	(b)	 	Intended to be sold outside of the ordinary course of business.
	 
	 	(c)	 	Consigned, sold or leased to others or on consignment or lease
from others or subject to a bailment.
	 
	 	(d)	 	Subject to a competing claim, lien or encumbrance.
	 
	 	(e)	 	Paid for in advance with progress payments or any other sums to
the Borrower in anticipation of the sale and delivery of inventory.
	 
	 	(f)	 	Obsolete or unusable in the ordinary course of business.
	 
	 	(g)	 	Inventory of work in progress.
	 
	 	(h)	 	Inventory that the Lender, in its sole discretion, disqualifies
as Eligible Inventory.

“Borrowing Base” means, at any time, the lesser of: (a) $3,500,000.00; or (b)
commencing sixty days after start-up of operations, the sum of: (i) 75% of Borrower’s
Eligible Accounts Receivable; plus (ii) 75% of Borrower’s Eligible Inventory.

“Borrowing Base Certificate” means the certificate in the form of Exhibit A attached
hereto properly completed and duly executed by an authorized officer of the Borrower.

“Incentive Payments” means any and all federal or state governmental subsidies,
payments, transfers or other benefits, whether now or hereafter established, received by the
Borrower in any fiscal year aged less than 120 days.

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

2

 

“Request for Advance” shall have the meaning specified in Section 6(a) of this
Supplement.

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

“Revolving Loan” shall have the meaning specified in Section 2 of this Supplement.

“Revolving Commitment” shall have the meaning specified in Section 2 of this
Supplement.

“Revolving Loan Maturity Date” shall have the meaning specified in Section 2 of this
Supplement.

“Revolving Loan Termination Date” shall have the meaning specified in
Section 2 of this Supplement.

“Unused Commitment Fee” shall have the meaning specified in Section 6(d) of this
Supplement.

     2. Revolving Loan Commitment. On the terms and conditions set forth in the MLA
and this Second Supplement, Lender agrees to make one or more advances (collectively, the
“Revolving Loan”) to the Borrower, during the period beginning on the Construction Loan Maturity
Date (as defined in Section 5 of this Second Supplement) and ending on the Business Day immediately
preceding the Revolving Loan Maturity Date (as hereinafter defined in this Section 2) (the
“Revolving Loan Termination Date”), in an aggregate principal amount outstanding at any one time
not to exceed $3,500,000.00 (the “Revolving Loan Commitment”) provided, however, that at no time
shall the Outstanding Revolving Advance exceed the Borrowing Base. The Revolving Loan Commitment
shall expire at 12:00 noon Central time on the first (1st) anniversary of the
Availability Date (the “Revolving Loan Maturity Date”). Subject to Section 7 of this Second
Supplement, under the Revolving Loan Commitment amounts borrowed and repaid or prepaid may be
reborrowed at any time prior to and including the Termination Date.

     3. Purpose. The purposes for which advances under the Loan may be used are for
general corporate and operating purposes of the Borrower and its subsidiaries, including closing
costs and fees associated with the

3

 

Revolving Loan. The Borrower agrees that the proceeds of the Loan are to be used only for the
purposes set forth in this Section 3.

     4. Repayment of the Revolving Loan. The Borrower will pay interest on the
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
Revolving Loan, and continuing on each Monthly Payment Date thereafter until the Revolving Loan
Maturity Date. On the Revolving Loan Maturity Date, the amount of the then unpaid principal
balance of the Revolving Loan and any and all other amounts due and owing hereunder or under any
other Loan Document relating to the Revolving Loan will 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.

     5. 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 Revolving Loan are satisfied (the “Availability Date”) and ending on the Termination
Date, advances under the Revolving Loan will be made as provided in this Second Supplement.

     6. 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 Accounts 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 Article III of this Second Supplement),
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

4

 

acquired by the Lender to fund such Advance when such Advance, as a result of such failure, is not
made on such date.

          (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 underwriting and participation 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 Revolving Loan from the
Construction Loan Maturity Date until the Revolving Loan Maturity Date at the rate of 0.25% per
annum, payable in arrears in quarterly installments payable on the first (1st) day of
each third month after the Construction Loan Maturity Date.

          (e) Conditions Precedent to All Advances. The Lender’s obligation to make each
Advance under the 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) Completion of Project. The Project shall have been completed per the Plans and
Specifications and a Completion Certificate shall have been obtained;

               (ii) Repayment of Construction Loan. All obligations of the Borrower’s for the
Construction Loan shall have been paid in full;

               (iii) 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;

               (iv) No Defaults. The Borrower is not in default under the terms of the MLA, 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;

               (v) 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; and

               (vi) Marketing Agreements. The Borrower has executed marketing agreements for all
ethanol and DDGs 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.

     7. Letters of Credit.

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

               (i) the aggregate amount of outstanding Letter of Credit Liabilities shall not at any time
exceed the amount of $500,000.00;

               (ii) the sum of the outstanding Letters of Credit plus the Outstanding Revolving Advances
shall not at any time exceed the Borrowing Base.

          (b) Letter of Credit Request Procedure. The Borrower shall give the Lender
irrevocable prior notice (effective upon receipt) on or before 3:00 P.M. (Minneapolis, Minnesota
time) on the Business Day three Business Days prior to the date of the requested issuance of a
Letter of Credit specifying the requested amount, expiry date and issuance date of each Letter of
Credit to be issued and the nature of the transactions to be supported thereby. Any such notice
received after 3:00 P.M. (Minneapolis, Minnesota time) on a Business Day shall be deemed to have
been received and be effective on the next Business Day. Each Letter of Credit shall be in the
form of Exhibit B to this Supplement, have an expiration date that occurs on or before the
Revolving Loan Maturity Date, shall be payable in U.S. dollars, must be satisfactory in form and
substance to the Lender, and shall be issued pursuant to such documentation as the Lender may
require, including, without limitation, the Lender’s standard form letter of credit request and
reimbursement Second Supplement; provided that, in the event of any conflict between the terms of
such Second Supplement and the other Loan Documents, the terms of the other Loan Documents shall
control.

          (c) Letter of Credit Fees. The Borrower shall pay to the Lender for (i) all fees,
costs, and expenses of the Lender arising in connection with any Letter of Credit, including the
Lender’s customary fees for amendments, transfers, and drawings on Letters of Credit and (ii) on
the date of the issuance of the Letter of Credit, and at the anniversary date of issuance of such
Letter of Credit, an issuance fee equal to two and one-half (2.5%) percent, on an annualized basis,
of the maximum amount available to be drawn under the Letter of Credit.

          (d) Funding of Drawings. Upon receipt from the beneficiary of any Letter of Credit of
any demand for payment or other drawing under such Letter of Credit, the Issuer shall promptly
notify the Borrower as to the amount to be paid as a result of such demand or drawing and the
respective payment date. Any notice pursuant to the forgoing sentence shall specify the amount to
be paid as a result of such demand or drawing and the respective payment date.

          (e) Reimbursements. After receipt of the notice delivered pursuant to clause (d) of
this section with respect to a Letter of Credit, the Borrower shall be irrevocably and
unconditionally obligated to reimburse the Lender for any amounts paid by the Lender upon any
demand for payment or drawing under the applicable Letter of Credit, without presentment, demand,
protest, or other formalities of any kind other than the notice required by clause (d) of this
section. Such reimbursement shall occur no later than 3:00 P.M. (Minneapolis, Minnesota time) on
the date of payment under the applicable Letter of Credit if the notice under clause (d) of this
section is received by 2:00 P.M. (Minneapolis, Minnesota time) on such date or by

6

 

11:00 A.M. (Minneapolis, Minnesota time) on the next Business Day, if such notice is received after
2:00 P.M. (Minneapolis, Minnesota time). All payments on the Reimbursement Obligations (including
any interest earned thereon) shall be made to the Lender for the account of the Lender in U.S.
dollars and in immediately available funds, without set-off, deduction, or counterclaim.

          (f) Reimbursement Obligations Absolute. The Reimbursement Obligations of the Borrower
under this Second Supplement shall be absolute, unconditional, and irrevocable, and shall be
performed strictly in accordance with the terms of the Loan Documents under all circumstances
whatsoever and the Borrower hereby waives any defense to the payment of the Reimbursement
Obligations based on any circumstance whatsoever, including, without limitation, in any case, the
following circumstances: (i) any lack of validity or enforceability of any Letter of Credit or any
other Loan Document; (ii) any amendment or waiver of or any consent to departure from any Loan
Document; (iii) the existence of any claim, set-off, counterclaim, defense, or other rights which
any Borrower or any other Person may have at any time against any beneficiary of any Letter of
Credit, the Lender or any other Person, whether in connection with any Loan Document or any
unrelated transaction; (iv) any statement, draft, or other documentation presented under any Letter
of Credit proving to be forged, fraudulent, invalid, or insufficient in any respect or any
statement therein being untrue or inaccurate in any respect whatsoever; (v) payment by the Lender
under any Letter of Credit against presentation of a draft or other document that does not comply
with the terms of such Letter of Credit; or (vi) any other circumstance whatsoever, whether or not
similar to any of the foregoing; provided that Reimbursement Obligations with respect to a Letter
of Credit may be subject to avoidance by a Borrower if the Borrower proves in a final
non-appealable judgment that it was damaged and that such damage arose directly from the Lender’s
willful misconduct or gross negligence in determining whether the documentation presented under the
Letter of Credit in question complied with the terms thereof.

          (g) Issuer Responsibility. Borrower assumes all risks of the acts or omissions of any
beneficiary of any Letter of Credit with respect to its use of such Letter of Credit. Neither the
Lender, nor any of its respective officers or directors shall have any responsibility or liability
to the Borrower or any other Person for: (a) the failure of any draft to bear any reference or
adequate reference to any Letter of Credit, or the failure of any documents to accompany any draft
at negotiation, or the failure of any Person to surrender or to take up any Letter of Credit or to
send documents apart from drafts as required by the terms of any Letter of Credit, or the failure
of any Person to note the amount of any instrument on any Letter of Credit, each of which
requirements, if contained in any Letter of Credit itself, it is agreed may be waived by the
Lender; (b) errors, omissions, interruptions, or delays in transmission or delivery of any
messages; (c) the validity, sufficiency, or genuineness of any draft or other document, or any
endorsement(s) thereon, even if any such draft, document or endorsement should in fact prove to be
in any and all respects invalid, insufficient, fraudulent, or forged or any statement therein is
untrue or inaccurate in any respect; (d) the payment by the Lender to the beneficiary of any Letter
of Credit against presentation of any draft or other document that does not comply with the terms
of the Letter of Credit; or (e) any other circumstance whatsoever in making or failing to make any
payment under a Letter of Credit. The Lender may accept documents that appear on

7

 

their face to be in order, without responsibility for further investigation, regardless of any
notice or information to the contrary.

     8. Interest Rate. Subject to the provisions of Sections 6 and 9 of this Second
Supplement, the 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
Revolving Loan shall be as provided in the 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 (including, without
limitation, any purchase of equity of Lender when required), 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
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 in
effect on the Revolving Loan under the terms of the Revolving Note; (iii) after the maturity of the
Revolving Loan, whether by reason of acceleration or otherwise, the unpaid principal balance of the
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 Revolving Loan under the terms of the 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 Supplement or
the Revolving Note is not paid within ten (10) days of the due date thereof, the Borrower shall, in
addition to such amount, a late charge equal to five percent (5%) of the amount of such payment.

     11. 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:

8

 

(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.

     12. Payments and Computations.

          (a) Method of Payment. Except as otherwise expressly provided herein, all payments of
principal, interest, and other amounts to be made by the Borrower under the Loan Documents shall be
made to the Lender in U.S. dollars and in immediately available funds, without set-off, deduction,
or counterclaim, not later than 2:00 P.M. (Minneapolis, Minnesota time) on the date on which such
payment shall become due (each such payment made after such time on such due date to be deemed to
have been made on the next succeeding Business Day). The Borrower shall, at the time of making
each such payment, specify to the Lender the sums payable under the Loan Documents to which such
payment is to be applied and in the event that the Borrower fail to so specify or if an Event of
Default exists, the Lender may apply such payment and any proceeds of any Collateral to the Loan
Obligations in such order and manner as it may elect in its sole discretion, subject to Section
12(c).

          (b) Application of Funds. Apply all payments received by it to the Borrower’s
obligations to Lender in such order and manner as Lender may elect in its sole discretion;
provided that any payments received from any guarantor or from any disposition of any
collateral provided by such guarantor shall only be applied against obligations guaranteed by such
guarantor.

          (c) Payments on a Non-Business Day. Whenever any payment under any Loan Document
shall be stated to be due on a day that is not a Business Day, such payment may be made on the next
succeeding Business Day, and such extension of time shall in such case be included in the
computation of the payment of interest and fees, as the case may be.

          (d) Proceeds of Collateral. All proceeds received by the Lender from the sale or
other liquidation of the Collateral when an Event of Default exists shall first be applied as
payment of the accrued and unpaid fees and expenses of the Lender hereunder and then to all other
unpaid or unreimbursed Loan Obligations (including reasonable attorneys’ fees and expenses) owing
to the Lender and then any remaining amount of such proceeds shall be applied to the unpaid amounts
of Loan Obligations, until all the Loan Obligations have been paid and satisfied in full or cash
collateralized. After all the Loan Obligations (including without limitation, all contingent Loan
Obligations) have been paid and satisfied in full, all Commitments terminated and all other
obligations of the Lender to the Borrower otherwise satisfied, any proceeds of Collateral shall be
delivered to the Person entitled thereto as directed by the Borrower or as otherwise determined by
applicable law or applicable court order.

          (e) Computations. Except as expressly provided otherwise herein, all computations of
interest and fees shall be made on the basis of actual number of days lapsed over

9

 

a year of 365 or 366 days, as appropriate. Interest shall accrue from and include the date of
borrowing, but exclude the date of payment.

     13. Maximum Amount Limitation. Anything in this MLA, this Second Supplement, or the
other Loan Documents to the contrary notwithstanding, Borrower shall not be required to pay
unearned interest on the Revolving Note or any of the Loan Obligations, or ever be required to pay
interest on the 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 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 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
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 Revolving Note, be either refunded
to the Borrower, or credited on the principal of the 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
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 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. Lender Records. All advances and all payments or prepayments made thereunder on
account of principal or interest may be evidenced by the Lender in accordance with its usual
practice in an account or accounts evidencing such advances and all payments or prepayments
thereunder from time to time and the amounts of principal and interest payable and paid from time
to time thereunder; in any legal action or proceeding in respect of the Notes, the entries made in
such account or accounts shall be prima facie evidence of the existence and amounts
of all advances and all payments or prepayments made thereunder on account of principal or
interest. Lender shall provide monthly statements of such entries to Borrower for the purpose of
confirming the accuracy of such entries.

     15. Mandatory Prepayments or Collateralization. The Borrowers shall, within five (5)
days following the earlier of the delivery of each Borrowing Base Certificate hereof or the day
upon which such Borrowing Base Certificate was due, either (i) prepay the Advances in
the amount, if any, by which the Outstanding Credit on the date of prepayment under this Section 15

10

 

exceeds the Borrowing Base at such time, together with accrued interest to the date of such
prepayment on the amount prepaid, or (ii) pledge and assign to the Lender additional collateral
acceptable to the Lender, in the Lender’s sole discretion, and deliver all documentation that the
Lender, in its sole discretion, may require in connection with such pledge and assignment and the
perfection of a first-priority security interest in such additional collateral, so that the
Borrowing Base plus the value assigned by the Lender, in its sole discretion, to such additional
collateral equals or exceeds the Outstanding Credit.

     16. Loan Payments. During the continuance of an Event of Default, the Lender may
deduct any obligations due or any other amounts due and payable by the Borrower under the Loan
Documents from any accounts maintained with the Lender.

     17. Reporting Requirements. In addition to the reporting requirements under Section
5.01(c) in the MLA, the Borrower will furnish to the Lender as soon as available and in any event
within 30 days after the end of each month (or at such other times or with such greater frequency
as is requested by the Lender), a duly completed Borrowing Base Certificate, setting forth the
Borrowing Base as of the last day of such month calculated based upon collateral value criteria and
advance rates which do not exceed those set forth in the Borrowing Base Certificate, and including
such other information, representation and warranties contemplated therein, certified by the
appropriate authorized officer of the Borrower.

     18. Compensation. Upon the request of the Lender, the Borrower shall pay to the
Lender such amount or amounts as shall be sufficient (in the reasonable opinion of the Lender) to
compensate it for any loss, cost, or expense (excluding loss of anticipated profits incurred by it)
as a result of: (i) any payment, prepayment, or conversion of a LIBOR rate loan for any reason on a
date other than the last day of the Interest Period for such Loan; or (ii) any failure by the
Borrower for any reason (including, without limitation, the failure of any condition precedent
specified in the MLA or this Supplement to be satisfied) to borrow, extend, or prepay a LIBOR rate
loan on the date for such borrowing, extension, or prepayment specified in the relevant notice of
borrowing, extension or prepayment under this Agreement.

     Such indemnification may include any amount equal to the excess, if any, of: (a) the amount
of interest which would have accrued on the amount so prepaid, or not so borrowed, converted or
extended, for the period from the date of such prepayment or of such failure to borrower, convert
or extend to the last day of the applicable Interest Period (or in the case of a failure to borrow,
convert or extend, the Interest Period that would have commenced on the date of such failure) in
each case at the applicable rate of interest for such loan as provided for herein; over (b) the
amount of interest (as reasonably determined by the Lender) which would have accrued to the Lender
on such amount by placing such amount on deposit for a comparable period with leading banks in the
interbank LIBOR market. The covenants of the Borrower set forth in this section shall survive the
repayment of the Revolving Loan and other obligations under the Loan Documents hereunder.

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

11

 

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.

	 	 	 
	SUPERIOR CORN PRODUCTS, LLC

a Michigan limited liability company
	 
	 	 
	By:
	 	/s/ CHAD D. HATCH
	 

	 	 
	Name: Chad D. Hatch 

Title: Vice President and Treasurer
	 
	 	 
	AGSTAR FINANCIAL SERVICES, PCA

an United States corporation
	 
	 	 
	By:
	 	/s/ MARK SCHMIDT
	 

	 	 
	 

	 	Mark Schmidt
	 

	 	Its Vice President

12

 

EXHIBIT A

BORROWING BASE CERTIFICATE

Detailed Calculation

Date: _________________ ____,______

	 	 	 	 	 	 	 	 	 	 	 
	1	 	Accounts Receivable:
	 	 	 	 	 	 	 	 
	 	 	     ___________________ (ethanol)
	 	$	 	 	 	 	 	 
	 	 	     ___________________ (DDGs)
	 	$	 	 	 	 	 	 
	 	 	     Other
	 	$	 	 	 	 	 	 
	 	 	     Other
	 	$	 	 	 	 	 	 
	 	 	     Total
	 	$	 	 	 	 	 	 
	 	 	Deduct Ineligible Accounts

 (31 days or more from invoice date)
	 	$	 	 	 	 	 	 
	 	 	Deduct Ineligible Accounts

 (as determined by Bank)
	 	$	 	 	 	 	 	 
	 	 	Eligible Accounts Receivable
	 	$	 	 	 	 	 	 
	 	 	Multiply by Borrowing Base Factor
	 	 	75.00	%	 	 	 	 
	 	 	Accounts Receivable Loan Availability
	 	 	 	 	 	$	 	 
	 	 	 
	 	 	 	 	 	 	 	 
	2	 	Corn and Distiller’s Dried Grain (current value)
	 	 	 	 	 	 	 	 
	 	 	Ending Corn Inventory
	 	$	 	 	 	 	 	 
	 	 	Ending DDGs Inventory
	 	$	 	 	 	 	 	 
	 	 	Total Inventory
	 	 	 	 	 	 	 	 
	 	 	Multiply by Borrowing Base Factor
	 	 	75.00	%	 	 	 	 
	 	 	Corn Inventory Loan Availability
	 	 	 	 	 	$	 	 
	 	 	 
	 	 	 	 	 	 	 	 
	3	 	Ethanol Inventories (lower of cost or market)
	 	 	 	 	 	 	 	 
	 	 	Ending Fuel Ethanol Inventory
	 	$	 	 	 	 	 	 
	 	 	Ending Denaturant Inventory
	 	$	 	 	 	 	 	 
	 	 	Ending AA Enzyme Inventory
	 	$	 	 	 	 	 	 
	 	 	Ending GA Enzyme Inventory
	 	$	 	 	 	 	 	 
	 	 	Other Inventory
	 	 	 	 	 	 	 	 
	 	 	Total Inventory
	 	$	 	 	 	 	 	 
	 	 	Multiply by Borrowing Base Factor
	 	 	75.00	%	 	 	 	 
	 	 	Inventory Loan Availability
	 	 	 	 	 	$	 	 
	 	 	 
	 	 	 	 	 	 	 	 
	4	 	Total Borrowing Base (Totals from #1, #2, & #3)
	 	 	 	 	 	$	 	 
	 	 	 
	 	 	 	 	 	 	 	 
	5	 	Outstanding Loan Balance (as of month end)
	 	$	 	 	 	 	 	 
	 	 	 
	 	 	 	 	 	 	 	 
	6	 	Margin (Line 4 minus Line 5)
	 	 	 	 	 	$	 	 

13

 

EXHIBIT B

FORM OF LETTER OF CREDIT

IRREVOCABLE STANDBY LETTER OF CREDIT NO. ______

(Date)

________________________

________________________

________________________

(Beneficiary)

Ladies and Gentlemen:

At the request of Superior Corn Products, LLC, ___, Lake Odessa, MI ___, we
hereby establish our Irrevocable Standby Letter of Credit in your favor in the amount of $ ___
U.S. dollars.

We undertake that drawings under this Letter of Credit will be honored upon presentation of your
draft drawn on AgStar Financial Services, PCA, at 1921 Premier Drive, Mankato, Minnesota 56002-4249
and the original of this Letter of Credit prior to the expiration date set forth herein. All
drafts submitted to Agstar Financial Services, PCA must indicate the number and date of this
credit.

This Letter of Credit expires on ___, but will automatically renew on each anniversary
date of ___for an additional one (1) year if you have not received by registered mail
notification of our intention not to renew sixty (60) days prior to the original expiration date
and each subsequent expiration date. However, in no event will this Letter of Credit be extended
beyond___. Unless AgStar is notified of an address to the contrary the notification
will be sent to ___.

Except as expressly stated herein, this undertaking is not subject to any conditions or
qualification. The obligation of AgStar Financial Services, PCA, under this Letter of Credit shall
be the individual obligation of AgStar Financial Services, PCA, and in no way contingent upon
reimbursement with respect thereto.

This credit is subject to the Uniform Customs and Practice for Documentary Credits, 1993 Version,
of the International Chamber of Commerce or any successor publication.

Sincerely,

AGSTAR FINANCIAL SERVICES, PCA

Mark Schmidt

14

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