Document:

exv10w24

 

Exhibit 10.24

	 	 	 	 	 	 	 
	 

	 	STATE of NEBRASKA

DAKOTA COUNTY
	 	}
	 	ss.
	 	 	Filed for record this 3 day of
	 	 	October 2006 at 2:40 o’clock
	 	 	P M., and recorded as
	 	 	Instrument No 06-010248
	 	 	Register of Deads ???

 

DATE: September 28, 2006

SUBORDINATE DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS, AND

SECURITY AGREEMENT

FIXTURE FINANCING STATEMENT

(Hereinafter referred to as “Deed of Trust”)

MADE BY

SIOUXLAND ETHANOL, LLC

1501 Knox Boulevard

P.O. Box 147

Jackson, NE 68743

(Hereinafter referred to as “Trustor”)

TO

Wells Fargo Bank, National Association,

as Trustee

1248 O Street

Lincoln, NE 68508

(Hereinafter referred to as “Trustee”)

(Hereinafter collectively referred to as “Beneficiary” and “Secured Party”)

THIS DEED OF TRUST CONSTITUTES A FIXTURE FINANCING STATEMENT

UNDER THE NEBRASKA UNIFORM COMMERCIAL CODE

 

 

 

          To the extent of Trustor’s estate, right, title and interest to the Property as defined
below, Trustor hereby irrevocably grants, transfers, pledges and assigns to Trustee, its
successors and assigns, IN TRUST, WITH POWER OF SALE and right of entry and possession, all of
Trustor’s estate, right, title and interest in any and all of the following described property
which is (except where the context otherwise requires) herein collectively called the “Property,”
whether now owned or held or hereafter acquired, and any proceeds thereof or accessions thereto,
including:

     (A) That certain real property, more particularly described in Exhibit A attached hereto and
incorporated herein by this reference, together with all of the easements, rights, privileges,
franchises and appurtenances thereunto belonging or in anywise appertaining, and all structures and
buildings and leasehold improvements now or at any time hereafter located therein (hereinafter such
real property, when referred to alone, shall be referred to as the “Premises”), and all of the
estate, right, title, interest, claim and demand whatsoever of Trustor therein or thereto, either
at law or in equity, in possession or in expectancy, now or hereafter acquired;

     (B) All equipment, apparatus, machinery, fixtures, fittings, vehicles, tools, rolling stock
and appliances and any additions to, substitutions for, changes in or replacement of the whole or
any part thereof, now or at any time hereafter affixed to, attached to, placed upon or used in any
way in connection with the use, enjoyment, occupancy or operation of the Premises or any portion
thereof or otherwise used by Trustor (the “Equipment”);

     (C) All rights, title and interest of Trustor in and to all streets, roads and public places,
opened or proposed, and all easements and rights of way, vaults, party wall agreements, public or
private, revocable licenses, tenements, hereditaments, rights and appurtenances, now or hereafter
used in connection with, belonging or appertaining to the Premises (hereinafter referred to,
together with the Premises and Equipment, as the Real Property);

     (D) All of the rents, royalties, issues, profits, revenue, income, proceeds and other benefits
of the Property (the “Rents and Profits”), including the Trustor’s interest in the real estate
described in Exhibit A attached hereto and incorporated by this reference, or arising from the use
or enjoyment of all or any portion thereof or from any lease or agreement pertaining thereto, and
all right, title and interest of Trustor in and to all leases of the Property, including all or any
portion of the real estate described in Exhibit A, now or hereafter entered into, and all right,
title and interest of Trustor thereunder, including, without limitation, cash or securities
deposited thereunder to secure performance by the lessees of their obligations thereunder, whether
said cash or securities are to be held until the expiration of the terms of said leases or applied
to one or more of the installments of rent coming due immediately prior to the expiration of the
terms of said leases or applied to one or more of the installments of rent coming due immediately
prior to the expiration of said terms; subject to, however, the provisions contained in Section
1.06 hereof;

     (E) All proceeds (including claims and demands therefor) of the conversion, voluntary or
involuntary, of any of the foregoing Property into cash or liquidated claims, including, without
limitation, proceeds of insurance and condemnation awards on the Premises (hereinafter sometimes
called “Insurance Proceeds” and “Condemnation Proceeds”); and

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     (F) All rights, title and interest of Trustor in any and all building permits, revocable
license permits (including insurance and bonds), any and other permits, licenses or authorization
required by the governmental authorities having or exercising jurisdiction over the Premises or
Fixtures (hereinafter collectively referred to as “Permits,
Licenses, Approvals and Agreements”).

          FOR THE PURPOSE OF SECURING, due, prompt and complete observance, performance and discharge of
each and every payment, obligation, covenant and agreement contained in the Community Redevelopment
Authority of the Village of Jackson, Nebraska’s (“Authority”) Tax Increment Revenue Bonds
(Siouxland Ethanol, LLC Project) (the “Bonds”), in the original principal amount of $4,030,000, and
all obligations of Trustor pursuant to a Guaranty Agreement in favor of Beneficiary dated as of the
date of this Deed of Trust (“Guaranty”), subject to (i) liens for ad valorem taxes and special
assessments not then delinquent; (ii) this Bond Resolution; (iii) the Redevelopment Contract; (iv)
this Subordinate Deed of Trust; (v) utility, access and other easements and rights-of-way, mineral
rights, reservations, restrictions and exceptions that are of record on the date hereof; (vi) such
minor defects, irregularities, encumbrances, easements, rights-of-way and clouds on title as
normally exist with respect to properties similar in character to the Premises and as do not in the
aggregate, in the opinion of Independent Counsel, materially impair the property affected thereby
for the purposes for which it was acquired or is held by the Company; and (vii) deeds of trust or
mortgages securing debt financing incurred by Company for acquisition, construction, equipping and
operating the Project.

The Bonds and Guaranty are hereinafter referred to together as the “Obligations.”

Pursuant to that certain Subordination Agreement, dated as of September 28, 2006 (the
“Subordination Agreement”), between the Trustee and Farm Credit Services of America, FLCS and
CoBank, ACB as its administrative agent (the “Senior Lender”), the liens and security interests
granted to the Trustee herein are expressly subordinate to the liens and security interests the
Company has granted or may grant to the Senior Lender. The Subordination Agreement restricts the
ability of the Trustee to enforce the Deed of Trust, to take other actions, and to accept payments
from the Company without the consent of the Senior Lender.

     The Agreement does not restrict the ability of the Company to incur additional indebtedness
and grant liens and security interests to secure such indebtedness. The Senior Credit Facility and
any additional debt of the Company from the Senior Lender will be secured on a senior basis to the
security granted by this Deed of Trust. In addition, the Company may secure certain additional
debt on a parity basis with the security for the Bonds granted herein.

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ARTICLE I

COVENANTS OF TRUSTOR

          To protect the security of this Deed of Trust, Trustor covenants, warrants and agrees to and
with Beneficiary and Trustee as follows:

     1.01 Payment of Principal and Interest. Trustor will pay the principal of and interest,
if any, on and all other sums becoming due or payable with respect to the Obligations at the time
and place and in the manner specified in the Obligations and in the Resolution of the Authority
dated July 20, 2006, and this Deed of Trust according to the terms of the Obligations, the
Resolution and this Deed of Trust.

     1.02 Warranty of Title. Trustor warrants that it has good and marketable title in fee
simple to the Premises subject to no lien, charge or encumbrance except such as are listed as
exceptions to title in the title policy or policies insuring the lien of this Deed of Trust issued
upon recordation hereof by a title company or companies acceptable to Beneficiary. This Deed of
Trust is and will remain a valid and enforceable lien on the Property subject only to the
exceptions referred to above. Trustor has full power and lawful authority to grant, assign,
transfer and mortgage its interest in the Property in the manner and form hereby done or intended.
Trustor will preserve its interest in and title to the Property and will forever collectively
warrant and defend the same to Trustee and will forever warrant and defend the validity and
priority of the lien hereof against the claims of all persons and parties whomsoever. Trustor shall
promptly and completely observe, perform, and discharge each and every obligation, covenant and
agreement affecting the Property whether the same is prior and superior or subject and subordinate
hereto.

     1.03 Further Assurances.

          (a) Trustor will do, execute, acknowledge and deliver all and every such further acts, deeds,
conveyances, mortgages, assignments, notices of assignments, pledge agreements, transfers and
assurances as Trustee or Beneficiary shall from time to time reasonably require, for the better
assuring, conveying, assigning, transferring and confirming unto Trustee and Beneficiary the
property and rights hereby conveyed or assigned or intended now or hereafter so to be, or which
Trustor may be or may hereafter become bound to convey or assign to Trustee or Beneficiary, or for
carrying out the intention or facilitating the performance of the terms of this Deed of Trust, or
for filing, registering or recording this Deed of Trust and, on demand, Trustor will execute and
deliver, and hereby authorizes Trustee or Beneficiary to execute in the name of Trustor to the
extent Trustor may lawfully do so, one or more financing statements, chattel mortgages or
comparable security instruments, to evidence more effectively the lien hereof upon the Fixtures.

          (b) Trustor forthwith upon the execution and delivery of this Deed of Trust, and thereafter
from time to time, will cause this Deed of Trust, and any security instrument creating a lien or
evidencing the lien hereof upon the Property and each instrument of further assurance, to be filed,
registered or recorded in such manner and in such places as may be required by any present or
future law in order to publish notice of and fully to protect the lien hereof upon the title of
Trustee to, and the security interest of Beneficiary in the Property.

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     1.04 Conversion and Security. All right, title and interest of Trustor in and to all
extensions, improvements, betterments, renewals, substitutes and replacements of, and all additions
and appurtenances to the Property, hereafter acquired by, or released to Trustor, or constructed,
assembled or placed by Trustor on the Premises and all conversions of the security constituted
thereby, immediately upon such acquisition, release, construction, assembling, placement or
conversion, as the case may be, and in each such case, without any further deed of trust,
conveyance, assignment or other act by Trustor, shall become subject to the lien of this Deed of
Trust as fully and completely, and with the same effect, as though now owned by Trustor and
specifically described in the granting clause hereof, but at any and all times Trustor will execute
and deliver to Trustee any and all such further assurances, deeds of trust, conveyances or
assignments thereof as Trustee or Beneficiary may reasonably require for the purpose of expressly
and specifically subjecting the same to the lien of this Deed of Trust.

     1.05 Security Agreement. To the extent allowed by the Nebraska Uniform Commercial
Code, this Deed of Trust shall be self-operative and constitute a Security Agreement and Fixture
Financing Statement with respect to the Equipment, Rents and Profits, Insurance Proceeds and
Condemnation Proceeds, Permits, Licenses, Approvals and Agreements. Trustor hereby agrees to
execute and deliver on demand and hereby irrevocably constitutes and appoints Beneficiary the
attorney-in-fact of Trustor, to execute, deliver and, if appropriate, to file with the appropriate
filing officer or office such security agreements, financing statements or other instruments as
Beneficiary may request or require in order to impose or perfect the lien or security interest
hereof more specifically thereon. A photographic or other reproduction of this Deed of Trust or of
any financing statement relating to this Deed of Trust shall be sufficient as a financing
statement.

     1.06 Assignment of Rents and Profits. Beneficiary and Trustee shall have the right,
power and authority during the continuance of this Deed of Trust to collect the Rents and Profits
of the Property and of personal property located thereon with or without taking possession of the
Property affected hereby, and Trustor hereby absolutely and unconditionally assigns all such Rents
and Profits to Beneficiary including the Rents and Profits of the Premises described in Exhibit A
attached hereto. Beneficiary, however, hereby consents to the Trustor’s collection and retention of
such Rents and Profits as they accrue and become payable so long as Trustor is not at such time, in
default with respect to the indebtedness secured hereby, or in the performance of any covenant or
agreement hereunder or hereby secured.

ARTICLE II

EVENTS OF DEFAULT

          The following shall constitute events of default (“Events of Default”)
hereunder:

     2.01 Obligations, Covenants, and Agreements. A default by Trustor in the due, prompt
and complete observance and performance of any obligation, covenant and agreement contained in
this Deed of Trust.

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     2.02 Other Obligations. A default by Trustor in the due, prompt, and complete
observance and performance of any obligation, covenant and agreement contained in the Guaranty, or
the occurrence of any other Event of Default as defined by and under the Resolution, including the
payment, when due of any installment of principal or interest, if any, on the Bonds.

ARTICLE III

REMEDIES

          Upon the occurrence of any Event of Default, Trustee and Beneficiary shall have the following
rights and remedies subject to the rights of holders of prior encumbrances identified in Section
1.02 of this Deed of Trust:

     3.01 Possession. Upon the occurrence of any Event of Default hereunder including,
without limitation, defaults in the Agreement or the Resolution, and acceleration of payment of
principal of and interest on the Series A Bonds then the Beneficiary in person or by agent may,
without any obligation so to do and without notice or demand upon Trustor and without releasing
Trustor from any obligation hereunder or in any other agreement or instrument relating to the
Obligations, including the Guaranty: (i) make any payment or do any act which Trustor has failed to
make or do; (ii) enter upon, take possession of, manage and operate the Property or any part
thereof; (iii) make or enforce, or, if the same be subject to modification or cancellation, modify
or cancel any leases of the Property or any part thereof upon such terms or conditions as
Beneficiary deems proper; (iv) obtain and evict tenants, and fix or modify rents, make repairs and
alterations and do any acts which Beneficiary deems proper to protect the security hereof; and (v)
with or without taking possession, in its own name or in the name of Trustor, sue for or otherwise
collect and receive rents, royalties, issues, profits, revenue, income and other benefits,
including those past due and unpaid, and apply the same less costs and expenses of operation and
collection, including reasonable attorneys’ fees, upon the indebtedness secured hereby. The
entering upon and taking possession of the Property, the collection of any rents, royalties,
issues, profits, revenue, income or other benefits and the application thereof as aforesaid shall
not cure or waive any default theretofore or thereafter occurring or affect any notice of default
hereunder or invalidate any act done pursuant to any such notice; and, notwithstanding continuance
in possession of the Property, or any part thereof, by Beneficiary, Trustee or a receiver, and the
collection, receipt and application of rents, royalties, issues, profits, revenue, income or other
benefits, Beneficiary shall be entitled to exercise every right provided for in this Deed of Trust
or by law upon or after the occurrence of a default, including the power to direct the Trustee to
exercise the power of sale. Any of the actions referred to in this Section 3.01 may be taken by
Beneficiary, either in person or by agent, with or without bringing any action or proceeding, or by
receiver appointed by a court and any such action may also be taken irrespective of whether any
notice of default or election to sell has been given hereunder and without regard to the adequacy
of the security for the indebtedness hereby secured. Further, Beneficiary, at the expense of
Trustor, either by purchase, repair or construction, may from time to time maintain and restore the
Property or any part thereof and complete construction uncompleted as of the date thereof and in
the course of such completion may make such changes in the contemplated fixtures as Beneficiary may
deem desirable and may insure the same. Beneficiary shall be entitled, without notice and to the
full extent

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provided by law, to the appointment by a court having jurisdiction of a receiver to take
possession of and protect the Property or any part thereof, and operate the same and collect the
Rents and Profits.

     3.02 Receiver.

          (a) Beneficiary shall be entitled to the appointment of a receiver by a court having
jurisdiction, to the full extent provided by law, without notice, to take possession of and protect
the Property or any part thereof, and operate the same and collect the Rents and Profits, without
regard to the adequacy of the security of the Property, and without regard to the enforcement by
Trustee or Beneficiary of any other remedy provided herein.

          (b) Notwithstanding the appointment of any receiver, liquidator or trustee of Trustor, or of
any of its property, or of the Property or any part thereof, Trustee and Beneficiary shall be
entitled to retain possession and control of all property now or hereafter held under this Deed of
Trust, including, but not limited to, the Rents and Profits.

     3.03 Foreclosure. Beneficiary may bring an action in any court of competent
jurisdiction enforce this Deed of Trust or to enforce any of the covenants and agreements hereof.

     3.04 Power to Sell. Beneficiary may elect to cause the sale of Trustor’s interest in
the Property or any part thereof to be sold as follows:

          (a) Beneficiary may proceed as if the entire Property consisted of real property in accordance
with Section 3.04(d) below, or Beneficiary may elect to treat any of the Property which consists of
a right in action or which is property that can be severed from the Premises or the Equipment
without causing structural damage thereto as if the same were personalty, and dispose of the same
in accordance with Section 3.04(c) below, separate and apart from the sale of real property, the
remainder of the Property being treated as real property.

          (b) Beneficiary may cause any such sale or other disposition to be conducted immediately
following the expiration of the grace period, if any, herein provided or provided in the Agreement
(or immediately upon the expiration of any redemption or reinstatement period required by law) or
Beneficiary may delay any such sale or other disposition for such period of time as Beneficiary
deems to be in its best interest. Should Beneficiary desire that more than one such sale or other
disposition be conducted, Beneficiary, may at its option, cause the same to be conducted
simultaneously or successively, on the same day or at such different days or times and in such
order, as Beneficiary may deem to be in its best interest.

          (c) Should Beneficiary elect to cause any of the Property to be disposed of as personalty as
permitted by Section 3.04(a) above, Beneficiary may dispose of any part thereof in any manner now
or hereafter permitted by the Nebraska Uniform Commercial Code or in accordance with any other
remedy provided by law. Any such disposition may be conducted by an employee, attorney or agent of
Beneficiary or Trustee. Any person, including, Trustor, Trustee and Beneficiary, shall be eligible
to purchase any part or all of such personalty at any such disposition. Any such disposition may be
either public or private as Beneficiary may elect, subject to the provisions of the Nebraska
Uniform Commercial Code. Beneficiary shall have all of the rights and remedies of a secured party

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under the Nebraska Uniform Commercial Code. Expenses of retaking, holding, preparing for sale,
selling or the like shall include Beneficiary’s reasonable attorney’s fees and legal expenses, and
upon Beneficiary’s election to proceed under this Section 3.04(c), Trustor, upon demand of
Beneficiary, shall assemble such personalty and make it available to Beneficiary at the Premises,
a place which is deemed reasonably convenient to Beneficiary and
Trustor. Beneficiary shall give
Trustor such prior written notice of the time and place of any public sale or other disposition of
such personalty or of the time at or after which any private sale or any other intended
disposition is to be made as may be required by the Nebraska Uniform Commercial Code, and if such
notice is sent to Trustor three (3) days prior to any intended disposition in the manner provided
for the mailing of notices herein it shall constitute reasonable notice to Trustor.

          (d) Should Beneficiary elect to sell the Property or any part thereof which is real property
or which Beneficiary has elected to treat as real property, upon such election, Beneficiary or
Trustee shall give such notice of default and election to sell as may then be required by law.
Thereafter, upon the expiration of such time and the giving of such notice of sale as may then be
required by law, and without the necessity of any demand upon Trustor, Trustee, at the time and
place specified in the notice of sale, shall sell the Property or any portion thereof specified by
Beneficiary, at public auction to the highest bidder for cash in lawful money of the United States,
subject, however, to the provisions of Section 3.04(g) hereof. For any cause it deems expedient,
Trustee may, and upon request of Beneficiary shall, from time to time postpone the sale by public
declaration thereof at the time and place last appointed for the sale. If the Premises consist of
several lots or parcels, Beneficiary may designate the order in which such lots or parcels shall be
offered for sale or sold. Any persons, including Trustor, Trustee and Beneficiary, may purchase at
the sale. Upon receipt of payment, Trustee shall execute and deliver to the purchaser or purchasers
a deed or deeds conveying the property so sold, but without any covenant or warranty whatsoever,
express or implied, whereupon such purchaser or purchasers shall be let into immediate possession.

          (e) In the event of a sale or other disposition of the Property, or any part thereof, and in
execution of a deed or other instrument of conveyance pursuant thereto, the recitals therein of
facts, such as the occurrence of an Event of Default, the compliance with the provisions of any
statute or Act, the giving of notice of default and notice of sale, demand that such sale should be
made, postponement of sale, terms of sale, sale, purchaser, payment of purchase of such sale or
disposition, shall be conclusive proof of the truth of such facts; any such deed or instrument of
conveyance shall be conclusive against all persons as to such facts recited therein.

          (f) The acknowledgment contained in any deed or conveyance executed as aforesaid of the
receipt of the purchase money shall be sufficient to discharge the grantee of all obligations to
see to the proper application of the consideration therefor as hereinafter provided. The purchaser
at any trustee’s or foreclosure sale hereunder may disaffirm any easement granted or rental or
lease contract made in violation of any provision of this Deed of Trust, and may take immediate
possession of the purchased portion of the Property free from, and despite the terms of, such grant
of easement and rental or lease contract.

          (g) Upon the completion of any sale or sales made by Trustee or Beneficiary, as the case may
be, under or by virtue of this Section 3.04, Trustee or any officer of any court empowered to do
so, shall execute and deliver to the accepted purchaser or purchasers a good and sufficient

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instrument, or good and sufficient instruments, conveying, assigning and transferring all estate,
right, title and interest in and to the Property and rights sold. Trustee is hereby appointed
irrevocably the true and lawful attorney of assignments, transfers and deliveries of the Property
or any part thereof and the rights so sold; and for that purpose Trustee may execute all necessary
instruments of conveyance, assignment and transfer, and may substitute one or more persons with
like power, Trustor hereby ratifying and confirming all that its said attorney or any substitute or
substitutes shall lawfully do by virtue hereof. Nevertheless, Trustor, if so requested by Trustee
or Beneficiary, shall ratify and confirm any such sale or sales by executing and delivering to
Trustee or to such purchaser or purchasers all such instruments as may be advisable in the judgment
of Trustee or Beneficiary, for the purpose as may be designated in such request. Any such sale or
sales made under or by virtue of this Section 3.04, whether made under the power of sale herein
granted or under or by virtue of judicial proceedings or of a judgment or decree of foreclosure and
sale, shall operate to divest all of the estate, right, title, interest, claim and demand
whatsoever, whether at law or in equity, of Trustor in and to the properties and rights so sold,
and shall be a perpetual bar, both at law and in equity, against Trustor and any and all persons
claiming or who may claim the same, or any part thereof, from, through or under Trustor.

     3.05 Rescission by Beneficiary. Beneficiary may at any time rescind the giving or
filing of a notice of default pursuant hereto by executing, acknowledging and delivering to Trustee
a Cancellation of Notice of Default in due form, and the exercise by Beneficiary of such right of
rescission shall constitute a cancellation of any prior declaration by Beneficiary declaring all
sums due hereunder and under the Agreement due and payable, but shall not effect or constitute a
waiver of any default nor impair the right of Beneficiary to make other declarations, based on the
same or any other Event of Default, declaring all such sums due and payable or to foreclose
hereupon.

     3.06 Waiver by Trustor. Trustor hereby expressly waives any right which it may have to
direct the order in which any of the Property shall be sold in the event of any sale or sales
pursuant hereto.

     3.07 Application of Sales Proceeds. Unless otherwise provided by law, the purchase
money, proceeds or avails of any sale made under or by virtue of this
Article III, together with all
other sums which then may be held by Trustee or Beneficiary under this Deed of Trust, whether under
the provisions of this Article III, or otherwise, shall, after payment of the costs and expenses of
the proceedings, including any sale pursuant to Section 3,04, resulting in the collection of such
moneys and of the expenses, liabilities and advances incurred or made by Trustee, be paid to Paying
Agent pursuant to the Resolution of the Authority dated October 24, 2003, authorizing issuance of
the Bonds, for application as set forth therein.

     3.08 No Remedy Exclusive and No Waiver. No remedy herein conferred upon or reserved to
Trustee or Beneficiary is intended to be exclusive of any other remedy provided in this Deed of
Trust, the Guaranty, the Resolution, the Bonds or by law, but each shall be cumulative and shall be
in addition to every other remedy given hereunder or now or hereafter existing at law or in equity
or by statute, No delay or omission of Trustee or Beneficiary to exercise any right or power
accruing upon any Event of Default shall impair any right or power or shall be construed to be a
waiver of any Event of Default or any acquiescence therein; and every power and remedy given by
this Deed of Trust to Trustee or Beneficiary may be exercised from time to time as often as may be
deemed

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expedient by Trustee or Beneficiary. Beneficiary, by accepting payment of any sum secured hereby
after its due date, or by making any payment or taking any action which, under the provisions
hereof, Beneficiary is entitled but not obligated to make or take, does not waive its right to
require prompt payment when due from Trustor or to declare a default for Trustor’s failure to pay
or fulfill its obligations under this Deed of Trust. If there exists additional security for the
performance of the obligations secured hereby, the Beneficiary, at its sole option and without
limiting or affecting any of the rights or remedies hereunder, may exercise any of the rights and
remedies to which it may be entitled hereunder either concurrently with whatever rights it may
have in connection with such other security or in such order as it may determine.

     3.09 Surrender of Premises.

          (a) Upon the occurrence of any Event of Default and pending the exercise by Trustee or
Beneficiary or their agents or attorneys of their right to exclude Trustor from all or any part of
the Premises, Trustor agrees to vacate and surrender possession of the Premises to Trustee or
Beneficiary, as the case may be, or to a receiver, if any, and in default thereof may be evicted by
any summary action or proceeding for the recovery of possession of premises for nonpayment of rent,
however designated.

          (b) In the event that there is a Trustee’s sale hereunder and if at the time of such sale
Trustor or its heirs, personal representative, executor, administrator, successor or assign is
occupying the Premises or any part thereof so sold, each and all shall immediately become the
tenant of the purchaser at such sale, which tenancy shall be a tenancy from day to day terminable
at the will of either tenant or landlord, at a reasonable rental per day based upon the value of
the Premises, such rental to be due daily to said purchaser. An action of forcible detainer shall lie if the
tenant holds over after a demand in writing for possession of the Premises; and this Deed of
Trust and the trustee’s deed shall constitute a lease and agreement under which the tenant’s
possession arose and continued.

          (c) Successor Trustor. In the event ownership of the Property or any portion thereof
becomes vested in a person other than the Trustor (as herein named), Beneficiary may, without
notice to the Trustor (as herein named), whether or not Beneficiary has given written consent to
such change in ownership, deal with such successor or successors in interest with reference to this
Deed of Trust and the indebtedness secured hereby, and in the same manner as with Trustor, without
in any way compromising or discharging Trustor’s liability hereunder or under the indebtedness
hereby secured.

          (d) Beneficiary’s and Trustee’s Right to Act. Should Trustor fail to make any payment
or to do any act required under the terms of the Agreement or this Deed of Trust, then Beneficiary
or Trustee may, without obligation so to do, and without notice to or demand upon Trustor and
without releasing Trustor from any obligation thereunder,

          (i) Make any such payment or do or perform any such acts in such manner and to such
extent as either Beneficiary or Trustee in its sole discretion may determine to be
necessary to proper to preserve the value of the Property and/or to protect the security
of this Deed of Trust; or

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          (ii) Do or perform any acts which Trustor is obligated hereunder to do or perform; or

          (iii) Pay, purchase, contest or compromise any encumbrance, charge or lien, which in
the judgment of either appears to be prior or superior hereto.

In exercising any such powers or performing any such acts Beneficiary and Trustee are hereby
authorized to enter upon the Property at any time for such purpose and to incur any liability and
expend whatever amounts in their absolute discretion they may deem necessary therefor, including,
but not limited to, the cost of evidence of title and the employment of counsel and the payment of
counsel’s reasonable fees.

     3.10 Exception to Obligations of Trustee. Notwithstanding any provision in this Deed
of Trust to the contrary, Trustee shall have no obligation to take title to or to obtain
possession or control of the Project or Premises unless the Trustee is satisfied, in its sole
discretion, that such title, control or possession will not subject Trustee to any hazardous
material clean-up obligation with respect to the Project or Premises.

ARTICLE IV

CONCERNING TRUSTEE

     4.01 Liability and Acceptance. Trustee, by its acceptance hereof, covenants faithfully
to perform and fulfill the trusts herein created, being liable, however, only for willful
negligence or misconduct. Trustee accepts this trust when this Deed of Trust, duly executed and
acknowledged, is made a matter of public record as provided by law.

     4.02 Resignation. Trustee may resign at any time upon giving thirty (30) days’ notice
in writing to Trustor and to beneficiary.

     4.03 Successor Trustee. Beneficiary may remove Trustee at any time or from time to time
and select a successor trustee. In the event of the death, dissolution, removal, resignation,
refusal to act, or inability to act of Trustee, or in its sole discretion for any reason
whatsoever, Beneficiary may, without notice and without specifying any reason therefor and without
applying to any court, select and appoint a successor trustee, and all powers, rights, duties and
authority of Trustee, as aforesaid, shall thereupon become vested in such successor, without any
need for conveyance from any predecessor trustee. Such successor trustee shall not be required to
give bond for the faithful performance of its duties unless required by Beneficiary. Such successor
trustee shall be appointed by written instrument duly recorded in each county where the Premises or
any part thereof are located, which appointment may be executed by an authorized agent of
Beneficiary and if Beneficiary is a trust or corporation and such appointment be executed in its
behalf by any single trustee or officer of such trust of corporation, such appointment shall be
conclusively presumed to be executed with authority and shall be valid and sufficient without proof
of any action by the trustees or Board of Directors or any superior officer of the trust or
corporation. Trustor hereby ratifies and confirms

10

 

any and all acts which the herein Trustee, or its successor or successors in this trust, shall do
lawfully by virtue hereof.

     4.04 Reconveyances. Upon written request of Beneficiary stating that all sums secured
hereby have been paid, and upon surrender of this Deed of Trust and the Guaranty to Trustee for
cancellation and delivery to the Trustor or his successors in interest, and upon payment of its
fees, Trustee shall reconvey, without warranty, the Property. The recitals in such conveyance of
any matters of fact shall be conclusive proof of the truthfulness thereof. The grantee in such
reconveyance may be described as “the person or persons legally entitled thereto”.

     4.05 Costs of Trustee’s Performance. Trustor shall pay all costs, fees and expenses of
Trustee, its agents and counsel in connection with the performance of its duties hereunder; and
Trustor shall pay all taxes (except federal and state income taxes) and other governmental charges
or impositions imposed by any governmental authority upon Trustee or Beneficiary by reason of its
or their interest in this Deed of Trust or the Guaranty.

ARTICLE V

MISCELLANEOUS

     5.01 Severability. In the event any one or more of the provisions contained in this
Deed of Trust 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 provision of this Deed
of Trust, but this Deed of Trust shall be construed as if such invalid, illegal or unenforceable
provision had never been contained herein or therein.

     5.02 Unsecured Debt. If the lien of this Deed of Trust is invalid or unenforceable as
to any part of the debt secured hereby, or if the lien is invalid or unenforceable as to any part
of the Property, the unsecured or partially secured portion of the debt shall be completely paid
prior to the payment of the remaining and secured or partially secured portion of the debt and all
payments made on the debt, whether voluntary or under foreclosure or other enforcement action or
procedure, shall be considered to have been first paid on and applied to the full payment of that
portion of the debt which is not secured or not fully secured by the lien of this Deed of Trust.

     5.03 Notices. All written notices expressly provided hereunder to be given by
Beneficiary to Trustor and all notices and demands of any kind or nature whatsoever which Trustor
may be required or may desire to give to or serve on Beneficiary shall be in writing and shall be
served by registered or certified mail. Any such notice or demand so served by registered or
certified mail shall be deposited in the United States mail, with postage thereon fully prepaid and
addressed to the party so to be served at its address above stated or at such other address of
which it shall have notified, in writing, the person charged with giving such notice. Service of
any such notice or demand so made shall be deemed complete on the date of actual delivery as shown
by the addressee’s registry or certification receipt or the expiration of the third day after the
date of mailing, whichever is earlier in time.

11

 

     5.04 Request for Notice. Trustor hereby requests that a copy of any Notice of Default
and any Notice of Sale hereunder be mailed to it at its address herein contained.

     5.05 Nonwaiver. The granting of consent by Beneficiary to any transaction as required
by the terms hereunder shall not be deemed a waiver of the right to require such consent to future
or successive transactions.

     5.06 Headings. The headings of the sections in this Deed of Trust are inserted solely
for convenience of reference, and are not intended to govern, limit or aid in the construction of
any term or provision hereof.

     5.07 Gender and Number. Whenever the context so requires, the neuter gender herein
shall include the masculine or feminine or both, and the singular number shall include the plural.

     5.08 Counterparts. This Deed of Trust may be executed in any number of counterparts and
each of such counterparts shall for all purposes be deemed to be an original; and all such
counterparts shall together constitute but one and the same deed of trust.

     5.09 Governing Jurisdiction. This Deed of Trust shall be governed by and construed
under the laws of the State of Nebraska (“Governing Jurisdiction”).

     5.10 Definition of Terms. Unless otherwise expressly stated, the term “Trustor” is
used herein and includes Trustor’s successors and interests and assigns; the word “Trustee” as used
herein includes Trustee’s successors in interest and assigns; and the word “Beneficiary” as used
herein, includes Beneficiary’s successors in interest and assigns.

     5.11 Acceptance by Trustee. Trustee accepts this Trust when this Deed of Trust, duly
executed and acknowledged, is made a public record as provided by law.

12

 

          The undersigned have executed this Deed of Trust and Security Agreement the day and year first
hereinabove written.

	 	 	 	 	 	 	 
	 	 	TRUSTOR:	 	 
	 
	 	 	 	 	 	 
	 	 	SIOUXLAND ETHANOL, LLC,

 a Nebraska limited liability company	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Tom Lynch	 	 
	 

	 	 	 	 

Its Authorized Representative
	 	 

	 	 	 	 	 
	STATE OF NEBRASKA

	 	 	)	 
	 

	 	 	) ss.
	 
	COUNTY OF LANCASTER

	 	 	)	 

          The foregoing instrument was acknowledged before me this 27 day of
September, 2006, by Tom Lynch, President of SIOUXLAND
ETHANOL, LLC, a Nebraska limited liability company, on behalf of the company.

GENERAL
NOTARY - State of Nebraska 
RONDA JACKSON 
My Comm. Exp. Sept. 20, 2006

(S E A L)

	 	 	 	 	 
	 

	 	/s/ Ronda Jackson	 	 
	 

	 	 

Notary Public
	 	 

13

 

EXHIBIT A

Legal Description

The land referred to is situated in the State of Nebraska, County of Dakota and is described as
follows:

Tract C:

A tract of land consisting of part of the SE 1/4 of Section 27, Township 29 North, Range 7 East of
the 6th P.M., Dakota County, Nebraska and more particularly described as follows: Commencing at the
South 1/4 corner of Section 27, said point also being the point
of Beginning; thence N00°40’00"E
upon and along the West line of the SE 1/4 a distance of 33.00 feet of the North right-of-way line
of Knox Road; thence continuing N00°40’00"W upon and along said West line a distance of 1005.13
feet to the intersection of said West line and the Westerly C.B. & Q Railroad R.O.W. line; thence
S35°08’38"E upon and along said Westerly Railroad R.O.W. line a distance of 1236.03 feet to the
intersection of said Westerly Railroad R.O.W. line and said North R.O.W. line of Knox Road; thence
continuing S35°08’38"E upon and along said Westerly Railroad R.O.W. line a distance of 40.59 feet
to the South line of said SE 1/4; thence N89°32’3 5"W upon and along said South line a distance of
747.05 feet to the Point of Beginning.

Tract E:

A tract of land consisting of part of the SE 1/4 of Section 27, Township 29 North, Range 7 East of
the 6th P.M., Dakota County, Nebraska and more particularly described as follows: Commencing at
the South 1/4 corner of Section 27; thence N00°40’00"E upon and along the West line of the SE 1/4
a distance of 1209.04 feet to the intersection of said West line and the Easterly C.B. & Q
Railroad R.O.W. line. Said point also being the point of Beginning;
thence continuing N00°40’00"E
upon and along said west line a distance of 124.76 feet to the Westerly R.O.W. line of Highway 20;
thence S35°08’38"E upon and along said Westerly Hwy 20 R.O.W. line a distance of 805.80 feet;
thence S54°51’22"W upon and along said Hwy 20 R.O.W. line a distance of 73.00 feet to the
intersection of Hwy 20 R.O.W. and Easterly Railroad R.O.W.;
thence N35°08’38"W upon and along said
Easterly Railroad R.O.W. line a distance of 704.62 feet to the Point of Beginning.

Tract B:

A tract of land consisting of part of the SW 1/4 of Section 27, Township 29 North, Range 7 East of
the 6th P.M., Dakota County, Nebraska and more particularly described as follows: Commencing at
the South 1/4 corner of Section 27, said point also being the point of beginning; thence on an
assumed bearing of N 89°33’24"W upon and along the South line of the SW 1/4 of Section 27 a
distance of 269.07 feet; thence N 00°26’36“E Perpendicular to said South line a distance of 73.00
feet; thence N 89°33’24“W parallel with said South line a distance of 30.00 feet; thence S
00°26’36“W perpendicular to said South line a distance
of 73.00 feet; thence N89°33’24"W upon and
along said South line a distance of 453.97 feet; thence N
00°26’36" Perpendicular to said South
line a distance of 33,00 feet to the North Right-of-way line of Knox Road; thence continuing N
00°26’36“E Perpendicular to said South line a distance
of 417.00 feet; thence N35°08’38"W parallel

A-1

 

with C.B. & Q Railroad R.O.W. line a distance of 2651.04 feet to the South R.O.W. line of 143rd
Street; thence continuing N 35°08’38"W parallel with said Railroad R.O.W. line a distance of 40.23
feet to the North line of said SW 1/4; thence N89°44’23"E upon and along said North line a
distance of 1167.77 feet to said C.B. & Q Railroad westerly
R.O.W. line; thence S 35°08’38"E upon
and along said Westerly Railroad R.O.W. line a distance of 40.23 feet to the intersection of said
Westerly R.O.W. line and along said Westerly Railroad R.O.W. line a distance of 40.23 feet to the
intersection of said Westerly R.O.W. line and said South R.O.W. line of 143rd Street; thence
continuing S 35°08’38"E upon and along said Westerly Railroad R.O.W. line a distance of 1945.48
feet to a point on the East line of said SW 1/4; thence S
00°40’00"W upon and along said East line
a distance of 1005.13 feet to said North R.O.W. line of Knox Road;
thence continuing S 00°40’00"W
upon and along said East line a distance of 33.00 feet to the Point of Beginning.

Tract D:

A tract of land consisting of part of the SW 1/4 of Section 27, Township 29 North, Range 7 East of
the 6th P.M., Dakota County, Nebraska and more particularly described as follows: Commencing at
the South 1/4 corner of Section 27; thence N 00°40’00"E upon and along the East line of the SW 1/4
a distance of 1209.04 feet to the intersection of said East line and the Easterly C.B. & Q
Railroad (Right-of-Way) R.O.W. line, said point also being the point of Beginning; thence N
35°08’38"W upon and along said Westerly Hwy 20 R.O.W. line a distance of 1727.89 feet to the
intersection of said Easterly Railroad R.O.W. line and 143rd Street R.O.W. line; thence S
89°44’23"W upon and along 143rd Street R.O.W. line a distance of 88.99 feet to the intersection of
South 143rd R.O.W. line and Westerly Hwy 20 R.O.W. line; thence
S35°08’38"E upon and along said
Westerly R.O.W. line a distance of 1575.82 feet to said East line of
SW 1/4; thence S 00°40’00"W
upon and along said East line a distance of 124.76 feet to the Point of Beginning.

A-2exv10w25

 

Exhibit 10.25

DEBT SUBORDINATION AGREEMENT

     THIS DEBT SUBORDINATION AGREEMENT (“Agreement”) is made and entered into as of September
28, 2006, among Wells Fargo Bank, National Association, in Lincoln, Nebraska, as trustee (the
“Creditor”) for the owners of the $4,030,000 Community Redevelopment Authority of the Village of
Jackson, Nebraska, Tax Increment Revenue Bonds, Taxable Series 2006A (Siouxland Ethanol Plant
Project) (the “Series 2006A Bonds”) pursuant to that certain Bond Resolution, dated as of July 20,
2006 (the “Bond Resolution”), and Siouxland Ethanol, LLC (“the Company”), and Farm Credit Services
of America, FLCA (“FCSA”).

WITNESSETH

     WHEREAS, the Company is now and may from time to time hereafter be indebted to Creditor;
and

     WHEREAS, the Company desires to obtain loans, extensions of credit or other financial
accommodations from FCSA; and

     WHEREAS, FCSA is unwilling to provide such financial accommodations to the Company unless
Creditor and the Company enter into this Agreement with FCSA;

     NOW, THEREFORE, in consideration of the covenants contained herein, and to induce FCSA to
provide financial accommodations to or for the benefit of the Company, the parties hereto,
intending to be legally bound hereby, do agree as follows:

     1. Definitions. In addition to such other terms as are elsewhere defined herein, as
used in this Agreement the following terms shall have the following meanings:

     “Junior Debt” means all indebtedness, liabilities, debit balances, covenants and duties at
any time or times owed by the Company to Creditor (but solely in its capacity as trustee), whether
direct or indirect, absolute or contingent, secured or unsecured, due or to become due, now
existing or hereafter arising, under the Subordinated Debt, together with all interest, fees,
charges, expenses and attorney’s fees for which the Company is now or hereafter becomes liable to
pay to Creditor under any agreement or by law.

     “Loan Agreement” means: (i) that certain Credit Agreement dated as of May 4, 2006, between
FCSA and the Company; and (ii) all amendments to and
restatements of each of the foregoing.

     “Subordinated Debt” means that/those certain obligations to make payments in the Redevelopment
Contract, the Guaranty and the Subordinate Deed of Trust (all as defined in the Bond Resolution) or
of debt service on the Series 2006A Bonds to be issued in the aggregate principal amount not to
exceed $4,030,000. True and correct copies of the Redevelopment Contract, the Guaranty, the
Subordinate Deed of Trust and the Bond Resolution are annexed hereto as Exhibit A. In the event
this Agreement is executed and delivered prior to the execution and delivery of the Subordinated
Debt, unexecuted final versions shall be provided to FCSA, and the Company agrees to provide copies
of the executed documents to FCSA as soon as available and without change from the drafts delivered
to FCSA without the express prior consent of the

 

 

Debt Subordination Agreement

FCSA. The Subordinated Debt does not include the Series 2006A Bonds or the obligation of the
Company to pay property taxes.

     “Superior Debt” means all loans, advances, liabilities, debit balances, covenants and duties
at any time or times owed by the Company to FCSA, whether direct or indirect, absolute or
contingent, secured or unsecured, due or to become due, now existing or hereafter arising,
including, without limitation, (i) any and all indebtedness, liabilities and obligations now or
hereafter owing by the Company to FCSA under the Loan Agreement, (ii) any indebtedness, liability
or obligation owing by the Company to others which FCSA may have obtained by assignment, pledge,
purchase or otherwise, (iii) any and all loans made or credit extended by FCSA to the Company
during the pendency of any bankruptcy case of the Company and (iv) all interest (including any
interest that accrues on any of the Superior Debt during the pendency of any bankruptcy case of
the Company, whether or not FCSA is authorized by 11 U.S.C. § 506 to collect such interest from
the Company), fees, charges, expenses and attorneys’ fees for which the Company is now or
hereafter becomes liable to pay to FCSA under any agreement or by law.

     2. Subordination. Subject to the provisions of paragraph 5 hereof, Creditor hereby
postpones and subordinates all of the Junior Debt to the full and final payment and discharge of
all of the Superior Debt. Without limiting the generality of the foregoing, in the event of any
distribution, division or application, partial or complete, voluntary or involuntary, by operation
of law or otherwise, of all or any part of the assets of the Company or the proceeds thereof to
creditors of the Company or upon any indebtedness of the Company, by reason of the liquidation,
dissolution or other winding up of the Company or the Company’s business, or in the event of any
sale, receivership, insolvency or bankruptcy proceeding, or assignment for the benefit of
creditors, or any proceeding by or against the Company for any relief under any bankruptcy or
insolvency law or laws relating to the relief of the Company, readjustment of indebtedness,
reorganization, compositions or extensions, then and in any such event any payment or distribution
of any kind or character, either in cash, securities or other property, which shall be payable or
deliverable upon or with respect to any of the Junior Debt shall be paid or delivered directly to
the FCSA for application to the Superior Debt (whether or not the same is then due) until all of
the Superior Debt has been fully paid and discharged. The Subordinated Debt shall at all times bear
a conspicuous legend that the Junior Debt evidenced thereby is subordinated to the Superior Debt
pursuant to this Agreement. The Company’s and Creditor’s books shall be marked to evidence the
subordination of all of the Junior Debt to FCSA. FCSA is authorized to examine such books from time
to time and to make any notations required by this Agreement. The provisions of this paragraph 2
shall remain effective and binding upon Creditor, to the full extent of the Superior Debt, even of
any of the Superior Debt is avoided, equitably subordinated or nullified in any bankruptcy case of
the Company.

     3. Warranties and Representations of the Company and Creditor. The
Company and Creditor each hereby represents and warrants that: (a) it has not relied nor will
it rely on any representation or information of any nature made by or received from FCSA or the
FCSA relative to the Company in deciding to execute this Agreement; (b) Creditor is or will be the
lawful owner of the Subordinated Debt as trustee for the bondholders; (c) Creditor has not
heretofore assigned or transferred any of the Junior Debt, any interest therein or any collateral
or security pertaining thereto other than to the bondholders; and (d) Creditor has not heretofore
given any subordination in respect of the Junior Debt.

2

 

Debt Subordination Agreement

     4. Negative Covenants. For so long as this Agreement is in effect: (a) the
Company shall not, directly or indirectly, make any payment (other than a payment permitted by
paragraph 5 hereof) on account of or to satisfy all or any part of the Junior Debt; (b) Creditor
shall not demand, collect or accept from the Company or any other person any payment (other than a
payment permitted by paragraph 5 hereof) or collateral on account of the Junior Debt or any part
thereof other than amounts on deposit under the Bond Resolution, or accelerate the maturity of the
Junior Debt or realize upon or enforce any collateral securing the Junior Debt other than amounts
on deposit under the Bond Resolution; (c) Creditor shall not exchange, set off or otherwise
discharge any part of the Junior Debt; (d) Creditor shall not hereafter give any subordination in
respect of the Junior Debt or transfer or assign any of the Junior Debt to any person other than
FCSA unless the transferee or assignee thereof first agrees in writing with FCSA to be bound by the
terms of this Agreement; provided, however, this shall not apply to transfers of bonds secured by,
and payable from, the Junior Debt; (e) the Company shall not hereafter issue any instrument,
security or other writing evidencing any part of the Junior Debt, and Creditor will not receive any
such writing, except for the bonds or upon the prior written approval of the FCSA or at the request
of and in the manner requested by the FCSA; (f) the Company and Creditor shall not amend, alter or
modify any provision of the Subordinated Debt without the prior written consent of the FCSA; (g)
Creditor shall not commence or join with any other creditors of the Company in commencing any
bankruptcy, reorganization, receivership or insolvency proceeding against the Company; and (h)
neither the Company nor Creditor otherwise shall take or permit any action prejudicial to or
inconsistent with FCSA’s priority position over Creditor that is
created by this Agreement.

     5. Permitted Payments. If and for so long as no Material Potential Default or Event
of Default (as those terms are defined in the Loan Agreement) exists at the time, or would result
from the making of such payment, but only upon written notice of such event from the FCSA, the
Company may pay to Creditor, and Creditor may accept and retain, any regularly scheduled
installments of principal of, and interest on, the Junior Debt due and owing to Creditor by the
Company under the Subordinated Debt in accordance with its present tenor, but without prepayment
(whether mandatory or optional other than regularly scheduled annual prepayments of principal) and
without payment upon acceleration.

     6. Turnover of Prohibited Transfers. If any payment, distribution or security or the
proceeds thereof are received by Creditor on account of or with respect to any of the Junior Debt
other than as permitted in paragraph 5 hereof, Creditor shall forthwith deliver same to the FCSA in
the form received (except for the addition of any endorsement or assignment necessary to effect a
transfer of all rights therein to FCSA) for application to the Superior Debt or, at the FCSA’s
option, Creditor shall pay to the FCSA the amount thereof on demand. FCSA is irrevocably
authorized to supply any required endorsement or assignment which may have been omitted. Until so
delivered any such payment, distribution or security shall by held by Creditor in trust for FCSA
and shall not be commingled with other funds or property of Creditor.

     7. Waivers. The Company and Creditor each hereby waives any defense based on the
adequacy of a remedy at law which might be asserted as a bar to the remedy of specific performance
of this Agreement in any action brought therefor by FCSA. To the fullest extent permitted by law,
the Company and Creditor each hereby waives: presentment, demand, protest, notice or protest,
notice of default or dishonor, notice of payment or nonpayment and any and all

3

 

Debt Subordination Agreement

other notices and demands of any kind in connection with all instruments (whether negotiable or
non-negotiable) evidencing all or any portion of the Superior Debt or the Junior Debt to which the
Company or Creditor may be a party; the right to require FCSA to marshal any security, or to
enforce any security interest or lien FCSA may now or hereafter have in any collateral securing the Superior Debt or to pursue any claim it may have against any guarantor of the Superior Debt,
as a condition to FCSA’s entitlement to receive any payment on account of the Junior Debt; notice
of the acceptance of this Agreement by FCSA, notice of any loans made, extensions granted or other
action taken in reliance hereon; and all other demands and notices of every kind in connection
with this Agreement, the Superior Debt or the Junior Debt. Creditor assents to any release,
renewal, extension, compromise or postponement of the time of payment to the Superior Debt, to any
substitution, exchange or release of collateral therefor and to the addition or release of any
person primarily or secondarily liable thereon. In addition, the Company and Creditor hereby waive
any claim or defense that may be available to a guarantor or surety.

     8. Subrogation. Provided that the Superior Debt has been indefeasibly finally paid
and discharged and no claim of a preferential transfer or the like can be made with respect
hereto, Creditor shall be subrogated to the rights of FCSA to receive payments or distributions
of cash, property or securities payable or distributable on account of the Superior Debt, to the
extent of all payments and distributions paid over to or for the benefit of FCSA pursuant to this
Agreement. In no event, however, shall Creditor have any rights or claims against FCSA for any
alleged impairment of Creditor’s subrogation rights, Creditor acknowledging that any actions
taken by FCSA with respect to the Superior Debt or the Collateral are authorized and consented to
by Creditor.

     9. Statement of Account. The Company and Creditor each agrees to render to the FCSA
from time to time upon the FCSA’s request therefor a statement of the Company’s account with
Creditor and to afford the FCSA access to the books and records of Creditor and the Company in
order that the FCSA may make a full examination of the state of accounts of the Company with
Creditor.

     10. Validity of Junior Debt. The provisions of this Agreement subordinating the
Junior Debt are solely for the purpose of defining the relative rights of FCSA and Creditor and
shall not impair, as between Creditor and the Company, the obligation of the Company, which is
unconditional and absolute, to pay the Junior Debt in accordance with its terms except as payment
thereof may be postponed in accordance with this Agreement.

     11. Indulgences Not Waivers. Neither the failure nor any delay on the part of FCSA
to exercise any right, remedy, power or privilege hereunder shall operate as a waiver thereof or
give rise to an estoppel, nor be construed as an agreement to modify the terms of this Agreement,
nor shall any single or partial exercise of any right, remedy, power or privilege with respect to
any occurrence be construed as a waiver of such right, remedy, power or privilege with respect to
any other occurrence. No waiver by a party hereunder shall be effective unless it is in writing
and signed by the party making such waiver, and then only to the extent specifically stated in
such writing.

     12. Duration. This Agreement shall become effective when executed by the Company
and Creditor and accepted by FCSA, and, when so accepted, shall constitute a

4

 

Debt Subordination Agreement

continuing agreement of subordination, and shall remain in effect until all of the Superior Debt
has been paid and all instruments and agreements at any time evidencing or securing the whole or
any part of the Superior Debt have been terminated. FCSA may, without notice to Creditor, extend
or continue credit and make other financial accommodations to or for the account of the Company in
reliance upon this Agreement.

     13. Default and Enforcement. If any representation or warranty in this Agreement or in
any instrument evidencing or securing the Superior Debt proves to have been materially false when
made, or, in the event of a breach by either the Company or Creditor in the performance of any of
the terms of this Agreement or any instrument or agreement evidencing or securing the Superior
Debt, all of the Superior Debt shall, at the option of FCSA, become immediately due and payable
without presentment, demand, protest, or notice of any kind, notwithstanding any time or credit
otherwise allowed. At any time Creditor fails to comply with any provision of this Agreement that
is applicable to Creditor, FCSA may demand specific performance of this Agreement, whether or not
the Company has complied with this Agreement, and may exercise any other remedy available at law or
equity. Without limiting the generality of the foregoing, if Creditor, in violation of this
Agreement, shall institute or participate in any action suit or proceeding against the Company, the
Company may interpose this Agreement as a defense and FCSA is irrevocably authorized to intervene
and interpose such defense in the Company’s name. If Creditor attempts to enforce or realize upon
any collateral securing the Junior Debt in violation of this Agreement, the Company or FCSA (in the
Company’s or FCSA’s name) may by virtue of this Agreement
restrain such realization or enforcement.

     14. Notices. All notices, requests, demands, and other communications required or
permitted under this Agreement or by law shall be in writing and shall be deemed to have been duly
given, made and received when delivered against receipt, or when received by facsimile at the
office of the noticed party or on the day after deposit in the United States mails, postage
prepaid, addressed as set forth below:

	 	 	 	 	 
	(a)
	 	If to FCSA:	 	 
	 
	 	 	 	5015 S. 118th Street
	 
	 	 	 	Omaha, NE 68137
	 
	 	Attention:	 	Shane Frahm, Vice President
	 
	 	Fax No.:	 	                                                            
	 
	 	 	 	 
	(b)
	 	If to Creditor:	 	Wells Fargo Bank, National Association, as trustee
	 
	 	 	 	Corporate Trust Department
	 
	 	 	 	1248 ‘O’ Street
	 
	 	 	 	Lincoln, Nebraska 68508
	 
	 	 	 	 
	 
	 	Attention:	 	Chad Shirk
	 
	 	Fax No.:	 	402.434.4612

5

 

Debt Subordination Agreement

	 	 	 	 	 
	(c)
	 	If to Company:	 	Siouxland Ethanol, LLC
	 
	 	 	 	110 East Elk Street
	 
	 	 	 	Jackson, NE 68743
	 
	 	 	 	 
	 
	 	Attention:	 	Chairman
	 
	 	Fax No.:	 	402.632.2676

     Any addressee may alter the address to which communications are to be sent by
giving notice of such change of address in conformity with the provisions of this paragraph
for the giving of notice.

     15. FCSA’s
Duties Limited. The rights granted to FCSA in this Agreement are
solely for its protection and nothing herein contained imposes on FCSA any duties with respect
to any property either of the Company or of Creditor heretofore or hereafter received by FCSA
beyond reasonable care in the custody and preservation of such property while in FCSA’s
possession. FCSA has no duty to preserve rights against prior parties on any instrument or
chattel paper received from the Company or Creditor as collateral security for the Superior
Debt or any portion thereof.

     16. Authority. The Company and Creditor represent and warrant that they have
authority to enter into this Agreement and that the person signing for the Company is
authorized and directed to do so.

     17. Entire
Agreement. This Agreement constitutes and expresses the entire
understanding between the parties hereto with respect to the subject matter hereof, and
supersedes all prior agreements and understandings, inducements or conditions, whether express
or implied, oral or written. Neither this Agreement nor any portion or provision hereof may be
changed, waived or amended orally or in any manner other than by an agreement in writing
signed by FCSA, the Company and Creditor.

     18. Additional
Documentation. The Company and Creditor shall execute and
deliver to the FCSA such further instruments and shall take such further action as the FCSA
may at any time or times reasonably request in order to carry out the provisions and intent of
this Agreement.

     19. Successors
and Assigns. This Agreement shall inure to the benefit of FCSA,
its successors and assigns, and shall be binding upon both the Company and Creditor and their
respective heirs, executors, successors and assigns. Any person or entity whose loans or
advances to the Company hereafter are used to refinance and pay indefeasibly in full the
Superior Debt shall be deemed for all purposes hereof to be the successor to FCSA, and from
and after the date of any such refinancing in satisfaction in full of the Superior Debt such
person or entity shall be deemed a party hereto in the place and stead of FCSA as if such
person or entity had been the original signatory hereto, and all loans, advances, liabilities,
debit balances, covenants and duties at any time or times owed by the Company to such
successor to FCSA, whether direct or indirect, absolute or contingent, secured or unsecured,
due or to become due, then existing or thereafter arising, including any renewals, extensions,
modifications, or

6

 

Debt Subordination Agreement

replacements of any of the foregoing, shall be deemed for all purposes hereunder to constitute and
be Superior Debt.

     20. Defects
Waived. This Agreement is effective notwithstanding any defect in the
validity or enforceability of any instrument or document at any time evidencing or securing the
whole or any part of the Superior Debt.

     21. Governing Law. The validity, construction and enforcement of this Agreement shall
be governed by the internal laws of the State of Nebraska.

     22. Severability. The provisions of this Agreement are independent of and separable
from each other. If any provision hereof shall for any reason be held invalid or unenforceable, it
is the intent of the parties that such invalidity or unenforceability shall not affect the validity
or enforceability of any other provision hereof, and that this Agreement shall be construed as if
such invalid or unenforceable provision had never been contained
herein.

     23. Execution
and Counterparts. This Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed to be an original and all of which counterparts taken
together shall constitute but one and the same instrument. In proving this Agreement in any
judicial proceeding, it shall not be necessary to produce or account for more than one such
counterpart signed by the party against whom such enforcement is
sought.

     24. Consent
to the Subordinated Debt. For the purposes of Sections 7.7, 7.8 and 7.9
of the Loan Agreement and any supplement to the Loan Agreement, FCSA hereby consents and agrees in
writing to the incurrence of debt by the Company, and the security therefor, represented by the
Subordinated Debt, This Agreement is the agreement for subordinating debt, and it conforms to the
requirements set out in Section 7.10 of the Loan Agreement.

7

 

Debt Subordination Agreement

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be signed, sealed
and delivered as of the date shown above.

	 	 	 	 	 
	ATTEST:	 	Siouxland Ethanol, LLC
	 
	 	 	 	 
	/s/
Douglas Garwood 

	 	By:	 	/s/ Tom Lynch 
	 

	 	 	 	 
	  Secretary
	 	 	 	 
	 

	 	Title:
	 	President
	 
	 	 	 	 
	[CORPORATE SEAL]
	 	 	 	 

(Signature Page to Debt Subordination Agreement)

S-1

 

Debt Subordination Agreement

	 	 	 	 	 
	ATTEST:	 	Wells Fargo Bank, National
Association,

as trustee
	 
	 	 	 	 
	/s/ Richard K. Debuse II

	 	By:	 	/s/ Chad W. Shirk 
	 

	 	 	 	 
	Vice President
	 	 	 	 
	 

	 	Title:
	 	Vice President
	 
	 	 	 	 
	[CORPORATE SEAL]
	 	 	 	 
	 
	 	 	 	 
	???
	 	 	 	 

(Signature Page to Debt Subordination Agreement)

S-2

 

Debt Subordination Agreement

Farm Credit Services of America, FLCA

	 	 	 	 	 
	By:

	 	/s/ Shane Frahn
 

	 	 
	Title:

	 	Vice President	 	 

(Signature Page to Debt Subordination Agreement)

S-3

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