Document:

EXHIBIT 4.16

        EXECUTIVE EMPLOYMENT AGREEMENT

        
     THIS   AGREEMENT    made   the   22nd day   of    January,
     2009.

        BETWEEN:

        ONCOLYTICS BIOTECH (U.S.), INC.

        ("OBUS")

        -and-

        MARY ANN DILLAHUNTY

        (the "Employee")

        WHEREAS:

        
            	
                         

                    	
                        A.

                    	
                        OBUS is an Affiliate (as defined herein) of Oncolytics Biotech Inc.;

                    

        

        
            	
                         

                    	
                        B.

                    	
                        The Employee has been employed by Oncolytics Biotech Inc.;

                    

        

        
            	
                         

                    	
                        C.

                    	
                        The Employee, Oncolytics Biotech Inc. and OBUS wish to transfer the employment of the Employee from Oncolytics Biotech Inc. to OBUS, with the result that the Employee’s employment with Oncolytics will terminate as of December 31, 2008 and OBUS will employ the Employee as of January 1, 2009;

                    

        

        NOW THEREFORE the parties agree as follows:

        Section 1 - Definitions and Interpretation

        
            	
                        (1)

                    	
                        In this Agreement the following defined terms shall have the meanings indicated:

                    

        

        
            	
                         

                    	
                        (a)

                    	
                        ”Affiliate” means any entity that, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with a party. For the purposes of this definition, control shall mean: (i) the direct or indirect ownership of fifty percent (50%) or more of the voting stock of a corporation; or
                        (ii) the direct or indirect ownership of fifty (50%) or more of the ownership interest of any other entity; or (iii) the ability to elect a majority of the directors of the entity;

                    

        

        
            	
                         

                    	
                        (b)

                    	
                        "Business" means the business currently carried on by OBUS and its Affiliates, which is the development, testing, marketing and sale of pharmaceutical products together with such additional business as OBUS may decide to undertake from time to time;

                    

        

        
            	
                         

                    	
                        (c)

                    	
                        "Commencement Date" means January 1, 2009;

                    

        

        
            	
                         

                    	
                        (d)

                    	
                        "Confidential Information" means all confidential information of OBUS and its Affiliates and includes:

                    

        

        
            	
                         

                    	
                        (i)

                    	
                        any data or information directly or indirectly related to the Business or arising directly or indirectly in the course of, or derived from the Employee's employment with OBUS whether related to products, equipment, inventions, ideas, designs, methods, systems, improvements, processes, research or otherwise;

                    

        

        
            	
                         

                    	
                        (ii)

                    	
                        any technical or scientific know-how;

                    

        

         

        
            

        

        
            

            - 2 -

            

        

         

        
            	
                         

                    	
                        (iii)

                    	
                        financial and sales information, customer lists, pricing policies, lists of suppliers, proprietary computer programs in any format whatsoever, programming techniques, the manner of plans or methods of operation and the like relating to the Business;

                    

        

        
            	
                         

                    	
                        (iv)

                    	
                        patent applications, drawings, blueprints, manuals, letters, notebooks, reports and all other materials (written or otherwise) related to the Business or to the agents, joint venturers or contractors of OBUS or its Affiliates; and

                    

        

        
            	
                         

                    	
                        (v)

                    	
                        any information provided to or received by OBUS or its Affiliates on a confidential basis;

                    

        

        
            	
                         

                    	
                        (e)

                    	
                        "Good Reason" means any one of the following events occurring on or after the Commencement Date:

                    

        

        
            	
                         

                    	
                        (i)

                    	
                        any reduction in the Employee's then existing annual base compensation and benefits, unless comparable reductions are made for all other executive employees of OBUS;

                    

        

        
            	
                         

                    	
                        (ii)

                    	
                        any material diminution of the Employee's duties, responsibilities, authority or reporting structure, excluding for this purpose an isolated or inadvertent action not taken in bad faith which is remedied by OBUS immediately after notice thereof is given by the Employee;

                    

        

        
            	
                         

                    	
                        (iii)

                    	
                        any request that the Employee relocate to a work site that would increase the Employee's one-way commute distance by more than fifty (50) miles from the Employee's then principal residence, unless the Employee accepts such relocation opportunity; or

                    

        

        
            	
                         

                    	
                        (iv)

                    	
                        any material breach by OBUS of its obligations under this Agreement that is not remedied within thirty (30) days of written notice of such breach from the Employee;

                    

        

        
            	
                         

                    	
                        (f)

                    	
                        "Intellectual Property" means all information, data, designs, processes, software, algorithms and inventions, including those that may be the subject of patent, copyright, industrial design, trademarks, trade secret or other forms of legal protection, made, conceived or developed by the Employee during the term of employment with OBUS,
                        whether alone or jointly with others and whether during or after regular working hours, that relates to or in any way pertains to or connects with any matter developed, or under investigation or development by OBUS or its Affiliates, or related to the Business;

                    

        

        
            	
                         

                    	
                        (g)

                    	
                        "Termination Event" means:

                    

        

        
            	
                         

                    	
                        (i)

                    	
                        breach by the Employee of any material provision of this Agreement;

                    

        

        
            	
                         

                    	
                        (ii)

                    	
                        material violation by the Employee of any statutory or common law duty of loyalty to OBUS;

                    

        

        
            	
                         

                    	
                        (iii)

                    	
                        the commission of an indictable offence by the Employee against OBUS; and

                    

        

        
            	
                         

                    	
                        (iv)

                    	
                        personal or professional conduct of the Employee which in the reasonable and good faith judgment of OBUS may significantly injure OBUS' Business or interfere with the Employee's job performance.

                    

        

        (2)       This Agreement shall be governed by and construed in accordance with the laws in force in the State of California. The parties hereby submit to the jurisdiction of the Courts of California.

        (3)       The parties shall with reasonable diligence take all action, do all things, attend or cause their representatives to attend all meetings and execute all further documents, agreements and assurances as may be required from time to time in order to carry out the terms and conditions of this Agreement in accordance with their true intent.

         

        
            

        

        
            

            
                - 3 -

            

            

        

         

        
            	
                        (4)

                    	
                        The following schedule is attached to and forms part of this Agreement:

                    

        

        Schedule "A" – Job Description

        Section 2 - Employment

        (1)       OBUS agrees to employ the Employee in the position of President of OBUS and Vice President, Intellectual Property of Oncolytics Biotech Inc., and the Employee accepts the employment, starting on the Commencement Date.

        (2)       The Employee shall perform the duties and responsibilities associated with the position of President of OBUS and Vice President, Intellectual Property of Oncolytics Biotech Inc., including those set out on the Job Description attached as Schedule "A". The Employee shall report to the Board of Directors of OBUS. The Employee may, from time to
        time, be assigned or undertake additional duties and responsibilities including duties and responsibilities for Affiliates of OBUS, and the Employee's duties and responsibilities may be modified or expanded from time to time.

        
            	
                        (3)

                    	
                        The Employee shall perform the duties and responsibilities set out in Section 2(2):

                    

        

        
            	
                         

                    	
                        (a)

                    	
                        diligently, faithfully and to the best of the Employee's ability; and

                    

        

        
            	
                         

                    	
                        (b)

                    	
                        in the best interests of OBUS.

                    

        

        (4)       The Employee shall comply with the terms, conditions and requirements of OBUS' Policy Manual, as the same may be amended, revised or added to from time to time.

        Section 3 - Remuneration

        (1)       OBUS shall pay to the Employee a salary of ONE HUNDRED FIFTY FOUR THOUSAND FIVE HUNDRED ($154,500.00) U.S. DOLLARS per annum, exclusive of bonuses, benefits and other compensation, payable in equal installments of TWELVE THOUSAND EIGHT HUNDRED AND SEVENTY-FIVE ($12,875.00) U.S. DOLLARS on the 15th and last day of each month. The
        Employee shall be eligible for a bonus payment of not more than twenty-five (25%) of the annual base salary based upon mutually agreed corporate and personal objectives.

        (2)       OBUS shall, on or before the anniversary date of this Agreement in each year, evaluate and set the Employee's salary for the next ensuing year.

        (3)       OBUS shall reimburse the Employee for all out-of-pocket expenses incurred by the Employee in the performance of the Employee's obligations under this Agreement, subject to OBUS' policies then in force.

        (4)       OBUS shall be entitled to withhold from any payments made to the Employee any amounts that OBUS is required to withhold pursuant to any Act in force that relates to income tax, unemployment insurance premiums or pension plan premiums in any jurisdiction under which such payments are required to be made by or on behalf of the Employee, including,
        without limitation, the Internal Revenue Service (U.S.) and the State of California. The Employee will provide OBUS with information reasonably required to determine which jurisdiction or jurisdictions require any such withholdings.

        Section 4 - Benefits

        The Employee shall be entitled to payment in lieu of employment benefits (medical, dental, etc.) of a total value of NINETEEN THOUSAND ONE HUNDRED SEVENTY ($19,170.00) U.S. DOLLARS annually, payable pro rata with the Employee’s monthly payment of salary.

        Section 5 - Vacations

         

        
            

        

        
            

            
                - 4 -

            

            

        

         

        The Employee shall, in addition to all statutory holidays, be entitled to twenty (20) days paid vacation during each twelve (12) month period of employment under this Agreement, with the amount of earned and paid vacation to be adjusted based upon the Employee’s obligation to work part time in accordance with Schedule A. The Employee's vacation time shall be
        governed by applicable policies of OBUS.

        Section 6 - Place of Employment

        The Employee shall be based in California, shall perform the majority of the Employee's employment obligations from and out of OBUS' offices located in California and shall travel to Affiliates’ offices in Alberta and Barbados, as needed.

        Section 7 - Confidential Information

        (1)       The Employee confirms that the Confidential Information is the sole and exclusive property of OBUS and is held by the Employee in trust for the benefit of OBUS. The Employee shall use the Employee's best efforts and exercise utmost diligence to protect and safeguard the Confidential Information. Neither during the period of employment by OBUS nor
        thereafter for a period of three years shall the Employee, directly or indirectly, use or disclose to any other person any Confidential Information, whether or not acquired, learned or obtained or developed by the Employee alone or in conjunction with others, except as such disclosure or use may be required in connection with the employment with OBUS or as may be agreed to in writing by OBUS.

        
            	
                        (2)

                    	
                        Subsection 7(1) shall not apply to Confidential Information that:

                    

        

        
            	
                         

                    	
                        (a)

                    	
                        is in the public domain at the time of its disclosure, or which, after disclosure, becomes part of the public domain other than by disclosure by the Employee;

                    

        

        
            	
                         

                    	
                        (b)

                    	
                        the Employee can show was in the Employee's possession at the time of disclosure and was not acquired from OBUS or its Affiliates; or

                    

        

        
            	
                         

                    	
                        (c)

                    	
                        was received by the Employee from a third party without a covenant of confidentiality, provided such third party is under no obligation of confidentiality with respect to the Confidential Information.

                    

        

        (3)       The Employee shall keep informed of OBUS' policies and procedures for safeguarding OBUS' property including, without limitation, the Confidential Information and the confidentiality thereof, and will strictly comply therewith at all times. The Employee shall not, except as required in the course of the employment with OBUS, remove from OBUS'
        premises any OBUS property including, without limitation, Confidential Information. The Employee shall, immediately upon termination of employment with OBUS, return to OBUS all of OBUS' property in the Employee's possession, including, without limitation, all tangible parts of or relating to the Confidential Information as is in the Employee's possession or under the Employee's control without retaining any copies or record thereof or any other mechanical means that, alone or in
        combination with other means, would permit the Employee to reproduce or make available the Confidential Information.

        (4)       The Employee shall advise any future employer, associate or affiliate that the Employee has signed this Agreement and is bound by its terms and conditions.

        Section 8 - Intellectual Property

        (1)       The Employee confirms that any and all Intellectual Property shall be the sole and exclusive property of OBUS and shall be assigned by the Employee to OBUS, or its nominee. The Employee agrees to disclose promptly to OBUS or its nominee any and all Intellectual Property and to execute written assignments of the Employee's right, title and
        interest in and to the Intellectual Property to OBUS or its nominee.

        
            	
                        (2)

                    	
                        With respect to any Intellectual Property, the Employee also agrees:

                    

        

         

        
            

        

        
            

            
                - 5 -

            

            

        

         

        
            	
                         

                    	
                        (a)

                    	
                        to assist OBUS or its nominee in preparing any necessary copyright and patent applications, including United States and foreign applications, covering the Intellectual Property;

                    

        

        
            	
                         

                    	
                        (b)

                    	
                        to sign and deliver all such applications and their assignment to OBUS or its nominee; and

                    

        

        
            	
                         

                    	
                        (c)

                    	
                        generally to give all information and testimony, to co-operate with OBUS and its solicitors, to sign all lawful papers, and to do all lawful things that may be needed or requested by OBUS to obtain, extend, reissue, maintain or enforce United States and foreign copyrights or patents covering the Intellectual Property.

                    

        

        (3)       OBUS shall bear all expenses that are incurred in obtaining, extending, reissuing, maintaining and enforcing any and all copyrights or patents in respect of the Intellectual Property assigned to OBUS or its nominee by the Employee, and in the vesting and perfecting of title thereto in OBUS or its nominee and shall pay the Employee reasonable
        compensation for any time that OBUS may require the Employee to expend in order to accomplish the above subsequent to the termination of employment with OBUS.

        (4)       The Employee hereby waives in favour of OBUS and its Affiliates, all moral rights in any and all copyright works authored or co-authored by the Employee during the term of this Agreement that directly relate to the Business of OBUS or its Afilliates.

        Section 9 - Term and Termination

        (1)       The Employee's employment under this Agreement shall commence on the Commencement Date and shall continue until terminated in accordance with this Section 9.

        (2)       Subject to Sections 9(3), (4) and (5), and notwithstanding any other provision contained herein to the contrary, the employment relationship between the Employee and OBUS arising out of this Agreement shall terminate upon forty-five (45) days notice being given to OBUS by the Employee or immediately upon notice being given to the Employee by
        OBUS.

        (3)       If OBUS is entitled to terminate this Agreement as the result of a Termination Event, OBUS shall not be required to compensate the Employee in respect of such termination or provide any period of notice in lieu of compensation with respect to such termination.

        (4)       Subject to Section 9(5), if this Agreement is terminated by OBUS at any time other than pursuant to Section 9(3), or if this Agreement is terminated by the Employee for Good Reason, the Employee shall be entitled to severance payment determined as follows:

        
            	
                         

                    	
                        (a)

                    	
                        twelve (12) month’s pay plus accelerated vesting of all of her then unvested stock options.

                    

        

         

        
            

        

        
            

            
                - 6 -

            

            

        

         

        Such severance compensation shall be paid to the Employee so as to maximize any reduction in income tax payable thereon as permitted by applicable laws. The severance payment as provided pursuant to this Section 9(4) shall include an amount equal to the value of the payment in lieu of benefits to which the Employee would otherwise have been entitled during the notice period.

        (5)       Notwithstanding Section 9(4), if there is a change of control of OBUS, as defined herein, and if this Agreement is terminated by OBUS at any time within one (1) year following the change of control other than pursuant to Section 9(3), the Employee shall be entitled to severance payment equal to twice that determined pursuant to Section 9(4). Such
        severance compensation shall be paid to the Employee so as to maximize any reduction in income tax payable thereon as permitted by applicable law.

        For the purposes of this Section 9(5), “change of control” means any amalgamation, merger or other corporate reorganization which results in any change in the present effective voting control of OBUS, or will result in a change of the person or persons who own or control sufficient voting shares in OBUS to elect a majority of the directors of OBUS, or will result in a person
        acquiring sufficient voting shares in OBUS to elect a majority of the directors of OBUS.

        (6)       The Employee acknowledges and agrees that payment in lieu of notice in accordance with Section 9(4) or 9(5) shall be and is conclusively deemed to be reasonable compensation for termination of this Agreement and hereby waives any claim or potential claim that the Employee now has or may hereafter have, against OBUS for further severance
        compensation or notice other than that provided by the terms of this Agreement.

        
            	
                        (7)

                    	
                        The Employee confirms that:

                    

        

        
            	
                         

                    	
                        (a)

                    	
                        any breach of this Agreement or unauthorized disclosure of Confidential Information may result in irreparable harm to the Business of OBUS and considerable monetary damages to OBUS;

                    

        

        
            	
                         

                    	
                        (b)

                    	
                        the damages suffered by OBUS may be difficult to establish; and

                    

        

        
            	
                         

                    	
                        (c)

                    	
                        interim and permanent injunctions may be the only suitable remedy for OBUS;

                    

        

        but nothing herein shall in any way limit or restrict any other remedies available to OBUS at law or in equity including an action for damages.

        (8)       Termination of the Employee's employment with OBUS for any reason whatsoever shall not terminate the Employee's obligations under Sections 7, 8 and 10 of this Agreement.

        Section 10 - Non-Competition

        (1)       The Employee shall not, during the term of this Agreement, engage, hold an interest in or have any involvement, either directly or indirectly, in any business entity, venture or undertaking if such would materially interfere with or conflict with the Employee's duties and obligations to OBUS as provided for under this Agreement, provided that the
        acquisition of a non-control position in publicly traded companies will not contravene this Section.

        (2)       The Employee shall not, during the term of this Agreement, and for a period of one (1) year following the termination or expiration of this Agreement, either individually or in partnership or jointly or in conjunction with any person, firm or corporation as principal, employee, partner, director or as a shareholder or investor (if actually
        involved in the management of a business which is competitive with the Business of OBUS or its Affiliates) carry on or be engaged in any business which is directly competitive with the Business of OBUS or its Affiliates.

        (3)       The parties agree that all of the restrictions contained in Subsection 10(2) hereof are reasonable and valid, and that all defences to the strict enforcement thereof by OBUS are hereby waived by the Employee.

         

        
            

        

        
            

            
                - 7 -

            

            

        

         

        (4)       The Employee agrees that the remedy at law for any breach by the Employee of the provisions of this Section 10 may be inadequate and that in the event of such breach, OBUS may make an application to a court of competent jurisdiction for an order granting OBUS temporary, permanent or both kinds of injunctive relief against the Employee, without
        the necessity of proving actual damage to OBUS.

        (5)       The Employee agrees that any waiver by OBUS of a breach of this Agreement by the Employee shall only be a waiver with respect to the particular breach giving rise to the waiver.

        Section 11 - Notices

        All notices, reports, invoices, payments and formal communications (collectively referred to as "Notices") required or permitted to be given hereunder shall be in writing and shall be delivered personally or sent by prepaid registered mail or facsimile transmission to the following address or such other address as the relevant party may notify from time to
        time:

        
            	
                         

                    	
                        TO:

                    	
                        OBUS

                    

        

        ONCOLYTICS BIOTECH (U.S.), INC.

        107 San Pedro Road

        Half Moon Bay, California

        94019

         

        WITH COPY TO:

        ONCOLYTICS BIOTECH INC.

        Suite 210, 1167 Kensington Crescent N.W.

        Calgary, Alberta

        T2N 1X7

        Attention: President

        
            	
                         

                    	
                        TO:

                    	
                        The Employee

                    

        

        MARY ANN DILLAHUNTY

        107 San Pedro Road

        Half Moon Bay, CA

        94019

        Notices sent by prepaid registered mail shall be deemed to be received by the addressee on the seventh day (excluding Saturdays, Sundays, Statutory Holidays and any period of postal disruption) following the mailing thereof. Notices personally served shall be deemed to be received when actually delivered, provided such delivery shall be during normal business hours.

         

        
            

        

        
            

            
                - 8 -

            

            

        

         

        Section 12 - Dispute Resolution

        If a dispute arises between the parties, the parties shall use the following dispute resolution procedure.

        (1)       Meet and Confer.  A meeting shall be held promptly between the parties, attended by individuals with decision-making authority regarding the dispute, to attempt, in good faith, to negotiate a resolution of the dispute.

        (2)       Mediation.  If within 15 days after such meeting, the parties have not succeeded in negotiating a resolution of the dispute, they agree to submit the dispute to mediation in San Francisco, California, under the auspices of, and in accordance with the rules of, JAMS/Endispute (“JAMS”).  The parties will jointly
        appoint a mutually acceptable mediator, seeking assistance in such regard from JAMS if they are unable to agree upon such appointment.  If the parties are not successful in resolving the dispute through mediation, then the parties agree that the dispute shall be decided by arbitration as provided below.

        (3)       Arbitration.  If the parties have been unable to resolve their dispute through mediation, as provided above, any remaining controversy or claim arising out of, or relating to, the employment relationship or subject matter of this Agreement, or the making, performance or interpretation hereof, shall be decided by binding arbitration in
        San Francisco, California.  The arbitration shall be conducted under the auspices of, and in accordance with the rules of JAMS, by a neutral arbitrator who is mutually agreeable to the parties hereto, or appointed by JAMS if the parties cannot agree.  There will be only one arbitrator appointed.  The arbitrator may award damages as well as equitable and declaratory relief.  The arbitration award shall be final and conclusive upon the parties and a judgment or
        decree upon the award may be entered in any court having jurisdiction over the subject matter of the controversy.

        (4)       Provisional Remedies and Injunctive Relief.  Notwithstanding the agreement to submit disputes to negotiation, mediation and arbitration, as provided above, either party may seek from a court of competent jurisdiction any provisional or interim relief that is necessary to protect the rights or property of that party.

        (5)       Notice:  by initialing in the space below, you are agreeing to have any dispute arising out of the matters included in the “Arbitration” provision decided by neutral arbitration as provided by law and you are giving up any rights you might possess to have the dispute litigated in a court or jury trial.  By initialing
        in the space below, you are giving up your judicial rights to discovery and appeal.  If you refuse to submit to arbitration after agreeing to this provision, you may be compelled to arbitrate under the authority of the California Code of Civil Procedure.  Your agreement to this arbitration provision is voluntary.

        WE HAVE READ AND UNDERSTAND THE FOREGOING AND AGREE TO SUBMIT DISPUTES ARISING OUT OF THE MATTERS INCLUDED IN THE “ARBITRATION” PROVISION TO NEUTRAL BINDING ARBITRATION.  BY PLACING THEIR INITIALS HERE, THE PARTIES AGREE TO BINDING ARBITRATION IN ACCORDANCE WITH THE FOREGOING PROVISION.

        
            	
                         

                    	
                        Company:  

                    	
                        Employee:  

                    

        

        Section 13 - Enurement

        This Agreement shall enure to the benefit of and be binding upon the parties hereto and:

        
            	
                         

                    	
                        (a)

                    	
                        in the case of OBUS, its successors and permitted assigns; and

                    

        

        
            	
                         

                    	
                        (b)

                    	
                        in the case of the Employee, her heirs, executors, administrators or other personal representatives.

                    

        

         

        
            

        

        - 9 -

         

        IN WITNESS WHEREOF the parties have executed this Agreement as of the day and year first above written.

        
            	
                        ONCOLYTICS BIOTECH (U.S.), INC.

                    	
                         

                    
	
                         

                    	
                         

                    	
                         

                    
	
                         

                    	
                        Per:

                    	
                        /s/ Kirk Look

                    
	
                         

                    	
                         

                    	
                        [Name] Kirk Look

                        [Title] CFO

                    
	
                         

                    	
                        Per:

                    	
                         

                    
	
                         

                    	
                         

                         

                    	
                        [Name]

                        [Title]

                    
	
                    	
                    	
                    	
                    

        

         

        
            	
                        
/s/ T. Gene Dillahunty

________________________

                    	
                        
/s/ Mary Ann Dillahunty

________________________________

                    

        

        
            	
                        Witness

                    	
                        MARY ANN DILLAHUNTY

                    

        

         

        
            

        

        SCHEDULE "A"

        JOB DESCRIPTION

         

        The Employee shall perform the duties and responsibilities associated with the position President of OBUS and of Vice President, Intellectual Property, of Oncolytics Biotech Inc., and without limiting the generality of the foregoing, shall provide guidance and assistance to OBUS and its Affiliates related to:

         

        
            	
                         

                    	
                        1.

                    	
                        Intellectual Property, including

                    

        

        
            	
                         

                    	
                        a.

                    	
                        Intellectual Property management

                    

        

        
            	
                         

                    	
                        b.

                    	
                        preparing, filing and prosecuting patent applications;

                    

        

        
            	
                         

                    	
                        c.

                    	
                        Intellectual Property protection strategies; and

                    

        

        
            	
                         

                    	
                        d.

                    	
                        direction of patent filings, prosecution and maintenance;

                    

        

        
            	
                         

                    	
                        2.

                    	
                        Oncolytics' business strategy;

                    

        

        
            	
                         

                    	
                        3.

                    	
                        the management of legal affairs of OBUS and its Affiliates; and

                    

        

        
            	
                         

                    	
                        4.

                    	
                        the executive management of OBUS and its Affiliates.

                    

        

         

         

        The Employee shall perform the employment duties on a part-time basis for one-half (1/2) of normal working hours and days which on the average shall be 26 weeks per year.form8k_030609exh101.htm

    Exhibit
10.1

     

    PROMISSORY
NOTE

    

    
      
        	
                Principal

                $36,600,000.00

              	
                Loan
      Date

                03-02-2009

              	
                Maturity

                9-1-2010

              	
                Loan
      No.

                9001

              	
                Call

                4A0

              	
                Collateral

                8605

              	
                Account

                2740409

              	
                Officer

                70308

              	
                Initials

              
	
                References
      in the shaded area are for Lender’s use only and do not limit the
      applicability of this document to any particular loan or
item.

                Any
      item above containing “****” has been omitted due to text length
      limitations

              

      

    

    

    
      	
              Borrower:

              Southwest
      Iowa Renewable Energy, LLC

              2101
      South 42nd Ave.

              Council
      Bluffs, IA  51501

            	
              Lender:

              Commerce
      Bank, N.A.

              Clayton
      Banking Center

              PO
      Box 11573

              St.
      Louis, MO  63105

            

    

    
       

      
        

        

      

    

    
      	
              Principal
      Amount:  $36,600,000.00

            	
              Date
      of Note:  March 2, 2009

            

    

    

    PROMISE TO
PAY.  Southwest Iowa Renewable Energy, LLC (“Borrower”)
promises to pay to Commerce Bank, N.A. (“Lender”), or order, in lawful money of
the United States of America, the principal amount of Thirty-six Million Six
Hundred Thousand & 00/100 Dollars ($36,600,000.00) or so much as may be
outstanding, together with interest on the unpaid outstanding principal balance
of each advance.  Interest shall be calculated from the date of each
advance until repayment of each advance.

    

    ADVANCES. As of the date of
this Note, the outstanding principal balance of this Note is Thirty Five Million
One Hundred Forty Four Thousand One Hundred Seventy-Four 51/100 Dollars
($35,144,174.51).  Beginning April 1, 2009, and on the first day of
each month thereafter, an advance in the amount of accrued interest shall be
made automatically without any request for an advance by Borrower. 

    

    PAYMENT.  Borrower
will pay this loan in one payment of all outstanding principal plus all accrued
unpaid interest on September 1, 2010.  Interest which shall have
accrued as of the first day of each month, beginning April 1, 2009, and on the
first day of each month thereafter shall be due, and shall be paid by an advance
on the Note as provided herein.  Unless otherwise agreed or required
by applicable law, payments will be applied first to any accrued unpaid
interest; then to principal; then to any unpaid collection costs; and then to
any late charges.  The annual interest rate for this Note is computed
on a 365/360 basis; that is, by applying the ratio of the annual interest rate
over a year of 360 days, multiplied by the outstanding principal balance,
multiplied by the actual number of days the principal balance is
outstanding.  Borrower will pay Lender at Lender’s address shown above
or at such other place as Lender may designate in writing.

    

    VARIABLE INTEREST
RATE.  The interest rate on this Note is subject to change from
time to time based on changes in an index which is the (i) LIBOR divided by (ii)
1 minus the LIBOR Reserve Requirement (the “Index”); provided, however, that in no
event shall the interest rate on this Note be less than 3 percentage points per
annum.  Lender will tell Borrower the current Index rate upon
Borrower’s request.  The interest rate change will occur monthly on
the first (1st) day of each month based on the most recent Index then available.
“LIBOR” means the daily average of interbank offered rates for US Dollar
deposits in the London market based on quotations at major banks, as published
under the heading “London Interbank Offered Rates (LIBOR)” in the “Money Rates”
column of The Wall Street
Journal for the one month maturity. “LIBOR Reserve Requirement” means, at
any time, the maximum rate at which reserves (including, without limitation, any
marginal, special, supplemental, or emergency reserves) are required to be
maintained under regulations issued from time to time by the Board of Governors
of the Federal Reserve System (or any successor) by member banks of the Federal
Reserve System against “Eurocurrency liabilities” (as such term is used in
Regulation D).  Without limiting the effect of the foregoing, the
LIBOR Reserve Requirement shall reflect any other reserves required to be
maintained by such member banks with respect to (i) any category of liabilities
which includes deposits
by reference to which LIBOR is to be determined, or (ii) any category of
extensions of credit or other assets which include LIBOR loans.  The
Index shall be adjusted automatically on and as of the effective date of any
change in the LIBOR Reserve Requirement.  Borrower understands that
Lender may make loans based on other rates as well.  So long as
interest on this Note is calculated based on the Index, the interest rate to be
applied to the unpaid principal balance
during this Note will be at a rate of 1.50 percentage points over the
Index.  NOTICE:  Under no circumstances will the interest
rate on this Note be more than the maximum rate allowed by applicable
law. 

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

     

    
    

     

    
      	 	
               PROMISSORY
      NOTE

            	
               Exhibit
      10.1

            
	 	
               (Continued)

            	 
	 Loan No.
      9001	 	
               Page
      2

            
	 	 	 

    

     

     

    PREPAYMENT.  Borrower
agrees that all expenses and all loan fees and other prepaid finance charges are
earned fully as of the date of the loan and will not be subject to refund upon
early payment (whether voluntary or as a result of default), except as otherwise
required by law.   Except for the foregoing, Borrower may pay
without penalty all or a portion of the amount owed earlier than it is
due.  Early payments will not, unless agreed to by Lender in writing,
relieve Borrower of Borrower’s obligation to continue to make payments of
accrued unpaid interest.  Rather, early payments will reduce the
principal balance due.  Borrower agrees not to send Lender payments
marked “paid in full”, “without recourse”, or similar language.  If
Borrower sends such a payment, Lender may accept it without losing any of
Lender’s rights under this Note, and Borrower will remain obligated to pay any
further amount owed to Lender.  All written communications concerning
disputed amounts, including any check or other payment instrument that indicates
that the payment constitutes “payment in full” of the amount owed or that is
tendered with other conditions or limitations or as full satisfaction of a
disputed amount must be mailed or delivered to:  Commerce Bank, N.A.;
Clayton Banking Center; 8000 Forsyth; P.O. Box 11573; St. Louis,
MO  63105.

    

    LATE CHARGE.  If a
payment is more than ten (10) days late, Borrower will be charged 5.000% of the unpaid portion of the
payment or $250.00, whichever is less.

    

    INTEREST AFTER
DEFAULT.  Upon the occurrence and during the continuance of an
Event of Default (as hereinafter defined), including failure to pay upon final
maturity, the interest rate on this Note shall be increased by adding a 3.000
percentage point margin (“Default Rate Margin”).  The Default Rate
Margin shall also apply to each succeeding interest rate change that would have
applied had there been no default.  However, in no event will the
interest rate exceed the maximum interest rate limitations under applicable
law.

    

    REPRESENTATIONS AND
WARRANTIES.  Borrower represents and warrants to Lender, as of
the date of this Note, as of the date of each disbursement of loan proceeds, as
of the date of any renewal, extension or modification of any Loan, and at all
times any amount is outstanding under this Note:

    

    Organization.  Borrower
is a limited liability company which is, and at all times shall be, duly
organized, validly existing, and in good standing under and by virtue of the
laws of the State of Iowa.  Borrower is duly authorized to transact
business in all states in which Borrower is doing business, having obtained all
necessary filings, governmental licenses and approvals for each state in which
Borrower is doing business.  Specifically, Borrower is, and at all
times shall be, duly qualified as a foreign limited liability company in all
states in which the failure to so qualify would have a material adverse effect
on its business or financial condition.  Borrower has the full power
and authority to own its properties and to transact the business in which it is
presently engaged or presently proposes to engage.  Borrower maintains
an office at 2101 South 42nd Ave., P.O. Box 986, Council Bluffs,
IA  51502-0986.  Borrower will notify Lender prior to any
change in the location of Borrower’s state of organization or any change in
Borrower’s name.  Borrower shall do all things necessary to preserve
and to keep in full force and effect its existence, rights and privileges, and
shall comply with all regulations, rules, ordinances, statutes, orders and
decrees of any governmental or quasi-governmental authority or court applicable
to Borrower and Borrower’s business activities, the noncompliance with which
would have a material adverse effect on its business or financial condition or
its prospects of timely completing the Project. For purposes of this Note,
“Project” shall mean Borrower’s ethanol production facility in Pottawattamie
County, Iowa.

    Authorization.  Borrower’s
execution, delivery, and performance of this Note has been duly authorized by
all necessary action by Borrower and do not conflict with, result in a violation
of, or constitute a default under  (1)  any provision
of  (a)  Borrower’s articles of organization or operating
agreement, or  (b)  any agreement or other instrument
binding upon Borrower or  (2)  any law, governmental
regulation, court decree, or order applicable to Borrower or to Borrower’s
properties.

    Legal Effect.  This
Note constitutes the legal, valid, and binding obligation of Borrower
enforceable against Borrower in accordance its terms.

    

    COVENANTS.  Borrower
agrees that, so long as any amount is outstanding under this Note, Borrower
will:

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

     

    
      	
            	
               PROMISSORY
      NOTE

            	
               Exhibit
      10.1

            
	 	
               (Continued)

            	 
	 Loan No.
      9001	 	
               Page
      3

            

    

    Fees and
Expenses.  Pay, on Lender’s demand, all reasonable fees,
charges, and other expenses incurred by Lender in connection with the
originating of the loan evidenced by this Note, including without limitation
Lender’s reasonable attorneys fees.

    Notices of Claims and
Litigation.  Promptly inform Lender in writing of (1) any
“Event of Default” (as defined therein) under the Bank Group Facility as that
term is defined below, whether or not there shall be a waiver of such Event of
Default, and any event or condition which, with the giving of notice or the
passage of time, would become an Event of Default under the Bank Group Facility,
and (2) all existing and all threatened litigation, claims, investigations,
administrative proceedings or similar actions affecting Borrower of which
Borrower has knowledge and which could reasonably be expected to have a material
adverse affect on the business or financial condition of Borrower or Borrower’s
prospects of timely completing the Project.

    Financial
Statements.  Furnish Lender copies of such financial statements
and other related information at such frequencies and in such detail as Borrower
furnishes the lenders under the Bank Group Facility.

    

    COLLATERAL.  The
payment and performance of Borrower’s obligations to Lender under this Note is
secured by Intrust Bank, N.A. Irrevocable Standby Letter of Credit No.
08SBLC0345 issued for the account of ICM Inc. and for the benefit of the Lender
in the original face amount of $8,784,000 (the “Letter of Credit”) and by a
pledge of and grant of a security interest in Bunge N.A. Holdings, Inc.’s Money
Market Deposit Account No. 208020279 maintained with Lender (which has an
original credit balance in the amount of $27,816,000) (the “Pledged Deposit
Account”) pursuant to that certain Pledge of Money Market Deposit Account
executed by Bunge N.A. Holdings, Inc. in favor of Lender dated of even date
herewith.

    

    DEFAULT.  Each of
the following shall constitute an event of default (“Event of Default”) under
this Note:

    

    Payment
Default.  Borrower fails to make any payment when due under
this Note and any such failure shall remain unremedied for more than three (3)
business days.

    Other
Defaults.  Borrower fails to comply with or to perform any
other term, obligation, covenant or condition contained in this Note or in any
of the related documents or to comply with or to perform any term, obligation,
covenant or condition contained in any other agreement between Lender and
Borrower and any such failure shall remain unremedied for more than ten (10)
business days after written notice thereof from the Lender to the
Borrower.

    Default in Favor of Third
Parties.  Borrower defaults under any loan, extension of
credit, security agreement, purchase or sales agreement, or any other agreement,
in favor of any other creditor or person that could reasonably be expected to
have a material adverse effect on any of Borrower’s property or Borrower’s
ability to timely complete the Project or Borrower’s ability to repay this Note
or perform Borrower’s obligations under this Note or any of the related
documents.  Without limitation, the occurrence of an “Event of
Default” (as defined therein)  under the Bank Group Facility shall
constitute an Event of Default.  “Bank Group Facility” means the
credit facility from certain lenders and AgStar Financial Services, PCA, as
administrative agent, in favor of Borrower evidenced by a Credit Agreement dated
May 2, 2007, as amended by a First Amendment to Credit Agreement dated as of
March 7, 2008, as further amended by a Second Amendment to Credit Agreement
dated as of December 19, 2008, as further amended by a Third Amendment to Credit
Agreement dated as of December 30, 2008, and as further amended by a Fourth
Amendment to Credit Agreement dated as of the date of this Note, without giving
effect to any other amendments thereto unless acceptable to Lender and accepted
by Lender in writing and without giving effect to any waivers granted under the
Bank Group Facility unless acceptable to Lender and accepted by Lender in
writing.

    False
Statements.  Any warranty, representation or statement made or
furnished to Lender by Borrower or on Borrower’s behalf under this Note or the
related documents is false or misleading in any material respect, either now or
at the time made or furnished or becomes false or misleading at any time
thereafter.

    Dissolution or
Bankruptcy.  The dissolution of Borrower (regardless of whether
election to continue is made), or any other termination of Borrower’s existence
as a going business, the appointment of a receiver for any part of Borrower’s
property, any assignment for the benefit of creditors, any type of creditor
workout or the commencement of any proceeding under any bankruptcy or insolvency
laws by or against Borrower (and, if against Borrower, is not dismissed within
thirty (30) days after the commencement thereof).

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    
      	
            	
               PROMISSORY
      NOTE

            	
               Exhibit
      10.1

            
	 	
               (Continued)

            	 
	 Loan No.
      9001	 	
               Page
      4

            

    Creditor or Forfeiture
Proceedings.  Commencement of foreclosure or forfeiture
proceedings, whether by judicial proceeding, self-help, repossession or any
other method, by any creditor of Borrower or by any governmental agency against
any collateral securing the loan.  This includes a garnishment of any
of Borrower’s accounts, including any deposit accounts, with
Lender.  However, this Event of Default shall not apply if there is a
good faith dispute by Borrower as to the validity or reasonableness of the claim
which is the basis of the creditor or forfeiture proceeding and if Borrower
gives Lender written notice of the creditor or forfeiture proceeding and
deposits with Lender monies or a surety bond for the creditor or forfeiture
proceeding, in an amount determined by Lender, in its sole discretion, as being
an adequate reserve or bond for the dispute.

    Events Affecting
Guarantor.  Any of the preceding events occurs with respect to
any guarantor, endorser, surety, or accommodation party of any of the
indebtedness or any guarantor, endorser, surety, or accommodation party dies or
becomes incompetent, or revokes or disputes the validity of, or liability under,
any guaranty of the indebtedness evidenced by this Note.

    Credit Rating.  The
Credit Rating issued by either of the Rating Agencies for the Issuer of the
Letter of Credit shall be downgraded two levels or more from the level Issuer
held at the date of this Note, and, within ten (10) business days following
written notice to Borrower, Borrower has not replaced the Letter of Credit with
a letter of credit in an aggregate amount equal to the undrawn face amount of
the Letter of Credit in form and substance satisfactory to Lender and issued by
a bank acceptable to Lender.  As used herein, “Credit Rating” means
the long-term issuer rating assigned by Moody’s Investors Service or Standard
& Poor’s, “Issuer” shall mean Intrust Bank, N.A., and “Letter of Credit” has
the meaning ascribed thereto in the Section of this Note entitled
“COLLATERAL.”  As of the date of this Note, Issuer holds the following
Credit Rating:  A3 by Moody’s Investor Service (meaning that a
downgrade to Baa2 or lower will result in an Event of Default) and A- by
Standard & Poors (meaning that a downgrade to BBB or lower will result in an
Event of Default).

    Interest
Coverage.  If Lender shall determine and notify Borrower in
writing that that the sum of the outstanding principal amount due on this Note
and the interest and fees due on this Note shall at any time exceed the sum of
the undrawn face amount of the Letter of Credit plus the then credit balance in
the Pledged Deposit Account and the face amount of such Letter of Credit and/or
the then credit balance in the Pledged Deposit Account are not increased to an
aggregate amount at least equal to the sum of the outstanding principal amount
due on this Note and the interest and fees due on this Note within ten (10)
business days after the effective date of such notice (as set forth in the
Section of this Note entitled “NOTICES”).

    

    LENDER’S
RIGHTS.  Upon the occurrence of an Event of Default, any
commitment and obligation of Lender under this Note or any other agreement
immediately will terminate including any obligation to make further advances,
and, at Lender’s option, Lender may declare the entire unpaid principal balance
under this Note and all accrued unpaid interest immediately due and payable, all
without notice of any kind to Borrower, except that in the case of an Event of
Default of the type described in the “Dissolution or Bankruptcy” subsection
above, such acceleration shall be automatic and not optional.  In
addition, Lender shall have all the rights and remedies provided in any
documents relating to this Note or available at law, in equity, or
otherwise.  Upon the declaration that the entire unpaid principal
balance and accrued interest shall be due and payable or upon the occurrence of
an Event of Default of the type described in the “Dissolution or Bankruptcy”
subsection above, the unpaid principal balance and accrued interest shall be due
and payable hereunder and Borrower is obligated to pay that amount to
Lender.  Notwithstanding any other provision of this Note, Lender
shall, prior to exercising any other rights or remedies available to Lender,
submit draws under the Letter of Credit in form Lender reasonably believes to be
proper under the terms of the Letter of Credit and exercise its rights against
funds on deposit in the Pledged Deposit Account on a proportionate basis
(initially 76% of the then outstanding principal balance of this Note together
with all accrued and unpaid interest thereon with respect to the Pledged Deposit
Account and 24% of the then outstanding principal balance of this Note together
with all accrued and unpaid interest thereon with respect to the Letter of
Credit, subject to adjustment as set forth herein) and collect, if made
available to Lender, the proceeds of such Pledged Deposit Account and such
Letter of Credit and apply such proceeds to the amount due
hereunder.  Lender agrees that, in the event a principal payment is
made on this Note (other than as a result of a draw on the Letter of Credit or
from the application of funds from the Pledged Deposit Account), upon the
request of Borrower and upon Lenders’ receipt of confirmation from AgStar
Financial Services, PCA, as agent under the Bank Group Facility, that such
principal payment is permitted under the Bank Group Facility,

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    
      	
            	
               PROMISSORY
      NOTE

            	
               Exhibit
      10.1

            
	 	
               (Continued)

            	 
	 Loan No.
      9001	 	
               Page
      5

            

    Lender
will consent to and acknowledge a reduction in the amount on deposit in the
Pledged Deposit Account and a reduction in the face amount of the Letter of
Credit by an amount equal to the applicable proportionate share of such
principal payment (76% of the amount of such principal payment with respect to
the Pledged Deposit Account and 24% of the amount of such principal payment with
respect to the Letter of Credit, subject to adjustment as set forth herein)
unless Bunge N.A. Holdings, Inc. and ICM Inc. jointly instruct Lender that said
reductions shall be made on a different basis.

    

    Lender
acknowledges and agrees that upon the request of Bunge N.A. Holdings, Inc. the
face amount of the Letter of Credit may be reduced from time to time provided a
corresponding deposit in an amount equal to said reduction is made by Bunge N.A.
Holdings, Inc. to the Pledged Deposit Account.  In such event, any
subsequent proportionate exercise of rights by Lender against funds on deposit
in the Pledged Deposit Account or the Letter of Credit and any proportionate
reductions in the amount on deposit in the Pledged Deposit Account and the face
amount of the Letter of Credit in the event of a principal payment shall be
adjusted accordingly.

    

    ATTORNEYS’ FEES;
EXPENSES.  Lender may hire or pay someone else to help collect
this Note if Borrower does not pay.  Borrower will pay Lender that
amount.  This includes, subject to any limits under applicable law,
Lender’s reasonable attorneys’ fees and Lender’s reasonable legal expenses
whether or not there is a lawsuit, including reasonable attorneys’ fees and
expenses for bankruptcy proceedings (including efforts to modify or vacate any
automatic stay or injunction), and appeals.  If not prohibited by
applicable law, Borrower also will pay any court costs, in addition to all other
sums provided by law.

    

    GOVERNING
LAW.  This Note will be governed by federal law applicable to Lender
and, to the extent not preempted by federal law, the laws of the State of
Missouri without regard to its conflicts of law provisions.  This Note
has been accepted by Lender in the State of Missouri.

    

    RIGHT OF SETOFF.  To
the extent permitted by applicable law, Lender reserves a right of setoff in all
Borrower’s accounts with Lender (whether checking, savings, or some other
account).  This includes all accounts Borrower holds jointly with
someone else and all accounts Borrower may open in the
future.  However, this does not include any IRA or Keogh accounts, or
any trust accounts for which setoff would be prohibited by
law.  Borrower authorizes Lender, to the extent permitted by
applicable law, to charge or setoff all sums owing on the indebtedness against
any and all such accounts.

    

    LINE OF
CREDIT.  This Note evidences a straight line of
credit.  Once the total amount of principal has been advanced,
Borrower is not entitled to further loan advances.  Borrower agrees to
be liable for all sums advanced hereunder.

    

    SUCCESSOR
INTERESTS.  The terms of this Note shall be binding upon
Borrower, and upon Borrower’s successors and assigns, and shall inure to the
benefit of Lender and its successors and assigns.

    

    NOTICES.  Any notice
required to be given under this Note shall be given in writing, and shall be
effective when actually delivered, when actually received by telefacsimile
(unless otherwise required by law), when deposited with a nationally recognized
overnight courier, or, if mailed, when deposited in the United States mail, as
first class, certified or registered mail postage prepaid, directed to the
addresses shown near the beginning of this Note.  Either Lender or
Borrower may change its address for notices under this Note by giving formal
written notice to the other, specifying that the purpose of the notice is to
change the party’s address.  For notice purposes, Borrower agrees to
keep Lender informed at all times of Borrower’s current address.

    

    SEVERABILITY.  If a
court of competent jurisdiction finds any provision of this Note to be illegal,
invalid, or unenforceable as to any circumstance, that finding shall not make
the offending provision illegal, invalid, or unenforceable as to any other
circumstance.  If feasible, the offending provision shall be
considered modified so that it becomes legal, valid and
enforceable.  If the offending provision cannot be so modified, it
shall be considered deleted from this Note.  Unless otherwise required
by law, the illegality, invalidity, or unenforceability of any provision of this
Note shall not affect the legality, validity or enforceability of any other
provision of this Note.

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    
      	
            	
               PROMISSORY
      NOTE

            	
               Exhibit
      10.1

            
	 	
               (Continued)

            	 
	 Loan No.
      9001	 	
               Page
      6

            

    GENERAL
PROVISIONS.  If any part of this Note cannot be enforced, this
fact will not affect the rest of the Note.  Lender may delay or forgo
enforcing any of its rights or remedies under this Note without losing
them.  Borrower and any other person who signs, guarantees or endorses
this Note, to the extent allowed by law, waive presentment, demand for payment,
and notice of dishonor.  Upon any change in the terms of this Note,
and unless otherwise expressly stated in writing, no party who signs this Note,
whether as maker, guarantor, accommodation maker or endorser, shall be released
from liability.  All such parties agree that Lender may renew or
extend (repeatedly and for any length of time) this loan or release any party or
guarantor or collateral; or impair, fail to realize upon or perfect Lender’s
security interest in the collateral; and take any other action deemed necessary
by Lender without the consent of or notice to anyone.  All such
parties also agree that Lender may modify this loan without the consent of or
notice to anyone other than the party with whom the modification is
made.  The obligations under this Note are joint and
several.

    

    AMENDMENT AND
RESTATEMENT.  This Note amends and restates the Promissory Note
dated March 7, 2008 executed by Borrower in favor of Lender in the original
principal amount of $36,000,000 (the “Prior Note”).  The indebtedness
evidenced by the Prior Note and outstanding as of the date of this Line of
Credit Note is not extinguished hereby but continues hereunder.

    

    ORAL
AGREEMENTS OR COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR TO FOREBEAR FROM
ENFORCING REPAYMENT OF A DEBT INCLUDING PROMISES TO EXTEND OR RENEW SUCH DEBT
ARE NOT ENFORCEABLE, REGARDLESS OF THE LEGAL THEORY UPON WHICH IT IS BASED THAT
IS IN ANY WAY RELATED TO THE CREDIT AGREEMENT.  TO PROTECT YOU
(BORROWER(S)) AND US (CREDITOR) FROM MISUNDERSTANDING OR DISAPPOINTMENT, ANY
AGREEMENTS WE REACH COVERING SUCH MATTERS ARE CONTAINED IN THIS WRITING, WHICH
IS THE COMPLETE AND EXCLUSIVE STATEMENT OF THE AGREEMENT BETWEEN US, EXCEPT AS
WE MAY LATER AGREE IN WRITING TO MODIFY IT.

    

    JURY
WAIVER.  Lender and Borrower hereby waive the right to any jury trial
in any action, proceeding, or counterclaim brought by either Lender or Borrower
against the other.

    

    PRIOR
TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS
NOTE, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS.  BORROWER
AGREES TO THE TERMS OF THE NOTE.

    

    BORROWER
ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS PROMISSORY NOTE.

     

    
      
        
          
            
              
                
                  
                    	

                            SOUTHWEST
      IOWA RENEWABLE ENERGY, LLC

                          	 
	 	 
      

                            BORROWER:

                          	 
	
                            By:
      

                          	 /s/ 
      Mark Drake	 
	 	Mark Drake, Chief Executive
      Officer	 
	 	
                          	 
	 	 	 

                  

                

              

            

          

        

      

    

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    
      	
            	
               PROMISSORY
      NOTE

            	
               Exhibit
      10.1

            
	 	
               (Continued)

            	 
	 Loan No.
      9001	 	
               Page
      7

            

    

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              	

                                       

                                      Acknowledged
      and agreed to:

                                       

                                      
                                        LENDER:

                                      

                                    	 
	 	 	 
	
                                      By:
      

                                    	/s/ Jeffrey
      S. Potts    	 
	 	Jeffrey
      S. Potts	 
	 	Senior
      Vice President	 
	 	 	 

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    
 

    
      
        
          

        

      

    

    LASER PRO
Lending, Ver. 5.33.00.004  Copr. Harland Financial Solutions, Inc.
1997, 2008.   All Rights Reserved.   -
MO  J:\CFI\LPL\D20.FC  TR-136682  PR-18
(M)

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