Document:

EXHIBIT 10.2

 

 

ACCOUNTS AGREEMENT

dated as of October 1, 2007

among

HEARTLAND GRAIN FUELS, L.P.,

as the Borrower,

AMARILLO NATIONAL BANK,

as the Accounts Bank and the Securities Intermediary,

WESTLB AG, NEW YORK BRANCH,

as the Collateral Agent for the Senior Secured Parties,

WESTLB AG, NEW YORK BRANCH,

as the Administrative Agent for the Lenders,

and

WELLS FARGO BANK, NATIONAL ASSOCIATION, AS TRUSTEE
OF THE

BROWN COUNTY, SOUTH DAKOTA SUBORDINATE SOLID WASTE

FACILITIES REVENUE BONDS (HEARTLAND GRAIN FUELS,
L.P.

ETHANOL PLANT PROJECT) SERIES 2007A,

as the Second Lien Agent for the Second Lien Claimholders

 

 

TABLE OF
CONTENTS

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE I
  DEFINITIONS AND INTERPRETATION

  	
  2

  
	
  Section 1.01

  	
  Defined Terms

  	
  2

  
	
  Section 1.02

  	
  Principles of
  Interpretation

  	
  12

  
	
  Section 1.03

  	
  Credit Agreement
  and UCC Definitions

  	
  12

  
	
  Section 1.04

  	
  Accounting and
  Financial Determinations

  	
  12

  
	
   

  	
   

  	
   

  
	
  ARTICLE II
  APPOINTMENT; GRANT OF SECURITY INTEREST

  	
  13

  
	
  Section 2.01

  	
  Appointment by
  Collateral Agent

  	
  13

  
	
  Section 2.02

  	
  Appointment by
  Second Lien Agent

  	
  13

  
	
  Section 2.03

  	
  Limitation of
  Liability

  	
  14

  
	
  Section 2.04

  	
  Project Accounts

  	
  14

  
	
  Section 2.05

  	
  Representations,
  Warranties and Covenants of Accounts Bank

  	
  15

  
	
  Section 2.06

  	
  Project Accounts
  as Deposit Account

  	
  18

  
	
  Section 2.07

  	
  Grant of
  First-Priority Security Interest

  	
  18

  
	
  Section 2.08

  	
  Grant of
  Second-Priority Security Interest

  	
  19

  
	
  Section 2.09

  	
  Control and
  Perfection of Account Collateral

  	
  20

  
	
  Section 2.10

  	
  Subordination

  	
  21

  
	
  Section 2.11

  	
  Agreement to
  Hold In Trust

  	
  22

  
	
   

  	
   

  	
   

  
	
  ARTICLE III
  PROJECT ACCOUNTS

  	
  22

  
	
  Section 3.01

  	
  Establishment of
  Project Accounts

  	
  22

  
	
  Section 3.02

  	
  Deposits into
  and Withdrawals from Project Accounts

  	
  24

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV
  CONSTRUCTION ACCOUNT

  	
  26

  
	
  Section 4.01

  	
  Construction
  Account

  	
  26

  
	
  Section 4.02

  	
  Bond Proceeds
  Sub-Account

  	
  28

  
	
   

  	
   

  	
   

  
	
  ARTICLE V
  LIQUIDATED DAMAGES ACCOUNT

  	
  32

  
	
  Section 5.01

  	
  Liquidated
  Damages Account

  	
  32

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI
  REVENUE ACCOUNT

  	
  33

  
	
  Section 6.01

  	
  Revenue Account

  	
  33

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII
  OPERATING ACCOUNT

  	
  44

  
	
  Section 7.01

  	
  Operating
  Account

  	
  44

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII
  MAINTENANCE CAPITAL EXPENSE ACCOUNT

  	
  45

  
	
  Section 8.01

  	
  Maintenance
  Capital Expense Account

  	
  45

  

 

i

 

	
  ARTICLE IX
  WORKING CAPITAL RESERVE ACCOUNT

  	
  45

  
	
  Section 9.01

  	
  Working Capital
  Reserve Account

  	
  45

  
	
   

  	
   

  	
   

  
	
  ARTICLE X DEBT
  SERVICE RESERVE ACCOUNT

  	
  47

  
	
  Section 10.01

  	
  Debt Service
  Reserve Account

  	
  47

  
	
  Section 10.02

  	
  Debt Service
  Letter of Credit

  	
  48

  
	
  Section 10.03

  	
  Excess in Debt
  Service Reserve Account

  	
  48

  
	
   

  	
   

  	
   

  
	
  ARTICLE XI
  PREPAYMENT HOLDING ACCOUNT

  	
  49

  
	
  Section 11.01

  	
  Prepayment
  Holding Account

  	
  49

  
	
   

  	
   

  	
   

  
	
  ARTICLE XII
  INSURANCE AND CONDEMNATION PROCEEDS ACCOUNTS

  	
  50

  
	
  Section 12.01

  	
  Insurance and
  Condemnation Proceeds Accounts

  	
  50

  
	
   

  	
   

  	
   

  
	
  ARTICLE XIII
  EXTRAORDINARY PROCEEDS ACCOUNT

  	
  54

  
	
  Section 13.01

  	
  Extraordinary
  Proceeds Account

  	
  54

  
	
   

  	
   

  	
   

  
	
  ARTICLE XIV
  CONTINGENCY RESERVE ACCOUNT

  	
  55

  
	
  Section 14.01

  	
  Contingency
  Reserve Account. (a) Payments into the Contingency Reserve Account

  	
  55

  
	
   

  	
   

  	
   

  
	
  ARTICLE XV
  GENERAL PROVISIONS RELATING TO THE PROJECT ACCOUNTS

  	
  57

  
	
  Section 15.01

  	
  No Security
  Interests

  	
  57

  
	
  Section 15.02

  	
  Borrower Acknowledgments

  	
  57

  
	
  Section 15.03

  	
  Further
  Assurances

  	
  58

  
	
  Section 15.04

  	
  UCC Termination
  Statements

  	
  59

  
	
   

  	
   

  	
   

  
	
  ARTICLE XVI
  INTEREST AND INVESTMENTS

  	
  59

  
	
  Section 16.01

  	
  Investments

  	
  59

  
	
  Section 16.02

  	
  Sale and
  Liquidation

  	
  60

  
	
  Section 16.03

  	
  Interest and
  Investment Income

  	
  60

  
	
  Section 16.04

  	
  Accounts
  Information

  	
  61

  
	
   

  	
   

  	
   

  
	
  ARTICLE XVII
  DEFAULT AND ENFORCEMENT

  	
  62

  
	
  Section 17.01

  	
  Notices of
  Suspension of Project Accounts

  	
  62

  
	
  Section 17.02

  	
  Collateral Agent
  Appointed Attorney-in-Fact

  	
  62

  
	
  Section 17.03

  	
  Enforcement

  	
  64

  
	
  Section 17.04

  	
  Application of
  Proceeds

  	
  66

  
	
  Section 17.05

  	
  Collateral
  Agent’s Discretionary Powers

  	
  66

  
	
  Section 17.06

  	
  Regarding the
  Collateral Agent

  	
  66

  

 

ii

 

	
  ARTICLE XVIII
  THE ACCOUNTS BANK

  	
  67

  
	
  Section 18.01

  	
  Duties of the
  Accounts Bank and Securities Intermediary

  	
  67

  
	
  Section 18.02

  	
  Exculpatory
  Provisions

  	
  68

  
	
  Section 18.03

  	
  Reliance by
  Accounts Bank

  	
  70

  
	
  Section 18.04

  	
  Written
  Instructions; Notices

  	
  70

  
	
  Section 18.05

  	
  Resignation or
  Removal of Accounts Bank

  	
  71

  
	
  Section 18.06

  	
  No Amendment to
  Duties of Accounts Bank Without Consent

  	
  72

  
	
   

  	
   

  	
   

  
	
  ARTICLE XIX
  REPRESENTATIONS AND WARRANTIES

  	
  72

  
	
  Section 19.01

  	
  Representations
  and Warranties

  	
  72

  
	
   

  	
   

  	
   

  
	
  ARTICLE XX
  MISCELLANEOUS

  	
  74

  
	
  Section 20.01

  	
  Rights of Second
  Lien Agent and Second Lien Claimholders

  	
  74

  
	
  Section 20.02

  	
  Amendments, Etc.

  	
  75

  
	
  Section 20.03

  	
  Applicable Law;
  Jurisdiction; Etc.

  	
  75

  
	
  Section 20.04

  	
  Assignments

  	
  77

  
	
  Section 20.05

  	
  Benefits of
  Accounts Agreement

  	
  77

  
	
  Section 20.06

  	
  Costs and
  Expenses

  	
  78

  
	
  Section 20.07

  	
  Counterparts;
  Effectiveness

  	
  79

  
	
  Section 20.08

  	
  Indemnification
  by the Borrower

  	
  79

  
	
  Section 20.09

  	
  No Waiver;
  Cumulative Remedies

  	
  81

  
	
  Section 20.10

  	
  Notices and
  Other Communications

  	
  81

  
	
  Section 20.11

  	
  Patriot Act
  Notice

  	
  84

  
	
  Section 20.12

  	
  Severability

  	
  84

  
	
  Section 20.13

  	
  Survival

  	
  84

  
	
  Section 20.14

  	
  Waiver of
  Consequential Damages, Etc.

  	
  84

  
	
  Section 20.15

  	
  Waiver of
  Litigation Payments

  	
  85

  

 

iii

 

	
   

  	
   

  	
   

  
	
  EXHIBITS

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit A

  	
  Form of
  Construction Withdrawal Certificate

  	
   

  
	
  Exhibit B

  	
  Form of
  Liquidated Damages Transfer Certificate

  	
   

  
	
  Exhibit C-1

  	
  Form of
  Pre-Conversion Date Revenue Account Withdrawal Certificate

  	
   

  
	
  Exhibit C-2

  	
  Form of
  Post-Conversion Date Revenue Account Withdrawal Certificate

  	
   

  
	
  Exhibit D

  	
  Form of
  Restricted Payment Certificate

  	
   

  
	
  Exhibit E

  	
  Form of Operating
  Account Withdrawal Certificate

  	
   

  
	
  Exhibit F

  	
  Form of Working
  Capital Reserve Transfer Certificate

  	
   

  
	
  Exhibit G

  	
  Form of Debt
  Service Reserve Release Certificate

  	
   

  
	
  Exhibit H

  	
  Form of
  Insurance and Condemnation Proceeds Request Certificate

  	
   

  
	
  Exhibit I

  	
  Form of Extraordinary
  Proceeds Release Certificate

  	
   

  
	
  Exhibit J

  	
  Form of
  Contingency Reserve Transfer Certificate

  	
   

  
	
  Exhibit K

  	
  Form of Bond
  Proceeds Withdrawal Certificate

  	
   

  
	
  Exhibit L

  	
  Form of
  Independent Engineer’s Certificate

  	
   

  

 

 

iv

 

 

THIS ACCOUNTS
AGREEMENT, dated as of October 1, 2007, (this “Accounts Agreement”), is
entered into by and among HEARTLAND GRAIN FUELS, L.P., a Delaware limited
partnership (the “Borrower”), AMARILLO NATIONAL BANK, in its capacity as
accounts bank (together with its successors and assigns in such capacity, the “Accounts
Bank”) and in its capacity as securities intermediary (together with its
successors and assigns in such capacity, the “Securities Intermediary”),
WESTLB AG, NEW YORK BRANCH, in its capacity as collateral agent for the Senior
Secured Parties (as defined below) (together with its successors and assigns in
such capacity, the “Collateral Agent”), WESTLB AG, NEW YORK BRANCH, in
its capacity as administrative agent for the Lenders (together with its
successors and assigns in such capacity, the “Administrative Agent”),
Wells Fargo Bank, National Association, in its capacity as trustee of the Brown
County, South Dakota Subordinate Solid Waste Facilities Revenue Bonds
(Heartland Grain Fuels, L.P. Ethanol Plant Project) Series 2007A (in such
capacity and, together with its successors and permitted assigns, the “Second
Lien Agent”) for the Second Lien Claimholders (as defined below).

 

RECITALS

 

WHEREAS, the
Borrower has entered into that certain Senior Credit Agreement, dated as of the
date hereof (the “Credit Agreement”), among the Borrower, each of the
Lenders from time to time party thereto, the Administrative Agent, the
Collateral Agent, WestLB AG, New York Branch, as Issuing Bank, and WestLB AG,
New York Branch, as Lead Arranger, Sole Bookrunner and Syndication Agent,
pursuant to which, among other things, the Lenders have committed to make loans
to, and for the benefit of, the Borrower;

 

WHEREAS, certain
Lenders or their affiliates may, from time to time, enter into interest rate
hedging agreements with the Borrower as permitted under the Credit Agreement;

 

WHEREAS, pursuant
to that certain Bond Trust Indenture dated as of October 1, 2007 (the “Bond
Indenture”) between Brown County, South Dakota (the “Issuer”) as
bond issuer and the Second Lien Agent as bond trustee, the Issuer will issue
and deliver its $19,000,000 Subordinate Solid Waste Facilities Revenue Bonds
(Heartland Grain Fuels, L.P. Ethanol Plant Project) Series 2007A (the “Bonds”)
for the purpose of purchasing, constructing and installing certain improvements
to be located on the Site for the Aberdeen Plants;

 

WHEREAS, the
Issuer has agreed to lend the proceeds of the Bonds (the “Subordinated Debt”)
to the Borrower pursuant to that certain Loan Agreement effective as of the
date hereof (the “Subordinated Loan Agreement”) between the Borrower and

 

 

the Issuer. Pursuant
to the Bond Indenture, the Issuer has assigned to the Second Lien Agent its
rights and obligations under the Subordinated Loan Agreement, except for the
Unassigned Rights (as defined in the Bond Indenture); and

 

WHEREAS, it is a
requirement under the Credit Agreement and the Subordinated Loan Agreement that
the Borrower execute and deliver this Accounts Agreement.

 

AGREEMENT

 

NOW, THEREFORE, in
consideration of the promises contained herein, and to induce the lenders under
the Credit Agreement to enter into the Credit Agreement and to make the
advances of credit to the Borrower contemplated thereby, and to induce the
Interest Rate Protection Providers (as defined in the Credit Agreement) to
enter into the Interest Rate Protection Agreements (as defined below) and to
provide the interest rate hedges contemplated thereby, and to induce the Issuer
to issue and deliver the Bonds, to enter into the Subordinated Loan Agreement
and to make the advances of credit to the Borrower contemplated thereby, and
for other good and valuable consideration, the receipt and adequacy of which
are hereby acknowledged, and intending to be legally bound, the parties hereto
hereby agree as follows:

 

ARTICLE I

DEFINITIONS AND INTERPRETATION

 

Section 1.01           Defined Terms. The
following terms when used in this Accounts Agreement, including its preamble
and recitals, shall, except where the context otherwise requires, have the
following meanings:

 

“Aberdeen
Insurance and Condemnation Proceeds Account” has the meaning provided in Section 3.01(a)(ix)
(Establishment of Project Accounts).

 

“Account
Collateral” has the meaning provided in Section 2.07 (Grant of First-Priority Security Interest).

 

“Accounts Bank”
has the meaning provided in the preamble.

 

“Accounts Bank
Action” has the meaning provided in Section 18.04(b) (Written Instructions; Notices).

 

2

 

“Accounts Bank
Fee Letter” means that certain Fee Letter between the Accounts Bank and the
Borrower, dated as of the date hereof, setting forth certain fees due and
payable to the Accounts Bank.

 

“Administrative
Agent” has the meaning provided in the preamble.

 

“Agents”
means, collectively, the Administrative Agent, the Collateral Agent and the
Accounts Bank.

 

“Bond
Collateral Documents” means (i) the Bond Indenture, (ii) the “Subordinate
Mortgage” (as defined in the Bond Indenture), (iii) the “Subordinate Security
Agreement” (as defined in the Bond Indenture), (iv) the “Subordinate Equity
Pledge Agreement” (as defined in the Bond Indenture), and any documents
granting, or relating to the grant, of security for the payment of amounts due
under the Subordinated Loan Agreement and the Bonds.

 

“Bond Debt
Service Reserve Fund” means the trust fund entitled “Debt Service Reserve
Fund” created under the Bond Indenture.

 

“Bond Expense
Fund” means the trust fund entitled “Expense Fund” created under the Bond
Indenture.

 

“Bond Funds”
means the “Bond Sinking Fund”, the “Debt Service Reserve Fund”, the “Expense
Fund”, the “Interest Fund”, the “Project Fund”, the “Rebate Fund”, the “Redemption
Fund” and the “Revenue Fund” (each as defined in the Bond Indenture), together
with such other funds, accounts or sub-accounts established by the Bond Trustee
pursuant to the Bond Indenture in administering the Trust Estate (as defined in
the Bond Indenture).

 

“Bond Indenture”
has the meaning provided in the third recital.

 

“Bond Liens”
means the second-priority security interest created in favor of the Second Lien
Agent, for the benefit of the Second Lien Claimholders, pursuant to the Bond
Collateral Documents, which security interest (other than the lien on the Bond
Funds) is subject to Section 7.02(b) (Negative Covenants—Liens)
of the Credit Agreement and to the Intercreditor Agreement.

 

“Bond Proceeds
Sub-Account” has the meaning provided in Section 3.01(a)(xiii) (Establishment of Project Accounts).

 

“Bond Proceeds
Withdrawal Certificate” means a certificate in substantially the form of Exhibit K,
duly executed by an Authorized Officer of the Borrower, directing the transfer
or withdrawal of funds from the Bond Proceeds Sub-Account.

 

3

 

“Bond Project
Fund” means the trust fund entitled “Project Fund” created under the Bond
Indenture.

 

“Bond Revenue
Fund” means the trust account of that name created under the Bond
Indenture.

 

“Bonds” has
the meaning provided in the third recital.

 

“Borrower”
has the meaning provided in the preamble.

 

“Cash
Equivalents” means:

 

(a)                                  readily
marketable direct obligations of the government of the United States or any
agency or instrumentality thereof, or obligations unconditionally guaranteed by
the full faith and credit of the government of the United States, in each case
maturing within one (1) year from the date of acquisition thereof;

 

(b)                                 securities
issued by any state of the United States of America or any political
subdivision of any such state or any public instrumentality thereof having
maturities of not more than one (1) year from the date of acquisition
thereof and, at the time of acquisition, having a rating of AA- or higher from
S&P or Aa3 or higher from Moody’s (or, if at any time neither S&P nor
Moody’s shall be rating such obligations, an equivalent rating from another
nationally recognized rating service);

 

(c)                                  investments
in commercial paper maturing within one hundred eighty (180) days from the
date of acquisition thereof and having, at such date of acquisition, a rating
of at least A-1 or P-1 from either S&P or Moody’s (or, if at any time
neither S&P nor Moody’s shall be rating such obligations, an equivalent
rating from another nationally recognized rating service);

 

(d)                                 investments
in certificates of deposit, banker’s acceptances and time deposits maturing
within two hundred and seventy (270) days from the date of acquisition
thereof issued or guaranteed by or placed with, and money market deposit
accounts issued or offered by, the Administrative Agent or any domestic office
of any commercial bank organized under the laws of the United States of
America, any State thereof, any country that is a member of the Organisation
for Economic Co-Operation and Development or any political subdivision

 

4

 

thereof, that has a combined capital and surplus and
undivided profits of not less than five hundred million Dollars ($500,000,000);

 

(e)                                  fully
collateralized repurchase agreements with a term of not more
than 30 days for securities described in clause (a) above and
entered into with a financial institution satisfying the criteria of
clause (d) of this definition; and

 

(f)                                    investments
in “money market funds” within the meaning of Rule 2a-7 of the Investment
Company Act of 1940, as amended, substantially all of whose assets are
invested in investments of the type described in clauses (a) through
(e) of this definition.

 

“Collateral
Agent” has the meaning provided in the preamble.

 

“Construction
Account” has the meaning provided in Section 3.01(a)(i) (Establishment of Project Accounts).

 

“Construction
Withdrawal Certificate” means a certificate in substantially the form of Exhibit A,
duly executed by an Authorized Officer of the Borrower, directing the transfer
or withdrawal of funds from the Construction Account.

 

“Contingency
Reserve Account” has the meaning provided in Section 3.01(a)(xii) (Establishment of Project Accounts).

 

“Contingency
Reserve Transfer Certificate” means a certificate in substantially the form
of Exhibit J, duly executed by an Authorized Officer of the Borrower,
directing the transfer or withdrawal of funds from the Contingency Reserve
Account.

 

“Costs of the
Project” has the meaning provided in the Bond Indenture.

 

“Credit
Agreement” has the meaning provided in the first recital.

 

“Current
Priority Subordinated Interest” means, with respect to any Quarterly
Period, interest at the per annum rate of eight and one-half percent
(8.50%) accrued, and due and payable, under the Subordinated Loan
Agreement (provided that the aggregate outstanding principal amount of
Subordinated Debt does not exceed nineteen million Dollars ($19,000,000))
during such Quarterly Period, but expressly excluding any such interest that
accrued on the Subordinated Debt in any previous Quarterly Period.

 

“Debt Service
Reserve Account” has the meaning provided in Section 3.01(a)(vii) (Establishment of Project Accounts).

 

5

 

“Debt Service
Reserve Release Certificate” means a certificate in substantially the form
of Exhibit G, duly executed by an Authorized Officer of the
Borrower directing the transfer or withdrawal of funds from the Debt Service
Reserve Release Certificate.

 

“Delay
Liquidated Damages” means any delay liquidated damages payable to the
Borrower pursuant to the Design-Build Agreement or any other construction
contracts to which the Borrower is a party.

 

“Extraordinary
Proceeds Account” has the meaning provided in Section 3.01(a)(xi) (Establishment of Project Accounts).

 

“Extraordinary
Proceeds Release Certificate” means a certificate in substantially the form
of Exhibit I, duly executed by an Authorized Officer of the
Borrower directing the transfer or withdrawal of funds from the Extraordinary
Proceeds Account.

 

“Gross Proceeds”
has the meaning provided in the Code.

 

“Huron
Insurance and Condemnation Proceeds Account” has the meaning provided in Section 3.01(a)(x)
(Establishment of Project Accounts).

 

“Indemnitee”
has the meaning provided in Section 20.08(a) (Indemnification
by the Borrower).

 

“Independent
Engineer’s Certificate” means a certificate of the Independent Engineer in
substantially the form of Exhibit L.

 

“Insurance and
Condemnation Proceeds Accounts” means, collectively, the Aberdeen Insurance
and Condemnation Proceeds Account and the Huron Insurance and Condemnation
Proceeds Account.

 

“Insurance and
Condemnation Proceeds Request Certificate” means a certificate, in
substantially the form of Exhibit H, duly executed by an Authorized
Officer of the Borrower, setting forth proposed instructions for the transfer
or withdrawal of Insurance Proceeds and/or Condemnation Proceeds from an
Insurance and Condemnation Proceeds Account.

 

“Investment
Proceeds” has the meaning provided in the Code.

 

“Interest Rate
Protection Agreement” means each interest rate swap, collar, put, or cap,
or other interest rate protection arrangement, with a Qualified Counterparty,
in each such case that is reasonably satisfactory to the Administrative Agent
and is

 

6

 

entered into in
accordance with Section 7.01(u) (Affirmative Covenants –
Interest Rate Protection Agreement) of the Credit Agreement.

 

“Issue Price”
has the meaning provided in the Code.

 

“Issuer”
has the meaning provided in the third recital.

 

“LC Cash
Collateral Sub-Account” has the meaning provided in Section 3.01(a)(xiv)
(Establishment of Project Accounts).

 

“Liquidated
Damages Account” has the meaning provided in Section 3.01(a)(ii) (Establishment of Project Accounts).

 

“Liquidated
Damages Transfer Certificate” means a certificate in substantially the form
of Exhibit B, duly executed by an Authorized Officer of the
Borrower, directing the transfer or withdrawal of funds from the Liquidated
Damages Account.

 

“Maintenance
Capital Expense Account” has the meaning provided in Section 3.01(a)(v)  (Establishment of Project Accounts).

 

“Material
Default” means

 

(i)                                     any
Default under Section 8.01(a)(ii) (Nonpayment),
Section 8.01(f)(ii)(B) (Cross Defaults),
Section 8.01(i) (Bankruptcy, Insolvency) or
Section 8.01(j) (Project Document Defaults;
Termination) of the Credit Agreement;

 

(ii)                                  any
Default under Section 8.01(d) (Non-Performance of Other
Covenants and Obligations) of the Credit Agreement arising as a
result of any default

 

(A)                              by
the Borrower in the due performance and observance of any covenant or agreement
under Section 7.01(a) (Compliance with Laws),
Section 7.01(b) (Environmental Matters), Section
7.01(c) (Operations and Maintenance), Section
7.01(e) (Payment of Obligations), Section 7.01(f)
(Governmental Approvals), Section 7.01(l)
(Project Documents), Section 7.01(m) (Preservation of Title; Acquisition of Additional Property),
Section 7.01(n)(ii) and (iii) (Maintenance of Liens;
Creation of Liens on Newly Acquired Property), Section 7.01(o) (Certificate of Formation), Section 7.01(p) (Separateness) and Section

 

7

 

7.01(u) (Interest Rate Protection
Agreement) of the Credit Agreement;

 

(B)                                by
the Borrower in the due performance and observance of any covenant or agreement
under Section 5.03 (No Other Filings)
and Section 5.04 (No Sale of Collateral) of the
Security Agreement; and

 

(C)                                by
any Pledgor under Section 5.03 (No Other Filings)
of the Pledge Agreement.

 

“Monthly Date”
means the last Business Day of each calendar month.

 

“Net Swap
Payment” means, with respect to any Interest Rate Protection Agreement and
for any period, all scheduled Obligations due and payable by the Borrower under
such Interest Rate Protection Agreement during such period, as a result of any
netting applicable thereto.

 

“Notice of
Security Discharge Date” has the meaning provided in Section 20.01 (Rights of Second Lien Agent and Second Lien Claimholders).

 

“Notice of
Suspension” has the meaning provided in Section 17.01(a) (Notices of Suspension of Project Accounts).

 

“Operating
Account” has the meaning provided in Section 3.01(a)(iv) (Establishment of Project Accounts).

 

“Operating
Account Withdrawal Certificate” means a certificate in substantially the
form of Exhibit E, duly executed by an Authorized Officer of the
Borrower, directing the transfer or withdrawal of funds from the Operating
Account.

 

“Original
Proceeds” has the meaning provided in the Code.

 

“Patriot Act”
means United States Public Law 107-56, Uniting and Strengthening America
by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism
(USA PATRIOT ACT) of 2001, and the rules and regulations promulgated
thereunder from time to time in effect.

 

“Permitted
Budgeted Operating Expenses Level” means, for any month in any Fiscal Year,
with respect to Operation and Maintenance Expenses (other than Operation and
Maintenance Expenses for the cost of corn and natural gas), one hundred and ten
percent (110%) of the amount projected for such expenses (other than Operation
and Maintenance Expenses for the cost of corn and natural gas) for the period
from the start

 

8

 

of such Fiscal
Year (or, if the Closing Date occurred during such Fiscal Year, from the Closing
Date) through (and including) such month in the then-current Operating Budget.

 

“Post-Conversion
Date Revenue Account Withdrawal Certificate” means a certificate in
substantially the form of Exhibit C-2, duly executed by an
Authorized Officer of the Borrower, directing the transfer or withdrawal of
funds from the Revenue Account.

 

“Pre-Conversion
Date Revenue Account Withdrawal Certificate” means a certificate in
substantially the form of Exhibit C-1, duly executed by an
Authorized Officer of the Borrower, directing the transfer or withdrawal of
funds from the Revenue Account.

 

“Pre-Conversion
Prepayment Target” has the meaning provided in the Credit Agreement.

 

“Prepayment
Holding Account” has the meaning provided in Section 3.01(a)(x) (Establishment of Project Accounts).

 

“Project
Accounts” means the Construction Account, the Liquidated Damages Account,
the Revenue Account, the Operating Account, the Maintenance Capital Expense
Account, the Working Capital Reserve Account, the Debt Service Reserve Account,
the Prepayment Holding Account, the Aberdeen Insurance and Condemnation
Proceeds Account, the Huron Insurance and Condemnation Proceeds Account, the
Extraordinary Proceeds Account, the Contingency Reserve Account, the Additional
Capital Expenditure Sub-Account, the Bond Proceeds Sub-Account and the LC Cash
Collateral Sub-Account.

 

“Qualified
Counterparty” has the meaning provided in the Credit Agreement.

 

“Related Parties”
means, with respect to any Person, such Person’s Affiliates and the partners, directors,
officers, employees, agents and advisors of such Person and of such Person’s
Affiliates.

 

“Restoration or
Replacement Plan” means a plan and time schedule, reasonably satisfactory
to the Required Lenders
and the Independent Engineer, for the application of Insurance Proceeds and
Condemnation Proceeds arising from any Casualty Event or Event of Taking,
respectively, and any other funds available to the Borrower with which to
restore or replace the Project, or any portion thereof, affected by such Casualty
Event or Event of Taking.

 

9

 

“Restricted
Payment Certificate” means a certificate in substantially the form of Exhibit D,
duly executed by an Authorized Officer of the Borrower, directing the transfer
or withdrawal of funds for Restricted Payments.

 

“Revenue Account”
has the meaning provided in Section 3.01(a)(iii) (Establishment
of Project Accounts).

 

“Revenue
Account Withdrawal Certificate” means, before the Conversion Date, a
Pre-Conversion Date Revenue Account Withdrawal Certificate, and after the
Conversion Date, a Post-Conversion Date Revenue Account Withdrawal Certificate.

 

“Second Lien
Account Collateral” has the meaning provided in Section 2.08 (Grant of Second-Priority Security Interest).

 

“Second Lien
Agent” has the meaning provided in the preamble.

 

“Second Lien
Agent Indemnitee” has the meaning provided in Section 20.08(b) (Indemnification by the Borrower).

 

“Second Lien
Claimholders” means, at any relevant time, the holders of Second Lien Obligations
(as defined in the Intercreditor Agreement) at such time, including the holders
of Bonds, the Second Lien Agent and the Issuer.

 

“Second Lien
Project Accounts” means the Revenue Account, the Operating Account, the
Maintenance Capital Expense Account, the Working Capital Reserve Account, the
Aberdeen Insurance and Condemnation Proceeds Account, the Huron Insurance and
Condemnation Proceeds Account, the Extraordinary Proceeds Account, and the
Additional Capital Expenditure Sub-Account.

 

“Securities
Intermediary” has the meaning provided in the preamble.

 

“Security
Discharge Date” means the date on which (i) all outstanding
Commitments (as defined in the Credit Agreement) and Interest Rate Protection
Agreements have been terminated and (ii) all amounts payable in respect of
the Obligations have been irrevocably and indefeasibly paid in full in cash
(other than obligations under the Financing Documents that by their terms
survive and with respect to which no claim has been made by the Senior Secured
Parties).

 

“Senior Secured
Parties” means the Lenders, the Agents and any Interest Rate Protection
Provider.

 

“Subordinated
Debt” has the meaning provided in the fourth recital.

 

10

 

“Subordinated
Loan Agreement” has the meaning provided in the fourth recital.

 

“Swap
Termination Value” means, in respect of any one or more Swap Contracts
(including any Permitted Commodity Hedging Arrangements or any Interest Rate
Protection Agreements), after taking into account the effect of any legally
enforceable netting agreement relating to such Swap Contracts, (a) for any
date on or after the date such Swap Contracts have been closed out and
termination value(s) determined in accordance therewith, such termination value(s),
and (b) for any date prior to the date referenced in clause (a), the
amount(s) determined as the mark-to-market value(s) for such Swap Contracts, in
accordance with the terms of the applicable Swap Contract, or, if no provision
is made therein, as determined based upon one or more mid-market or other
readily available quotations provided by any recognized dealer in such Swap
Contracts (which may include a Lender or any Affiliate of a Lender).

 

“Target Balance
Amount” means the aggregate principal amount under the Term Loans on the
Conversion Date as reduced by 1/24th of such amount on each
Quarterly Payment Date thereafter.

 

“Tax Exemption
Agreement” means that certain Tax Exemption Agreement and Certificate,
dated as of October 1, 2007, among the Borrower, the Issuer, the Accounts Bank
and the Second Lien Agent.

 

“UCC” means
the Uniform Commercial Code as the same may, from time to time, be in
effect in the State of New York; provided, however, in the event
that, by reason of mandatory provisions of law, any or all of the perfection or
priority of the security in any Account Collateral is governed by the
Uniform Commercial Code as in effect in a jurisdiction other than the
State of New York, the term “UCC” shall mean the Uniform Commercial
Code as in effect, from time to time, in such other jurisdiction for purposes
of the provisions hereof relating to such perfection or priority and for
purposes of definitions related to such provisions.

 

“Warranty Work”
means any work relating to the repair, replacement or correction of
any failure, defect or deficiency related to the Aberdeen II Plant.

 

“Working
Capital Reserve Account” has the meaning provided in Section 3.01(a)(vi)
(Establishment of Project Accounts).

 

“Working
Capital Reserve Transfer Certificate” means a certificate in substantially
the form of Exhibit F, duly executed by an Authorized Officer of
the Borrower, directing the transfer or withdrawal of funds from the Working
Capital Reserve Account.

 

11

 

Section 1.02           Principles of
Interpretation. (a)  Unless
otherwise defined or the context otherwise requires, terms for which meanings
are provided in this Accounts Agreement shall have the same meanings when used
in the Credit Agreement.

 

(b)        Unless the context requires otherwise,
any reference in this Accounts Agreement to any Financing Document shall mean
such Financing Document and all schedules, exhibits and attachments thereto, as
amended from time to time.

 

(c)         All the agreements, contracts or
documents defined or referred to herein shall mean such agreements, contracts
or documents as the same may from time to time be supplemented, amended or
replaced or the terms thereof waived or modified to the extent permitted by,
and in accordance with, the terms thereof and this Accounts Agreement, and
shall disregard any supplement, amendment, replacement or waiver made in breach
of this Accounts Agreement.

 

(d)        Defined terms in this Accounts Agreement
shall include in the singular number the plural and in the plural number the
singular.

 

(e)         The words “herein,” “hereof” and “hereunder”
and words of similar import when used in this Accounts Agreement shall, unless
otherwise expressly specified, refer to this Accounts Agreement as a whole and
not to any particular provision of this Accounts Agreement and all references
to Articles, Sections, Exhibits and Schedules shall be references to Articles,
Sections, Exhibits and Schedules of this Accounts Agreement, unless otherwise
specified.

 

(f)         The words “include,” “includes” and “including”
are not limiting.

 

(g)        The word “or” is not exclusive.

 

(h)        Any reference to any Person shall
include its permitted successors and permitted assigns in the capacity
indicated, and in the case of any Governmental Authority, any Person succeding
to its functions and capacities.

 

Section 1.03           Credit Agreement and UCC
Definitions. Unless otherwise defined herein or unless the context
otherwise requires, terms used in this Accounts Agreement, including its
preamble and recitals, have the meanings provided in the Credit Agreement or,
if not defined therein, the UCC.

 

Section 1.04           Accounting and Financial
Determinations. Unless otherwise specified, all accounting terms used in
any Financing Document shall be interpreted, all accounting determinations and
computations hereunder or thereunder shall

 

12

 

be made, and
all financial statements required to be delivered hereunder or thereunder shall
be prepared, in accordance with GAAP.

 

ARTICLE II

APPOINTMENT; GRANT OF SECURITY INTEREST

 

Section 2.01           Appointment by Collateral
Agent. (a) The Collateral Agent, on behalf and at the direction of the
Senior Secured Parties, hereby appoints and authorizes the Accounts Bank to act
as its depository for the benefit of the Senior Secured Parties, and as the
securities intermediary or bank with respect to the Project Accounts for the
benefit of the Collateral Agent, on behalf of the Senior Secured Parties, with
such powers as are expressly delegated to the Accounts Bank by the terms of
this Accounts Agreement, together with such other powers as are reasonably
incidental thereto. The Accounts Bank hereby accepts each such appointment and
agrees to act as the depository for the Collateral Agent, on behalf of the
Senior Secured Parties, and as the securities intermediary or bank with respect
to the Project Accounts, for the benefit of the Collateral Agent, on behalf of
the Senior Secured Parties, in accordance with the terms of this Accounts
Agreement. The Accounts Bank further agrees to accept and hold, as securities
intermediary or as a bank, in its custody and in accordance with the terms of
this Accounts Agreement, for the Collateral Agent, on behalf of the Senior
Secured Parties, the Project Accounts and the Account Collateral.

 

(b)        The Collateral Agent also hereby appoints and
authorizes the Accounts Bank to act on its behalf for the purpose of the
creation and perfection of a first priority security interest in favor of the
Collateral Agent, for the benefit of the Senior Secured Parties, in the Project
Accounts to the extent that they are deemed under applicable Law not to
constitute securities accounts or deposit accounts and in any Account
Collateral that is deemed under applicable Law not to constitute a “financial
asset” (within the meaning of Section 8-102(9) of the UCC). The Accounts Bank
hereby accepts this appointment and agrees to act as the Accounts Bank for the
Collateral Agent, on behalf of the Senior Secured Parties, for such purpose and to hold and maintain exclusive
dominion and control over the Project Accounts and any such Account Collateral
on behalf of the Collateral Agent, acting for the benefit of the Senior Secured
Parties.

 

Section 2.02           Appointment by Second Lien
Agent. (a) The Second Lien Agent, on behalf and at the direction of
the Second Lien Claimholders, hereby appoints and authorizes the Accounts Bank
to act as its depository for the benefit of the Second Lien Claimholders, and
as the securities intermediary or bank with respect to the Second Lien Project
Accounts for the benefit of the Second Lien Agent, on behalf of the Second Lien
Claimholders, with such powers as are expressly delegated to the Accounts Bank
by

 

13

 

the terms of
this Accounts Agreement, together with such other powers as are reasonably
incidental thereto. The Accounts Bank hereby accepts each such appointment and
agrees to act as the depository for the Second Lien Agent, on behalf of the
Second Lien Claimholders, and as the securities intermediary or bank with
respect to the Second Lien Project Accounts, for the benefit of the Second Lien
Agent, on behalf of the Second Lien Claimholders, in accordance with the terms
of this Accounts Agreement. The Accounts Bank further agrees to accept and
hold, as securities intermediary or as a bank, in its custody and in accordance
with the terms of this Accounts Agreement, for the Second Lien Agent, on behalf
of the Second Lien Claimholders, the Second Lien Project Accounts and the
Second Lien Account Collateral.

 

(b)        The Second Lien Agent also hereby
appoints and authorizes the Accounts Bank to act on its behalf for the purpose
of the creation and perfection of a second priority security interest in favor
of the Second Lien Agent, for the benefit of the Second Lien Claimholders, in
the Second Lien Project Accounts to the extent that they are deemed under
applicable Law not to constitute securities accounts or deposit accounts and in
any Second Lien Account Collateral that is deemed under applicable Law not to
constitute a “financial asset” (within the meaning of Section 8-102(9) of the
UCC). The Accounts Bank hereby accepts this appointment and agrees to act as
the Accounts Bank for the Second Lien Agent, on behalf of the Second Lien
Claimholders, for
such purpose.

 

Section 2.03           Limitation of Liability.
Notwithstanding any provision to the contrary contained elsewhere in any
Financing Document or any Subordinated Debt Document, the Accounts Bank shall
not have any duties or responsibilities, except those expressly set forth
herein, nor shall the Accounts Bank have or be deemed to have any fiduciary
relationship with any Senior Secured Party, the Second Lien Agent or any Second
Lien Claimholder, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into any Financing Document or any
Subordinated Debt Document or otherwise exist against the Accounts Bank. Without
limiting the generality of the foregoing sentence, the use of the term “agent”
in any Financing Document or Subordinated Debt Document with reference to the
Accounts Bank is not intended to connote any fiduciary or other implied (or
express) obligations arising under agency doctrine of any applicable Law. Instead,
such term is used merely as a matter of market custom, and is intended to
create or reflect only an administrative relationship between independent
contracting parties.

 

Section 2.04           Project Accounts. (a) The
Borrower agrees that it will have no legal or equitable right to withdraw funds
from the Project Accounts, except for those rights expressly granted to the
Borrower in this Accounts Agreement. The Account Collateral will not constitute
repayment of the Obligations or the Subordinated Debt until

 

14

 

so applied as
payments in accordance with the terms of this Accounts Agreement and the other
Financing Documents.

 

(b)        The Accounts Bank shall not have title
to the funds on deposit in or credited to the Project Accounts, and shall
credit the Project Accounts with all receipts of interest, dividends and other
income received on the property held in the Project Accounts. The Accounts Bank
shall administer and manage the Project Accounts in strict compliance with its
duties with respect to the Project Accounts pursuant to this Accounts
Agreement, and shall be subject to and comply with all of the obligations that
the Accounts Bank owes to the Borrower and the Collateral Agent, for the
benefit of the Senior Secured Parties, with respect to the Project Accounts,
including all subordination obligations set forth in Section 2.10 (Subordination) with respect to the Accounts Bank’s right
of set-off or recoupment or right to obtain a Lien, pursuant to the terms of
this Accounts Agreement. The Accounts Bank hereby agrees to comply with any and
all written instructions originated by the Collateral Agent directing the
disbursement, deposit and/or transfer of any funds and all other property held
in the Project Accounts without any further consent of the Borrower or any
other Person, and to comply with any and all written instructions originated by
the Borrower directing the disbursement, deposit and/or transfer of any funds
and all other property held in the Project Accounts subject to, and in
accordance with, the terms of this Accounts Agreement.

 

Section 2.05           Representations, Warranties
and Covenants of Accounts Bank. The Accounts Bank hereby represents,
warrants, covenants and agrees as follows:

 

(a)         it is a securities intermediary on the
date hereof and shall act as such in maintaining the Project Accounts and all
of the Account Collateral (including all securities and other financial assets
or security entitlements deposited in or credited to the Project Accounts) from
time to time transferred, deposited in or credited to or maintained in the
Project Accounts;

 

(b)        it is the bank with which each Project
Account is maintained and the securities intermediary with respect to the
financial assets held in the Project Accounts. In this regard, (i) if the
Accounts Bank has knowledge that an issuer of any financial asset is required
to make a payment or distribution in respect of such financial asset, the
Accounts Bank shall have fulfilled its duty under applicable Law to take action
to obtain such payment or distribution if (A) it credits such payment or
distribution to the Project Accounts in accordance with this Accounts Agreement
if such payment or distribution is made or (B) it notifies the Borrower
and the Collateral Agent that such payment or distribution has not been made,
and (ii) if the Accounts Bank is required by applicable Law or this
Accounts Agreement to credit to any Project Account any financial asset
purported to be transferred or credited to the Accounts Bank pursuant

 

15

 

to applicable
Law, the Accounts Bank shall have fulfilled its duty to so credit any Project
Account if it credits as a security entitlement to the applicable party
whatever rights the Accounts Bank purportedly has in the financial asset
transferred or credited to the Accounts Bank and the Accounts Bank shall have
no duty to ensure that applicable Law has been complied with in respect of the
transfer of the financial asset or to create a security interest in or Lien on
any financial asset purported to be transferred or credited to the Accounts
Bank and subsequently credited to any Project Account;

 

(c)         it shall promptly perform all duties
imposed upon a securities intermediary and a bank under the UCC, other
applicable Law and this Accounts Agreement;

 

(d)        the Collateral Agent, for the benefit of
the Senior Secured Parties, and no other Person, is the Accounts Bank’s
customer with respect to the Project Accounts, and the Borrower has consented
to the Collateral Agent, on behalf and for the benefit of the Senior Secured
Parties, being deemed the customer hereunder;

 

(e)         the Securities Intermediary’s
jurisdiction, for purposes of this Accounts Agreement and Article 8 of the
UCC, is and shall continue to be the State of New York, and the bank’s
jurisdiction of the Accounts Bank, for purposes of this Accounts Agreement and
Section 9-304(b)(1) of the UCC, is and shall continue to be the State of
New York;

 

(f)         it has established and maintains the
Project Accounts as set forth in Section 3.01 (Establishment
of Project Accounts);

 

(g)        each Project Account is and will be
maintained as a securities account or, as set forth in Section 2.06 (Project Accounts as Deposit Account), a deposit account;

 

(h)        all financial assets acquired by or
delivered to the Accounts Bank shall be held by the Accounts Bank and credited
by book entry to the relevant Project Account or otherwise accepted by the
Accounts Bank for credit to the relevant Project Account. Any financial asset
so credited or accepted for credit to the relevant Project Account shall be
registered in the name of, payable to, or to the order of, or indorsed to the
Accounts Bank or in blank and in no case will any financial asset credited to
any Project Account or held by the Accounts Bank for credit to any Project
Account be registered in the name of, payable to, to the order of, or indorsed
to, the Borrower, except to the extent that such financial asset has been
subsequently indorsed by the Borrower to the Accounts Bank or in blank;

 

16

 

(i)          each item of property (including any
cash, security, general intangible, document, instrument or obligation, share,
participation, interest or other property whatsoever) deposited in or credited
to any Project Account shall be treated as a financial asset under and for the
purposes of Article 8 of the UCC, including Section 8-102(a)(9)(iii)
thereof. Notwithstanding any provision herein to the contrary, any property
contained in the Project Accounts that is not deemed to be a financial asset
under applicable Law, to the extent permitted by applicable Law, will be deemed
to be deposited in a deposit account and subject to Section 2.06 (Project Accounts as Deposit Account);

 

(j)          the Collateral Agent, for the benefit
of the Senior Secured Parties, is the entitlement holder in any security
entitlements with respect to any financial assets deposited in or credited to
the Project Accounts, and the Collateral Agent may issue entitlement orders
with respect thereto;

 

(k)         if at any time it receives an
entitlement order or any other order from the Collateral Agent directing the
transfer, redemption or liquidation of any financial asset carried in the
Project Accounts or any instruction originated by the Collateral Agent
directing the disbursement, deposit and/or transfer of any funds or other
property held in the Project Accounts, the Accounts Bank shall comply with such
entitlement order, instruction or other order without further consent by the
Borrower or any other Person. The Borrower hereby agrees that the Collateral
Agent, on behalf of and for the benefit of the Senior Secured Parties, shall
have control of the security entitlements carried in the Project Accounts and
of the financial assets carried in the Project Accounts, and the Borrower
hereby disclaims any entitlement to claim control of such security entitlements
or financial assets;

 

(l)          all property delivered to the Accounts
Bank pursuant to this Accounts Agreement or the other Financing Documents will
be promptly deposited in or credited to a Project Account by an appropriate
entry in its records in accordance with this Accounts Agreement;

 

(m)        the Accounts Bank shall not change the
name or account number of any Project Account unless it obtains the prior
written consent of the Collateral Agent and provides prior written notice to
the Borrower;

 

(n)        except for the claims and interest of
(i) the Collateral Agent, for the benefit of the Senior Secured Parties,
in the Project Accounts, (ii) the Second Lien Agent, for the benefit of the
Second Lien Claimholders, in the Second Lien Project Accounts and (iii) the
Borrower, in the Project Accounts, it does not know of and has not received
written notice of any right or claim (including any adverse claim) to or
interest in the Project Accounts or any Account Collateral (including, without
limitation,

 

17

 

funds and
financial assets) deposited in or credited to the Project Accounts by any
Person. If any Person (other than the Collateral Agent, on behalf of the Senior
Secured Parties, or the Second Lien Agent, on behalf of the Second Lien
Claimholders) asserts any Lien, encumbrance or adverse claim (including any
writ, garnishment, judgment, warrant of attachment, execution or similar process)
against any Project Account or in any financial asset or other property
deposited therein or credited thereto, the Accounts Bank will promptly notify
the Collateral Agent, the Borrower and, if such Project Account is a Second
Lien Project Account, the Second Lien Agent, in writing thereof; and

 

(o)        the Accounts Bank has not entered into
and will not enter into any agreement with respect to the Project Accounts or
any financial assets or other property deposited in or credited to any Project
Account other than this Accounts Agreement, as may be amended from time to time.
The Accounts Bank has not entered into and will not enter into any agreement
with the Borrower or any other Person purporting to limit or condition the
obligation of the Accounts Bank to comply with entitlement orders or any other
order originated by the Collateral Agent in accordance with this Accounts
Agreement.

 

Section 2.06           Project Accounts as Deposit
Account. (a) The parties hereto agree that, to the extent that the Project
Accounts are not considered “securities accounts” (within the meaning of
Section 8-501(a) of the UCC), the Project Accounts shall be deemed to be
deposit accounts (as defined in Section 9-102(a)(29) of the UCC) to the extent
a security interest can be granted and perfected under the UCC in the Project
Accounts as deposit accounts, which the Borrower shall maintain with the
Accounts Bank acting not as Securities Intermediary but as a “bank” (within the
meaning of Section 9-102(a)(8) of the UCC).

 

(b)        The Collateral Agent, on behalf of the
Senior Secured Parties, shall be deemed the sole customer of the Accounts Bank
for purposes of the Project Accounts and, as such, shall be entitled to all of
the rights that customers of banks have under applicable Law with respect to
deposit accounts, including the right to withdraw funds from, or close, the
Project Accounts, and the Borrower hereby consents to the Collateral Agent
being deemed the customer hereunder.

 

Section 2.07           Grant of First-Priority
Security Interest. (a)  As security
for the prompt and complete payment when due (whether at stated maturity, by
acceleration or otherwise) of any and all of the Obligations and the due
performance and compliance by the Borrower with all of the terms, conditions,
and agreements to be performed and complied with by it under and pursuant to
the terms of the Credit Agreement and the other Financing Documents, the
Borrower hereby acknowledges and confirms the pledge, collateral assignment,
hypothecation, and granting of a first-priority security interest to

 

18

 

the Collateral
Agent, for the benefit of the Senior Secured Parties, pursuant to the Security
Agreement in, all of its right, title and interest in and to the following, in
each case, as to each type of property described below, whether now owned or
hereafter acquired by the Borrower, wherever located, and whether now or
hereafter existing or arising (collectively, the “Account Collateral”):

 

(i)                                     each
of the Project Accounts (other than the Bond Proceeds Sub-Account), including
all funds, Cash Equivalents, securities, financial assets or other property
held in, required to be held in or credited to any of such Project Accounts or
otherwise in possession or control of the Accounts Bank pursuant to this
Accounts Agreement, and all interest, dividends and other income derived
therefrom;

 

(ii)                                  all
statements, certificates, instruments and investment property representing or
evidencing any property described in clause (i) above held in, required
to be held in or credited to any of such Project Accounts or otherwise in
possession or control of the Accounts Bank pursuant to this Accounts Agreement;
and

 

(iii)                               to
the extent not included in the foregoing, all proceeds, products and accessions
of and to any and all of the foregoing, including whatever is received upon any
collection, exchange, sale or other disposition of any of the foregoing and any
property into which any of the foregoing is converted, whether cash or non-cash
proceeds, and any and all other amounts paid or payable under or in connection
with any of the foregoing and all security entitlements of the Borrower in any
and all of the foregoing.

 

Section 2.08           Grant of Second-Priority
Security Interest. (a)  As security
for the prompt and complete payment when due (whether at stated maturity, by
acceleration or otherwise) of any and all of the obligations of the Borrower
and the due performance and compliance by the Borrower with all of the terms,
conditions, and agreements to be performed and complied with by it under and
pursuant to the terms of the Subordinated Loan Agreement and the other
Subordinated Debt Documents, the Borrower hereby acknowledges and confirms the
pledge, collateral assignment, hypothecation, and granting of a second-priority
security interest (subject to the terms of the Intercreditor Agreement) to the
Second Lien Agent, for the benefit of the Second Lien Claimholders, pursuant to
the “Subordinate Security Agreement” (as defined in the Bond

 

19

 

Indenture),
over all of its right, title and interest in and to the following, in each
case, as to each type of property described below, whether now owned or
hereafter acquired by the Borrower, wherever located, and whether now or
hereafter existing or arising (collectively, the “Second Lien Account
Collateral”):

 

(i)                                     each
of the Second Lien Project Accounts, including all funds, Cash Equivalents,
securities, financial assets or other property held in, required to be held in
or credited to any of the Second Lien Project Accounts or otherwise in
possession or control of the Accounts Bank pursuant to this Accounts Agreement,
and all interest, dividends and other income derived therefrom;

 

(ii)                                  all
statements, certificates, instruments and investment property representing or
evidencing any property described in clause (i) above held in, required
to be held in or credited to any of the Second Lien Project Accounts or
otherwise in possession or control of the Accounts Bank pursuant to this
Accounts Agreement; and

 

(iii)                               to
the extent not included in the foregoing, all proceeds, products and accessions
of and to any and all of the foregoing, including whatever is received upon any
collection, exchange, sale or other disposition of any of the foregoing and any
property into which any of the foregoing is converted, whether cash or non-cash
proceeds, and any and all other amounts paid or payable under or in connection
with any of the foregoing and all security entitlements of the Borrower in any
and all of the foregoing;

 

For the avoidance
of doubt, (x) the Second Lien Account Collateral shall not include any right,
title or interest in any property held in, required to be held in or credited
to the Construction Accounts, the Liquidated Damages Account, the Debt Service
Reserve Account, the Contingency Reserve Account, the Prepayment Holding
Account or the Bond Proceeds Sub-Account, and (ii) notwithstanding any
provision of this Agreement to the contrary, the Collateral Agent shall have no
lien on the funds in the Bond Proceeds Sub-Account.

 

Section 2.09           Control and Perfection of
Account Collateral. (a) The Borrower specifically acknowledges and
agrees that (i) (A) each Project Account pledged hereunder shall be
maintained so that the Collateral Agent, on behalf and for the benefit

 

20

 

of the Senior
Secured Parties, has control of such Project Account in the manner specified in
Section 9-104 of the UCC, (B) all Cash Equivalents pledged hereunder shall
be maintained so that the Collateral Agent, on behalf and for the benefit of
the Senior Secured Parties, has control of such Cash Equivalents in the manner
specified in Section 9-106 of the UCC, and (C) all financial assets
held in the Project Accounts and pledged hereunder shall be maintained so that
the Collateral Agent, on behalf and for the benefit of the Senior Secured
Parties, has control of such financial assets in the manner specified in
Section 8-106 of the UCC.

 

(b)        The Borrower shall give, execute,
deliver, file, record, authenticate, authorize or obtain all such UCC financing
statements as may be necessary to perfect and maintain the security interests
granted under this Accounts Agreement.

 

(c)         Until the Security Discharge Date and
payment in full of all obligations under the Subordinated Debt Documents, the
Borrower shall not have any rights against or to monies held in the Project
Accounts, except the right to receive or make requisitions of funds deposited
in or credited to the Project Accounts as permitted by this Accounts Agreement.

 

Section 2.10           Subordination. (a) The
Accounts Bank hereby acknowledges the first-priority security interest granted
hereby to the Collateral Agent, for the benefit of the Senior Secured Parties,
and the second-priority security interest granted hereby to the Second Lien
Agent, for the benefit of the Second Lien Claimholders. In the event that the
Accounts Bank has or subsequently obtains by agreement, operation of Law or
otherwise a right of recoupment or set-off or any Lien in any of the Project
Accounts, Account Collateral or any financial asset or other property deposited
therein or credited thereto or any security entitlement related thereto, the
Accounts Bank hereby agrees that such right of recoupment or set-off and/or any
such Lien shall (except to the extent provided in clause (c) of this Section
2.10) be subordinate to the security interest of each of the Collateral
Agent, on behalf and for the benefit of the Senior Secured Parties, and the
Second Lien Agent, on behalf of and for the benefit of the Second Lien
Claimholders. The Accounts Bank agrees that it shall not (except to the extent
provided in clause (c) of this Section 2.10) assert or enforce
any such right of recoupment or set-off and/or any Lien until the Notice of
Security Discharge Date and payment in full of all obligations under the
Subordinated Debt Documents.

 

(b)        (i) Until the Notice of Security
Discharge Date, the financial assets and other items deposited in or credited
to the Project Accounts and all other Account Collateral will not (except to
the extent provided in clause (c) of this Section 2.10) be
subject to deduction, set-off, banker’s lien or any other right in favor of any
Person other than the Collateral Agent, on behalf and for the benefit of the
Senior Secured Parties, and (ii)  from
and after the Notice of Security Discharge Date until the payment

 

21

 

in full of all
obligations under the Subordinated Debt Documents, the financial assets and
other items deposited in or credited to the Project Accounts and all other
Account Collateral will not (except to the extent provided in clause (c)
of this Section 2.10) be subject to deduction, set-off, banker’s lien or
any other right in favor of any Person other than the Second Lien Agent, on
behalf and for the benefit of the Second Lien Claimholders.

 

(c)         The Project Accounts, Account
Collateral or any financial asset or other property deposited therein or
credited thereto shall be subject to deduction, set-off, banker’s lien and
recoupment to the extent of returned items and chargebacks either for
uncollected checks or other items of payment and transfers previously credited
to one or more Project Accounts, and each of the Collateral Agent, on behalf of
and for the benefit of the Senior Secured Parties, the Second Lien Agent, on
behalf of and for the benefit of the Second Lien Claimholders, and the Borrower
hereby expressly authorize the Accounts Bank to debit the relevant Project
Account(s) for such amounts.

 

Section 2.11           Agreement to Hold In Trust.
All payments received directly by the Borrower that are required to be
deposited into the Project Accounts in accordance with the terms of this
Accounts Agreement, the Credit Agreement, or any other Financing Document
(including any amount received by the Borrower pursuant to, or in connection
with, any Project Document or any sale of Products) shall be held by the
Borrower in trust for the Collateral Agent, on behalf and for the benefit of
the Senior Secured Parties, shall be segregated from other funds of the
Borrower and shall, forthwith upon receipt by the Borrower, be turned over to
the Collateral Agent or its designee in the same form as received by the
Borrower (duly endorsed by the Borrower to the Collateral Agent or the Accounts
Bank, if requested) for deposit and disbursement in accordance with this
Accounts Agreement.

 

ARTICLE III

PROJECT ACCOUNTS

 

Section 3.01                                Establishment
of Project Accounts. (a) On or prior to the Closing Date, the Accounts Bank
shall establish and maintain, in the name of the Collateral Agent and on the
books and records of the Accounts Bank’s offices located in Amarillo, Texas,
the accounts set forth below:

 

(i)                                     a
special, segregated, Dollar-denominated account entitled “Construction
Account”, Account No. 129542 (the “Construction Account”);

 

22

 

(ii)                                  a
special, segregated Dollar-denominated account entitled “Liquidated Damages
Account”, Account No. 129607 (the “Liquidated Damages Account”);

 

(iii)                               a
special, segregated, Dollar-denominated account entitled “Revenue Account”,
Account No. 129615 (the “Revenue Account”);

 

(iv)                              a
special, segregated, Dollar-denominated account entitled “Operating Account”,
Account No. 129461 (the “Operating Account”);

 

(v)                                 a
special, segregated, Dollar-denominated account entitled “Maintenance Capital
Expense Account”, Account No. 

129488 (the “Maintenance Capital Expense Account”);

 

(vi)                              a
special, segregated, Dollar-denominated account entitled “Working Capital
Reserve Account”, Account No. 128619 (the “Working Capital Reserve
Account”);

 

(vii)                           a
special, segregated, Dollar-denominated account entitled “Debt Service Reserve
Account”, Account No. 129496 (the “Debt Service Reserve Account”);

 

(viii)                        a special,
segregated, Dollar-denominated account entitled “Prepayment Holding Account”,
Account No. 129518 (the “Prepayment Holding Account”);

 

(ix)                                a
special, segregated, Dollar-denominated account entitled “Aberdeen Insurance
and Condemnation Proceeds Account”, Account No. 129526 (the “Aberdeen
Insurance and Condemnation Proceeds Account”);

 

(x)                                   a
special, segregated, Dollar-denominated account entitled “Huron Insurance and
Condemnation Proceeds Account”, Account No. 129534 (the “Huron
Insurance and Condemnation Proceeds Account”);

 

(xi)                                a
special, segregated, Dollar-denominated account entitled “Extraordinary
Proceeds Account”, Account No. 128449 (the “Extraordinary Proceeds
Account”);

 

23

 

(xii)                             a special,
segregated, Dollar-denominated account entitled “Contingency Reserve Account”,
Account No. 128457 (the “Contingency Reserve Account”);

 

(xiii)                          a
special, segregated, Dollar-denominated sub-account of the Construction Account
entitled the “Bond Proceeds Sub-Account”, Account No. 128511 (the “Bond
Proceeds Sub-Account”); and

 

(xiv)                         a
special, segregated, Dollar-denominated sub-account of the Working Capital
Reserve Account entitled the “LC Cash Collateral Sub-Account”, Account
No. 129364 (the “LC Cash Collateral Sub-Account”).

 

Section 3.02           Deposits into and
Withdrawals from Project Accounts. (a) Amounts shall be deposited into
and withdrawn from the Project Accounts in strict accordance with this Article III.

 

(b)        The Accounts Bank will only be required
to transfer funds hereunder on a “same day” basis if it has received written
notice of such proposed transfer, together with all certificates, notices,
directions and other documents required under this Accounts Agreement to be
delivered to the Accounts Bank relating thereto, not later than 11:00 a.m.
Eastern time on the Business Day of such proposed transfer and, if such notice
or any such related document is received by the Accounts Bank after such time,
such transfer will be undertaken on the next Business Day succeeding the date
of receipt by the Accounts Bank of all such documentation.

 

(c)         If any transfer, withdrawal, deposit,
investment or payment of any funds by the Accounts Bank or any other action to
be taken by the Accounts Bank under this Accounts Agreement is to be made or
taken on a day other than a Business Day, such transfer, withdrawal, deposit,
investment, payment or other action will be made or taken on the next
succeeding Business Day.

 

(d)        (i) 
Any instruction, direction, notice, certificate, request or requisition
given to the Accounts Bank by the Borrower with respect to the transfer,
withdrawal, deposit, investment or payment of any funds under this Accounts
Agreement or with respect to any other obligations to be performed by the Accounts
Bank under this Accounts Agreement (A) must be in writing and signed by an
Authorized Officer of the Borrower, (B) in referencing any of the Project
Accounts, must refer to the specific Project Account name and number,
(C) shall constitute a representation by the Borrower that all conditions
set forth in this Accounts Agreement for such withdrawal have been satisfied,
whether or not those conditions are explicitly

 

24

 

stated to be
so satisfied and (D) shall be copied to the Administrative Agent and the
Collateral Agent.

 

(ii)  Any instruction, direction, notice,
certificate, request or requisition given to the Accounts Bank by the
Collateral Agent or the Administrative Agent with respect to the transfer,
withdrawal, deposit investment or payment of any funds under this Accounts
Agreement or with respect to any other obligations to be performed by the
Accounts Bank under this Accounts Agreement (A) must be in writing,
(B) in referencing any of the Project Accounts, must refer to the specific
Project Account name and number, and (C) shall be copied to the Borrower.

 

(iii)  Notwithstanding anything contained in this
Accounts Agreement or any other Financing Document to the contrary, the
Accounts Bank may rely on, and shall be protected in acting or refraining from
acting upon, any instruction, direction, notice, certificate, request or
requisition of the Borrower, the Administrative Agent or the Collateral Agent.

 

(e)         None of the Project Accounts shall go
into overdraft, and the Accounts Bank shall not comply with any request or
direction to the extent that it would cause any of the Project Accounts to do
so.

 

(f)         The Borrower hereby acknowledges that
it has irrevocably instructed each Project Party, and agrees that it shall so
instruct each future Project Party and each payor in connection with any sale
of Product, to make all payments due and payable to the Borrower under any
Project Document and in connection with any such sale of Product directly to
the Accounts Bank for deposit in, or to be credited in the manner set forth in
this Article III. The Borrower further agrees that it shall
irrevocably instruct each other Person from whom the Borrower is entitled to
receive Cash Flow or Insurance Proceeds and Condemnation Proceeds to make all
payments due and payable to the Borrower from such Person directly to the
Accounts Bank for deposit, and to be credited, in the manner set forth in this Article III.

 

(g)        The Accounts Bank shall not be charged
with knowledge of any Notice of Suspension, Default or Event of Default unless
the Accounts Bank has received such Notice of Suspension or other written
notice of such Default or Event of Default from the Administrative Agent, the
Collateral Agent or an Authorized Officer of the Borrower. The Accounts Bank
shall not be charged with the knowledge that the Conversion Date has occurred
unless it has received written notice thereof from the Administrative Agent or
from the Borrower if countersigned by the Administrative Agent.

 

25

 

(h)        The Accounts Bank shall not be charged
with the knowledge that any transfer or withdrawal from any Project Account
would result in the occurrence of a Default or Event of Default, unless it has
received written notice thereof from the Administrative Agent, the Collateral
Agent or an Authorized Officer of the Borrower.

 

(i)          Notwithstanding anything contained in
this Accounts Agreement or any other Financing Document to the contrary, the
Accounts Bank shall have no obligation to (i) make any payment, transfer
or withdrawal from any Project Account until it has received written direction
to make such payment, transfer or withdrawal from the Collateral Agent, the
Administrative Agent, or the Borrower if this Accounts Agreement explicitly
provides that any such direction may be made by the Borrower, or
(ii) determine whether any payment, transfer or withdrawal from any
Project Account made in accordance with any written direction from the
Collateral Agent, the Administrative Agent or the Borrower (if this Accounts
Agreement explicitly provides that any such direction may be made by the
Borrower) complies with the terms of this Accounts Agreement. The Accounts Bank
shall have no liability for, nor any responsibility or obligation to confirm,
the use or application by the Borrower, Administrative Agent, the Collateral
Agent or any other recipient of amounts withdrawn or transferred from any
Project Account.

 

(j)          Notwithstanding any other provision of
this Accounts Agreement or any other Financing Document (but without limiting Section
3.02(g), (h) and (i) (Deposits into and
Withdrawals from Project Accounts)), without the express prior
written consent of the Required Lenders, no amount may be withdrawn from any
Project Account if a Default or Event of Default would occur as a result of
such withdrawal.

 

(k)         On the date of each withdrawal by the
Accounts Bank from a Project Account, the Borrower shall be deemed to represent
and warrant that no Notice of Suspension is in effect and that no Default or
Event of Default would occur as a result of such withdrawal, unless the
Required Lenders have previously consented in writing to such withdrawal,
notwithstanding that a Notice of Suspension is in effect or that a Default or
Event of Default would occur as a result of such withdrawal.

 

ARTICLE IV

CONSTRUCTION ACCOUNT

 

Section 4.01           Construction Account. (a) Payments
into the Construction Account. Until (and including) the Conversion Date,
the Borrower (or, with respect to Loan proceeds, the Administrative Agent)
shall cause the following amounts to be paid into the Construction Account:

 

26

 

(i)                                     until
the Conversion Date, all equity contributions received by the Borrower in
respect of the Aberdeen II Plant;

 

(ii)                                  all
proceeds disbursed from the Bond Project Fund for the Aberdeen II Plant
pursuant to the Bond Indenture with directions to deposit such proceeds into
the Bond Proceeds Sub-Account;

 

(iii)                               all
proceeds of the Construction Loans (except (A) for any Fundings applied
directly to the payment of Debt Service or other Obligations or (B) as
otherwise applied on the Conversion Date in accordance with
Section 2.06(e) (Funding of Loans)
of the Credit Agreement);

 

(iv)                              all
damages payable (other than Delay Liquidated Damages) under the Design-Build
Agreement;

 

(v)                                 all
amounts required to be deposited into the Construction Account pursuant to Section 14.01(b)
(Contingency Reserve Account); and

 

(vi)                              all
amounts deposited into the Construction Account pursuant to Section
4.02(b)(i)(y) (Withdrawals from the Bond Proceeds
Sub-Account).

 

(b)        Withdrawals from the Construction
Account. (i)  Unless a Notice of
Suspension is in effect or a Default or Event of Default would occur as a result
of any application of funds contemplated by this Section 4.01, the
Borrower may direct the transfer or withdrawal of funds standing to the credit
of the Construction Account (A) to pay Project Costs then due and owing
strictly in accordance with the Construction Budget, (B) to pay Project
Costs relating to repayment in full on the Closing Date of Existing Plant Debt
and (C) to the extent of any additional equity provided by the Pledgors
pursuant to Section 6.01(gg) (Existing Plant Debt Payoff)
of the Credit Agreement, to pay the amount by which the repayment in full of
the Existing Plant Debt (including accrued interest) exceeds forty-seven
million Dollars ($47,000,000), in each case by delivering a Construction
Withdrawal Certificate to the Accounts Bank (with a copy to the Administrative
Agent and the Independent Engineer) which, in the case of any Loan proceeds,
shall be for application strictly in accordance with the relevant Funding
Notice (as defined in the Credit Agreement). All payments from the Construction
Account shall be made by the Accounts Bank pursuant to instructions set forth
in the relevant Construction Withdrawal Certificate directly to the payee. In
the event that the Borrower fails to deliver such a Construction Withdrawal
Certificate, the

 

27

 

Administrative
Agent is hereby authorized to direct, in writing, the Accounts Bank to transfer
or withdraw the amounts necessary to pay Project Costs that are, from time to
time, due and payable.

 

(ii)           Conversion Date. On the
Conversion Date, all amounts on deposit in or standing to the credit of the
Construction Account (other than amounts on deposit in or standing to the
credit of the Additional Capital Expenditure Sub-Account and the Bond Proceeds
Sub-Account) shall be withdrawn and such account (but not the Additional
Capital Expenditure Sub-Account) shall be terminated and closed at the written
instruction of the Borrower or the Administrative Agent, and such amounts shall
be applied in accordance with Section 2.06(e) (Funding of
Loans) of the Credit Agreement and the Construction Withdrawal
Certificate (a copy of which shall be delivered to, and shall constitute
instructions to, the Accounts Bank).

 

Section 4.02           Bond Proceeds Sub-Account.
(a)  All proceeds disbursed from the Bond Project Fund for the Aberdeen II
Plant pursuant to the Bond Indenture shall be deposited into the Bond Proceeds
Sub-Account. On the Closing Date the Second Lien Agent is required to deposit
fifteen million five hundred eighty-three thousand five hundred sixty-two
Dollars and fifty cents ($15,583,562.50) of the Original Proceeds of the Bonds
solely into the Bond Proceeds Sub-Account.

 

(b)        Withdrawals from the Bond Proceeds
Sub-Account. (i)  Unless a Notice of
Suspension is in effect or a Default or Event of Default would occur as a
result of any application of funds contemplated by this Section 4.02,
funds standing to the credit of the Bond Proceeds Sub-Account shall be
disbursed only upon delivery to the Accounts Bank of (A) a Bond Proceeds
Withdrawal Certificate (with a copy to the Administrative Agent, the
Independent Engineer and the Second Lien Agent), countersigned by each of the
Borrower and the Second Lien Agent, and, (B) an Independent Engineer’s
Certificate. All payments from the Bond Proceeds Sub-Account shall be made by
the Accounts Bank pursuant to instructions set forth in the relevant Bond
Proceeds Withdrawal Certificate either (x) directly to the payee, or (y) in the
case of a requested disbursement for Costs of the Project previously paid by or
on behalf of the Borrower, but in respect of which no Bond Proceeds Withdrawal
Certificate has been delivered previously, for transfer to the Construction
Account in an amount equal to the amount of such previous payments.

 

(ii)         Termination. On the earlier of
the Conversion Date and the Conversion Date Certain, at the written instruction
of the Second Lien Agent, all amounts on deposit in or standing to the credit
of the Bond Proceeds Sub-Account shall be paid to the Second Lien Agent for
deposit into the Bond Project Fund and application as set forth in the Bond
Indenture, and such account shall be terminated and closed. All parties to this
Accounts Agreement agree and covenant not to contest or seek to prohibit

 

28

 

the payment of
such amounts to the Second Lien Agent or assert any claim to such monies under
any theory.

 

(c)         Notices Regarding Nature of Bond
Proceeds. The Borrower and the Second Lien Agent hereby notify the parties
hereto that:

 

(i)            the initial deposit of
Original Proceeds of the Bonds referenced in Section 4.02(a) constitutes
all of the Original Proceeds of the Bonds (being $19,000,000) less $1,900,000
of such Original Proceeds which are being deposited into the Bond Debt Service
Reserve Fund, $366,000 of such Original Proceeds being deposited to the Bond
Expense Fund, and $1,136,437.50 of such Original Proceeds for the purpose of
paying interest on the Bonds during the construction period;

 

(ii)           the Bonds are being
issued with a date of issuance so there is no accrued interest and are being
sold by Dougherty & Company LLC, as underwriter, to the ultimate
purchaser(s) thereof at a price equal to the par amount thereof resulting in an
Issue Price of $19,000,000;

 

(iii)          all earnings on
investments of Original Proceeds deposited into the Bond Proceeds Sub-Account
constitute Investment Proceeds;

 

(iv)          the Original Proceeds
and Investment Proceeds (which includes investment earnings on investment
earnings) constitute Gross Proceeds of the Bonds;

 

(v)           the Gross Proceeds of
the Bonds deposited into the Bond Proceeds Sub-Account are subject to yield
restrictions as to investment as set forth in the Code, except to the extent to
which a temporary period (as defined in the Code) exists to allow for the
investment of such accounts at a yield (as defined in the Code) in excess of
the yield (as defined in the Code) on the Bonds;

 

(vi)          Excess Earnings (as
defined in the Code) on Gross Proceeds are subject to rebate to the United
States of America as set forth in the Code and tax returns are

 

29

 

required to be filed periodically as set
forth in the Code as to the calculation of such rebate;

 

(vii)       The
exclusion of interest paid on the Series 2007A Bonds from gross income of the
recipient for federal income tax purposes is dependant on continued compliance
with the requirements of the Code after issuance of the Bonds and such
compliance requirements apply to the proceeds deposited into the Bond Proceeds
Sub-Account, are not limited to matters within the control of the Issuer or the
Borrower, may be based on actual occurrences rather than reasonable
expectations of the Issuer or the Borrower at the time of issuance of the Bonds
and may result in all interest paid on the Bonds to be included in taxable
income of the recipient thereof from the date of issuance of the Bonds;

 

(viii)      Compliance
obligations with respect to the Bonds, including without limitation,
recordkeeping, may survive the termination of the Accounts Agreement and the
payment in full of the Bonds; and

 

(ix)       
References to the Code shall include the regulations, technical advice
memorandum, published rulings and private letter rulings of the Internal Revenue
Service relating to the applicable provisions of the Code.

 

(d)                         Covenants
Relating to Bond Proceeds Sub-Account.

 

(i)           Except for amounts transferred to
the Construction Account in accordance with Section 4.02(b)(i)(y), all
amounts on deposit in the Bond Proceeds Sub-Account shall be used solely for
the payment of Costs of the Project.

 

(ii)         Notwithstanding any provision herein
to the contrary, all amounts on deposit in the Bond Proceeds Sub-Account (A)
shall be invested solely at the direction of the Second Lien Agent in Cash
Equivalents, (B) shall be segregated and separated from all other amounts on
deposit pursuant to the Accounts Agreement, (C) shall not be commingled with
any amounts on deposit in any other Project Accounts, and (D) shall be
accounted for separately from all other amounts on deposit with the Accounts
Bank.

 

30

 

(iii)          Each investment of
amounts on deposit in the Bond Proceeds Sub-Account shall be purchased solely
from such amounts. No such investment shall be apportioned to or represent an
investment of monies in any other Project Account.

 

(iv)          The Accounts Bank shall
maintain complete and accurate records of all disbursements from the Bond
Proceeds Sub-Account, and shall provide monthly reports of such disbursements
together with copies of all supporting documentation to the Second Lien Agent
within 10 days from the end of each month for such month. Such obligation to
maintain records shall survive the termination of the Accounts Agreement for
the period set forth in Section 9.01 (Recordkeeping Obligation)
of the Tax Exemption Agreement.

 

(v)           The Accounts Bank shall
maintain complete and accurate records as to all investments and earnings with
such information as required by Section 9.01 (Recordkeeping
Obligation) of the Tax Exemption Agreement and provide reports to
the Second Lien Agent within 10 days from the end of each month for activity
during such month, together with copies of all back-up documentation. The
obligation to maintain such records shall survive the termination of the
Accounts Agreement for the period set forth in Section 9.01 (Recordkeeping Obligation) of the Tax Exemption Agreement.

 

(vi)          The Accounts Bank shall
not honor any claim by any other party to funds in the Bond Proceeds
Sub-Account to be disbursed and shall not so disburse such funds to any such
claimant and shall promptly notify the Second Lien Agent, the Borrower, the
Issuer and the Administrative Agent of any such claim.

 

(vii)         No disbursement shall be
made to the Borrower, or any other party, for Costs of the Project actually
paid by the Borrower or any other party more than 60 days prior to July 3,
2007, except preliminary expenditures identified in Treas. Reg. Section
1.150-2(f)(2) not exceeding $3,800,000.

 

31

 

(viii)        No party to the Accounts
Agreement other than the Second Lien Agent shall have the right to give
instructions to withdraw or use the amounts on deposit in the Bond Proceeds
Sub-Account, other than the Accounts Bank acting as agent for the Second Lien
Agent to maintain possession of such funds, or shall make any claim or commence
any action under any provision of any document, law or asserted legal right
with respect to such amounts and specifically agree that such amounts may be
used solely for the payment of Costs of the Project pursuant to the terms and
conditions of this Accounts Agreement.

 

(ix)           The delivery of the
proceeds of the Bonds, and the investment earnings thereon, to the Accounts
Bank does not constitute delivery to or possession by the Borrower and the
Borrower shall have no right of control over such funds other than to request
disbursement thereof upon a valid Written Request (as defined in the Bond
Indenture). No party to this Agreement shall assert, claim or seek a
determination that such amounts constitute part of the bankrupt estate of the
Borrower for bankruptcy or insolvency purposes. All amounts in the Bond
Proceeds Sub-Account shall be held in trust for the benefit of the Second Lien
Claimholders, subject to application to pay Costs of the Project as set forth
in Section 4.02(b)(i).

 

(x)            Once all of the
conditions in this Agreement and the relevant Bond Proceeds Withdrawal
Certificate (other than execution of such certificate by the Second Lien Agent)
to disbursement of funds from the Bond Proceeds Sub-Account have been
satisfied, then the Second Lien Agent shall execute, and deliver to the
Borrower and the Accounts Bank, such Bond Proceeds Withdrawal Certificate.

 

ARTICLE V

LIQUIDATED DAMAGES ACCOUNT

 

Section 5.01           Liquidated
Damages Account. (a)  Payments
into the Liquidated Damages Account. The Borrower shall cause all Delay
Liquidated Damages received on or prior to the Conversion Date to be paid into
the Liquidated Damages Account.

 

32

 

(b)        Withdrawals from the
Liquidated Damages Account. (i)  Payment
of Debt Service or Fixed Costs. Until (but not including) the Conversion
Date, unless a Notice of Suspension is in effect or a Default or an Event of
Default would occur as a result of any application of funds contemplated by
this Section 5.01, the Borrower may, from time to time, submit a
Liquidated Damages Transfer Certificate to the Accounts Bank to direct the
transfer or withdrawal of funds standing to the credit of the Liquidated
Damages Account to pay directly any amounts due and payable for (A) Debt
Service or (B) fixed costs or other amounts, in each case that are due and
owing and approved by the Administrative Agent and the Independent Engineer. In
the event that the Borrower fails to deliver such a Liquidated Damages Transfer
Certificate, the Collateral Agent, as directed in writing by the Administrative
Agent, is hereby authorized to direct, in writing, the Accounts Bank (with a
copy to the Borrower) to transfer or withdraw the amounts necessary to pay Debt
Service, fixed costs or other amounts that are due and owing.

 

(ii)  Conversion Date. On the Conversion
Date, the Accounts Bank shall, upon written direction from the Borrower or the
Collateral Agent, transfer any funds on deposit in or standing to the credit of
the Liquidated Damages Account to the Revenue Account.

 

ARTICLE VI

REVENUE ACCOUNT

 

Section 6.01           Revenue
Account. (a) Payments into the Revenue Account. The Borrower shall
cause the following amounts to be paid into the Revenue Account:

 

(i)            all Cash Flow;

 

(ii)           except as set forth in Section 13.01
(Extraordinary Proceeds Account), all
proceeds from the sale or disposition of any assets of the Borrower;

 

(iii)          any other income
received by or on behalf of the Borrower that is not required to be deposited
in or credited to another Project Account, or applied directly to the
Obligations, in accordance with this Accounts Agreement;

 

(iv)          any Delay Liquidated
Damages received after the Conversion Date; and

 

33

 

(v)           amounts transferred to
the Revenue Account pursuant to Section 2.06(e) (Funding of
Loans) of the Credit Agreement, Section 5.01(b)(ii) (Withdrawals from the Liquidated Damages Account), Section 9.01(b)
(Withdrawals from the Working Capital Reserve
Account) or (c) (Excess Amount in Working
Capital Reserve Account), Section 10.03 (Excess in Debt Service Reserve Account), Section
11.01(b) (Withdrawals from the Prepayment Holding Account),
Section 13.01(b)(i)(A) (Withdrawals from the
Extraordinary Proceeds Account – Asset Disposal) or (ii)(A) (Withdrawals from the Extraordinary Proceeds Account – Project Document
Termination Payments) or Section 14.01(b)(iii) (Withdrawals from the Contingency Reserve Account).

 

(b)        Withdrawals from the
Revenue Account Prior to Conversion Date. Until (but not including) the
Conversion Date, unless a Notice of Suspension is in effect or a Default or
Event of Default would occur as a result of any application of funds
contemplated by this Section 6.01(b), upon receipt of a
Pre-Conversion Date Revenue Account Withdrawal Certificate duly executed by an
Authorized Officer of the Borrower, the Accounts Bank shall, in accordance with
the directions set forth therein, cause funds held in the Revenue Account to be
withdrawn or transferred to pay the following amounts on the dates and at the
priorities indicated below:

 

(i)            first, on each Monthly Date (or, in the
case of amounts to pay Operation and Maintenance Expenses for the cost of corn,
on any date), to the Operating Account, in the amount certified by the Borrower
in such Revenue Account Withdrawal Certificate as required to pay Operation and
Maintenance Expenses that, in each such case (other than Operation and
Maintenance Expenses for the cost of corn), are or will become due and payable
during the immediately succeeding calendar month; provided, that the
aggregate amount of withdrawals (other than for amounts to pay Operation and
Maintenance Expenses for the cost of corn and natural gas) pursuant to this priority
first for all calendar months in
such Fiscal Year (or, if the Closing Date occurred during such Fiscal Year, for
all calendar months since the Closing Date), including amounts proposed to be
drawn on such Monthly Date for the immediately succeeding calendar month, does
not exceed the Permitted Budgeted Operating Expenses Level for such

 

34

 

immediately succeeding calendar month, as
certified by the Borrower in such Revenue Account Withdrawal Certificate;

 

(ii)           second,
on each Monthly Date, to the Maintenance Capital Expense Account, in the amount
certified by the Borrower in such Revenue Account Withdrawal Certificate as
necessary to pay Maintenance Capital Expenses that, in each such case, are or
will become due and payable during the immediately succeeding calendar month; provided
that such transfer shall require the approval of the Independent Engineer if
(A) such Maintenance Capital Expenses are incurred or to be incurred for
compliance with any Environmental Law or other applicable Law and
(I) would exceed five hundred thousand Dollars ($500,000) or
(II) together with all previous transfers to the Maintenance Capital
Expense Account pursuant to this clause (A) during the then current Fiscal Year
(or, if the Closing Date occurred during the current Fiscal Year, since the
Closing Date), would exceed, in the aggregate, one million Dollars
($1,000,000), or (B) such Maintenance Capital Expenses are for any other
purpose and, taken together with all previous transfers to the Maintenance
Capital Expense Account pursuant to this clause (B) during the then current
Fiscal Year (or, if the Closing Date occurred during the current Fiscal Year,
since the Closing Date), would exceed, in the aggregate, five hundred thousand
Dollars ($500,000), as certified by the Borrower in such Revenue Account
Withdrawal Certificate;

 

(iii)          third,
on any date when due and payable, to the Administrative Agent, for the account
of the Senior Secured Parties, in the amount certified by the Borrower in such
Revenue Account Withdrawal Certificate or otherwise instructed in writing to
the Accounts Bank by the Administrative Agent as necessary to pay Fees, costs
and expenses then due and payable under the Financing Documents;

 

(iv)          fourth,
on any date when due and payable, to the Administrative Agent, for the account
of the Senior Secured Parties, in the amount certified by the Borrower in

 

35

 

such Revenue Account Withdrawal Certificate
or otherwise instructed in writing to the Accounts Bank by the Administrative
Agent as necessary to pay any interest then due and payable under the Financing
Documents and any fees, expenses or Net Swap Payments owing to any Interest
Rate Protection Provider;

 

(v)           fifth,
on each Monthly Date when due and payable, to the Administrative Agent, for the
account of the Interest Rate Protection Providers, on a pro rata basis,
the amount certified by the Borrower in such Revenue Account Withdrawal
Certificate or otherwise instructed in writing to the Accounts Bank by the
Administrative Agent as payments of Swap Termination Value then due and payable
by the Borrower with respect to any Interest Rate Protection Agreements;

 

(vi)          sixth,
on each Monthly Date, when required pursuant to Section 3.10(e)(ii) of the
Credit Agreement, to the Administrative Agent in the amount certified by the
Borrower in such Revenue Account Withdrawal Certificate, as a payment of the
Working Capital Loans to ensure that there are no outstanding Working Capital
Loans for a period of ten (10) consecutive Business Days in each calendar year;

 

(vii)         seventh,
on any date when required pursuant to Section 3.10(a)(v) or
Section 3.10(e)(i) (Mandatory Prepayment)
of the Credit Agreement, or otherwise at the option of the Borrower pursuant to
Section 3.09(d)(ii) (Optional Prepayment)
of the Credit Agreement, to the Administrative Agent in the amount certified by
the Borrower in such Revenue Account Withdrawal Certificate or otherwise
instructed in writing to the Accounts Bank by the Administrative Agent, for
application as a prepayment of the Working Capital Loans;

 

(viii)        eighth,
on each Monthly Date, to the Working Capital Reserve Account, in the amount
certified by the Borrower in such Revenue Account Withdrawal Certificate or
otherwise instructed in writing to the Accounts Bank by the Administrative
Agent as equal to the difference between

 

36

 

(A) the Working Capital Reserve Required
Amount and (B) the funds on deposit in or standing to the credit of the
Working Capital Reserve Account on such Monthly Date;

 

(ix)           ninth,
on each Monthly Date, to the Contingency Reserve Account, the amount specified
in such Revenue Account Withdrawal Certificate or otherwise instructed in
writing to the Accounts Bank by the Administrative Agent as shall cause the
amount on deposit in the Contingency Reserve Account to equal the Contingency
Reserve Required Amount at such time;

 

(x)            tenth,
provided that no Default or Event of Default has occurred and is continuing, on
each Quarterly Payment Date, in an amount certified by the Borrower in such
Revenue Account Withdrawal Certificate, which amount shall not exceed fifty
percent (50%) of the funds remaining after priority ninth above, to the Persons or accounts specified in
such Revenue Account Withdrawal Certificate (including, if required to be paid
directly to any taxing authority, to such taxing authority), for payment of any
Permitted Tax Distribution;

 

(xi)           eleventh,
on each Quarterly Payment Date, to the Administrative Agent, all remaining
amounts after priority tenth, as
certified by the Borrower in such Revenue Account Withdrawal Certificate or
otherwise instructed in writing to the Accounts Bank by the Administrative
Agent, for application as a prepayment of the Construction Loans in accordance
with Section 3.10(b)(i) (Mandatory Prepayment)
of the Credit Agreement, provided that the aggregate prepayments
pursuant to this priority eleventh  shall not exceed twenty-nine million Dollars ($29,000,000);
and

 

(xii)          twelfth, on
each Quarterly Payment Date, in the amount certified by the Borrower in such
Revenue Account Withdrawal Certificate or otherwise instructed in writing to
the Accounts Bank by the Administrative Agent, as a prepayment of the
Construction Loans in accordance with Section 3.10(b)(i) (Mandatory
Prepayment) of the Credit Agreement and, provided that no Default or
Event of

 

37

 

Default has occurred and is continuing, for
distribution to the Pledgors, in amounts such that the ratio of Aggregate
Pre-Conversion Cash Sweeps to Aggregate Pre-Conversion Distributions is equal
to 60:40, provided, that if sufficient amounts are not available at this
priority for prepayment of the Construction Loans in order for such ratio to be
achieved, then all such amounts shall be applied as a prepayment of the
Construction Loans in accordance with Section 3.10(b)(i) (Mandatory
Prepayment) of the Credit Agreement.

 

(c)         Withdrawals from the
Revenue Account On and After the Conversion Date. Commencing on (and
including) the Conversion Date, unless a Notice of Suspension is in effect or a
Default or Event of Default would occur as a result of any application of funds
contemplated by this Section 6.01(c), upon receipt of a
Post-Conversion Date Revenue Account Withdrawal Certificate duly executed by an
Authorized Officer of the Borrower, the Accounts Bank shall, in accordance with
the directions set forth therein, cause funds held in the Revenue Account to be
withdrawn or transferred to pay the following amounts on the dates and at the
priorities indicated below:

 

(i)            first, on each Monthly Date (or, in the
case of amounts to pay Operation and Maintenance Expenses for the cost of corn,
on any date), to the Operating Account, the amount certified by the Borrower in
such Revenue Account Withdrawal Certificate as required to pay Operation and
Maintenance Expenses that, in each such case (other than Operation and
Maintenance Expenses for the cost of corn), are or will become due and payable
during the immediately succeeding calendar month; provided, that the
aggregate amount of withdrawals (other than for amounts to pay Operation and
Maintenance Expenses for the cost of corn and natural gas) pursuant to this priority
first and to priority first of Section 6.01(b) for all calendar months
in such Fiscal Year (or, if the Closing Date occurred during such Fiscal Year,
for all calendar months since the Closing Date), including amounts proposed to
be drawn on such Monthly Date for the immediately succeeding calendar month, does
not exceed the Permitted Budgeted Operating Expenses Level for such immediately
succeeding calendar month, as certified by the Borrower in such Revenue Account
Withdrawal Certificate;

 

38

 

(ii)           second,
on each Monthly Date, to the Maintenance Capital Expense Account, in the amount
certified by the Borrower in such Revenue Account Withdrawal Certificate as
necessary to pay Maintenance Capital Expenses that, in each such case, are or
will become due and payable during the immediately succeeding calendar month; provided
that such transfer shall require the approval of the Independent Engineer if
(A) such Maintenance Capital Expenses are incurred or to be incurred for
compliance with any Environmental Law or other applicable Law and
(I) would exceed five hundred thousand Dollars ($500,000) or
(II) together with all previous transfers to the Maintenance Capital
Expense Account pursuant to this clause (A) during the then current Fiscal
Year, would exceed, in the aggregate, one million Dollars ($1,000,000), or
(B) such Maintenance Capital Expenses are for any other purpose and, taken
together with all previous transfers to the Maintenance Capital Expense Account
pursuant to this clause (B) during the then current Fiscal Year, would exceed,
in the aggregate, five hundred thousand Dollars ($500,000), as certified by the
Borrower in such Revenue Account Withdrawal Certificate;

 

(iii)          third,
on any date when due and payable, to the Administrative Agent, for the account of
the Senior Secured Parties, in the amount certified by the Borrower in such
Revenue Account Withdrawal Certificate or otherwise instructed in writing to
the Accounts Bank by the Administrative Agent as necessary to pay Fees, costs
and expenses then due and payable under the Financing Documents;

 

(iv)          fourth,
on any date when due and payable, to the Administrative Agent, for the account
of the Senior Secured Parties, in the amount certified by the Borrower in such
Revenue Account Withdrawal Certificate or otherwise instructed in writing to
the Accounts Bank by the Administrative Agent as necessary to pay any interest
then due and payable under the Financing Documents and any fees, expenses or
Net Swap Payments owing to any Interest Rate Protection Provider;

 

39

 

(v)           fifth,
on each Monthly Date, when required pursuant to Section 3.10(e)(ii) of the
Credit Agreement, to the Administrative Agent in the amount certified by the
Borrower in such Revenue Account Withdrawal Certificate, as a payment of the
Working Capital Loans to ensure that there are no outstanding Working Capital
Loans for a period of ten (10) consecutive Business Days in each calendar year;

 

(vi)          sixth,  on any date when required pursuant to Section 3.10(a)(v) or
Section 3.10(e)(i) (Mandatory Prepayment)
of the Credit Agreement, or otherwise at the option of the Borrower pursuant to
Section 3.09(d)(ii) (Optional Prepayment)
of the Credit Agreement, to the Administrative Agent in the amount certified by
the Borrower in such Revenue Account Withdrawal Certificate or otherwise
instructed in writing to the Accounts Bank by the Administrative Agent, for
application as a prepayment of the Working Capital Loans;

 

(vii)         seventh,
on each Quarterly Payment Date, to pay to the Administrative Agent, for the
account of the Senior Secured Parties, on a pro  rata basis, the
amount certified by the Borrower in such Revenue Account Withdrawal Certificate
or otherwise instructed in writing to the Accounts Bank by the Administrative
Agent as (A) principal amounts due and payable with respect to the Term
Loans and, on the Working Capital Loan Maturity Date, with respect to the
Working Capital Loans, (B) payments of Swap Termination Value then due and
payable by the Borrower with respect to any Interest Rate Protection
Agreements;

 

(viii)        eighth,
on each Monthly Date, to the Working Capital Reserve Account, in the amount
certified by the Borrower in such Revenue Account Withdrawal Certificate or
otherwise instructed in writing to the Accounts Bank by the Administrative
Agent as equal to the difference between (A) the Working Capital Reserve
Required Amount and (B) the funds on deposit in or standing to the credit
of the Working Capital Reserve Account on such Monthly Date;

 

40

 

(ix)           ninth,
on each Monthly Date, to the Debt Service Reserve Account, in the amount
certified by the Borrower in such Revenue Account Withdrawal Certificate or
otherwise instructed in writing to the Accounts Bank by the Administrative
Agent as equal to the difference between (A) the Debt Service Reserve
Required Amount and (B) the funds on deposit in or standing to the credit
of the Debt Service Reserve Account (including the Stated Amount of any Debt
Service Reserve Letter of Credit) on such Monthly Date;

 

(x)            tenth, on
each Monthly Date until the expiration of the Warranty Period, to the
Contingency Reserve Account, the amount certified by the Borrower in such
Revenue Account Withdrawal Certificate or otherwise instructed in writing to
the Accounts Bank by the Administrative Agent as shall cause the amount on
deposit in the Contingency Reserve Account to equal the Contingency Reserve
Required Amount at such time;

 

(xi)           eleventh,
provided that no Material Default or Event of Default has occurred and is
continuing, on each Quarterly Payment Date, to the Second Lien Agent, for the
account of the Second Lien Claimholders, in the amount certified in writing by
the Borrower (with a copy to the Administrative Agent and the Second Lien
Agent) as Current Priority Subordinated Interest for the Quarterly Period
ending on such Quarterly Payment Date;

 

(xii)          twelfth,
once the Pre-Conversion Prepayment Target has been achieved, on each Quarterly
Payment Date, to the Administrative Agent in the amount certified by the
Borrower in such Revenue Account Withdrawal Certificate or otherwise instructed
in writing to the Accounts Bank by the Administrative Agent, for application as
a prepayment of the Term Loans in accordance with Section 3.10(b)(ii) (Mandatory Prepayment) of the Credit Agreement in an amount
equal to sixty percent (60%) of the cash remaining in the Revenue Account
after the transfer required (if any) pursuant to priority eleventh;

 

41

 

(xiii)         thirteenth,
only after the Notice of Security Discharge Date has been delivered, on each
January 1 and July 1, to the Second Lien Agent, for the account of the Second
Lien Claimholders, on a pro  rata basis, as and in the amount certified
in writing by the Borrower as principal amounts due and payable with respect to
the Subordinated Debt;

 

(xiv)        fourteenth,
provided that no Default or Event of Default has occurred and is continuing, on
each Quarterly Payment Date, in an amount certified by the Borrower in such
Revenue Account Withdrawal Certificate to the Persons or accounts specified in
such Revenue Account Withdrawal Certificate (including, if required to be paid
directly to any taxing authority, to such taxing authority) for payment of any
Permitted Tax Distribution, provided that prior to achievement of the
Pre-Conversion Prepayment Target no more than 50% of the cash available at this
priority fourteenth shall be applied for such
Permitted Tax Distribution;

 

(xv)         fifteenth,
to the Administrative Agent in the amount certified by the Borrower in such
Revenue Account Withdrawal Certificate or otherwise instructed in writing to
the Accounts Bank by the Administrative Agent:

 

(A)      on each Quarterly Payment Date until the
Pre-Conversion Prepayment Target has been achieved, for application as a
prepayment of the Term Loans in accordance with Section 3.10(b)(ii) (Mandatory
Prepayment) of the Credit Agreement in an amount equal to the cash remaining in
the Revenue Account after the transfer required (if any) pursuant to priority
fourteenth, provided
that the aggregate prepayments pursuant to priority eleventh of Section 6.01(b) and
this priority fifteenth
shall not exceed twenty-nine million Dollars ($29,000,000), and

 

(B)       on the date on which the Pre-Conversion
Prepayment Target is achieved, for application as a prepayment of the Term
Loans in an amount equal to 60% of the cash remaining in the Revenue Account
after the transfer required (if any) pursuant to subsection (A) above;

 

42

 

(xvi)        sixteenth, on
each Quarterly Payment Date, to the Administrative Agent, in the amount
certified by the Borrower in such Revenue Account Withdrawal Certificate or
otherwise instructed in writing to the Accounts Bank by the Administrative
Agent, for application as a prepayment of the Term Loans in accordance with
Section 3.10(b)(ii) (Mandatory Prepayment)
of the Credit Agreement in an amount such that after such prepayment the
then-outstanding principal amount of the Term Loans is equal to the Target
Balance Amount for such Quarterly Payment Date;

 

(xvii)       seventeenth,
on each Quarterly Payment Date (A) if the Historical Debt Service Coverage
Ratio as of such Quarterly Payment Date is less than 1.5:1.0, to the Administrative
Agent, all amounts on deposit in or standing to the credit of the Revenue
Account after the transfer required to be made pursuant to priority sixteenth, for application as a prepayment of the Term
Loans in accordance with Section 3.10(c) (Mandatory
Prepayment) of the Credit Agreement, as certified by the Borrower in
such Revenue Account Withdrawal Certificate or instructed in writing to the
Accounts Bank by the Administrative Agent, or (B) if the Historical Debt Service Coverage Ratio as of such
Quarterly Payment Date is greater than or equal to 1.5:1.0 and the
Prospective Debt Service Coverage Ratio
as of such Quarterly Payment Date is less than 1.5:1.0, as certified by
the Borrower in such Revenue Account Withdrawal Certificate or instructed in writing
to the Accounts Bank by the Administrative Agent, to the Prepayment Holding
Account, all amounts on deposit in or standing to the credit of the Revenue
Account after the transfer required pursuant to priority sixteenth;

 

(xviii)      eighteenth, only after the Notice of Security Discharge
Date, on each January 1 and July 1, to the Second Lien Agent, for the
account of the Second Lien Claimholders, on a pro  rata basis, as
and in the amount certified by the Borrower in such Revenue Account Withdrawal
Certificate to fund the Bond Revenue Fund, which amount shall be an amount
certified by the Borrower;

 

43

 

(xix)         nineteenth,
on each Quarterly Payment Date, subject to the satisfaction of the conditions
set forth in Section 7.02(s) (Negative Covenants -
Restricted Payments) of the Credit Agreement, in the amount
certified by an Authorized Officer of the Borrower in the Restricted Payment
Certificate, to the Persons or accounts specified in the Restricted Payment Certificate,
for the payment of interest, fees, expenses and other amounts (including
amounts to replenish the Bond Debt Service Reserve Fund or the “Rebate Fund”
(as defined in the Bond Indenture) pursuant to the Bond Indenture) then due and
owing with respect to the Subordinated Debt; and

 

(xx)          twentieth,
subject to the satisfaction of the conditions set forth in Section 7.02(s)
(Negative Covenants—Restricted Payments)
of the Credit Agreement, on, or within thirty (30) days following, each
Quarterly Payment Date, as and in the amount certified by an Authorized Officer
of the Borrower in a Restricted Payment Certificate.

 

ARTICLE VII

OPERATING ACCOUNT

 

Section 7.01           Operating
Account. (a)  Payments into the
Operating Account. Funds shall be deposited into the Operating Account
pursuant to priority first  of Section 6.01(b) (Revenue Account) and priority first
of Section 6.01(c) (Revenue
Account).

 

(b)        Withdrawals from the
Operating Account. Unless a Notice of Suspension is in effect or a Default
or Event of Default would occur as a result of any application of funds
contemplated hereby, and so long as adequate funds are then available in the
Operating Account, the Borrower:

 

(i)            may, by written
instruction to the Accounts Bank (with a copy to the Collateral Agent and the
Administrative Agent), withdraw or transfer funds from the Operating Account
from time to time as may be necessary to pay directly any amounts owed by the
Borrower for Operation and Maintenance Expenses; and

 

44

 

(ii)           may direct the transfer
of funds from time to time to the Local Accounts, with respect to which a
Blocked Account Agreement has been executed and is in full force and effect, by
delivery of an Operating Account Withdrawal Certificate to the Accounts Bank.

 

(c)         The Borrower shall ensure
that the funds on deposit in and standing to the credit of all Local Accounts
do not exceed, in the aggregate at any one time, two hundred thousand Dollars
($200,000).

 

ARTICLE VIII

MAINTENANCE CAPITAL EXPENSE ACCOUNT

 

Section 8.01           Maintenance
Capital Expense Account. (a) Payments into the Maintenance Capital
Expense Account. Funds shall be deposited into the Maintenance Capital
Expense Account pursuant to priority second
of Section 6.01(b) (Revenue Account)
and priority second of Section 6.01(c)
(Revenue Account).

 

(b)        Withdrawals from the
Maintenance Capital Expense Account. Unless a Notice of Suspension is in
effect or a Default or Event of Default would occur as a result of any
application of funds contemplated hereby, and so long as adequate funds are
then available in the Maintenance Capital Expense Account, the Borrower may, by
written instruction to the Accounts Bank (with a copy to the Administrative
Agent), withdraw or transfer funds from the Maintenance Capital Expense Account
from time to time as may be necessary to pay directly any amounts owed by the
Borrower for Maintenance Capital Expenses in accordance with the most recent
Revenue Account Withdrawal Certificate.

 

ARTICLE IX

WORKING CAPITAL RESERVE ACCOUNT

 

Section 9.01           Working
Capital Reserve Account. (a)  Payments
into the Working Capital Reserve Account. Funds shall be deposited into the
Working Capital Reserve Account in accordance with priority eighth of Section 6.01(b) (Revenue Account), priority eighth
of Section 6.01(c) (Revenue
Account), priority third of
Section 3.09(d)(ii) (Optional
Prepayment) of the Credit Agreement and priority fourth of Section 3.10(g) (Mandatory Prepayment) of the Credit
Agreement. Amounts deposited into the Working Capital Reserve Account pursuant
to priority second of
Section 3.09(d)(ii) (Optional
Prepayment) of the Credit Agreement and priority third of

 

45

 

Section
3.10(g) (Mandatory Prepayment) of
the Credit Agreement shall be deposited into the LC Cash Collateral
Sub-Account.

 

(b)        Withdrawals from the
Working Capital Reserve Account. Unless a Notice of Suspension is in effect
or a Default or Event of Default would occur as a result of any application of
funds contemplated hereby, the Borrower may direct, by delivery of a Working
Capital Reserve Transfer Certificate to the Accounts Bank (with a copy to the
Administrative Agent), the transfer or withdrawal of amounts standing to the
credit of the Working Capital Reserve Account (other than amounts standing to
the credit of the LC Cash Collateral Sub-Account) to the Revenue Account for:

 

(i)            amounts due and owing
for Operation and Maintenance Expenses, as certified by the Borrower in such
Working Capital Reserve Transfer Certificate, but only to the extent that
adequate funds are not available for the payment of such Operation and
Maintenance Expenses in the Operating Account.

 

(ii)           amounts due and owing
for Maintenance Capital Expenses, as certified by the Borrower in such Working
Capital Reserve Transfer Certificate, but only to the extent that adequate
funds are not available for the payment of such Maintenance Capital Expenses in
the Maintenance Capital Expense Account.

 

(c)         Excess Amount in
Working Capital Reserve. If, on any Quarterly Payment Date, the funds on
deposit in or standing to the credit of the Working Capital Reserve Account
(other than amounts standing to the credit of the LC Cash Collateral
Sub-Account) are in excess of the Working Capital Reserve Required Amount,
unless a Notice of Suspension is in effect or a Default or Event of Default
would occur as a result of such transfer, the Borrower may direct, by delivery
of a Working Capital Reserve Transfer Certificate to the Accounts Bank (with a
copy to the Administrative Agent), the transfer to the Revenue Account of an
amount equal to the difference between (x) the aggregate amount of all
funds on deposit in or standing to the credit of the Working Capital Reserve
Account and (y) the Working Capital Reserve Required Amount, as certified
by the Borrower and confirmed by the Administrative Agent in such Working
Capital Reserve Transfer Certificate.

 

(d)           Following the funding of the LC Cash
Collateral Sub-Account, the Borrower or the Administrative Agent may direct in
writing, in the case of the Borrower by delivery of a Working Capital Reserve
Transfer Certificate to the Accounts Bank (with a copy to the Administrative
Agent), the transfer of amounts standing to the credit

 

46

 

of the LC Cash
Collateral Sub-Account to pay to the Administrative Agent, for the account of
the Working Capital Lenders, the amount of any Working Capital Loans resulting
from draws on the Letters of Credit.

 

(e)         If at any time the amounts
standing to the credit of the LC Cash Collateral Sub-Account are in excess of
the aggregate Maximum Available Amounts under all Letters of Credit then
outstanding, the Borrower may direct, by delivery of a Working Capital Reserve
Transfer Certificate to the Accounts Bank (with a copy to the Administrative
Agent), the transfer to the Revenue Account of an amount equal to the
difference between (x) the aggregate total amount of all funds on deposit
in or standing to the credit of the LC Cash Collateral Sub-Account and
(y) the aggregate of all such Maximum Available Amounts, as certified by
the Borrower and confirmed by the Administrative Agent in such Working Capital
Reserve Transfer Certificate.

 

ARTICLE X

DEBT SERVICE RESERVE ACCOUNT

 

Section 10.01         Debt
Service Reserve Account. (a)  Payments
into the Debt Service Reserve Account. Funds shall be deposited into the
Debt Service Reserve Account:

 

(i)            on the Conversion
Date, pursuant to priority first of
Section 2.06(e) (Funding of Loans)
of the Credit Agreement; and

 

(ii)           pursuant to priority
ninth of Section 6.01(c)(Revenue Account).

 

provided that,
notwithstanding the foregoing, in lieu of cash, the Borrower may cause to be
delivered to the Accounts Bank one or more Debt Service Reserve Letters of
Credit (each of which shall be accompanied by a Debt Service LC Waiver Letter),
the Stated Amounts of which shall be credited to the Debt Service Reserve
Account.

 

(b)        Withdrawals from the
Debt Service Reserve Account. On any date when the amounts available at priorities
third, fourth
and  seventh  as set forth in Section 6.01(c) (Revenue
Account) are insufficient to pay Debt Service then due and
owing, the Accounts Bank shall (upon written notification from the Borrower or
the Administrative Agent, with a copy to the Administrative Agent or the
Borrower, as applicable, setting forth the amount of such shortfall) withdraw
funds from the Debt Service Reserve Account to pay to the Administrative Agent,
for the account of the Senior Secured Parties, the amount of such shortfall of
the Debt Service then due and

 

47

 

payable, which
funds shall be applied by the Administrative Agent in the order of priority set
forth in priorities third, fourth and seventh  in Section 6.01(c) (Revenue Account). The Accounts Bank shall promptly
notify the Administrative Agent and the Collateral Agent if, at any time, there
are insufficient funds (without taking into account any Debt Service Reserve
Letters of Credit) standing to the credit of the Debt Service Reserve Account
to make the payments required under this Section 10.01(b).

 

Section 10.02         Debt
Service Letter of Credit. Upon the written instruction of the
Administrative Agent (which will promptly thereafter send a copy of such
instruction to the Borrower), the Collateral Agent shall make a demand in
accordance with the provisions of each Debt Service Reserve Letter of Credit,
draw all or a portion of the Stated Amount of any Debt Service Reserve Letter
of Credit that has been delivered in accordance with this Accounts Agreement,
and deposit the funds received into the Debt Service Reserve Account. The
Administrative Agent shall instruct the Collateral Agent to make such demand:

 

(a)         if amounts are required
to be withdrawn from the Debt Service Reserve Account pursuant to Section 10.01(b),
and the amounts to be so withdrawn exceed the funds, not including the
aggregate Stated Amounts of the Debt Service Reserve Letters of Credit standing
to the credit of the Debt Service Reserve Account, in the amount necessary to
make the payments of Debt Service then due and payable;

 

(b)        in full, if the commercial
bank that issued such Debt Service Reserve Letter of Credit is no longer an
Acceptable Bank; or

 

(c)         in full, if (A) no
less than thirty (30) days prior to the expiry date of each such Debt
Service Reserve Letter of Credit, the Collateral Agent has not received notice
from the issuing bank that it will extend such expiry date or renew such Debt
Service Reserve Letter of Credit and no substitute or replacement letter of
credit satisfying the requirements of a “Debt Service Reserve Letter of Credit”
has been delivered to the Collateral Agent to replace the Stated Amount of such
expiring Debt Service Reserve Letter of Credit and (B) excluding the
Stated Amount of such Debt Service Reserve Letter of Credit and the Stated
Amount of any other Debt Service Reserve Letter of Credit that similarly could
be drawn, an amount equal to the Debt Service Reserve Required Amount is not on
deposit in or standing to the credit of the Debt Service Reserve Account on the
date of such drawing.

 

Section 10.03         Excess
in Debt Service Reserve Account. If, on any Quarterly Payment Date, the
funds on deposit in or standing to the credit of the Debt Service Reserve
Account (taking into account the Stated Amounts of any Debt Service Reserve
Letters of Credit standing to the credit of the Debt Service Reserve Account)
are in excess of the Debt Service Reserve Required Amount, unless a Notice of
Suspension is

 

48

 

in effect or a
Default or Event of Default would occur as a result of such transfer, the
Borrower may direct, by delivery of a Debt Service Reserve Release Certificate
to the Accounts Bank (with a copy to the Administrative Agent), the transfer to
the Revenue Account of an amount equal to the difference between (x) the
aggregate total amount of all funds on deposit in or standing to the credit of
the Debt Service Reserve Account (taking into account the Stated Amounts of any
Debt Service Reserve Letters of Credit standing to the credit of the Debt
Service Reserve Account) and (y) the Debt Service Reserve Required Amount,
as certified by the Borrower and confirmed by the Administrative Agent in such
Debt Service Reserve Release Certificate; provided, that if such
difference is positive due to the posting of a Debt Service Reserve Letter of
Credit to the Debt Service Reserve Account to replace or substitute for cash
then on deposit, such amount may be distributed directly to any Pledgor or such
other Affiliate of the Borrower who provided such Debt Service Reserve Letter
of Credit (and such distribution shall not be treated as a Restricted Payment
for purposes of this Accounts Agreement).

 

ARTICLE XI

PREPAYMENT HOLDING ACCOUNT

 

Section 11.01         Prepayment
Holding Account. (a)  Payments
into the Prepayment Holding Account. Funds shall be deposited into the
Prepayment Holding Account pursuant to priority seventeenth of Section 6.01(c) (Revenue Account).

 

(b)        Withdrawals from the
Prepayment Holding Account. The Accounts Bank shall withdraw funds from the
Prepayment Holding Account upon receipt of written instructions from the
Borrower or the Administrative Agent in accordance with the terms set forth
below.

 

(i)            Excess Amounts in
Prepayment Holding Account. If, on any Quarterly Payment Date, each of the
Historical Debt Service Coverage Ratio and the Prospective Debt Service
Coverage Ratio are greater than or equal to 1.5:1.0 then, subject to the
satisfaction of the conditions set forth in Section 7.02(s) (Negative Covenants - Restricted Payments) of the Credit
Agreement, the Borrower may submit a Restricted Payment Certificate to the
Accounts Bank directing the transfer of amounts on deposit in and standing to
the credit of the Prepayment Holding Account for deposit into the Revenue
Account.

 

49

 

(ii)           Mandatory Prepayment.
If, on any Quarterly Payment Date, the Historical Debt Service Coverage Ratio
is less than 1.5:1.0 then all amounts on deposit in and standing to the
credit of the Prepayment Holding Account shall, upon the written instruction of
the Borrower or the Administrative Agent, be paid to the Administrative Agent,
for the account of the Lenders, in the amount certified by the Borrower in such
Revenue Account Withdrawal Certificate or otherwise instructed in writing to
the Accounts Bank by the Administrative Agent, as a prepayment of the Term
Loans (as defined in the Credit Agreement) in accordance with
Section 3.10(c) (Mandatory Prepayment)
of the Credit Agreement.

 

(iii)          Optional Prepayment.
On any Interest Payment Date, any amounts on deposit in and standing to the
credit of the Prepayment Holding Account may, at the sole option and upon the
written instruction of the Borrower, be paid to the Administrative Agent for
the account of the Lenders, as a prepayment of the Loans in the amount
certified by the Borrower in such Revenue Account Withdrawal Certificate, in
accordance with Section 3.09 (Optional Prepayment)
of the Credit Agreement.

 

ARTICLE XII

INSURANCE AND CONDEMNATION PROCEEDS ACCOUNTS

 

Section 12.01         Insurance
and Condemnation Proceeds Accounts. (a) 
Payments into the Insurance and Condemnation Proceeds Accounts. Until
the Security Discharge Date, the Borrower shall cause all Insurance Proceeds
and all Condemnation Proceeds with respect to any Aberdeen Plant to be
deposited in or credited to the Aberdeen Insurance and Condemnation Proceeds
Account, and with respect to the Huron Plant to be deposited in or credited to
the Huron Insurance and Condemnation Proceeds Account.

 

(b)        Withdrawals from the
Insurance and Condemnation Proceeds Accounts. The Borrower shall not make,
direct, or request the Accounts Bank to make, any withdrawals from any
Insurance and Condemnation Proceeds Account except as permitted by this Article
XII and provided that no Notice of Suspension has been delivered that has
not been withdrawn and no Default or Event of Default would occur as a result
of such transfer or withdrawal.

 

50

 

(c)         Amounts of $2,500,000
or Less. The Borrower may apply any Insurance Proceeds and Condemnation
Proceeds deposited into any Insurance and Condemnation Proceeds Account in
amounts less than or equal to two million five hundred thousand Dollars
($2,500,000) arising from any one claim or any series of claims relating to the
same occurrence directly for the replacement or repair of damaged assets to
which such Insurance Proceeds or Condemnation Proceeds, as the case may be,
relate; provided, that the Borrower delivers to the Administrative Agent
and the Accounts Bank, no fewer than five (5) Business Days in advance of any
such proposed transfers or withdrawals from such Insurance and Condemnation
Proceeds Account, an Insurance and Condemnation Proceeds Request Certificate
setting forth proposed instructions for such withdrawals or transfers. An
Authorized Officer of the Borrower shall certify that each Insurance and
Condemnation Proceeds Request Certificate is being delivered, and the withdrawals
specified therein are being directed, in accordance with this Accounts
Agreement and the other Transaction Documents, and shall also certify that the
directed withdrawals or transfers will be used exclusively for repair or
replacement of damaged assets to which such Insurance Proceeds or Condemnation
Proceeds, as the case may be, relate.

 

(d)        Amounts in Excess of
$2,500,000 but not Exceeding $15,000,000. Any Insurance Proceeds and
Condemnation Proceeds deposited into any Insurance and Condemnation Proceeds
Account in amounts greater than two million five hundred thousand Dollars
($2,500,000) but less than or equal to fifteen million  Dollars ($15,000,000) arising from any one
claim or any series of claims relating to the same occurrence shall:

 

(i)            be applied for repair
or replacement of damaged assets to which such Insurance Proceeds or
Condemnation Proceeds, as the case may be, relate in accordance with the
Borrower’s direction in an Insurance and Condemnation Proceeds Request
Certificate delivered to the Administrative Agent and the Accounts Bank if,
within sixty (60) days after the occurrence of the Casualty Event or Event
of Taking (or such later date as may be acceptable to the Administrative Agent)
giving rise to such proceeds, the Borrower delivers a Restoration or
Replacement Plan to the Administrative Agent and the Independent Engineer with
respect to such Casualty Event or Event of Taking that is based upon, and
accompanied by, each of the following:

 

(A)      a description of the nature and extent of such
Casualty Event or Event of Taking, as the case may be;

 

51

 

(B)       a bona fide assessment (from a contractor chosen
by the Borrower and reasonably acceptable to the Independent Engineer) of the
estimated cost and time needed to restore or replace the Project to
substantially the same value and general performance capability as prior to
such event;

 

(C)       reasonably satisfactory evidence that such
Insurance Proceeds or Condemnation Proceeds, as the case may be, are sufficient
to make the necessary restorations or replacements;

 

(D)       a certificate of an Authorized Officer of the
Borrower certifying that (1) all work contemplated to be done under the
Restoration or Replacement Plan is reasonably expected to be done within the
time periods, if any, required under any Project Document; (2) all
Governmental Approvals necessary to perform the work have been obtained (or are
reasonably expected to be obtained without undue delay); and (3) the
Project once repaired/restored will continue to perform at the annual levels
set forth in the then-current Operating Budget with respect to production
volume, yield and utility consumption (or other levels approved by the Required
Lenders);

 

(E)       the Casualty Event or Event of Taking, as the
case may be (including the non-operation of the Project during any period of
repair or restoration) has not resulted or would not reasonably be expected to
result in a default giving rise to a termination of, or a materially adverse
modification of, one or more of the Governmental Approvals or Project Documents
(or, in the case of a default giving rise to a termination of a Project
Document, an agreement replacing such Project Document, in form and substance,
and with a counterparty, reasonably satisfactory to the Required Lenders, is
entered into (together with all applicable Ancillary Documents) within
forty-five (45) days thereof (or, such termination could not reasonably be
expected to result in a Material Adverse Effect, within sixty (60) days
thereof));

 

52

 

(F)       after taking into consideration the availability
of such Insurance Proceeds or Condemnation Proceeds, as applicable, and
Business Interruption Insurance Proceeds and any additional funded equity
contributions for the purpose of covering such costs, there will be adequate
amounts available to pay all ongoing expenses including Debt Service during the
period of repair or restoration;

 

(G)       construction contractors and vendors of
recognized skill, reputation and creditworthiness and reasonably acceptable to
the Administrative Agent and the Independent Engineer have executed
reconstruction contracts, purchase orders or similar arrangements for the
repair, rebuilding or restoration on terms and conditions reasonably acceptable
to the Administrative Agent and the Independent Engineer; and

 

(H)       a confirmation by the Independent Engineer of
its agreement with the matters set forth in Section 12.01(d)(i)(A)-(G)
and its approval of such Restoration or Replacement Plan, which approval will
not be unreasonably withheld, conditioned or delayed; or

 

(ii)           Mandatory Prepayment.
If (A) the Borrower does not deliver such Restoration or Replacement Plan
and the accompanying deliveries referred to in Section 12.01(d)(i)
within such sixty (60) day period, or (B) after such Restoration or
Replacement Plan is effected, there are excess Insurance Proceeds or
Condemnation Proceeds, as the case may be, on deposit in or standing to the
credit of such Insurance and Condemnation Proceeds Account, the Accounts Bank
shall on the next succeeding Quarterly Payment Date thereafter, upon the
written instruction of the Borrower or the Administrative Agent, transfer to
the Administrative Agent, for the account of the Lenders, an amount equal to
such Insurance Proceeds or Condemnation Proceeds, as the case may be, for
mandatory prepayment of the Loans in accordance with Section 3.10(a)(i) or
(ii) (as applicable) (Mandatory Prepayment)
of the Credit Agreement.

 

53

 

(e)         Amounts Exceeding
$15,000,000. Any Insurance Proceeds or Condemnation Proceeds deposited into
any Insurance and Condemnation Proceeds Account in amounts greater than fifteen
million Dollars ($15,000,000) arising from any one claim or any series of
claims relating to the same occurrence shall be applied, at the written
instruction of the Administrative Agent, to the Administrative Agent to prepay
the Loans or for repair or replacement of damaged assets, as determined by the
Required Lenders in their sole discretion.

 

ARTICLE XIII

EXTRAORDINARY PROCEEDS ACCOUNT

 

Section 13.01         Extraordinary
Proceeds Account. (a)  Payments
into the Extraordinary Proceeds Account. Until the Security Discharge Date,
the Borrower shall cause (i) all proceeds of asset disposals (other than
proceeds from the sale of Products) that will not be used for replacement in
accordance with Section 7.02(f)(i) (Negative
Covenants — Asset Dispositions) of the Credit Agreement and
(ii) all Project Document Termination Payments to be deposited into the
Extraordinary Proceeds Account.

 

(b)        Withdrawals from the
Extraordinary Proceeds Account. (i)  Asset Disposal. If at any time proceeds of an asset
disposal are deposited into the Extraordinary Proceeds Account, then on any
Quarterly Payment Date:

 

(A)      if such proceeds are in an amount in the
aggregate of less than three million Dollars ($3,000,000) (taken together with
any other proceeds of asset disposals deposited in the Extraordinary Proceeds
Account during the then-current Fiscal Year) the Borrower may submit an
Extraordinary Proceeds Release Certificate to the Accounts Bank, certified by
an Authorized Officer of the Borrower, directing the transfer of such funds to
the Revenue Account; and

 

(B)       if such proceeds are in an amount equal to or
greater than three million Dollars ($3,000,000) (taken together with any other
proceeds of asset disposals deposited in the Extraordinary Proceeds Account
during the then-current Fiscal Year), such amounts in excess of three million
Dollars ($3,000,000) shall be transferred, upon the written instruction of the
Borrower or the Administrative Agent, to the Administrative Agent for
application as a prepayment of the Loans in

 

54

 

accordance with Section 3.10(a)(iv) (Mandatory Prepayment) of the Credit Agreement.

 

(ii)           Project Document
Termination Payments. If at any time Project Document Termination Payments
are deposited into the Extraordinary Proceeds Account, then on any Quarterly
Payment Date:

 

(A)      if such Project Document Termination Payments are
in an amount in the aggregate of less than three million Dollars ($3,000,000)
(taken together with any other Project Document Termination Payments received
during the then-current Fiscal Year), the Borrower may submit an Extraordinary
Proceeds Release Certificate to the Accounts Bank, certified by an Authorized
Officer of the Borrower, directing the transfer of such Project Document
Termination Payments to the Revenue Account; and

 

(B)       if such Project Document Termination Payments
are in an amount equal to or greater than three million Dollars ($3,000,000)
(taken together with any other Project Document Termination Payments received
during the then-current Fiscal Year), such amounts in excess of three million
Dollars ($3,000,000) shall be transferred, upon the written instruction of the
Borrower or the Administrative Agent, to the Administrative Agent for
application as a prepayment of the Loans in accordance with
Section 3.10(a)(iii) (Mandatory
Prepayment) of the Credit Agreement.

 

ARTICLE XIV

CONTINGENCY RESERVE ACCOUNT

 

Section 14.01         Contingency
Reserve Account. (a) Payments into the Contingency Reserve Account. Funds
shall be deposited into the Contingency Reserve Account pursuant to priority
ninth of Section 6.01(b)
(Revenue Account) and
priority third of
Section 2.06(e) (Funding of Loans)
of the Credit Agreement,

 

(b)        Withdrawals from the
Contingency Reserve Account. Unless a Notice of Suspension is in effect or
a Default or Event of Default would occur as a result of any application of
funds contemplated hereby, the Borrower may direct, by

 

55

 

delivery of a
Contingency Reserve Transfer Certificate to the Accounts Bank (with a copy to
the Administrative Agent) or the Administrative Agent may direct the Accounts
Bank to transfer or withdraw amounts standing to the credit of the Contingency
Reserve Account in accordance with the terms below.

 

(i)            Project Costs. If,
prior to the Conversion Date, at any time from time to time, sufficient amounts
are not available in the Construction Budget to pay Project Costs then due and
owing, then funds may be transferred from the Contingency Reserve Account to
the Construction Account to pay Project Costs, as certified by an Authorized
Officer of the Borrower in such Contingency Reserve Transfer Certificate or
such written instruction by the Administrative Agent.

 

(ii)           Conversion Date.
On the Conversion Date, funds on deposit in the Contingency Reserve Account that
are in excess of the Contingency Reserve Required Amount at such time, as
certified by an Authorized Officer of the Borrower in such Contingency Reserve
Transfer Certificate or such written instruction by the Administrative Agent,
(A) upon written notice of either Borrower or Administrative Agent, shall be
applied to fund the Debt Service Reserve Account in an amount such that the
amount on deposit therein is equal to the Debt Service Reserve Required Amount,
and (B) after the application of amounts set forth in clause (A), if any, shall
be deposited into the Revenue Account for application in accordance with the
priorities set forth in Section 6.01(c) (Revenue Account).

 

(iii)          Warranty Period.

 

(A)      At any time during the Warranty Period, funds on
deposit in the Contingency Reserve Account may be withdrawn from the
Contingency Reserve Account to pay for Warranty Work, as certified by an
Authorized Officer of the Borrower in such Contingency Reserve Transfer
Certificate; provided that prior written consent of the Independent
Engineer shall be required if the amount withdrawn, individually or in the
aggregate relating to the same Warranty Work, exceeds five hundred thousand
Dollars ($500,000).

 

56

 

(B)       Upon expiration of the Warranty Period (as
defined in the Credit Agreement), any remaining funds on deposit in the
Contingency Reserve Accounts shall be transferred to the Revenue Account, as
certified by an Authorized Officer of the Borrower in such Contingency Reserve
Transfer Certificate or such written instruction by the Administrative Agent.

 

ARTICLE XV

GENERAL PROVISIONS RELATING TO THE PROJECT ACCOUNTS

 

Section 15.01         No
Security Interests. The Borrower shall not at any time create or permit to
subsist any Lien (other than (a) until the Security Discharge Date,
first-priority Liens in favor of the Collateral Agent, for the benefit of the
Senior Secured Parties, arising under this Accounts Agreement or the other
Security Documents, (b) second-priority Liens in favor of the Second Lien
Agent, for the benefit of the Second Lien Claimholders, arising under this
Accounts Agreement or the Bond Collateral Documents, and (c) Permitted
Liens) on all or any part of any of the Project Accounts or the Account Collateral,
or assign, transfer or otherwise dispose of all or any part of its right or
title to any of the Project Accounts or the Account Collateral other than in
accordance with, or as permitted by, the terms of this Accounts Agreement, or
the other Financing Documents.

 

Section 15.02         Borrower
Acknowledgments.  (a) The Borrower acknowledges that neither
any insufficiency of funds in the Project Accounts (or any of them), nor any
inability to apply any funds in the Project Accounts (or any of them) against
any or all amounts owing under the Credit Agreement or the Subordinated Loan
Agreement, or any other Financing Document or Subordinated Debt Document, shall
at any time limit, reduce or otherwise affect the Borrower’s Obligations under
the Credit Agreement or any other Financing Document, or the Borrower’s
obligations under the Subordinated Loan Agreement or any other Subordinated
Debt Document.

 

(b)        Each party to this
Accounts Agreement acknowledges that none of the Accounts Bank, the Collateral
Agent or any other Senior Secured Party, or the Second Lien Agent or any Second
Lien Claimholder, shall incur any obligation or liability in circumstances
where there are insufficient funds deposited in or credited to any Project
Account to make a payment in full that would otherwise have been made pursuant
to the terms of this Accounts Agreement, except (in the case of the Accounts
Bank) to the extent that the loss arises directly from the Accounts Bank’s
gross negligence or willful misconduct.

 

57

 

Section 15.03         Further
Assurances. (a) The Borrower shall, at any time and from time to time at
the first demand of the Accounts Bank or the Collateral Agent and at the sole
cost and expense of the Borrower, promptly and duly execute and deliver, or
otherwise authenticate, all further instruments and documents, and take all
further action, that may be necessary or required under applicable Law or that
the Accounts Bank or the Collateral Agent may reasonably request, in order to
perfect and protect any pledge or security interest granted or purported to be
granted hereunder or to enable each of the Accounts Bank, the Collateral Agent,
on behalf of the Senior Secured Parties, to exercise and enforce its rights and
remedies hereunder with respect to any Account Collateral.

 

(b)        Without limiting the
generality of the foregoing, the Borrower will promptly, with respect to the
Account Collateral:

 

(i)            execute or
authenticate and file such UCC financing or continuation statements, or
amendments thereto, and such other instruments or notices, as may be necessary,
or as the Accounts Bank, the Collateral Agent or the Administrative Agent may
reasonably request, in order to perfect and preserve the security interests
granted or purported to be granted hereunder;

 

(ii)           take all action
necessary to ensure that the Collateral Agent, for the benefit of the Senior
Secured Parties, has control of the Account Collateral as provided in
Sections 8-106, 9-104, 9-106 and any other applicable Section of the
UCC;

 

(iii)          take all action
necessary to ensure that the Collateral Agent, for the benefit of the Senior
Secured Parties, has a first-priority perfected security interest in all
Account Collateral described in Section 2.07 (Grant of
First-Priority Security Interest) under the laws of the
jurisdiction in which the Borrower is located (within the meaning of
Section 9-307 of the UCC);

 

(iv)          deliver to the
Collateral Agent or the Administrative Agent evidence that all other action
that the Accounts Bank, the Administrative Agent or the Collateral Agent may
deem reasonably necessary in order to perfect and protect the security interest
created by the Borrower under this Accounts Agreement has been taken.

 

58

 

(c)         No provision in Section 15.03(b)
shall be deemed to limit the provisions in Section 16.03(a).

 

(d)        The Borrower hereby
authorizes the Administrative Agent and the Collateral Agent to file one or
more UCC financing or continuation statements, and amendments thereto, relating
to all or any part of the Account Collateral without the signature of the
Borrower where permitted by applicable Law.

 

Section 15.04         UCC
Termination Statements. At the request of the Borrower or the Second Lien
Agent, upon the Notice of Security Discharge Date, the Collateral Agent will,
at the sole cost and expense of the Borrower, file UCC termination statements
terminating the existing UCC financing statements filed by the Collateral Agent
pursuant to the Financing Documents.

 

ARTICLE XVI

INTEREST AND INVESTMENTS

 

Section 16.01         Investments.
(a) Each amount deposited in or credited to a Project Account from time to
time shall, from the time it is so deposited or credited until the time it is
withdrawn from that Project Account (whether for the purpose of making an
investment in Cash Equivalents or otherwise applied in accordance with the
terms of this Accounts Agreement), earn interest at such rates as may be agreed
from time to time by the Borrower and the Accounts Bank.

 

(b)        Prior to the receipt by
the Accounts Bank of a Notice of Suspension, any amounts held by the Accounts
Bank in the Project Accounts shall be invested by the Accounts Bank from time
to time, at the risk and expense of the Borrower, solely in such Cash
Equivalents as an Authorized Officer of the Borrower shall direct in writing
(which may be in the form of a standing instruction). The Borrower shall select
Cash Equivalents having such maturities as shall cause the Project Accounts to
have a cash balance as of any day sufficient to cover the transfers to be made
from the Project Accounts on such day in accordance with this Accounts
Agreement, the Credit Agreement, the other Financing Documents, the Project
Documents and any Additional Project Documents. Upon delivery by the Collateral
Agent to the Accounts Bank of a Notice of Suspension and until written
revocation of such Notice of Suspension is delivered to the Accounts Bank by
the Collateral Agent, any amounts held by the Accounts Bank in the Project
Accounts shall be invested by the Accounts Bank from time to time, solely in
such Cash Equivalents as the Collateral Agent or the Administrative Agent, in
its sole discretion, may direct; provided that the Accounts Bank’s
obligation to invest such amounts is conditioned upon receipt by the Accounts
Bank of a valid United States Department of the Treasury Internal Revenue

 

59

 

Service tax
Form W-9 in accordance with Section 16.03(b) (Interest and
Investment Income). Neither the Collateral Agent, the Accounts
Bank nor the Administrative Agent shall be liable for any loss resulting from
any Cash Equivalents (or any investment or reinvestment therein or liquidation
or redemption thereof) from any Project Account or the sale or redemption thereof
except to the extent that such loss results solely from the gross negligence or
willful misconduct of the Collateral Agent, the Accounts Bank or the
Administrative Agent, as the case may be, it being understood and agreed that
in no event shall any of the Administrative Agent, the Accounts Bank or the
Collateral Agent, as the case may be, be liable for any loss resulting from any
investment made, or any sale or redemption of any investment made, in
accordance with instructions received from the Borrower, the Collateral Agent
or the Administrative Agent, as the case may be, or failure to receive written
direction as required hereunder, or in accordance with Section 16.02 (Sale and Liquidation) hereof.

 

Section 16.02         Sale
and Liquidation. In the event that the cash balance in any of the Project
Accounts is as of any day insufficient to cover the transfers to be made from
such Project Account on such day (and if advised in writing by the
Administrative Agent or the Borrower of such circumstances), the Collateral
Agent may (but shall not be obligated to) direct the Accounts Bank, without
instructions from the Borrower, to sell or liquidate the Cash Equivalents
standing to the credit of such Project Account (without regard to maturity
date) in such manner as the Collateral Agent may direct in order to obtain cash
at least sufficient to make such transfers and to pay any expenses and charges
incurred in connection with effecting any such sale or liquidation, which
expenses and charges the Accounts Bank shall be authorized to pay with cash on
deposit in such Project Account. Neither the Accounts Bank, the Collateral
Agent nor any other Senior Secured Party shall be liable to any Person for any
loss suffered because of any such sale or liquidation.

 

Section 16.03         Interest
and Investment Income. (a) All interest and other investment income
earned from investments in Cash Equivalents made from amounts in any Project
Account shall remain in such Project Account until transferred from such
Project Account in accordance with the terms of this Accounts Agreement.

 

(b)        It is acknowledged by the
parties hereto that all investment income earned on amounts on deposit in or
credited to the Project Accounts for all Tax purposes shall be attributed to
and be income of the Borrower. The Borrower shall be responsible for
determining any requirements for paying Taxes or reporting or withholding any
payments for Tax purposes hereunder. The Borrower shall prepare and file all
Tax information required with respect to the Project Accounts. The Borrower
agrees to indemnify and hold each Senior Secured Party and each Second Lien
Claimholder harmless against all liability for Tax withholding and/or reporting
for any investment income earned on the Project Accounts and payments in
respect thereof. Such

 

60

 

indemnities shall survive the termination or
discharge of this Accounts Agreement or resignation of the Accounts Bank. None
of the Collateral Agent, the Accounts Bank, the Second Lien Agent, any Senior
Secured Party or any Second Lien Claimholder shall have any obligation with
respect to the making of or the reporting of any payments for Tax purposes. From
time to time, and as reasonably requested by the Accounts Bank, the Borrower
shall provide to the Accounts Bank a United States Department of the Treasury
Internal Revenue Service tax Form W-9 or other appropriate form required
with respect to the withholding or exemption from withholding of income tax on
any investment income earned on the Project Accounts. The Accounts Bank shall
be entitled to rely on an opinion of legal counsel (which may be counsel to the
Borrower) in connection with the reporting of any earnings with respect hereto.

 

Section 16.04         Accounts
Information. (a) The Accounts Bank will:

 

(i)            within ten
(10) Business Days after the end of the month in which the first deposit
is made into any Project Account and within ten (10) Business Days after
the end of each month thereafter, provide the Borrower, the Collateral Agent
and the Administrative Agent a report with respect to the Project Accounts,
setting forth in reasonable detail all deposits to and disbursements from each
of the Project Accounts during such month, including the date on which made,
and the balances of and any investments in each of the Project Accounts at the
end of such month, including information regarding categories, amounts,
maturities and issuers of Cash Equivalents; and

 

(ii)           within ten
(10) Business Days after receipt of any written request by the Borrower,
the Collateral Agent, the Administrative Agent or the Second Lien Agent,
provide to the Borrower, the Collateral Agent, the Administrative Agent or the
Second Lien Agent, as the case may be, such other information as the Borrower,
the Collateral Agent, the Administrative Agent, or the Second Lien Agent, as
the case may be, may reasonably specify regarding all Cash Equivalents and any
other investments made by the Accounts Bank pursuant hereto and regarding
amounts available in the Project Accounts.

 

(b)        The Accounts Bank will
maintain all of the Project Accounts and all books and records with respect
thereto as may be necessary to record properly all transactions carried out by
it under this Accounts Agreement.

 

61

 

(c)         If any Cash Equivalent
ceases to be a Cash Equivalent, the Accounts Bank will, as soon as reasonably
practicable after becoming aware of such cessation, notify the Collateral Agent
and the Borrower in writing of such cessation and, upon the written direction
of the Borrower (or, if the Borrower fails to provide direction within three
(3) Business Days of the date of the Accounts Bank’s notice, upon the written
direction of the Collateral Agent), will cause the relevant investment to be
replaced by a Cash Equivalent or by cash; provided that this Section 16.04(c)
will not oblige the Accounts Bank to liquidate any investment earlier than its
normal maturity date unless:

 

(i)            directed to do so
under Section 16.02 (Sale and Liquidation);
or

 

(ii)           the maturity date of
the relevant investment exceeds the maturity date that would enable it to
continue to qualify as a Cash Equivalent.

 

ARTICLE XVII

DEFAULT AND ENFORCEMENT

 

Section 17.01         Notices
of Suspension of Project Accounts. (a) The Collateral Agent may, but
shall not be required to, suspend the right of the Accounts Bank and the
Borrower to withdraw or otherwise deal with any funds deposited in or credited
to the Project Accounts at any time during the occurrence and continuance of an
Event of Default by delivering a notice to the Accounts Bank (with a copy to
the Borrower, the Administrative Agent and the Bond Trustee) (a “Notice of
Suspension”).

 

(b)        Notwithstanding any other
provision of the Credit Agreement or any other Financing Document, after the
issuance by the Collateral Agent of a Notice of Suspension in accordance with Section 17.01(a)
and until such time as the Collateral Agent advises the Accounts Bank and the
Borrower in writing that it has withdrawn such Notice of Suspension, no amount
may be withdrawn by the Accounts Bank from any Project Account, including for
investment in Cash Equivalents, without the express prior written consent of
the Collateral Agent.

 

(c)         For the avoidance of
doubt, the withdrawal of a Notice of Suspension by the Collateral Agent shall
not affect any other Notice of Suspension that it may have issued.

 

Section 17.02         Collateral
Agent Appointed Attorney-in-Fact. The Borrower hereby irrevocably
constitutes and appoints the Collateral Agent and any

 

62

 

officer or
agent thereof, with full power of substitution, as its true and lawful
attorney-in-fact (which appointment as attorney-in-fact shall be coupled with
an interest), with full authority, if a Notice of Suspension has been delivered
to the Accounts Bank and until such Notice of Suspension has been withdrawn, to
take any action and to execute any and all documents and instruments in the
place and stead of the Borrower and in the name of the Borrower or otherwise,
that the Collateral Agent may deem necessary or advisable to accomplish the
purposes of this Accounts Agreement in a commercially reasonable manner to the
extent required by the UCC, without notice to the Borrower, including:

 

(a)         if an Event of Default
has occurred and is continuing, to exercise the rights and remedies set forth
in this Accounts Agreement and the other Financing Documents;

 

(b)        to take any action that
the Collateral Agent may, in its discretion and at the Borrower’s expense, deem
necessary or appropriate (i) to perfect, maintain and enforce any security
interest or other Lien created in favor of the Collateral Agent, for the
benefit of the Senior Secured Parties, (ii) to create, perfect, maintain
and enforce any security interest or other Lien granted or purported to be
granted hereby or (iii) to otherwise accomplish the purposes of this
Accounts Agreement;

 

(c)         to receive, endorse and
collect all funds or other property in which the Borrower has an interest and
that would constitute Account Collateral under the terms of this Accounts
Agreement, in each case representing any proceeds, dividends, interest payments
or other distributions constituting Account Collateral or any part thereof and
to give full discharge for the same and to file any claim or to take any other
action or proceeding in any court of law or equity or otherwise deemed
necessary or appropriate by the Collateral Agent for the purpose of collecting
any and all of such proceeds, dividends, payments or other distributions;

 

(d)        to pay or discharge Taxes
and Liens levied or placed on the Account Collateral;

 

(e)         (i) to direct any
party liable for any payment under or with respect to any of the Account
Collateral to make payment of any and all moneys due or to become due
thereunder or with respect thereto directly to the Collateral Agent or as the
Collateral Agent may direct, (ii) to ask or make, demand for, collect,
receive payment of and receipt for, any and all moneys, claims and other
amounts due or to become due at any time in respect of or arising out of any of
the Account Collateral, (iii) to commence and prosecute any suits, actions
or proceedings at law or in equity in any court of competent jurisdiction to
collect the Account Collateral or any part thereof and to enforce any other
right in respect of any of the Account Collateral, (iv) to defend any
suit, action or proceeding brought against the Borrower with respect to any of
the

 

63

 

Account
Collateral and (v) to settle, compromise or adjust any suit, action or
proceeding described in Section 17.02(e)(iii) and (iv) and,
in connection therewith, to give such discharges or releases as the Collateral
Agent may deem appropriate;

 

(f)         (i) to execute,
in connection with any sale, lease, license or other disposition permitted to
be made by the Collateral Agent hereunder, any endorsements, assignments,
transfer statements or other instruments of conveyance or transfer with respect
to the Account Collateral, and to file or register the same if required by
applicable Law; and

 

(g)        to communicate in its own
name with any party to any agreement or instrument included in the Account
Collateral, at any reasonable time, with regard to any matter relating to such
agreement or instrument.

 

Section 17.03         Enforcement.
(a) Notwithstanding any other provision of the Credit Agreement or any
other Financing Document, the Collateral Agent or its designee may, on behalf
of the Senior Secured Parties, at any time during the occurrence and
continuance of an Event of Default, and following delivery of a Notice of Suspension
that has not been withdrawn (provided that any failure to deliver such notice
shall not affect the validity of any actions taken under this Section 17.03(a))
take enforcement action with respect to the Account Collateral, as provided in
Article VI (Remedies Upon a Security
Event of Default) of the Security Agreement. Without limitation and
in addition to any and all rights with respect to the Account Collateral under
the Credit Agreement or any other Financing Document, the Collateral Agent may
take enforcement action by:

 

(i)            personally, or by
attorneys, taking possession of the Account Collateral or any part thereof,
from the Accounts Bank, the Borrower or any other Person that then has
possession of any part thereof with or without notice or process of law;

 

(ii)           instructing any
obligor, guarantor or counterparty to any agreement, instrument or other
obligation in respect of or relating to the Borrower or the Account Collateral
to make any payment required by the terms of such agreement, instrument or
obligation directly to the Collateral Agent or the Administrative Agent, for
the benefit of the Senior Secured Parties;

 

(iii)          taking possession of the
Account Collateral or any part thereof by directing the Accounts Bank or the
Borrower, as

 

64

 

the case may be, to deliver the same to the
Collateral Agent, for the benefit of the Senior Secured Parties, at any place
or places designated by the Collateral Agent, it being understood that the
Accounts Bank’s and the Borrower’s obligations to so deliver the Account
Collateral are of the essence of this Accounts Agreement and that, accordingly,
upon application to a court of equity having jurisdiction, the Collateral
Agent, for the benefit of the Senior Secured Parties, shall be entitled to a
decree requiring specific performance by the Accounts Bank or the Borrower, as
the case may be, of such obligations;

 

(iv)          foreclosing on the
Account Collateral as herein provided or in any manner permitted by applicable
Law (including through any permitted non-judicial foreclosure) either
concurrently or in such order as the Collateral Agent may determine without
affecting the rights or remedies to which the Collateral Agent, for the benefit
of the Senior Secured Parties, may be entitled under this Accounts Agreement,
the Credit Agreement, or any other Financing Document. The Borrower hereby
waives, to the extent permitted by applicable Law, notice and judicial hearing
in connection with the Collateral Agent’s taking possession or commencing any
collection, recovery, receipt, appropriation, repossession, retention, set-off,
sale, leasing, licensing, conveyance, assignment, transfer, liquidation, or
other disposition of or realization upon any or all of the Account Collateral,
including any and all prior notice and hearing for any prejudgment remedy or
remedies and any right to any such notice which the Borrower would otherwise
have under applicable Law;

 

(v)           withdrawing any and all
cash and liquidating any and all Cash Equivalents that are part of the Account
Collateral and applying such cash, the liquidation proceeds of Cash Equivalents
and other cash, if any, then held as Account Collateral in accordance with Section
17.04 (Application of Proceeds);

 

(vi)          selling, assigning or otherwise
liquidating the Account Collateral, or any part thereof, at a public or private
sale, for cash, upon credit or for future delivery, and at such

 

65

 

prices as the Collateral Agent may deem
satisfactory, and taking possession of the proceeds of any such sale or
liquidation.

 

(b)        Notwithstanding anything
to the contrary in this Accounts Agreement, the Credit Agreement, any other
Financing Document or the Subordinated Debt Documents, the Borrower acknowledges
that if an Event of Default has occurred and is continuing, and following
delivery of a Notice of Suspension that has not been withdrawn (provided that
any failure to deliver such notice shall not affect the validity of any actions
taken under this Section 17.03(b)), the Collateral Agent, on behalf
of the Senior Secured Parties, is entitled to apply amounts deposited in or
credited to any Project Account (other than the Bond Proceeds Sub-Account) as
contemplated in Section 17.04 (Application of Proceeds).

 

(c)         The Accounts Bank shall
promptly comply with any instruction given by the Collateral Agent as
contemplated by Section 2.01 (Appointment)
(without reference to any inconsistent request or instruction from the Borrower
or otherwise).

 

(d)        The Collateral Agent may,
during the continuance of an Event of Default, and at any time following the
delivery of a Notice of Suspension and until such notice has been withdrawn
(provided that any failure to deliver such notice shall not affect the validity
of any actions taken under this Section 17.03), exercise its rights
under this Section 17.03 as frequently, and as many times, as it
considers appropriate.

 

Section 17.04         Application
of Proceeds. Upon the occurrence and during the continuation of an Event of
Default, the proceeds of any sale of, or other realization upon, all or any
part of the Account Collateral shall be applied in accordance with
Section 4.2 of the Intercreditor Agreement. The Borrower shall remain
liable for any deficiency in accordance with the respective Financing Documents
to which it is a party.

 

Section 17.05         Collateral
Agent’s Discretionary Powers. Nothing in this Article XVII
shall impair the right of the Collateral Agent in its discretion to take or
omit to take any action deemed proper by the Collateral Agent and which action
or omission is consistent with any express written direction of the
Administrative Agent or with the express provisions of this Accounts Agreement.
The Collateral Agent shall have the right at any time to seek instructions from
the Administrative Agent concerning the administration of this Accounts
Agreement, and to request, and receive, direction from the Administrative Agent
regarding the enforcement actions set forth in Section 17.03 (Enforcement).

 

Section 17.06         Regarding
the Collateral Agent. The Collateral Agent shall be afforded all of the
rights, powers, protections, immunities and indemnities set forth in

 

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the Credit
Agreement and the Security Agreement as if the same were specifically set forth
herein.

 

ARTICLE XVIII

THE ACCOUNTS BANK

 

Section 18.01         Duties
of the Accounts Bank and Securities Intermediary. (a) The Accounts
Bank, acting as Securities Intermediary, will have the obligations of a
securities intermediary under Article 8 of the UCC, and acting as a bank
with respect to the Project Accounts, will have the obligations of a bank under
Article 9 of the UCC. The Accounts Bank will also have those duties and
responsibilities expressly set forth in this Accounts Agreement, and no
additional duties, responsibilities, obligations or liabilities shall be
inferred from the provisions of this Accounts Agreement or imposed on the
Accounts Bank. The Accounts Bank will act at the written direction of the
Collateral Agent, the Administrative Agent and, as expressly provided in this
Accounts Agreement, the Borrower, but will not be required to take any action
that is contrary to this Accounts Agreement or applicable Law or that, in its
reasonable judgment, would involve it in expense or liability, unless it has
been furnished with adequate indemnity and/or security against such expense or
liability. The Accounts Bank will have no responsibility to ensure the
performance by any other party of its duties and obligations hereunder. The
Accounts Bank will use the same care with respect to the safekeeping and
handling of property held in the Project Accounts as the Accounts Bank uses in
respect of property held for its own sole benefit. The provisions of this Article XVIII
are solely for the benefit of the Accounts Bank, the Collateral Agent and the
Senior Secured Parties.

 

(b)        In performing its functions and duties under this Accounts Agreement,
the Accounts Bank will act solely as the depository of the Collateral
Agent, for the benefit of the Senior Secured Parties, and as Securities
Intermediary or as a bank, as the case may be, with respect to the Project Accounts for the benefit of the
Collateral Agent, for the benefit of the Senior Secured Parties. The Accounts
Bank does not assume and will not be deemed to have assumed any obligation
toward or relationship of agency or trust with or for the Borrower or any
Person other than the Collateral Agent. None of the Senior Secured Parties, the
Second Lien Agent, any Second Lien Claimholder or the Borrower will have any
rights against the Accounts Bank hereunder, other than for the Accounts Bank’s
gross negligence or willful misconduct. Except as otherwise expressly provided
in this Accounts Agreement, the Borrower will not have any right to direct the
Accounts Bank to distribute or allocate any funds, instruments, securities,
financial assets or other assets in the Project Accounts or to withdraw or
transfer any funds, instruments, securities, financial assets or other assets from
the Project Accounts. Except as otherwise expressly provided in this Accounts
Agreement,

 

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the Collateral
Agent, on behalf of the Senior Secured Parties, will have the sole right to
issue directions and instructions to the Accounts Bank, acting as Securities
Intermediary or bank, as the case may be, in accordance with this Accounts
Agreement, and to issue entitlement orders with respect to the Project Accounts.
It is expressly understood and agreed that any investment made with funds held
in the Project Accounts may be made only in accordance with the express
provisions of Section 16.01 (Investments)
and, when an investment is so made, it is expressly understood and agreed that
such investment was made with the permission of the Collateral Agent in the
exercise of its exclusive possession of, and dominion and control over, the
Project Accounts, which it maintains through the Accounts Bank. The Accounts
Bank shall not in any way whatsoever be liable for any loss or depreciation in
the value of any investments made pursuant to the terms of this Accounts
Agreement.

 

Section 18.02         Exculpatory
Provisions. (a) Neither the Accounts Bank nor any of its directors,
officers, employees or agents will have any duties or obligations except those
expressly set forth herein or required by applicable law. Without limiting the
generality of the foregoing, the Accounts Bank shall not:

 

(i)            be subject to any
fiduciary or other implied duties, regardless of whether a Default or Event of
Default has occurred and is continuing;

 

(ii)           have any duty to take
any discretionary action or exercise any discretionary powers, except
discretionary rights and powers expressly contemplated hereby that the Accounts
Bank is required to exercise as directed in writing by the Collateral Agent,
the Administrative Agent or the Required Lenders; provided that the Accounts Bank shall not be required to
take any action that, in its opinion or the opinion of its counsel, may expose
the Accounts Bank to liability or that is contrary to any Financing Document or
applicable Law; and provided further that no such direction given to the
Accounts Bank that in the sole judgment of the Accounts Bank imposes, or
purports to impose, or might reasonably be expected to impose upon the Accounts
Bank any obligation or liability not set forth herein or arising hereunder
shall be binding upon the Accounts Bank unless the Accounts Bank, in its sole
discretion, accepts such direction;

 

(iii)          except as expressly set
forth herein, have any duty to disclose, nor shall the Accounts Bank be liable
for any

 

68

 

failure to disclose, any information relating
to the Borrower or any of its Affiliates that is communicated to or obtained by
the Accounts Bank or any of its Affiliates in any capacity; or

 

(iv)          be required to institute
any legal proceedings arising out of or in connection with, or otherwise take
steps to enforce, this Accounts Agreement other than on the instructions of the
Required Lenders or the Administrative Agent;

 

(b)        Neither the Accounts Bank
nor any of its directors, officers, employees or agents shall be liable for any
action taken or not taken by it (i) with the prior written consent or at
the request of the Collateral Agent, the Administrative Agent or the Required
Lenders, (ii) as may be reasonably necessary, or as the Accounts Bank may
believe in good faith to be necessary, under the circumstances as provided in Section 2.01
(Appointment by Collateral Agent), Section
2.02 (Appointment by Second Lien Agent)
and Section 2.03 (Limitation of Liability)
or (iii) in the absence of its own gross negligence or willful misconduct.

 

(c)         Neither the Accounts Bank
nor any of its directors, officers, employees or agents shall be responsible
for or have any duty to ascertain or inquire into (i) any statement,
warranty or representation made in or in connection with this Accounts
Agreement, the Credit Agreement, or any other Financing Document, (ii) the
contents of any certificate, report, opinion or other document delivered
hereunder or thereunder or in connection herewith or therewith, (iii) the
performance or observance of any of the covenants, agreements or other terms or
conditions set forth herein or therein (including the use of proceeds) or the
occurrence or continuance of any Default or Event of Default, (iv) the
validity, enforceability, effectiveness, genuineness or admissibility in
evidence of this Accounts Agreement, the Credit Agreement, any other Financing
Document, or any other agreement, instrument or document, or the perfection or
priority of any Lien or security interest created or purported to be created by
any Security Document (or title to or rights in any collateral under any
Security Document), or (v) the satisfaction of any condition set forth in
ARTICLE VI (Conditions Precedent) of the
Credit Agreement or elsewhere herein or therein, other than to confirm receipt
of items expressly required to be delivered to the Accounts Bank.

 

(d)        The Accounts Bank may,
unless and until it shall have received directions from the Required Lenders or
the Administrative Agent, take such action or refrain from taking such action
in respect of a Default or Event of Default of which the Accounts Bank has been
advised in writing by the Required Lenders or the Administrative Agent as it
shall reasonably deem advisable in the best interests of the Lenders (but shall
not be obligated to do so).

 

69

 

Section 18.03         Reliance
by Accounts Bank. The Accounts Bank shall be entitled to rely upon, and
shall not (nor shall any of its directors, officers, employees or agents) incur
any liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing (including any electronic
message, internet or intranet website posting or other distribution) believed
by it to be genuine and to have been signed, sent or otherwise authenticated by
the proper Person. The Accounts Bank also may rely upon any statement made to
it orally or by telephone and believed by it to have been made by the proper
Person, and shall not incur any liability for relying thereon. The Accounts
Bank may consult with legal counsel (who may be counsel for the Borrower),
independent accountants and other experts selected by it, and shall not be
liable for any action taken or not taken by it in accordance with the advice of
any such counsel, accountants or experts. The Accounts Bank may at any time and
from time to time solicit written instructions in the form of directions from
the Administrative Agent, the Collateral Agent or the Required Lenders or an
order of a court of competent jurisdiction, as to any action that it may be
requested or required to take, or that it may propose to take, in the
performance of any of its obligations under this Accounts Agreement.

 

Section 18.04         Written
Instructions; Notices. (a) Notwithstanding anything in this Accounts
Agreement, the Credit Agreement, any other Financing Document or any
Subordinated Debt Document to the contrary, the Accounts Bank shall have no
obligation to (i) make any payment, transfer or withdrawal from any
Project Account until it has received written direction to make such payment,
transfer or withdrawal from the Administrative Agent, the Collateral Agent or
the Borrower as set forth herein or (ii) determine whether any payment,
transfer or withdrawal from any Project Account made in accordance with any
written direction from the Administrative Agent, the Collateral Agent or the Borrower
complies with the terms of this Accounts Agreement. The Accounts Bank shall
have no liability for, nor any responsibility or obligation to confirm, the use
or application by the Borrower, the Collateral Agent or the Administrative
Agent or any other recipient of amounts withdrawn or transferred from any
Project Account.

 

(b)        Except as otherwise
provided in this Accounts Agreement, the Accounts Bank shall take action under
this Accounts Agreement only as it shall be directed in writing by the
Collateral Agent or the Administrative Agent. In each case that the Accounts
Bank may or is required under the other Financing Documents to take any action
(an “Accounts Bank Action”), including without limitation to make any
determination or judgment, to give consents, to exercise rights, powers or
remedies or otherwise to act hereunder, under any other Financing Document, the
Accounts Bank may seek direction from the Collateral Agent or the
Administrative Agent and shall be entitled to refrain from such Accounts Bank Action
unless and until it has received such direction and shall not incur any
liability to any Person by reason of so refraining.

 

70

 

Section 18.05         Resignation
or Removal of Accounts Bank. (a)  The
Accounts Bank may resign from the performance of all its functions and duties
hereunder at any time by giving thirty (30)  days’
prior notice to the Borrower and the Collateral Agent. The Accounts Bank may be
removed (i) at any time by the Administrative Agent or the Required
Lenders, or (ii)  in the event of a material breach by the Accounts Bank
of its duties hereunder, by the Borrower in consultation with the
Administrative Agent. Such resignation or removal shall take effect upon the
appointment of a successor Accounts Bank, in accordance with this Section 18.05.

 

(b)        Upon the notice of
resignation by the Accounts Bank or upon the removal of the Accounts Bank
pursuant to Section 18.05(a), the Administrative Agent shall appoint a
successor Accounts Bank hereunder, who shall be a commercial bank having a
combined capital and surplus of at least two hundred fifty million Dollars
($250,000,000). So long as no Event of Default has occurred and is continuing,
such appointment shall be subject to the Borrower’s approval (such approval not
to be unreasonably withheld or delayed).

 

(c)         If no successor Accounts
Bank has been appointed by the Administrative Agent within thirty
(30) days after the date such notice of resignation was given by the
Accounts Bank or the date on which the Administrative Agent, the Required
Lenders or the Borrower elected to remove the Accounts Bank, pursuant to Section
18.05(a), any Senior Secured Party may petition any court of competent
jurisdiction for the appointment of a successor Accounts Bank. Such court may
thereupon, after such notice, if any, as it may deem proper, appoint a
successor Accounts Bank who shall serve as Accounts Bank hereunder until such
time, if any, as the Administrative Agent appoints a successor Accounts Bank,
as provided above.

 

(d)        Upon the acceptance of a
successor’s appointment as Accounts Bank hereunder, such successor shall
succeed to and become vested with all of the rights, powers, privileges and
duties of the retiring (or removed) Accounts Bank, and the retiring (or removed)
Accounts Bank shall be discharged from all of its duties and obligations
hereunder. After the retirement or removal of the Accounts Bank hereunder, the
provisions of this Article XVIII shall continue in effect for the
benefit of the retiring (or removed) Accounts Bank in respect of any actions
taken or omitted to be taken by it while the retiring or removed Accounts Bank
was acting as Accounts Bank.

 

(e)         The retiring or removed
Accounts Bank will promptly transfer all of the Project Accounts and the
Account Collateral to the possession or control of the successor Accounts Bank
and will, at the sole cost and expense of the Borrower, execute and deliver
such notices, instructions and assignments as may be reasonably necessary or
desirable to transfer the rights of the Accounts Bank, together with all
records and

 

71

 

reports, with
respect to the Project Accounts and the Account Collateral to the successor
Accounts Bank.

 

Section 18.06         No
Amendment to Duties of Accounts Bank Without Consent. The Accounts Bank
shall not be bound by any waiver, amendment, supplement or modification of this
Accounts Agreement that affects its rights or duties hereunder or thereunder
unless the Accounts Bank shall have given its prior written consent, in its
capacity as Accounts Bank, thereto.

 

ARTICLE XIX

REPRESENTATIONS AND WARRANTIES

 

Section 19.01         Representations
and Warranties. The Borrower represents and warrants as of the date of this
Accounts Agreement, as of the date of each Funding Notice, on each Funding Date
and on the Conversion Date that:

 

(a)         it is the legal and
beneficial owner of the Account Collateral free and clear of any Lien, claim,
encumbrance, option or right of others, except for the first-priority security
interest and other rights created under or provided for in this Accounts
Agreement and the other Financing Documents, the Bond Liens and other Permitted
Liens, and has the power and authority to pledge the Account Collateral pledged
by it hereunder. It has not authorized the filing of any effective financing
statement or other instrument similar in effect covering all or any part of the
Account Collateral, except (i) as filed in favor of the Collateral Agent,
for the benefit of the Senior Secured Parties, pursuant to this Accounts
Agreement or the other Financing Documents, and (ii) as filed or to be
filed, subsequent to such filing, in respect of the Bond Liens. To the best of
its knowledge, no effective financing statement or other instrument similar in
effect covering all or any part of the Account Collateral or listing the
Borrower or any trade name of the Borrower as debtor is on file in the
applicable recording office, except (i) as filed in favor of the
Collateral Agent, for the benefit of the Senior Secured Parties, relating to
the Financing Documents, or (ii) as filed or to be filed, subsequent to
such filing, in respect of the Bond Liens, subject to Section 7.02(b) (Negative Covenants—Liens) of the Credit Agreement and to the
Intercreditor Agreement, and it has not entered into, and shall not enter into,
any security control agreement or other agreement similar in effect, in each
case covering all or any part of the Account Collateral, except (i) as may
have been entered into in favor of the Collateral Agent, for the benefit of the
Senior Secured Parties, relating to this Accounts Agreement or the other
Financing Documents or (ii) as entered into, or to be entered into, in
favor of the Second Lien Agent, for the benefit of the Second Lien Claimholders,
pursuant to the Bond Indenture, subject to Section 7.02(b) (Negative Covenants — Liens) of the Credit Agreement and to
the Intercreditor Agreement;

 

72

 

(b)        on or prior to the date of
the first Funding Notice all filings, registrations, notifications and
recordings, if any, necessary or appropriate to create, preserve, protect and
perfect the first-priority security interest granted by the Borrower to the
Collateral Agent, for the benefit of the Senior Secured Parties, hereby in
respect of the Account Collateral will have been made, and such first-priority
security interest granted to the Collateral Agent, for the benefit of the
Senior Secured Parties, pursuant to this Accounts Agreement in and to the Account
Collateral will constitute a valid and enforceable security interest therein
that, to the extent such security interest may be perfected under the UCC, will
be perfected and that will be subject to no prior security interest that can be
perfected under the UCC;

 

(c)         until the Security
Discharge Date, the Borrower will not execute or authorize to be filed in any
public office any UCC financing statement (or similar statement or
instrument of registration under the law of any jurisdiction) or statements relating
to the Account Collateral, except for (i) the filings or registrations made in
respect of the Financing Documents and (ii) the filings or registrations
made or to be made, subsequent to such filings, in respect of the Bond Liens.

 

(d)        except for the filings,
registrations, notifications and recordings referred to in Section 19.01(b),
no authorization, approval or other action by, and no notice to or filing with,
any Governmental Authority or any other third party is required for
(i) the grant by the Borrower of the pledges and security interests
granted hereunder or for the execution, delivery or performance of this
Accounts Agreement by the Borrower, (ii) the perfection or maintenance of
the pledges and security interests created hereunder (including the
first-priority nature of the pledge and security interest in favor of the
Collateral Agent for the benefit of the Senior Secured Parties), or
(iii) the exercise by the Collateral Agent, on behalf of the Senior
Secured Parties, and the Accounts Bank of their respective rights provided for
in this Accounts Agreement or the remedies in respect of the Account Collateral
pursuant to this Accounts Agreement;

 

(e)         except for the rights of
the Collateral Agent, for the benefit of the Senior Secured Parties, granted
hereunder or pursuant hereto, and the second-priority rights of the Second Lien
Agent, for the benefit of the Second Lien Claimholders, pursuant to the
Subordinated Bond Documents and subject to Section 7.02 (Negative
Covenants) of the Credit Agreement and to the Intercreditor
Agreement, it does not know of and has not received written notice of any right
or claim to or interest in (including any adverse claim) any Account Collateral
by any Person other than the Borrower; and

 

(f)         its exact legal name is
Heartland Grain Fuels, L.P., it is duly organized and validly existing as a
limited partnership under the laws of the State of

 

73

 

Delaware, and
its chief executive office is located at the address provided for the Borrower
in Section 20.10 (Notices and Other
Communications).

 

ARTICLE XX

MISCELLANEOUS

 

Section 20.01         Rights
of Second Lien Agent and Second Lien Claimholders. (a) Upon the delivery by
the Administrative Agent to the Accounts Bank of written notice that the
Security Discharge Date has occurred (the “Notice of Security Discharge Date”):

 

(i)            all references to
withdrawals from the Project Accounts relating to payments to the Senior
Secured Parties shall have no force and effect;

 

(ii)           the Collateral Agent
and the Administrative Agent shall cease to have any rights hereunder, except
for their respective rights under Article XVIII (The Accounts
Bank) and this Article XX (Miscellaneous),
and shall cease to have any obligations hereunder;

 

(iii)          each reference in Section
2.04(b) (Project Accounts), Section 2.05 (Representations, Warranties and Covenants of Accounts Bank),
Section 2.06(b) (Project Accounts as
Deposit Account), Section
2.09 (Control and Perfection of Account Collateral),
Section 2.11 (Agreement to Hold in Trust),  Section
3.02(d), (g), (h), (i), (j) and (k) (Deposits into and
Withdrawals from Project Accounts), Section 15.01 (No Security Interests), Section 15.03 (Further Assurances), Section 15.04 (UCC Termination Statements), Section 16.01 (Investments), Section 16.02 (Sale and
Liquidation), Section 16.04 (Accounts
Information), Article XVII (Default and
Enforcement), Article XVIII (The Accounts
Bank), and Section 19.01 (Representations and
Warranties) to (A) the Collateral Agent and the Administrative
Agent shall be deemed a reference to the Second Lien Agent and (B) Senior
Secured Parties shall be deemed a reference to Second Lien Claimholders and
Accounts Bank;

 

74

 

(b)        This Agreement shall
terminate if (i) the Security Discharge Date has occurred and (ii) the Accounts
Bank has received a notice in writing from the Borrower confirming that no
default or event of default has occurred and is continuing under the Bond
Indenture. Upon termination of this Agreement, all Funds in the Project
Accounts shall be released to the Borrower.

 

Section 20.02         Amendments,
Etc. No amendment or waiver of any provision of this Accounts Agreement and
no consent to any departure by the Borrower shall be effective unless in
writing signed by the Collateral Agent and, in the case of an amendment, the
Borrower, the Collateral Agent, the Administrative Agent and the Accounts Bank
(and, after the Notice of Security Discharge Date, the Second Lien Agent), and
each such waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given; provided, that no
amendment, waiver or consent shall (i) unless in writing and signed by the
Accounts Bank in addition to the Collateral Agent, affect the rights or duties
of, or any fees or other amounts payable to, the Accounts Bank under this
Accounts Agreement, or (ii) unless in writing and signed by the Second Lien
Agent, affect the rights or duties of the Second Lien Agent under this Accounts
Agreement.

 

Section 20.03         Applicable
Law; Jurisdiction; Etc. (a) GOVERNING LAW. THIS AGREEMENT SHALL
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK, UNITED STATES OF AMERICA, WITHOUT REFERENCE TO CONFLICTS OF LAWS (OTHER
THAN SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW).

 

(b)        SUBMISSION TO
JURISDICTION. EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY
SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THE
COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY AND OF THE UNITED
STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, AND ANY APPELLATE
COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING
TO THIS ACCOUNTS AGREEMENT, OR ANY OTHER FINANCING DOCUMENT, OR FOR RECOGNITION
OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND
UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT OR, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT. EACH OF THE
PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING
SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER

 

75

 

JURISDICTIONS
BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS
ACCOUNTS AGREEMENT OR IN ANY OTHER FINANCING DOCUMENT SHALL AFFECT ANY RIGHT
THAT ANY SENIOR SECURED PARTY MAY OTHERWISE HAVE TO BRING ANY ACTION OR
PROCEEDING RELATING TO THIS ACCOUNTS AGREEMENT, ANY OTHER FINANCING DOCUMENT
AGAINST THE BORROWER, THE ACCOUNTS BANK OR ITS PROPERTIES IN THE COURTS OF ANY
JURISDICTION.

 

(c)         WAIVER OF VENUE. EACH
OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER
HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS ACCOUNTS AGREEMENT OR ANY OTHER FINANCING DOCUMENT IN ANY COURT
REFERRED TO IN SECTION 20.03(b). EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE
DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR
PROCEEDING IN ANY SUCH COURT.

 

(d)        Appointment of Process
Agent and Service of Process. The Borrower hereby irrevocably appoints C T
Corporation System with an office on the date hereof at 111 Eighth Avenue,
New York, New York 10011, as its agent to receive on behalf of
itself and its property services of copies of the summons and complaint and any
other process that may be served in any such action or proceeding in the State
of New York. If for any reason the Process Agent shall cease to act as such for
the Borrower, the Borrower hereby agrees to designate a new agent in New York
City on the terms and for the purposes of this Section 20.03
reasonably satisfactory to the Collateral Agent, on behalf of the Senior
Secured Parties. Such service may be made by mailing or delivering a copy of
such process to the Borrower in care of the Process Agent at the Process Agent’s
above address, and the Borrower hereby irrevocably authorizes and directs the
Process Agent to accept such service on its behalf. As an alternative method of
service, the Borrower also irrevocably consents to the service of any and all
process in any such action or proceeding by the air mailing of copies of such
process to the Borrower at its then effective notice addresses pursuant to Section 20.10
(Notices and Other Communications).

 

(e)         Immunity. To the
extent that the Borrower has or hereafter may acquire any immunity from
jurisdiction of any court or from any legal process (whether through service or
notice, attachment prior to judgment, attachment in aid of execution, execution
or otherwise) with respect to itself or its property, the Borrower hereby

 

76

 

irrevocably
and unconditionally waives such immunity in respect of its obligations under
this Accounts Agreement, the other Financing Documents and, without limiting
the generality of the foregoing, agrees that the waivers set forth in this Section 20.03(e)
shall have the fullest scope permitted under the Foreign Sovereign Immunities
Act of 1976 of the United States and are intended to be irrevocable for
purposes of such Act.

 

(f)         WAIVER OF JURY TRIAL.
EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL
PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS ACCOUNTS
AGREEMENT, ANY OTHER FINANCING DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY
OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY
HERETO (i) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON
WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND
(ii) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED
TO ENTER INTO THIS ACCOUNTS AGREEMENT, THE OTHER FINANCING DOCUMENTS BY, AMONG
OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 20.03.

 

Section 20.04         Assignments.
The provisions of this Accounts Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns
permitted hereby, except that the Borrower may not assign or otherwise transfer
any of its rights or obligations hereunder without the prior written consent of
the Collateral Agent and the Administrative Agent (and, after the Notice of
Security Discharge Date, the Second Lien Agent), and the Accounts Bank may not
assign or delegate any of its rights or obligations under this Accounts
Agreement except pursuant to Section 18.05 (Resignation or Removal of Accounts Bank).

 

Section 20.05         Benefits
of Accounts Agreement. Nothing in this Accounts Agreement or any other
Financing Document, express or implied, shall give to any Person, other than
the parties hereto, the Senior Secured Parties and their respective successors
and assigns permitted under this Accounts Agreement or any other Financing
Document, Participants to the extent provided in Section 10.03 (Assignments) of the Credit Agreement,
Second Lien Claimholders and their respective successors and assigns permitted
under this Accounts Agreement or any Subordinated Debt Document, and Related
Parties of the Administrative Agent, the Collateral Agent, the Accounts Bank
and the Second Lien Agent any benefit or any legal or equitable right or remedy
under or by reason of this Accounts Agreement.

 

77

 

Section 20.06         Costs
and Expenses. (a)  The Borrower shall
pay (i) all reasonable and documented out-of-pocket expenses incurred by
the Accounts Bank, the Administrative Agent and the Collateral Agent (including
all reasonable fees, costs and expenses of counsel for the Accounts Bank, the
Administrative Agent and the Collateral Agent), in connection with the
preparation, negotiation, execution and delivery of this Accounts Agreement and
the administration and maintenance of the Project Accounts (whether or not the
transactions contemplated hereby are consummated); (ii) all reasonable and
documented out-of-pocket expenses incurred by the Collateral Agent, the Administrative
Agent and the Accounts Bank (including all reasonable fees, costs and expenses
of counsel for Collateral Agent, the Administrative Agent and the Accounts
Bank), in connection with any amendments, modifications or waivers of the
provisions of this Accounts Agreement (whether or not the transactions
contemplated hereby are consummated); (iii) all reasonable and documented
out-of-pocket expenses incurred by the Accounts Bank, the Administrative Agent
and the Collateral Agent (including all reasonable fees, costs and expenses of
counsel for Accounts Bank, the Administrative Agent and the Collateral Agent),
in connection with the administration of this Accounts Agreement (whether or
not the transactions contemplated hereby are consummated); and (iv) all
out-of-pocket expenses incurred by the Accounts Bank, the Administrative Agent
and the Collateral Agent (including all fees, costs and expenses of counsel for
any of the Accounts Bank, the Administrative Agent and the Collateral Agent),
in connection with the enforcement or protection of their rights in connection
with this Accounts Agreement, including their rights under this Section 20.06(a),
including in connection with any workout, restructuring or negotiations in
respect of the Obligations.

 

(b)        Subject to the terms of
the Intercreditor Agreement, the Borrower shall pay (i) all reasonable and
documented out-of-pocket expenses incurred by the Second Lien Agent (including
all reasonable fees, costs and expenses of counsel for the Second Lien Agent),
in connection with the preparation, negotiation, execution and delivery of this
Accounts Agreement and the administration and maintenance of the Project
Accounts (whether or not the transactions contemplated hereby are consummated);
(ii) all reasonable and documented out-of-pocket expenses incurred by the
Second Lien Agent (including all reasonable fees, costs and expenses of counsel
for the Second Lien Agent), in connection with any amendments, modifications or
waivers of the provisions of this Accounts Agreement (whether or not the
transactions contemplated hereby are consummated); (iii) all reasonable
and documented out-of-pocket expenses incurred by the Second Lien Agent
(including all reasonable fees, costs and expenses of counsel for the Second
Lien Agent), in connection with the administration of this Accounts Agreement
(whether or not the transactions contemplated hereby are consummated); and
(iv) all out-of-pocket expenses incurred by the Second Lien Agent
(including all fees, costs and expenses of counsel for the Second Lien Agent),
in connection with the enforcement or protection of its rights in connection

 

78

 

with this
Accounts Agreement, including its rights under this Section 20.06(b),
including in connection with any workout, restructuring or negotiations in
respect of the Subordinated Debt.

 

Section 20.07         Counterparts;
Effectiveness. This Accounts Agreement may be executed in counterparts (and
by different parties hereto in different counterparts), each of which shall
constitute an original, but all of which when taken together shall constitute a
single contract. This Accounts Agreement shall become effective when it has
been executed by the Collateral Agent and when the Collateral Agent has
received counterparts hereof that, when taken together, bear the signatures of
each of the other parties hereto. Delivery of an executed counterpart of a
signature page of this Accounts Agreement by telecopy or portable document
format (“pdf”) shall be effective as delivery of a manually executed
counterpart of this Accounts Agreement.

 

Section 20.08         Indemnification
by the Borrower. (a)  In addition to
the indemnity by Borrower set forth in Section 20.10(f) (Notices and Other Communications), the
Borrower hereby agrees to indemnify the Collateral Agent (and any sub-agent
thereof), the Administrative Agent (and any sub-agent thereof), the Accounts
Bank and each Related Party of any of the foregoing Persons (each such Person
being called an “Indemnitee”) against, and hold each Indemnitee harmless
from, any and all losses, claims, damages, liabilities and related expenses
(including all reasonable fees, costs and expenses of counsel for any
Indemnitee), incurred by any Indemnitee or asserted against any Indemnitee by any
third party or by the Borrower arising out of, in connection with, or as a
result of:

 

(i)            the execution or
delivery of this Accounts Agreement or any agreement or instrument contemplated
hereby or thereby, the performance by the parties hereto or thereto of their
respective obligations hereunder or thereunder or the consummation of the
transactions contemplated hereby or thereby;

 

(ii)           any funds deposited in
or credited to any Project Account or the use or proposed use of the proceeds
therefrom; and

 

(iii)          any actual or
prospective claim, litigation, investigation or proceeding relating to any of
the foregoing, whether based on contract, tort or any other theory, whether
brought by a third party, the GP Pledgor or any of its shareholders, directors
or creditors, the Borrower or any of its partners or creditors, and in each
case regardless of whether any Indemnitee is a party thereto and whether or not
any of the

 

79

 

transactions contemplated hereunder, in all
cases, whether or not caused by or arising, in whole or in part, out of the
comparative, contributory or sole negligence of the Indemnitee.

 

provided that such
indemnity shall not, as to any Indemnitee, be available to the extent that such
losses, claims, damages, liabilities or related expenses are determined by a
court of competent jurisdiction by final and non-appealable judgment to have
resulted from the gross negligence or willful misconduct of such Indemnitee.

 

(b)        The Borrower hereby
agrees, subject to the terms of the Intercreditor Agreement, to indemnify the
Second Lien Agent and each Related Party thereof (each such Person being called
an “Second Lien Agent Indemnitee”) against, and hold each Second Lien
Agent Indemnitee harmless from, any and all losses, claims, damages,
liabilities and related expenses (including all reasonable fees, costs and
expenses of counsel for any Second Lien Agent Indemnitee), incurred by any
Second Lien Agent Indemnitee or asserted against any Second Lien Agent Indemnitee
by any third party or by the Borrower arising out of, in connection with, or as
a result of:

 

(i)            the execution or
delivery of this Accounts Agreement or any agreement or instrument contemplated
hereby or thereby, the performance by the parties hereto or thereto of their
respective obligations hereunder or thereunder or the consummation of the
transactions contemplated hereby or thereby;

 

(ii)           any funds deposited in
or credited to any Project Account or the use or proposed use of the proceeds
therefrom; and

 

(iii)          any actual or
prospective claim, litigation, investigation or proceeding relating to any of
the foregoing, whether based on contract, tort or any other theory, whether
brought by a third party, the GP Pledgor or any of its shareholders, directors
or creditors, the Borrower or any of its partners or creditors, and in each
case regardless of whether any Second Lien Agent Indemnitee is a party thereto
and whether or not any of the transactions contemplated hereunder, in all
cases, whether or not caused by or arising, in whole or in part, out of the
comparative, contributory or sole negligence of the Second Lien Agent
Indemnitee;

 

80

 

provided that such
indemnity shall not, as to any Second Lien Agent Indemnitee, be available to
the extent that such losses, claims, damages, liabilities or related expenses
are determined by a court of competent jurisdiction by final and non-appealable
judgment to have resulted from the gross negligence or willful misconduct of
such Second Lien Agent Indemnitee.

 

Section 20.09         No
Waiver; Cumulative Remedies. No failure by any Senior Secured Party, the
Accounts Bank, the Administrative Agent, the Collateral Agent or the Second
Lien Agent to exercise, and no delay by any such Person in exercising, any
right, remedy, power or privilege hereunder, or under any other Financing
Document, shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude any other or
further exercise thereof or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and privileges herein provided, and
provided under each other Financing Document, are cumulative and not exclusive
of any rights, remedies, powers and privileges provided by law.

 

Section 20.10         Notices
and Other Communications. (a)  Except in the case of notices and
other communications expressly permitted to be given by telephone (and except
as provided in Section 20.10(b)), all notices and other
communications provided for herein shall be in writing and shall be delivered
by hand or overnight courier service, mailed by certified or registered mail or
sent by telecopier or electronic mail as follows:

 

	
  If to the Borrower:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Heartland Grain
  Fuels, L.P.

  
	
   

  	
  10201 Wayzata
  Blvd, Suite 250

  
	
   

  	
  Minneapolis, MN
  55305

  
	
   

  	
  Attention:

  	
  Chief Executive
  Officer

  
	
   

  	
  Telephone:

  	
  763-226-2701

  
	
   

  	
  Facsimile:

  	
  763-226-2725

  
	
   

  	
  E-mail:

  	
  rstephenson@advancedbioenergy.com

  
	
   

  	
   

  	
   

  
	
  If to the Accounts Bank:

  
	
   

  	
   

  	
   

  
	
   

  	
  Amarillo National
  Bank

  
	
   

  	
  P.O. Box 1

  
	
   

  	
  Amarillo, Texas
  79105

  
	
   

  	
  (or, for
  delivery by overnight courier, to:

  
	
   

  	
  410 S. Taylor

  
	
   

  	
  Amarillo, Texas
  79101)

  
	
   

  	
  Attention:

  	
  Craig Sanders,
  Executive Vice President

  

 

81

 

	
   

  	
  Telephone:

  	
  806-378-8244

  
	
   

  	
  Facsimile:

  	
  806-345-1663

  
	
   

  	
  E-mail:

  	
  craig.sanders@anb.com

  
	
   

  	
   

  	
   

  
	
  If to the Collateral Agent:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  WestLB AG, New
  York Branch

  
	
   

  	
  1211 Avenue of
  the Americas

  
	
   

  	
  New York, NY
  10036

  
	
   

  	
  Attention:
  Thomas Brensic

  
	
   

  	
  Telephone:

  	
  212 597-1153

  
	
   

  	
  Facsimile:

  	
  212 597-1490

  
	
   

  	
  Email:

  	
  Thomas_Brensic@westlb.com

  
	
   

  	
  Group e-mail:

  	
  NYC_Documents_Groups@WestLB.com

  
	
   

  	
   

  	
   

  
	
  If to the Administrative Agent:

  
	
   

  	
   

  	
   

  
	
   

  	
  WestLB AG, New
  York Branch

  
	
   

  	
  1211 Avenue of
  the Americas

  
	
   

  	
  New York, NY
  10036

  
	
   

  	
  Attention:

  	
  Andrea Bailey

  
	
   

  	
  Telephone:

  	
  (212) 597-1158

  
	
   

  	
  Facsimile:

  	
  (212) 302-7946

  
	
   

  	
  E-mail:

  	
  NYC_Agency_Services@WestLB.com

  
	
   

  	
   

  	
   

  
	
  If to the Second Lien Agent:

  
	
   

  	
   

  	
   

  
	
   

  	
  Wells Fargo
  Bank, N.A.

  
	
   

  	
  Corporate Trust
  & Escrow Services

  
	
   

  	
  MAC N9311-115

  
	
   

  	
  625 Marquette
  Ave. 11th Floor

  
	
   

  	
  Minneapolis, MN
  55479

  
	
   

  	
  Attention:

  	
  Stephen R.
  Gubrud

  
	
   

  	
  Telephone:

  	
  (612) 667-9090

  
	
   

  	
  Facsimile:

  	
  (612) 667-2160

  
	
   

  	
  E-mail:

  	
  Steven.R.Gubrud@wellsfargo.com

  

 

(b)        Notices sent by hand or
overnight courier service, or mailed by certified or registered mail, shall be
deemed to have been given when received; notices sent by telecopier shall be
deemed to have been given when sent (except that, if not given during normal
business hours for the recipient, shall be deemed to have been given at the
opening of business on the next Business Day for the recipient). Notices

 

82

 

delivered
through electronic communications to the extent provided in Section 20.10(d)
shall be effective as provided in Section 20.10(d).

 

(c)         Notices and other
communications to the Borrower, the Collateral Agent, the Administrative Agent
or the Accounts Bank hereunder may be delivered or furnished by electronic
communication (including e-mail and internet or intranet websites). Each of the
Collateral Agent, the Administrative Agent, the Accounts Bank or the Borrower
may, in its discretion, agree to accept notices and other communications to it
hereunder by electronic communications pursuant to procedures approved by it; provided that approval of such
procedures may be limited to particular notices or communications.

 

(d)        Unless otherwise
prescribed, (i) notices and other communications sent to an e-mail address
shall be deemed received upon the sender’s receipt of an acknowledgement from
the intended recipient (such as by the “return
receipt requested” function, as available, return e-mail or other
written acknowledgement); provided
that if such notice or other communication is not received during the normal
business hours of the recipient, such notice or communication shall be deemed
to have been received at the opening of business on the next Business Day for
the recipient, and (ii) notices or communications posted to an internet or
intranet website shall be deemed received upon the deemed receipt by the
intended recipient at its e-mail address as described in Section 20.10(a)
of notification that such notice or communication is available and identifying
the website address therefor.

 

(e)         Each of the Borrower, the
Collateral Agent, the Administrative Agent, the Accounts Bank and the Second
Lien Agent may change its address, telecopier or telephone number for notices
and other communications hereunder by notice to the other parties hereto.

 

(f)         The Collateral Agent, the
Administrative Agent, the Accounts Bank and the Second Lien Agent shall be
entitled to rely and act upon any written notices purportedly given by or on
behalf of the Borrower even if (i) such notices were not made in a manner
specified herein, were incomplete or were not preceded or followed by any other
form of notice specified herein, or (ii) the terms thereof, as understood
by the recipient, varied from any confirmation thereof. The Borrower shall
indemnify the Collateral Agent, the Administrative Agent, the Accounts Bank,
the Second Lien Agent and the Related Parties of each of them from all losses,
costs, expenses and liabilities resulting from the reliance by such Person on
each notice purportedly given by or on behalf of the Borrower. All telephonic
notices to and other telephonic communications with the Collateral Agent, the

 

83

 

Administrative
Agent, the Accounts Bank or the Second Lien Agent may be recorded by the
Collateral Agent, the Administrative Agent, the Accounts Bank or the Second
Lien Agent, and each of the parties hereto hereby consents to such recording.

 

Section 20.11         Patriot
Act Notice. The Accounts Bank hereby notifies the Borrower that pursuant to
the requirements of the Patriot Act, it is required to obtain, verify and
record information that identifies the Borrower, which information includes the
name and address of the Borrower and other information that will allow the
Accounts Bank to identify the Borrower in accordance with the Patriot Act.

 

Section 20.12         Severability.
If any provision of this Accounts Agreement or any other Financing Document is
held to be illegal, invalid or unenforceable, (a) the legality, validity
and enforceability of the remaining provisions of this Accounts Agreement, the
other Financing Documents shall not be affected or impaired thereby and
(b) the parties shall endeavor in good faith negotiations to replace the
illegal, invalid or unenforceable provisions with valid provisions the economic
effect of which comes as close as possible to that of the illegal, invalid or
unenforceable provisions. The invalidity of a provision in a particular
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

 

Section 20.13         Survival.
Notwithstanding anything in this Accounts Agreement to the contrary, Article XIX
(Representations and Warranties)
and Section 20.06 (Costs and
Expenses) and 20.08 (Indemnification by the Borrower) shall survive any
termination of this Accounts Agreement. In addition, each representation and
warranty made hereunder, in any other Financing Document or other document
delivered pursuant hereto or thereto or in connection herewith or therewith
shall survive the execution and delivery hereof and thereof. Such
representations and warranties have been or will be relied upon by the Accounts
Bank, the Collateral Agent, the Administrative Agent, each other Senior Secured
Party, the Second Lien Agent and each other Second Lien Claimholder, regardless
of any investigation made by the Accounts Bank, the Collateral Agent, the
Administrative Agent, each other Senior Secured Party, the Second Lien Agent
and each other Second Lien Claimholder or on their behalf and notwithstanding
that the Accounts Bank, the Collateral Agent, the Administrative Agent, each
other Senior Secured Party, the Second Lien Agent or each other Second Lien
Claimholder may have had notice or knowledge of any Default or Event of Default
at the time of the Funding, and shall continue in full force and effect as long
as any Loan, any other Obligation hereunder or under any other Financing
Document or obligation under the Subordinated Debt Documents shall remain
unpaid or unsatisfied.

 

Section 20.14         Waiver
of Consequential Damages, Etc. To the fullest extent permitted by
applicable Law, the Borrower shall not assert, and hereby waives, any claim
against any Indemnitee, on any theory of liability, for special, indirect,
consequential or punitive damages (as opposed to direct or actual damages)
arising out

 

84

 

of, in
connection with, or as a result of, this Accounts Agreement, any other
Financing Document or any agreement or instrument contemplated hereby, the
transactions contemplated hereby or thereby, any Loan or the use of the
proceeds thereof. No Indemnitee shall be liable for any damages arising from
the use by unintended recipients of any information or other materials
distributed by it through telecommunications, electronic or other information
transmission systems in connection with this Accounts Agreement, the other Financing
Documents or the transactions contemplated hereby or thereby.

 

Section 20.15         Waiver
of Litigation Payments. To the extent that the Borrower may, in any action,
suit or proceeding brought in any of the courts referred to in Section 20.03(b)
(Applicable Law; Jurisdiction; Etc.)
or elsewhere arising out of or in connection with this Accounts Agreement or
any other Financing Document to which it is a party, be entitled to the benefit
of any provision of law requiring any Lender or any Agent in such action, suit
or proceeding to post security for the costs of such Person or to post a bond
or to take similar action, each such Person hereby irrevocably waives such
benefit, in each case to the fullest extent now or in the future permitted
under the laws of New York or, as the case may be, the jurisdiction in which
such court is located.

 

(Remainder of page intentionally blank. Next
page is signature page.)

 

85

 

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

 

	
   

  	
  HEARTLAND
  GRAIN FUELS, L.P.,

  as the Borrower

  
	
   

  	
  By:

  	
  Dakota Fuels,
  Inc.

  
	
   

  	
  Its:

  	
  General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Revis L.
  Stephenson III

  	
   

  
	
   

  	
   Name:

  	
  Revis L. Stephenson III

  
	
   

  	
   Title:

  	
  Chairman

  
						

 

 

	
   

  	
  AMARILLO
  NATIONAL BANK,

  as the Accounts Bank

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Craig L.
  Sanders

  	
   

  
	
   

  	
   Name:

  	
  Craig L. Sanders

  
	
   

  	
   Title:

  	
  Executive Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  AMARILLO
  NATIONAL BANK,

  as the Securities Intermediary

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Craig L.
  Sanders

  	
   

  
	
   

  	
   Name:

  	
  Craig L. Sanders

  
	
   

  	
   Title:

  	
  Executive Vice President

  
						

 

 

	
   

  	
  WESTLB
  AG, NEW YORK BRANCH,

  as the Collateral Agent

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Michael
  Pantelogianis

  	
   

  
	
   

  	
   Name:

  	
  Michael Pantelogianis

  
	
   

  	
   Title:

  	
  Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Paul Vastola

  	
   

  
	
   

  	
   Name:

  	
  Paul Vastola

  
	
   

  	
   Title:

  	
  Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  WESTLB,
  AG, NEW YORK BRANCH,

  as the Administrative Agent

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Michael
  Pantelogianis

  	
   

  
	
   

  	
   Name:

  	
  Michael Pantelogianis

  
	
   

  	
   Title:

  	
  Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Paul Vastola

  	
   

  
	
   

  	
   Name:

  	
  Paul Vastola

  
	
   

  	
   Title:

  	
  Director

  
					

 

 

	
   

  	
   

  	
  WELLS
  FARGO BANK, NATIONAL ASSOCIATION, AS TRUSTEE OF THE BROWN COUNTY, SOUTH
  DAKOTA SUBORDINATE SOLID WASTE FACILITIES REVENUE BONDS (HEARTLAND GRAIN
  FUELS, L.P. ETHANOL PLANT PROJECT) SERIES 2007A,

  as the Second Lien Agent

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Steven
  Gubrud

  	
   

  
	
   

  	
   

  	
   Name:

  	
  Steven Gubrud

  
	
   

  	
   

  	
   Title:

  	
  Vice PresidentEXHIBIT
10.3

 

 

BOND TRUST INDENTURE

 

Between

 

Brown County, South Dakota

 

And

 

Wells Fargo Bank, National Association

 

as Bond Trustee

 

 

Dated as of October 1, 2007

 

 

$19,000,000

 

Brown County, South Dakota

Subordinate Solid Waste Facilities Revenue Bonds

(Heartland Grain Fuels, L.P. Ethanol Plant Project) Series 2007A

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  GRANTING CLAUSES

  	
  3

  
	
   

  	
   

  	
   

  
	
  ARTICLE I

  	
  DEFINITIONS

  	
  5

  
	
  Section 1.1

  	
  Definitions

  	
  5

  
	
  Section 1.2

  	
  Interpretation

  	
  28

  
	
   

  	
   

  	
   

  
	
  ARTICLE II

  	
  THE SERIES 2007A BONDS

  	
  29

  
	
  Section 2.1

  	
  Authorized Amount of Series 2007A Bonds

  	
  29

  
	
  Section 2.2

  	
  Issuance of Series 2007A Bonds

  	
  29

  
	
  Section 2.3

  	
  Execution; Limited Obligation

  	
  30

  
	
  Section 2.4

  	
  Authentication

  	
  31

  
	
  Section 2.5

  	
  [Intentionally Deleted]

  	
  32

  
	
  Section 2.6

  	
  Form of Bonds and Temporary Bonds

  	
  32

  
	
  Section 2.7

  	
  Delivery of Series 2007A Bonds

  	
  32

  
	
  Section 2.8

  	
  Mutilated, Lost, Stolen or Destroyed Series 2007A
  Bonds

  	
  33

  
	
  Section 2.9

  	
  Bond Register; Transfer and Exchange of Series 2007A
  Bonds; Persons Treated as Owners

  	
  33

  
	
  Section 2.10

  	
  Cancellation

  	
  34

  
	
  Section 2.11

  	
  Book-Entry Only System

  	
  34

  
	
  Section 2.12

  	
  Successor Securities Depository; Transfers Outside
  Book-Entry Only System

  	
  36

  
	
  Section 2.13

  	
  Payments and Notices to Cede & Co

  	
  36

  
	
   

  	
   

  	
   

  
	
  ARTICLE III

  	
  APPLICATION OF SERIES
  2007A BOND PROCEEDS AND REQUIRED FUND DEPOSITS; EXPENSE FUND; PROJECT FUND;
  REBATE FUND

  	
  37

  
	
  Section 3.1

  	
  Deposit of Funds

  	
  37

  
	
  Section 3.2

  	
  Expense Fund

  	
  37

  
	
  Section 3.3

  	
  Project Fund

  	
  37

  
	
  Section 3.4

  	
  Rebate Fund

  	
  39

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV

  	
  REVENUES AND FUNDS

  	
  40

  
	
  Section 4.1

  	
  Source of Payment of Series 2007A Bonds

  	
  40

  
	
  Section 4.2

  	
  Revenue Fund

  	
  40

  
	
  Section 4.3

  	
  Interest Fund

  	
  40

  
	
  Section 4.4

  	
  Bond Sinking Fund

  	
  40

  
	
  Section 4.5

  	
  Debt Service Reserve Fund

  	
  41

  
	
  Section 4.6

  	
  Redemption Fund

  	
  43

  
	
  Section 4.7

  	
  Investment of Funds

  	
  43

  
	
  Section 4.8

  	
  Trust Funds

  	
  44

  
	
  Section 4.9

  	
  Excluded Funds; Transfers to Rebate Fund

  	
  44

  
				

 

i

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE V

  	
  REDEMPTION OF SERIES
  2007A BONDS

  	
  45

  
	
  Section 5.1

  	
  Redemption Dates and Prices

  	
  45

  
	
  Section 5.2

  	
  Bond Sinking Fund Deposits - Mandatory Deposits

  	
  47

  
	
  Section 5.3

  	
  Notice of Redemption

  	
  47

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI

  	
  GENERAL COVENANTS

  	
  49

  
	
  Section 6.1

  	
  Payment of Principal and Interest

  	
  49

  
	
  Section 6.2

  	
  Performance of Covenants; Legal Authorization

  	
  49

  
	
  Section 6.3

  	
  Ownership; Instruments of Further Assurance

  	
  49

  
	
  Section 6.4

  	
  Recording and Filing

  	
  49

  
	
  Section 6.5

  	
  Books and Records

  	
  50

  
	
  Section 6.6

  	
  Bond Register

  	
  50

  
	
  Section 6.7

  	
  Rights Under the Loan Agreement

  	
  50

  
	
  Section 6.8

  	
  Designation of Additional Paying Agents

  	
  50

  
	
  Section 6.9

  	
  Arbitrage; Compliance with Tax Exemption Agreement

  	
  50

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII

  	
  EVENTS OF DEFAULT;
  REMEDIES

  	
  51

  
	
  Section 7.1

  	
  Extension of Payment; Penalty

  	
  51

  
	
  Section 7.2

  	
  Events of Default

  	
  51

  
	
  Section 7.3

  	
  Acceleration

  	
  52

  
	
  Section 7.4

  	
  Remedies; Rights of Bondholders

  	
  52

  
	
  Section 7.5

  	
  Direction of Proceedings by Bondholders

  	
  53

  
	
  Section 7.6

  	
  Appointment of Receivers

  	
  53

  
	
  Section 7.7

  	
  Application of Moneys

  	
  53

  
	
  Section 7.8

  	
  Remedies Vested in Bond Trustee

  	
  55

  
	
  Section 7.9

  	
  Rights and Remedies of Bondholders

  	
  55

  
	
  Section 7.10

  	
  Termination of Proceedings

  	
  56

  
	
  Section 7.11

  	
  Waiver of Events of Default

  	
  56

  
	
  Section 7.12

  	
  Borrower’s Rights of Possession and Use of Its
  Property

  	
  56

  
	
  Section 7.13

  	
  Waiver of Redemption; Effect of Sale of Trust Estate

  	
  56

  
	
  Section 7.14

  	
  Notice of Default

  	
  57

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII

  	
  THE BOND TRUSTEE

  	
  58

  
	
  Section 8.1

  	
  Acceptance of the Trusts

  	
  58

  
	
  Section 8.2

  	
  Fees, Charges and Expenses of Bond Trustee and any
  Additional Paying Agent

  	
  60

  
	
  Section 8.3

  	
  Notice to Issuer and the Bondholders if Default
  Occurs

  	
  61

  
	
  Section 8.4

  	
  Good Faith Reliance

  	
  61

  
	
  Section 8.5

  	
  Dealings in Series 2007A Bonds

  	
  61

  
	
  Section 8.6

  	
  Several Capacities

  	
  61

  
	
  Section 8.7

  	
  Intervention by Bond Trustee

  	
  61

  
	
  Section 8.8

  	
  Successor Bond Trustee by Merger or Consolidation

  	
  62

  
	
  Section 8.9

  	
  Bond Trustee Required; Eligibility

  	
  62

  
					

 

ii

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  Section 8.10

  	
  Resignation by the Bond Trustee

  	
  62

  
	
  Section 8.11

  	
  Removal of the Bond Trustee

  	
  62

  
	
  Section 8.12

  	
  Appointment of Successor Bond Trustee by the
  Bondholders; Temporary Bond Trustee

  	
  63

  
	
  Section 8.13

  	
  Judicial Appointment of Successor Trustee

  	
  63

  
	
  Section 8.14

  	
  Concerning Any Successor Bond Trustees

  	
  63

  
	
  Section 8.15

  	
  Bond Trustee Protected in Relying Upon Resolution,
  Etc

  	
  64

  
	
  Section 8.16

  	
  Successor Bond Trustee as Trustee of Funds, Paying
  Agent and Bond Registrar

  	
  64

  
	
   

  	
   

  	
   

  
	
  ARTICLE IX

  	
  SUPPLEMENTAL BOND
  INDENTURES

  	
  65

  
	
  Section 9.1

  	
  Supplemental Bond Indentures Not Requiring Consent
  of Bondholders

  	
  65

  
	
  Section 9.2

  	
  Supplemental Bond Indentures Requiring Consent of
  Bondholders

  	
  66

  
	
   

  	
   

  	
   

  
	
  ARTICLE X

  	
  AMENDMENTS TO THE LOAN
  AGREEMENT

  	
  68

  
	
  Section 10.1

  	
  Amendments, Etc. to Loan Agreement Not Requiring
  Consent

  	
  68

  
	
  Section 10.2

  	
  Amendments, Etc. to Loan Agreement Requiring Consent
  of the Bondholders

  	
  68

  
	
   

  	
   

  	
   

  
	
  ARTICLE XI

  	
  SATISFACTION OF THIS
  BOND INDENTURE

  	
  70

  
	
  Section 11.1

  	
  Defeasance

  	
  70

  
	
  Section 11.2

  	
  Liability of Issuer Not Discharged

  	
  71

  
	
  Section 11.3

  	
  Provision for Payment of Portion of the Series 2007A
  Bonds

  	
  71

  
	
  Section 11.4

  	
  When Advance Refunding is Not Permitted and Special
  Conditions for Refundings

  	
  72

  
	
   

  	
   

  	
   

  
	
  ARTICLE XII

  	
  MANNER OF EVIDENCING
  OWNERSHIP OF SERIES 2007A BONDS

  	
  73

  
	
  Section 12.1

  	
  Proof of Ownership

  	
  73

  
	
   

  	
   

  	
   

  
	
  ARTICLE XIII

  	
  MISCELLANEOUS

  	
  74

  
	
  Section 13.1

  	
  Limitation of Rights

  	
  74

  
	
  Section 13.2

  	
  Unclaimed Moneys

  	
  74

  
	
  Section 13.3

  	
  Severability

  	
  74

  
	
  Section 13.4

  	
  Notices

  	
  75

  
	
  Section 13.5

  	
  Bond Trustee as Paying Agent and Registrar

  	
  75

  
	
  Section 13.6

  	
  Counterparts

  	
  75

  
	
  Section 13.7

  	
  Applicable Law

  	
  75

  
	
  Section 13.8

  	
  Immunity of Officers, Employees and Members of
  Issuer

  	
  75

  
	
  Section 13.9

  	
  Parties Interested Hereunder

  	
  76

  
	
  Section 13.10

  	
  Continuing Disclosure

  	
  76

  
	
  Section 13.11

  	
  The Intercreditor Agreement

  	
  76

  
					

 

iii

 

	
  EXHIBIT A (FORM OF SERIES 2007A BOND)

  	
  A-1

  
	
   

  	
   

  
	
  EXHIBIT B PROJECT DESCRIPTION

  	
  B-1

  
	
   

  	
   

  
	
  EXHIBIT C INTEREST PAYMENT SCHEDULE

  	
  C-1

  

 

iv

 

THIS BOND TRUST INDENTURE
(this “Bond Indenture”), dated as of October 1, 2007, between the BROWN COUNTY,
SOUTH DAKOTA, a public body corporate and politic and a political subdivision,
created and existing under the laws of the State of South Dakota (the “Issuer”),
and WELLS FARGO BANK, NATIONAL ASSOCIATION, as trustee (the “Bond Trustee”),
duly established, existing and authorized to accept and execute trusts of the
character herein set out under and by virtue of the laws of the United States
of America. Capitalized terms used but not defined in the following recitals
and granting clauses shall have the meanings given such terms in Article I
hereof.

 

W I T N E S S E T
H:

 

WHEREAS, the Issuer
is a public body corporate and politic and a political subdivision duly and
validly created and existing under the laws and constitution of the State of
South Dakota and has all powers granted under the provisions of South Dakota
Codified Laws Chapter 9-54, as supplemented and amended (the “Act”); and

 

WHEREAS, pursuant to
the Act, the Issuer is authorized and empowered, among other things, to issue
its revenue bonds for the purpose of financing “pollution control facilities”
(within the meaning of the Act) within the territorial jurisdiction of the
Issuer; and

 

WHEREAS,
simultaneously with the execution and delivery of this Bond Indenture, the
Issuer and Heartland Grain Fuels, L.P., a limited partnership organized and
existing under the laws of the State of Delaware (the “Borrower”) which
operates an ethanol production facility (the “Facility”) located in Brown
County at 38469-133nd  Street,
Aberdeen, South Dakota 57401, have entered into a Loan Agreement (the “Loan
Agreement”), pursuant to which the Borrower covenants, among other things, to
make loan repayments in amounts and at times which will be sufficient to pay
when due the principal of, premium, if any, and interest on the revenue bonds
herein authorized; and

 

WHEREAS, the
Borrower has requested the Issuer to issue its revenue anticipation
certificates and lend the proceeds thereof to the Borrower for the purpose of
providing funds which will be used, together with certain funds of the
Borrower, to provide the amounts necessary to (i) pay the cost of the
acquisition, construction and equipping of improvements to and expansion of the
Facility consisting of certain Solid Waste Disposal Facilities (as herein
defined which constitute a project within the meaning of the Act (the “Project”),
including reimbursement to the Borrower of certain moneys previously spent with
respect to the Project, (ii) fund a debt service reserve, (iii) pay interest on
the revenue bonds during construction of the Project and (iv) pay certain
expenses incurred in connection with the issuance of said revenue bonds; and

 

WHEREAS, the Issuer
is authorized under the Act to issue its revenue bonds for the aforesaid
purposes and the Issuer has determined that the public interest will be best
served by the issuance of its revenue bonds in order to lend funds to the
Borrower for such purposes; and

 

WHEREAS, the Issuer
has determined that it will issue its revenue anticipation certificates, to be
known as Brown County, South Dakota Subordinate Solid Waste Facilities Revenue
Bonds (Heartland Grain Fuels, L.P. Ethanol Plant Project), Series 2007A (the “Series

 

1

 

2007A Bonds”), pursuant to the provisions of this Bond Indenture, for
the purpose of providing the amounts necessary, together with certain funds of
the Borrower, to (i) pay the costs of the Project, (ii) fund a debt service
reserve, (iii) pay interest on the Series 2007A Bonds during construction of
the Project and (iv) pay certain expenses incurred in connection with the
issuance of the Series 2007A Bonds; and

 

WHEREAS, the
execution and delivery of this Bond Indenture and the issuance of the Series
2007A Bonds have been in all respects duly and validly authorized by a
resolution duly adopted by the Issuer; and

 

WHEREAS, the Series
2007A Bonds will be issued in substantially the form set forth in Exhibit A
hereto, with necessary and appropriate variations, omissions and insertions as
permitted or required by this Bond Indenture; and

 

WHEREAS all things
necessary to make the Series 2007A Bonds, when authenticated by the Bond
Trustee and issued as in this Bond Indenture provided, the valid, binding and
legal obligations of the Issuer according to the import thereof, and to
constitute this Bond Indenture a valid assignment and pledge of the payments
and prepayments of the Borrower under the Loan Agreement to be applied to the
payment of the principal of, premium, if any, and interest on the Series 2007A
Bonds and a valid assignment of the rights of the Issuer under the Loan
Agreement (excluding Unassigned Rights), have been done and performed, and the
creation, execution and delivery of this Bond Indenture, and the creation,
execution and issuance of the Series 2007A Bonds, subject to the terms hereof,
have in all respects been duly authorized;

 

NOW, THEREFORE, THIS BOND INDENTURE
WITNESSETH:

 

That the Issuer
in consideration of the premises and of the purchase of the Series 2007A Bonds
and of other good and lawful consideration, the receipt of which is hereby
acknowledged, and to secure the payment of the principal of, premium, if any,
and interest on the Series 2007A Bonds and the performance and observance of
all of the covenants and conditions herein or therein contained, has executed
and delivered this Bond Indenture and has conveyed, granted, assigned,
transferred, pledged, set over and confirmed, and by these presents does hereby
convey, grant, assign, transfer, pledge, set over and confirm, unto the Bond
Trustee, its successor or successors and its or their assigns forever, a
security interest in the property hereinafter described (said property being
herein sometimes referred to as the “Trust Estate”) to wit:

 

2

 

GRANTING CLAUSES

 

DIVISION I

 

All right,
title and interest of the Issuer in and to the Loan Agreement and the amounts
payable to the Issuer thereunder (excluding Unassigned Rights);

 

DIVISION II

 

All right,
title and interest of the Bond Trustee in and to the Bond Collateral Documents
and all amounts realized from the enforcement thereof (excluding with respect
to Unassigned Rights);

 

DIVISION III

 

Any and all
other property of every kind and nature from time to time hereafter, by
delivery or by writing of any kind, conveyed, pledged, assigned or transferred
as and for additional security hereunder by the Issuer, the Borrower, or anyone
on their behalf to the Bond Trustee, subject to the terms thereof, including
without limitation funds of the Borrower held by the Bond Trustee in any of the
funds and accounts established hereunder or otherwise as security for the
Series 2007A Bonds and the Bond Proceeds Sub-Account established pursuant to
the Accounts Agreement;

 

EXCEPTED PROPERTY

 

There is,
however, expressly excepted and excluded from the lien and operation of this
Bond Indenture amounts held by the Bond Trustee in the Rebate Fund established
by this Bond Indenture;

 

TO HAVE AND TO HOLD,
all and singular, the properties and the rights and privileges hereby conveyed,
assigned and pledged by the Issuer or intended so to be, unto the Bond Trustee
and its successors and assigns forever, in trust, nevertheless, for the equal
and pro rata benefit and security of each and every holder of the Series 2007A
Bonds issued and to be issued hereunder, without preference, priority or
distinction as to participation in the benefit and protection hereof of one Series
2007A Bond over or from the others, by reason of priority in the issue or
negotiation or maturity thereof, or for any other reason whatsoever, except as
herein otherwise expressly provided, so that each and all of such Series 2007A
Bonds shall have the same right, lien and privilege under this Bond Indenture
and shall be equally secured hereby with the same effect as if the same had all
been made, issued and negotiated simultaneously with the delivery hereof and
were expressed to mature on one and the same date;

 

PROVIDED, NEVERTHELESS,
and these presents are upon the express condition that if the Issuer or its
successors or assigns shall well and truly pay or cause to be paid the
principal of such Series 2007A Bonds with interest according to the provisions
set forth in the Series 2007A Bonds and each of them or shall provide for the
payment or redemption of such Series 2007A Bonds by depositing or causing to be
deposited with the Bond Trustee the entire amount of funds or securities
requisite for payment or redemption thereof when and as authorized by the
provisions hereof, and shall also pay or cause to be paid all other sums
payable hereunder by the 

 

3

 

Issuer, then these presents and the estate and rights hereby granted
shall cease, determine and become void, and thereupon the Bond Trustee, on
payment of its lawful charges and disbursements then unpaid, on demand of the
Issuer and upon the payment of the cost and expenses thereof, shall duly
execute, acknowledge and deliver to the Issuer such instruments of satisfaction
or release as may be necessary or proper to discharge this Bond Indenture,
including if appropriate any required discharge of record, and if necessary
shall grant, convey, reassign and deliver to the Issuer, its successors or
assigns, all and singular the property, rights, privileges and interests by it
hereby granted, conveyed, assigned and delivered, and all substitutes therefor,
or any part thereof, not previously disposed of or released as herein provided;
otherwise this Bond Indenture shall be and remain in full force.

 

AND IT IS HEREBY COVENANTED, DECLARED AND
AGREED by and between the parties hereto that all
Series 2007A Bonds are to be issued, authenticated and delivered, and that all
the trust estate is to be held and applied, subject to the further covenants,
conditions, releases, uses and trusts hereinafter set forth, and the Issuer,
for itself and its successors, does hereby covenant and agree to and with the
Bond Trustee and its respective successors in said trust, for the benefit of
those who shall hold the Series 2007A Bonds, or any of them as follows:

 

4

 

ARTICLE I

 

DEFINITIONS

 

Section 1.1                         Definitions. The following words and terms as used herein shall have the
following meanings herein and in the Loan Agreement, unless the context or use
indicates another or different meaning or intent:

 

“ABE Pledge Agreement” means that certain Pledge and Security
Agreement, dated as of October 1, 2007 among, Advanced BioEnergy, ABE
Heartland, LLC, and the Bond Trustee, as amended or supplemented from time to
time.

 

“Aberdeen Expansion” means the expansion of
the Aberdeen Facility financed in part by the Senior Credit Facilities and the
Series 2007A Bonds and includes the Project.

 

“Aberdeen Facility” means the existing ethanol
production facility owned by the Borrower in the City of Aberdeen, Brown
County, South Dakota.

 

“Aberdeen Grain Elevator Lease” means that certain Lease
Agreement, dated as of October 1, 2007, between the Borrower and South Dakota
Wheat Growers Association, relating to the grain elevator for the Aberdeen
Facility.

 

“Aberdeen Senior Mortgage” means that certain
Mortgage — Collateral Real Estate Mortgage, Security Agreement, Financing
Statement, Fixture Filing and Assignment of Leases, Rents and Security Deposits
made by the Borrower to the collateral agent specified therein for the benefit
of the Senior Lenders relating to the Aberdeen Facility.

 

“Aberdeen Subordinate Mortgage” means that
certain Subordinate Mortgage — Collateral Real Estate Mortgage, Security
Agreement, Financing Statement, Fixture Filing and Assignment of Leases, Rents
and Security Deposits made by the Borrower to the Bond Trustee relating to the
Aberdeen Facility.

 

“Aberdeen Subordination, Non-Disturbance and Attornment Agreement”
means that certain Subordination, Non-Disturbance and Attornment Agreement,
dated as of October 1, 2007 among the Bond Trustee as mortgagee, the Borrower
as lessee and South Dakota Wheat Growers Association as mortgagor, in relation
to the Aberdeen Grain Elevator Lease, including all schedules, exhibits and
attachments thereto.

 

“Accounts Agreement” means that certain
Accounts Agreement by and among the Borrower, the Accounts Bank, the collateral
agent as set forth therein, the administrative agent as set forth therein and
the Bond Trustee.

 

“Accounts Bank” means Amarillo National Bank,
not its individual capacity, but solely as depository bank and securities
intermediary under the Accounts Agreement, and includes each other Person that
may, from time to time, be appointed as successor Accounts Bank pursuant to and
in accordance with the Accounts Agreement.

 

5

 

“Act” means South
Dakota Codified Laws Chapter 9-54 as supplemented and amended.

 

“Additional Facility Document” means each contract,
agreement, letter agreement or other instrument to which the Borrower becomes a
party after the date hereof, other than any document under which the Borrower
(a) could not reasonably be expected to have obligations or liabilities in
the aggregate in excess of two million Dollars ($2,000,000), or be entitled to
receive revenues in the aggregate in excess of two million Dollars
($2,000,000), in either case in value in any twelve (12) month period and
(b) a termination of which could not reasonably be expected to result in a
Material Adverse Effect; provided, that for the purposes of this
definition, any series of related transactions (other than transactions,
including hedging transactions, relating to the sale of Products or the
purchase of corn and natural gas and Interest Rate Protection Agreements) shall
be considered as one transaction, and all contracts, agreements, letter
agreements or other instruments in respect of such transactions shall be
considered as one contract, agreement, letter agreement or other instrument, as
applicable.

 

“Administrative Agent”  means West LB, not in its individual capacity
but solely as administrative agent for the Senior Lenders under the Senior
Credit Agreement and the other Financing Documents, and includes each other
Person that may, from time to time, be appointed as successors Administrative
Agent pursuant to the Senior Credit Agreement.

 

“Advanced BioEnergy” means Advanced BioEnergy,
LLC a Delaware limited liability company, which currently owns 100% of the
Equity Interests in the Parent Company, and its successors and assigns and any
surviving, resulting or transferee entity.

 

“Affiliate” of any Person means any other
Person that, directly or indirectly, controls, is controlled by or is under
common control with such Person. A Person shall be deemed to be “controlled by”
any other Person if such other Person (a) possesses, directly or indirectly,
power to direct or cause the direction of the management and policies of such
Person whether by contract or otherwise or (b) owns at least ten percent (10%)
of the Equity Interests in such Person.

 

“Ancillary Documents” means, with respect to
each Additional Facilities Document, the following;

 

(i)                                    each
security instrument and agreement necessary or desirable to grant to the Bond
Trustee a perfected Lien (subject only to Permitted Liens) in such Additional
Facilities Document and all property interests received by the Borrower in
connection therewith;

 

(ii)                                 all
recorded UCC financing statements and other filings required to perfect such
Lien;

 

(iii)                              if
reasonably requested by the Bond Trustee, opinions of counsel for the Borrower
addressing such matters relating to such document, each applicable Bond
Collateral Document and Lien;

 

(iv)                             certified
evidence of the authorization of such Additional Facility Document by the
Borrower.

 

6

 

“Authorized Investments”
means any of the following investments which at the time are legal investments
under the laws of the State:

 

(v)                               Government
Obligations;

 

(vi)                            Obligations
of agencies of the United States government issued by the Federal Land Banks,
the Federal Home Loan Bank, the Federal Intermediate Credit Bank, and the
Central Bank for Cooperatives;

 

(vii)                         Direct
obligations of, and obligations fully guaranteed by, any of the fifty states of
the United States of America rated a minimum of “A1” or “AA” by S&P or any
equivalent rating by any equivalent rating service (such rating requirement can
be met by an attached letter of credit from any bank meeting the requirements
stated in clause (e) below or by municipal bond insurance);

 

(viii)                      Indebtedness
of any county or other local government body within the United States of
America rated at least “A1” or “AA” by S&P or any equivalent rating by any
equivalent rating service (such rating requirement can be met by an attached
letter of credit from any bank meeting the requirements stated in clause (e)
below or by municipal bond insurance);

 

(ix)                              Indebtedness
of any corporation rated “A1” or “AA” by S&P or any equivalent rating by
any equivalent rating service;

 

(x)                                 Certificates
of deposit, banker’s acceptances, trust deposits, demand deposits, including
interest bearing money market accounts, or time deposits of any commercial
bank, branch or Edge Act (12 USC 611 et seq.) branch which is a member of the
Federal Reserve System, including the Trustee or any of its affiliates, has a
net worth of at least $100 million and whose short term bank deposits have an “A”
prefix by S&P or any equivalent rating by any equivalent rating service;

 

(xi)                              Repurchase
agreements or reverse repurchase agreements with financial institutions whose
commercial paper is “A1” or whose debt rating is “AA” by S&P or an
equivalent rating by an equivalent rating service or any bank who meets the
requirements as stated in clause (e) above, provided that in all cases the
market value of the collateral used for such transactions must be adequate to
insure safety, liquidity and preservation of capital: “AAA” 102%, “AA” 110%;

 

(xii)                          Securities
and Exchange Commission Rule 2a 7 money market funds with a net asset value of
one dollar and a parent company rating of “A1” or better by S&P or any
equivalent rating by any equivalent rating service, including, without
limitation, any mutual fund for which the Bond Trustee or an affiliate of the
Bond Trustee serves as investment manager, administrator, shareholder servicing
agent, and/or custodian or subcustodian, notwithstanding that (a) the Bond
Trustee or an affiliate of the Bond Trustee receives fees from such funds for
services rendered, (b) the Bond Trustee charges and collects fees for services
rendered pursuant to the Bond Indenture, which fees are separate from the fees
received from such 

 

7

 

funds, and (c) services
performed for such funds and pursuant to this Indenture may at times duplicate
those provided to such funds by the Trustee or its affiliates; and

 

(xiii)                       any other
obligations or securities permitted by the Senior Credit Facilities.

 

“Authorized Officer” means (i) with respect to
any Person that is a corporation, the chief executive officer, the chief
operating officer, the president, any vice president, the treasurer or the
chief financial officer of such Person, (ii) with respect to any Person that is
a partnership, an Authorized Officer of a general partner of such Person, (iii)
with respect to any Person that is a limited liability company, any manager,
the president, any vice president, the treasurer or the chief financial officer
of such Person, or an Authorized Officer of the managing member of such Person,
or (iv) with respect to any Person, such other representative of such Person
who, in each such case, has been named as an Authorized Officer on a
certificate of incumbency of such Person delivered to the Bond Trustee on or
after the date hereof.

 

“Blocked Account Agreement” means the “Blocked
Account Agreement” as defined in the Senior Credit Agreement.

 

“Bond Accounts” means the funds and accounts established and
maintained under the Bond Indenture.

 

“Bond Collateral Documents” means the Bond Indenture, the
Subordinate Mortgage, the Subordinate Security Agreement, the Subordinate
Equity Pledge, the ABE Pledge Agreement and any other documents granting, or
relating to the grant, of security for the payment of amounts due under the
Loan Agreement and the Series 2007A Bonds.

 

“Bond Documents” means the Series 2007A  Bonds, the Loan Agreement, the Bond
Collateral Documents, the Bond Resolution and any other documents entered into
in connection with, or relating to, the Series 2007A Bonds and the transactions
contemplated by the issuance thereof.

 

“Bond Proceeds Withdrawal Certificate” 
means a certificate substantially in the form
of the “Bond Proceeds Withdrawal Certificate” attached as Exhibit K to the
Accounts Agreement.

 

“Bond Resolution” means the resolution of the Issuer
authorizing the issuance of the Series 2007A Bonds and the related transactions
and documents.

 

“Bondholder”, “Holder”,
“Owner” and “Registered Owner” mean with respect to the Series 2007A
Bonds the registered owner of any Series 2007A Bond and does not mean any
beneficial owner of the Series 2007A Bonds whether through the book-entry only
system of DTC or otherwise.

 

“Bond Counsel” means Briggs and Morgan,
Professional Association or any other nationally recognized municipal bond
counsel selected by the Issuer or by the Borrower with the consent of the
Issuer.

 

8

 

“Bond Indenture”
means this Bond Trust Indenture between the Issuer and the Bond Trustee, as it
may from time to time be amended or supplemented.

 

“Bond Proceeds Sub-Account” means the account
so named established pursuant to the Accounts Agreement solely for the deposit
of proceeds of the Series 2007A Bonds, and interest earnings thereon, from the
Project Fund as permitted or directed by the Bond Indenture held under the
Accounts Agreement solely for the payment of Costs of the Project as defined in
the Bond Indenture and the Tax Exemption Agreement.

 

“Bond Register”
means the registration books of the Issuer kept by the Bond Trustee (in its
capacity as Registrar) to evidence the registration and transfer of the Series
2007A Bonds.

 

“Bond Sinking Fund”
means the fund created in Section 4.4 hereof.

 

“Bond Trustee” means
Wells Fargo Bank, National Association, as trustee, or any successor trustee
under this Bond Indenture.

 

“Bond Year” means
any twelve-month period beginning January 1 of a calendar year and ending on
December 31 of the succeeding calendar year. For the purpose of calculating
debt service on the Series 2007A Bonds payable in any Bond Year, principal and
interest payable on the Series 2007A Bonds on January 1 of any Bond Year shall
be deemed to be payable during the preceding Bond Year.

 

“Borrower” means Heartland Grain Fuels, L.P.,
a Delaware limited partnership and its successors and assigns and any
surviving, resulting or transferee entity.

 

“Business Day” means
a day which is not (a) a Saturday, Sunday or legal holiday on which banking
institutions in the State, the State of New York or the state in which the
principal corporate trust office of the Bond Trustee is located are authorized
by law or executive order to close or (b) a day on which the New York Stock
Exchange is authorized or obligated by law or executive order to close.

 

“Capitalized Lease Liabilities” of any Person
means all monetary obligations of such Person under any leasing or similar
arrangement that, in accordance with GAAP, would be classified as capitalized
leases on a balance sheet of such Person or otherwise disclosed as such in a
note to such balance sheet and, for purposes of the Financing Documents, the
amount of such obligations shall be the capitalized amount thereof, determined
in accordance with GAAP.

 

“Cash Equivalents” means:

 

(a)                                  readily
marketable direct obligations of the government of the United States or any
agency or instrumentality thereof, or obligations unconditionally guaranteed by
the full faith and credit of the government of the United States, in each case
maturing within one (1) year from the date of acquisition thereof;

 

(b)                                 securities
issued by any state of the United States of America or any political
subdivision of any such state or any public instrumentality thereof having
maturities of not more than one (1) year from the date of acquisition thereof
and, at the time of acquisition, 

 

9

 

having a rating of AA- or
higher from S&P or Aa3 or higher from Moody’s (or, if at any time neither
S&P nor Moody’s shall be rating such obligations, an equivalent rating from
another nationally recognized rating service);

 

(c)                                  investments
in commercial paper maturing within one hundred eighty (180) days from the date
of acquisition thereof and having, at such date of acquisition, a rating of at
least A-1 or P-1 from either S&P or Moody’s (or, if at any time neither
S&P nor Moody’s shall be rating such obligations, an equivalent rating from
another nationally recognized rating service);

 

(d)                                 investments
in certificates of deposit, banker’s acceptances and time deposits maturing
within two hundred and seventy (270) days from the date of acquisition thereof
issued or guaranteed by or placed with, and money market deposit accounts
issued or offered by, the Administrative Agent or any domestic office of any
commercial bank organized under the laws of the United States of America, any
State thereof, any country that is a member of the Organization for Economic
Co-Operation and Development or any political subdivision thereof, that has a
combined capital and surplus and undivided profits of not less than five
hundred million Dollars $(500,000,000);

 

(e)                                  fully
collateralized repurchase agreements with a term of not more than 30 days for
securities described in clause (a) above and entered into with a financial
institution satisfying the criteria of clause (d) of this definition; and

 

(f)                                    investments
in “money market funds” within the meaning of Rule 2a-7 of the Investment
Company Act of 1940, as amended, substantially all of whose assets are invested
in investments of the type described in clauses (a) through (e) of this
definition.

 

“Cash Flow” means, for any period, the sum
(without duplication) of the following: 
(i) all cash paid to the Borrower during such period in connection with
the Ethanol Marketing Agreement, Co-Product Marketing Agreement and any other
sales of Products, (ii) all interest and investment earnings paid to the Borrower
or the Project Accounts during such period on amounts on deposit in the Project
Accounts, (iii) all cash paid to the Borrower during such period as business
interruption insurance proceeds, and (iv) all other cash paid to the Borrower
during such period; provided, however, that Cash Flow shall not include any
proceeds of the Senior Credit Facilities or any other Indebtedness incurred by
the Borrower; insurance proceeds; condemnation proceeds; the any equity
contribution; proceeds from any disposition of assets of the Facilities or the
Borrower (other than Products); tax refunds; amounts received, whether by way
of a capital contribution or otherwise, from any holders of Equity Interests of
the Borrower; and any other extraordinary or non-cash income or receipt of the
Borrower under GAAP.

 

“Cash Flow Available for Debt Service” means,
for any period, an amount equal to the amount of Cash Flow deposited in the “Revenue
Account” established under the Accounts Agreement during such period minus all
amounts paid during such period pursuant to priorities first and second of
Section 6.01(c) of the Accounts Agreement so long as the Accounts Agreement is
in effect and thereafter means, for any period, an amount equal to Cash Flow
minus all amounts paid by the Borrower for Operation and Maintenance Expenses
and Maintenance Capital Expenses.

 

10

 

“Change Order” means, with respect to an
Expansion, each “Change Order” (if any) as described in the respective
Design-Build Agreement.

 

“Closing Date” means the date on which all the
conditions set forth in the Senior Credit Facilities as to closing and first
funding have been satisfied or waived.

 

“Code” means the
Internal Revenue Code of 1986, as amended from time to time. Each reference to
the Code herein shall be deemed to include the United States Treasury
Regulations, including temporary and proposed regulations relating to the Code
or the sections thereof specifically referenced.

 

“Collateral” means all assets of and Equity
Interests in the Borrower, whether now owned or hereafter acquired, upon which
a Lien is purported to be created by any Bond Collateral Document then in
effect or contemplated to be in effect.

 

“Collateral Agent” means WestLB, not in its
individual capacity but solely in its capacity as collateral agent for the
Senior Secured Parties under the Financing Documents, and includes each other
Person that may, from time to time, be appointed as successor Collateral Agent
pursuant to Section 9.06 (Resignation or Removal of Agent) of the Credit
Agreement.

 

“Commodity Hedging Arrangements” means any arrangement to
hedge the price of corn purchases, ethanol sales, Distillers Grains sales or
natural gas purchases.

 

“Commodity Risk Management Plans” means risk management plans
prepared by the Borrower setting forth terms and conditions relating to any
Commodity Hedging Arrangements from time to time proposed to be entered into by
the Borrower, including any updates made to such risk management.

 

“Construction Budget” means the budget
attached the Senior Credit Facilities that sets forth all categories of costs
and expenses required in connection with the development, construction,
start-up, and testing of the Aberdeen Expansion, including all construction
costs, all costs under the Design-Build Agreement, all interest, taxes and
other carrying costs related to the construction loans, and costs related to
the construction of the facilities described under the Aberdeen Expansion
Documents, as updated from time to time in accordance the Senior Credit
Facilities.

 

“Contest” means, with respect to any matter or
claim involving any Person, that such Person is contesting such matter or claim
in good faith and by appropriate proceedings timely instituted; provided
that the following conditions are satisfied: 
(a) such Person has posted a bond or cash collateral (or other security
acceptable to the Senior Lenders so long as the Senior Credit Facilities are in
effect or, thereafter, the Bond Trustee) for the full amount of such claim (or
such lower amount as is acceptable to the Senior Lenders so long as the Senior
Credit Facilities are in effect or, thereafter, the Bond Trustee); (b) during
the period of such contest, the enforcement of any contested item is
effectively stayed; (c) none of such Person or any of its officers, directors
or employees, or any Senior Lender, the Bond Trustee, the Issuer or nay
Bondholder or their respective officers, directors or employees, is or would
reasonably be expected to become subject to any criminal liability or sanction
in connection with such contested items; and (d) such contest and any resultant
failure to pay or discharge the claimed or assessed amount during the 

 

11

 

pendency of such contest does not, and could not reasonably be expected
to (i) result in a Material Adverse Effect or (ii) involve a material risk of
the sale, forfeiture or loss of, or the creation, existence or imposition of
any Lien on, any of the Collateral.

 

“Contractual Obligation” means, as to any
Person, any provision of any security issued by such Person or of any
agreement, instrument or other undertaking to which such Person is a party or
by which it or any of its property is bound.

 

“Conversion Date” means the Business Day upon which
(i) all the conditions precedent set forth in the Senior Credit Facilities
for the conversion from a construction loan to a term loan shall have been
satisfied (or waived in accordance with the terms of the Senior Credit
Facilities) and (ii) the construction loans are converted to term loans.

 

“Co-Product Marketing Agreement” means that
certain Co-Product Marketing Agreement, dated as of May 9, 2007, between the
Borrower and Dakotaland Feeds, LLC.

 

“Costs of the Project” means
all costs of acquiring, constructing and equipping the Project which are
permitted by the Act and consist of Solid Waste Disposal Facilities, and,
without intending to limit or restrict any proper definition of such costs
under any applicable law, shall include:

 

(a)                                  subject
to the reimbursement restrictions contained in the Code, payment to the
Borrower of such amounts, if any, as are necessary to reimburse the Borrower in
full for all advances and payments made by it or for its account, with respect
to the Project for expenditures in connection with the acquisition of any
property required for the Project, the preparation of the plans and
specifications (including any preliminary study or planning of the Project), or
any aspect thereof and any reports or analyses concerning the Project, and all
real or personal property deemed necessary in connection with the Project, or
any one or more of said expenditures (including architectural, engineering and
supervisory services);

 

(b)                                 payment
for labor, services, materials and supplies used or furnished in the
acquisition, construction and equipping of the Project, all as provided in the
plans and specifications, payment for the cost of the acquisition, construction
and installation of facilities, and all real and personal property deemed
necessary in connection with the Project and payment for the miscellaneous
expenses incidental to any of the foregoing items;

 

(c)                                  payment
of any other costs and expenses relating to the acquisition, construction and
equipping of the Project, including interest on the Series 2007A Bonds during
construction of the Project, or the authorization, issuance and sale of the
Series 2007A Bonds;

 

(d)                                 the
cost of any indemnity and surety bonds to secure deposits in the Project Fund,
taxes or other municipal or governmental charges lawfully levied or assessed
during construction upon the Project or any property acquired therefor, and
premiums on insurance, if any, in connection with the Project, during
construction; and

 

12

 

(e)                                  any
obligation or expense hereafter incurred by the Borrower for any of the
foregoing purposes.

 

“Dakota Fuels” means Dakota Fuels, Inc., a
Delaware corporation, which is the general partner of the Borrower.

 

“Date of Taxability” means the date on which a
Determination of Taxability exists by expiration of any appeal period or
unsuccessful conclusion of any appeal or contest.

 

“Debt Service” means, for any period, with
respect to the Senior Credit Facilities or the Loan Agreement, as the case may
be, the sum of (i) all fees and (iii) principal payments of the Loans
(excluding the Required Cash Sweep and any other mandatory prepayments)
scheduled to become due and payable during such period to the Senior Lenders or
the Bond Trustee as the case may be and ,with respect to the Senior Credit
Facilities only, all payments due by the Borrower pursuant to Section 4.03
(Increased Eurodollar Loan Costs) and Section 4.07(a) (Taxes) of the Senior
Credit Facilities with respect to such scheduled principal, interest and fees.

 

“Debt Service Requirements”
means, with respect to the period of time for which calculated, the aggregate
of the payments required to be made during such period in respect of principal
(whether at maturity, as a result of mandatory sinking fund redemption, a
mandatory prepayment or otherwise) and interest on Outstanding Series 2007A
Bonds.

 

“Debt Service Reserve Fund”
means the fund created by Section 4.5 hereof.

 

“Debt Service Reserve Requirement”
means an amount equal to the lesser of (i) the Maximum Annual Debt Service
Requirement on the Series 2007A Bonds, (ii) 10% of the Proceeds of the Series
2007A Bonds or (iii) 125% of the average annual debt service on the Series
2007A Bonds.

 

“Defaulted Interest”
means interest on the Series 2007A Bonds which is payable but not duly paid on
the date due.

 

“Deferred Approvals” has the meaning provided
in the Senior Credit Agreement.

 

“Design-Build Agreement” means each of the
design build agreements for the Aberdeen Expansion specified in the Senior
Credit Facilities.

 

“Distillers Grains” means any form of
distillers grain products (including syrup) marketed by the Borrower from time
to time.

 

“Determination of Taxability” means the
issuance of a statutory notice of deficiency by the Internal Revenue Service,
or ruling of the National Office or any District Office, or a final decision by
any court of competent jurisdiction that interest on the Series 2007A Bonds is
includible in the gross income of the recipient under Section 103 and related sections
of the Code and regulations thereunder as in effect at the date of issuance of
the Series 2007A Bonds, for any reason other than a change of law or that the
Holder is a substantial user or a related person under Section 147(a), provided
that the period for a contest or appeal, if any, of such action, 

 

13

 

ruling or decision has expired without any such appeal or contest
having been instituted, or, if instituted, such contest or appeal has been
unsuccessfully concluded.

 

“DTC” means The
Depository Trust Company, a New York corporation, and its successors and
assigns.

 

“DTC Participant” or
“DTC Participants” means
securities brokers and dealers, banks, trust companies, clearing corporations
and certain other corporations which have access to the DTC system.

 

“Environmental Affiliate” means any Person,
only to the extent of, and only with respect to matters or actions of such
Person for which, the Borrower could reasonably be expected to have liability
as a result of the Borrower retaining, assuming, accepting or otherwise being
subject to liability for Environmental Claims relating to such Person, whether
the source of the Borrower’s obligation is by contract or operation of Law.

 

“Environmental Approvals” means any
Governmental Approvals required under applicable Environmental Laws.

 

“Environmental Claim” means any written
notice, claim, demand or similar written communication by any Person alleging
potential liability or requiring or demanding regulatory compliance or remedial
or responsive measures (including potential liability for investigatory costs,
cleanup, remediation and mitigation costs, governmental response costs, natural
resources damages, property damages, personal injuries, fines or penalties) in
each such case (x) either (i) with respect to environmental
contamination-related liabilities or obligations with respect to which the
Borrower could reasonably be expected to be responsible that are, or could
reasonably be expected to be, in excess of two hundred thousand Dollars
($200,000) in the aggregate, or (ii) that has or could reasonably be expected
to result in a Material Adverse Effect and (y) arising out of, based on or
resulting from (i) the presence, release or threatened release into the
environment, of any Materials of Environmental Concern at any location, whether
or not owned by such Person; (ii) circumstances forming the basis of any
violation, or alleged violation, of any Environmental Laws or Environmental
Approvals; or (iii) personal injury or damage to property as a result of
exposure to Materials of Environmental Concern.

 

“Environmental Laws” means all Laws applicable
to the Facilities relating to pollution or protection of human health, safety
or the environment (including ambient air, surface water, ground water, land
surface or subsurface strata), including Laws relating to emissions,
discharges, releases or threatened releases of Materials of Environmental
Concern, or otherwise applicable to the Facilities relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport,
management, remediation or handling of Materials of Environmental Concern.

 

“Environmental Site Assessment Report” means,
a Phase I environmental site assessment report prepared by an environmental
consulting firm reasonably acceptable to the Administrative Agent, which report
shall comply with ASTM standard 1527-05 (with such modifications thereto as may
reasonably be requested by the Borrower and are reasonably acceptable to the
Administrative Agent), and a Phase II environmental site assessment 

 

14

 

reasonably acceptable to the Senior Lenders, addressing any recognized
environmental conditions or other areas of concern identified in the relevant
Phase I report if in the reasonable determination of the Senior Lenders, acting
in consultation with the Independent Engineer, a Phase II assessment is
warranted.

 

“Equity Interests” means, with respect to any
Person, all of the shares of capital stock of (or other ownership or profit
interests in) such Person, all of the warrants, options or other rights for the
purchase or acquisition from such Person of shares of capital stock of (or
other ownership or profit interests in) such Person, all of the securities
convertible into or exchangeable for shares of capital stock of (or other
ownership or profit interests in) such Person or warrants, rights or options
for the purchase or acquisition from such Person of such shares (or such other
interests), and all of the other ownership or profit interests in such Person
(including partnership, member or trust interests therein), whether voting or
nonvoting, and whether or not such shares, warrants, options, rights or other
interests are outstanding on any date of determination, in each such case
including all voting rights and economic rights related thereto.

 

“ERISA” means the Employee Retirement Income
Security Act of 1974, as amended, and any successor statute of similar import,
together with the regulations thereunder, in each case as in effect from time
to time. References to sections of ERISA also refer to any successor sections.

 

“ERISA Affiliate” means any Person, trade or
business that, together with the Borrower, is or was treated as a single
employer under Section 414 of the Code or Section 4001 of ERISA.

 

“Escrow Obligations”
means (i)  Government Obligations, (ii)
certificates evidencing a direct ownership interest in Government Obligations
or in future interest or principal payments thereon held in a custody account
by a custodian satisfactory to the Bond Trustee, and (iii) obligations of any
state of the United States of America or any political subdivision, public
instrumentality or public Issuer of any such state which are fully secured by
and payable solely from Government Obligations held pursuant to an escrow
agreement satisfactory to the Bond Trustee.

 

“Ethanol Marketing Agreement” means that
certain Ethanol Marketing Agreement dated as of November 30, 2000, between the
Borrower and Williams Ethanol Services, Inc. D/B/A  Williams Bio-Energy, N/K/A Aventine Renewable
Energy, Inc., as amended March 31, 2003 and December 1, 2006.

 

“Event of Abandonment” means any of the
following shall have occurred: (i) the abandonment by the Borrower of the
development, construction, operation or maintenance of the Facilities for a
period of more than sixty (60) consecutive days (other than as a result of
force majeure, an any taking, exercise of rights of eminent domain, public
improvement, inverse condemnation, condemnation or similar action of or
proceeding by any Governmental Authority relating to any material part of the
Project with, any Equity Interests of the Borrower, or any other assets
thereof, or any event that causes the Facilities, or any materials portion
thereof, to be damaged, destroyed, or rendered unfit for normal use for any
reason), (ii) the suspension of all or substantially all of the Borrower’s
activities with respect to the Facilities, other than as the result of such
force majeure, taking or casualty, for a period of more than sixty (60)
consecutive days, 

 

15

 

or (iii) any written acknowledgement by the Borrower of a final
decision to take any of the foregoing actions.

 

“Expansions” means the Aberdeen Expansion and
the Huron Expansion.

 

“Expense Fund” means
the fund created in Section 3.2 hereof.

 

“Facilities” means the Aberdeen Facility, the
Aberdeen Expansion, the Huron Facility and the Huron Expansion, if undertaken.

 

“Facilities Documents” means the documents
related to the Facilities defined as the “Project Documents” in the Senior
Credit Facilities.

 

“Facilities Parties” means each Person (other
than the Borrower or the Parent Company) who is a party to a Facilities
Document.

 

“Final Completion Date” means with respect to
the Aberdeen Expansion, the date (which shall occur on or before the Conversion
Date Certain) on which the conditions in the Senior Credit Agreement have been
satisfied, as certified by each of the Borrower and the Independent Engineer in
a Final Completion Certificate.

 

“Final Completion Certificate” means (a) a
certificate of the Independent Engineer, (b) a certificate of the Borrower, in
each case in the form required by the Senior Credit Facilities and confirming
that the Final Completion Date has occurred.

 

“Financial Model” means the pro forma
financial statements and projections of revenue and expenses and cash flows
with respect to the Borrower and the Facilities for the period from September
1, 2007 through the Fiscal Year ended December 31, 2022, attached to the Senior
Credit Facilities, as the same may be updated by the Borrower.

 

“Financial Officer” means, with respect to any
Person, the controller, treasurer or chief financial officer of such Person.

 

“Financing Documents” means the “Financing
Documents” relating to the Senior credit Facilities as defined in the Senior
Credit Agreement together with the Bond Documents.

 

“First Lien Agent” has the meaning provided in
the Intercreditor Agreement.

 

“First Lien Claimholders” means, at any
relevant time, the holders of First Lien Obligations at such time, including
the First Lien Lenders, the First Lien Administrative Agent, the First Lien
Agent, the Accounts Bank and Counterparties under the First Lien Hedge
Agreements as defined in the Intercreditor Agreement.

 

“Fiscal Year” means any period of twelve (12)
consecutive calendar months ending on September 30.

 

“Fiscal Quarter” means any quarter of a Fiscal
Year.

 

16

 

“Funding Notice” means a request for funding
of the Senior Credit Facilities for a construction or working capital or upon
conversion to the term loan as further defined in the Senior Credit Agreement.

 

“GAAP” means generally accepted accounting
principles in effect from time to time in the United States, applied on a
consistent basis.

 

“Government Obligations”
means direct obligations of the United States of America and obligations on
which the timely payment of principal and interest is fully guaranteed by the
United States of America.

 

“Governmental Approval” means any
authorization, consent, approval, license, lease, ruling, permit,
certification, exemption, filing for registration by or with any Governmental
Authority.

 

“Governmental Authority” means any nation,
state, sovereign, or government, any federal, regional, state, local or
political subdivision and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to
government.

 

“Guarantee” means, as to any Person, (a) any
obligation, contingent or otherwise, of such Person guaranteeing or having the
economic effect of guaranteeing any Indebtedness or other obligation payable or
performable by another Person (the “primary obligor”) in any manner, whether
directly or indirectly, and including any obligation of such Person, direct or
indirect, (i) to purchase or pay (or advance or supply funds for the purchase
or payment of) such Indebtedness or other obligation, (ii) to purchase or lease
property, securities or services for the purpose of assuring the obligee in
respect of such Indebtedness or other obligation of the payment or performance
of such Indebtedness or other obligation, (iii) to maintain working capital,
equity capital or any other financial statement condition or liquidity or level
of income or cash flow of the primary obligor so as to enable the primary
obligor to pay such Indebtedness or other obligation, or (iv) entered into for
the purpose of assuring in any other manner the obligee in respect of such
Indebtedness or other obligation of the payment or performance thereof or to
protect such obligee against loss in respect thereof (in whole or in part), or
(b) any Lien on any assets of such Person securing any Indebtedness or other obligation
of any other Person, whether or not such Indebtedness or other obligation is
assumed by such Person (or any right, contingent or otherwise, of any holder of
such Indebtedness to obtain any such Lien).

 

“Historical Debt Service Coverage Ratio” or “HDSCR”
means, as of any Quarterly Payment Date, for the four (4) Fiscal Quarters
immediately preceding (and not including the then-current Fiscal Quarter) such
Quarterly Payment Date (or, if less than four (4) Fiscal Quarters have elapsed
since the Conversion Date, for such number of full Fiscal Quarters that has
elapsed since the Conversion Date), the ratio of (i) Cash Flow Available for
Debt Service during such period to (ii) Debt Service on the Senior Credit
Facilities or the Loan Agreement, as the case may be, during such period.

 

“Huron Expansion” means the expansion of the
Huron Facility if undertaken and if financed in part by the Senior Lenders.

 

17

 

“Huron Facility” means the existing ethanol
production facility owned by the Borrower in Huron, South Dakota.

 

“Huron Grain Elevator Lease” means that
certain Lease Agreement, dated as of October 1, 2007, between the Borrower and
South Dakota Wheat Growers Association, relating to the grain elevator for the
Huron Facility.

 

“Huron Ground Lease” means that certain Ground
Lease, dated as of May 1, 1998, between the Borrower as Lessee and Farmland
Industries, Inc. as Lessor, as assigned to Land O’Lakes Farmland Feed LLC
(n/k/a Land O’Lakes Purina Feed LLC) pursuant to an Assignment and Assumption
of Ground Lease dated July 16, 2004, and as amended by the First Amendment to
Lease dated as of February 10, 2006, between Land O’Lakes Purina Feed, LLC and
the Borrower.

 

“Huron Senior Mortgage” means that certain
Mortgage – One Hundred Eighty Day Redemption, Collateral Real Estate Mortgage,
Security Agreement, Financing Statement, Fixture Filing and Assignment of
Leases, Rents and Security Deposits made by the Borrower to the Collateral
Agent for the benefit of the Senior Lenders relating to the Huron Facility.

 

“Huron Subordinate Mortgage” means that
certain, Subordinate Mortgage – One Hundred Eighty Day Redemption, Collateral
Real Estate Mortgage, Security Agreement, Financing Statement, Fixture Filing
and Assignment of Leases, Rents and Security Deposits made by the Borrower to
the Bond Trustee relating to the Huron Facility.

 

“Huron Subordination, Non-Disturbance and Attornment Agreement”
means that certain Subordination, Non-Disturbance and Attornment Agreement,
dated as of October 1, 2007, among the Bond Trustee as mortgagee, the Borrower
as lessee and South Dakota Wheat Growers Association as mortgagor, in relation
to the Huron Grain Elevator Lease, including all schedules, exhibits and
attachments thereto.

 

“Indebtedness” means, as to any Person at a
particular time, without duplication, all of the following, whether or not
included as indebtedness or liabilities in accordance with GAAP:

 

(g)                                 all
obligations of such Person for or in respect of moneys borrowed or raised,
whether or not for cash by whatever means (including acceptances, deposits,
discounting, letters of credit, factoring, and any other form of financing
which is recognized in accordance with GAAP in such Person’s financial
statements as being in the nature of a borrowing or is treated as “off-balance
sheet” financing);

 

(h)                                 all
obligations of such Person evidenced by bonds, debentures, notes, loan
agreements or other similar instruments;

 

(i)                                     all
obligations of such Person for the deferred purchase price of property or
services;

 

(j)                                     all
obligations of such Person under conditional sale or other title retention
agreements relating to property or assets acquired by such Person (even though
the 

 

18

 

rights and remedies of
the seller or lender under such agreement in the event of default are limited
to repossession or sale of such property or are otherwise limited in recourse);

 

(k)                                  the
maximum amount of all direct or contingent obligations of such Person arising
under letters of credit (including standby and commercial), bankers’
acceptances, bank guaranties, surety bonds and similar instruments;

 

(l)                                     all
Capitalized Lease Liabilities;

 

(m)                               net
obligations of such Person under any Swap Contract;

 

(n)                                 all
obligations of such Person to purchase, redeem, retire, defease or otherwise
make any payment in respect of any Equity Interests in such Person or any other
Person or any warrants, rights or options to acquire such Equity Interests,
valued, in the case of redeemable preferred interests, at the greater of its
voluntary or involuntary liquidation preference plus accrued and unpaid
dividends; and

 

(o)                                 all
Guarantees of such Person in respect of any of the foregoing.

 

For all
purposes hereof, the Indebtedness of any Person shall include the Indebtedness
of any partnership or joint venture (other than a joint venture that is itself
a corporation or limited liability company) in which such Person is a general
partner or a joint venturer, unless such Indebtedness is expressly made
non-recourse to such Person. The amount of any net obligation under any Swap
Contract on any date shall be deemed to be the Swap Termination Value thereof
as of such date.

 

“Independent Engineer”
means the engineer or other expert selected by the Senior Lenders to review
construction of the Aberdeen Expansion and draw requests for proceeds of the
Senior Loan and draw request for the proceeds of the Series 2007A Bonds.

 

“Independent Engineer Certificate” means a
certificate of the Independent Engineer substantially in the form of the “Independent
Engineer’s Certificate attached as Exhibit L to the Accounts Agreement.

 

“Intercreditor Agreement” means that certain
Intercreditor Agreement dated as of October 1, 2007 by and between the
Borrower, the Parent Company, the Administrative Agent and the Bond Trustee.

 

“Interest Fund” means
the fund created in Section 4.3 hereof.

 

“Interest Payment Date”
means with respect to the Series 2007A Bonds each January 1 and July 1,
commencing January 1, 2008; provided that, if such day shall not be a Business
Day, payment shall be made on the next succeeding Business Day with the same
force and effect as if made on the date such payment was due.

 

“Interest Rate Protection Agreement” means
each interest rate swap, collar, put, or cap, or other interest rate protection
arrangement, with a Qualified Counterparty, in each such 

 

19

 

case that is reasonably satisfactory to the Administrative Agent and is
entered into in accordance with the Senior Credit Facilities.

 

“Law” means, with respect to any Governmental
Authority, any constitutional provision, law, statute, rule, regulation,
ordinance, treaty, order, decree, judgment, decision, common law, holding,
injunction, Governmental Approval or requirement of such Governmental Authority.
Unless the context clearly requires otherwise, the term “Law” shall include
each of the foregoing (and each provision thereof) as in effect at the time in
question, including any amendments, supplements, replacements, or other
modifications thereto or thereof, and whether or not in effect as of the date
of this Agreement.

 

“Leased Premises” means those certain leased
premises described in the Huron Ground Lease, the Huron Grain Elevator Lease
and the Aberdeen Grain Elevator Lease.

 

“Letter of Representations”
means the Blanket Issuer Letter of Representations from the Issuer to DTC.

 

“Lien” means any security interest, mortgage,
pledge, hypothecation, assignment, deposit arrangement, encumbrance, bailment,
conditional sales or title retention agreement, lien (statutory or otherwise),
charge against or interest in property, in each case of any kind, to secure
payment of a debt or performance of an obligation.

 

“Loan Agreement”
means the Loan Agreement relating to the Series 2007A Bonds, dated as of the
date hereof, between the Borrower and the Issuer, as it may from time to time
be amended or supplemented.

 

“Local Account” means any local bank account
(other than the Project Accounts and the Bond Accounts) in the name of the
Borrower.

 

“Maintenance Capital Expenses” means all
expenditures by the Borrower for regularly scheduled (or reasonably
anticipated) major maintenance of the Facilities, Prudent Ethanol Operating
Practice and vendor and supplier requirements constituting major maintenance
(including teardowns, overhauls, capital improvements, replacements and/or
refurbishments of major components of the Facilities).

 

“Mandatory Sinking Fund Redemption”
has the meaning given such term in Section 5.1 hereof.

 

“Material Adverse Effect” means any event,
development or circumstance that has had or could reasonably be expected to
have a material adverse effect on (i) the business, assets, property, condition
(financial or otherwise), prospects, or operations of the Borrower or the
Facilities taken as a whole, (ii) the ability of the Borrower, any Pledgor, any
Project Party or any party (other than a Senior Secured Party) to the
Intercreditor Agreement or Accounts Agreement to perform its material
obligations under any Transaction Document to which it is a party, (iii)
creation, perfection or priority of the Liens granted, or purported to be
granted, in favor, or for the benefit, of the Collateral Agent pursuant to the
Security Documents or (iv) the rights or remedies of any Senior Secured Party
under any Financing Document.

 

20

 

“Materials of Environmental Concern” means
chemicals, pollutants, contaminants, wastes, toxic substances and hazardous
substances, any toxic mold, radon gas or other naturally occurring toxic or
hazardous substance or organism and any material that is regulated in any way,
or for which liability is imposed, pursuant to an Environmental Law.

 

“Maximum Annual Debt Service Requirement”
means the largest total Debt Service Requirements for the current or any
succeeding Bond Year.

 

“Mortgaged Property” means all real property
right, title and interest of the Borrower that is subject to the Subordinate
Mortgage.

 

“Multiemployer Plan” means a Plan that is a “multiemployer
plan” as defined in Section 4001(a)(3) of ERISA.

 

“Necessary Project Approvals” has the meaning
set forth in the Senior Credit Facilities.

 

“Net Worth” of any Person means, as of any
given date, the aggregate of capital, surplus and retained earnings (including
any cumulative translation adjustment) of such Person as would be shown on a
consolidated balance sheet of such Person prepared as of such date in
accordance with generally accepted accounting principles which may be in part
established with respect to asset value by an appraisal firm established in
accordance with generally accepted accounting principles.

 

“Obligations” means and includes all loans,
advances, debts, liabilities, Indebtedness and obligations, howsoever arising,
owed to the Agents, the Lender or any Senior Secured Party of every kind and
description (whether or not evidenced by any note or instrument and whether or
not for the payment of money), direct or indirect (including those acquired by
assumption), absolute or contingent, due or to become due, now existing or
hereafter arising and including interest and fees that accrue after the
commencement by or against the Borrower of any Insolvency or Liquidation
Proceeding naming the Borrower as the debtor in such proceeding, regardless of
whether such interest and fees are allowed claims in such (including the
Interest Rate Protection Agreement), proceeding, pursuant to the terms of this
Agreement or any of the other Financing Documents including all principal,
interest, fees, charges, expenses, attorneys’ fees, costs and expenses,
accountants’ fees and Consultants’ fees payable by the Borrower hereunder or
thereunder.

 

“Officer’s Certificate” means
a certificate signed, in the case of a certificate delivered by a corporation,
by the President, any Vice-President or any other officer authorized to sign by
resolution of the governing body of such corporation or, in the case of a
certificate delivered by any other Person, the chief executive or chief
financial officer of such other Person, in either case whose authority to
execute such Certificate shall be evidenced to the satisfaction of the Bond
Trustee for the purpose of this Bond Indenture.

 

“Operating Budget” means the operating budget
required to be prepared pursuant to the Senior Credit Facilities or the Loan
Agreement, as the case may be.

 

“Operating Budget Category” means, at any time
with respect to each Operating Budget, each line item set forth in such
Operating Budget in effect at such time.

 

21

 

“Operating Statement” means an operating
statement with respect to the Facilities, in substantially the form required by
the Senior Credit Facilties.

 

“Operation and Maintenance Expenses” means,
for any period, the sum without duplication of all (i) reasonable and necessary
expenses of administering, managing and operating, and generating Products for
sale from, the Facilities and maintaining it in good repair and operating
condition, (ii)  costs associated with
the supply and transportation of all corn, natural gas, electricity and other
supplies and raw materials to the Facilities and distribution and sale of
Products from the Facilities that the Borrower is obligated to pay, (iii) all
reasonable and necessary insurance costs (other than insurance premiums that
are paid as costs of the Aberdeen Expansion), (iv) property, sales and
franchise taxes to the extent that the Borrower is liable to pay such taxes to
the taxing authority (other than taxes imposed on or measured by income or
receipts) to which the Facilities, may be subject (or payment in lieu of such
taxes to which the Facilities may be subject), (v) reasonable and necessary
costs and fees incurred in connection with obtaining and maintaining in effect
the Necessary Project Approvals, (vi) reasonable and arm’s-length legal,
accounting and other professional fees attendant to any of the foregoing items
during such period, (vii) the reasonable costs of administration and
enforcement of the Transaction Documents, (viii) costs incurred pursuant to the
Permitted Commodity Hedging Arrangements, and (ix) all other costs and expenses
included in the then-current Operating Budget. In no event shall cost of
Aberdeen Expansion or Maintenance Capital Expenses be considered Operation and
Maintenance Expenses.

 

“Outstanding” means,
with respect to the Series 2007A Bonds, all Series 2007A Bonds which have been
duly authenticated and delivered by the Bond Trustee under this Bond Indenture,
except:

 

(a)                                  Series
2007A Bonds cancelled after purchase in the open market or because of payment
at or redemption prior to maturity;

 

(b)                                 Series
2007A Bonds for the payment or redemption of which cash or Government
Obligations shall have been theretofore deposited with the Bond Trustee
(whether upon or prior to the maturity or redemption date of any such Series
2007A Bonds) in accordance with this Bond Indenture; provided that if such
Series 2007A Bonds are to be redeemed prior to the maturity thereof, notice of
such redemption shall have been given or arrangements satisfactory to the Bond
Trustee shall have been made therefor, or waiver of such notice satisfactory in
form to the Bond Trustee shall have been filed with the Bond Trustee;

 

(c)                                  Series
2007A Bonds in lieu of which others have been authenticated under this Bond
Indenture; and

 

(d)                                 Series
2007A Bonds owned by the Borrower, the Parent Company or affiliate thereof.

 

“Parent Company” means ABE Heartland, LLC, a
Delaware limited liability company, which currently owns, directly or
indirectly, 100% of the Equity Interests in the Borrower and its successors and
assigns and any surviving, resulting or transferee entity.

 

22

 

“Paying Agent” means
the Bond Trustee and the bank or banks, if any, designated pursuant to this
Bond Indenture to receive and disburse the principal of and interest and
premium, if any, on the Series 2007A Bonds.

 

“PBGC” means the Pension Benefit Guaranty
Corporation and any entity succeeding to any or all of its functions under
ERISA.

 

“Permitted Commodity Hedging Arrangements” means
those Commodity Hedging Arrangements entered into by the Borrower in accordance
with the provisions of the Senior Credit Facilities.

 

“Permitted Liens” means Liens identified in
the Senior Credit Facilities as “Permitted Liens”.

 

“Permitted Tax Distribution” means, with
respect to any distributee that is required to pay tax as a result of its
direct or indirect ownership of the Borrower, an amount equal to forty percent
(40%) of such distributee’s estimated share of the taxable income of the
Borrower (after netting or otherwise taking account of a distributee’s shares
of the income, loss, deduction and credit associated with the distributee’s interest
in the Borrower) that the distributee is reasonably expected to have to report
for income tax purposes for the Fiscal Quarter distributed to the extent
necessary to fund a distributee’s timely payment to a Governmental Authority of
tax liability (including estimated payments thereof) and subject to correction
as described below.

 

“Person” means any
natural person, firm, joint venture, association, partnership, business trust,
corporation, public body, agency or political subdivision thereof or any other
separately existing agency.

 

“Plan” means an employee pension benefit plan (as defined in
Section 3(3) of ERISA) subject to Title IV of ERISA or
Section 412 of the Code that is sponsored or maintained by the Borrower or
any ERISA Affiliate, or in respect of which the Borrower or any ERISA Affiliate
has any obligation to contribution or liability.

 

“Proceeds” means (a)
if the first offering price of the Series 2007A Bonds minus the compensation
paid to the underwriter (the “Net Price”) is equal to or greater than 98% of
the aggregate principal amount of the Series 2007A Bonds, an amount equal to
the original aggregate principal amount of the Series 2007A Bonds or (b) if the
net price is less than 98% of the original aggregate principal amount of the
Series 2007A Bonds, an amount equal to the net price.

 

“Products” means ethanol, Distillers Grains,
and any other co product or by-product produced in connection with the
production of ethanol at the Project.

 

“Project” means the
improvements, modifications, expansions and equipment purchases to be made for
the Aberdeen Facility which constitute Solid Waste Facilities, the cost of
which are to be financed, in whole or in part, with a portion of the proceeds
of the Series 2007A Bonds, the plans and specifications for which are on file
with the Borrower.

 

23

 

“Project Accounts” has the meaning provided in
Section 1.01 of the Accounts Agreement.

 

“Project Fund” means
the fund created in Section 3.3 hereof.

 

“Prospective Debt Service Coverage Ratio” or “PDSCR”
means, for any Quarterly Payment Date, for the Fiscal Quarter including such
Quarterly Payment Date and the three (3) Fiscal Quarters immediately following
such Quarterly Payment Date, the ratio of (i) Cash Flow Available for Debt
Service projected for such period to (ii) Debt Service on the Senior Credit
Facilities or the Loan Agreement, as the case may be, projected for such
period, in each case based on the then-current Operating Budget approved in
accordance with the Senior Credit Facilities, as the same has been updated (if
necessary) to reflect the then-current projections for commodity prices.

 

“Prudent Ethanol Operating Practice” means
those reasonable practices, methods and acts that (i) are commonly used in the
region where the Facilities is located to manage, operate and maintain ethanol
production, distribution, equipment and associated facilities of the size and
type that comprise the Facilities safely, reliably, and efficiently and in
compliance with applicable Laws, manufacturers’ warranties and manufacturers’
and licensor’s recommendations and guidelines, and (ii) in the exercise of
reasonable judgment, skill, diligence, foresight and care are expected of an
ethanol plant operator, in order to efficiently accomplish the desired result
consistent with safety standards, applicable Laws, manufacturers’ warranties,
manufacturers’ recommendations and, in the case of the Facilities, the Project
Documents. Prudent Ethanol Operating Practice does not necessarily mean one
particular practice, method, equipment specifications or standard in all cases,
but is instead intended to encompass a broad range of acceptable practices,
methods, equipment specifications and standards.

 

“Quarterly Payment Date” means each March 31,
June 30, September 30 and December 31.

 

“Purchase Contract”
means the contract for the purchase of the Series 2007A Bonds among the Issuer,
the Borrower and the purchasers named therein.

 

“Rebate Fund” means
the Rebate Fund created by Section 3.4 of this Bond Indenture.

 

“Record Date” means
the fifteenth day of the month (whether or not a Business Day) next preceding
an Interest Payment Date.

 

“Redemption Fund” means
the fund created in Section 4.6 hereof.

 

“Registrar” means
the Bond Trustee as bond registrar for the Series 2007A Bonds.

 

“Required Cash Sweep” means each mandatory
prepayment of the Loans made pursuant to Section 3.10 (Mandatory Prepayment) of
the Senior Credit Facilities.

 

“Restricted Payments” means any (a) dividend
or other distribution (whether in cash, securities or other property), or any
payment (whether in cash, securities or other property), including any sinking
fund or similar deposit, on account of the purchase, redemption, 

 

24

 

retirement, defeasance, acquisition, cancellation or termination of any
Equity Interests of the Borrower, or on account of any return of capital to any
holder of any such Equity Interest in, or any other Affiliate of, the Borrower,
or any option, warrant or other right to acquire any such dividend or other
distribution or payment, (b) any payment of fees (other than corporate overhead
costs, expenses or any other payments pursuant to the Administrative Services
Agreement) for any management, consultancy or administrative services, to any
Person who owns, directly or indirectly, any Equity Interest in the Borrower,
or any Affiliate of any such Person, or (c) any payment of indemnification
obligations pursuant to the Borrower L.P. Agreement; provided that any
Permitted Tax Distributions shall not constitute Restricted Payments.

 

“Revenue Fund” means
the fund created by Section 4.2 of this Bond Indenture.

 

“Senior Credit Agreement” means that certain
Credit Agreement, dated as of October 1, 2007, among the Borrower, each of
the lenders from time to time party thereto, the Administrative Agent, WestLB
AG, New York Branch, as collateral agent, issuing bank, lead arranger, sole
book runners and syndicate agent.

 

“Senior Credit Facilities” means the
construction loan, the term loan, and the working capital loan to be made by
the Senior Lenders to the Borrower to finance a portion of the Expansions and
to refinance certain existing debt of the Borrower relating to the Facilities,
which are secured by the Senior Mortgage, the Senior Security Agreement and the
Senior Equity Pledge Agreement.

 

“Senior Equity Pledge Agreement” means that
certain Pledge and Security Agreement dated as of October 1, 2007 by and among
the Parent Company, ABE Heartland, LLC and the collateral agent set forth
therein, as amended or supplemented from time to time.

 

“Senior Lenders” means WestLB and the other
lenders from time to time party to the loan agreement in respect of the Senior
Credit Agreement.

 

“Senior Mortgage” means  the
Aberdeen Senior Mortgage and the Huron Senior Mortgage.

 

“Senior Secured Parties” means the Lenders,
the Agents and any Interest Rate Protection Provider as defined in the Credit
Agreement.

 

“Senior Security Agreement” means that certain
Assignment and Security Agreement dated September, 2007 from the Borrower to
the Senior Lenders, as amended or supplemented from time to time.

 

“Series 2007A Bonds” means
the Brown County, South Dakota Subordinate Solid Waste Facilities Revenue Bonds
(Heartland Grain Fuels, L.P. Ethanol Plant Project), Series 2007A, to be issued
by the Issuer pursuant to the terms and conditions of this Bond Indenture.

 

“Site” means, with respect to each Facility
those certain parcels described in the Senior Credit Facilities with respect to
such Facility.

 

25

 

“SNDAs” means each of the Aberdeen
Subordination, Non-Disturbance and Attornment Agreement and the Huron
Subordination, Non-Disturbance and Attornment Agreement.

 

“Solid Waste Disposal Facilities” means “Solid
Waste Disposal Facilities” as defined by the Code and regulations thereunder
for the purposes of Section 142(a)(6) of the Code.

 

“S&P” means Standard &Poor’s Rating
Group.

 

“Special Interest Payment Date”
means the date, which need not be an Interest Payment Date, fixed by the Bond
Trustee pursuant to the Bond Indenture for the payment of Defaulted Interest to
Holders as of the Special Record Date.

 

“Special Record Date” means the fifteenth day
(whether or not a Business Day) before a Special Interest Payment Date.

 

“State” means the
State of South Dakota.

 

“Subordinate Equity Pledge Agreement” means
that certain Subordinate Pledge and Security Agreement dated as of October 1,
2007 among the Parent Company, Dakota Fuels, the Borrower and the Bond Trustee
as amended or supplemented from time to time.

 

“Subordinate Mortgage” means the Aberdeen
Subordinate Mortgage and the Huron Subordinate Mortgage.

 

“Subordinate Security Agreement” means that
certain Subordinate Assignment and Security Agreement dated as of October 1,
2007 from the Borrower to the Bond Trustee as amended or supplemented from time
to time.

 

“Swap Contract” means (a) any and all rate
swap transactions, basis swaps, credit derivative transactions, forward rate
transactions, commodity swaps, commodity options, forward commodity contracts,
equity or equity index swaps or options, bond or bond price or bond index swaps
or options or forward bond or forward bond price or forward bond index
transactions, interest rate options, forward foreign exchange transactions, cap
transactions, floor transactions, collar transactions, currency swap
transactions, cross-currency rate swap transactions, currency options, spot
contracts, or any other similar transactions or any combination of any of the
foregoing (including any options to enter into any of the foregoing), whether
or not any such transaction is governed by or subject to any master agreement,
(b) any and all transactions of any kind, and the related confirmations, which
are subject to the terms and conditions of, or governed by, any form of master
agreement published by the International Swaps and Derivatives Association,
Inc., any International Foreign Exchange Master Agreement, or any other master
agreement, including any such obligations or liabilities under any such master
agreement and (c) for the avoidance of doubt, includes the Permitted Commodity
Hedging Arrangements and any Interest Rate Protection Agreements and excludes
any contract for the physical sale or purchase of any commodity.

 

“Swap Termination Value” means, in respect of
any one or more Swap Contracts (including any Permitted Commodity Hedging
Arrangements or any Interest Rate Protection Agreements), after taking into
account the effect of any legally enforceable netting agreement 

 

26

 

relating to such Swap Contracts, (a) for any date on or after the date
such Swap Contracts have been closed out and termination value(s) determined in
accordance therewith, such termination value(s), and (b) for any date prior to
the date referenced in clause (a), the amount(s) determined as the
mark-to-market value(s) for such Swap Contracts, in accordance with the terms
of the applicable Swap Contract, or, if no provision is made therein, as
determined based upon one or more mid-market or other readily available
quotations provided by any recognized dealer in such Swap Contracts (which may
include a Lender or any Affiliate of a Lender).

 

“Tax” or “Taxes” means any present or future
taxes (including income, gross receipts, license, payroll, employment, excise,
severance, stamp, documentary, occupation, premium, windfall profits,
environmental, capital stock, franchise, profits, withholding, social security
(or similar), unemployment, disability, real property, personal property,
sales, use, transfer, registration, value-added, ad valorem, alternative or
add-on minimum, estimated, or other tax of any kind whatsoever), levies,
imposts, duties, fees or charges (including any interest, penalty, or addition thereof)
imposed by any government or any governmental agency or instrumentality or any
international or multinational agency or commission.

 

“Tax Exemption Agreement”
means that certain Tax Exemption Agreement and Certificate, dated the date of
delivery of the Series 2007A Bonds, among the Borrower, the Issuer, the Bond
Trustee and the Accounts Bank.

 

“Taxable Rate” means that variable rate of
interest which adjusts the first day of each calendar quarter in each year
(January 1, April 1, July 1 and October 1) and is equal to the sum of (i) the
rate of interest published as the London Interbank Offered Rate (LIBOR) with a
term of three (3) months as of the first day of each calendar quarter or
following Business Day if such first day is not a Business Day, and (ii) plus
350 basis points.

 

“Termination Event” means (i) a reportable event within
the meaning of Section 4043(c) of ERISA with respect to any Plan, (ii) the
initiation of any action by the Borrower, any ERISA Affiliate or any Plan
fiduciary to terminate any Plan (other than a standard termination under
Section 4041(b) of ERISA) or the treatment of an amendment to any Plan as
a termination under Section 4041(e) of ERISA, (iii) the institution
of proceedings by the PBGC under Section 4042 of ERISA to terminate any
Plan or to appoint a trustee to administer any Plan, (iv) the withdrawal
of the Borrower or any ERISA Affiliate from any Multiemployer Plan during a
plan year in which the Borrower or such ERISA Affiliate was a “substantial
employer” as defined in Section 4001(a)(2) of ERISA or the cessation of
operations which results in the termination of employment of twenty percent
(20%) of any Multiemployer Plan participants who are employees of the
Borrower or any ERISA Affiliate, (v) the partial or complete withdrawal of
the Borrower or any ERISA Affiliate from any Multiemployer Plan, or
(vi) the Borrower or any ERISA Affiliate is in default (as defined in
Section 4219(c)(5) of ERISA) with respect to payments to any Multiemployer
Plan.

 

“Title Continuation” means a written notice
issued by the title insurance company (including their local title insurance
abstractors) confirming the status of title as set forth in the Title Insurance
Policy, which indicates that, there has been no change in the title of title to
the Mortgaged Property and no Liens or survey exceptions (in the case of any
updated or “as-built” survey that has been issued) not theretofore approved by
the Senior Lenders, which written 

 

27

 

notice shall contain no recorded mechanic’s liens except as approved by
the Required Lenders or as otherwise subject to a Contest.

 

“Transaction Documents” means, collectively,
the Financing Documents and the Facilities Documents.

 

“Trust Estate” means the trust estate defined
in the granting clauses hereof.

 

“Unassigned Rights”
means the right of the Issuer to receive payment of its fees and expenses, the
Issuer’s right to indemnification under the Loan Agreement, the Issuer’s right
to execute and deliver supplements and amendments to the Loan Agreement.

 

“Unfunded Benefit Liabilities” means, with
respect to any Plan at any time, the amount (if any) by which (i) the present
value of all accrued benefits calculated on an accumulated benefit obligation
basis and based upon the actuarial assumptions used for accounting purposes
(i.e., those determined in accordance with FASB statement No.35 and used in
preparing the Plan’s financial statements) exceeds (ii) the fair market value
of all Plan assets allocable to such benefits, determined as of the then most
recent actuarial valuation report for such Plan.

 

“Written Request”
means, with respect to the Issuer, a request in writing by the Chairman, County
Auditor or other authorized officer of the Issuer; with respect to the Bond
Trustee, a request in writing signed by an authorized officer of the Bond
Trustee; with respect to the Borrower or the Parent Company, a request in
writing signed by the Chief Executive Officer, President, Chief Financial
Officer or any Vice President of the Borrower or the Parent Company, and with
respect to the issuer, the Bond Trustee, the Borrower and the Parent Company,
as the case may be, any other officers designated to sign such requests by
official action of the appropriate entity.

 

Section 1.2                         Interpretation. Words of the masculine gender
shall be deemed and construed to include correlative words of the feminine and
neuter genders. Unless the context shall otherwise indicate, words importing
the singular number shall include the plural and vice versa. All accounting
terms not otherwise defined herein have the meanings assigned to them in
accordance with generally accepted accounting principles. Headings of articles
and sections herein and the table of contents hereof are solely for convenience
of reference, do not constitute a part hereof and shall not affect the meaning,
construction or effect hereof. All references in this Bond Indenture to
designated “Articles”, “Sections” and other subdivisions are to the designated
Articles, Sections and other subdivisions of this Bond Indenture as originally
executed. The words “herein”, “hereof” and “hereunder” and other words of
similar import refer to this Bond Indenture as a whole and not to any
particular Article, Section or other subdivision unless the context indicates
otherwise.

 

28

 

ARTICLE II

 

THE SERIES 2007A
BONDS

 

Section 2.1                         Authorized Amount of Series 2007A Bonds.
No bonds may be issued under the provisions of this Bond Indenture except in
accordance with this Article. The total principal amount of Series 2007A Bonds
that may be issued is hereby expressly limited to $19,000,000

 

Section 2.2                         Issuance of Series 2007A Bonds.
The Series 2007A Bonds shall be designated “Brown County, South Dakota Subordinate
Solid Waste Facilities Revenue Bonds (Heartland Grain Fuels, L.P. Ethanol Plant
Project), Series 2007A”.

 

The Series
2007A Bonds shall be issuable only as registered bonds in the denominations of
$5,000 and integral multiples thereof. Unless the Issuer shall otherwise
direct, the Series 2007A Bonds shall be numbered from R-1 upward. The CUSIP
number of 115433AA2 shall be set forth on the Bond.

 

The Series
2007A Bonds shall be dated as of the date of issuance and delivery thereof,
shall bear interest at the rate of eight and one-quarter percent (8.25%) per
annum (except to the extent to which the Bonds bear interest at the Taxable
Rate pursuant to Section 5.1 hereof), calculated on the basis of a 360-day year
of twelve 30-day months, payable on each Interest Payment Date, and shall
mature on January 1, 2017 and be subject to Mandatory Sinking Fund Redemption
as set forth in Section 5.2 hereof on January 1 in the years and in the amounts
as follows:

 

	
  Principal

  Amount

  	
   

  	
  Due in

  the Year

  	
   

  
	
  $

  	
  5,840,000.00

  	
   

  	
  2016

  	
   

  
	
  6,320,000.00

  	
   

  	
  2017

  	
   

  
	
  6,840,000.00

  	
   

  	
  2018

  	
  *

  
					

 

* Final
Maturity

 

Each Series
2007A Bond shall, except as provided in this Section 2.2, bear interest from
the Interest Payment Date next preceding the date of authentication of such
Series 2007A Bond to which interest on the Series 2007A Bonds has been paid,
unless (i) such date of authentication is an Interest Payment Date to which
interest has been paid, in which case from such Interest Payment Date, (ii)
such date of authentication is after the Record Date with respect to an
Interest Payment Date and prior to such Interest Payment Date, in which case
from such Interest Payment Date or (iii) no interest has been paid on the
Series 2007A Bonds, in which case from the date of issuance and delivery thereof.

 

The person in
whose name any Series 2007A Bond is registered at the close of business on any
Record Date with respect to any Interest Payment Date shall be entitled to
receive the 

 

29

 

interest payable on such Interest Payment Date notwithstanding any
registration of transfer or exchange subsequent to such Record Date and prior
to such Interest Payment Date.

 

The principal
of and interest on the Series 2007A Bonds shall be payable in any currency of
the United States of America which, at the respective dates of payment thereof,
is legal tender for the payment of public and private debts and such principal
shall be payable upon presentation at the principal corporate trust office of
the Bond Trustee. Payment of the interest on any Series 2007A Bond shall be
made to the Person appearing on the Bond Register as the Registered Owner
thereof as of the close of business of the Bond Trustee on the Record Date for
such interest payment and shall be paid (i) by check or draft of the Bond
Trustee mailed on the applicable Interest Payment Date to the registered owner
at such owner’s address as it appears on the Bond Register or at such other
address as is furnished to the Bond Trustee in writing by such Owner not less than
15 days prior to the Interest Payment Date or (ii) as to any Owner of
$1,000,000 or more in aggregate principal amount of the Series 2007A Bonds who
so elects, by wire transfer of funds to such wire transfer address within the
continental United States as the Registered Owner shall have furnished in
writing to the Bond Trustee no later than the Record Date, which wire
instructions shall remain in effect until Bond Trustee is notified to the
contrary.

 

Defaulted
Interest with respect to any Series 2007A Bond shall cease to be payable to the
Owner of such Series 2007A Bond on the relevant Record Date and, except as
hereinafter provided, shall be payable to the Owner in whose name such Series
2007A Bond is registered at the close of business of the Bond Trustee on the
Special Record Date for the payment of such Defaulted Interest, which Special
Record Date shall be fixed in the following manner. The Borrower shall notify
the Bond Trustee in writing of the amount of Defaulted Interest proposed to be
paid on each Series 2007A Bond and the date of the proposed payment (which date
shall be such, as will enable the  Bond
Trustee to comply with the next sentence hereof) and, at the same time, the
Borrower or the Obligated Group shall deposit with the Bond Trustee an amount
of money equal to the aggregate amount proposed to be paid in respect of such
Defaulted Interest or shall make arrangements satisfactory to the Bond Trustee
for such deposit prior to the date of the proposed payment, such money when
deposited to be held in trust for the benefit of the owners of the Series 2007A
Bonds entitled to such Defaulted Interest as provided in this Section. Following
receipt of such funds, the Bond Trustee shall fix a Special Record Date for the
payment of such Defaulted Interest which date will be fifteen (15) days prior
to the date of the proposed payment. The Bond Trustee shall promptly notify the
Borrower of such Special Record Date and, in the name and at the expense of the
Borrower, shall cause notice of the proposed payment of such Defaulted Interest
and the Special Record Date therefor to be mailed, first-class postage prepaid,
not less than 10 days prior to such Special Record Date to each Owner of a
Series 2007A Bond entitled to such notice at the address of such Owner as it
appears on the Bond Register. Such Defaulted Interest shall be paid to the
Owners of the Series 2007A Bonds in whose names the Series 2007A Bonds on which
such Defaulted Interest is to be paid are registered on such Special Record
Date.

 

Section 2.3                         Execution; Limited Obligation. The Series 2007A Bonds shall be
executed on behalf of the Issuer by the manual or facsimile signature of the
Chair of the County Commission and attested by the manual or facsimile
signature of (or such other officer as may be designated by the Issuer), shall
have impressed or printed by facsimile thereon the corporate seal of the
Issuer, if required by law, and shall be countersigned by an attorney actually
residing in 

 

30

 

the State and duly
licensed to practice in the State. The facsimile signatures of said officers
shall have the same force and effect as if such officers had manually signed
each of said Series 2007A Bonds. In case any officer whose signature or
facsimile signature shall appear on the Series 2007A Bonds shall cease to be
such officer before the delivery of such Series 2007A Bonds, such signature or
facsimile signature shall nevertheless be valid and sufficient for all
purposes, the same as if he had remained in office until delivery.

 

The Series
2007A Bonds shall be limited obligations of the Issuer payable solely from (a)
amounts payable under the Loan Agreement (except for Unassigned Rights), (b)
amounts derived from the enforcement of the Bond Collateral Documents (except
for amounts with respect to Unassigned Rights) amounts on deposit in the funds
to the extent herein provided and (c) income from the temporary investment of
any of the foregoing. So long as the Senior Credit Facilities are outstanding,
all funds available to the Borrower to make loan repayments (including
Unassigned Rights) and all amounts derived from the enforcement of the Bond
Collateral Documents are subject to prior liens in favor of the Senior Lenders
and are subject to the provisions of the Accounts Agreements ant the
Intercreditor Agreement. The Series 2007A Bonds shall be a valid claim of the
respective Owners thereof only against the funds established under this Bond
Indenture and other moneys held by the Bond Trustee for the benefit of the
Series 2007A Bonds and the payments  due
or to become due upon or under the Loan Agreement (except for Unassigned
Rights), all of which are hereby assigned and pledged hereunder for the equal
and ratable payment of the Series 2007A Bonds and shall be used for no other
purpose than to pay the principal of, premium, if any, and interest on the
Series 2007A Bonds, except as may be otherwise expressly authorized in this
Bond Indenture. The Series 2007A Bonds do not constitute a debt or liability of
the State or of any political subdivision thereof or a pledge of the faith and
credit of the State or any political subdivision thereof. The issuance of the
Series 2007A Bonds under the provisions of the Act does not, directly,
indirectly or contingently, obligate the State or any political subdivision
thereof to levy any form of taxation for the payment thereof or to make any
appropriation for their payment, and such Series 2007A Bonds and interest
payable thereon do not now and shall never constitute a debt of the State or
any political subdivision thereof within the meaning of the Constitution or the
statutes of the State and do not now and shall never constitute a charge
against the credit or taxing power of the State or any political subdivision
thereof. Neither the State nor any political subdivision thereof shall in any
event be liable for the payment of the principal of or interest on the Series
2007A Bonds or for the performance of any pledge, obligation or agreement of
any kind whatsoever which may be undertaken by the Issuer. No breach by the
Issuer of any such pledge, obligation or agreement may impose any liability,
pecuniary or otherwise, upon the State or any political subdivision thereof. No
covenant or agreement in the Series 2007A Bonds or in this Bond Indenture and
no obligation herein imposed upon the Issuer and no breach thereof shall
constitute or give rise to or impose upon the Issuer a general liability or a
charge upon its general credit or property other than the trust estate, as
provided herein.

 

Section 2.4                         Authentication. No Series
2007A Bond shall be valid or obligatory for any purpose or entitled to any
security or benefit under this Bond Indenture unless and until a certificate of
authentication on such Series 2007A Bond shall have been duly executed by the
Bond Trustee, and such executed certificate of the Bond Trustee upon any such
Series 2007A Bond shall be conclusive evidence that such Series 2007A Bond has
been authenticated and delivered under this Bond Indenture. The Bond Trustee’s
certificate of authentication on any 

 

31

 

Series 2007A Bond shall
be deemed to have been executed by it if signed by an authorized officer or
signatory of the Bond Trustee, but it shall not be necessary that the same
officer or signatory sign the certificate of authentication on all of the
Series 2007 Bonds issued hereunder.

 

Section 2.5                         [Intentionally
Deleted]

 

Section 2.6                         Form of Bonds and Temporary Bonds.
The Series 2007A Bonds shall be substantially in the form set forth in Exhibit
A hereto with such appropriate variations, omissions and insertions as are
permitted or required by this Bond Indenture or deemed necessary by the Bond
Trustee and the Issuer.

 

Series 2007A
Bonds may be initially issued in temporary form exchangeable for definitive
Series 2007A Bonds when ready for delivery. The temporary Series 2007A Bonds
shall be of such denomination or denominations as may be determined by the
Issuer and may contain such reference to any of the provisions of this Bond
Indenture as may be appropriate. Every temporary Series 2007A Bond shall be
executed by the Issuer and be authenticated by the Bond Trustee upon the same
conditions and in substantially the same manner as the definitive Series 2007A
Bonds. If the Issuer issues temporary Series 2007A Bonds, it will execute and
furnish definitive Series 2007A Bonds without delay and thereupon the temporary
Series 2007A Bonds may be surrendered for cancellation in exchange therefor at
the principal corporate trust office of the Bond Trustee, and the Bond Trustee
shall authenticate and deliver in exchange for such temporary Series 2007A
Bonds an equal aggregate principal amount of definitive Series 2007A Bonds of
the same Series and maturity of authorized denominations. Until so exchanged,
the temporary Series 2007A Bonds shall be entitled to the same benefits under
this Bond Indenture as definitive Series 2007A Bonds authenticated and
delivered hereunder.

 

Section 2.7                         Delivery of Series 2007A Bonds.
Upon the execution and delivery of this Bond Indenture, the Issuer shall
execute and deliver to the Bond Trustee and the Bond Trustee shall authenticate
the Series 2007A Bonds and deliver them to the purchasers as may be directed by
the Issuer as hereinafter in this Section 2.7 provided.

 

Prior to the
delivery by the Bond Trustee of any of the Series 2007A Bonds there shall be
filed with or delivered to the Bond Trustee and the Issuer:

 

(a)                                  a
copy, duly certified by the Chair of the County Commission or the County Auditor
of the Issuer, of the resolutions adopted and approved by the Issuer
authorizing the execution and delivery of the Purchase Contract, the Loan
Agreement, this Bond Indenture, and the Tax Exemption Agreement and the
issuance and sale of the Series 2007A Bonds;

 

(b)                                 copies,
duly certified by the Secretary or an Assistant Secretary of the Borrower of
the resolutions adopted and approved by the Borrower authorizing the execution
of or approving the, the Loan Agreement, the Subordinate Mortgage, the
Subordinate Security Agreement, the Subordinate Equity Pledge Agreement and the
Tax Exemption Agreement and approving this Bond Indenture and the issuance and
sale of the Series 2007A Bonds;

 

(c)                                  an
original executed counterpart of this Bond Indenture, the Loan Agreement, the
Subordinate Mortgage, the Subordinate Security Agreement, the Subordinate
Equity Pledge Agreement and the Tax Exemption Agreement;

 

32

 

(d)                                 a
request and authorization to the Bond Trustee on behalf of the Issuer and
signed by its Chair (or such other officer as may be designated by the Issuer)
to authenticate and deliver the Series 2007A Bonds to the purchasers therein
identified upon payment to the Bond Trustee, but for the account of the Issuer,
of the net proceeds from the sale of the Series 2007A Bonds;

 

(e)                                  the
approving opinion of Bond Counsel;

 

(f)                                    an
opinion of counsel to the Borrower as to the valid authorization, execution and
delivery of the Loan Agreement and other related documents and as to such other
matters as reasonably requested; and

 

(g)                                 such
other closing documents and opinions of counsel as the Bond Trustee or the
Issuer may reasonably specify.

 

Section 2.8                         Mutilated, Lost, Stolen or Destroyed Series
2007A Bonds. In the event any temporary or definitive Series
2007A Bond is mutilated, lost, stolen or destroyed, the Issuer may execute and
the Bond Trustee may authenticate a new Series 2007A Bond of like form, date,
maturity and denomination as that mutilated, lost, stolen or destroyed;
provided that, in the case of any mutilated Series 2007A Bond, such mutilated
Series 2007A Bond shall first be surrendered to the Bond Trustee, and in the
case of any lost, stolen or destroyed Series 2007A Bond, there shall be first
furnished to the Issuer and the Bond Trustee evidence of such loss, theft or
destruction satisfactory to the Issuer and the Bond Trustee, together with
indemnity satisfactory to them. In the event any such Series 2007A Bond shall
have matured, instead of issuing a replacement Series 2007A Bond the Issuer may
pay the same without surrender thereof. The Issuer and the Bond Trustee may
charge the holder or owner of such Series 2007A Bond with their reasonable fees
and expenses in this connection.

 

Section 2.9                         Bond Register; Transfer and Exchange of
Series 2007A Bonds; Persons Treated as Owners. The Bond Register
shall be kept by the Bond Trustee at its principal corporate trust office. At
reasonable times and under reasonable regulations established by the Bond
Trustee, the Bond Register may be inspected and copied by the Issuer.

 

Upon surrender
for registration of transfer of any Series 2007A Bond at the principal
corporate trust office of the Bond Trustee, the Issuer shall execute and the
Bond Trustee shall authenticate and deliver in the name of the transferee or
transferees a new fully registered Series 2007A Bond or Series 2007A Bonds of
the same maturity and of authorized denomination for the aggregate principal
amount which the Registered Owner is entitled to receive. Any Series 2007A Bond
or Series 2007A Bonds may be exchanged at said office of the Bond Trustee for a
like aggregate principal amount of Series 2007A Bond or Series 2007A Bonds of
the same maturity of other authorized denominations. The execution by the
Issuer of any Series 2007A Bond shall constitute full and due authorization of
such Series 2007A Bond, and the Bond Trustee shall thereby be authorized to
authenticate, date and deliver such Series 2007A Bond.

 

All Series
2007A Bonds presented for registration of transfer or exchange shall be
accompanied by a written instrument or instruments of transfer or authorization
for exchange, in 

 

33

 

form and with guaranty of signature satisfactory to the Bond Trustee,
duly executed by the Registered Owner or by such Owner’s duly authorized
attorney.

 

No service
charge shall be imposed for any exchange or registration of transfer of Series
2007A Bonds. The Issuer and the Bond Trustee may, however, require payment by
the person requesting an exchange or registration of transfer of Series 2007A
Bonds of a sum sufficient to cover any tax, fee or other governmental charge
that may be imposed in relation thereto, except in the case of the issuance of
a Series 2007A Bond or Series 2007A Bonds for the unredeemed portion of a
Series 2007A Bond surrendered for redemption.

 

The Issuer and
the Bond Trustee shall not be required to register the transfer of or exchange
any Series 2007A Bond after notice calling such Series 2007A Bond or portion
thereof for redemption has been given or during the 15-day period next
preceding the first mailing of such notice of redemption of Series 2007A Bonds
of the same maturity.

 

New Series
2007A Bonds delivered upon any registration of transfer or exchange shall be
valid obligations of the Issuer, evidencing the same debt as the Series 2007A
Bonds surrendered, shall be secured by this Bond Indenture and shall be
entitled to all of the security and benefits hereof to the same extent as the
Series 2007A Bond surrendered.

 

The Issuer and
the Bond Trustee may treat the Registered Owner of any Series 2007A Bond as the
absolute owner thereof for all purposes, whether or not such Series 2007A Bond
shall be overdue, and shall not be bound by any notice, actual or constructive,
to the contrary. All payments of or on account of the principal of and premium,
if any, and interest on any such Series 2007A Bond as  herein provided shall be made only to or upon
the written order of the registered owner thereof or his legal representative,
but such registration may be changed as herein provided. All such payments
shall be valid and effectual to satisfy and discharge the liability upon such
Series 2007A Bond to the extent of the sum or sums so paid.

 

Section 2.10                  Cancellation. Any Series 2007A
Bond surrendered for the purpose of payment or retirement or for exchange or
registration of transfer or for replacement pursuant to Section 2.8 or Section
2.9 hereof, shall be cancelled upon surrender thereof to the Bond Trustee or
any Paying Agent. If the Issuer or the Borrower shall acquire any of the Series
2007A Bonds, the Issuer or the Borrower shall deliver such Series 2007A Bonds
to the Bond Trustee for cancellation and the Bond Trustee shall cancel the same.
Any such Series 2007A Bonds cancelled by any Paying Agent other than the Bond
Trustee shall be promptly transmitted by such Paying Agent to the Bond Trustee.
A certificate identifying all Series 2007A Bonds so cancelled shall be
delivered by the Bond Trustee to the Issuer and to the Borrower. Cancelled
Series 2007A Bonds may be destroyed by the Bond Trustee unless instructions to
the contrary are received from the Issuer or the Borrower.

 

Section 2.11                  Book-Entry Only System. The
Series 2007A Bonds shall be initially issued in the form of a separate single
fully registered Bond for each of the maturities thereof. Upon initial
issuance, the ownership of each such Series 2007A Bond shall be registered in
the Bond Register in the name of Cede & Co., as nominee of DTC, and except
as provided in Section 2.12 hereof, all of the outstanding Series 2007A Bonds
shall be registered in the Bond Register in the name of Cede & Co., as
nominee of DTC.

 

34

 

With respect
to Series 2007A Bonds registered in the Bond Register in the name of Cede &
Co., as nominee of DTC, the Issuer, the Bond Trustee and the Borrower shall
have no responsibility or obligation to any DTC Participant or to any person on
behalf of whom such a DTC Participant holds an interest in the Series 2007A
Bonds. Without limiting the immediately preceding sentence, the Issuer, the
Bond Trustee and the Borrower shall have no responsibility or obligation with
respect to (i) the accuracy of the records of DTC, Cede & Co. or any DTC
Participant with respect to any ownership interest in the Series 2007A Bonds,
(ii) the delivery to any DTC Participant or any other Person, other than a
Bondholder, as shown in the Bond Register, of any notice with respect to the
Series 2007A Bonds, including any notice of redemption, (iii) the payment to
any DTC Participant or any other Person, other than a Bondholder, as shown in
the Bond Register, of any amount with 
respect to principal of or interest on, the Series 2007A Bonds or (iv)
any consent given by DTC as registered owner. So long as the certificates for
the Series 2007A Bonds are not issued pursuant to Section 2.12 hereof, the
Issuer and the Bond Trustee may treat DTC or any successor securities
depository as, and deem DTC or any successor securities depository to be, the
absolute owner of the Series 2007A Bonds for all purposes whatsoever, including
without limitation (i) the payment of principal, premium, if any, and interest
on the Series 2007A Bonds, (ii) giving notice of redemption and other matters
with respect to the Series 2007A Bonds, (iii) registering transfers with
respect to the Series 2007A Bonds and (iv) the selection of Series 2007A Bonds
for redemption. Notwithstanding any other provision of this Bond Indenture to
the contrary, the Issuer, the Bond Trustee and any Paying Agent shall be
entitled to treat and consider the Person in whose name each Series 2007A Bond
is registered in the Bond Register as the absolute owner of such Series 2007A
Bond for the purpose of payment of principal, premium, if any, and interest
with respect to such Series 2007A Bond, for the purpose of giving notices of
redemption and other matters with respect to such Series 2007A Bond, for the
purpose of registering transfers with respect to such Series 2007A Bond, and
for all other purposes whatsoever. The Bond Trustee and any Paying Agent shall
pay all principal of, premium, if any, and interest on the Series 2007A Bonds
only to or upon the order of the respective Bondholders, as shown in the Bond
Register as provided in this Bond Indenture, or their respective attorneys duly
authorized in writing, and all such payments shall be valid and effective to
fully satisfy and discharge the Issuer’s obligations with respect to payment of
principal of and interest on the Series 2007A Bonds to the extent of the sum or
sums so paid. No Person other than a Bondholder, as shown in the Bond Register,
shall receive a Series 2007A Bond certificate evidencing the obligation of the
Issuer to make payments of principal, premium, if any, and interest pursuant to
this Bond Indenture. Upon delivery by DTC to the Bond Trustee of written notice
to the effect that DTC has determined to substitute a new nominee in place of
Cede & Co., and subject to the provisions in this Bond Indenture with respect
to interest checks or drafts being mailed to the registered owner at the close
of business on the Record Date, the word “Cede & Co.” in this Bond
Indenture shall refer to such new nominees of DTC; and upon receipt of such a
notice the Bond Trustee shall promptly deliver a copy of the same to any Paying
Agent. Except as provided in Section 2.12 hereof, the Series 2007A Bonds may be
transferred, in whole but not in part, only to DTC or to Cede & Co., or to
a successor securities depository selected or approved by the Issuer or to a
nominee of such successor securities depository. If at any time DTC notifies
the Issuer that it is unwilling or unable to continue as securities depository
with respect to the Series 2007A Bonds, or if at any time DTC shall no longer
be registered or in good standing under the Securities  Exchange Act of 1934, as amended, or other
applicable statute or regulation and a 

 

35

 

successor securities depository is not appointed by the Issuer within
90 days after the Issuer receives notice or becomes aware of such condition, as
the case may be, then the Issuer shall execute and the Bond Trustee shall
authenticate and deliver certificates representing the Series 2007A Bonds as
provided in Section 2.12.

 

Section 2.12                  Successor Securities Depository; Transfers
Outside Book-Entry Only System. The Bondholders have no right to
a depository for the Series 2007A Bonds. The Issuer or the Bond Trustee may
remove DTC or any successor thereto for cause at any time. In such event, the
Issuer shall (i) appoint a successor securities depository, qualified to act as
such under Section 17A of the Securities and Exchange Act of 1934, as amended,
notify DTC and DTC Participants of the appointment of such successor securities
depository and transfer one or more separate Series 2007A Bond certificates to
such successor securities depository or (ii) notify DTC and DTC Participants of
the availability through DTC of Series 2007A Bond certificates and transfer one
or more separate Series 2007A Bond certificates to DTC Participants having
Series 2007A Bonds credited to their DTC accounts. In such event, the Series
2007A Bonds shall no longer be restricted to being registered in the Bond
Register in the name of Cede & Co., as nominee of DTC, but may be
registered in the name of the successor securities depository, or its nominee,
or in whatever name or names Bondholders transferring or exchanging Series
2007A Bonds shall designate, in accordance with the provisions of this Bond
Indenture.

 

The Issuer has
executed the Letter of Representations in connection with the issuance of its
bonds. The Letter of Representations is for the purpose of effectuating the
book-entry only system of DTC and shall not be deemed to amend, supersede or
supplement the terms of this Bond Indenture which are intended to be complete
without reference to the Letter of Representations. In the event of any
conflict between the terms of the Letter of Representations and the terms of
this Bond Indenture, the terms of this Bond Indenture shall control. DTC may
exercise the rights of a Bondholder hereunder only in accordance with the terms
hereof applicable to the exercise of such rights.

 

Section 2.13                  Payments and Notices to Cede & Co. Notwithstanding any other
provision of this Bond Indenture to the contrary, so long as a Series 2007A
Bond is registered in the name of Cede & Co., as nominee of DTC, all
payments with respect to principal of, premium, if any, and interest on such
Series 2007A Bond and all notices with respect to such Bond shall be made and
given, respectively, in the manner provided in the Letter of Representations. The
Bond Trustee shall request in each notice sent to Cede & Co. pursuant to
the terms of this Bond Indenture that Cede & Co. forward or cause to be
forwarded such notice to the DTC Participants.

 

36

 

ARTICLE III

 

APPLICATION OF
SERIES 2007A BOND PROCEEDS

AND REQUIRED FUND DEPOSITS; EXPENSE FUND; PROJECT FUND;

REBATE FUND

 

Section 3.1                         Deposit of Funds. The Issuer,
for and on behalf of, and as a loan to, the Borrower, shall deposit with the
Bond Trustee all amounts required to be paid to the Bond Trustee by the
Borrower from its available funds other than the Series 2007A Bond proceeds and
all of the net proceeds from the sale of the Series 2007A Bonds, and the Bond
Trustee shall, out of such proceeds, as may be further specified by a Written
Request of the Borrower delivered to the Bond Trustee upon delivery of the
Series 2007A Bonds:

 

(a)                                  Deposit
$366,000.00 from monies paid to the Bond Trustee by the Borrower consisting of
available funds of the Borrower other than proceeds of the Series 2007A Bonds
and $380,000.00 from the proceeds of the Series 2007A Bonds to the credit of
the Expense Fund; provided that, pursuant to a Written Request of the Borrower
delivered to the Bond Trustee, all or any portion of said amount may be paid
directly from bond proceeds for payment of any item which is authorized by
Section 3.2 to be paid from the Expense Fund; provided, however, no more than
two percent (2%) of the proceeds of the Series 2007A Bonds shall be used to pay
cots of issuance of the Series 2007A Bonds.

 

(b)                                 Deposit
to the credit of the Debt Service Reserve Fund the sum of $1,900,000.00 which
will be sufficient to satisfy the Debt Service Reserve Requirement; and

 

(c)                                  Deposit
the balance ($16,720,000.00) of the proceeds of the Series 2007A Bonds
(including $1,136,437.50 representing capitalized interest on the Series 2007A
Bonds) to the Project Fund.

 

Section 3.2                         Expense Fund. The Issuer hereby establishes
with the Bond Trustee a separate account to be known as the “Series 2007A
Expense Fund – Heartland Grain Fuels, L.P. Ethanol Plant Project” (the “Expense
Fund”). A deposit to the credit of the Expense Fund will be made pursuant to
Section 3.1(a) hereof. Amounts on deposit in the Expense Fund shall be disbursed
upon the Written Request of the Borrower for the payment of expenses for any
recording, trustee’s fees and expenses, accounting and legal fees, financing
costs (including costs of acquiring investments for the funds and escrows), and
other fees and expenses incurred or to be incurred by or on behalf of the
Issuer or the Borrower in connection with or incident to the issuance and sale
of the Series 2007A Bonds. At such time as the Bond Trustee is furnished with a
Written Request stating that all such fees and expenses have been paid, and in
no event later than December 31, 2007, the Bond Trustee shall transfer any
moneys remaining in the Expense Fund to the Project Fund.

 

Section 3.3                         Project Fund. The Issuer
hereby establishes with the Bond Trustee a separate account to be known as the “Series
2007A Project Fund – Heartland Grain Fuels, L.P. Ethanol Plant Project.” (the “Project
Fund”). Proceeds of the Series 2007A Bonds shall be deposited to the credit in
the Project Fund pursuant to Section 3.1(c) hereof. Immediately upon deposit of
such proceeds, the Bond Trustee shall transfer the amount of $15,583,562.50 to
the 

 

37

 

Accounts Bank for deposit
to the Bond Proceeds Sub-Account held by the Accounts Bank pursuant to the
terms of the Accounts Agreement. The Bond Trustee shall retain $1,136,437.50 in
the Project Fund to be applied to the payment of interest on the Series 2007A
Bonds as set forth in (a) below of this Section 3.3 The Bond Trustee shall
direct the disbursement of funds by the Accounts Bank from the Bond Proceeds
Sub-Account upon the procedures set forth in (a) below.

 

(a)                                  Disbursements
from the Project Fund. In order to obtain disbursement of amounts in the
Bond Proceeds Sub-Account, the Borrower shall submit a separate Bond Proceeds
Withdrawal Certificate to the Bond Trustee and shall request the certificate of
the Independent Engineer as required below. Upon review and execution, the Bond
Trustee shall submit the Bond Proceeds Withdrawal Certificate to the
Administrative Agent and the Independent Engineer to authorize and direct the
withdrawal of the amount set forth in the Bond Proceeds Withdrawal Certificate
by the Accounts Bank, from the Bond Proceeds Sub-Account. If there are
insufficient funds in the Bond Proceeds Sub-Account, the Bond Trustee may, so
long as all requirements for disbursement from the Bond Proceeds Sub-Account
have been met, disburse moneys on deposit in the Project Fund in order to pay
the Costs of the Project set forth in such Bond Proceeds Withdrawal
Certificate. The Bond Trustee may not disburse amounts in the Project Fund
required to pay interest for other Costs of the Project.

 

To the extent
that the Borrower leases from third parties or otherwise provides equipment for
the Project from sources other than funds on deposit in the Project Fund or the
Bond Proceeds Sub-Account, the costs thereof shall not be included in the costs
referred to above.

 

In addition,
on December 25, 2007 and on June 25, 2008, the Bond Trustee shall transfer from
the Project Fund to the Interest Fund the amount of capitalized interest set
forth on Exhibit C hereto with respect to the applicable Interest
Payment Date, which transferred amount shall be applied to pay interest on the
Series 2007A Bonds on the applicable Interest Payment Date pursuant to Section
4.3 hereof. The amount of $1,136,437.50 shall be reserved for and used solely
to pay interest on the Series 2007A Bonds. Investment earning on such amount
may be used to pay other Costs of the Project under the disbursement procedures
set forth above

 

(b)                                 Completion
Certificate. Within 120 days after the substantial completion of the
Facilities, the Borrower has agreed in the Loan Agreement to cause a completion
certificate of an Independent Engineer to be delivered to the Bond Trustee,
which certificate shall state that based upon periodic visits to the site, such
Independent Engineer has generally become familiar with the progress and
quality of the work on the Project and has determined that in general the work
on the Project and the Facilities have been completed in compliance with the
contract documents relating thereto, and to deliver to the Bond Trustee a
completion certificate of the Borrower, which certificate shall state that
substantial completion has occurred and that all Costs of the Project to be
paid from the Project Fund have been included in Written Requests previously
submitted to the Bond Trustee which have been paid by the Bond Trustee and
directing the Bond Trustee to apply any amount remaining in the Project Fund to
the mandatory redemption of Series 2007A Bonds upon completion as required by
Section 5.1 hereof.

 

38

 

Substantial
completion of the Project shall be deemed to have occurred when the Borrower is
able to occupy and utilize all portions of the Facilities in the manner in
which and for the purposes for which the same were intended, with no
significant impairment of the utility thereof to the Borrower for such
purposes.

 

(c)                                  Disposition
of Project Fund Moneys After Completion. If after payment by the Bond
Trustee of all orders theretofore tendered to the Bond Trustee under the
provisions of subparagraph (a) of this Section 3.3 and after receipt by the
Bond Trustee of the completion certificates described in subparagraph (b) of
this Section 3.3 there shall remain any balance of moneys in the Project Fund,
such moneys shall be transferred to the Bond Sinking Fund; provided, however,
that the Borrower shall have obtained an opinion of Bond Counsel that such
transfer will not impair the exclusion from federal income taxation of the
interest on any of the Series 2007A Bonds.

 

Section 3.4                         Rebate Fund. There is hereby established with
the Bond Trustee a “Series 2007A Rebate Fund- Heartland Grain Fuels, L.P.
Ethanol Plant Project.” (the “Rebate Fund”) which shall be held separate and
apart from all other moneys of the Bond Trustee. Moneys in the Rebate Fund are
neither pledged to nor available to be used to pay debt service on the Series
2007 Bonds. Deposits to be made to the Rebate Fund and other provisions
relating thereto are set forth in the Tax Exemption Agreement.

 

39

 

ARTICLE IV

REVENUES AND FUNDS

 

Section 4.1                         Source of Payment of Series 2007A Bonds. The Series 2007A Bonds herein
authorized and all payments to be made by the Issuer thereon and into the
various funds established under this Bond Indenture are not general obligations
of the Issuer but are limited obligations payable solely from (i) amounts
payable under the Loan Agreement pledged hereunder (other than Unassigned
Rights), (ii) amounts on deposit in the Funds created hereunder to the extent
herein provided and (iii) certain income from the temporary investment of any
of the foregoing.

 

Section 4.2                         Revenue Fund. The Issuer hereby establishes
with the Bond Trustee, and agrees to maintain so long as any of the Series
2007A Bonds are outstanding, a separate account to be known as the “Series
2007A Revenue Fund – Heartland Grain Fuels, L.P. Revenue Fund” (the “Revenue
Fund”). The Bond Trustee shall deposit all amounts received for payment of the
Series 2007A Bonds to the Revenue Fund for transfer to the Interest Fund, the
Bond Sinking Fund, the Debt Service Reserve Fund and the Redemption Fund as set
forth in this Article.

 

Section 4.3                         Interest Fund. The Issuer hereby establishes
with the Bond Trustee, and agrees to maintain so long as any of the Series
2007A Bonds are outstanding, a separate account to be known as the “Series 2007A
Interest Fund – Heartland Grain Fuels, L.P. Ethanol Plant Project.” (the “Interest
Fund”).

 

On or before
December 31, 2007 the Bond Trustee shall deposit in the Interest Fund from
amounts on deposit in the Revenue Fund, an amount which, (after taking into
account the amount to be transferred from the Project Fund to the Interest Fund
on the twenty-fifth day of the month preceding each Interest Payment Date
representing that portion of the capitalized interest which is to be applied to
the payment of interest on the Series 2007A Bonds on the next succeeding
Interest Payment Date, as such amount is set forth on Exhibit C hereto)
will be sufficient to pay the interest to become due on the series 2007A Bonds
on January 1, 2008. On or before each Quarterly Payment date after December 31,
2007, commencing March 31, 2008, the Bond Trustee shall deposit in the Interest
Fund from amounts on deposit in the Revenue Fund, an amount which (after taking
into account said available amount of capitalized interest) will be equal to
not less than one-half of the interest to become due on the Series 2007A Bonds
on the next succeeding Interest Payment Date. No such deposit need be made,
however, to the extent that there is a sufficient amount already on deposit and
available for such purpose in the Interest Fund. If any such Quarterly Payment
Day is not a Business Day, the deposit herein required to be made shall be made
on the next preceding Business Day or so long as the Accounts Agreement is in
effect, such Business Day as directed in the Accounts Agreement. Moneys on
deposit in the Interest Fund, other than income earned thereon which is to be
transferred to other funds created under this Bond Indenture, shall be applied
by the Bond Trustee to pay interest on the Series 2007A Bonds as it becomes
due.

 

Section 4.4                         Bond Sinking Fund. The Issuer hereby establishes
with the Bond Trustee and agrees to maintain so long as any of the Series 2007A
Bonds are outstanding, a separate 

 

40

 

account to be known as
the “Series 2007A Bond Sinking Fund – Heartland Grain Fuels, L.P. Ethanol Plant
Project.” (the “Bond Sinking Fund”).

 

On or before
each Quarterly Payment Date, commencing March 31, 2015, after making the
required deposits into the Interest Fund, the Bond Trustee shall deposit in the
Bond Sinking Fund, from amounts on deposit in the Revenue Fund, an amount which
is not less than one-fourth of the principal of the Series 2007A Bonds next to
become due, whether at maturity or by Mandatory Sinking Fund Redemption. No
such deposit need be made, however, to the extent that there is a sufficient
amount already on deposit and available for such purpose in the Bond Sinking
Fund. If any such Quarterly Payment Date day is not a Business Day, the deposit
herein required to be made shall be made on the next preceding Business Day.

 

Moneys on
deposit in the Bond Sinking Fund, other than income earned thereon which is to
be transferred to other funds created under this Bond Indenture, shall be
applied by the Bond Trustee to pay principal on the Series 2007A Bonds as it
becomes due whether at maturity or by Mandatory Sinking Fund Redemption. In
lieu of such payment, the Bond Trustee may, at the written request of the
Borrower, purchase in the open market an equal principal amount of Series 2007A
Bonds of the maturity to be paid or which is subject to Mandatory Sinking Fund
Redemption at prices not exceeding the principal amount of the Series 2007A
Bonds being purchased plus accrued interest, with such interest portion of the
purchase price to be paid from the Interest Fund and the principal portion of
such purchase price to be paid from the Bond Sinking Fund. In addition, the
amount of Series 2007A Bonds to be paid or redeemed on any date shall be
reduced by the principal amount of Series 2007A Bonds of the maturity required
to be paid or redeemed which are acquired by the Borrower and delivered to the
Bond Trustee for cancellation.

 

Section 4.5                         Debt Service Reserve Fund. The Issuer hereby establishes
with the Bond Trustee and agrees to maintain so long as any of the Series 2007A
Bonds are Outstanding, a separate account to be known as the “Series 2007A Debt
Service Reserve Fund – Heartland Grain Fuels, L.P. Ethanol Plant Project.” (the
“Debt Service Reserve Fund”). An initial deposit to the credit of the Debt
Service Reserve Fund is to be made under the provisions of Section 3.1(b)
hereof.

 

The Debt
Service Reserve Fund shall be maintained in an amount equal to the Debt Service
Reserve Requirement. Funds on deposit in the Debt Service Reserve Fund shall be
used to make up any deficiencies in the Interest Fund and Bond Sinking Fund (in
the order listed). The amount of any deficiency created pursuant to such use of
said funds shall be restored to the Debt Service Reserve Fund from loan
repayments to be made by the Borrower in not more than 4 consecutive
substantially equal quarterly installments (the first such installment to be
made on the Quarterly Payment Date following the month in which such deficiency
is created) as provided in Article IV of the Loan Agreement.

 

On the first
business day of January, 2008, and on the first business day of each January
thereafter (each a “Valuation Date”), while any Series 2007A Bonds are
Outstanding, the Trustee shall determine the aggregate value on such date of
the Authorized Investments then held in the Debt Service Reserve Fund on the
basis of the lower of cost or market value plus accrued interest. If such
value, together with any cash then held in said Fund, is less than the Debt 

 

41

 

Service Reserve Requirement, the Trustee shall immediately notify the
Issuer and the Borrower of the amount of such deficiency, and subject to the
express terms of the Accounts Agreement and the Intercreditor Agreement, the
Borrower shall restore the amount of said deficiency to the Debt Service
Reserve Fund from loan repayments to be made by the Borrower not later than one
month after the date of such valuation in one monthly deposit pursuant to
Article IV of the Loan Agreement. If the value of the securities on deposit in
the Debt Service Reserve Fund on any Valuation Date, together with any cash
then held therein, exceeds such requirement, such excess shall be transferred
to the Bond Sinking Fund at the direction of the Borrower but, in any event,
not less than annually. No deficiency shall be deemed to have occurred within
the meaning of this paragraph if moneys have been transferred to the Bond
Sinking Fund from the Debt Service Reserve Fund and the Borrower is repaying
the same pursuant to the provisions of the second paragraph of this Section
4.5.

 

In lieu of the
deposit of moneys in the Debt Service Reserve Fund, the Issuer, at the
direction of the Borrower, may cause to be so credited a surety bond, an
insurance policy or a letter of credit payable to the Issuer for the benefit of
the owners of the Series 2007A Bonds in an amount equal to the Debt Service
Reserve Requirement or the difference between the Debt Service Reserve
Requirement and the amounts then on deposit in the Debt Service Reserve Fund
with respect to the Series 2007A Bonds. The surety bond, insurance policy or
letter of credit shall be payable (upon the giving of notice as required
thereunder) on any date on which moneys will be required to be withdrawn from
the Debt Service Reserve Fund and applied to the payment of the principal of or
interest on the Series 2007A Bonds and such withdrawals cannot be made by
amounts credited to the Debt Service Reserve Fund. The insurer providing such
surety bond or insurance policy shall be an insurer whose municipal bond
insurance policies insuring the payment, when due, of the principal of and
interest on municipal bond issues results in such issues being rated in the
highest rating category by either Standard & Poor’s Rating Services, a
Division of The McGraw Hill Companies (“S&P”), or Moody’s Investors
Service, Inc. (“Moody’s”), or their successors, or any insurer who holds the
highest policyholder ratings accorded insurers by A. M. Best & Co. or any
comparable service. The letter of credit issuer shall be a bank or trust
company which is rated not lower than the highest rating category by S&P
and Moody’s, or their successors, and the letter of credit itself shall be
rated in the highest category of either such rating agency. If a disbursement
is made pursuant to a surety bond, an insurance policy or a letter of credit
provided pursuant to this paragraph, the Borrower shall be obligated either (i)
to reinstate the maximum limits of such surety bond, insurance policy or letter
of credit or (ii) to deposit funds into the Debt Service Reserve Fund in
accordance with the first paragraph of this Section 4.5, or a combination of
such alternatives, as shall result in the amount credited to the Debt Service
Reserve Fund equaling the Debt Service Reserve Requirement for the Series 2007A
Bonds.

 

If the issuer
of a surety bond, insurance policy or letter of credit on deposit in the Debt
Service Reserve Fund shall cease to have a rating described in the immediately
preceding paragraph, the Borrower shall use reasonable efforts to replace such
surety bond, insurance policy or letter of credit with one issued by an issuer
having a rating so described, but shall not be obligated to pay, or commit to
pay, increased fees, expenses or interest in connection with such replacement
or to make deposits in the Debt Service Reserve Fund in lieu of replacing such
surety bond, insurance 

 

42

 

policy or letter of credit with another, and such surety bond,
insurance policy or letter of credit shall fully satisfy the Debt Service
Reserve Requirement notwithstanding such decrease in rating.

 

To the extent
the Issuer or the Borrower deposits funds in the Debt Service Reserve Fund,
other funds on deposit therein may be transferred to the Bond Sinking Fund, so
long as the Debt Service Reserve Fund is maintained in an amount which is not
less than the Debt Service Reserve Requirement.

 

Section 4.6                         Redemption Fund. The Issuer hereby establishes
with the Bond Trustee and agrees to maintain so long as any of the Series 2007A
Bonds are outstanding a separate account to be known as the “Series 2007A
Redemption Fund – Heartland Grain Fuels, L.P. Ethanol Plant Project.” (the “Optional
Redemption Fund”). In the event of (i) prepayment by or on behalf of the
Borrower of amounts payable on the Loan Agreement or (ii) deposits with the
Bond Trustee by the Borrower or the Issuer of moneys from any other source for
redeeming Series 2007A Bonds (other than a Mandatory Sinking Fund Redemption),
except as otherwise provided in this Bond Indenture, such moneys shall be
deposited in the Redemption Fund. Moneys on deposit in the Redemption Fund
shall be used first, to make up any deficiencies existing in the Interest Fund
and the Bond Sinking Fund (in that order) and second, for the redemption or
purchase of Series 2007A Bonds in accordance with the provisions of Article V
hereof.

 

Section 4.7                         Investment of Funds. (a)  Upon receipt of a Written Request of the
Borrower filed with the Bond Trustee, moneys consisting of proceeds of the
Series 2007A Bonds, if any, and all investment earnings thereon in the Interest
Fund, Bond Sinking Fund, Debt Service Reserve Fund, Project Fund, Expense Fund
and Redemption Fund shall be invested in Authorized Investments, and all
remaining moneys in said funds shall be invested in Qualified Investments
specified by the Borrower. Such investments shall be made so as to mature on or
prior to the date or dates that moneys therefrom are reasonably anticipated to
be required. If the Borrower fails to give such direction and file such written
request with the Bond Trustee, moneys in such funds shall be invested in
Government Obligations, maturing not more than fourteen days after the day such
investment is made. As and when any amounts invested pursuant to this Bond
Indenture may be needed for disbursements from the Bond Sinking Fund, the
Interest Fund, the Debt Service Reserve Fund, the Expense Fund, the Project
Fund or the Redemption Fund, the Bond Trustee shall cause a sufficient amount
of such investments to be sold or otherwise converted into cash to the credit
of such fund. The Bond Trustee may rely upon an Officer’s Certificate of the
Borrower in determining whether any investments constitute Authorized
Investments and comply with the investment restrictions in this Bond Indenture
and the Tax Exemption Agreement. The Bond Trustee, when authorized by the
Borrower, may trade with itself in the purchase and sale of securities for such
investment; provided, however, that in no case shall any investment be
otherwise than in accordance with the investment limitations contained herein
and in the Tax Exemption Agreement. The Bond Trustee shall not be liable or
responsible for any loss resulting from any such investments. Gains from
investments shall be credited to and held in, and losses shall be charged to,
the fund or account from which the investment is made.

 

(b)                                 All
investment earnings on amounts in the Project Fund shall be credited to the
Project Fund. Other than the Project Fund, all income in excess of the 

 

43

 

requirements of the funds
specified in subsection (a) of this Section derived from the investment of
moneys on deposit in any such funds shall be deposited in the following funds,
in the order listed:

 

(i)                                The
Debt Service Reserve Fund to the extent necessary to maintain the amount
required therein.

 

(ii)                             The
Bond Sinking Fund and the Interest Fund (in that order) to the extent, with
respect to the Bond Sinking Fund, of the amount required to be deposited in the
Bond Sinking Fund to make the next required principal payment on the Series
2007A Bonds if such payment is scheduled to occur within 13 months of the date
of such deposit, and to the extent, with respect to the Interest Fund, of the
amounts required to be deposited in the Interest Fund necessary to make any
interest payments on the Series 2007A Bonds occurring within 13 months of the
date of such deposit; and

 

(iii)                          The balance,
if any, in the Redemption Fund.

 

Section 4.8                         Trust Funds. All moneys received by the Bond Trustee under the provisions
of this Bond Indenture shall, except as provided in Section 4.9 hereof, be
trust funds under the terms hereof for the benefit of all Series 2007A Bonds
outstanding hereunder (except as otherwise provided) and shall not be subject
to lien or attachment of any creditor of the Issuer or the Borrower. Such
moneys shall be held in trust and applied in accordance with the provisions of
this Bond Indenture.

 

Section 4.9                         Excluded Funds; Transfers to Rebate Fund.
The foregoing provisions of this Article IV notwithstanding, (i) the Rebate
Fund shall not be considered a part of the “trust estate” created by this Bond
Indenture and (ii) the Bond Trustee shall be permitted to transfer moneys on
deposit in any of the trust funds established under this Article IV to the
Rebate Fund in accordance with the provisions of the Tax Exemption Agreement.

 

44

 

ARTICLE V

 

REDEMPTION OF
SERIES 2007A BONDS

 

Section 5.1                         Redemption Dates and Prices. The Series 2007A Bonds are
callable for redemption prior to maturity (herein  referred to as “Extraordinary Optional
Redemption”) pursuant to this Section 5.1 in the event of damage to or
destruction of the Facilities or any part thereof or condemnation or sale
consummated under threat of condemnation of the Facilities or any part thereof,
if the Net Proceeds of insurance, condemnation or sale received in connection
therewith exceed $5,000,000, but only to the extent of funds provided for in
Section 4.7 of the Loan Agreement; and pursuant to the Loan Agreement the
Borrower elects to have all or a portion of such Net Proceeds applied to the
prepayment of the Series 2007A Bonds. If so called for redemption, Series 2007A
Bonds shall be subject to redemption by the Issuer at the direction of the
Borrower, in whole or in part at any time, and if in part by maturities
designated by the Borrower (less than all of a single maturity to be selected
by lot in such manner as may be determined by the Bond Trustee) at the
principal amount thereof plus accrued and unpaid interest thereon to the
redemption date and without premium from the Net Proceeds from such insurance,
or condemnation award or such sale, but not in excess of the amount of such Net
Proceeds applied to such purpose.

 

Outstanding
Series 2007A Bonds are also subject to redemption prior to maturity (herein
referred to as “Optional Redemption”) on or after January 1, 2015 at the option
of the Issuer upon direction of the Borrower out of amounts prepaid under the
Loan Agreement and deposited in the Redemption Fund, in whole or in part at any
time, and if in part by maturities designated by the Borrower (and if less than
all of a single maturity is being redeemed, by lot within a maturity or in such
manner as may be reasonably determined by the Bond Trustee), at a redemption
price of 100% (expressed as percentages of the principal amount of the Series
2007A Bonds to be redeemed), plus accrued interest, if any,  thereon to the date of redemption.

 

	
  January 1, 2015 through December 31, 2015

  	
   

  	
  106

  	
  %

  
	
  January 1, 2016 through December 31, 2016

  	
   

  	
  104

  	
   

  
	
  January 1, 2017 and thereafter

  	
   

  	
  102

  	
   

  

 

No
Extraordinary Redemption or Optional Redemption of less than all of the Series
2007A Bonds Outstanding at the time of such redemption shall be made pursuant
to the foregoing provisions of this Section 5.1 unless the aggregate principal
amount of Series 2007A Bonds to be redeemed is equal to or greater than
$100,000.

 

Series 2007A
Bonds may be called for Extraordinary Redemption or Optional Redemption by the
Bond Trustee pursuant to this Section 5.1 upon receipt by the Bond Trustee at
least 60 days prior to the redemption date of a Written Request of the Borrower
requesting such redemption. Such Written Request shall specify the principal
amount of the Series 2007A Bonds to be called for redemption, the redemption
date, the applicable redemption price or prices, the provision or provisions
above specified pursuant to which such Series 2007A Bonds are to be called for
redemption and if the Series 2007A Bonds are to be redeemed in part, the 

 

45

 

maturities of such Series 2007A Bonds, and the amounts within each such
maturity to be redeemed. If for any reason the Bond Trustee has not received a
Written Request as to the maturities of the Series 2007A Bonds or the amounts
within any maturity to be redeemed, it shall apply the funds available for
redemption to redeem the Series 2007A Bonds in inverse order of maturity.

 

Following the
occurrence of the Determination of Taxability, the Series 2007A Bonds are
subject to mandatory redemption, in whole ,as soon as practicable but in any
event no later than ninety (90) days after the occurrence of a Determination of
Taxability. The Series 2007A Bonds are subject to mandatory redemption as
prepayment upon a Determination of Taxability from a prepayment by the Company
of all Loan Payments. The redemption price of the Series 2007A Bonds upon a
Determination of Taxability will be equal to one hundred eight percent (108%)
of the principal amount of the Bonds to be redeemed and prepaid plus interest
accrued, if any, to the mandatory redemption date following the Determination of
Taxability. In addition, upon occurrence of a Determination of Taxability, the
interest rate on the Bonds shall be adjusted as of the Date of Taxability to
the Taxable Rate. The Taxable Rate is equal to a fluctuating interest rate
adjusted on the first day of each calendar quarter to a rate equal to the sum
of the London Interbank Offered Rates (LIBOR) with a term of three months plus
350 basis points.

 

The Bonds are
subject to mandatory redemption in part by lot (or such other random means
selected by the Bond Trustee) at a redemption price equal to the principal
amount thereof, together with accrued interest to the date of redemption, from
proceeds of the Series 2007A Bonds available therefore after the Completion
Date.

 

In addition to
Extraordinary Optional Redemption, Optional Redemption, mandatory redemption
upon Determination of Taxability and mandatory redemption upon completion, the
Series 2007A Bonds are subject to mandatory sinking fund redemption pursuant to
and in the manner specified in Section 5.2 (herein referred to as “Mandatory
Sinking Fund Redemption”).

 

In lieu of
redeeming Series 2007A Bonds pursuant to this Section 5.1 or Section 5.2, the
Bond Trustee may, at the Written Request of the Borrower, use such funds
otherwise available hereunder for redemption of Series 2007A Bonds to purchase
for cancellation Series 2007A Bonds in the open market at a price not exceeding
the redemption price then applicable hereunder. It is understood that in the
case of any such redemption or purchase and cancellation of Series 2007A Bonds,
the Issuer shall receive credit against its required Bond Sinking Fund deposits
with respect to the Series 2007A Bonds of such maturity, which in the case of
Series 2007A Bonds subject to Mandatory Sinking Fund Redemption shall be
applied to the mandatory deposits with respect to Mandatory Sinking Fund
Redemption which the Borrower elects or, if no election is made, in the inverse
order thereof.

 

The portion of
any Series 2007A Bonds of a denomination of more than $5,000 to be redeemed
shall be in the principal amount of $5,000 or a multiple thereof, and in
selecting portions of such Series 2007A Bonds for redemption, the Bond Trustee
shall treat each such Series 2007A Bond as representing that number of Series
2007A Bonds of $5,000 denominations which is obtained by dividing the principal
amount of such Series 2007A Bond by $5,000.

 

46

 

Section 5.2                         Bond Sinking Fund Deposits - Mandatory
Deposits. With
respect to the payment of Series 2007A Bonds, whether at maturity or by
Mandatory Sinking Fund Redemption, the Issuer shall have on deposit in the Bond
Sinking Fund moneys in the amounts and at the times, respectively, as follows:

 

	
  January 1

  of the Year

  	
   

  	
  Principal

  Amount

  	
   

  
	
  2016 

  	
   

  	
  $

  	
  5,840,000.00

  	
   

  
	
  2017 

  	
   

  	
  6,320,000.00

  	
   

  
	
  2018*

  	
   

  	
  6,840,000.00

  	
   

  
					

*Final
Maturity

 

provided, that such amounts shall be reduced
(a) by the amount of Series 2007A Bonds of the applicable maturity acquired and
delivered in accordance with Section 4.4 hereof in satisfaction of such Bond
Sinking Fund requirements and (b) in connection with a partial redemption of
Series 2007A Bonds if the Borrower elects to reduce Mandatory Sinking Fund
Redemptions for the Series 2007A Bonds of the applicable maturity in the manner
provided in the penultimate paragraph of Section 5.1.

 

Moneys on
deposit in the Bond Sinking Fund on January 1 of any year shall be applied to
the Mandatory Sinking Fund Redemption of the Series 2007A Bonds next maturing
in the amount set forth above. Payment of the Series 2007A Bonds through the
Bond Sinking Fund shall be without premium. If less than all Series 2007A Bonds
of a particular maturity are subject to Mandatory Sinking Fund Redemption on a
particular date, the Series 2007A Bonds to be redeemed shall be selected by lot
in such manner as may be designated by the Bond Trustee. The Series 2007A Bonds
shall be paid by the Bond Trustee pursuant to the provisions of this paragraph
without any notice from or direction by the Issuer or the Borrower.

 

Section 5.3                         Notice of Redemption. Notice of the call for any
redemption of the Series 2007A Bonds shall state the following:  (i) the name of the Series 2007A Bonds, (ii)
the CUSIP number and bond certificate number of the Series 2007A Bonds to be redeemed,
(iii) the original dated date of the Series 2007A Bonds, (iv) the interest rate
and maturity date of the Series 2007A Bonds to be redeemed, (v) the date of the
redemption notice, (vi) the redemption date, (vii) the redemption price and
(viii) the address and telephone number of the principal office of the Bond
Trustee. Such notice shall further state that on the redemption date for such
Series 2007A Bonds there shall become due and payable upon each Series 2007A
Bond to be redeemed the redemption price thereof, or the redemption price of
the specified portion of the principal amount thereof in the case of a Series
2007A Bond to be redeemed in part only, with interest accrued and unpaid to
such date, and that from and after such date, interest thereon shall cease to
accrue and be payable. The redemption notice shall be given by mailing a copy
of such notice of redemption by first class mail, postage prepaid, to the
Issuer, and the registered owners of the Series 2007A Bonds to be redeemed at
the address shown on the Bond Register not less than 30 or more than 60 days
prior to the redemption date; provided, however, that failure to give such
notice by mailing or a defect in the notice or the mailing as to any Series
2007A Bond will not affect the validity of any proceedings for redemption as to
any other Series 2007A Bond with 

 

47

 

respect to which notice
was properly given. Said notice shall also be given by the Bond Trustee by
certified mail, return receipt requested, at least thirty days prior to the
date fixed for redemption, to each securities depository registered with the
Securities and Exchange Commission under the Securities Exchange Act of 1934,
as amended, and to the national information services which disseminate
redemption notices. Except for a mandatory sinking fund redemption pursuant to
Section 5.2 hereof, prior to the date that the redemption notice is first
mailed as aforesaid, funds shall be placed with the Bond Trustee to pay the
principal and redemption premium, if any, of such Series 2007A Bonds and the
accrued interest thereon to the redemption date. In the case of an optional
redemption, at the option of the Borrower, funds need not be deposited prior to
the mailing of the notice of redemption, provided that the notice of redemption
states that if funds are not on deposit with the Bond Trustee on or prior to
the redemption date, the redemption shall be cancelled and the Series 2007A
Bonds so called for redemption shall remain Outstanding and continue to bear
interest. Upon the happening of the above conditions, the Series 2007A Bonds,
or portions thereof, thus called for redemption shall not bear interest after
the applicable redemption date, shall no longer be protected by this Bond
Indenture and shall not be deemed to be outstanding under the provisions of
this Bond Indenture. The Bond Trustee shall redeem or purchase, in the manner
provided in this Article V, such an aggregate principal amount of Series 2007A
Bonds at the principal amount thereof plus accrued interest to the redemption
date as will exhaust as nearly as practicable such funds. At the Written
Request of the Borrower, such funds may be invested in Government Obligations
until needed for redemption.

 

48

 

ARTICLE VI

 

GENERAL COVENANTS

 

Section 6.1                         Payment of Principal and Interest. Subject to the limited source of
payment hereinafter referred to, the Issuer covenants that it will promptly pay
the principal of premium, if any, and interest on every Series 2007A Bond
issued under this Bond Indenture at the place, on the dates and in the manner
provided herein and in said Series 2007A Bonds according to the true intent and
meaning thereof. The principal of premium, if any, and interest on the Series
2007A Bonds are payable solely from payments or prepayments by the Borrower
under the  Loan Agreement, which Loan
Agreement and payments thereon are hereby specifically assigned and pledged to
the payment of the Series 2007A Bonds in the manner and to the extent herein
specified, and nothing in the Series 2007A Bonds or in this Bond Indenture
shall be considered as assigning or pledging any funds or assets of the Issuer
except the moneys and the Loan Agreement (other than Unassigned Rights) pledged
under this Bond Indenture.

 

Section 6.2                         Performance of Covenants; Legal Authorization. The Issuer covenants that it
will faithfully perform at all times any and all covenants, undertakings,
stipulations and provisions contained in this Bond Indenture, in any and every
Series 2007A Bond executed, authenticated and delivered hereunder and in all
proceedings of its members pertaining thereto. The Issuer represents that it is
duly  authorized under the Constitution
and laws of the State to issue the Series 2007A Bonds authorized hereby and to
execute this Bond Indenture and to assign the Loan Agreement and payments
thereon in the manner and to the extent herein set forth, that all action on
its part for the issuance of the Series 2007A Bonds and the execution and
delivery of this Bond Indenture has been duly and effectively taken, and that
the Series 2007A Bonds in the hands of the owners thereof are and will be valid
and enforceable obligations of the Issuer according to the import thereof.

 

Section 6.3                         Ownership; Instruments of Further Assurance. The Issuer represents that the
assignment of the Loan Agreement to the Bond Trustee hereby made are valid and
lawful. The Issuer covenants that it will defend its interest in the Loan
Agreement and the assignment thereof to the Bond Trustee, for the benefit of
the holders and owners of the Series 2007A Bonds, against the claims and
demands of all persons whomsoever. The Issuer covenants that it will do,
execute, acknowledge and deliver or cause to be done, executed, acknowledged
and delivered, such indentures supplemental hereto and such further acts,
instruments and transfers as the Bond Trustee may reasonably require for the
better assuring, transferring, mortgaging, conveying, pledging, assigning and
confirming unto the Bond Trustee, the Loan Agreement and all payments thereon
and thereunder (except for Unassigned Rights) pledged hereby to the payment of
the principal of, premium, if any, and interest on the Series 2007A Bonds.

 

Section 6.4                         Recording and Filing. The Issuer covenants that,
solely from additional amounts payable as provided in Section 7.11 of the Loan
Agreement, it will, if requested to do so in writing, cause this Bond Indenture
and all supplements hereto and the Loan Agreement and all supplements thereto,
and all related financing statements, to be kept, recorded and filed in such
manner and in such places as may be so requested in order to preserve and
protect fully the security of the holders of the Series 2007A Bonds and the
rights of the Bond Trustee hereunder. 

 

49

 

The Bond Trustee, at the
expense of the Borrower, agrees to file all continuation statements with
respect to such related financing statements as required from time to time by
law.

 

Section 6.5                         Books and Records. The Issuer covenants that so
long as any Series 2007A Bonds are outstanding and unpaid, to the extent of its
financial dealings or transactions in relation to the Property of the Borrower
and the amounts derived from the Loan Agreement, it will keep, or cause to be
kept, proper books of record and account including such records as are required
by the Tax Exemption Agreement. Such books shall at all times be open for any
lawful purpose to the inspection of the Bond Trustee and such accountants or
other agencies as the Bond Trustee may from time to time designate.

 

Section 6.6                         Bond Register. The Bond Trustee shall keep on
file at its office the Bond Register. At reasonable times and under reasonable
regulations established by the Bond Trustee, said Bond Register may be
inspected and copied by the Borrower or the Issuer.

 

Section 6.7                         Rights Under the Loan Agreement. The Issuer agrees that the Bond
Trustee in its own name or in the name of the Issuer may enforce all rights of
the Issuer and all obligations of the Borrower under and pursuant to the Loan
Agreement for and on behalf of the Bondholders (other than Unassigned Rights),
whether or not the Issuer is in default hereunder.

 

Section 6.8                         Designation of Additional Paying Agents. The Issuer shall (upon the
written direction of the Borrower) cause the necessary arrangements to be made
through the Bond Trustee and to be thereafter continued for the designation of
additional Paying Agents, if any, and for the making available of funds hereunder
for the payment of such of the Series 2007A Bonds as shall be presented when
due at the principal corporate trust office of the Bond Trustee, or its
successor in trust hereunder, or at the principal office of said additional
Paying Agents.

 

Section 6.9                         Arbitrage; Compliance with Tax Exemption
Agreement. The
Issuer covenants and agrees that it will not take any action, or fail to take
any action which may be requested of it, with respect to the investment of the
proceeds of the Series 2007A Bonds or with respect to the payments derived from
the Loan Agreement or any other moneys regardless of source or where held which
may result in constituting the Series 2007A Bonds “arbitrage bonds” within the
meaning of such term as used in Section 148 of the Code. The Issuer further
covenants and agrees that it will comply with and take all actions required by
the Tax Exemption Agreement.

 

50

 

ARTICLE VII

 

EVENTS OF DEFAULT;
REMEDIES

 

Section 7.1                         Extension of Payment; Penalty. In case the time for the payment
of principal of or the interest on any Series 2007A Bonds shall be extended,
whether or not such extension be by or with the consent of the Issuer, such
principal or such interest so extended shall not be entitled in case of default
hereunder to the benefit or security of this Bond Indenture except subject to
the prior payment in full of the principal of all Series 2007A Bonds then
outstanding and of all interest thereon, the time for the payment of which
shall not have been extended.

 

Section 7.2                         Events of Default. Each of the following events is
hereby declared an “event of default,” that is to say, if:

 

(a)                                  payment
of any installment of interest payable on any of the Series 2007A Bonds shall
not be made when the same shall become due and payable; or

 

(b)                                 payment
of the principal of, or the premium, if any, on the Series 2007A Bonds shall
not be made when the same shall become due and payable, either at maturity, by
proceedings for redemption, or upon acceleration; or

 

(c)                                  any
event of default as defined in Section 6.1 of the Loan Agreement shall occur
and such event of default shall be continuing for a period of 15 days from and
after the date the Issuer is entitled under the Loan Agreement to request that
the Bond Trustee declare the Series 2007A Obligation to be immediately due and
payable or such event of default shall be continuing for a period of 15 days
from and after the date on which the Bond Trustee is entitled under the Bond
Indenture to declare the Series 2007A Bonds immediately due and payable, or the
Bond Trustee shall declare the Series 2007A Bonds due and payable; or

 

(d)                                 the
Issuer shall default in the due and punctual performance of any other of the
covenants, conditions, agreements and provisions contained in the Series 2007A
Bonds, in this Bond Indenture, or in any indenture supplemental hereto to be
performed on the part of the Issuer, and such default shall continue for the
period of 30 days after written notice specifying such default and requiring the
same to be remedied shall have been given to the Issuer and the Borrower by the
Bond Trustee; provided, that the Bond Trustee may give such notice in its
discretion and shall give such notice at the written request of the owners of
not less than ten percent (10%) in aggregate principal amount of the Series
2007A Bonds then outstanding hereunder; provided further that if such default
cannot with due diligence and dispatch be wholly cured within 30 days but can
be wholly cured, the failure of the Issuer to remedy such default within such
30-day period shall not constitute a default hereunder if the Issuer shall
immediately upon receipt of such notice commence with due diligence and
dispatch the curing of such default and, having so commenced the curing of such
default, shall thereafter prosecute and complete the same with due diligence
and dispatch; or

 

(e)                                  the
Issuer or the Borrower shall default in the performance of any covenant,
condition, agreement or provision of the Tax Exemption Agreement, and such default

 

51

 

shall continue for the
period of 30 days after written notice specifying such default and requiring
the same to be remedied shall have been given to the party in default and the
Borrower by the other party; provided that if such default cannot with due
diligence and dispatch be wholly cured within 30 days but can be wholly cured,
the failure of the Issuer or the Borrower to remedy such default within such
30-day period shall not constitute a default hereunder if any of the foregoing
shall immediately upon receipt of such notice commence with due diligence and
dispatch the curing of such default and, having so commenced the curing of such
default, shall thereafter prosecute and complete the same with due diligence
and dispatch.

 

If on the date
payment of principal of or interest on the Series 2007A Bonds is due sufficient
moneys are not available to make such payment, the Bond Trustee shall give
telephonic notice, confirmed in writing, of such insufficiency to the Issuer
and the Borrower.

 

Section 7.3                         Acceleration. The Bond Trustee may, upon the
happening of any event of default specified in paragraphs (c) through (e) of
Section 7.2 and the continuance of the same for the period, if any, specified
in said paragraphs, without any action on the part of the Bondholders, and the
Bond Trustee shall, upon the happening of an event of default specified in
paragraph (a) or (b) of Section 7.2 or upon the happening and continuance of
any other event of default (other than those specified in paragraph (a) or (b)
of Section 7.2) and the written request of the owners of not less than
twenty-five percent in aggregate principal amount of the Series 2007A Bonds
then outstanding hereunder (exclusive of Series 2007A Bonds then owned by the
Issuer or the Borrower) and upon being indemnified to its satisfaction, by
notice in writing delivered to the Issuer and the Borrower, declare the entire
principal amount of the Series 2007A Bonds then outstanding hereunder and the interest
accrued thereon, immediately due and payable, and the entire principal and
interest shall thereupon become and be 
immediately due and payable, subject, however, to the provisions of
Section 7.11 hereof with respect to waivers of events of default.

 

Section 7.4                         Remedies; Rights of Bondholders. Upon the occurrence of any event
of default, the Bond Trustee may pursue any available remedy including a suit
at law or in equity to enforce the payment of the principal of, premium, if
any, and interest on the Series 2007A Bonds outstanding hereunder.

 

If an event of
default shall have occurred, and if it shall have been requested so to do by
the holders of not less than twenty-five percent in aggregate principal amount
of Series 2007A Bonds then outstanding and if it shall have been indemnified as
provided in Section 8.1 hereof, the Bond Trustee shall be obligated to exercise
such one or more of the rights and powers conferred by this Article VII as the
Bond Trustee shall deem most expedient in the interests of the holders of
Series 2007A Bonds; provided, however, that the Bond Trustee shall have the
right to decline to comply with any such request if the Bond Trustee shall be
advised by counsel (who may be its own counsel) that the action so requested
may not lawfully be taken or the Bond Trustee in good faith shall determine
that such action would be unjustly prejudicial to the holders of Series 2007A
Bonds not parties to such request.

 

No remedy by
the terms of this Bond Indenture conferred upon or reserved to the Bond Trustee
(or to the holders of Series 2007A Bonds) is intended to be exclusive of any
other remedy, but each and every such remedy shall be cumulative and shall be
in addition to any other 

 

52

 

remedy given to the Bond Trustee or to the holders of Series 2007A
Bonds hereunder now or hereafter existing at law or in equity or by statute.

 

No delay or
omission to exercise any right or power accruing upon any default or event of
default shall impair any such right or power or shall be construed to be a
waiver of any such default or event of default, or acquiescence therein; and
every such right and power may be exercised from time to time and as often as
may be deemed expedient.

 

No waiver of
any default or event of default hereunder, whether by the Bond Trustee or by
the holders of Series 2007A Bonds, shall extend to or shall affect any
subsequent default or event of default or shall impair any rights or remedies
consequent thereon.

 

In the event
that the Bondholders direct the Bond Trustee to take any action under the Bond
Indenture or act on behalf of the Bond Trustee or seek to enforce any right of
the Bond Trustee, the Bondholders, and each Bondholder shall be subject to the
express terms and conditions of the Intercreditor Agreement to the same extent
and with the same effect as if the Bond Trustee took such action without
direction from the Bondholders or took such action directly itself, as the case
may be.

 

Section 7.5                         Direction of Proceedings by Bondholders. The owners of a majority in
aggregate principal amount of Series 2007A Bonds then outstanding shall have
the right at any time, by an instrument or instruments in writing executed and
delivered to the Bond Trustee, to direct the method  and place of conducting all proceedings to be
taken in connection with the enforcement of the terms and conditions of this
Bond Indenture, including the enforcement of the rights of the Issuer under the
Loan Agreement or the appointment of a receiver or any other proceedings
hereunder; provided, that such direction shall not be otherwise than in
accordance with the provisions of law and of this Bond Indenture.

 

Section 7.6                         Appointment of Receivers. Upon the occurrence of an event
of default, and upon the filing of a suit or other commencement of judicial
proceedings to enforce the rights of the Bond Trustee and the holders of Series
2007A Bonds under this Bond Indenture, the Bond Trustee shall be entitled, as a
matter of right, to the appointment of a receiver or receivers of the rights
and properties pledged hereunder and of the revenues, issues, payments and
profits thereof, pending such proceedings, with such powers as the court making
such appointment shall confer.

 

Section 7.7                         Application of Moneys. All moneys received by the Bond
Trustee pursuant to any right given or action taken under the provisions of
this Article shall, after payment of the cost and expenses (including the fees
and expenses of counsel, which may be its in-house legal counsel) of the proceedings
resulting in the collection of such moneys and of the expenses, liabilities and
advances incurred or made by the Bond Trustee, and all moneys in the funds
maintained by the Bond Trustee under Articles III and IV, be applied as
follows:

 

(a)                                  Unless
the principal of all the Series 2007A Bonds shall have become or shall have
been declared due and payable, all such moneys shall be applied:

 

First:  To the payment to the Persons entitled
thereto of all installments of interest then due on the Series 2007A Bonds, in
the order of the maturity of the installments of 

 

53

 

such interest, and, if the amount available shall not be sufficient to
pay in full any particular installment, then to the payment ratably, according
to the amounts due on such installment, to the Persons entitled thereto without
any discrimination or privilege;

 

Second:  To the payment to the Persons entitled
thereto of the unpaid principal of any of the Series 2007A Bonds which shall
have become due (other than Series 2007A Bonds called for redemption for the
payment of which moneys are held pursuant to the provisions of this Bond
Indenture), in the order of their due dates, and, if the amount available shall
not be sufficient to pay in full Series 2007A Bonds due on any particular date,
then to the payment ratably, according to the amount of principal due on such
date, to the Persons entitled thereto without any discrimination or privilege;

 

Third:  To the payment to the Persons entitled
thereto of unpaid principal and interest due and owing on any Series 2007A
Bonds, the payment of principal and interest of which has been extended in the
manner described in Section 7.1; and

 

Fourth:  To the payment of amounts, if any, payable
pursuant to the Tax Exemption Agreement.

 

(b)                                 If
the principal of all the Series 2007A Bonds shall have become due or shall have
been declared due and payable, all such moneys shall be applied:

 

First:  To the payment of the principal and interest
then due and unpaid upon the Series 2007A Bonds, without preference or priority
of principal or interest over the other, or of any installment of interest over
any other installment of interest, or of any Series 2007A Bond over any other
Series 2007A Bond, ratably, according to the amounts due respectively for
principal and interest, to the Persons entitled thereto without any
discrimination or privilege;

 

Second:  To the payment of the principal and interest
then due and unpaid upon Series 2007A Bonds with respect to which the payment
of principal and interest has been extended as described in Section 7.1; and

 

Third: To the
payment of amounts, if any, payable pursuant to the Tax Exemption Agreement.

 

(c)                                  If
the principal of all the Series 2007A Bonds shall have been declared due and payable,
and if such declaration shall thereafter have been rescinded and annulled under
the provisions of this Article, then, subject to the provisions of paragraph
(b) of this Section in the event that the principal of all the Series 2007A
Bonds shall later become due or be declared due and payable, the moneys shall
be applied in accordance with the provisions of paragraph (a) of this Section.

 

Whenever
moneys are to be applied by the Bond Trustee pursuant to the provisions of this
Section, such moneys shall be applied by it at such times, and from time to
time, as the Bond Trustee shall determine, having due regard for the amount of
such moneys available for application and the likelihood of additional moneys
becoming available for such application in the future. Whenever the Bond
Trustee shall apply such moneys, it shall fix the date (which shall 

 

54

 

be an Interest Payment Date unless it shall  deem another date more suitable, or, with
respect to payments of Defaulted Interest, shall be such date as is required by
the last paragraph of Section 2.2 hereof) upon which such application is to be
made and upon such date interest on the amounts of principal to be paid on such
dates shall cease to accrue. The Bond Trustee shall give such notice as it may
deem appropriate of the deposit with it of any such moneys and of the fixing of
any such date and of the Special Record Date by mailing a copy of such notice
by first class mail, postage prepaid, to the registered owners of the Series
2007A Bonds, at least 10 days prior to the Special Record Date. The Bond
Trustee shall not be required to make payment to the holder of any Series 2007A
Bond until such Series 2007A Bond shall be presented to the Bond Trustee for
appropriate endorsement or for cancellation if fully paid.

 

Whenever all
Series 2007A Bonds and interest thereon have been paid under the provisions of
this Section 7.7 and all expenses and charges of the Bond Trustee have been
paid, any balance remaining shall be paid to the Persons entitled to receive
the same; if no other Person shall be entitled thereto, then the balance shall
be paid to the Borrower.

 

Section 7.8                         Remedies Vested in Bond Trustee. All rights of action including
the right to file proof of claims under this Bond Indenture or under any of the
Series 2007A Bonds may be enforced by the Bond Trustee without the possession
of any of the Series 2007A Bonds or the production thereof in any trial or
other proceedings relating thereto and any such suit or proceeding instituted
by the Bond Trustee shall be brought in its name as Bond Trustee without the
necessity of joining as plaintiffs or defendants any holders of the Series
2007A Bonds, and any recovery of judgment shall be for the equal benefit of the
holders of the outstanding Series 2007A Bonds.

 

Section 7.9                         Rights and Remedies of Bondholders. No holder of any Series 2007A
Bond shall have any right to institute any suit, action or proceeding in equity
or at law for the enforcement of this Bond Indenture or for the execution of
any trust hereof or for the appointment of a receiver or any other remedy
hereunder, unless (i) a default shall have become an event of default, (ii) the
holders of twenty-five percent in aggregate principal amount of Series 2007A
Bonds then outstanding shall have made written request to the Bond Trustee and
shall have offered it reasonable opportunity either to proceed to exercise the
powers hereinbefore granted or to institute such action, suit or proceeding in
its own name, and unless also they have offered to the Bond Trustee indemnity
as provided in Section 8.1, and (iii) unless the Bond Trustee shall thereafter
fail or refuse to exercise the power hereinbefore granted, or to institute such
action, suit or proceeding in its own name; and such notification, request and
offer of indemnity are hereby declared in every case at the option of the Bond
Trustee to be conditions precedent to the 
execution of the powers and trusts of this Bond Indenture and to any
action or cause of action for the enforcement of this Bond Indenture, or for
the appointment of a receiver or for any other remedy hereunder; it being
understood and intended that no one or more holders of the Series 2007A Bonds
shall have any right in any manner whatsoever to affect, disturb or prejudice
the lien of this Bond Indenture by any action or to enforce any right hereunder
except in the manner herein provided, and that all proceedings at law or in
equity shall be instituted, had and maintained in the manner herein provided
and for the equal benefit of the holders of all Series 2007A Bonds outstanding.
Nothing in this Bond Indenture contained shall, however, affect or impair the
right of any holder to enforce the payment of the principal of and interest on
any Series 2007A Bond at and after the maturity thereof, or the obligation of
the Issuer to pay the 

 

55

 

principal of and interest
on each of the Series 2007A Bonds issued hereunder to the respective holders
thereof at the time and place, from the source and in the manner in said Series
2007A Bonds expressed.

 

Section 7.10                  Termination of Proceedings. In case the Bond Trustee shall
have proceeded to enforce any right under this Bond Indenture by the
appointment of a receiver, or otherwise, and such proceedings shall have been
discontinued or abandoned for any reason, or shall have been determined
adversely to the Bond Trustee, then and in every case the Issuer and the Bond
Trustee shall, subject to any determination in such proceeding, be restored to
their former positions and rights hereunder with respect to the property
pledged and assigned hereunder, and all rights, remedies and powers of the Bond
Trustee shall continue as if no such proceedings had been taken.

 

Section 7.11                  Waiver of Events of Default. The Bond Trustee may in its
discretion waive any event of default hereunder and its consequences and
rescind any declaration of maturity of principal upon written request of the
holders of (1) at least 51% in aggregate principal amount of all the Series
2007A Bonds outstanding in respect of which default in the payment of principal
and/or interest exists, or (2) at least 51% in aggregate principal amount of
all the Series 2007A Bonds outstanding. The foregoing notwithstanding, in no
event shall there be waived (a) any event of default in the payment when due
(other than with respect to principal becoming due as a result of acceleration
of the Series 2007A Bonds) of the principal of any outstanding Series 2007A
Bonds whether by Mandatory Sinking Fund Redemption or at the dates of maturity
specified therein or (b) any default in the payment when due of the interest on
any such Series 2007A Bonds, unless prior to such waiver or rescission all
arrears of interest, with interest thereon (to the extent permitted by law) at
the rate borne by the Series 2007A Bonds in respect of which such default shall
have occurred on overdue installments of interest or all  arrears of payments of principal when due, as
the case may be, and all expenses of the Bond Trustee and any Paying Agent in
connection with such default shall have been paid or provided for. In case of
any such waiver or rescission or in case any proceeding taken by the Bond
Trustee on account of any such default shall have been discontinued or
abandoned or determined adversely, then and in every such case the Issuer, the
Bond Trustee and the Bondholders shall, subject to any determination in such
proceeding, be restored to their former positions and rights hereunder
respectively, but no such waiver or rescission shall extend to any subsequent
or other default, or impair any right consequent thereon.

 

Section 7.12                  Borrower’s Rights of Possession and Use of
Its Property. So
long as the Borrower is in full compliance with the terms and provisions of the
Loan Agreement, the Borrower shall be suffered and permitted to possess, use
and enjoy its Property and appurtenances thereto free of claims of the Issuer
and the Bond Trustee.

 

Section 7.13                  Waiver of Redemption; Effect of Sale of Trust
Estate. The
Issuer, to the extent permitted by law, shall not claim any rights under any
stay, valuation, exemption or extension law, and hereby waives any right of
redemption which it may have in respect of any sale or other disposition of the
Borrower’s Property pursuant to the rights and remedies granted under this
Article VII. Upon the institution of any foreclosure proceedings or upon such
sale or other disposition of the Borrower’s Property, or any acceleration of
the principal of all Series 

 

56

 

2007A Bonds then
outstanding hereunder, if not previously due and payable shall without more
become immediately due and payable.

 

Section 7.14                  Notice of Default. Upon the occurrence of an Event
of Default hereunder, the Bond Trustee will promptly give written notice
thereof to the Issuer and the Borrower setting forth the nature of such Event
of Default.

 

57

 

ARTICLE VIII

 

THE BOND TRUSTEE

 

Section 8.1                         Acceptance of the Trusts. The Issuer initially appoints
the Bond Trustee as Paying Agent and Registrar. The Bond Trustee accepts and
agrees to execute the trusts imposed upon it by this Bond Indenture and to act
as the Bond Trustee  under the Tax
Exemption Agreement, but only upon the terms and conditions set forth herein,
to all of which the Issuer agrees and the respective owners of the Series 2007A
Bonds agree by their acceptance of delivery of any of the Series 2007A Bonds. The
Bond Trustee, prior to the occurrence of an event of default hereunder and
after the curing of all events of default hereunder which may have occurred,
undertakes to perform such duties and only such duties as are specifically set
forth in this Bond Indenture and to perform such trusts as an ordinarily
prudent trustee under a corporate indenture and no other implied covenants or
obligations should be read into this Bond Indenture against the Bond Trustee. If
an event of default has occurred and is continuing, the Bond Trustee shall
exercise such of the rights and powers vested in it by this Bond Indenture and
shall use the same degree of care as a prudent person would exercise in the
circumstances in the conduct of such person’s own affairs. The Bond Trustee
agrees to perform such trusts only upon and subject to the following expressed
terms and conditions:

 

(a)                                  The
Bond Trustee may execute any of the trusts or powers hereof and perform any of
its duties by or through attorneys, agents or receivers and shall not be
responsible for the misconduct or negligence of any such attorneys, agents or
receivers appointed in the exercise of care, and shall be entitled to advice of
counsel concerning all matters of trusts hereof and duties hereunder, and may
in all cases pay and be reimbursed for such reasonable compensation to any
attorney, agent, receiver or employee retained or employed by it in connection
herewith. The Bond Trustee may act upon the opinion or advice of an attorney,
surveyor, engineer or accountant selected by it in the exercise of reasonable
care. The Bond Trustee shall not be responsible for any loss or damage
resulting from any action or nonaction based on its good faith reliance upon
such opinion or advice.

 

(b)                                 The
Bond Trustee shall not be responsible for any recital herein, or in the Series
2007A Bonds (except with respect to the certificate of the Bond Trustee
endorsed on the Series 2007A Bonds), or for the investment of moneys as herein
permitted (except that no investment shall be made except in compliance with
Section 4.7 hereof and the Tax Exemption Agreement), or for the recording or
re-recording, filing or re-filing of this Bond Indenture, or any supplement or
amendment thereto, or the filing of financing statements(other than
continuation statements), or for the validity of the execution by the Issuer of
this Bond Indenture, or of any supplemental indentures or instruments of
further assurance, or for the sufficiency of the security for the Series 2007A
Bonds issued hereunder or intended to be secured hereby, or for the value or
title of the property herein conveyed or otherwise as to the maintenance of the
security hereof. The Bond Trustee may (but shall be under no duty to) require
of the Issuer and the Borrower full information and advice as to the
performance of the covenants, conditions and agreements in the Loan Agreement.
Except as otherwise provided in Section 7.4 hereof, the Bond Trustee shall have
no obligation to perform any of the duties of the Issuer under the Loan
Agreement.

 

58

 

(c)                                  The
Bond Trustee shall not be accountable for the investment, use or application by
the Issuer or the Borrower of any of the Series 2007A Bonds or the proceeds
thereof or for the use or application of any money paid over by the Bond
Trustee in accordance with the provisions of this Bond Indenture or for the use
and application of money received by any Paying Agent. The Bond Trustee may
become the owner of Series 2007A Bonds secured hereby with the same rights it
would have if not Bond Trustee.

 

(d)                                 The
Bond Trustee shall be protected in acting upon any notice, order, requisition,
request, consent, certificate, order, opinion (including an opinion of
Independent Counsel), affidavit, letter, telegram or other paper or document in
good faith deemed by it to be genuine and correct and to have been signed or
sent by the proper person or persons. Any action taken by the Bond Trustee
pursuant to this Bond Indenture upon the request or Issuer or consent of any
person who at the time of making such request or giving such Issuer or consent
is the owner of any Series 2007A Bond, shall be conclusive and binding upon all
future owners of the same Series 2007A Bond and upon Series 2007A Bonds issued
in exchange therefor or in place thereof.

 

(e)                                  As
to the existence or non-existence of any fact or as to the sufficiency or
validity of any instrument, paper or proceeding, the Bond Trustee shall be
entitled to rely upon a certificate signed on behalf of the Issuer by its Chair
or County Auditor as sufficient evidence of the facts therein contained and
prior to the occurrence of a default of which the Bond Trustee has been
notified as provided in subsection (g) of this Section, or of which by said
subsection it is deemed to have notice, may accept a similar certificate to the
effect that any particular dealing, transaction or action is necessary or
expedient, but may at its discretion secure such further evidence deemed
necessary or advisable, but shall in no case be bound to secure the same. The
Bond Trustee may accept a certificate of the Chair or County Auditor of the
Issuer to the effect that a resolution in the form therein set forth has been
adopted by the Issuer as conclusive evidence that such resolution has been duly
adopted, and is in full force and effect.

 

(f)                                    The
permissive right of the Bond Trustee to do things enumerated in this Bond
Indenture shall not be construed as a duty and the Bond Trustee shall not be
answerable for other than its gross negligence or willful default.

 

(g)                                 The
Bond Trustee shall not be required to take notice or be deemed to have notice
of any default hereunder, other than an event of default under clause (a) or
(b) of Section 7.2 hereof unless the Bond Trustee shall be specifically
notified in writing of such default by the Issuer or by the holders of at least
twenty-five percent in aggregate principal amount of all Series 2007A Bonds
then outstanding, and all notices or other instruments required by this Bond
Indenture to be delivered to the Bond Trustee must, in order to be effective,
be delivered at the principal corporate trust office of the Bond Trustee, and
in the absence of such notice so delivered the Bond Trustee may conclusively
assume there is no default except as aforesaid.

 

(h)                                 The
Bond Trustee shall not be personally liable for any debts contracted or for
damages to persons or to personal property injured or damaged, or for salaries
or nonfulfillment of contracts during any period in which it may be in possession
of or managing 

 

59

 

the Property of the
Borrower and shall have no obligation to expend its own funds for any purpose
whatsoever.

 

(i)                                     At
any and all reasonable times, the Bond Trustee, and its duly authorized agents,
attorneys, experts, engineers, accountants and representatives, shall have the
right fully to inspect any and all books, papers and records of the Issuer
pertaining to the Series 2007A Bonds, and to take such memoranda from and in
regard thereto as may be desired.

 

(j)                                     The
Bond Trustee shall not be required to give any bond or surety in respect of the
execution of the said trusts and powers or otherwise in respect of the
premises.

 

(k)                                  Notwithstanding
anything contained elsewhere in this Bond Indenture, the Bond Trustee shall
have the right, but shall not be required, to demand, in respect of the
authentication of any Series 2007A Bonds, the withdrawal of any cash, the
release of any Property, or any action whatsoever within the purview of this
Bond Indenture, any showings, certificates, opinions, appraisals or other
information, or corporate action or evidence thereof, in addition to that by
the terms hereof required as a condition of such action by the Bond Trustee
deemed reasonably necessary for the purpose of establishing the right of the
Issuer to the authentication of any Series 2007A Bonds, the withdrawal of any
cash, the release of any property or the taking of any other action by the Bond
Trustee.

 

(l)                                     Before
taking any action under Articles VII or VIII of this Bond Indenture other than
an acceleration when required pursuant to Section 7.3 hereof, the Bond Trustee
may require that a satisfactory indemnity bond be furnished for the
reimbursement of all expenses to which it may be put and to protect it against
all liability, except liability which is adjudicated to have resulted from its
gross negligence or willful default in connection with any action so taken.

 

(m)                               All
moneys received by the Bond Trustee or any Paying Agent shall, until used or
applied or invested as provided in this Bond Indenture or in the Tax Exemption
Agreement, be held in trust for the purposes for which they were received but
need not be segregated from other funds except to the extent required by law or
by this Bond Indenture or by the Tax Exemption Agreement. Neither the Bond
Trustee nor any Paying Agent shall be under any liability for interest on any
moneys received hereunder except such as may be agreed upon.

 

Section 8.2                         Fees, Charges and Expenses of Bond Trustee
and any Additional Paying Agent. The Bond Trustee shall be entitled to payment and/or
reimbursement for reasonable fees and for its services rendered hereunder and
all advances, counsel fees and other expenses reasonably and necessarily made
or incurred by the Bond Trustee in connection with such services. The Bond
Trustee shall be entitled to payment and/or reimbursement for the reasonable
fees and charges of the Bond Trustee as Paying Agent and Registrar for the
Series 2007A Bonds as hereinabove provided. Any additional Paying Agent shall
be entitled to payment and/or reimbursement for its reasonable fees and charges
as additional Paying Agent for the Series 2007A Bonds. Upon an event of default
hereunder, but only upon an event of default hereunder, the Bond Trustee and
any additional Paying Agent shall have a right of payment prior to payment on
account of interest or principal of, or premium, if any, on any Series 2007A
Bond for the foregoing advances, fees, costs and expenses incurred; provided,
however, that in no 

 

60

 

event shall the Bond
Trustee or any such additional Paying Agent have any such prior right of
payment or claim therefor against moneys or obligations deposited with or paid
to the Bond Trustee for the  redemption
or payment of Series 2007A Bonds which are deemed to have been paid in
accordance with Article XI hereof.

 

Section 8.3                         Notice to Issuer and the Bondholders if
Default Occurs. If
a default occurs of which the Bond Trustee is by subsection (g) of Section 8.1
hereof required to take notice or if notice of default is given as in said
subsection (g) provided, then the Bond Trustee shall give written notice
thereof by first class mail, postage prepaid, to the Issuer and the registered owners
of all Series 2007A Bonds then outstanding.

 

Section 8.4                         Good Faith Reliance. The Bond Trustee and any
additional Paying Agent shall be protected and shall incur no liability in
acting or proceeding in good faith upon any resolution, notice, telegram, telex
or facsimile transmission, request, consent, waiver, certificate, statement,
affidavit, voucher, bond, requisition or other paper or document which it shall
in good faith believe to be genuine and to have been passed or signed by the
proper board, body or person or to have been prepared and furnished pursuant to
any of the provisions of this Bond Indenture or the Loan Agreement, or upon the
written opinion of any attorney, engineer, accountant or other expert believed
by the Bond Trustee and any additional Paying Agent, as the case may be, to be
qualified in relation to the subject matter, and the Bond Trustee and any
additional Paying Agent shall be under no duty to make any investigation or
inquiry as to any statements contained or matters referred to in any such
instrument, but may accept and rely upon the same as conclusive evidence of the
truth and accuracy of such statements. Neither the Bond Trustee nor any Paying
Agent shall be bound to recognize any person as an owner of Series 2007A Bonds
or to take any action at such person’s request unless satisfactory evidence
that such person is the registered owner of such Series 2007A Bond shall be
furnished to such entity.

 

Section 8.5                         Dealings in Series 2007A Bonds. The Bond Trustee and any
additional Paying Agent, in its individual capacity, may in good faith buy,
sell, own, hold and deal in any of the Series 2007A Bonds issued hereunder, and
may join in any action which any owner may be entitled to take with like effect
as if it did not act in any capacity hereunder. The Bond Trustee and any
additional Paying Agent, in its individual capacity, either as principal or
Agent, may also engage in or be interested in any financial or other
transaction with the Borrower, and may act as depository, trustee or Agent for
any committee or body of owners of Series 2007A Bonds secured hereby or other
obligations of the Issuer or the Borrower as freely as if it did not act in any
capacity hereunder.

 

Section 8.6                         Several Capacities. Anything in this Bond Indenture
to the contrary notwithstanding, the same entity  may serve hereunder as the Bond Trustee, the
Paying Agent and the Registrar, and in any other combination of such
capacities, to the extent permitted by law.

 

Section 8.7                         Intervention by Bond Trustee. In any judicial proceeding to
which the Issuer is a party and which in the opinion of the Bond Trustee and
its counsel has a substantial bearing on the interests of owners of the Series
2007A Bonds, the Bond Trustee may intervene on behalf of Bondholders and, subject
to the provisions of Section 8.1(1), shall do so if requested in writing by the
owners of at least twenty-five percent in aggregate principal amount of all 

 

61

 

Series 2007A Bonds then
outstanding. The rights and obligations of the Bond Trustee under this Section
are subject to the approval of a court of competent jurisdiction.

 

Section 8.8                         Successor Bond Trustee by Merger or
Consolidation. Any
corporation or association into which the Bond Trustee may be converted or
merged, or with which it may be consolidated, or to which it may sell or
transfer its corporate trust business and assets as a whole or substantially as
a whole, or any corporation or association resulting from any such conversion,
sale, merger, consolidation or transfer to which it is a party, provided such
corporation or association is otherwise eligible under Section 8.9 hereof,
shall be and become successor Bond Trustee hereunder and vested with all of the
title to the whole property or trust estate and all the trusts, powers,
discretions, immunities, privileges and all other matters as was its
predecessor, without the execution or filing of any instrument or any further
act, deed or conveyance on the part of any of the parties hereto, anything
herein to the contrary notwithstanding.

 

Section 8.9                         Bond Trustee Required; Eligibility. There shall at all times be a
Bond Trustee hereunder which shall be a bank or trust company in good standing
under the law of the State and organized under the laws of the United States of
America or any state, authorized to exercise corporate trust powers, subject to
supervision or examination by federal or state authorities, and having a
reported combined capital and surplus of not less than $75,000,000. If at any
time the Bond Trustee shall cease to be eligible in accordance with the
provisions of this Section, it shall resign immediately in the manner provided
in Section 8.10 hereof. No resignation or removal of the Bond Trustee and no
appointment of a successor Bond Trustee shall become effective until the
successor Bond Trustee has accepted its appointment under Section 8.13 hereof.

 

Section 8.10                  Resignation by the Bond Trustee. Subject to Section 8.9, the Bond
Trustee and any successor Bond Trustee may at any time resign from the trusts
created by this  Bond Indenture and the
Tax Exemption Agreement by executing any instrument in writing resigning such
trusts and specifying the date when such resignation shall take effect, and
filing the same with the Issuer and the Borrower, not less then 45 days before
the date specified in such instrument when such resignation shall take effect,
and by giving notice of such resignation by first class mail, postage prepaid,
not less than 20 days prior to such resignation date, to each registered owner
of Series 2007A Bonds then outstanding, as shown by the Bond Register.

 

Section 8.11                  Removal of the Bond Trustee. Subject to Section 8.9, the
owners of not less than fifty-one percent in aggregate principal amount of the
Series 2007A Bonds which are outstanding at the time, may remove the Bond
Trustee for “cause” by notice to the Issuer, the Bond Trustee and the Borrower.
The Bond Trustee shall continue to act as Bond Trustee hereunder and have the
right to proceed to cure any gross negligence, willful misconduct or failure or
unwillingness to perform its duties (any of which shall be deemed to constitute
“cause”), for a period of two weeks. If such cure is not effected within such
time, the Bond Trustee’s functions hereunder will be terminated immediately
upon the appointment of a successor bond trustee by the Borrower pursuant to
Section 8.12 hereof. Subject to Section 8.9, the Bond Trustee may be removed by
filing with the Bond Trustee so removed, and with the Issuer and the Borrower,
an instrument or instruments in writing by the owners of not less than
fifty-one percent in aggregate principal amount of the Series 2007A Bonds which
are outstanding hereunder at the time of execution of such instrument,
appointing a successor, or an 

 

62

 

instrument or instruments
in writing by the owners of not less than fifty-one percent in aggregate
principal amount of the Series 2007A Bonds which are outstanding hereunder at
the time of execution of such instrument, consenting to the appointment by the
Issuer of a successor and accompanied by an instrument of appointment by the
Issuer of such successor.

 

Section 8.12                  Appointment of Successor Bond Trustee by the
Bondholders; Temporary Bond Trustee. Subject to Section 8.9 in case the Bond Trustee hereunder
shall resign or be removed, or be dissolved, or shall be in the process of
dissolution or liquidation, or otherwise becomes incapable of acting hereunder,
or in case it shall be taken under the control of any public officer or
officers, or of a receiver appointed by a court, a successor may be appointed,
by the owners of a majority in aggregate principal amount of Series 2007A Bonds
then outstanding, by an instrument or concurrent instruments in writing signed
by such owners, or by their attorneys in fact, duly authorized; provided,
nevertheless, that in case of such vacancy the Borrower by an instrument
executed and signed by a duly authorized officer, may appoint a temporary Bond
Trustee to fill such vacancy until a successor Bond Trustee shall be appointed
by the Bondholders in the manner above provided; provided further, that if no
permanent successor Bond Trustee shall have been appointed by the Bondholders
within the six calendar months next succeeding the month during which the
Issuer appoints such a temporary Bond Trustee, such temporary Bond Trustee
shall without any further action on the part of the Issuer or the Bondholders
become the permanent successor Bond Trustee. The foregoing notwithstanding, any
such temporary Bond Trustee so appointed by the Issuer shall immediately and
without further act be superseded by any successor Bond Trustee so appointed by
such Bondholders within the six calendar months next succeeding the month
during which such temporary Bond Trustee is appointed.

 

Section 8.13                  Judicial Appointment of Successor Trustee. In case at any time the Bond
Trustee shall resign and no appointment of a successor Bond Trustee shall be
made pursuant to the foregoing provisions of this Article VIII prior to the
date specified in the notice of resignation as the date when such resignation
is to take effect, the resigning Bond Trustee may forthwith apply to a court of
competent jurisdiction for the appointment of a successor Bond Trustee. If no
appointment of a successor Bond Trustee shall be made pursuant to the foregoing
provisions of this Article VIII within 30 days after a vacancy shall have
occurred in the office of Bond Trustee, any owner of Series 2007A Bonds may
apply to any court of competent jurisdiction to appoint a successor Bond
Trustee. Such court may thereupon, after such notice, if any, as it may deem
proper and prescribe, appoint a successor Bond Trustee.

 

Section 8.14                  Concerning Any Successor Bond Trustees. Every successor Bond Trustee
appointed hereunder shall execute, acknowledge and deliver to its predecessor
and also to the Issuer an instrument in writing accepting such appointment
hereunder, and thereupon such successor, without any further act, deed or
conveyance, shall become fully vested with all the estates, properties, rights,
powers, trusts, duties and obligations of its predecessor; but such predecessor
shall, nevertheless, on the written request of the Issuer, or of its successor,
execute and deliver an instrument transferring to such successor Bond Trustee
all the estates, properties, rights, powers and trusts of such predecessor
hereunder; and every predecessor Bond Trustee shall deliver all securities and
moneys held by it as Bond Trustee hereunder to its successors. Should any
instrument in writing from the Issuer be required by any successor Bond Trustee
for more fully and certainly vesting in such successor the estate, rights,
powers and duties hereby 

 

63

 

vested or intended to be
vested in the predecessor, any and all such instruments in writing shall, on
request, be executed, acknowledged and delivered by the Issuer. The resignation
of any Bond Trustee and the instrument or instruments removing any Bond Trustee
and appointing a successor hereunder, together with all other instruments
provided for in this Article shall be filed and/or recorded by the successor
Bond Trustee in each recording office, if any, where this Bond Indenture shall
have been filed and/or recorded.

 

Section 8.15                  Bond Trustee Protected in Relying Upon
Resolution, Etc. The
resolutions, opinions, certificates and other instruments provided for in this
Bond Indenture may be accepted by the Bond Trustee as conclusive evidence of
the facts and conclusions stated therein and shall be full warrant, protection
and Issuer to the Bond Trustee for the release of property and the withdrawal
of cash hereunder.

 

Section 8.16                  Successor Bond Trustee as Trustee of Funds,
Paying Agent and Bond Registrar. In the event of a change in the office of Bond Trustee, the
predecessor Bond Trustee which has resigned or been removed shall cease to be
trustee of the Expense Fund, Interest Fund, Bond Sinking Fund, Project Fund,
Redemption Fund and any other funds provided hereunder and Registrar and Paying
Agent for principal of, premium, if any, and interest on the Series 2007A
Bonds, and the successor Bond Trustee shall become such Bond Trustee, Registrar
and Paying Agent unless a separate Paying Agent or Agents are appointed by the
Issuer in connection with the appointment of any successor Bond Trustee.

 

64

 

ARTICLE IX

 

SUPPLEMENTAL BOND
INDENTURES

 

Section 9.1                         Supplemental Bond Indentures Not Requiring
Consent of Bondholders. Subject
to the limitations set forth in Section 9.2 hereof with respect to this Section
9.1, the Issuer and the Bond Trustee may, but without the consent of, or notice
to, any of the Bondholders, enter into an indenture or indentures supplemental
to this Bond Indenture, as shall not be inconsistent with the terms and
provisions hereof, for any one or more of the following purposes:

 

(a)                                  to
cure any ambiguity or formal defect or omission in this Bond Indenture;

 

(b)                                 to
grant to or confer upon the Bond Trustee for the benefit of the Bondholders any
additional rights, remedies, powers or Issuer that may lawfully be granted to
or conferred upon the Bondholders and the Bond Trustee, or either of them;

 

(c)                                  to
assign and pledge under or subject to this Bond Indenture additional revenues,
properties or collateral;

 

(d)                                 to
evidence the appointment of a separate bond trustee or the succession of a new
bond trustee hereunder;

 

(e)                                  to
permit the qualification of this Bond Indenture under the Trust Indenture Act
of 1939, as then amended, or any similar federal statute hereafter in effect or
to permit the qualification of the Series 2007A Bonds for sale under the
securities laws of any state of the United States;

 

(f)                                    to
permit continued compliance with the Tax Exemption Agreement;

 

(g)                                 to
provide for the refunding or advance refunding of any Series 2007A Bonds,
including the right to establish and administer an escrow fund and to take
related action in connection therewith; and

 

(h)                                 to
make any other change that, in the judgment of the Bond Trustee, does not
materially adversely affect the rights of any Bondholders.

 

If at any time
the Issuer or the Bond Trustee proposes to enter into an indenture or
indentures supplemental to this Bond Indenture pursuant to subparagraph (i) above,
the Bond Trustee shall cause notice of the proposed execution of such
supplemental indenture to be given to each rating agency, if any, then
maintaining a rating on the Series 2007A Bonds in the manner provided in
Section 13.4 hereof at least 30 days prior to the execution of such
supplemental indenture, which notice shall include a copy of the proposed
supplemental indenture and shall deliver to each such rating agency each such
supplemental indenture promptly after it becomes effective.

 

65

 

Section 9.2                         Supplemental Bond Indentures Requiring
Consent of Bondholders. In
addition to supplemental indentures 
covered by Section 9.1 hereof and subject to the terms and provisions
contained in this Section, and not otherwise, the owners of not less than
fifty-one percent in aggregate principal amount of the Series 2007A Bonds which
are outstanding hereunder at the time of the execution of such supplemental
indenture, shall have the right, from time to time, anything contained in this
Bond Indenture to the contrary notwithstanding, to consent to and approve the
execution by the Issuer and the Bond Trustee of such other indenture or
indentures supplemental hereto as shall be deemed necessary and desirable by
the Issuer for the purpose of modifying altering, amending, adding to or
rescinding, in any particular, any of the terms or provisions contained in this
Bond Indenture or in any supplemental indenture; provided, however, that
nothing in this Section or in Section 9.1 hereof contained shall permit, or be
construed as permitting, a supplemental indenture effecting or providing for:
(a) an extension of the stated maturity or reduction in the principal amount
of, or reduction in the rate or extension of the time of paying interest on, or
reduction of any premium payable on the redemption of any Series 2007A Bonds,
without the consent of the owners of such Bonds; (b) a reduction in the amount
or extension of the time of any payment required to be made to or from the Interest
Fund or the Bond Sinking Fund; (c) the creation of any lien prior to or on a
parity with the lien of this Bond Indenture, without the consent of the owners
of all the Series 2007A Bonds at the time outstanding; (d) a reduction in the
aforesaid aggregate principal amount of Series 2007A Bonds the owners of which
are required to consent to any such supplemental indenture, without the consent
of the owners of all the Series 2007A Bonds at the time outstanding which would
be affected by the action to be taken; or (e) a modification of the rights,
duties or immunities of the Bond Trustee, without the written consent of the
Bond Trustee.

 

If at any time
the Issuer shall request the Bond Trustee to enter into any such supplemental
indenture for any of the purposes of this Section, the Bond Trustee shall, upon
being satisfactorily indemnified with respect to expenses, cause notice of the
proposed execution of such supplemental indenture to be mailed to each holder
of Series 2007A Bonds as shown on the Bond Register and to each rating agency
then maintaining a rating on the Series 2007A Bonds. Such notice shall briefly
set forth the nature of the proposed supplemental indenture and shall state
that copies thereof are on file at the principal corporate trust office of the
Bond Trustee for inspection by all Bondholders. The Bond Trustee shall not,
however, be subject to any liability to any Bondholder by reason of its failure
to mail such notice, and any such failure shall not affect the validity of such
supplemental indenture when consented to and approved as provided in this
Section. If the holders of the requisite principal amount of Series 2007A Bonds
which are outstanding hereunder at the time of the execution of any such
supplemental indenture shall have consented to and approved the execution
thereof as herein provided, no holder of any Series 2007A Bond shall have any
right to object to any of the terms and provisions contained therein, or the
operation thereof, or in any manner to question the propriety of the execution
thereof, or to enjoin or restrain the Bond Trustee or the Issuer from executing
the same or from taking any action pursuant to the provisions thereof. Upon the
execution of any such supplemental indenture as in this Section permitted and
provided, this Bond Indenture shall be and be deemed to be modified and amended
in accordance therewith and the Bond Trustee shall deliver a copy of such
supplemental indenture to each rating agency then maintaining a rating on the
Series 2007A Bonds.

 

66

 

Anything
herein to the contrary notwithstanding, so long as the Borrower is not in
default under the Loan Agreement, a supplemental indenture under this Article
IX which adversely affects the rights of the Borrower under the Loan Agreement
shall not become effective unless and until such corporation shall have
consented in writing to the execution and delivery of such supplemental
indenture. In this regard, the Bond Trustee shall cause notice of the proposed
execution and delivery of any such supplemental indenture to which the Borrower
has not already consented, together with a copy of the proposed supplemental
indenture and a written consent form to be signed by the Borrower, to be mailed
by certified or registered mail to the Borrower at least 30 days prior to the
proposed date of execution and delivery of any such supplemental indenture.

 

67

 

ARTICLE X

 

AMENDMENTS TO THE
LOAN AGREEMENT

 

Section 10.1                  Amendments, Etc. to Loan Agreement Not
Requiring Consent. The
Issuer, the Borrower and the Bond Trustee may, but without the consent of or
notice to the owners of the Series 2007A Bonds, consent to any amendment,
change or modification of the Loan Agreement (i) as may be required by the  provisions of this Bond Indenture or such
Loan Agreement, (ii) for the purpose of curing any ambiguity or formal defect
or omission, (iii) in connection with any other change therein which, in the judgment
of the Bond Trustee, does not materially adversely affect the rights of the
Bond Trustee, the owners of the Series 2007A Bonds or (iv) as may be required
for the purpose of complying with the provisions of the Tax Exemption
Agreement; provided, however, that nothing in this Section 10.1 shall permit,
or be construed as permitting, any amendment, change or modification of the
Loan Agreement that may result in anything described in clauses (a) through (e)
of Section 9.2(a) hereof, without the consent of each Bondholder affected. If
at any time the Borrower shall request the Issuer and the Bond Trustee to
consent to any amendment, change or modification of the Loan Agreement pursuant
to clause (iii) above, the Bond Trustee shall cause notice of the proposed
execution of such amendment, change or modification to the Loan Agreement to be
given to each rating agency, if any, then maintaining a rating on the Series
2007A Bonds at least 30 days prior to the execution of such amendment, change
or modification to the Loan Agreement, which notice shall include a copy of the
proposed amendment, change or modification to the Loan Agreement.

 

Section 10.2                  Amendments, Etc. to Loan Agreement Requiring
Consent of the Bondholders. Except
for the amendments, changes or modifications as provided in Section 10.1
hereof, neither the Issuer nor the Bond Trustee shall consent to any other
amendment, change or modification of the Loan Agreement without the written
approval or consent, given and procured as in this Section provided, of the
owners of not less than fifty-one percent in aggregate principal amount of the
Series 2007A Bonds which are outstanding hereunder at the time of execution of
any such amendment, change or modification. If at any time the Issuer and the
Borrower shall request the consent of the Bond Trustee to any such proposed
amendment, change or modification of the Loan Agreement, the Bond Trustee
shall, upon being satisfactorily indemnified with respect to expenses, cause
notice of such proposed amendment, change or modification to be given to each
holder of the Series 2007A Bonds as shown on the Bond Register in the same
manner as provided by Section 9.2 hereof with respect to supplemental
indentures. Such notice shall briefly set forth the nature of such proposed
amendment, change or modification and shall state that copies of the instrument
embodying the same are on file at the principal office of the Bond Trustee for
inspection by all Bondholders. The Bond Trustee shall not, however, be subject
to any liability to any Bondholder by reason of its failure to give such
notice, and any such failure shall not affect the validity of such amendment,
change or modification when consented to and approved as provided in this
Section. If the holders of not less than fifty-one percent in aggregate
principal amount of the Series 2007A Bonds outstanding hereunder at the time of
the execution of any such amendment, change or modification shall have
consented to and  approved the execution
thereof as herein provided, no holder of any Series 2007A Bond shall have any
right to object to any of the terms and provisions contained therein, or the
operation thereof, or in any manner to question the propriety of the execution
thereof, or to 

 

68

 

enjoin or restrain the
Bond Trustee or the Issuer from executing the same or from taking any action
pursuant to the provisions thereof.

 

69

 

ARTICLE XI

 

SATISFACTION OF
THIS BOND INDENTURE

 

Section 11.1                  Defeasance. If the Issuer shall pay or provide for the payment of the
entire indebtedness on all Series 2007A Bonds (including, for the purposes of
this Section 11.1, Series 2007A Bonds held by the Borrower outstanding in any
one or more of the following ways:

 

(a)                                  by
paying or causing to be paid the principal of and interest on all Series 2007A
Bonds outstanding, as and when the same become due and payable;

 

(b)                                 by
depositing with the Bond Trustee, in trust, at or before maturity, moneys in an
amount sufficient to pay or redeem (when redeemable) all Series 2007A Bonds
outstanding (including the payment of interest payable on such Series 2007A
Bonds to the maturity or redemption date thereof), provided that such moneys,
if invested, shall be invested in Escrow Obligations in an amount, without
consideration of any income or increment to accrue thereon, sufficient to pay
or redeem (when redeemable) and discharge the indebtedness on all Series 2007A
Bonds outstanding at or before their respective maturity dates; it being
understood that the investment income on such Escrow Obligations may be used
for any other purpose under the Act;

 

(c)                                  by
delivering to the Bond Trustee, for cancellation by it, all Series 2007A Bonds
outstanding; or

 

(d)                                 by
depositing with the Bond Trustee, in trust, moneys or Escrow Obligations in
such amount as the Bond Trustee shall determine will, together with the income
or increment to accrue thereon, without consideration of any reinvestment
thereof, be fully sufficient to pay or redeem (when redeemable) and discharge the
indebtedness on all Series 2007A Bonds outstanding at or before their
respective maturity dates (which determination shall be made in reliance upon
an accountant’s verification report reasonably accepted to the Bond Trustee);

 

and if the Issuer shall pay or cause to be
paid or make arrangements satisfactory to the Bond Trustee for the payment of
all other sums payable hereunder by the Issuer, and if any such Series 2007A
Bonds are to be optionally redeemed prior to the maturity thereof, irrevocable
notice of such redemption shall have been given in accordance with the
requirements of this Bond Indenture or irrevocable instructions shall have been
given to the Bond Trustee of such notice, this Bond Indenture and the estate
and rights granted hereunder shall cease, determine, and be discharged, and
thereupon the Bond Trustee shall, upon Written Request of the Issuer, and upon
receipt by the Bond Trustee of an Officer’s Certificate of the Borrower and an
opinion of Independent Counsel, each stating that in the opinion of the signers
all conditions precedent to the satisfaction and discharge of this Bond
Indenture have been complied with, forthwith execute proper instruments
acknowledging satisfaction of and discharging this Bond Indenture and the lien
hereof.

 

70

 

The
satisfaction and discharge of this Bond Indenture shall be without prejudice to
the rights of the Bond Trustee to charge and be reimbursed by the Issuer and
the Borrower for any expenditures which it may thereafter incur in connection
herewith.

 

Any moneys,
funds, securities, or other property remaining on deposit in the Expense Fund,
Interest Fund, Bond Sinking Fund, Project Fund, Redemption Fund or in any other
fund or investment under this Bond Indenture (other than the Escrow Obligations
or other moneys deposited in trust as above provided) shall, upon the full
satisfaction of this Bond Indenture, forthwith be transferred, paid over and
distributed to the Issuer and the Borrower, as their respective interests may
appear.

 

The Issuer or
the Borrower may at any time surrender to the Bond Trustee for cancellation by
it any Series 2007A Bonds previously authenticated and delivered, which the
Issuer or the Borrower may have acquired in any manner whatsoever, and such
Series 2007A Bonds, upon such surrender and cancellation, shall be deemed to be
paid and retired.

 

Section 11.2                  Liability of Issuer Not Discharged. Upon the deposit with the Bond
Trustee, in trust, at or before maturity, of money or Escrow Obligations in the
necessary amount to pay or redeem all outstanding Series 2007A Bonds (whether
upon or prior to their maturity or the redemption date of such Series 2007A
Bonds) and compliance with the other payment requirements of Section 11.1,
provided that if such Series 2007A Bonds are to be redeemed prior to the
maturity thereof, notice of  such
redemption shall have been given as in Article V herein provided, or provisions
satisfactory to the Bond Trustee shall have been made for the giving of such
notice, and subject to the provisions of Section 11.4, this Bond Indenture may
be discharged in accordance with the provisions hereof but the liability of the
Issuer upon the Series 2007A Bonds shall continue, but the owners thereof shall
thereafter be entitled to payment only out of the moneys or the Escrow
Obligations deposited with the Bond Trustee as aforesaid.

 

Section 11.3                  Provision for Payment of Portion of the
Series 2007A Bonds. If
the Issuer shall pay or provide for the payment of a portion of the Series
2007A Bonds (including, for the purposes of this Section 11.3, any Series 2007A
Bonds held by the Borrower) in one or more of the following ways:

 

(a)                                  by
paying or causing to be paid the principal of and interest on such portion of
the Series 2007A Bonds, as and when the same shall become due and payable;

 

(b)                                 by
depositing with the Bond Trustee, in trust, at or before maturity, moneys in an
amount sufficient to pay or redeem (when redeemable) a portion of the Series
2007A Bonds outstanding (including the payment of interest payable on such
portion of the Series 2007A Bonds to the maturity or redemption date thereof),
provided that such moneys, if invested, shall be invested in Escrow Obligations
in an amount, without consideration of any income or increment to accrue
thereon, sufficient to pay or redeem (when redeemable) and discharge the
indebtedness on such portion of the Series 2007A Bonds at or before their
respective maturity dates; it being understood that the investment income on
such Escrow Obligations may be used for any other purpose under the Act;

 

71

 

(c)                                  by
delivering to the Bond Trustee, for cancellation by it, such portion of the
Series 2007A Bonds; or

 

(d)                                 by
depositing with the Bond Trustee, in trust, moneys or Escrow Obligations in
such amount as the Bond Trustee shall determine (which determination shall be
made in reliance on an accountant’s verification report of an accountant
reasonably acceptable to the Bond Trustee) will, together with the income or
increment to accrue thereon, without consideration of any reinvestment thereof,
be fully sufficient to pay or redeem (when redeemable) and discharge the
indebtedness on such portion of the Series 2007A Bonds at or before their
respective maturity dates;

 

and if the Issuer shall also pay or cause to
be paid or made arrangements satisfactory to the Bond Trustee for the payment
of all other sums payable hereunder by the Issuer with respect to such Series
2007A Bonds, and, if such Series 2007A Bonds are to be redeemed prior to the
maturity thereof, notice of such redemption shall have been given as in Article
V of this Bond Indenture provided or provisions satisfactory to the Bond
Trustee shall have been made for the giving of such notice, such Series 2007A
Bonds shall cease to be entitled to any lien, benefit or security under this
Bond Indenture. The liability of the Issuer in respect of such Series 2007A
Bonds shall continue, but the owners thereof shall thereafter be entitled to
payment (to the exclusion of all other Bondholders) only out of the moneys or
the Escrow Obligations deposited with the Bond Trustee as aforesaid.

 

Section 11.4                  When Advance Refunding is Not Permitted and
Special Conditions for Refundings. The other provisions of this Bond Indenture notwithstanding,
none of the Series 2007A Bonds outstanding hereunder may be refunded as
aforesaid nor may this Bond Indenture be discharged if under any circumstances
would result in the loss of any exclusion from federal income taxation to which
the Series 2007A Bonds would otherwise be entitled. As a condition precedent to
the advance refunding of any Series 2007A Bonds outstanding hereunder, the Bond
Trustee shall receive an opinion of Bond Counsel (which counsel and opinion,
including without limitation the scope, form, substance and other aspects
thereof are acceptable to the Bond Trustee and which opinion may be based upon
a ruling or rulings of the Internal Revenue Service and the verification report
referred to in Sections 11.1 and 11.3 hereof) to the effect that such advance
refunding will not result in the loss of any exclusion for purposes of federal
income taxation to which the interest on the Series 2007A Bonds would otherwise
be entitled.

 

72

 

ARTICLE XII

 

MANNER OF
EVIDENCING OWNERSHIP OF SERIES 2007A BONDS

 

Section 12.1                  Proof of Ownership. Any request, direction, consent
or other instrument provided by this Bond Indenture to be signed and executed
by the Bondholders may be in any number of concurrent writings of similar tenor
and may be signed or executed by such Bondholders in person or by agent
appointed in writing. Proof of the execution of any such request, direction or
other instrument or of the writing appointing any such agent and of the
ownership of Series 2007A Bonds, if made in the following manner, shall be
sufficient for any of the purposes of this Bond Indenture and shall be
conclusive in favor of the Bond Trustee and the Issuer, with regard to any
action taken by them, or either of them, under such request or other
instrument, namely:

 

(a)                                  the
fact and date of the execution by any person of any such writing may be proved
by the certificate of any officer in any jurisdiction who by law has power to
take acknowledgments in such jurisdiction, that the person signing such writing
acknowledged before him the execution thereof, or by the affidavit of a witness
of such execution; and

 

(b)                                 the
ownership of Series 2007A Bonds and the amounts and registration numbers of
such Bonds and the date of holding the same shall be proved by the Bond
Register.

 

Any action
taken or suffered by the Bond Trustee pursuant to any provision of this Bond
Indenture, upon the request or with the assent of any Person who at the time is
the owner of any Series 2007A Bond or Series 2007A Bonds, shall be conclusive
and binding upon all future owners of the same Series 2007A Bond or Series
2007A Bonds.

 

73

 

ARTICLE XIII

MISCELLANEOUS

 

Section 13.1      Limitation of Rights.  With the exception of rights herein expressly
conferred, nothing expressed or mentioned in or to be implied from this Bond
Indenture or the Series 2007A Bonds is intended or shall be construed to give
to any person other than the parties hereto and the owners of the Series 2007A
Bonds any legal or equitable right, remedy or claim under or in respect to this
Bond Indenture or any covenants, conditions and provisions herein contained;
this Bond Indenture and all of the covenants, conditions and provisions hereof
being intended to be and being for the sole and exclusive benefit of the
parties hereto and the owners of the Series 2007A Bonds as herein provided.

 

Section 13.2      Unclaimed Moneys.  Any moneys deposited with the Bond Trustee in
accordance with the terms and covenants of this Bond Indenture, in order to
redeem or pay any Series 2007A Bond in accordance with the provisions of this
Bond Indenture which remain unclaimed by the owners of the Series 2007A Bond
for four years after the redemption or maturity date, as the case may be,
shall, if the Borrower is not at the time, to the knowledge of the Bond
Trustee, in default with respect to any of the terms and conditions of this
Bond Indenture or the Series 2007A Bonds, be repaid by the Bond Trustee to the
Borrower upon its written request therefor; and thereafter the owners of the
Series 2007A Bond shall be entitled to look only to the Borrower for payment
thereof.  Such moneys may be invested in
accordance with Section 4.7 hereof if the Borrower makes arrangements
satisfactory to the Bond Trustee to indemnify the Bond Trustee  for any costs which it may incur due to the
unavailability of moneys due to such investment.  Investment income on any such unclaimed
moneys received by the Bond Trustee shall be deposited as provided in Section
4.7 hereof until the final maturity or redemption date of the Series 2007A
Bonds.  Any such income generated after
such date shall be deemed to be unclaimed moneys of the type referred to in the
first sentence of this Section and shall be disposed of in accordance with such
sentence. The Issuer hereby covenants and agrees to indemnify and save the Bond
Trustee harmless from any and all loss, costs, liability and expense suffered
or incurred by the Bond Trustee by reason of having returned any such moneys to
the Issuer as herein provided.

 

Section 13.3      Severability.  If any provision of this Bond Indenture shall
be held or deemed to be or shall, in fact, be inoperative or unenforceable as
applied in any particular case in any jurisdiction or jurisdictions or in all
jurisdictions, or in all cases because it conflicts with any other provision or
provisions or any constitution or statute or rule of public policy, or for any
other reason, such circumstances shall not have the effect of rendering the
provision in question inoperative or unenforceable in any other case or
circumstance, or of rendering any other provision or provisions herein
contained invalid, inoperative, or unenforceable to any extent whatever.

 

The invalidity
of any one or more phrases, sentences, clauses or Sections in this Bond
Indenture contained shall not affect the remaining portions of this Bond
Indenture, or any part thereof.

 

74

 

Section 13.4      Notices.  It shall be
sufficient service of any notice, request, complaint, demand or other paper if
the same shall be duly mailed by registered or certified mail, sent by
reputable registered overnight mail or delivery service, or send by personal
delivery or confirmed facsimile delivery, and addressed as follows:

 

To the Issuer:

 

Brown County ,
South Dakota

25 Market Street, Suite 2

Aberdeen,
South Dakota 57401

Attention:
County Auditor

 

To the
Borrower:

 

Heartland
Grain Fuels, L.P.

10201 Wayzata Boulevard, Suite 250

Minneapolis, Minnesota 55305

Attention:
General Partner

 

To the Bond
Trustee:

 

Well Fargo,
National Association

MAC N9311-115

625 Marquette
Avenue, 11th Floor

Minneapolis,
Minnesota 55479

Attention:  Corporate Trust

 

Section 13.5      Bond Trustee as Paying Agent and Registrar.  The Bond Trustee is hereby designated and
agrees to act as principal Paying Agent and Registrar for and in respect to the
Series 2007A Bonds.

 

Section 13.6      Counterparts.  This Bond Indenture may be simultaneously
executed in several counterparts, each of which shall be an original and all of
which shall constitute but one and the same instrument.

 

Section 13.7      Applicable Law.  This Bond Indenture shall be governed
exclusively by the applicable laws of the State of South Dakota.

 

Section 13.8      Immunity of Officers, Employees and Members
of Issuer.  No recourse shall be had for the payment of
the principal of or premium, if any, or interest on any of the Series 2007A
Bonds or for any claim based thereon or upon any obligation, covenant or
agreement in this Bond Indenture contained against any past, present or future
elected official, officer, director, member, employee or agent of the Issuer,
or of any successor political subdivision, as such, either directly or through
the Issuer or any successor political subdivision, under any rule of law or
equity, statute or constitution or by the enforcement of any assessment or
penalty or otherwise, and all such liability of any such elected official,
officers, directors, members, employees or agents as such is hereby expressly
waived and released as a condition of 

 

75

 

and consideration for the
execution of this Bond Indenture and the issuance of such Series 2007A Bonds.

 

Section 13.9      Parties Interested Hereunder.  Nothing in this Bond Indenture expressed or
implied is intended or shall be construed to confer upon, or to give or grant
to, any person or entity, other than the Issuer, the Bond Trustee and the
registered owners of the Series 2007A Bonds, any right, remedy or claim under
or by reason of this or any covenant, condition or stipulation hereof, and all
covenants, stipulations, promises and agreements in this Bond Indenture,
contained by and on behalf of the Issuer shall be for the sole and exclusive
benefit of the Issuer, the Bond Trustee and the registered owners of the Series
2007A Bonds.

 

Section 13.10    Continuing Disclosure.  Pursuant to Section 5.16 of the Loan
Agreement, the Borrower has agreed to undertake all responsibility for
compliance with continuing disclosure requirements pursuant to a Continuing
Disclosure Agreement, dated as of September 1, 2007 (the “Continuing Disclosure
Agreement”) between the Borrower and the Bond Trustee to be executed the date
of issuance and delivery of the Series 2007A Bonds, and the Issuer shall have
no liability to the Bondholders or any other person with respect to such
disclosure matters.  Notwithstanding any
other provision of this Bond Indenture, failure of the Borrower to comply with
the Continuing Disclosure Agreement shall not be considered an event of
default, hereunder; however, any Bondholder may take such actions as may be
necessary and appropriate, including seeking mandate or specific performance by
court order, to cause the Borrower to comply with its obligations under Section
5.16 of the Loan Agreement.

 

Section 13.11    The
Intercreditor Agreement. 
In connection with the execution and delivery of the Bond Indenture, the
Bond Trustee has entered into the Intercreditor Agreement which sets forth the
relative rights and priorities of the Bondholders and the Senior Lenders. The
performance of the Bond Trustee of its duties hereunder and all actions taken
by the Bond Trustee, as trustee hereunder, are subject to the express terms of
the Intercreditor Agreement. Notwithstanding anything in this Bond Indenture to
the contrary, any right of payment from or on behalf of the Borrower, liens or
security interests granted to the Bond Trustee (other than the liens and
security interests granted pursuant to the Granting Clauses of the Bond
Indenture), the exercise of certain rights on remedies hereunder and the
ability of the Bond Trustee to perform or enforce certain provisions of this
Bond Indenture are subject to the provisions of (but only to the extent
provided in) the Intercreditor Agreement. In the event that the express terms
of the Intercreditor Agreement shall prohibit or restrict the Bond Trustee from
taking any action or enforcing any right hereunder, the express terms of the
Intercreditor Agreement shall govern and in the event of any conflict between
the express terms of the Intercreditor Agreement and the Bond Indenture, the
express terms of the Intercreditor Agreement shall govern and control; provided,
however, the terms of the Intercreditor Agreement shall not constitute and
amendment to, or waiver or deletion of, performance of any provisions, or waive
or delete or amend any default or an Event of Default under the Bond Indenture.

 

76

 

IN WITNESS WHEREOF,
the Brown County, South Dakota, has caused these presents to be signed in its
name and on its behalf by its Chair, and the same to be attested by its County
Auditor, and to evidence its acceptance of the trusts hereby created, Wells
Fargo Bank, National Association has caused these presents to be signed in its
name and on its behalf by one of its authorized officers, [its official seal to
be hereunto affixed], and the same to be attested by one of its authorized
officers, all as of the day and year first above written.

 

	
   

  	
  BROWN
  COUNTY, SOUTH DAKOTA

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Mike Wiese

  	
   

  
	
   

  	
  Its:

  	
  Chair

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Attest:

  	
  /s/ Maxine Taylor

  	
   

  
	
   

  	
  Its:

  	
  County
  Auditor

  
						

 

 

[Execution by
Bond Trustee on following page.]

 

 

	
   

  	
  WELLS
  FARGO BANK, NATIONAL

  ASSOCIATION

  
	
   

  	
  AS BOND
  TRUSTEE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Steven R. Gubrud

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Its:

  	
  Vice President

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Its:

  	
   

  	
   

  

 

 

EXHIBIT A

(FORM OF SERIES 2007A BOND)

 

UNITED STATES OF AMERICA

 

STATE OF SOUTH DAKOTA

 

BROWN COUNTY, SOUTH DAKOTA

 

SUBORDINATE SOLID WASTE FACILITIES REVENUE
BOND

 

(HEARTLAND GRAIN FUELS, L.P. ETHANOL PLANT
PROJECT), SERIES 2007A

 

R-_______

 

INTEREST RATE:

 

MATURITY DATE:

 

DATED DATE:

 

CUSIP:

 

REGISTERED OWNER:

 

PRINCIPAL SUM:

 

AS PROVIDED IN THE BOND INDENTURE REFERRED TO
HEREIN, UNTIL THE TERMINATION OF THE SYSTEM OF BOOK-ENTRY-ONLY TRANSFERS
THROUGH THE DEPOSITORY TRUST COMPANY, NEW YORK, NEW YORK (TOGETHER WITH ANY
SUCCESSOR SECURITIES DEPOSITORY APPOINTED PURSUANT TO THE BOND INDENTURE, “DTC”),
AND NOTWITHSTANDING ANY OTHER PROVISIONS OF THE BOND INDENTURE TO THE CONTRARY,
(A) THIS BOND MAY BE TRANSFERRED, IN WHOLE BUT NOT IN PART, ONLY TO A NOMINEE
OF DTC, OR BY A NOMINEE OF DTC TO DTC OR A NOMINEE OF DTC, OR BY DTC OR A
NOMINEE OF DTC TO ANY SUCCESSOR SECURITIES DEPOSITORY OR ANY NOMINEE THEREOF
AND (B) A PORTION OF THE PRINCIPAL AMOUNT OF THIS BOND MAY BE PAID OR REDEEMED
WITHOUT SURRENDER HEREOF TO THE PAYING AGENT. 
DTC OR A NOMINEE, TRANSFEREE OR ASSIGNEE OF DTC OF THIS BOND MAY NOT
RELY UPON THE PRINCIPAL AMOUNT INDICATED HEREON AS THE PRINCIPAL AMOUNT HEREOF
OUTSTANDING AND UNPAID.  THE PRINCIPAL
AMOUNT HEREOF OUTSTANDING AND UNPAID SHALL FOR ALL PURPOSES BE THE AMOUNT
DETERMINED IN THE MANNER PROVIDED IN THE BOND INDENTURE.

 

A-1

 

UNLESS THIS BOND IS PRESENTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC (A) TO THE BOND REGISTRAR FOR REGISTRATION OF
TRANSFER OR EXCHANGE OR (B) TO THE BOND TRUSTEE FOR PAYMENT OF PRINCIPAL OR
REDEMPTION PRICE, AND ANY BOND ISSUED IN REPLACEMENT HEREOF OR SUBSTITUTION
HEREFOR IS REGISTERED IN THE NAME OF DTC OR ITS NOMINEE OR SUCH OTHER NAME AS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC AND ANY PAYMENT IS MADE TO DTC
OR ITS NOMINEE, ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
BY OR TO ANY PERSON IS WRONGFUL BECAUSE ONLY THE REGISTERED OWNER HEREOF, CEDE
& CO., AS NOMINEE OF DTC, HAS AN INTEREST HEREIN.

 

BROWN COUNTY,
SOUTH DAKOTA (the “Issuer”), a public body corporate and politic and a
political subdivision duly and validly created and existing under the laws and
constitution of the state of South Dakota and has all powers granted under the
provisions, restrictions and limitations of South Dakota Codified Laws Chapter
9-54, as supplemented and amended (the “Act”), for value received, hereby
promises to pay in lawful money of the United States of America to the
registered owner shown above, or registered assigns, on the maturity date
specified above, unless this Bond shall be redeemable and shall have previously
been called for redemption and payment of the redemption price made or provided
for, but solely from amounts available under the Bond Indenture (hereinafter
referred to), and certain amounts payable under the Loan Agreement (hereinafter
referred to), which payments are pledged and assigned for the benefit and
payment hereof pursuant to the Bond Indenture and not otherwise, upon surrender
hereof, the principal sum set forth above, and to pay interest on such
principal amount (based on a 360-day year composed of twelve 30-day months) in
like manner, but solely from said amounts available under the Bond Indenture,
and certain amounts payable under the Loan Agreement, from the dated date
hereof at the rate  per annum specified
above, payable on each January 1 and July l, beginning January 1, 2008, until
payment of such principal amount, or provision therefor, shall have been made
upon redemption or at maturity.  

 

The principal
of this Bond is payable upon surrender of this Bond at the principal corporate
trust office in Minneapolis, Minnesota of Wells Fargo Bank, National
Association, as bond trustee (the “Bond Trustee”).  Except as otherwise provided in the Bond
Indenture with respect to Defaulted Interest (as defined therein), interest
payments hereon shall be made to the registered owner (the “Holder”) hereof
appearing on the registration books of the Issuer (the “Bond Register”)
maintained by the Bond Trustee, as bond registrar, as of the close of business
of the Bond Trustee on the 15th day of the month (whether or not a business
day) next preceding the interest payment date (the “Record Date”) and shall be
paid (i) by check or draft of the Bond Trustee mailed on the applicable
interest payment date to the Holder at the Holder’s address as it appears on
the Bond Register or at such other address furnished in writing by such
registered owner to the Bond Trustee no later than the Record Date or (ii) as
to any Holder of $1,000,000 or more in aggregate principal amount of the Series
2007A Bonds who so elects, by wire transfer of funds to such wire transfer
address within the continental United States as the Holder shall have furnished
in writing to the Bond Trustee no later than the Record Date, which wire
instructions shall remain in effect until the Bond Trustee is notified to the
contrary.

 

Defaulted
Interest with respect to any Series 2007A Bond shall cease to be payable to the
Owner of such Series 2007A Bond on the relevant Record Date and, except as
hereinafter 

 

A-2

 

provided, shall be payable to the Owner in whose name such Series 2007A
Bond is registered at the close of business of the Bond Trustee on the Special
Record Date for the payment of such Defaulted Interest, which Special Record
Date shall be fixed in the following manner. 
The Borrower shall notify the Bond Trustee in writing of the amount of
Defaulted Interest proposed to be paid on each Series 2007A Bond and the date
of the proposed payment (which date shall be such, as will enable the  Bond Trustee to comply with the next sentence
hereof) and, at the same time, the Borrower or the Obligated Group shall
deposit with the Bond Trustee an amount of money equal to the aggregate amount
proposed to be paid in respect of such Defaulted Interest or shall make
arrangements satisfactory to the Bond Trustee for such deposit prior to the
date of the proposed payment, such money when deposited to be held in trust for
the benefit of the owners of the Series 2007A Bonds entitled to such Defaulted
Interest as provided in this Section. 
Following receipt of such funds, the Bond Trustee shall fix a Special
Record Date for the payment of such Defaulted Interest which date will be
fifteen (15) days prior to the date of the proposed payment.  The Bond Trustee shall promptly notify the
Borrower of such Special Record Date and, in the name and at the expense of the
Borrower, shall cause notice of the proposed payment of such Defaulted Interest
and the Special Record Date therefor to be mailed, first-class postage prepaid,
not less than 10 days prior to such Special Record Date to each Owner of a
Series 2007A Bond entitled to such notice at the address of such Owner as it
appears on the Bond Register. Such Defaulted Interest shall be paid to the
Owners of the Series 2007A Bonds in whose names the Series 2007A Bonds on which
such Defaulted Interest is to be paid are registered on such Special Record
Date.

 

Upon a
Determination of Taxability, the interest rate on the Bonds will be converted
to the Taxable Rate as of the date of the Determination of Taxability,
regardless of the date as of which the Bonds were taxable. The Taxable Rate is
a fluctuating per annum interest rate adjusted on the first day of each
calendar quarter in a year (January 1, April 1, July, and October 1) and equal
to the sum of (i) the rate of interest published as the London Interbank
Offered Rates with a term of three months as of each adjustment date, plus (ii)
350 basis points. If the adjustment date is not a Business Day, the rate will
be adjusted on the next Business Day. The Bond Trustee may be precluded by the
terms of the Intercreditor Agreement and the Accounts Agreement from paying
interest in the Bonds at the Taxable Rate.

 

This Bond is
one of an authorized series of Bonds issued under the Bond Indenture in the
aggregate principal amount of $______________ (the “Series 2007A Bonds”) for
the purpose of lending funds to Heartland Grain Fuels, L.P., a limited
partnership, organized and existing under the laws of the State of Delaware
(the “Borrower”) which funds will be used, together with certain moneys of the
Borrower, to (i) pay the cost of the acquisition, construction and equipping of
improvements and expansion of the Facility consisting of certain Solid Waste
Disposal Facilities (as herein defined which constitute a project within the
meaning of the Act) (the “Project”), which is owned by the Issuer and operated
by the Borrower, (ii) fund a debt service reserve, (iii) pay interest on the
Series 2007A Bonds during construction of the Project and (iv) pay certain
expenses incurred in connection with the issuance of the Series 2007A Bonds.

 

The loan by
the Issuer to the Borrower of the proceeds of the Series 2007A Bonds will be
made under and secured pursuant to a Loan Agreement, dated as of October 1,
2007 (the “Loan Agreement”) between the Borrower and the Issuer. 

 

A-3

 

The Series
2007A Bonds are all issued under and equally and ratably secured by and
entitled to the security of a Bond Trust Indenture dated as of October 1, 2007
(the “Bond Indenture”) duly executed and delivered by the Issuer to the Bond
Trustee, pursuant to which Bond Indenture all of the right, title and interest
of the Issuer in and to the Loan Agreement (excluding Unassigned Rights, as
defined in the Bond Indenture) are assigned by the Issuer to the Bond Trustee
as security for the Series 2007A Bonds. The payment of principal and interest,
and redemption premium, if any, on Series 2007A Bonds will be secured by the
Bond Collateral Documents as defined in the Bond Indenture. The ability of the
Borrower to make payments under the Loan Agreement and the enforcement thereof
and of the Bond Collateral Documents, and the use of the proceeds of any such
enforcement, are subject and subordinate to the Senior Credit Facilities
between the Borrower and the Senior Lenders pursuant to the Accounts Agreement
and the Intercreditor Agreement, all as defined in the Bond Indenture.
Reference is made to the Bond Indenture, the Loan Agreement, the Bond
Collateral Documents, the Senior Credit Facilities, the Accounts Agreement, the
Intercreditor Agreement and to all amendments to any such agreements for the
provisions, among others, with respect to the nature and extent of the
security, the rights, duties and obligations of the Issuer, the Bond Trustee
and the rights of the owners of the Series 2007A Bonds and the Senior Lenders,
and to all the provisions of which the owner, by the acceptance of this Bond,
assents.

 

This Bond and
such other Bonds of the series of which it forms a part do not constitute a
debt or liability of the State of South Dakota (the “State”) or of any
political subdivision thereof or a pledge of the faith and credit of the State
or any political subdivision thereof. 
The issuance of the Series 2007A Bonds under the provisions of the Act
does not, directly, indirectly or 
contingently, obligate the State or any political subdivision thereof to
levy any form of taxation for the payment thereof or to make any appropriation
for their payment, and such Bonds and the interest payable thereon do not now
and shall never constitute a debt of the State or any political subdivision
thereof within the meaning of the Constitution or the statutes of the State and
do not now and shall never constitute a charge against the credit or taxing
power of the State or any political subdivision thereof.  Neither the State nor any political
subdivision thereof shall in any event be liable for the payment of the principal
of or interest on the Series 2007A Bonds or for the performance of any pledge,
obligation or agreement of any kind whatsoever which may be undertaken by the
Issuer.  No breach by the Issuer of any
such pledge, obligation or agreement may impose any liability, pecuniary or
otherwise, upon the State or any political subdivision thereof.  No covenant or agreement in the Series 2007A
Bonds or in the Bond Indenture and no obligation imposed by the Bond Indenture
upon the Issuer and no breach thereof shall constitute or give rise to or
impose upon the Issuer a general liability or a charge upon its general credit
or property other than the trust estate (as described in the Bond
Indenture).  

 

This Bond and
such other Bonds of the series of which it forms a part, and the interest
payable hereon and thereon, are limited obligations of the Issuer and are
payable solely from amount available under the Bond Indenture and from payments
or prepayments to be made under the Loan Agreement, which are pledged and
assigned for the payment of the Series 2007A Bonds in accordance with the Bond
Indenture, and from moneys and investments on deposit in various funds under
the Bond Indenture.

 

This Bond is
registered on the Bond Register and may be transferred by the registered owner
hereof at the written request of such registered owner in person or by his duly
authorized 

 

A-4

 

attorney, but only in the manner, subject to the limitations and upon
the payment of the charges provided in the Bond Indenture and upon surrender
and cancellation of this Bond.  Upon such
transfer, a new fully registered bond or bonds of the same maturity and of
authorized denominations for the same aggregate principal amount shall be
issued to the transferee in exchange therefor. 
The Issuer and the Bond Trustee may deem and treat the person in whose
name this Bond is registered as the absolute owner hereof for the purpose of
receiving payment of, or on account of, the principal and interest due hereon
and for all other purposes, and neither the Issuer nor the Bond Trustee shall
be affected by any notice to the contrary. 
The Issuer and the Bond Trustee shall not be required to register the
transfer or exchange of any Series 2007A Bond after notice calling such Bond or
portion thereof for redemption has been given as provided in the Bond
Indenture, or during the period of 15 days next preceding the giving of such
notice of redemption with respect to any Series 2007A Bonds of the same
maturity.

 

The Series
2007A Bonds are issuable only as registered bonds, in denominations of $5,000
and integral multiples thereof.

 

With respect
to the payment of Series 2007A Bonds, whether at maturity or by Mandatory
Sinking Fund Redemption (as defined in the Bond Indenture), the Issuer shall
have on deposit in the Bond Sinking Fund (as defined in the Bond Indenture),
moneys in the amounts and at the times, respectively, as follows:

 

	
  January 1

  of the Year

  	
   

  	
  Principal

  Amount

  	
   

  	
  January 1

  of the Year

  	
   

  	
  Principal

  Amount

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

Moneys on
deposit in the Bond Sinking Fund on January 1 of each year shall be applied to
the Mandatory Sinking Fund Redemption of the Series 2007A Bonds in the amount
set forth above.  Payment of the Series
2007A Bonds through the Bond Sinking Fund shall be without premium.  If less than all Series 2007A Bonds of a
particular maturity are subject to Mandatory Sinking Fund Redemption on a
particular date, the Series 2007A Bonds to be redeemed shall be selected by lot
in such manner as may be designated by the Bond Trustee.

 

Subject to the
express terms of the Accounts Agreement and the Intercreditor Agreement, the
Series 2007A Bonds are redeemable out of proceeds received from insurance and
condemnation and from sale under threat of condemnation under certain
conditions described in the Bond Indenture (“Extraordinary Redemption”), in
whole or in part, and if in part, by maturities (less than all of a single
maturity to be selected by lot in such manner as may be determined by the Bond
Trustee) designated by the Borrower, at a redemption price equal to the
principal amount thereof plus accrued and unpaid interest thereon to the date
fixed for redemption and without premium, as provided in the Bond Indenture.

 

Subject to the
express terms of the Accounts Agreement and the Intercreditor Agreement,
outstanding Series 2007A Bonds are also subject to redemption prior to maturity
on or after 

 

A-5

 

January 1, _____ at the option of the Issuer upon direction of the
Borrower (“Optional Redemption”) out of amounts prepaid under the Loan
Agreement and deposited in the Redemption Fund (as defined in the Bond
Indenture), in whole or in part at any time, and if in part by maturities (less
than all of a single maturity is being redeemed by, lot within a maturity or in
such manner as may be reasonably determined by the Bond Trustee) at the
redemption prices (expressed as percentages of the principal amount of the
Series 2007A Bonds to be redeemed) as set forth below plus accrued interest
thereon to the date fixed for redemption:

 

	
  Redemption Dates

  (Dates inclusive)

  	
   

  	
  Redemption

  Price

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  January 1, 20__ through December 31, 20__

  	
   

  	
  ____

  	
  %

  
	
  January 1, 20__ through December 31, 20__

  	
   

  	
  ____

  	
  %

  
	
  January 1, 20__ and thereafter

  	
   

  	
  ____

  	
  %

  

 

No
Extraordinary Redemption or Optional Redemption of less than all of the Series
2007A Bonds at the time outstanding shall be made unless the aggregate
principal amount of Series 2007A Bonds to be redeemed is equal to or greater
than $100,000.  In the case of any
Extraordinary Redemption or Optional Redemption or any purchase and
cancellation of Series 2007A Bonds, the Issuer shall receive credit against its
required Bond Sinking Fund deposits with respect to such Series 2007A Bonds.

 

Subject to the
express terms of the Accounts Agreement and the Intercreditor Agreement,
outstanding Series 2007A Bonds are also subject to mandatory redemption prior
to maturity (herein referred to as a “Determination of Taxability Redemption”)
upon a Determination of Taxability, in whole but not in part, on the
earliest redemption date for which notice can be given as required in Section
5.3 hereof as the redemption price equal to the principal amount of the Series
2007A Bonds to be redeemed plus accrued interest thereon to the date of
redemption, without penalty.

 

Subject to the
express terms of the Accounts Agreement and the Intercreditor Agreement, the
Bonds are subject to mandatory redemption in part by lot (or such other random
means selected by the Bond Trustee) at a redemption price equal to the principal
amount thereof, together with accrued interest to the date of redemption, from
proceeds of the Series 2007A Bonds available therefor after the Completion
Date.

 

In the event
any of the Series 2007A Bonds are called for redemption as aforesaid, notice
thereof identifying the Series 2007A Bonds to be redeemed will be given by
mailing a copy of the redemption notice by mail not less than 30 or more than
60 days prior to the date fixed for redemption to the registered  owner of each Series 2007A Bond to be redeemed
at the address shown on the Bond Register; provided, however, that failure to
give such notice by mailing, or any defect in such notice or mailing, as to any
Series 2007A Bond, shall not affect the validity of any proceedings for
redemption of any other Series 2007A Bond with respect to which notice was
properly given.  All Series 2007A Bonds
so called for redemption will cease to bear interest 

 

A-6

 

on the specified redemption date, provided funds for their redemption
are on deposit at the place of payment at that time, and shall no longer be
protected by the Bond Indenture and shall not be deemed to be outstanding under
the provisions of the Bond Indenture.

 

The Series
2007A Bonds are subject to advance defeasance of the Bond Indenture by
depositing with the Bond Trustee, in trust, moneys or Escrow Obligations (as
defined in the Bond Indenture) in such amount as the Bond Trustee shall
determine (such determination may be based upon an accountant’s verification
report) will, together with the income or increment to accrue thereon, without
consideration of any reinvestment thereof, be fully sufficient to pay or redeem
(when redeemable) and discharge the indebtedness on all Series 2007A Bonds
outstanding under the Bond Indenture at or before their respective maturity
dates.  The Series 2007A Bonds are also
subject to advance defeasance of the Bond Indenture by depositing with the Bond
Trustee, in trust, at or before maturity, moneys in an amount sufficient to pay
or redeem (when redeemable) all Series 2007A Bonds outstanding (including the
payment of interest payable on such Series 2007A Bonds to the maturity or
redemption date thereof), provided that such moneys, if invested, shall be
invested in Escrow Obligations (as defined in the Bond Indenture) in an amount,
without consideration of any income or increment to accrue thereon, sufficient
to pay or redeem (when redeemable) and discharge the indebtedness on all Series
2007A Bonds outstanding under the Bond Indenture at or before their respective
maturity dates; it being understood that the investment income on such Escrow
Obligations may be used for any other purpose under the Act.  Upon such payment or provision therefor,
together with all other payments required under the Bond Indenture, the Bond
Indenture may be discharged in accordance with the provisions thereof, but the
Issuer shall remain the obligor on all Series 2007A Bonds, although the owners
thereof and the owner hereof shall be entitled to payment solely out of such
moneys or Escrow Obligations deposited with the Bond Trustee.

 

The Issuer may
also pay or provide for the payment of any portion of the Series 2007A Bonds
by: (a) depositing with the Bond Trustee, in trust, moneys or Escrow
Obligations in such amount as the Bond Trustee shall determine (such
determination may be based upon an accountant’s verification report) will,
together with the income or increment to accrue thereon, without consideration
of any reinvestment thereof, be fully sufficient to pay or redeem (when
redeemable) and discharge the indebtedness on such portion of the Series 2007A
Bonds at or before their respective maturity dates; or (b) depositing with the
Bond Trustee, in trust, at or before maturity, moneys in an amount sufficient
to pay or redeem (when redeemable) a portion of the Series 2007A Bonds
outstanding (including the payment of interest payable on such portion of the
Series 2007A Bonds to the maturity or redemption date thereof), provided that
such moneys, if invested, shall be invested in Escrow Obligations in an amount,
without consideration of any income or increment to accrue thereon, sufficient
to pay or redeem (when redeemable) and discharge the indebtedness on such
portion of the Series 2007A Bonds at or before their respective maturity dates;
it being understood that the investment income on such Escrow Obligations may
be used for any other purpose under the Act. Upon such deposit, such portion of
the Series 2007A Bonds shall cease to be entitled to any lien, benefit or
security under the Bond Indenture.  The
Issuer shall remain the obligor on such portion of the Series 2007A Bonds but
the owners thereof shall be entitled to payment (to the exclusion of all other
Bondholders) solely out of such moneys or Escrow Obligations deposited with the
Bond Trustee.

 

A-7

 

The foregoing
notwithstanding, none of the Series 2007A Bonds may be so refunded nor may the
Bond Indenture be discharged if under any circumstances such refunding would
result in the loss of any exclusion for purposes of federal income taxation to
which the interest on the Series 2007A Bonds would otherwise be entitled.  As a condition precedent to the advance
refunding of any Series 2007A Bonds, the Bond Indenture requires that the Bond
Trustee receive an opinion of nationally recognized municipal bond counsel
(which counsel and opinion, including without limitation the scope, form,
substance and other aspects thereof are acceptable to the Bond Trustee and which
opinion may be based upon a ruling or rulings of the Internal Revenue Service
and an accountant’s verification report) to the effect that such refunding will
not result in the loss of any exclusion for purposes of federal income taxation
to which the interest on the Series 2007A Bonds would otherwise be entitled.

 

The owner of
this Bond shall have no right to enforce the provisions of the Bond Indenture
or to institute action to enforce the covenants therein, or to take any action
with respect to any event of default under the Bond Indenture, or to institute,
appear in or defend any suit or other proceedings with respect thereto, except
as provided in the Bond Indenture.  In
certain events, on the conditions, in the manner and with the effect set forth
in the Bond Indenture, the principal of the Series 2007A Bonds issued under the
Bond Indenture and then outstanding may become or may be declared due and
payable before the stated maturity thereof, together with interest accrued
thereon.  Modifications or alterations of
the Bond Indenture or of any supplements thereto, may be made only to the
extent and in the circumstances permitted by the Bond Indenture.

 

It is hereby
certified that all conditions, acts and things required to exist, happen and be
performed under the Act and under the Bond Indenture precedent to and in the
issuance of this Bond, exist, have happened and have been performed, and that
the issuance, authentication and delivery of this Bond have been duly
authorized by resolution of the Issuer duly adopted.

 

No recourse
shall be had for the payment of the principal of, premium, if any, or interest
on any of the Series 2007A Bonds or for any claim based thereon or upon any
obligation, covenant or agreement in the Bond Indenture contained, against any
past, present or future officer, director, member, employee or agent of the
Issuer, or any incorporator, officer, director, member, trustee, employee or
agent of any successor to the Issuer or body politic, as such, either directly
or through the Issuer or any successor to the Issuer or body politic, under any
rule of law or equity, statute or constitution or by the enforcement of any
assessment or penalty or otherwise, and all such liability of any such
incorporators, officers, directors, trustees, members, employees or agents, as
such, is hereby expressly waived and released as a condition of and
consideration for the execution of the Bond Indenture and the issuance of any
of the Series 2007A Bonds.

 

This Bond
shall not be valid or become obligatory for any purpose or be entitled to any
security or benefit under the Bond Indenture until the certificate of
authentication hereon shall have been duly executed by the Bond Trustee.

 

A-8

 

IN WITNESS WHEREOF,
as provided by the Act, Brown County, South Dakota has caused this Bond to be
executed in its name and on its behalf by the manual or facsimile signature of
its Chair [and its seal to be hereunto affixed or reproduced] and attested with
the manual or facsimile signature of its County Auditor, all as of the dated
date specified above.

 

	
   

  	
  BROWN
  COUNTY, SOUTH DAKOTA

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
  Its:

  	
  Chair

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Attest:

  	
   

  
	
   

  	
  Its:

  	
  County
  Auditor

  
					

(Seal)

 

 

	
  Countersignature of Resident Attorney

  
	
   

  	
   

  
	
   

  	
   

  
	
  Countersigned:

  
	
   

  	
   

  
	
   

  	
   

  
	
  By

  	
   

  	
   

  	
   

  
	
   

  	
  A Resident
  Attorney

  	
   

  	
   

  

 

A-9

 

CERTIFICATE OF AUTHENTICATION

 

This Bond is
one of the Series 2007A Bonds described in the within-mentioned Bond Indenture.

 

Authentication Date:

 

	
   

  	
  WELLS
  FARGO BANK, NATIONAL

  ASSOCIATION,

  
	
   

  	
  Bond
  Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Authorized
  Signatory

  

 

A-10

 

ASSIGNMENT 

 

FOR VALUE RECEIVED,
the undersigned sells, assigns and transfers unto

 

	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (Name and Address of Assignee)

  	
   

  

 

the within Bond and does hereby irrevocably
constitute and appoint _______________________, Attorney, to transfer the said
Bond on the Bond Register thereof with full power of substitution in the
premises.

 

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  NOTICE: The assignor’s signature to this assignment
  must correspond with the name as it appears upon the face of the within bond
  in every particular, without alteration or enlargement or any change
  whatsoever.

  	
   

  

 

	
  Signature guaranteed:

  	
   

  	
   

  
	
   

  	
  NOTICE: 
  Signature must be guaranteed by an institution who is a participant in
  the Securities Transfer Agent Medallion Program (“STAMP”) or similar program

  	
   

  

 

	
  NOTICE:

  	
   

  	
  The signature to this assignment must correspond with the name of the
  registered owner as it appears upon the face of the within Bond in every
  particular, without alteration or enlargement or any change whatever.

  

 

A-11

 

EXHIBIT B

PROJECT DESCRIPTION

 

The Project
consists of Solid Waste Disposal Facilities at the Aberdeen Facility, including
the following:

 

Centrifuge. 
The centrifuge portion of the Project consists of (i) the stillage pump,
(ii) the whole stillage tank, (iii) centrifuges, (iv) a centrifuge conveyor,
used solely to transport stillage cake from the centrifuges to the dryer, (v) then
stillage storage tanks, used to temporarily hold then stillage removed from the
centrifuges prior to being pumped to the evaporator, and (vi) related
pipes, valves, switches, agitators, and controls.

 

Evaporator. 
The evaporator portion of the Project consists of (i) a portion of the
cost of the gas-fired boiler, representing that portion of the boiler used to
produce steam for the processing of by-products, (ii) heat exchangers, which
allow heat to be transferred from the steam to the thin stillage and from the
evaporated vapor to the cooling water, (iii) evaporator recirculation pumps,
used to recirculate the syrup until proper specifications are reached, (iv) a
surge tank, used to temporarily hold the syrup before it is pumped to the
dryer, (v) a syrup feed pump, used solely to pump the syrup from the evaporator
to the dryer, and (vi) related pipes, valves, switches, agitators, small pumps
and controls.

 

Dryer. 
The dryer portion of the Project consists of (i) a dryer feed conveyor,
used to convey the stillage cake to the dryer, (ii) a mixer in which the cake
and syrup are mixed, (iii) the dryer drum and its drive system, (iv) a
gas-fired burner and combustion furnace used exclusively to supply heat to the
dryer, (v) a dryer discharge conveyor system, used to convey the DDGS out of
the dryer, (vi) a recycle screw conveyor, which is used to convey a portion of
the DDGS back into the dryer to enhance drying efficiencies, (vii) a 4-cyclone
air/production separation system, (viii) a large induced draft fan, which pulls
a draft on the dryer drum and discharges water vapor up the discharge stack in
the form of steam, (ix) a stainless steel dryer discharge stack, which routes
all steam away from the dryer, and (x) related pipes, valves, switches and
controls.

 

Methanator. 
The methanator portion of the Project consists of:  (i) the digester; (ii) the biogas scrubber
and the biogas flare that burns off the cleaned gas; (iii) the decarbonator;
(iv) the recycle tank; (v) tanks which store the “food” sources for the bacteria
in the digester; and (vi) related pipes, valves, switches, and controls.

 

Storage. 
The Project includes related storage to be used exclusively for the
storage of DDGS.  In addition, the
storage portion of the Project includes (i) a conveyor system used to move the
DDGS from the dryer exit conveyor to the storage building, (ii) conveyors,
elevator leg, weigh system, and related equipment used to handle weigh, and
load bulk DDGS onto trucks or rail cars, and (iii) related pipes, valves,
switches, and controls.

 

B-1

 

EXHIBIT C

INTEREST PAYMENT SCHEDULE

 

The following
amounts shall be withdrawn from the Project Fund on or before the Interest
Payment date set forth below in the amount set forth below and transferred to
the Interest Fund to pay interest on such Interest Payment Date:

 

	
  Interest Payment

  Date

  	
   

  	
  Amount

  	
   

  
	
  January 1,
  2008

  	
   

  	
  $

  	
  357,041.67

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  July 1, 2008

  	
   

  	
  779,395.83

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
  $

  	
  1,136,437.50

  	
   

  

 

C-1

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