Document:

Exhibit 10.16
	 

	 
		EXECUTION COPY
	 

	 
		MASTER AGREEMENT
	 

	 
		 
	 

	 
		            This
		Master Agreement (the “Master Agreement”) is made effective this
		25th day of September, 2006 (the “Effective Date”) by and
		among Cargill, Incorporated, a Delaware corporation (“Cargill,
		Incorporated”), Cargill Commodity Services, Inc., a Delaware corporation
		(“CCSI”) (Cargill, Incorporated and CCSI are referred to collectively
		as “Cargill”), and Pioneer Trail Energy, LLC, a Delaware limited
		liability company (“Producer”), collectively referred to hereinafter
		as “Parties” or individually as a “Party.”
	 

	 
		 
	 

	 
		RECITALS
	 

	 
		 
	 

	 
		1. Producer intends to construct, own and
		operate a commercial ethanol facility at Wood River, Nebraska, that will
		produce denatured fuel-grade ethanol (“Ethanol Facility”), which
		Ethanol Facility is anticipated to produce approximately 115 million gallons
		per year of denatured fuel grade ethanol.
	 

	 
		 
	 

	 
		2. Producer and Cargill have executed that
		certain Grain Facility Lease under which Producer will lease from Cargill the
		Grain Facility for the purpose of receiving, storing and handling Corn (as
		defined in the Corn Supply Agreement).
	 

	 
		 
	 

	 
		3. Producer desires and intends to procure
		certain goods and services from Cargill in connection with its ownership and
		operation of the Ethanol Facility.
	 

	 
		 
	 

	 
		4. Cargill agrees to provide Producer with
		such goods and services, in accordance with the terms and conditions of this
		Master Agreement and certain Goods and Services Agreements.
	 

	 
		 
	 

	 
		5. In consideration of the foregoing, the
		mutual promises herein contained and other good and valuable consideration, the
		receipt and sufficiency of which is hereby acknowledged, the Parties agree as
		follows.
	 

	 
		 
	 

	 
		AGREEMENT
	 

	 
		 
	 

	 
			
				
				  1.
				

			 	
				
				  Ancillary
				  Agreements. 
				

			 

 

	 
		 
	 

	 
		(a) The Parties have entered into or will
		enter into the following ancillary agreements (the “Goods and Services
		Agreements”): 
	 

	 
		 
	 

	 
			
				
				   
				

			 	
				
				  (A)
				

			 	
				
				  Ethanol Marketing Agreement (the
				  “Ethanol Agreement”);
				

			 

 

	 
		 
	 

	 
			
				
				   
				

			 	
				
				  (B)
				

			 	
				
				  Corn Supply Agreement (the
				  “Corn Supply Agreement”);
				

			 

 

	 
		 
	 

	 
			
				
				   
				

			 	
				
				  (C)
				

			 	
				
				  Corn Futures Advisory Agreement (the
				  “Corn Advisory Agreement”);
				

			 

 

	 
		 
	 

	 
			
				
				   
				

			 	
				
				  (D)
				

			 	
				
				  Distillers Grains Marketing
				  Agreement (the “DG Agreement”);
				

			 

 

	 
		 
	 

	 
			
				
				   
				

			 	
				
				  (E)
				

			 	
				
				  NAESB Base Agreement for the
				  Purchase and Supply of Natural Gas (the “NAESB Agreement”);
				

			 

 

	 
		 
	 

	 
		 
	 

	 
		 
	 

	 
		 
	 

	 
		 
	 

	 
 

	 
	 

	 
			
				
				   
				

			 	
				
				  (F)
				

			 	
				
				  Gas Supply Representation and
				  Management Agreement (the “Gas Supply Agreement”); and 
				

			 

 

	 
		 
	 

	 
			
				
				   
				

			 	
				
				  (G)
				

			 	
				
				  Risk Management Advisory Agreement
				  (the “Risk Advisory Agreement”).
				

			 

 

	 
		 
	 

	 
		(b) Confidentiality Agreement. The Parties have also entered into that certain
		Confidentiality Agreement, in substantially the form of Exhibit A, of even date
		herewith.
	 

	 
		 
	 

	 
		(c) Exclusivity.
		Goods and services to be provided under the Goods and Services Agreements shall
		be referred to hereinafter as “Goods” or “Services.” The
		Parties agree that Cargill shall have the exclusive right to provide Goods and
		Services at the Ethanol Facility, including any expansion or increase in
		capacity at the Ethanol Facility, subject to the terms and conditions of the
		Goods and Services Agreements. The Parties further acknowledge and agree that
		CCSI is the sole and exclusive service provider under the Corn Advisory
		Agreement and the Risk Advisory Agreement.
	 

	 
		 
	 

	 
		(d) Additional Ethanol Facilities. The Parties agree that Cargill will have a right of
		first negotiation (but not the obligation) to provide the aggregate commercial
		arrangements similar to the Goods and Services provided in connection with the
		Ethanol Facility to any subsequently constructed ethanol plant owned or
		operated by Producer or any Affiliate of Producer. 
	 

	 
		 
	 

	 
		(e) Term of Master Agreement. This Master Agreement shall become effective on the
		date hereof and shall remain in effect for so long as any of the Goods and
		Services Agreements remains in effect.
	 

	 
		 
	 

	 
			
				
				  2.
				

			 	
				
				  Termination.
				  
				

			 

 

	 
		 
	 

	 
		Cargill may terminate this Master Agreement,
		together with all (but not less than all) the Goods and Services Agreements, if
		Producer fails to cause the Provisional Acceptance date, as defined in the EPC
		Contract, to occur on or before December 31, 2009. If an Event of Default
		occurs under any Principal Document, then the non-defaulting Party may, upon
		written notice to the defaulting Party, terminate only such Principal Document
		under which such Event of Default occurred. Termination
		under any Goods and Services Agreement other than a Principal Document shall be
		governed by the terms and conditions set forth in the applicable Goods and
		Services Agreement. 
	 

	 
		 
	 

	 
			
				
				  3.
				

			 	
				
				  Force Majeure.
				

			 

 

	 
		 
	 

	 
		(a) Each Party shall be excused from a
		failure to perform or a delay in performance under each of the Goods and
		Services Agreements (other than its payment obligations for Goods or Services
		previously delivered) to the extent caused by events beyond its reasonable
		control including, but not limited to, acts of God, war, riots, insurrections,
		laws, proclamations, regulations, strikes of a regional or national nature,
		acts of terrorism, sabotage, floods, fires, explosions, acts of any government
		body, and other events beyond the reasonable control and without the fault of
		such Party (“Force Majeure”).
	 

	 
		 
	 

	 
		(b) The Party claiming Force Majeure shall
		use its commercially reasonable efforts to remove the cause of its inability to
		perform or its delay in performance. The Party claiming Force Majeure shall
		give prompt written notice to the other Party of such event, specifying its
		
	 

	 
		 
	 

	 
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		nature and anticipated duration. The
		inability of a Party to perform its obligations under this Master Agreement or
		the Goods and Services Agreements shall be deemed to have been subject to an
		event of Force Majeure to the extent that Party’s ability to so perform
		has been directly inhibited or precluded because an event of Force Majeure had
		inhibited or precluded any other Party from performing any material action on
		which the performance of such Party’s obligations was dependent.
	 

	 
		 
	 

	 
		(c) If a Force Majeure event prevents any
		Party from performing under a Principal Document for three hundred sixty-five
		(365) consecutive calendar days, the non-claiming Party shall have the right to
		terminate such Principal Document upon thirty (30) calendar days’ written
		notice to the Party claiming Force Majeure. Producer will maintain business
		interruption insurance in accordance with Section 9. 
	 

	 
		 
	 

	 
		(d) If an event of Force Majeure prevents
		any Party from performing under any of the Goods and Services Agreements other
		than the Principal Documents for one hundred eighty (180) consecutive calendar
		days, the non-claiming Party shall have the right to terminate such Goods and
		Services Agreement (other than the Principal Documents) upon thirty (30)
		calendar days’ written notice to the Party claiming Force Majeure.
	 

	 
		 
	 

	 
			
				
				  4.
				

			 	
				
				  No Default if Failure to Perform
				  Results from Other Party’s Default. 
				

			 

 

	 
		 
	 

	 
		(a) Notwithstanding anything to the contrary
		in any of the Goods and Services Agreements, Producer shall not be in default
		under this Master Agreement or any of the Goods and Services Agreements to the
		extent that a breach by Cargill of any term or covenant contained in this
		Master Agreement, any of the Goods and Services Agreements, the Grain Facility
		Lease, the Access Agreement, Rail Exchange Agreement or Pre-Commercial Corn
		Agreement is the proximate cause of its failure to perform under this Master
		Agreement or any of the Goods and Services Agreement.
	 

	 
		 
	 

	 
		(b) Notwithstanding anything to the contrary
		in any of the Goods and Services Agreements, Cargill shall not be in default
		under this Master Agreement or any of the Goods and Services Agreements to the
		extent that a breach by Producer of any term or covenant contained in this
		Master Agreement, any of the Goods and Services Agreements, the Grain Facility
		Lease, the Access Agreement, Rail Exchange Agreement or Pre-Commercial Corn
		Agreement is the proximate cause of its failure to perform under this Master
		Agreement or any of the Goods and Services Agreement.
	 

	 
		 
	 

	 
			
				
				  5.
				

			 	
				
				  Setoff Rights; Aggregate Exposure
				  of Cargill.
				

			 

 

	 
		 
	 

	 
		(a) Ordinary Course.
		Each Party is hereby irrevocably authorized at any time and from time to time
		without advance notice (so long as written notice is provided to the other
		party reasonably promptly thereafter) to set off and apply any and all amounts
		due and owing for the physical delivery or sale of goods from such Party to the
		other Party under any and all of the Goods and Services Agreements and the
		Related Goods and Services Agreements against any amounts due and owing for the
		physical delivery or sale of goods from such Party to the other Party or the
		Related Producer Entity, provided, however, no such set off rights shall be
		exercised unless the amounts due and owing are capable of being objectively
		determined and not subject to good faith dispute. In the event a Party disputes
		in good faith whether an amount is due and owing to the other Party, the other
		Party may set off against such amount only if the amount in dispute is placed
		into a mutually agreeable escrow account pending resolution of such dispute in
		accordance with Section 6. Any invoices presented by one Party to the other
		Party under any 
	 

	 
		 
	 

	 
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		Goods and Services Agreement
		or the Related Goods and Services Agreement for which such set off is being
		made shall clearly identify the amount of the set off.
	 

	 
		 
	 

	 
		(b) Setoff in Producer Default Situation. Cargill is hereby irrevocably authorized at any time
		and from time to time during which a Producer default or Event of Default has
		occurred under any of the Goods and Services Agreements and has not been cured
		by Producer within five (5) Business Days of receipt of notice from Cargill of
		such Producer Event of Default, to set off and apply any and all amounts owing
		from Cargill to Producer under any of the Goods and Services Agreements or the
		Related Goods and Services Agreements, against the Aggregate Exposure of
		Cargill. Promptly upon any such set-off, Cargill will provide written notice to
		Producer setting forth the amount, source and application of such
		set-off. The rights
		of Cargill under this Section are in addition to other rights and remedies that
		Cargill has under this Agreement and applicable law. In the event a Party
		disputes in good faith whether an amount is due and owing to the other Party,
		the other Party may set off against such amount only if the amount in dispute
		is placed into a mutually agreeable escrow account pending resolution of such
		dispute in accordance with Section 6.
	 

	 
		 
	 

	 
		(c) Setoff in Cargill Default Situation. Producer is hereby irrevocably authorized at any time
		and from time to time during which a Cargill default or Event of Default has
		occurred under any of the Goods and Services Agreements and has not been cured
		by Cargill within five (5) Business Days of receipt of notice from Producer of
		such Cargill Event of Default, to set off and apply any and all amounts owing
		from Producer to Cargill under any of the Goods and Services Agreements or the
		Related Goods and Services Agreements, against all amounts due and owing by
		Cargill to Producer and the Related Producer Entity. Promptly upon any such
		set-off, Producer will provide written notice to Cargill setting forth the
		amount, source and application of such set-off. The rights of Producer under this Section are in
		addition to other rights and remedies that Producer has under this Agreement
		and applicable law. In the event a Party disputes in good faith whether an
		amount is due and owing to the other Party, the other Party may set off against
		such amount only if the amount in dispute is placed into a mutually agreeable
		escrow account pending resolution of such dispute in accordance with Section
		6.
	 

	 
		 
	 

	 
		(d) Aggregate Exposure of Cargill. It is the Parties’ intent that at no time during
		the term of this Master Agreement will the Aggregate Exposure of Cargill exceed
		the amount owed by Cargill to Producer. However, if the Aggregate Exposure of
		Cargill should at any time exceed the amount owed by Cargill to Producer, then
		Cargill shall be entitled, in its sole discretion, to (i) withhold payments to
		Producer in an amount equal to the difference between the Aggregate Exposure of
		Cargill and the amount owed by Cargill to Producer; and/or (ii) unwind hedge
		positions, if any, consistent with the terms of the Risk Advisory Agreement
		and/or the Corn Advisory Agreement in an amount equal to the difference between
		the Aggregate Exposure of Cargill and the amount owed by Cargill to Producer.
		
	 

	 
		 
	 

	 
			
				
				  6.
				

			 	
				
				  Dispute
				  Resolution.
				

			 

 

	 
		 
	 

	 
		                           In
		the event a dispute arises under this Master Agreement, any Goods and Services
		Agreement or the Confidentiality Agreement that cannot be resolved by those
		with direct responsibility for the matter in dispute, such dispute shall be
		resolved by way of the following process:
	 

	 
		 
	 

	 
		(a) Senior management from Producer and from
		Cargill shall meet to discuss the basis for the dispute and shall use their
		best efforts to reach a reasonable resolution to the dispute. 
	 

	 
		 
	 

	 
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		(b) If negotiations pursuant to Section 6(a)
		are unsuccessful, unless otherwise specified in the Goods and Services
		Agreement applicable to the dispute, the matter will promptly be submitted by
		either Party to arbitration in accordance with the Commercial Arbitration
		Rules, then in effect, of the American Arbitration Association
		(“AAA”), except to the extent modified herein. The arbitration shall
		be held in the State of New York, unless otherwise agreed by the Parties.
		Judgment on the award rendered may be entered in any court having jurisdiction
		thereof.
	 

	 
		 
	 

	 
		(c) Cargill and Producer shall, within
		thirty (30) days of receipt of notice that the matter has been referred to
		arbitration, appoint one arbitrator each and, within thirty (30) days of the
		appointment of the last of such two arbitrators the two arbitrators shall
		appoint a third arbitrator. If either Party or the two arbitrators fail to
		timely appoint an arbitrator, AAA shall appoint the said arbitrator. 
	 

	 
		 
	 

	 
		(d) The Parties shall bear their respective
		costs incurred in connection with the procedures described in this Section
		6.
	 

	 
		 
	 

	 
		(e) Notwithstanding any other provision of
		this Master Agreement, each Party shall be entitled to access the courts to
		obtain appropriate injunctive relief to preserve their rights during the
		pendency of the resolution process of paragraphs (a) through (d) of this
		Section, to preserve the status quo, or to prevent irreparable harm.
	 

	 
		 
	 

	 
		(f) All negotiations and written statements
		conducted or made pursuant to this Section 6 are confidential and shall be
		treated as compromise and settlement negotiations for purposes of Federal and
		State Rules of Evidence. If the Parties reach agreement pertaining to any
		dispute pursuant to the procedures set forth in this Section 6, such agreement
		will be reduced to writing, signed by authorized representatives of each Party,
		and will be final and binding upon the Parties.
	 

	 
		 
	 

	 
			
				
				  7.
				

			 	
				
				  Controlling
				  Agreement.
				

			 

 

	 
		 
	 

	 
		To the extent any provision of this Master
		Agreement conflicts with a provision of any Goods and Services Agreement or the
		Confidentiality Agreement, the provision of the Goods and Services Agreement or
		the Confidentiality Agreement will control. 
	 

	 
		 
	 

	 
			
				
				  8.
				

			 	
				
				  Indemnification; Limitation of
				  Liability. 
				

			 

 

	 
		 
	 

	 
		(a) Producer agrees to indemnify, defend and
		hold harmless Cargill, its Affiliates and their respective officers, directors,
		employees, agents, shareholders and representatives, from and against any and
		all Damages to the extent arising out of (i) any fraud, negligence or willful
		misconduct of Producer or any of its officers, directors, employees, agents,
		representatives and contractors, or (ii) any breach of this Master Agreement or
		any of the Goods and Services Agreements by Producer. Cargill shall promptly
		notify Producer of any suit, proceeding, action or claim for which Producer may
		have liability pursuant to this Section 8(a).
	 

	 
		 
	 

	 
		(b) Cargill, Incorporated agrees to
		indemnify, defend and hold harmless Producer, its Affiliates and their
		respective officers, directors, employees, agents, shareholders and
		representatives from and against any and all Damages to the extent arising out
		of (i) any fraud, negligence or willful misconduct of Cargill, Incorporated or
		any of its officers, directors, employees, agents, representatives and
		contractors; or (ii) any breach of this Master Agreement or any of the Goods
		and Services Agreements by Cargill, Incorporated. CCSI agrees to indemnify,
		defend and hold harmless Producer, its Affiliates and their respective
		officers, directors, employees, agents, shareholders and representatives from
		and against any and all Damages to the 
	 

	 
		 
	 

	 
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		extent arising out of (i) any fraud,
		negligence or willful misconduct of CCSI or any of its officers, directors,
		employees, agents, representatives and contractors; or (ii) any breach of this
		Master Agreement or any of the Goods and Services Agreements by CCSI. Producer
		shall promptly notify Cargill, Incorporated of any suit, proceeding, action or
		claim for which Cargill, Incorporated or CCSI may have liability pursuant to
		this Section 8(b). 
	 

	 
		 
	 

	 
		(c) Neither Party makes any guarantee,
		warranty or representation, express or implied, with respect to any profit, or
		of any particular economic results from transactions hereunder. In no event
		shall either Party be liable to the other Party for punitive or exemplary
		damages or for indirect, special or consequential damages, including without
		limitation actual or alleged loss of profits, lost sales, loss of value of
		brands, tradenames, trademarks, service names or service marks. Furthermore,
		under no circumstances shall Cargill be liable for repayment of any debt of
		Producer (including without limitation any bank financing, tax-exempt bonds or
		trade debt incurred by Producer), or any failure by Producer to make any
		payment of principal, interest or premium on any such debt. 
	 

	 
		 
	 

	 
		(d) Producer understands and agrees that
		Cargill makes no warranty respecting legal or regulatory requirements or risks.
		Producer shall obtain such legal and regulatory advice from third parties as it
		may deem necessary respecting the applicability of legal and regulatory
		requirements applicable to Producer’s business.
	 

	 
		 
	 

	 
			
				
				  9.
				

			 	
				
				  Insurance. 
				

			 

 

	 
		 
	 

	 
		(a) During the term of this Master
		Agreement, Producer shall, at its own expense, carry in full force and effect
		those insurance policies more fully described herein:
	 

	 
		 
	 

	 
		(i) Commercial general liability insurance,
		written on “occurrence” policy forms, including coverage for
		premises/operations, products/completed operations, property damage, blanket
		contractual liability, sudden and accidental pollution for the premises and
		personal injury, with no exclusions for explosion, collapse and underground
		perils, subject to Section 9(c), no less than $20,000,000 for each occurrence
		and in the aggregate, except that the sudden and accidental pollution for the
		premises shall be subject to a sublimit of $1,000,000 either through this
		policy or by separate cover noted below. The commercial general liability
		policy shall also include a severability of interest clause and a cross
		liability clause in the event more than one entity is “named insured”
		under the liability policy. During construction, the limit may be met through a
		combination of the Owners and/or EPC Contractors coverage if the EPC Contractor
		adds Cargill as an addition insured on its insurance program.
	 

	 
		 
	 

	 
		(ii) Pollution liability insurance,
		including coverage for off-site clean-up, bodily injury and property damage,
		written on an occurrence or on a “claims made” form, with limits of
		no less than $1,000,000.
	 

	 
		 
	 

	 
		(iii) Automobile liability insurance,
		including coverage for owned, non-owned and hired automobiles for both bodily
		injury and property damage in accordance with statutory legal requirements,
		with combined single limits of, subject to Section 9(f), no less than
		$20,000,000 per accident with respect to bodily injury, property damage or
		death. 
	 

	 
		 
	 

	 
		(iv) Workers compensation insurance to
		statutory limits and employer’s liability with a limit of, subject to
		Section 9(c), not less than $20,000,000 and such other
	 

	 
		 
	 

	 
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		forms of insurance which is required by law
		to provide for the project, providing statutory benefits and covering loss
		resulting from injury, sickness, disability or death of the employees of the
		Producer. To the extent applicable, insurance shall cover Jones Act, Longshore
		and Harbor Workers Act and Continental Shelf Land Act.
	 

	 
		 
	 

	 
		(v) “All risk” property insurance
		(including Builder’s Risk coverage during the course of construction of
		the Ethanol Facility), as such term is used in the insurance industry, insuring
		all real and personal property of the Ethanol Facility or Grain Facility as
		applicable, for an amount of not less than full replacement cost of the
		completed Ethanol Facility or the Grain Facility, as applicable. Such insurance
		shall include coverage for the following: flood, earthquake, comprehensive
		boiler and machinery coverage, business interruption and delay of opening
		during the course of construction, extra expense, expediting expense, debris
		removal, and demolition and increased cost of construction, as applicable.
		Sublimits are permitted as respects to the following: (i) debris removal,
		25% of loss, (ii) expediting expense, $2,000,000, (iii) increased costs due to
		orders by law and demolition costs of undamaged portion due to enforcement of
		by law, $2,000,000 and (iv) such other coverages customarily sub-limited in
		reasonable amounts consistent with current industry practice with respect to
		similar risks and acceptable to the Cargill.
	 

	 
		 
	 

	 
		In the event all risk property coverage and
		the boiler and machinery coverage is not written in the same policy, each
		policy shall contain a joint loss agreement.
	 

	 
		 
	 

	 
		All such policies will have deductibles
		commensurate with industry practice.
	 

	 
		 
	 

	 
		(b) During the term of this Master
		Agreement, Cargill shall, at its own expense, carry in full force and effect
		those insurance policies more fully described herein:
	 

	 
		 
	 

	 
		(i) Commercial general liability insurance,
		written on “occurrence” policy forms, including coverage for
		premises/operations, products/completed operations, property damage, blanket
		contractual liability, sudden and accidental pollution for the premises and
		personal injury, with no exclusions for explosion, collapse and underground
		perils, subject to Section 9(c), no less than $20,000,000 for each occurrence
		and in the aggregate, except that the sudden and accidental pollution for the
		premises shall be subject to a sublimit of $1,000,000 either through this
		policy or by separate cover noted below. The commercial general liability
		policy shall also include a severability of interest clause and a cross
		liability clause in the event more than one entity is “named insured”
		under the liability policy. 
	 

	 
		 
	 

	 
		(ii) Automobile liability insurance,
		including coverage for owned, non-owned and hired automobiles for both bodily
		injury and property damage in accordance with statutory legal requirements,
		with combined single limits of, subject to Section 9(c), no less than
		$20,000,000 per accident with respect to bodily injury, property damage or
		death. 
	 

	 
		 
	 

	 
		(iii) Workers compensation insurance to
		statutory limits and employer’s liability with a limit of, subject to
		Section 9(c), not less than $20,000,000 and such other forms of insurance which
		is required by law to provide for the project, providing statutory benefits and
		covering loss resulting from injury, sickness, disability or death of the
		employees of the Cargill. 
	 

	 
		 
	 

	 
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		(c) Umbrella or excess liability insurance
		may be purchased in order to satisfy the limit requirements described in
		Sections 9(a)(i), 9(b)(i), 9(a)(iii), 9(b)(iii) and, with respect to
		employer’s liability, 9(a)(iv) and 9(b)(iv). If the policy or policies
		provided under this Section 9(c) contain(s) aggregate limits applying to other
		operations other than the Ethanol Facility or Grain Facility, as applicable,
		and such limits are diminished below $20,000,000 by any incident, occurrence,
		claim, settlement or judgment against such insurance which has caused the
		insurer to establish a reserve, Producer, after obtaining knowledge of such
		event shall inform Cargill, and within thirty (30) business days purchase an
		additional umbrella/excess liability insurance policy, or obtain a
		reinstatement of limits, to satisfy the requirements of Section 9(a)(i),
		9(a)(iii) or 9(a)(iv).
	 

	 
		 
	 

	 
		(d) The insured shall provide the other
		Party with certificates of insurance evidencing the above coverages not later
		than thirty (30) days after the Effective Date. All policies shall contain a
		provision that will provide thirty (30) days’ prior written notice of
		cancellation or material reduction in coverage to the other Party. Except with
		respect to the All Risk Property insurance as it relates to the Grain Facility,
		each party and the Financing Parties will be added as an Additional Insured,
		the insurance will be primary on their favor and insurers will permit a waiver
		of subrogation against the other Party with respect to the policies in this
		Section 9, where legally allowed.
	 

	 
		 
	 

	 
		(e) Cargill shall have the right to (i) self
		insure with respect to any of the required insurance policies or coverages in
		such amounts as it deems appropriate, or (ii) use Cargill, Incorporated’s
		wholly-owned captive insurance company to insure part or all of the coverage
		required by this Section 9, subject to if, in the event self insurance or
		a captive is used, that Cargill will indemnify the Producer for any losses that
		would have been otherwise covered by the insurance.
	 

	 
		 
	 

	 
			
				
				  10.
				

			 	
				
				  Miscellaneous.
				

			 

 

	 
		 
	 

	 
		(a) Successors and Assigns.
	 

	 
		 
	 

	 
		All of the terms, covenants, and conditions
		of this Master Agreement shall be binding upon, and inure to the benefit of and
		be enforceable by the Parties and their respective successors, heirs, executors
		and permitted assigns. Except as provided herein, neither Party may assign its
		rights, duties or obligations under this Master Agreement or any one or more of
		the Goods and Services Agreements, to any other person or entity without the
		prior written consent of the other Party. Notwithstanding the
		foregoing, (i)
		upon written notice by Cargill,
		Cargill, Incorporated may assign its rights, duties and obligations under the
		Ethanol Agreement and/or the DG Agreement one or more of its Affiliates,
		provided that no such assignment will relieve Cargill, Incorporated of primary
		responsibility thereunder
		and (ii) provided that no default on
		the part of Producer hereunder is then existing, Producer may without Cargill's
		consent (but upon prior written notice to Cargill), assign, pledge or otherwise
		encumber this Agreement, any other Goods and Services Agreement, the Access
		Agreement, the Rail Exchange Agreement or the Pre-Commercial Corn Agreement to
		any Financing Party as collateral security for the financing of the Ethanol
		Facility; provided however, no such assignment, pledge or encumbrance shall
		release Producer from its obligations hereunder, grant any additional notice or
		cure rights to any party, or otherwise affect Cargill's rights and remedies
		hereunder. For the avoidance of doubt, Cargill consents to the Producer’s
		entering into the Consent, dated the date hereof, by and among Cargill,
		Producer and Deutsche Bank Trust Company Americas with respect to this
		Agreement and any other Goods 
	 

	 
		 
	 

	 
		8
	 

	 
		 
	 

	 
		 
	 

	 
 

	 
		and Services Agreements, the Access
		Agreement, the Rail Exchange Agreement and the Pre-Commercial Corn Agreement.
		
	 

	 
		 
	 

	 
		(b) Notices. All
		notices, requests, demands or other communications required or permitted to be
		given or made under this Master Agreement, the Goods and Services Agreement and
		the Confidentiality Agreement shall be in writing and delivered personally or
		sent by prepaid, first class, certified or registered air mail, return receipt
		requested, or by facsimile transmission with confirmation receipt to the
		intended recipient thereof at the address or facsimile number set forth below.
		Any such notice, demand, request or communication shall be deemed to have been
		duly given immediately if delivered personally or made by a confirmed
		facsimile, or five (5) days after mailing, and in proving the same it shall be
		sufficient to show that the envelope containing the notice, demand, request or
		communication was duly addressed, stamped and posted or that receipt of a
		facsimile was confirmed by the recipient. The addressees and facsimile numbers
		of the Parties:
	 

	 
		 
	 

	 
			
				
				  To Cargill:
				

			 	
				
				  Cargill, Incorporated
				

			 

 

	 
			
				
				   
				

			 	
				
				  Commercial Manager for Ethanol /
				  62
				

			 
	 	
				
				  15407 McGinty Road West
				

			 
	 	
				
				  Wayzata, MN 55391-2399
				

			 
	 	
				
				  Fax: (952) 742-7440
				

			 

 

	  

	  

	  

	 
		 
	 

	 	
			 
				With Copy to:
			 

		  	
			 
				Cargill, Incorporated
			 

		  

	 	 	
			 
				AgHorizons Commercial Leader /
				19
			 

		  

	 	 	
			 
				15407 McGinty Road West
			 

		  

	 	 	
			 
				Wayzata, MN 55391-2399
			 

		  

	 	 	
			 
				Fax: (952) 742-7313
			 

		  

	  

	  

	  

	  

	  

	 
		 
	 

	 	
			 
				With Copy to:
			 

		  	
			 
				Cargill, Incorporated
			 

		  

	 	 	
			 
				Horizon Milling DG Marketing /
				121
			 

		  

	 	 	
			 
				15407 McGinty Road West
			 

		  

	 	 	
			 
				Wayzata, MN 55391-2399
			 

		  

	 	 	
			 
				Fax: (952) 742-6999
			 

		  

	 
		 
	 

	 	
			 
				With Copy to:
			 

		  	
			 
				Cargill Direct
			 

		  

	 	 	
			 
				c/o Cargill, Incorporated – Attn:
				Clayton Weiby
			 

		  

	 	 	
			 
				15407 McGinty Road West, MS #20

			 

		  

	 	 	
			 
				Wayzata, MN 55391-2399
			 

		  

	 	 	
			 
				Fax: (952) 742-7242
			 

		  

	 
		 
	 

	 
			
				
				  With Copy to:
				

			 	
				
				  Cargill, Incorporated
				

			 
	 	
				
				  Attn: Kathy Gerken, Contract
				  Admin.
				

			 
	 	
				
				  12700 Whitewater Dr.,
				

			 
	 	
				
				  Minnetonka, MN 55343
				

			 
	 	
				
				  Fax: (952) 984-3627
				

			 

 

	  

	  

	  

	 
		 
	 

	 	
			 
				With Copy to:
			 

		  	
			 
				Cargill, Incorporated
			 

		  
	 	
			 
				Law Department / 24
			 

		  
	 	
			 
				15407 McGinty Road West
			 

		  
	 	
			 
				Wayzata, MN 55391-2399
			 

		  
	 	
			 
				Attn: Sweeteners NA BU Attorney

			 

		  
	 	
			 
				Fax: (952) 742-6349 
			 

		  

	  

	  

	  

	  

	 
		 
	 

	  

	  

	  

	  

	  

	  

	 
		 
	 

	 
		9
	 

	 
		 
	 

	 
		 
	 

	 
 
	 
	 

	  

	  

	  

	  

	  

	 	
			 
				To Producer:
			 

		  	
			 
				Pioneer Trail Energy, LLC
			 

		  
	 	
			 
				1625 Broadway, Suite 2400
			 

		  
	 	
			 
				Denver, CO 80202
			 

		  
	 	
			 
				Attn: Scott H. Pearce
			 

		  
	 	
			 
				Fax: (303) 626-8251 
			 

		  

	 
		 
	 

	 
		Either Party may, from time to time,
		furnish, in writing, to the other Party, notice of a change in the address
		and/or fax number(s) to which notices are to be given hereunder.
	 

	 
		 
	 

	 
		                (c)
		Applicable Law.
		This Master Agreement, the Goods and
		Services Agreements and the Confidentiality Agreement shall be governed in all
		respects by the laws of the State of New York, except with respect to its
		choice of law provisions. In the performance of their respective duties and
		obligations under this Master Agreement and each of the Goods and Services
		Agreements, the Parties agree to comply with all applicable laws, regulations,
		orders, permits and licenses.
	 

	 
		 
	 

	 
		                (d)
		Cover and Mitigation. Each Party shall have the obligation to use
		commercially reasonable efforts to mitigate damages associated with the default
		by any Party under this Master Agreement or any of the Goods and Services
		Agreements.
	 

	 
		 
	 

	 
		                (e)
		Headings. The headings as to contents of particular sections of
		this Master Agreement, the Goods and Services Agreements and the
		Confidentiality Agreement are inserted for convenience and shall not be
		construed as part of this Master Agreement, the Goods and Services Agreements
		or the Confidentiality Agreement or as a limitation on the scope of any terms
		or provisions of this Master Agreement, the Goods and Services Agreements or
		the Confidentiality Agreement.
	 

	 
		 
	 

	 
		                (f)
		Severability.
		In the event that any provision of this
		Master Agreement, the Goods and Services Agreements or the Confidentiality
		Agreement becomes or is declared by a court of competent jurisdiction to be
		illegal, unenforceable or void, either in whole or in part, this Master
		Agreement and the Goods and Services Agreements, as applicable, shall continue
		in full force and effect without said provision; provided that no
		such severability shall be effective if it materially changes the economic
		benefit of this Master Agreement or applicable Goods and Services Agreement to
		either Party.
	 

	 
		 
	 

	 
		                (g)
		No Third Party
		Beneficiaries. No provision of this
		Master Agreement, the Goods and Services Agreements or the Confidentiality
		Agreement is intended, or shall be construed, to be for the benefit of any
		third party.
	 

	 
		 
	 

	 
		                (h)
		Entire Agreement;
		Amendment. This Master
		Agreement, the Goods and Services Agreements, and the Confidentiality
		Agreement, including all written appendices and/or amendments to such
		agreements, constitute the entire understanding and agreement between the
		Parties with respect to the subject matter hereof, and supersede all prior and
		contemporaneous understandings and/or agreements, written or oral, regarding
		the subject matter of this Master Agreement, the Goods and Services Agreements
		and the Confidentiality Agreement. No course of prior dealings between the
		Parties and no usage of trade, except where expressly incorporated by
		reference, shall be relevant or admissible to supplement, explain, or vary any
		of the terms of this Master Agreement, the Goods and Services Agreements or the
		Confidentiality Agreement. Acceptance of, or acquiescence in, a course of
		performance rendered under this or any prior agreement shall not be relevant or
		admissible to determine the meaning of this Master 
	 

	 
		 
	 

	 
		10
	 

	 
		 
	 

	 
		 
	 

	 
 
	 
		Agreement, the Goods and Services Agreements
		or the Confidentiality Agreement even though the accepting or acquiescing Party
		has knowledge of the nature of the performance and an opportunity to object. No
		appendices, amendments, modifications, additions, or writings of any kind
		relating to this Master Agreement, the Goods and Services Agreements, or the
		Confidentiality Agreement will be binding unless in writing and signed by a
		duly authorized officer of both Parties. 
	 

	 
		 
	 

	 
		                (i)
		Counterparts.
		This Master Agreement, each of the
		Goods and Services Agreements, and the Confidentiality Agreement may be
		executed in counterparts, each of which may be deemed an original but together
		shall constitute but one and the same instrument.
	 

	 
		 
	 

	 
		                (j)
		Waiver. No failure on the part of any Party hereto to
		exercise, and no delay in exercising any right, power, or remedy under this
		Master Agreement, any Goods and Services Agreement, or the Confidentiality
		Agreement shall operate as a waiver thereof, nor shall any single or partial
		exercise of any right, power or remedy by any such Party preclude any other or
		further exercise thereof or the exercise of any other right, power or remedy.
		No express waiver or assent by any Party hereto to any breach of or default in
		any term or condition of this Master Agreement or of any Goods and Services
		Agreement or the Confidentiality Agreement shall constitute a waiver of or an
		assent to any succeeding breach of or default in the same or any other term or
		condition hereof.
	 

	 
		 
	 

	 
		                (k)
		Interpretation. The Parties acknowledge and agree that (a) each Party
		and its counsel have reviewed the terms and conditions of this Master
		Agreement, the Goods and Services Agreements and the Confidentiality Agreement
		and have contributed to the revision of same, (b) the normal rule of
		construction which holds that any ambiguities are resolved against the drafting
		party, shall not be employed in the interpretation of this Master Agreement,
		the Goods and Services Agreements, and the Confidentiality
		Agreement
		and (c) the terms and provisions of
		this Master Agreement, the Goods and Services Agreements and the
		Confidentiality Agreement shall be constructed fairly as to all Parties hereto
		and not in favor of or against any Party, regardless of which Party was
		generally responsible for the preparation of this Master Agreement, the Goods
		and Services Agreements or the Confidentiality Agreement.
	 

	 
		 
	 

	 
		                Unless
		otherwise required by the context in which any term appears, in this Master
		Agreement and in each of the Goods and Services Agreements: (i) capitalized
		terms used shall have the meanings specified in Section 11; (ii) the singular
		shall include the plural and vice versa; (iii) references to
		“Sections,” “Schedules,” “Annexes,”
		“Appendices” or “Exhibits” (if any) shall be to sections,
		schedules, annexes, appendices or exhibits hereof, unless otherwise specified;
		(iv) all references to a particular Person in any capacity shall be deemed to
		refer also to such Person’s authorized agents, successors and permitted
		assigns in such capacity; (v) the words “herein,” “hereof”
		and “hereunder” shall refer to this Master Agreement as a whole and
		not to any particular section or subsection hereof; (f) the words
		“include,” “includes” and “including” shall be
		deemed to be followed by the phrase “without limitation” and shall
		not be construed to mean that the examples given are an exclusive list of the
		topics covered; (vi) all accounting terms not specifically defined herein shall
		be construed in accordance with generally accepted accounting principles in the
		United States of America consistently applied; (vii) references to this Master
		Agreement shall include a reference to all appendices, annexes, schedules and
		exhibits hereto, as the same may be amended, modified, supplemented or replaced
		from time to time; (viii) references to any agreement, document or instrument
		shall be construed at a particular time to refer to such agreement, document or
		instrument as the same may be amended, modified, supplemented or replaced as of
		such time; (ix) the masculine shall include the feminine and neuter and vice
		versa; and (x) references to an applicable law or to legal requirements in
		general
	 

	 
		 
	 

	 
		11
	 

	 
		 
	 

	 
		 
	 

	 
 

	 
		shall mean a reference to such applicable
		law or legal requirement as the same may be amended, modified, supplemented or
		restated and be in effect from time to time.
	 

	 
		 
	 

	 
		                (l)
		Independent Contractors. The Parties to this Master Agreement, the Goods and
		Services Agreements and the Confidentiality Agreement are independent
		contractors. There is no relationship of partnership, joint venture,
		employment, franchise, or agency between the Parties, and neither Party shall
		make any representation to the contrary. Under no circumstances shall Cargill
		be liable for the debts or obligations of Producer (including without
		limitation any bank financing, tax-exempt bonds or trade debt incurred by
		Producer) or for the wages, salaries, or benefits of Producer’s employees,
		and Producer hereby agrees to indemnify, defend, and hold harmless Cargill from
		and against the same. Producer shall not be liable for the debts or obligations
		of Cargill or for the wages, salaries, or benefits of Cargill’s employees,
		and Cargill hereby agrees to indemnify and defend Producer from and against the
		same.
	 

	 
		 
	 

	 
		                (m)
		Confidentiality. The terms of this Master Agreement and the Goods and
		Services Agreement are confidential and, except as required by law, shall not
		be disclosed by either Party without the prior written consent of the other
		Party, which shall not be unreasonably withheld; provided,
		however, that either Party may disclose the terms of this
		Master Agreement and the Goods and Services Agreements to its lenders,
		accountants, legal counsel, and/or potential investors (other than
		Cargill’s competitors, including without limitation its competitors in the
		grain origination, ethanol, natural gas, distillers grains and wet corn milling
		businesses) so long as the disclosing Party provides prior written notice to
		the other Party and the receiving Party signs a confidentiality agreement
		prohibiting further disclosure and limiting use of the information disclosed to
		the evaluation of the transaction contemplated in this Master Agreement.
		Further, the Parties are bound by the terms of the Confidentiality Agreement
		between the Parties of even date herewith, a copy of which is attached hereto,
		with respect to Confidential Information as defined therein. 
	 

	 
		 
	 

	 
		                (n)
		Time is of the Essence. Each Party acknowledges that time is of the essence
		and hereby agrees to use commercially reasonable efforts to implement this
		Master Agreement and the transactions contemplated hereby.               

	 

	 
		 
	 

	 
		                (o)
		Condition Precedent;
		No-Recourse. The effectiveness of this
		Master Agreement and the Goods and Services Agreements is conditioned upon the
		approval by Cargill of a “no-recourse” provision which must be
		included in the Financing Documents and the organizational documents (or other
		documents as reasonably determined by Cargill) of Producer and the entities
		that are related to Producer, including without limitation BioFuel Energy, LLC,
		BFE Operating Company, LLC, and Buffalo Lake Energy, LLC (the “Related
		Producer Entity”) (collectively, the “Project Entities”). Such
		no-recourse provision shall be in a form satisfactory to Cargill, shall be
		expressed to be binding upon each of the Financing Parties and the members of
		the Project Entities by such parties’ acceptance of a related note or debt
		instrument or by execution of a Financing Document or by execution of the
		organizational or other documents, as applicable, and shall include a statement
		generally to the effect that none of the Financing Parties and none of the
		members of the Project Entities shall have any recourse against Cargill or any
		of its affiliated companies and their respective officers, directors and
		employees for any act or omission of Producer, its officers or directors,
		including without limitation any failure by Producer to pay any obligation when
		due.
	 

	 
		 
	 

	 
		                (p)
		Survival. The provisions of Sections 1(b), 5, 6, 7, 8, 10(b),
		10(c), 10(d), 10(g), 10(h), 10(k), 10(l), 10(m), 10(p) and 11 shall survive the
		expiration or earlier termination of this Master Agreement.
	 

	 
		 
	 

	 
		12
	 

	 
		 
	 

	 
		 
	 

	 
 
	 
		                (q)
		Audit Rights. Each Party shall have the right to request, but not
		more than once per quarter during the term of this Master Agreement, an
		independent certified public accountant selected by such Party to inspect and
		review, at the requesting Party’s sole expense, the records, documents and
		facilities (including, as applicable, the Ethanol Facility or Grain Facility)
		of the other Party that directly relate to and directly support this Master
		Agreement and the Goods and Services Agreements, to verify such Party’s
		compliance with the Master Agreement and the Goods and Services Agreements then
		in effect. Each Party shall have the right to request, but not more than once
		per year during the term of this Master Agreement, an independent certified
		public accountant selected by the requesting Party to inspect and audit, at the
		requesting Party’s sole expense, the records, documents and facilities
		(including the Ethanol Facility and Grain Facility) of the other Party that
		directly relate to and directly support the Master Agreement or Goods and
		Services Agreements to verify such Party’s compliance with the Master
		Agreement and the Goods and Services Agreements then in effect. Such
		inspections (i) shall be subject to the confidentiality requirements set forth
		in the Confidentiality Agreement between the Parties of even date herewith, the
		form of which is attached hereto, (ii) shall be conducted during normal
		business hours and in such a manner that does not unreasonably interfere with
		the relevant Party’s business operations, and (iii) shall not be unduly
		burdensome. The scope of any such inspections shall include any reasonable
		follow-up inspection that may be identified in the initial inspection as
		reasonably necessary to verify compliance with the Master Agreement and the
		Goods and Services Agreements then in effect. If any error is discovered during
		or as a result of such inspections in any statement rendered under any Goods
		and Services Agreement and such error is on the part of Cargill and results in
		a payment that is due to Producer, the amount due plus interest on such amount
		at the Default Rate shall be promptly paid to Producer by Cargill (or put in
		escrow pending resolution of any dispute pursuant to Section 6). If any error
		is discovered during or as a result of such inspections in any statement
		rendered under any Goods and Services Agreements and such error is on the part
		of Producer and results in a payment that is due to Cargill, the amount due
		plus interest on such amount at the Default Rate shall be promptly paid to
		Cargill by Producer (or put in escrow pending resolution of any dispute
		pursuant to Section 6). Producer and Cargill each covenant that it will
		maintain accurate and complete production and delivery records relating to the
		Goods and Services Agreements in a prudent and businesslike manner in
		accordance with sound commercial practices.
	 

	 
		 
	 

	 
		                (r)
		Access Rights. Cargill and its independent contractors (and their
		respective employees and agents) shall have the right, but not the obligation,
		to access the Ethanol Facility from time to time during normal working hours,
		upon reasonable advance notice to Producer, and in a manner that does not
		unreasonably interfere with Producer’s business operations, for the
		purpose of inspecting the Ethanol Facility for compliance with Producer’s
		contractual obligations to Cargill, as set forth in this Master Agreement and
		the Goods and Services Agreements, including without limitation Producer’s
		obligation to produce ethanol in accordance with the specifications and other
		terms set forth in the Ethanol Agreement, and to produce Distillers Grains in
		accordance with the Specifications and other terms set forth in the DG
		Agreement.
	 

	 
		 
	 

	 
			
				
				  11.
				

			 	
				
				  Definitions.
				

			 

 

	 
		 
	 

	 
		(a) Definitions. As
		used in this Master Agreement and in the Goods and Services Agreements, the
		following capitalized terms have the meanings indicated:
	 

	 
		 
	 

	 
		“Access Agreement” means the agreement between Cargill, Incorporated
		and Producer permitting Producer certain limited rights of access to the Grain
		Facility in connection with the construction of the Ethanol Facility prior to
		Producer taking possession of the Grain Facility
	 

	 
		 
	 

	 
		13
	 

	 
		 
	 

	 
		 
	 

	 
 
	 
		under the Grain Facility Lease, such
		agreement to be negotiated to the mutual satisfaction of the parties. 
	 

	 
		 
	 

	 
		“Affiliate”
		means with respect to any entity, any other entity that directly or indirectly
		controls, is controlled by, or is under common control with that entity. For
		the purposes of this Master Agreement, "control" means (i) the direct or
		indirect ownership of more than fifty percent (50%) of the total voting
		securities of every class or other evidences of ownership interest of the
		entity, or (ii) the possession, directly or indirectly, of the power to direct
		or cause the direction of the management and policies of an entity.
	 

	 
		 
	 

	 
		“Aggregate Exposure of Cargill” means, on any day of determination, an amount, if
		any, equal to the sum of the amounts which would be payable to Cargill if
		Cargill terminated the Corn Supply Agreement, the Corn Advisory Agreement, the
		NAESB Agreement, the Gas Supply Agreement, and the Risk Management Advisory
		Agreement, less amounts exclusively and irrevocably available to Cargill under
		letters of credit or cash deposits acceptable to Cargill, and plus the Related
		Project Exposure of Cargill. For clarification purposes, in calculating its
		Aggregate Exposure, Cargill may mark to market all open cash and futures
		positions. 
	 

	 
		 
	 

	 
		“Business Day” means every day other than a Saturday, Sunday or
		any other day on which banks in the state of New York are permitted or required
		to remain closed.
	 

	 
		 
	 

	 
		“Confidentiality Agreement” has the meaning specified in Section 1(b).

	 

	 
		 
	 

	 
		“Corn Advisory Agreement” has the meaning specified in Section 1(a).

	 

	 
		 
	 

	 
		“Corn Supply Agreement” has the meaning specified in Section 1(a).

	 

	 
		 
	 

	 
		“Damages”
		means any and all losses, costs, damages, expenses, obligations, injuries,
		liabilities, insurance deductibles and excesses, claims, proceedings, actions,
		causes of action, demands, deficiencies, lawsuits, judgments or awards, fines,
		penalties and interest, including reasonable attorneys’ fees, but
		excluding any punitive, exemplary, indirect, special or consequential
		damages, including without limitation actual or alleged loss of profits, lost
		sales, loss of value of brands, tradenames, trademarks, service names or
		service marks.
	 

	 
		 
	 

	 
		“Default Rate” means an interest rate per annum equal to the
		lesser of (i) the interest rate per annum for large commercial loans as
		published in The Wall Street
		Journal, Midwest edition, as the
		“prime rate” (sometimes referred to as the “base rate”)
		from time to time (or, if more than one rate is published, the arithmetic mean
		of such rates), determined as of the date the obligation to pay interest
		arises, plus two hundred (200) basis points, and (ii) the maximum
		rate permitted by applicable law.
	 

	 
		 
	 

	 
		“DG Agreement” has the meaning specified in Section 1(a).

	 

	 
		 
	 

	 
		“EPC Contract” means the Agreement for Engineering, Procurement
		and Construction, dated as of June 9, 2006, between Producer and TIC - The
		Industrial Company Wyoming, Inc.
	 

	 
		 
	 

	 
		“Ethanol Agreement” has the meaning specified in Section 1(a).

	 

	 
		 
	 

	 
		“Ethanol Facility” has the meaning specified in the Corn Supply
		Agreement.
	 

	 
		 
	 

	 
		 
	 

	 
		14
	 

	 
		 
	 

	 
		 
	 

	 
 
	 
		“Fairmont Master Agreement” means that certain Master Agreement dated as of
		the Effective Date by and among Cargill, Incorporated, CCSI, and Buffalo Lake
		Energy, LLC.
	 

	 
		 
	 

	 
		“Financing Documents” means any and all loan agreements, notes,
		indentures, security agreements, subordination agreements, mortgages, deeds of
		trust, participation agreements and other documents relating to the
		construction, interim, working capital and long-term financing of the Ethanol
		Facility and any refinancing thereof provided by the Financing Parties,
		including any and all modifications, extensions, renewals and replacements of
		any such financing or refinancing.
	 

	 
		 
	 

	 
		“Financing Parties” means any and all lenders, and any trustee or
		agent acting on their behalf, providing senior or subordinated construction,
		interim, working capital or long-term debt financing or refinancing to Producer
		or its Affiliates, the proceeds of which are applied in whole or in part to the
		financing of the Ethanol Facility.
	 

	 
		 
	 

	 
		“Force Majeure” has the meaning specified in Section 3(a).

	 

	 
		 
	 

	 
		“Gas Supply Agreement” has the meaning specified in Section 1(a).

	 

	 
		 
	 

	 
		“Goods and Services Agreements” has the meaning specified in Section 1(a).

	 

	 
		 
	 

	 
		“Goods” or
		“Services” means the goods and services to be provided under
		the Goods and Services Agreements.
	 

	 
		 
	 

	 
		“Grain Facility” has the meaning specified in the Corn Supply
		Agreement.
	 

	 
		 
	 

	 
		“Grain Facility Lease” means that certain Grain Facility Lease dated as
		of the date hereof by and between Cargill and Producer.
	 

	 
		 
	 

	 
		“Lien” means
		any mortgage, deed of trust, pledge, charge, security interest, easement or
		other lien or encumbrance.
	 

	 
		 
	 

	 
		“NAESB Agreement” has the meaning specified in Section 1(a).

	 

	 
		 
	 

	 
		“Person”
		means an individual, partnership, corporation, business trust, joint stock
		company, trust, unincorporated association, joint venture, governmental
		authority, limited liability company or any other entity of whatever
		nature.
	 

	 
		 
	 

	 
		“Pre-Commercial Corn Agreement” means the agreement between Cargill, Incorporated
		and Producer relating to the sale of corn other than Corn (as defined in the
		Corn Supply Agreement) from Cargill to Producer prior to the commencement of
		commercial operations of the Ethanol Facility, such agreement to be negotiated
		to the mutual satisfaction of the parties. 
	 

	 
		 
	 

	 
		“Principal Documents” means, collectively, the Corn Supply Agreement,
		the Ethanol Agreement, and the DG Agreement.
	 

	 
		 
	 

	 
		“Project Entities” has the meaning specified in Section
		10(o).
	 

	 
		 
	 

	 
		“Provisional Acceptance Date” means the date Provisional Acceptance is achieved
		under the EPC Contract.
	 

	 
		 
	 

	 
		 
	 

	 
		15
	 

	 
		 
	 

	 
		 
	 

	 
 
	 
		“Rail Exchange Agreement” means the agreement between Cargill, Incorporated
		and Producer relating to use and exchange of railcars, such agreement to be
		negotiated to the mutual satisfaction of the parties. 
	 

	 
		 
	 

	 
		“Related Goods and Services Agreements” means the Goods and Services Agreements as
		defined in the Fairmont Master Agreement.
	 

	 
		 
	 

	 
		“Related Producer Entity” has the meaning specified in Section
		10(o).
	 

	 
		 
	 

	 
		“Related Project Exposure of Cargill” means the Aggregate Exposure of Cargill as
		defined in the Fairmont Master Agreement.
	 

	 
		 
	 

	 
		“Risk Advisory Agreement” has the meaning specified in Section 1(a).

	 

	 
		 
	 

	 
		 
	 

	 
		 
	 

	 
		[Signature page follows]
	 

	 
		 
	 

	 
		16
	 

	 
		 
	 

	 
		 
	 

	 
 
	 
		IN WITNESS WHEREOF, the Parties have each
		executed this Master Agreement on the date first above written.
	 

	 
		 
	 

	 
			
				
				   
				

			 	
				
				  Pioneer Trail Energy, LLC
				

			 
	
				
				   
				

			 	
				
				  By:
				

			 	
				
				  /s/ Scott H. Pearce
				

			 
	
				
				   
				

			 	
				
				   
				

			 	
				
				

			 
	
				
				   
				

			 	
				
				  Its:
				

			 	
				
				  Authorized
				  Representative
				

			 
	
				
				   
				

			 	
				
				   
				

			 	
				
				

			 

 

	 
		 
	 

	 
			
				
				   
				

			 	
				
				  BFE Operating Company, LLC
				

			 
	
				
				   
				

			 	
				
				  By:
				

			 	
				
				  /s/ Scott H. Pearce
				

			 
	
				
				   
				

			 	
				
				   
				

			 	
				
				

			 
	
				
				   
				

			 	
				
				  Its:
				

			 	
				
				  Authorized
				  Representative
				

			 
	
				
				   
				

			 	
				
				   
				

			 	
				
				

			 

 

	 
		 
	 

	 
			
				
				   
				

			 	
				
				  Cargill, Incorporated
				

			 
	
				
				   
				

			 	
				
				  By:
				

			 	
				
				  /s/ Dennis C. Inman
				

			 
	
				
				   
				

			 	
				
				   
				

			 	
				
				

			 
	
				
				   
				

			 	
				
				  Its:
				

			 	
				
				  Vice President —
				  Cargill, Inc.
				

			 
	
				
				   
				

			 	
				
				   
				

			 	
				
				

			 

 

	 
		 
	 

	 
			
				
				   
				

			 	
				
				  Cargill Commodity Services
				  Inc.
				

			 
	
				
				   
				

			 	
				
				  By:
				

			 	
				
				  /s/ Dennis C. Inman
				

			 
	
				
				   
				

			 	
				
				   
				

			 	
				
				

			 
	
				
				   
				

			 	
				
				  Its:
				

			 	
				
				  President — Cargill
				  Commodity Services, Inc.
				

			 
	
				
				   
				

			 	
				
				   
				

			 	
				
				

			 

 

	 
		 
	 

	 
		 
	 

	 
		 
	 

	 
		 
	 

	 
		 
	 

	 
 
	 
		 
	 

	 
		Exhibit A
	 

	 
		Confidentiality
		Agreement
	 

	 
		                This
		Confidentiality Agreement (“Agreement”), is made effective this _____
		day of _______, 2006 (the “Effective Date”) by and between CARGILL,
		INCORPORATED, a Delaware corporation (“Cargill, Incorporated”),
		CARGILL COMMODITY SERVICES INC., a Delaware corporation (“CCSI”)
		(Cargill, Incorporated and CCSI are referred to collectively as
		“Cargill”), and BIOFUEL ENERGY, LLC, a Delaware limited liability
		company, BFE OPERATING COMPANY, LLC, a Delaware limited liability company, and
		PIONEER TRAIL ENERGY, LLC, a Delaware limited liability company
		(“Producer”), collectively referred to hereinafter as
		“Parties” or individually as a “Party.”
	 

	 
			
				
				   
				

			 	
				
				  1.
				

			 	
				
				  Purpose of this
				  Agreement
				

			 

 

	 
		                The
		purpose of this Agreement is for the Parties to discuss matters relating to or
		in connection with the Master Agreement, including the Goods and Services
		Agreements appended thereto (the “Master Agreement”) entered into by
		the Parties dated _________, 2006 and the respective obligations of the Parties
		thereunder (“Purpose”), and to protect the confidential nature of
		such discussions. In order to facilitate discussions contemplated hereunder,
		Cargill may receive from, and provide to, Producer certain Confidential
		Information, as defined below. Each Party’s information is proprietary,
		secret, and confidential, and will be disclosed by one Party (the
		“Disclosing Party”) to the other Party (the “Receiving
		Party”) on the following terms and conditions.
	 

	 
		 
	 

	 
			
				
				   
				

			 	
				
				  2.
				

			 	
				
				  Definition of Confidential
				  Information
				

			 

 

	 
		                “Confidential
		Information” shall mean any and all business, technical, and financial
		information related to the Purpose set forth above and disclosed by one Party
		to the other Party, either directly or indirectly. Confidential Information may
		include, by way of example, but without limitation, products, specifications,
		formulae, equipment, business strategies, customer lists, know-how, drawings,
		pricing information, inventions, ideas, and other information, or its potential
		use, that is owned by or in possession of Producer or Cargill. 
	 

	 
		               Confidential
		Information shall not include that which: (a) is in the public domain prior to
		disclosure by Disclosing Party; (b) becomes part of the public domain, by
		publication or otherwise, through no unauthorized act or omission on the part
		of the Receiving Party; (c) is lawfully in the Receiving Party's possession
		prior to disclosure by the Disclosing Party; or (d) is independently developed
		by an employee(s) of the Receiving Party with no access to the disclosed
		Confidential Information.
	 

	 
		                If
		Confidential Information is legally disclosed in confidence to the Receiving
		Party by a third party, then: (a) the Receiving Party shall have the right to
		use that portion of the above-mentioned Confidential Information so disclosed
		by the third party in connection with work done for that third party; and (b)
		such disclosure by that third party shall not place that portion of the
		above-mentioned Confidential Information in the public domain, and shall not
		relieve the Receiving Party of its obligations under this Agreement. 
	 

	 
		 
	 

	 
			
				
				   
				

			 	
				
				  3.
				

			 	
				
				  Obligations of
				  Protection
				

			 

 

	 
		                Proper
		and appropriate steps shall be taken and maintained by the Receiving Party, at
		all times, to protect the Confidential Information received. Dissemination of
		Confidential Information shall be limited to employees or agents that are
		directly involved with discussions contemplated by this Agreement, and even
		then only to such extent as is necessary and essential. Notwithstanding the
		foregoing, Cargill may disseminate the Master Agreement, the Goods and 
	 

	 
		 
	 

	 
		 
	 

	 
		1
	 

	 
		 
	 

	 
 
	 
		Services Agreements and ancillary
		transactional documents to its Affiliates and each of Cargill’s and its
		Affiliate’s respective employees and consultants who are not directly
		involved with the discussions contemplated by this Agreement. The Parties shall
		inform their employees and agents of the confidential nature of the information
		disclosed hereunder and cause all such employees and agents to abide by the
		terms of this Agreement. 
	 

	 
		                In
		addition, each Party may disclose Confidential Information regarding the
		Ethanol Facility and the performance of the Master Agreement and Goods and
		Services Agreements, including the material terms thereof, to (i) financial
		institutions and other Persons providing or expressing bona fide interest in
		providing debt financing or refinancing, lease financing and/or other credit
		support to Producer in connection with the construction and operation of the
		Ethanol Facility, and to the agent or trustee of any of them, (ii) rating
		agencies, (iii) Persons to which offering statements or other disclosure
		documents associated with the private or public offering of debt securities by
		or on behalf of Producer are provided, (iv) Persons that are potential equity
		transferees or purchasers of the Ethanol Facility, and (v) board members and
		equity owners consistent with its internal governance practices; provided,
		however, that such Persons agree to bound by the terms hereof or otherwise
		agree to maintain the confidential nature of the information hereof in a manner
		reasonably acceptable to the Parties. 
	 

	 
			
				
				   
				

			 	
				
				  4.
				

			 	
				
				  Obligations of
				  Non-disclosure
				

			 

 

	 
		                The
		Receiving Party shall not disclose the Disclosing Party’s Confidential
		Information to any unauthorized party without prior express written consent of
		the Disclosing Party or unless required by law or court order. If a Party is
		required by law or court order to disclose Confidential Information of the
		other Party, they shall give the Disclosing Party prompt notice of such
		requirement so that an appropriate protective order or other relief may be
		sought.
	 

	 
			
				
				   
				

			 	
				
				  5.
				

			 	
				
				  Authorized Use and Ownership
				  of Confidential Information
				

			 

 

	 
		               Confidential
		Information will be used only in connection with discussions contemplated by
		this Agreement; no other use will be made of it by the Receiving Party, it
		being recognized that both Parties have reserved all rights to their respective
		Confidential Information not expressly granted herein.
	 

	 
		                All
		documents containing Confidential Information and provided by the Disclosing
		Party shall remain the property of the Disclosing Party, and all such
		documents, and copies thereof, shall be returned or destroyed upon the request
		of the Disclosing Party. Documents prepared by the Receiving Party using
		Confidential Information of the Disclosing Party, or derived therefrom, shall
		be destroyed upon request of the Disclosing Party, confirmation of which shall
		be provided in writing. The Receiving Party, however, may keep one copy of any
		document requested to be returned or destroyed in the files of its legal
		department or outside counsel for record purposes only.
	 

	 
			
				
				   
				

			 	
				
				  6.
				

			 	
				
				  Term of Disclosure and
				  Duration of Confidentiality
				

			 

 

	 
		                The
		period for disclosure of Confidential Information between the Parties under
		this Agreement shall be coterminous with the term of the Master Agreement. The
		obligations imposed by this Agreement, including but not limited to
		non-disclosure and non-use, however, shall endure for one (1) year from the
		expiration or earlier termination of the Master Agreement. 
	 

	 
			
				
				   
				

			 	
				
				  7.
				

			 	
				
				  Ownership of Intellectual
				  Property
				

			 

 

	 
		                This
		Agreement is not, and is not intended to be, for the development of or the
		conception of inventions. Should the Parties hereto choose to pursue such
		activities, the Parties hereby agree to draft a subsequent written agreement
		for such activities. 
	 

	 
			
				
				   
				

			 	
				
				  Except as expressly provided herein,
				  no license or right is granted hereby to the
				

			 

 

	 
		 
	 

	 
		2
	 

	 
		 
	 

	 
		 
	 

	 
 
	 
		Receiving Party, by implication or
		otherwise, with respect to or under any patent application, patent, claims of
		patent or proprietary rights of the Disclosing Party. 
	 

	 
			
				
				   
				

			 	
				
				  8.
				

			 	
				
				  General
				  Provisions
				

			 

 

	 
		                This
		Agreement shall be governed by and construed in accordance with the laws of the
		State of New York, USA (notwithstanding conflict of laws) and the Parties
		hereby submit to non-exclusive jurisdiction and venue in the state and federal
		courts of New York and Nebraska for purposes of interpretation, validity, and
		enforcement of the terms of this Agreement.
	 

	 
		                This
		Agreement shall not be assigned by either Party without the prior written
		consent of the other Party, which consent shall not be unreasonably withheld.
		This Agreement shall be binding upon and shall inure to the benefit of the
		Parties and their permitted successors and assigns.          
	 

	 
		                Failure
		to enforce any provisions of this Agreement shall not constitute a waiver of
		any of the terms and conditions hereof.
	 

	 
		                No
		amendment, modification, or waiver of the terms of this Agreement shall be
		binding unless placed in writing and duly executed by the Parties’
		authorized representatives.
	 

	 
		            The
		Parties, through their authorized representatives, hereby agree to the terms
		and conditions of this Confidentiality Agreement.
	 

	 
		 
	 

	 
			
				
				  CARGILL, INCORPORATED
				

			 
	
				
				  By:
				

			 	

				
				   
				

			 	
				
				   
				

			 
	
				
				   
				

			 	
				
				

				
 	
				
				   
				

			 
	
				
				  Name:
				

			 	
				
				   
				

			 	
				
				   
				

			 
	
				
				   
				

			 	
				
				

				
 	
				
				   
				

			 
	
				
				  Title:
				

			 	
				
				   
				

			 	
				
				   
				

			 
	
				
				   
				

			 	
				
				

				
 	
				
				   
				

			 
	
				
				  Date:
				

			 	
				
				   
				

			 	
				
				   
				

			 
	
				
				   
				

			 	
				
				

				
 	
				
				   
				

			 

 

	 
		 
	 

	 
			
				
				  CARGILL COMMODITY SERVICES
				  INC.
				

			 
	
				
				  By:
				

			 	

				
				   
				

			 	
				
				   
				

			 
	
				
				   
				

			 	
				
				

				
 	
				
				   
				

			 
	
				
				  Name:
				

			 	
				
				   
				

			 	
				
				   
				

			 
	
				
				   
				

			 	
				
				

				
 	
				
				   
				

			 
	
				
				  Title:
				

			 	
				
				   
				

			 	
				
				   
				

			 
	
				
				   
				

			 	
				
				

				
 	
				
				   
				

			 
	
				
				  Date:
				

			 	
				
				   
				

			 	
				
				   
				

			 
	
				
				   
				

			 	
				
				

				
 	
				
				   
				

			 

 

	 
		 
	 

	 
			
				
				  BIOFUEL ENERGY, LLC
				

			 
	
				
				  By:
				

			 	

				
				   
				

			 	
				
				   
				

			 
	
				
				   
				

			 	
				
				

				
 	
				
				   
				

			 
	
				
				  Name:
				

			 	
				
				   
				

			 	
				
				   
				

			 
	
				
				   
				

			 	
				
				

				
 	
				
				   
				

			 
	
				
				  Title:
				

			 	
				
				   
				

			 	
				
				   
				

			 
	
				
				   
				

			 	
				
				

				
 	
				
				   
				

			 
	
				
				  Date:
				

			 	
				
				   
				

			 	
				
				   
				

			 
	
				
				   
				

			 	
				
				

				
 	
				
				   
				

			 

 

	 
		 
	 

	 
		 
	 

	 
		3
	 

	 
		 
	 

	 
		 
	 

	 
 
	 
	 

	 
			
				
				  BFE OPERATING COMPANY, LLC
				

			 
	
				
				  By:
				

			 	

				
				   
				

			 	
				
				   
				

			 
	
				
				   
				

			 	
				
				

				
 	
				
				   
				

			 
	
				
				  Name:
				

			 	
				
				   
				

			 	
				
				   
				

			 
	
				
				   
				

			 	
				
				

				
 	
				
				   
				

			 
	
				
				  Title:
				

			 	
				
				   
				

			 	
				
				   
				

			 
	
				
				   
				

			 	
				
				

				
 	
				
				   
				

			 
	
				
				  Date:
				

			 	
				
				   
				

			 	
				
				   
				

			 
	
				
				   
				

			 	
				
				

				
 	
				
				   
				

			 

 

	 
		 
	 

	 
			
				
				  PIONEER TRAIL ENERGY, LLC
				

			 
	
				
				  By:
				

			 	

				
				   
				

			 	
				
				   
				

			 
	
				
				   
				

			 	
				
				

				
 	
				
				   
				

			 
	
				
				  Name:
				

			 	
				
				   
				

			 	
				
				   
				

			 
	
				
				   
				

			 	
				
				

				
 	
				
				   
				

			 
	
				
				  Title:
				

			 	
				
				   
				

			 	
				
				   
				

			 
	
				
				   
				

			 	
				
				

				
 	
				
				   
				

			 
	
				
				  Date:
				

			 	
				
				   
				

			 	
				
				   
				

			 
	
				
				   
				

			 	
				
				

				
 	
				
				   
				

			 

 

	 
		 
	 

	 
		 
	 

	 
		4Exhibit 10.17
	 

	 
		GRAIN FACILITY LEASE
	 

	 
		THIS GRAIN FACILITY LEASE
		(“Lease”) is made and entered
		into this 25th day of September, 2006 (“Signing Date”), by
		and between Cargill,
		Incorporated, a Delaware corporation
		with principal offices and place of business at 15407 McGinty Road West,
		Wayzata, Minnesota 55391 (hereinafter referred to as “Landlord”), and
		Buffalo Lake Energy, LLC, a Delaware limited liability company with principal
		offices and place of business in Fairmont, Minnesota (hereinafter referred to
		as “Tenant”). The Effective Date of this Lease shall be the date of
		Provisional Acceptance (as defined in the Agreement for Engineering,
		Procurement and Construction, dated as of April 28, 2006, between Tenant and
		TIC - The Industrial Company Wyoming, Inc.) (“Effective Date”).
		Landlord and Tenant are each a “Party” and collectively are the
		“Parties” to this Lease. 
	 

	 
		RECITALS
	 

	 
			
				
				  A.
				

			 	
				
				  Tenant intends to construct, own and
				  operate a plant at Fairmont, Minnesota, for the production of 115 million
				  gallons per year of denatured fuel grade ethanol and related products (the
				  “Ethanol Facility”).
				

			 

 

	 
			
				
				  B.
				

			 	
				
				  The Ethanol Facility will be located
				  immediately adjacent to Landlord’s grain handling facility located in
				  Fairmont, Minnesota (the “Grain Facility”).
				

			 

 

	 
			
				
				  C.
				

			 	
				
				  Landlord and Tenant are parties to
				  that certain Corn Supply Agreement of even date herewith (the “Corn
				  Supply
				  Agreement”), under which Tenant is required to purchase corn exclusively
				  from Landlord for the purpose of ethanol production at the Ethanol Facility,
				  and under which corn will be delivered by Landlord to Tenant at the Grain
				  Facility truck dump or rail pit, as applicable.
				

			 

 

	 
			
				
				  D.
				

			 	
				
				  Landlord desires to lease to Tenant, and Tenant desires to lease
				  from Landlord, the Grain Facility, including the buildings, fixtures,
				  improvements, machinery, and equipment located at or about the Grain Facility
				  (collectively, the “Premises,” as more specifically defined below).
				  
				

			 

 

	 
			
				
				  E.
				

			 	
				
				  Landlord entered into that certain Industry Track
				  Contract-Articles of Agreement dated July 20, 2001 with Union Pacific Railroad
				  Company (“Railroad”) in connection with the track (“Track”)
				  located at or about the Grain Facility (the “Basic
				  Agreement”).
				

			 

 

	 
			
				
				  F.
				

			 	
				
				  Railroad has agreed to allow Tenant to use the Track pursuant to
				  a Consent to Joint Use of Track in the form of Exhibit D attached hereto and by
				  this reference incorporated herein.
				

			 

 

	 
			
				
				  G.
				

			 	
				
				  In consideration of the premises and
				  the terms, covenants, warranties and conditions hereinafter set forth, the
				  Parties mutually agree as follows:
				

			 

 

	 
		ARTICLE I
	 

	 
		DEMISE AND PERMITTED
		USE
	 

	 
		SECTION 1.01. Landlord agrees to lease to Tenant and Tenant agrees to
		lease from Landlord the Premises which consists of the real property more fully
		described on Exhibit A, attached hereto and by this reference
		incorporated herein (the “Real Property”), and all buildings,
		structures, installations, improvements, machinery and equipment located on the
		Real Property, including the
	 

	 
		 
	 

	 
 

	 
		 
	 

	 
		 property which is set forth in
		Exhibit B, attached hereto and by this reference incorporated
		herein (the “Personal Property”), subject, however, to:
	 

	 
		(a) Any state of facts an accurate survey may show;
	 

	 
		(b) Covenants, restrictions, easements, agreements and
		reservations listed in Exhibit
		C, whether or not of record (the
		“Permitted Exceptions”), and the standard exceptions contained in a
		standard title policy; and
	 

	 
		(c) Building, platting and zoning ordinances, and state and
		federal regulations.
	 

	 
		SECTION 1.02. During the Term, and subject to Section 15.02 below,
		Landlord hereby agrees that Tenant shall have the exclusive use of the Track
		pursuant to the Track Agreement and Consent to Joint Use of Track which are
		incorporated into this Lease as Exhibit D (the “Track Agreement”).
		Tenant hereby covenants and agrees: (i) to perform during the Term all
		covenants and obligations of the “Industry” as set forth in the Basic
		Agreement and all covenants and obligations of the “user” as set
		forth in the Track Agreement, and (ii) that in the event of a conflict between
		the terms and conditions of this Lease and the terms and conditions of the
		Track Agreement, by way of example, but without limitation, the termination
		provisions, then the terms and conditions of the Track Agreement shall govern
		and control. Landlord will not issue to the Railroad a notice of termination
		under the Basic Agreement or Track Agreement so long as (i) this Lease is in
		effect, and (ii) Tenant is not in breach or default of any of its covenants on
		obligations under this Lease, the Basic Agreement or the Track
		Agreement.
	 

	 
		SECTION 1.03.Tenant shall only use the Premises for purposes of
		receiving, storing and transferring corn (or any substitute or alternative raw
		commodity as permitted under the Corn Supply Agreement) to the Ethanol Facility
		to the extent required for the continued operation of the Ethanol Facility (the
		“Permitted Use”). 
	 

	 
		ARTICLE II
	 

	 
		TERM
	 

	 
		SECTION 2.01. The term (“Term”) of this Lease shall commence
		on the Effective Date and continue for a period of twenty (20) years. The Term
		shall be automatically extended for a period of two (2) years after the end of
		the initial 20-year period and after the end of any two-year extension period,
		unless at least one (1) year prior to the end of the initial term or any
		extended term either Party provides a written notice of termination to the
		other Party.
	 

	 
		ARTICLE III
	 

	 
		RENT
	 

	 
		SECTION 3.01. Base Rent. During the
		Term, Tenant agrees to pay to Landlord as and for rent for the Premises the sum
		of USD $1,200,000.00 per annum, subject to the Escalator Percentage set forth
		below, which sum shall be due and payable in equal monthly installments of USD
		$100,000.00, to be paid on the first business day of each month (“Base
		Rent”); provided, however, that one third (1/3) of the Base Rent shall be
		deemed to have been paid for so long as the Corn Supply Agreement between
		Landlord and Tenant with respect to the Ethanol Facility remains in effect; if
		for any reason whatsoever the Corn Supply Agreement expires or is terminated,
		this proviso shall not apply. Base Rent shall be prorated for any partial
		month. Base Rent payable by Tenant hereunder shall be absolutely net to
		Landlord. The Base Rent shall be payable at Landlord’s address given
		hereinbelow or at such other place as Landlord may, from time to time,
		designate in writing. The Base Rent shall be 
	 

	 
		 
	 

	 
		2
	 

	 
 

	 
		 
	 

	 
		adjusted by the Escalator Percentage on the
		first day of the month immediately preceding each anniversary of the Term. The
		Escalator Percentage shall be the CPI Index for Minnesota for the immediately
		preceding twelve (12) month period. 
	 

	 
		SECTION 3.02. Taxes.
		During the Term, in addition to the
		amount specified in Section 3.01, Tenant shall pay, as additional rent, before
		any penalty, interest or cost may be added thereto for the nonpayment thereof,
		the amount of any real estate taxes, special assessments, or other taxes or
		charges of any kind and nature which may be assessed, imposed, levied or
		charged upon the Premises or any part thereof, as more particularly set forth
		in Section 4.01 hereof.
	 

	 
		SECTION 3.03. Additional Rent/Triple Net Lease. During the
		Term, all other burdens or charges on the Premises, in addition to the rent
		provided hereinabove, and all operating costs thereof, shall be paid by the
		Tenant, so that this Lease shall yield Landlord the annual net rent specified
		in Section 3.01. Specifically, and without limitation, Tenant shall pay and
		discharge as they become due, promptly and before delinquency, any and all
		rentals, fees or other charges due and payable pursuant to the terms of any
		leases, licenses or other agreements entered into by or assumed by Tenant
		pertaining to the Premises demised hereunder.
	 

	 
		SECTION 3.04. Interest. If Tenant
		fails to pay any amounts to Landlord when due, Landlord may charge and receive
		interest accrued on the unpaid amount from the date it was due until the date
		actually paid at the Default Rate. “Default Rate” means an interest
		rate per annum equal to the lesser of (i) the interest rate per annum for large
		commercial loans as published in The
		Wall Street Journal, Midwest edition,
		as the “prime rate” (sometimes referred to as the “base
		rate”) from time to time (or, if more than one rate is published, the
		arithmetic mean of such rates), determined as of the date the obligation to pay
		interest arises, plus two hundred (200) basis points, and (ii) the
		maximum rate permitted by applicable law.
	 

	 
		ARTICLE IV
	 

	 
		TAXES AND UTILITIES
	 

	 
		SECTION 4.01. Payment of Taxes. Tenant shall
		pay, before any fine, penalty, interest or cost may be added thereto, or become
		due or be imposed by operation of law for the nonpayment thereof, all real
		estate taxes, special assessments or installments of special assessments, water
		and sewer rents, rates and charges, charges for public utilities, excises,
		levies, license and permit fees and other governmental charges, general and
		special, ordinary and extraordinary, foreseen and unforeseen, of any kind and
		nature whatsoever which at any time during the Term (or prior to the Term but
		relating to periods during the Term) may be levied, confirmed, imposed upon, or
		become due and payable out of or in respect of, or become a lien on, the
		Premises and any improvements thereof or in any part thereof or any
		appurtenance thereto, or any use or occupation of the Premises, or such
		franchises as may be appurtenant to the use of the Premises (all of which are
		sometimes herein referred to collectively as “Impositions” and
		individually as “Imposition”). 
	 

	 
		Tenant may exercise any option provided by
		law to pay any Imposition (and interest thereon) in installments as the same
		respectively become due and before fine, penalty or further interest may be
		added thereto. If, by exercising such option, any such installments shall be
		payable after the termination of this Lease, such unpaid installments shall be
		prorated as of the date of termination, and amounts payable after such date
		shall be paid by Landlord. All of the Impositions hereunder shall be prorated
		at the commencement of the term hereof. 
	 

	 
		 
	 

	 
		3
	 

	 
 

	 
		 
	 

	 
		SECTION 4.02. Right to Contest. Tenant, at its
		own expense, shall have the right in good faith to contest the amount or
		validity of any Imposition by appropriate legal proceedings diligently
		conducted in good faith; provided, however, that Tenant shall promptly pay and
		discharge all amounts determined to be payable pursuant to such legal
		proceedings. Landlord agrees to join in any such proceedings if such joinder is
		necessary to the prosecution thereof. Cost of such joinder shall be for the
		account of Tenant. 
	 

	 
		SECTION 4.03. Rebates.
		All rebates on account of any such
		taxes, rates, levies, charges, or assessments required to be paid and paid by
		Tenant under the provisions hereof shall belong to Tenant, and Landlord will,
		on the request of Tenant, execute any receipts, assignments, or other
		acquaintances that may be necessary in order to secure the recovery of any such
		rebates, and will pay over to Tenant any such rebates that may be received by
		Landlord. 
	 

	 
		SECTION 4.04. Personal Property Taxes. Tenant shall
		bear the burden for any Imposition levied against the personal property
		belonging to Tenant stored, kept or maintained in or upon the
		Premises. 
	 

	 
		SECTION 4.05. Utilities. Tenant shall
		initiate, contract for, and obtain, in its name, all utility or other services
		it desires for the Premises, and Tenant shall pay all such charges for such
		utility services as they become due during the Term.
	 

	 
		ARTICLE V
	 

	 
		REPAIRS AND MAINTENANCE OF PREMISES
		
	 

	 
		SECTION 5.01. During the Term, Tenant shall, at its own cost and
		expense, keep and maintain the Premises and any improvements thereon in good
		order and condition, and will make all necessary repairs (or replacements if
		not repairable), structural or nonstructural, to the Premises and improvements,
		to the end that the Premises and improvements shall at all times be kept in
		good and tenantable condition, reasonable wear and tear excepted, for the
		purposes for which the Premises are being used and in compliance with Article
		XI hereof. Tenant will not do or suffer any waste or damage or injury to the
		Premises or any improvement thereon, or any part thereof. All repairs made by
		Tenant shall be equal in quality and class to the original work. During the
		Term, Tenant hereby assumes the full and sole responsibility for the condition,
		operation, repair, replacement, maintenance and management of the Premises and
		any improvements thereon. During the Term, Tenant shall keep sidewalks and
		parking areas free and clear of snow, ice or other obstructions to travel and
		shall maintain lawn and parking areas in a clear and sightly condition, free of
		debris and waste. Notwithstanding the foregoing, and except as provided in
		Section 12.01 and Exhibit F,
		Tenant shall make no alterations to the
		Premises without the prior written consent of Landlord. Any alterations made by
		Tenant shall be at Tenant’s sole expense.
	 

	 
		ARTICLE VI
	 

	 
		LIENS
	 

	 
		SECTION 6.01. Tenant shall keep the Premises free of liens and
		covenants and agrees to hold harmless and indemnify Landlord from and against
		any costs, expenses and liabilities from any mechanic’s, laborers’ or
		materialmen’s or other liens, of whatsoever nature, which may be filed
		against the Premises during the Term of this Lease. Tenant shall discharge any
		such liens within thirty (30) days of the filing thereof. However, Tenant shall
		have the right to contest in the name of Landlord, any such liens as Tenant may
		deem necessary; provided that all expenses incurred by reason thereof shall be
		paid by Tenant, Tenant provides written notice to Landlord of its intent to
		contest such lien within three (3) days after the filing of such lien and
		Tenant, at Landlord’s request, gives reasonable security to 
	 

	 
		 
	 

	 
		4
	 

	 
 

	 
		 
	 

	 
		insure payment thereof and to prevent any
		sale, foreclosure or forfeiture of the Premises by reason of such
		nonpayment.
	 

	 
		ARTICLE VII
	 

	 
		LANDLORD’S ACCESS TO THE
		PREMISES
	 

	 
		SECTION 7.01. Landlord, or its employees, agents or nominees, shall,
		at reasonable times and upon reasonable notice, have free access to the
		Premises for the purposes of examining or inspecting the condition thereof and
		to determine if Tenant is performing the covenants and agreements of this
		Lease, exhibiting the same to prospective tenants and for the purpose of
		posting reasonable notices as Landlord may require to protect the rights of
		Landlord including, without limitation, notices of non-responsibility for lien
		claims. Notwithstanding the foregoing, Landlord, or its employees, agents or
		nominees, may access the Premises at any time without notice in the event
		Landlord determines in its sole discretion that exigent circumstances exist
		involving the threat of harm to the Premises or persons on or about the
		Premises. 
	 

	 
		ARTICLE VIII
	 

	 
		INSURANCE 
	 

	 
		SECTION 8.01. Liability Insurance. During the
		Term, Tenant, at its sole cost and expense, but for the mutual benefit of
		Landlord and Tenant, shall provide Commercial General Liability Insurance
		covering bodily injury (including personal injury) and property damage to
		third-parties occurring upon, in or about the Premises. Such insurance shall
		include Broad Form Contractual Liability covering Section 9.01 of this Lease.
		The policy shall have a limit of liability not less than $20,000,000 each
		occurrence and provide that coverage will not be canceled without thirty (30)
		days advance written notice to Landlord. Tenant shall also maintain an
		Automobile Liability policy with combined single limits of $20,000,000.
		Landlord shall be named an additional insured on such policies and
		Tenant’s policies shall be primary without right of contribution from
		Landlord or Landlord’s insurance policies.
	 

	 
		SECTION 8.02. Claims Made Basis. Tenant shall,
		to the extent reasonably possible, obtain the liability insurance required in
		Section 8.01 on an occurrence basis rather than a claims-made basis. To the
		extent Tenant must obtain some or all of this coverage on a claims-made basis,
		Tenant shall provide Landlord with satisfactory evidence that the retroactive
		date of the claims-made policy is prior to the date of this Lease, that the
		then remaining aggregate amount of Tenant’s coverage is and will be
		sufficient to meet the minimum amount of coverage required, and that the policy
		will either remain in force, be renewed, or a satisfactory discovery period
		will be purchased, to cover any claims which might arise in the future.
	 

	 
		SECTION 8.03. All
		Risk Property Insurance.
		During the Term, Tenant, at its sole
		cost and expense, but for the mutual benefit of Landlord and Tenant, shall
		insure against all risks of loss or damage to the Premises in an amount equal
		to the full replacement cost of the Premises, with such replacement cost to be
		approved by Landlord. The policy shall name Landlord as an additional insured
		as its interest may appear with respect to this Lease and provide that coverage
		will not be canceled without thirty (30) days advance written notice to
		Landlord. Tenant shall waive its rights of recovery and subrogation against
		Landlord for loss or damage to the Premises or Tenant’s other property.
		Tenant shall also, at its sole cost and expense, insure the Ethanol Facility
		against all risks of loss or damage in an amount equal to the full replacement
		cost of the facility, including building, fixtures, improvements, 
	 

	 
		 
	 

	 
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		machinery, and equipment located on or about
		the Ethanol Facility. Such limits shall be separate from those for the
		Premises. 
	 

	 
		SECTION 8.04. Contents Insurance. Tenant, at its
		sole cost and expense, but for the mutual benefit of Landlord and Tenant, shall
		maintain Property Insurance in All Risk form against loss or damage in an
		amount equal to the replacement cost of Tenant’s improvements,
		alterations, equipment, trade fixtures and other personal property located,
		leased or stored by Tenant in the Premises. The policy shall name Tenant as
		loss payee as its interest may appear with respect to this Lease and provide
		that coverage will not be canceled without thirty (30) days advance written
		notice to Landlord.
	 

	 
		SECTION 8.05. Workers Compensation and Employers Liability
		Insurance. Tenant, at its
		sole cost and expense, shall maintain Workers’ Compensation insurance with
		statutory limits, if applicable. The Employers Liability Insurance shall have
		limits of not less than $20,000,00 each accident/disease each employee/disease
		policy limit.
	 

	 
		SECTION 8.06. Certificates of Insurance. Tenant shall
		provide Landlord with certificates of insurance evidencing the coverage
		required in Sections 8.01 and 8.03 above. In the event Tenant shall fail to
		insure or to effect and maintain such policies, Landlord may obtain such
		insurance, and any amount so paid by Landlord for such insurance shall be
		treated as additional rent hereunder, which rent shall be immediately due and
		payable. 
	 

	 
		SECTION 8.07. Qualified Insurers. Any insurance
		required to be maintained by Tenant shall be written by companies reasonably
		acceptable to Landlord and legally qualified to issue such insurance. An
		insurance company will be deemed reasonably acceptable to Landlord if it is
		rated by Best’s Rating Guide not less than A-, X or better, and authorized
		to do business in the state where the Premises are located. The Commercial
		General Liability and Auto Liability insurance policies shall name Landlord as
		an additional insured, and the All Risk Property insurance shall name Landlord
		as additional insured and the Escrow Agent (as defined in the Escrow Agreement)
		as the sole loss payee, for the purpose that all loss proceeds be directed into
		the escrow account established pursuant to the Escrow Agreement for the purpose
		of replacing and/or rebuilding the damaged or destroyed Premises in accordance
		with Tenant’s obligations in Section 11.02. In the event any serious
		personal injury (including death of) or property damage occurs on or about the
		Premises, Tenant agrees to give Landlord prompt notice and a general
		description of the occurrence. Tenant agrees to reasonably cooperate with
		Landlord in the event Landlord has any questions concerning such personal
		injury or property damage. “Escrow Agreement” shall mean that certain
		escrow agreement by and among Landlord, Tenant, Pioneer Trail Energy, LLC and
		Deutsche Bank Trust Company Americas, as escrow agent. 
	 

	 
		ARTICLE IX
	 

	 
		INDEMNIFICATION
	 

	 
		SECTION 9.01.
	 

	 
		(a) Tenant shall hold Landlord harmless and
		indemnify Landlord from and against all liabilities, injuries, losses, claims,
		expenses (including, without limitation, attorneys’ fees) or damages
		directly or indirectly arising out of (i) Tenant’s, its employees’,
		agents’, licensees’, invitees’, contractors’ or
		customers’ use and occupancy of the Premises; (ii) any events on the
		Premises during the Term; (iii) any breach of this Lease by Tenant; (iv) any
		act or omission of Tenant or any of the foregoing parties on the Premises
		taking place in, on or about the Premises; or (v) any failure of Tenant, its
		employees, agents, licensees, invitees, contractors or customers to comply and
		conform with all federal, state and local laws, 
	 

	 
		 
	 

	 
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		statutes, regulations, rules and ordinances,
		or any directive, rule, regulation or request of Landlord, except to the extent of, in each case, such
		liabilities, losses, claims, expenses (including, without limitation,
		attorneys’ fees) or damages arising out of the fraud or willful misconduct
		of the Landlord.
	 

	 
		(b) Tenant further agrees to indemnify
		Landlord against and hold Landlord harmless from any loss or liability for or
		on account of any injury to (including death of) persons or damage to property,
		including costs and expenses (including attorneys’ fees and costs of
		defense) incident thereto, which losses, liability, costs and expenses arise
		out of or relate to the presence of Tenant, its agents, servants, employees,
		guests or invitees on or about the Premises or the use by Tenant, its agents,
		servants, employees, guests or invitees of the Premises,
		except to the extent of, in each
		case, such liabilities, losses, claims, expenses (including, without
		limitation, attorneys’ fees) or damages arising out of the fraud or
		willful misconduct of the Landlord.
	 

	 
		(c) From and after the Effective Date,
		Landlord will indemnify and hold harmless Tenant of and from any and all
		claims, damages, liabilities, losses, costs and expenses (including reasonable
		attorneys’ fees, court costs or costs incurred in investigation)
		(collectively “Losses”) incurred or suffered by Tenant to the extent
		arising out of any claim by a third party (including any governmental
		authority) or any fact, condition or circumstance, which would reasonably form
		the basis of such a third party claim against Tenant resulting from an
		Environmental Defect (as defined below) with respect to the Premises caused by
		Landlord’s activities or operations on or about the Premises prior to the
		Effective Date. 
	 

	 
		(d) From and after the Effective Date,
		Tenant will indemnify and hold harmless Landlord of and from any and all Losses
		incurred or suffered by Landlord to the extent arising out of any claim by a
		third party (including any governmental authority) or any fact, condition or
		circumstance, which would reasonably form the basis of such a third party claim
		against Landlord resulting from an Environmental Defect (as defined below) with
		respect to the Premises caused by Tenant’s activities or operations on or
		about the Premises on and after the Effective Date. 
	 

	 
		For purposes of this Section 9.01(c) and
		9.01(d), the following words and phrases shall have the following meanings:
		
	 

	 
		(i) “Environment” shall mean
		surface water, groundwater, land surface or subsurface strata or ambient air;
		
	 

	 
		(ii) “Environmental Defect” shall
		mean any environmentally-related commission, omission, activity or condition
		that: (i) constitutes a violation of an Environmental Law; (ii) would require
		remedial activity under any Environmental Law; (iii) presents an endangerment
		to the public health, welfare or the environment; or (iv) constitutes or is the
		result of a Release of any Hazardous Substance at the Real Property (all
		capitalized terms as hereafter or heretofore defined). “Environmental
		Defect” shall not include any environmentally-related commission,
		omission, activity or condition that is discovered by or known to Tenant prior
		to the Signing Date; 
	 

	 
		(iii) “Environmental Law” shall
		mean any applicable environmental law, regulation, rule, ordinance, or bylaw at
		the federal, state, or local level, whether existing as of the date hereof,
		previously enforced, or subsequently enacted, and shall include any condition
		or requirement in a Permit.
	 

	 
		(iv) “Hazardous Substance” shall
		mean any substance so defined under 42 U.S.C. §9601(14), petroleum,
		including crude oil or any fraction thereof, asbestos, polychlorinated
		byphenyls and radon.
	 

	 
		 
	 

	 
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		(v) “Release” shall have the
		meaning set forth in 42 U.S.C. §9601(22).
	 

	 
		ARTICLE X
	 

	 
		COMPLIANCE WITH LAWS
	 

	 
		SECTION 10.01. During the Term, Tenant agrees to comply with all
		governmental laws and regulations relative to the use or operation of the
		Premises, including, without limiting the generality of the foregoing, any
		OSHA, EPA or other safety or environmental laws and regulations. Tenant shall
		not store hazardous materials or hazardous substances on the Premises except
		(i) as consented to by Landlord (such consent not to be unreasonably withheld)
		and (ii) in compliance with all Environmental Laws. Tenant shall store all
		material on the Premises according to prudent and standard industry practice
		and label instructions, if any, even if such are more restrictive than the
		aforesaid governmental laws and regulations. The Tenant warrants that, at all
		times during the Term, Tenant shall be fully responsible for compliance with
		the Public Accommodation/ Commercial Facilities disability access rules and
		regulations under the American with Disabilities Act and with The Clean Air Act
		Amendments of 1990 (hereinafter the “Acts”) and shall indemnify and
		hold Landlord harmless from and against any and all claims, demands, damages,
		liabilities, costs and expenses arising out of said Acts, as amended from time
		to time, and their corresponding regulations or any other environmental laws or
		their regulations, except to the extent of, in each case, such liabilities,
		losses, claims, expenses (including, without limitation, attorneys’ fees)
		or damages arising out of the fraud or willful misconduct of the
		Landlord. During the period from the Signing Date until the
		Effective Date, Landlord will comply with all applicable laws relating to its
		ownership, use or operation of the Premises, and will use commercially
		reasonable efforts to maintain, and transfer to Tenant, any permits and
		licenses held by Landlord relating to the Premises that are transferable and
		which Tenant has requested be transferred by Landlord to Tenant as of the
		Effective Date.
	 

	 
		ARTICLE XI
	 

	 
		DAMAGE OR DESTRUCTION
	 

	 
		SECTION 11.01. No Obligation of Landlord to
		Repair. In the event of any damage or destruction to the
		Premises, Landlord shall have no obligation to repair, restore or rebuild the
		Premises.
	 

	 
		SECTION 11.02. Tenant
		Obligation to Repair. In the event
		all or any part of the Premises is damaged or destroyed by any casualty during
		the Term, Tenant shall, regardless of the amount of insurance proceeds
		available to cover relevant costs, have the obligation to repair and restore or
		rebuild to substantially the same condition that the Premises were in (or
		required to be in under this Lease) prior to such casualty, taking into account
		changes in laws and technology and according to plans and specifications
		developed by Tenant and approved in writing by Landlord. Net rent shall not be
		abated for any period during which the improvements are partially or wholly
		untenantable. 
	 

	 
		ARTICLE XII
	 

	 
		TENANT ALTERATIONS AND
		CONTESTS
	 

	 
		SECTION 12.01. Except as set forth in Exhibit F, Tenant may not
		make alterations, modifications or install fixtures, machinery or other trade
		equipment on or about the Premises (collectively, “Alterations”)
		without Landlord’s prior written consent. Notwithstanding the foregoing,
		Tenant may, without Landlord’s consent, and at Tenant’s sole expense,
		make (i) alterations required by applicable law and (ii) reasonably minor,
		non-structural Alterations, provided that the cost for such Alterations does
		not exceed, in the aggregate, Ten Thousand and 00/100 Dollars ($10,000.00).
		[Further, Tenant may install, at its sole expense, a
		conveyor belt and bulk weigher (collectively, the “Conveyor 
	 

	 
		 
	 

	 
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		System”) to facilitate transfer of corn
		from the Grain Facility to the Ethanol Facility, subject to the design being
		approved by Landlord, with such approval not to be unreasonably
		withheld.] If Alterations are permitted hereunder, Tenant shall
		make such Alterations at Tenant’s sole expense and in conformance with all
		applicable laws, statutes, ordinances, rules, regulations and the same may be
		removed at any time during the term of this Lease provided any damage caused by
		such removal is repaired by Tenant. Tenant shall keep the Premises free from
		any liens arising out of any work performed for, materials furnished to, or
		obligations incurred by Tenant. All Alterations (including, without limitation,
		the Conveyor System) made by Tenant shall become a part of the Premises at the
		termination of this Lease by lapse of time or otherwise, and without cost to
		Landlord shall remain on the Premises as the property of Landlord unless
		Landlord requires, by written notice to Tenant, specific items thereof to be
		removed by Tenant at Tenant’s sole expense, in which event Tenant shall do
		so prior to the expiration of the Term at its expense, and shall repair any
		damage caused thereby. Tenant shall return the Premises upon the termination of
		this Lease in the same condition as when rented to Tenant, reasonable wear and
		tear excepted.
	 

	 
		SECTION 12.02. Contests. After written
		notice to Landlord, Tenant may at its expense contest, by appropriate
		proceedings conducted in good faith and with due diligence (all such
		proceedings together with appeals therefrom being hereinafter referred to as
		“Contests”) the amount, validity or application, in whole or in part,
		of any law, tax, assessment, mechanics’ lien, encumbrance, charge or any
		other adverse claim for which Tenant is responsible under this Lease
		(hereinafter a “claim” or collectively “claims”); provided
		that (i) Tenant shall have furnished such security, if any, as may be required
		in the proceedings or reasonably required by Landlord, (ii) neither the
		Premises nor any part thereof nor any interest therein shall be, in the
		reasonable opinion of Landlord, in imminent danger of being forfeited or lost,
		and (iii) Tenant shall indemnify Landlord for any claims, costs, damages or
		other losses incurred by Landlord in connection with all Contests.
	 

	 
		ARTICLE XIII
	 

	 
		CONDEMNATION 
	 

	 
		SECTION 13.01. If all or a substantial part of the Premises are taken
		or conveyed as a result of condemnation and the remaining portion of the
		Premises cannot be restored to support the Ethanol Facility as required under
		the Corn Supply Agreement, this Lease shall terminate as of the date of such
		taking. Landlord shall be entitled to receive any and all awards that may be
		made in any such condemnation proceeding, and Tenant hereby assigns and
		transfers to Landlord any and all such awards that may be made to Tenant.
		Tenant shall not be entitled to damages based upon the value of the unexpired
		term of this Lease or for consequential damages to the land not so
		taken.
	 

	 
		ARTICLE XIV
	 

	 
		ASSIGNMENT AND SUBLEASE

	 

	 
		SECTION 14.01. No Assignment. Neither this
		Lease nor any interest of Tenant in this Lease shall be sold, assigned,
		transferred, sublet, conveyed, mortgaged or otherwise transferred or disposed
		of, whether by operation of law or otherwise (“Transfer”), without
		the prior written consent of Landlord. The acquisition or assumption of any
		interest in Tenant or an Affiliate of Tenant by a Prohibited Party shall
		constitute a Transfer. Notwithstanding the foregoing or any other provision of
		this Lease, Tenant may mortgage or otherwise encumber Tenant’s
		leasehold estate and Tenant’s rights under this Lease together with the
		Conveyor System, but excluding all other improvements appurtenant thereto
		pursuant to a leasehold mortgage or deed of trust (“Leasehold
		Mortgage”), and Tenant may assign its interest in the Lease as collateral
		security for such Leasehold Mortgage. For purposes of this section, (i)
		“Prohibited Party” means and includes, collectively, Archer Daniels
		Midland Company, CHS Inc., Tate & Lyle PLC, The Scoular Company, Bunge
		Limited, and 
	 

	 
		 
	 

	 
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		their respective Affiliates, as such list is
		reasonably updated by Landlord on an annual basis during the Term with the
		prior written consent of Tenant, which consent shall not be unreasonably
		withheld; provided, however, that in no event shall there be more than five (5)
		Prohibited Parties, but there may be any number of Affiliates of each
		Prohibited Party; and (ii)
		“Affiliate” means with respect to any entity, any other entity that
		directly or indirectly controls, is controlled by, or is under common control
		with that entity. For the purposes of this Lease, “control” means (i)
		the direct or indirect ownership of more than fifty percent (50%) of the total
		voting securities of every class or other evidences of ownership interest of
		the entity, or (ii) the possession, directly or indirectly, of the power to
		direct or cause the direction of the management and policies of an
		entity.
	 

	 
		SECTION 14.02. Release. Any assignment
		or sublease permitted by Landlord shall not release Tenant from its obligations
		herein unless Landlord’s consent specifically so provides. 
	 

	 
		ARTICLE XV
	 

	 
		DEFAULT
	 

	 
		SECTION 15.01. Events of Default. In the event
		any one or more of the following events shall occur: 
	 

	 
			
				
				   
				

			 	
				
				  (a)
				

			 	
				
				  Tenant fails to pay any Base Rent
				  due Landlord under this Lease within thirty (30) calendar days following
				  Landlord’s written notice that the same is due and payable;
				

			 

 

	 
			
				
				   
				

			 	
				
				  (b)
				

			 	
				
				  Tenant fails to pay any other amounts due Landlord under this
				  Lease, including without limitation Additional Rent, within thirty (30) days
				  following Landlord’s written notice that the same is due and payable;
				  
				

			 

 

	 
			
				
				   
				

			 	
				
				  (c)
				

			 	
				
				  Tenant defaults in any of its non-monetary obligations
				  hereunder and fails to cure such default within thirty (30) days after
				  Landlord’s notice of such default to Tenant; provided, however, that if
				  such default cannot be cured within such thirty-day period, but such default is
				  capable of being cured within sixty (60) days, then such period shall be
				  extended for a period not to exceed sixty (60) days in the aggregate so long as
				  Tenant is diligently pursing a cure during such period;
				

			 

 

	 
			
				
				   
				

			 	
				
				  (d)
				

			 	
				
				  Tenant files a voluntary petition in
				  bankruptcy, has filed against it an involuntary petition in bankruptcy, makes an
				  assignment for the benefit of creditors, has a trustee or receiver appointed
				  for any or all of its assets, is insolvent or fails or is unable to pay its
				  debts generally when due, in each case where such petition, appointment or
				  insolvency is not dismissed, discharged or remedied, as applicable, within
				  sixty (60) days; 
				

			 

 

	 
			
				
				   
				

			 	
				
				  (e)
				

			 	
				
				  Tenant shall permit this Lease or any estate of Tenant
				  hereunder to be sold under any attachment or execution; 
				

			 

 

	 
		then Landlord shall have the right to either
		(i) terminate this Lease upon the expiration of ten (10) days after written
		notice of such intent is given to Tenant in which event the term hereof shall
		expire and terminate with the same force and effect as though the date set
		forth in said notice were the date originally set forth herein and fixed for
		the expiration of the term, or (ii) re-enter and take possession of the
		Premises, dispossessing Tenant therefrom and thereupon receive any and all
		rents or other payments from subtenants, if any, of the Premises, and hold the
		Premises as hereinafter provided, without being deemed guilty of trespass, or
		becoming liable for any loss or damage which may be occasioned thereby, Tenant
		agreeing that no such re-entry or taking possession of the Premises by Landlord
		shall be construed as an 
	 

	 
		 
	 

	 
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		election on Landlord’s part to
		terminate this Lease, such right however, being continuously reserved by
		Landlord. For purposes of this Article XV, the terms “entry” and
		re-entry” are not limited to their technical meanings. 
	 

	 
		SECTION 15.02 Landlord May
		Perform Tenant’s Obligations under Track Agreement. If Tenant
		shall fail to keep or perform any of its obligations as provided under the
		Basic Agreement or Track Agreement, Landlord may (but shall not be obligated to
		do so), without waiving or releasing Tenant from any obligation, as an
		additional but not exclusive remedy, make any such payment or perform any such
		obligation, and all sums so paid by Landlord plus all necessary and incidental
		costs and expenses incurred by Landlord shall be deemed additional rent and
		shall be paid to Landlord on demand and if not so paid by Tenant, Landlord
		shall have the same rights and remedies as in the case of Events of Default, as
		set forth in Section 15.01.
	 

	 
		SECTION 15.03. Effect of Re-Letting. Landlord has
		no obligation to relet the Premises. In the event Landlord elects to re-enter
		the Premises, Landlord, in addition to collecting rents from subtenants as
		above provided, may, but shall not be obligated to, make such alterations and
		repairs as may be necessary in order to relet the Premises, or any part thereof
		and may continue to let or relet the Premises or any part thereof for such term
		or terms (which may extend beyond the term of this Lease) and at such rental
		and upon such other terms and conditions as Landlord in its sole discretion may
		deem advisable. All rentals and other sums received by Landlord from existing
		subtenants or from such reletting shall be applied first, to the payment of any
		indebtedness other than rent due hereunder from Tenant to Landlord; second, to
		the payment of any costs and expenses of such reletting, including reasonable
		brokerage fees and attorneys’ fees and of costs of any alterations and
		repairs; third, to the payment of rent and other charges due and unpaid
		hereunder; and the residue, if any, shall be held by Landlord and applied to
		payment of future rent as the same may become due and payable hereunder. If
		such rentals and other sums received from such reletting during any month be
		less than that to be paid during that month by Tenant hereunder, Tenant shall
		pay such deficiency to Landlord; if such rentals and sums shall be more, Tenant
		shall have no right to the excess. Such deficiency shall be calculated and paid
		monthly. Notwithstanding any such re-entry by Landlord, Landlord reserves the
		right at any time hereafter to terminate this Lease for any breach of Tenant,
		including the breach(es) which resulted in Landlord re-entering the Premises.
		
	 

	 
		SECTION 15.04. Rights of Recovery. Should
		Landlord at any time terminate this Lease for any breach, it may recover from
		Tenant all damages it may incur by reason of such breach, including, without
		limitation, the cost of recovering the Premises, reasonable attorneys’
		fees, and the excess, if any, of the present value of the rent reserved under
		this Lease, for the remainder of the stated term, over the then-reasonable
		present rental value of the Premises, for the remainder of the stated term. All
		such amounts shall be immediately due and payable from Tenant to Landlord. For
		purposes of determining the rent reserved hereunder, the rent for the remainder
		of the unexpired term shall be equal to the sum of all rents then being paid by
		Tenant pursuant to Article III. The failure of Landlord to relet the Premises
		shall not affect Tenant’s liability. The recovery provided for in this
		paragraph shall be in addition to any other rights and remedies Landlord shall
		have hereunder or under any federal, state or local law, regulation or
		ordinance. 
	 

	 
		 
	 

	 
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		ARTICLE XVI
	 

	 
		REMEDIES FOR DEFAULT
	 

	 
		SECTION 16.01. In the event a dispute arises under this Lease or if any
		Party hereto should default in the performance of any of its obligations
		hereunder, the other Party may resort to any remedy specified herein or
		available to it for said default, at law, in equity or by statute; provided,
		however, that Tenant shall not have any self-help right to cure a Landlord
		default under this Lease. With the exception of Section 9.01(c), in the event
		Landlord is in breach or default under this Lease, Landlord’s liability
		shall be limited to USD $5,000,000.00 as adjusted by the CPI Index for
		Minnesota for the immediately preceding twelve (12) month period prior to such
		breach or default.
	 

	 
		ARTICLE XVII
	 

	 
		DISCLAIMER OF
		WARRANTIES
	 

	 
		SECTION 17.01. The Premises is leased on an “AS IS, WHERE IS”
		and “WITH ALL FAULTS” basis, and Landlord shall have no obligation to
		prepare the Premises for Tenant’s occupancy. Except with respect to
		Section 19.11, Tenant acknowledges that Landlord SPECIFICALLY DISCLAIMS ALL
		WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, INCLUDING, WITHOUT LIMITATION, ANY
		WARRANTY OF MERCHANTABILITY OR FITNESS FOR INTENDED OR PARTICULAR PURPOSE, ANY
		WARRANTY AS TO THE DESIGN OR CONDITION OF THE PREMISES, QUALITY OR CAPACITY OF
		THE PREMISES, OR ANY WARRANTY WITH RESPECT TO PATENT INFRINGEMENT OR THE
		ABSENCE OF ANY LATENT DEFECT. In making this Lease, Tenant has not been induced
		by and has not relied upon representations, warranties or statements, whether
		express or implied, made by Landlord or any broker or any other person
		representing or purporting to represent Landlord, except such representations,
		warranties or statements which are included herein. Notwithstanding the
		foregoing, between the Signing Date and the Effective Date, Landlord (i) shall
		maintain the Premises as they existed as of the Signing Date in good order and
		repair consistent with Landlord’s customary maintenance and repair
		procedures applying to the Premises, reasonable wear and tear excepted, and
		(ii) shall provide Tenant with reasonable access as set forth in an access
		agreement to be mutually negotiated by the Parties. 
	 

	 
		ARTICLE XVIII
	 

	 
		NOTICES
	 

	 
		SECTION 18.01. Any notice required or permitted to be given hereunder
		shall be in writing and shall be deemed to have been duly given on the date
		actually delivered, or if transmitted by telex, telecopier or other form of
		written telecommunication, on the business day next following the date of
		transmission, if delivered or sent to the Parties at the following addresses or
		to such other address as shall be furnished in writing by any addressee:
		
	 

	 
		 
	 

	 
			
				
				  If to Landlord:
				

			 	
				
				   
				

			 	
				
				  Cargill, Incorporated

				  15407 McGinty Road West

				  Wayzata, MN, 55391-2399

				  Attention: AgHorizons Commercial Leader /
				  19
 Fax No: (952) 742-7313
				

			 
	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 
	
				
				  With copy to:
				

			 	
				
				   
				

			 	
				
				  Cargill, Incorporated

				  Law Department / 24

				  15407 McGinty Road West

				  Wayzata, MN 55391-2399

				  Attention: AgHorizons BU Attorney

				  Fax No: (952) 742-6349
				

			 

 

	 
		 
	 

	 
		12
	 

	 
 

	 
		 
	 

	 
		 
	 

	 
		 
	 

	 
			
				
				  If to Tenant:
				

			 	
				
				   
				

			 	
				
				  Buffalo Lake Energy, LLC

				  1625 Broad way, Suite 2400

				  Denver, CO 80202

				  Attention: Scott H. Pearce

				  Fax No: (303) 626-8251
				

			 

 

	 
		ARTICLE XIX
	 

	 
		MISCELLANEOUS
		PROVISIONS
	 

	 
		SECTION 19.01. Entire Agreement. This Lease and
		Exhibits attached hereto contain the entire understanding and agreement of the
		Parties hereto and shall not be modified in any manner except by an instrument
		in writing executed by both Parties. In the event any term, covenant or
		condition herein contained is held invalid or void by any court of competent
		jurisdiction, the invalidity of any such term, covenant or condition shall in
		no way affect any other term, covenant or condition herein contained.
	 

	 
		SECTION 19.02. Signage.
		Within sixty (60) days from the
		commencement of the Term, Tenant shall have removed or covered, at
		Tenant’s sole expense, any and all Landlord-owned signs, logos, and/or
		other trademarks and trade names, if any, from the Grain Facility.
	 

	 
		SECTION 19.03. Successors and Assigns. All the terms,
		covenants, and conditions of this Lease shall be binding upon, and inure to the
		benefit of and be enforceable by the Parties hereto and their respective
		successors, heirs, executors and permitted assigns. 
	 

	 
		SECTION 19.04. Governing Law. This Lease
		shall be governed, construed, and interpreted in accordance with the laws of
		the State of Minnesota. 
	 

	 
		SECTION 19.05. Headings. The headings
		contained in this Lease are for reference purposes only and shall not affect
		the meaning or interpretations of this Lease. 
	 

	 
		SECTION 19.06. Incorporation by Reference. The Recitals
		and Exhibits A through G attached hereto are hereby incorporated by reference
		and made a part hereof. 
	 

	 
		SECTION 19.07. Waivers and Amendments. This Lease and
		the other instruments to be executed pursuant hereto may be amended,
		superseded, canceled, renewed or extended, and their terms or covenants hereof
		may be waived, only by a written instrument executed by the Parties hereto or
		in the case of a waiver, by the Party waiving compliance. The failure of any
		Party at any time or times to require performance of any provision hereof shall
		in no manner affect its right at a later time to enforce the same. No waiver by
		any Party of the breach of any term or covenant contained in this Lease or in
		any other such instrument, whether by conduct or otherwise, in any one or more
		instances, shall be deemed to be, or construed as, a further or continuing
		waiver of any breach, or a waiver of the breach of any other term or covenant
		contained herein. The Parties reserve the right by mutual written consent to
		amend, modify, supersede and cancel this Lease, or waive the terms or
		conditions hereof, without the consent of any other person (natural or
		otherwise). 
	 

	 
		SECTION 19.08. Memorandum of Lease. Landlord and
		Tenant will execute, acknowledge and deliver to each other a memorandum of this
		Lease for recording in the form attached hereto as Exhibit E.
	 

	 
		 
	 

	 
		13
	 

	 
 

	 
		 
	 

	 
		 
	 

	 
		SECTION 19.09. Fee Mortgage. The lien of
		any mortgage now or hereafter placed upon the fee title to the Premises (a
		“Fee Mortgage”) shall be subject and subordinate to this Lease and to
		any amendments of this Lease; provided, however, that so long as
		any Fee Mortgage shall constitute a lien on the fee title to the Premises no
		amendment hereafter made to this Lease (i) to reduce the amount of rent payable
		by Tenant hereunder or (ii) to increase Landlord’s obligations in any way
		shall be binding upon the holder of any Fee Mortgage and any such holder shall
		be entitled to enforce this Lease in accordance with its terms prior to such
		amendment.
	 

	 
		SECTION 19.10. Quiet Enjoyment. Upon the
		observance and performance of all of the agreements, covenants, terms and
		conditions on Tenant’s part to be observed and performed in this Lease,
		Tenant shall peaceably and quietly hold and enjoy the Premises for the Term
		without unreasonable hindrance or interruption by Landlord. 
	 

	 
		SECTION 19.11. Representations and
		Warranties of Landlord. Landlord hereby
		makes the following representations and warranties to Tenant:
	 

	 
			
				
				   
				

			 	
				
				  (a)
				

			 	
				
				  Sale Agreements. Landlord has not
				  entered into any agreements contingent or otherwise for the sale of all or any
				  portion of the Premises, and, to Landlord’s actual knowledge and except as
				  may be set forth in the public records, there are no purchase options, rights
				  of first refusal or offer, or similar rights in favor of any party to purchase
				  all or any portion of the Premises.
				

			 

 

	 
			
				
				   
				

			 	
				
				  (b)
				

			 	
				
				  Condemnation. Landlord has not
				  received any written notice of the commencement of any proceedings for taking
				  by condemnation or eminent domain of any part of the Premises.
				

			 

 

	 
			
				
				   
				

			 	
				
				  (c)
				

			 	
				
				  No Violations. Landlord has not
				  received any written notice that expressly alleges that the Premises is in
				  violation of any private restriction or agreement. 
				

			 

 

	 
			
				
				   
				

			 	
				
				  (d)
				

			 	
				
				  Encumbrances. To Landlord’s
				  actual knowledge and except as may be set forth in the public records,
				  Landlord has not granted any easement, lease or license over all
				  or any portion of the Premises, that would materially interfere with
				  Tenant’s intended use of the Premises.
				

			 

 

	 
			
				
				   
				

			 	
				
				  (e)
				

			 	
				
				  Knowledge. As used herein, Landlord’s actual knowledge (and
				  words of similar import) shall be limited to the actual, present knowledge of
				  Jim Reiff, without duty of investigation or inquiry.
				

			 

 

	 
		SECTION 19.12. Integrated Agreements. The Parties
		hereby acknowledge and agree that the Corn Supply Agreement and this Lease have
		been negotiated and entered into simultaneously as integrated parts of one
		unified transaction with a common purpose. Without limiting the generality of
		the foregoing, (i) the Parties would not have entered into the Corn Supply
		Agreement and this Lease separately without entering into the other, (ii) the
		consideration for such agreements is not separate and distinct, but
		interrelated and incorporated by reference between the Corn Supply Agreement
		and this Lease, and (iii) in the event that either of the Parties becomes a
		debtor in bankruptcy, the Parties intend that the Corn Supply Agreement and
		this Lease are either accepted or rejected together as one executory
		contract.
	 

	 
		 
	 

	 
		14
	 

	 
 

	 
		 
	 

	 
		 
	 

	 
		IN WITNESS WHEREOF, the Parties hereto have caused this Lease to be
		executed on the day and year first above written.
	 

	 
		 
	 

	 
			
				
				   
				

			 	
				
				   
				

			 	
				
				  CARGILL, INCORPORATED
				

			 
	
				
				

			 	
				
				   
				

			 	
				
				  
 By:
				

			 	
				
				  /s/ Dennis C. Inman
				

			 
	
				
				   
				

			 	
				
				   
				

			 	
				
				  Its:
				

			 	
				
				  V.P. Cargill
				  AgHorizons
				

			 

 

	 
		 
	 

	 
			
				
				   
				

			 	
				
				   
				

			 	
				
				  BUFFALO LAKE ENERGY,
				  LLC
				

			 
	
				
				

			 	
				
				   
				

			 	
				
				  
 By:
				

			 	
				
				  /s/ Scott H. Pearce
				

			 
	
				
				   
				

			 	
				
				   
				

			 	
				
				  Its:
				

			 	
				
				  Authorized Representative
				

			 

 

	 
		 
	 

	 
		15

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