Document:

exv10w1

Exhibit 10.1

LOCK-UP AND VOTING AGREEMENT

     This Lock-Up and Voting Agreement (this “Agreement”) is made and entered into as of
March 31, 2010, by and among Marshall Financial Group, LLC, Banco Santander, S.A., New York Branch,
Farm Credit Bank of Texas, Coöperatieve Centrale Raiffeisen-Boerenleenbank B.A., “Rabobank
Nederland”, New York Branch, KEB NY Financial Corp., Nordkap Bank AG, WestLB AG, New York
Branch (“WestLB”) (collectively, the “Senior Secured Creditors” and each a
“Senior Secured Creditor”), Heartland Grain Fuels, L.P. (“HGF”), Advanced
BioEnergy, LLC (“ABE”) and Oppenheimer Rochester National Municipals (the
“Bondholder” and collectively, together with ABE, HGF and the Senior Secured Creditors that
have executed this Agreement, the “Parties”).

RECITALS

     A. The Senior Secured Creditors are the holders of senior secured notes issued by HGF and
other secured obligations of HGF pursuant to that certain Senior Credit Agreement, dated as of
October 1, 2007 (as amended and supplemented, the “Senior Credit Agreement”), among HGF, as
Borrower, the Lenders referred to therein and WestLB, as Administrative Agent (the
“Administrative Agent”), Collateral Agent, Issuing Bank, Lead Arranger, Sole Bookrunner and
Syndication Agent.

     B. The Bondholder is the sole holder of the Subordinate Solid Waste Facilities Revenue Bonds
(Heartland Grain Fuels, L.P. Ethanol Plant Project) Series 2007A (the “Bonds”), issued by
Brown County, South Dakota (the “Issuer”) under that certain Bond Trust Indenture, dated as
of October 1, 2007, between the Issuer and Wells Fargo Bank, National Association, in its capacity
as trustee of the Bonds (the “Trustee”).

     C. ABE, directly and indirectly, owns all of the partnership interests in HGF.

     D. The Parties have engaged in good faith negotiations with the objective of reaching an
agreement with regard to restructuring and recapitalizing HGF.

     E. The Parties now desire to implement a restructuring (the “Restructuring”) of HGF
consistent with the terms set forth in this Agreement and the Term Sheet attached hereto as Exhibit
A (the “Term Sheet”). In the event that HGF, ABE, the Bondholder and Senior Secured
Creditors that collectively hold at least two-thirds in amount and are more than fifty percent of
the number of the holders of claims based on amounts owed by HGF under the Senior Credit Agreement
(the “Senior Secured Claims”) agree to the terms of this Agreement, HGF intends, subject to
the terms and conditions of this Agreement, to prepare and file a plan of reorganization (the
“Plan”), consistent with the terms set forth in this Agreement and the Term Sheet,
implementing the Restructuring in a case (the “Chapter 11 Case”) to be filed under chapter
11 of title 11 of the United States Code (the “Bankruptcy Code”). Alternatively, in the
event that HGF, ABE, the Bondholder and all of the Senior Secured Creditors agree to the terms of
this Agreement by March 25, 2010, the Parties will implement the Restructuring through a
restructuring agreement consistent with the Term Sheet and that contains such other terms as are
acceptable to the Parties.

 

 

     F. HGF may seek acceptance of the Plan before the commencement of the Chapter 11 Case as
permitted by section 1126(b) of the Bankruptcy Code based on “adequate information” HGF will
provide to holders of claims entitled to vote on the Plan (“Prepetition Disclosure”). In
the alternative, HGF may file the Plan with a disclosure statement (“Disclosure Statement”)
as provided in section 1125 of the Bankruptcy Code shortly after the filing of the Chapter 11 Case.
HGF intends to use its commercially reasonable efforts to have the Plan confirmed by the United
States Bankruptcy Court for the District of Minnesota (the “Bankruptcy Court”) as
expeditiously as possible under the Bankruptcy Code and the Federal Rules of Bankruptcy Procedure
(the “Bankruptcy Rules”). In the course of the Chapter 11 Case, HGF intends to use its
commercially reasonable efforts to have the Prepetition Disclosure approved as meeting the
requirements of section 1126(b) or the Disclosure Statement approved under section 1125(b) of the
Bankruptcy Code.

     G. In order to expedite the implementation of the Restructuring, the Senior Secured Creditors
that have executed this Agreement (the “Executing Senior Secured Creditors”) and the
Bondholder are prepared to commit, on the terms and subject to the conditions of this Agreement, to
consummate the Restructuring and the transactions contemplated by the Term Sheet and, if necessary,
when properly solicited to do so, to vote their claims (as such term is defined in the Bankruptcy
Code) to accept the Plan.

     NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements set
forth herein, and for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the Parties hereby agree as follows:

     1. Voting. The Executing Senior Secured Creditors represent and warrant that, as of
the date hereof, they collectively hold at least two-thirds in amount and are more than fifty
percent of the number of the holders of Senior Secured Claims (the “Controlling Senior Secured
Claims”), with the power to vote and dispose of such claims. The Bondholder represents and
warrants that, as of the date hereof, it is the holder of 100% of the claims based on Bonds
(together with the Controlling Senior Secured Claims, the “Relevant Claims”) with the power
to vote and dispose or the power to direct the Trustee to vote and dispose of such claims. The
Executing Senior Secured Creditors and the Bondholder agree that, so long as this Agreement shall
remain in effect, when properly solicited to do so, they will (a) support, and otherwise use their
commercially reasonable efforts to take, all actions required or otherwise necessary to consummate
the Restructuring and the transactions contemplated by the Term Sheet and execute such instruments,
documents and agreements, including the Definitive Documents (as defined in the Term Sheet),
necessary to consummate the Restructuring, or (b) timely vote their Relevant Claims (and not revoke
or withdraw such vote) to accept the Plan and shall restructure the obligations of HGF consistent
with the terms and conditions of the Term Sheet and this Agreement, provided,
however, that the terms of the Plan and the Prepetition Disclosure or the Disclosure
Statement are substantially the terms set forth in the Term Sheet and include such other terms as
are acceptable to the Parties.

     2. Consummation of the Restructuring. The Parties agree that, so long as
this Agreement remains in effect, they will support, and otherwise use their commercially
reasonable efforts to take, all actions required or otherwise necessary to consummate the
Restructuring and the transactions contemplated by the Term Sheet. The foregoing obligation
includes, but is not

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limited to, (a) executing the Definitive Documents, (b) assisting, as necessary, in the
preparation and negotiation of the Definitive Documents, (b) voting in favor of the Plan, and (c)
otherwise taking such actions as are necessary to be able to consummate the Restructuring and the
transactions contemplated by the Term Sheet as expeditiously as possible, provided,
however, that the Plan is consistent with the Term Sheet and contains such other terms as
are acceptable to the Parties.

     3. Restriction on Transfer. The Bondholder and each Executing Senior Secured Creditor
hereby agrees that, so long as this Agreement shall remain in effect, it shall not sell, transfer
or assign any of its Relevant Claims or any option thereon or any right or interest therein, unless
the transferee thereof agrees in writing to be bound by all the terms of this Agreement by
executing a counterpart signature page of this Agreement and the transferor promptly provides HGF
and ABE with a copy thereof.

     4. HGF and ABE Agreements. In the event that the Restructuring is being implemented
through the Plan, HGF and ABE hereby agree to use commercially reasonable efforts to have the
Prepetition Disclosure or Disclosure Statement approved by the Bankruptcy Court, and thereafter to
use commercially reasonable efforts to obtain an order of the Bankruptcy Court confirming the Plan,
in each case, as expeditiously as possible under the Bankruptcy Code and the Bankruptcy Rules, and
consistent with the terms and conditions set forth in the Term Sheet and this Agreement. Upon
confirmation of the Plan, ABE agrees to make the cash contributions to HGF required by paragraph 4
of the Term Sheet and on the terms contained therein.

     5. Support of the Restructuring. As long as this Agreement remains in effect, (x) the
Parties will, on the terms and subject to the conditions of the Term Sheet and this Agreement,
support the Restructuring, and (y) the Bondholder and each Executing Senior Secured Creditor will,
when properly solicited to do so, (i) support, and otherwise use their commercially reasonable
efforts to take, all actions required or otherwise necessary to consummate the Restructuring and
the transactions contemplated by the Term Sheet and execute such instruments, documents and
agreements, including the Definitive Documents, necessary to consummate the Restructuring, or (ii)
vote for the Plan, provided, however, that the Plan implements a restructuring
consistent with the Term Sheet and containing such other terms as are acceptable to the Bondholder
and Executing Senior Secured Parties. As long as this Agreement remains in effect, none of the
Parties will (a) object to confirmation of the Plan or otherwise commence any proceeding to oppose
or alter the Plan or any other reorganization related documents or agreements (the “Plan
Documents”), (b) vote for, consent to, support or participate in the formulation of any other
plan of reorganization or liquidation proposed or filed or to be proposed or filed in any chapter
11 or chapter 7 case commenced in respect of HGF, (c) directly or indirectly seek, solicit, support
or encourage any other plan, sale, proposal or offer of dissolution, winding up, liquidation,
reorganization, merger or restructuring of HGF that could reasonably be expected to prevent, delay
or impede the successful restructuring of HGF as contemplated by the Term Sheet, the Plan or the
Plan Documents, (d) object to approval of the Prepetition Disclosure or the Disclosure Statement or
the solicitation of consents to the Plan, except to the extent that it believes, in good faith,
that the Prepetition Disclosure or the Disclosure Statement contains a material misstatement or
omission of a material fact, or (e) take

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any other action with respect to HGF that is inconsistent with, or that would delay
confirmation of, the Plan.

     6. Acknowledgement. This Agreement is not a solicitation for consents to the Plan.
HGF will not solicit acceptance of the Plan by the Bondholder or the Senior Secured Creditors until
the Bondholder and each Senior Secured Creditor has received the Prepetition Disclosure or the
Disclosure Statement.

     7. Termination of Agreement. The Bondholder and each Executing Senior Secured
Creditor may terminate its obligations hereunder and, if applicable, rescind its vote on the Plan
(which vote shall be null and void and have no further force and effect), but only if (a) in the
event that HGF, ABE, the Bondholder and all of the Senior Secured Creditors execute this Agreement,
the Restructuring does not occur within 55 days after the effective date of this Agreement, or (b)
the effective date of the Plan does not occur on or before July 9, 2010, or (c) HGF does not file
the Chapter 11 Case by April 26, 2010 or (d) the Restructuring is consummated. Upon such
termination, ABE and HGF will be estopped from opposing any efforts by the Bondholder or an
Executing Senior Secured Creditor to withdraw its vote pursuant to Bankruptcy Rule 3018 or under
other applicable law, including, without limitation, applicable securities law.

     8. Effectiveness. This Agreement will not become effective and binding on the parties
hereto unless and until the ABE, HGF, the Bondholder and Senior Secured Creditors holding
Controlling Senior Secured Claims have executed and delivered counterpart signature pages hereto.

     9. Representations and Warranties. Each of the Parties represents and warrants to
each other that the following statements are true, correct and complete as of the date hereof:

	 	(a)	 	Corporate Power and Authority. It has all requisite corporate,
partnership or LLC power and authority to enter into this Agreement and to carry out
the transactions contemplated by, and perform its respective obligations under, this
Agreement.
	 
	 	(b)	 	Authorization. The execution and delivery of this Agreement and the
performance of its obligations hereunder have been duly authorized by all necessary
corporate, partnership or LLC action on its part.
	 
	 	(c)	 	Binding Obligation. Subject to the provisions of sections 1125 and
1126 of the Bankruptcy Code, if applicable, this Agreement is the legally valid and
binding obligation of it, enforceable against it in accordance with its terms, except
to the extent that enforcement may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws relating to the rights of a creditor against a
debtor, or by equitable principles relating to enforceability.

     10. Further Acquisition of Claims. This Agreement shall in no way be construed to
preclude any Executing Senior Secured Creditor from acquiring additional claims based on
obligations owed under the Senior Credit Agreement. However, any such additional claims so

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acquired will automatically be deemed to be Relevant Claims and to be subject to the terms of
this Agreement.

     11. Amendments. This Agreement may not be modified, amended or supplemented without
the prior written consent of HGF, ABE, the Bondholder and the Executing Senior Secured Creditors.

     12. Impact of Appointment to Creditors Committee. If any official creditors committee
is appointed by the United States Trustee in the Chapter 11 Case and the United States Trustee
appoints the Bondholder or any Executing Senior Secured Creditor to be a member of such official
committee pursuant to section 1102 of the Bankruptcy Code, then the fact of such service on such
committee shall not otherwise affect the continuing obligations of the Bondholder or such Executing
Senior Secured Creditor under this Agreement or the validity or enforceability of this Agreement;
provided, however, that nothing contained herein shall prevent the Bondholder or
such Executing Senior Secured Creditor, in its capacity as a member of such official committee,
from acting in a manner consistent with its fiduciary duties as a member of such official
committee.

     13. Governing Law; Jurisdiction. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York, without regard to any conflicts of law
provision that would require the application of the law of any other jurisdiction. By its
execution and delivery of this Agreement, each of the Parties hereby irrevocably and
unconditionally agrees for itself that any legal action, suit or proceeding against it with respect
to any matter under or arising out of or in connection with this Agreement or for recognition or
enforcement of any judgment rendered in any such action, suit or proceeding, may be brought in the
United States District Court for the Southern District of New York. By execution and delivery of
this Agreement, each of the Parties hereby irrevocably accepts and submits itself to the
nonexclusive jurisdiction of such court, generally and unconditionally, with respect to any such
action, suit or proceeding. Notwithstanding the foregoing consent to New York jurisdiction, upon
the commencement of the Chapter 11 Case, each of the Parties hereby agrees that the Bankruptcy
Court shall have exclusive jurisdiction over all matters arising out of or in connection with this
Agreement.

     14. Headings. The headings of the sections, paragraphs and subsections of this
Agreement are inserted for convenience only and shall not affect the interpretation hereof.

     15. Successors and Assigns. This Agreement is intended to bind and inure to the
benefit of the Parties and their respective successors, assigns, heirs, executors, administrators
and representatives.

     16. Prior Negotiations. This Agreement and the Term Sheet supersede all prior
negotiations with respect to the subject matter hereof.

     17. Counterparts. This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original and all of which shall constitute one and the same Agreement.
This Agreement may be executed by facsimile, pdf or other electronic transmission of signatures.

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     18. No Third-Party Beneficiaries. Unless expressly stated herein, this Agreement
shall be solely for the benefit of the Parties and no other person or entity shall be a third-party
beneficiary hereof.

     19. Consideration. It is hereby acknowledged by the parties hereto that no
consideration shall be due or paid to the Bondholder or the Executing Senior Secured Creditors for
their agreement to vote to accept the Plan in accordance with the terms and conditions of this
Agreement other than ABE’s and HGF’s agreement to use commercially reasonable efforts to obtain
approval of the Prepetition Disclosure or the Disclosure Statement and commercially reasonable
efforts to confirm the Plan in accordance with the terms and conditions of this Agreement and the
Term Sheet.

     20. No Waiver of Participation and Reservation of Rights. Except as expressly
provided in this Agreement, nothing contained herein is intended to, or does, in any manner waive,
limit, impair or restrict the ability of the Bondholder or the Executing Senior Secured Creditors
to protect or preserve their rights, remedies and interests, including, without limitation, their
claims against HGF or their full participation in any case filed by or against HGF or any of its
affiliates under the Bankruptcy Code. If the Restructuring and the transactions contemplated by
this Agreement, including, without limitation, the Plan, are not consummated, or if this Agreement
is terminated for any reason, then the Bondholder and the Executing Senior Secured Creditors, as
well as the other Parties, fully reserve any and all of their rights, remedies, interests and
claims against the other Parties.

[Remainder of this page is blank]

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IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be executed and delivered by
its duly authorized officer as of the date first above written.

	 	 	 	 	 
	 	HEARTLAND GRAIN FUELS, L.P.

 	 
	 	By:  	Dakota Fuels, Inc.
 	 
	 	 	Its general partner 	 
	 	 	 
	 	By:  	 /s/ Richard R. Peterson
 	 
	 	 	Name:  	Richard R. Peterson 	 
	 	 	Title:  	CEO/President 	 
	 	 	 
	 	ADVANCED BIOENERGY, LLC

 	 
	 	By:  	/s/  Richard R. Peterson
 	 
	 	 	Name:  	Richard R. Peterson 	 
	 	 	Title:  	CEO/President	 
	 
	 	BANCO SANTANDER, S.A., NEW YORK BRANCH,

as Senior Secured Creditor
 	 
	 	 	 
	 	By:  	/s/ Jorge Saavedra 	 
	 	 	Name:	Jorge Saavedra 	 
	 	 	Title:  	Executive Director 	 
	 
	 	 	 
	 	By:  	/s/ Jesus Lopez
 	 
	 	 	Name:  	Jesus Lopez 	 
	 	 	Title:  	Senior Vice President 	 

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	 	COÖPERATIEVE CENTRALE RAIFFEISEN-

BOERENLEENBANK B.A.,
“RABOBANK NEDERLAND”, NEW YORK BRANCH,

as Senior Secured Creditor

 	 
	 	By:  	/s/ Andrew Sherman 	 
	 	 	Name:  	Andrew Sherman 	 
	 	 	Title:  	Executive Director 	 
	 
	 	 	 
	 	By:  	/s/ John McMahon
 	 
	 	 	Name:  	John McMahon 	 
	 	 	Title:  	Managing Director 	 
	 
	 	FARM CREDIT BANK OF TEXAS,

as Senior Secured Creditor

 	 
	 	By:  	/s/ Alan Robinson 	 
	 	 	Name:  	Alan Robinson 	 
	 	 	Title:  	Vice President 	 
	 
	 	KEB NY FINANCIAL CORP.,

as Senior Secured Creditor

 	 
	 	By:  	/s/ Yeon Hak Jeong 	 
	 	 	Name:  	Yeon Hak Jeong 	 
	 	 	Title:  	President 	 
	 
	 	 	 
	 	By:  	/s/ Seung Bum Woo
 	 
	 	 	Name:  	Seung Bum Woo 	 
	 	 	Title:  	Senior Vice President 	 

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	 	MARSHALL FINANCIAL GROUP, LLC,

a Delaware limited liability company,

as Senior Secured Creditor

 	 
	 	By:  	OUTSOURCE SERVICES
 MANAGEMENT, LLC, 

a Nevada  limited liability company, as Attorney-In-Fact
for Marshall Financial Group, LLC 	 
	 	 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	NORDKAP BANK AG,

as Senior Secured Creditor

 	 
	 	By:  	/s/ Gerig 	 
	 	 	Name:  	Gerig 	 
	 	 	Title:  	CIO 	 
	 
	 	 	 
	 	By:  	/s/ Alig
 	 
	 	 	Name:  	Alig 	 
	 	 	Title:  	CFO 	 
	 
	 	WESTLB AG, NEW YORK BRANCH,

as Senior Secured Creditor

 	 
	 	By:  	/s/ E. Keith Min 	 
	 	 	Name:  	E. Keith Min 	 
	 	 	Title:  	Managing Director 	 
	 
	 	 	 
	 	By:  	/s/ Dominick D’Ascoli
 	 
	 	 	Name:  	Dominick D’Ascoli 	 
	 	 	Title:  	Director 	 

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	 	OPPENHEIMER ROCHESTER NATIONAL 

MUNICIPALS,
as Bondholder

 	 
	 	By:  	/s/ Richard Stein
 	 
	 	 	Name:  	Richard Stein 	 
	 	 	Title:  	Vice President 	 

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Exhibit A

Term Sheet

Terms of Restructuring of HGF Senior Credit Agreement with Senior Secured

Creditors and HGF Subordinate Solid Waste Facilities Revenue Bonds

The following sets forth the terms of a restructuring of the obligations of Heartland Grain Fuels,
L.P. under (a) the Senior Credit Agreement, dated as of October 1, 2007, among Heartland Grain
Fuels, L.P. as Borrower, the Lenders referred to therein and WestLB AG, New York Branch, as
Administrative Agent for the Lenders (the “Administrative Agent”), Collateral Agent for the
Senior Secured Parties (the “Collateral Agent”), Issuing Bank with respect to the Letters
of Credit, and Lead Arranger, Sole Bookrunner and Syndication Agent (as amended and supplemented,
the “Senior Credit Agreement”), and (b) the Subordinate Solid Waste Facilities Revenue
Bonds (Heartland Grain Fuels, L.P. Ethanol Plant Project) Series 2007A (the “Bonds”) issued
by Brown County, South Dakota (the “Issuer”) under that certain Bond Trust Indenture, dated
as of October 1, 2007 (the “Indenture”), between the Issuer and Wells Fargo Bank, National
Association, in its capacity as trustee of the Bonds (the “Trustee”). Capitalized terms
used herein but not otherwise defined have the meanings given to them in the Senior Credit
Agreement.

Definitions

“ABE” means Advanced BioEnergy, LLC, a Delaware limited liability company.

“Bondholder” means the sole holder of the Bonds.

“Closing” means the closing of the restructuring contemplated by this Term Sheet.

“Definitive Documents” has the meaning given in paragraph 15 below.

“HGF” means Heartland Grain Fuels, L.P., a Delaware limited partnership, which prior to the
Closing will be converted to a Delaware limited liability company.

“Monthly Date” means the last business day of each month.

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

“Restructuring Agreement” has the meaning given in paragraph 1 below.

“Senior Secured Creditors” means WestLB and the other lenders and agents referred to in the
Senior Credit Agreement (for themselves and, in certain cases, on behalf of the interest rate
protection providers referred to in the Senior Credit Agreement).

“WestLB” means WestLB AG, New York Branch.

 

 

Terms and Conditions

	1.	 	Restructuring Agreement. The Senior Secured Creditors, the Issuer, the Trustee, the
Bondholder, ABE and HGF would enter into a restructuring agreement (which may be in the form
of a plan of reorganization in the event that HGF files a chapter 11 petition) consistent with
the terms and conditions described herein and such other terms and conditions as may be agreed
to by the parties (the “Restructuring Agreement”). The Restructuring Agreement would
contemplate a release and discharge of the Indenture, Bonds and all related agreements and an
amendment of the Senior Credit Agreement on terms consistent with those set forth below. If
the parties are unable to obtain the requisite approval of the Senior Secured Creditors and
the Bondholder to the Restructuring Agreement, then, on or before April 26, 2010, and provided
that a lock-up agreement has been entered into in accordance with paragraph 14 below, HGF will
file a voluntary petition commencing a prepackaged or prenegotiated case under Chapter 11 of
Title 11 of the U.S. Code (the “Bankruptcy Code”).
	 
	2.	 	Conversion to LLC. HGF will be converted into a Delaware limited liability company
at or prior to the Closing. ABE, either directly or through one or more of its subsidiaries,
will be the sole member of HGF.
	 
	3.	 	Payments by HGF. As a condition to the Closing, HGF would be required (a) to apply
an amount equal to the sum of $10.0 million in cash (to be contributed by ABE to HGF in
accordance with paragraph 4 below) plus $5 million from its existing cash reserves to
pay Outstanding Principal Obligations in accordance with paragraph 7(a) below, and (b) if the
Closing has not occurred before April 1, 2010, to pay to the Lenders a fee of $10,000 per day,
which will accrue starting on April 1, 2010 until the Closing and will be payable at the
Closing (such amount and fee collectively, the “Closing Payments”).
	 
	4.	 	Payments by ABE. As a condition to the Closing, ABE will contribute to HGF an amount
equal to the sum of (a) $10.0 million in cash, which HGF will apply in accordance with
paragraph 3 above, plus (b) $2.25 million, which HGF will apply in accordance with
paragraph 5 below.
	 
	5.	 	Payment on Bonds and Satisfaction. At the Closing, (a) the Bondholder would receive
a payment from HGF of $2.25 million in full satisfaction of the debt owed under the Bonds and
all related financing documents, as well as payment of certain other funds held by Trustee,
(b) the Trustee would transfer to the Administrative Agent for the account of the Lenders an
amount equal to $172,948.56, representing 50% of certain disputed interest payments that HGF
previously transferred to the Trustee and such amount shall be applied towards interest
accrued and unpaid under the Senior Credit Agreement prior to the Closing, and (c) the Bonds
and all related financing documents, and all obligations of HGF, ABE, Dakota Fuels, Inc. and
ABE Heartland, LLC thereunder, shall be terminated and cancelled.

 

 

	6.	 	Restructuring Fee. On the earlier of the Final Maturity Date and the date on which
the Loans are repaid in full, HGF would be required to pay a $3 million restructuring fee to
the Lenders (the “Restructuring Fee”).
	 
	7.	 	Adjustments to Indebtedness under Senior Credit Agreement. The outstanding
obligations under the Senior Credit Agreement immediately before the Closing Payments are made
consist of Term Loans in an aggregate principal amount of $87,979,000, Working Capital Loans
in an aggregate principal amount of $7,100,000 and Swap Termination Value under outstanding
Interest Rate Protection Agreements in an aggregate amount of $4,212,550 (such amounts
collectively, the “Outstanding Principal Obligations”). In consideration for the
Closing Payments and the Restructuring Fee:

	 	a.	 	at the Closing, the Closing Payments would be applied to repay the
Outstanding Principal Obligations on a pro rata basis;
	 
	 	b.	 	the remaining amount of Outstanding Principal Obligations following
such repayments, i.e., $84,291,550, would be deemed Term Loans and would be
allocated to each of the Lenders on a pro rata basis based on the amount of such
remaining Outstanding Principal Obligations held by that Lender or its Affiliate
that is an Interest Rate Protection Provider as set forth on Annex I hereto;
	 
	 	c.	 	interest accrued through the Closing on outstanding Term Loans and
Working Capital Loans, and any Net Swap Payments owing to any Interest Rate
Protection Provider, would be reduced to zero;
	 
	 	d.	 	interest rates applicable to the Loans would be amended as follows:

	 	i.	 	for the period from the Closing through the
second anniversary of the Closing, interest would be payable at a rate
of 150 basis points per annum plus LIBOR;
	 
	 	ii.	 	for the period from the second anniversary of the
Closing through the third anniversary of the Closing, interest would be
payable at a rate of 300 basis points per annum plus LIBOR; and
	 
	 	iii.	 	after the third anniversary of the Closing,
interest would be payable at a rate of 400 basis points per annum plus
LIBOR;

	 	e.	 	the Borrower would be permitted to enter into a prepaid interest
rate cap for the Term Loans on terms acceptable to the Required Lenders;
	 
	 	f.	 	the Final Maturity Date would be extended to March 31, 2016; and

 

 

	 	g.	 	commencing on the first Quarterly Payment Date after the Closing,
outstanding principal on the Loans would be repaid pursuant to quarterly
scheduled payments of $750,000, quarterly cash sweeps as provided in the Revenue
Account Waterfall described below and a payment on the final maturity date of all
remaining amounts.

	8.	 	Debt Service Reserve Account. The Debt Service Reserve Account will be funded and
replenished in accordance with the Revenue Account Waterfall described below. If, on any
date, amounts are withdrawn from the Debt Service Reserve Account to cover any shortfall in
the amounts available at sub-paragraphs (c), (d) or (e) of the Revenue Account Waterfall to
pay the obligations described therein, then, no later than the second Quarterly Payment Date
following such date, the Borrower shall ensure that the Debt Service Reserve Account is fully
funded to the Debt Service Reserve Required Amount (which will not be less than $3 million).
	 
	9.	 	Working Capital Reserve Account. The Working Capital Reserve Account will be funded
with up to $4 million (the “WCR Required Amount”) and replenished in accordance with
the Revenue Account Waterfall described below. In addition, at the Closing the Working
Capital Reserve Account will also be funded, in accordance with the Revenue Account Waterfall
described below, with up to an additional $2 million to pay costs of the Huron rail project
that is currently anticipated to be completed in the spring of 2010.
	 
	10.	 	Revenue Account Waterfall. All revenues shall be applied in the following order (the
“Revenue Account Waterfall”):

	 	a.	 	At the Closing and on each Monthly Date (or, with respect to the cost
of corn and natural gas, on any date), an amount equal to the budgeted operation
and maintenance expenses that are then due and payable or (except with respect to
the cost of corn and natural gas) will become due and payable during the
immediately succeeding calendar month (or, in the case of the Closing, during the
remainder of the then-current calendar month, if any), subject in each case (other
than with respect to the cost of corn and natural gas) to an agreed budget
variance, will be transferred to a dedicated project account to pay such expenses;
	 
	 	b.	 	On each Monthly Date, an amount equal to the maintenance capital
expenses that are or will become due and payable during the immediately succeeding
calendar month (subject to Independent Engineer approval for expenses that would
exceed $500,000 during the then current Fiscal Year) will be transferred to a
dedicated project account to pay such expenses;
	 
	 	c.	 	On any date, to pay fees, costs and expenses that are then due and
payable in accordance with the Senior Credit Agreement;

 

 

	 	d.	 	On any date, to pay interest on the Loans that is then due and
payable in accordance with the Senior Credit Agreement and on the Closing Date to
pay the cost of any interest rate cap;
	 
	 	e.	 	On each Quarterly Payment Date, to make scheduled principal payments
on the Loans in accordance with the Senior Credit Agreement;
	 
	 	f.	 	On the Closing Date and each Quarterly Payment Date, to fund the Debt
Service Reserve Account up to the Debt Service Reserve Required Amount;
	 
	 	g.	 	On the Closing Date and each Quarterly Payment Date, to fund the
Working Capital Reserve Account to the WCR Required Amount and, on the Closing
Date only, to fund the Working Capital Reserve Account in an additional amount up
to $2 million to pay costs of the Huron rail project;
	 
	 	h.	 	On each Quarterly Payment Date, provided no Default or Event of
Default has occurred and is continuing, to release a tax distribution to equity
holders;
	 
	 	i.	 	On each Quarterly Payment Date, to prepay the Loans in an amount
equal to (x) 100% of the cash remaining after item (h) or (y) after the
outstanding principal on the Loans is paid down to $25 million, 75% of the cash
remaining after item (h); and
	 
	 	j.	 	On or within 30 days following each Quarterly Payment Date,
immediately upon the satisfaction of the Release of Equity Distributions
conditions described below, all cash available may be used to make equity
distributions.

	11.	 	Release of Equity Distributions. On a quarterly basis, equity distributions
(excluding the tax distribution permitted in item (h) of the Revenue Account Waterfall) may be
made subject to, without limitation, (i) no Default or Event of Default existing or resulting
from the equity distribution, (ii) the Debt Service Reserve Account being fully funded, (iii)
the Working Capital Reserve Account being funded to the WCR Required Amount, (iv) each of the
Historical Debt Service Coverage Ratio and the Prospective Debt Service Coverage Ratio (as
each such term is defined in the Senior Credit Agreement) being greater than or equal to
1.5:1.0 and (v) no more than $25 million of principal being outstanding on the Loans.
	 
	12.	 	Management Agreement. At the Closing, HGF would enter into a management agreement
with ABE to provide management services to HGF for $80,000 per month during the first full
twelve months after Closing, and for each month thereafter, two cents per gallon multiplied by
the actual number of gallons of denatured ethanol produced for the calendar month most
recently ended, in each

 

 

	 	 	case payable in arrears, and containing such other terms as may be agreed to by ABE, HGF
and the Senior Secured Creditors.
	 
	13.	 	Claims of Other Creditors. All undisputed, liquidated and matured claims of HGF’s
creditors other than the claims of the Bondholder and the Senior Secured Creditors will be
paid in full in the ordinary course of business or pursuant to the Restructuring Agreement in
the event of a bankruptcy filing by HGF.
	 
	14.	 	Lock-Up Agreement. As soon as practicable after the acceptance of this term sheet by
ABE, HGF, the Bondholder and a simple majority of the Lenders holding at least two-thirds of
the amounts outstanding under the Senior Credit Agreement, the parties will work in good faith
to enter into a binding agreement (the “Lock-Up Agreement”) which will obligate ABE,
HGF, the Bondholder and such Lenders, subject to appropriate exceptions, to work in good faith
to effectuate the transactions contemplated by this term sheet and to vote for a plan of
reorganization that contains the terms set forth in this term sheet.
	 
	15.	 	Definitive Documents. The transactions contemplated by the above terms would be
effected by mutually agreed agreements, instruments and other documents as may be deemed
reasonably necessary by ABE, HGF, the Administrative Agent, the Senior Secured Creditors, the
Trustee, the Issuer and the Bondholder to consummate the foregoing transactions (such
agreements, instruments and other documents collectively, the “Definitive Documents”).
	 
	16.	 	Approvals. The Definitive Documents are subject to the internal credit approvals of
each of the Senior Secured Creditors and board approval by each of the other parties.

This Term Sheet is subject to negotiation and execution of the Definitive Documents described
above. Unless and until such Definitive Documents are executed by and delivered to the parties
thereto, none of the parties shall have any obligations with respect to the above-referenced terms
or the transactions contemplated herein except as set forth in the Lock-Up Agreement.

 

 

ANNEX I

	 	 	 	 	 	 	 	 	 
	 	 	PRINCIPAL	 	 	% OF TOTAL	 
	LENDER	 	AMOUNT	 	 	FACILITIES	 
	WESTLB AG, NEW YORK BRANCH.
	 	 	21,440,570	 	 	 	25.4362	%
	BANCO SANTANDER, S.A.
	 	 	14,682,240	 	 	 	17.4184	%
	FARM CREDIT BANK.OF TEXAS
	 	 	8,234,619	 	 	 	9.7692	%
	KEB NY FINANCIAL CORP.
	 	 	1,646,924	 	 	 	1.9538	%
	MARSHALL FINANCIAL GROUP, LLC
	 	 	7,164,118	 	 	 	8.4992	%
	NORDKAP BANK AG
	 	 	8,234,619	 	 	 	9.7692	%
	RABOBANK NEDERLAND,NEW YORK BRANCH
	 	 	22,888,461	 	 	 	27.1539	%
	 
	 	 	 	 	 	 
	Total
	 	 	84,291,550	 	 	 	100.0000	%exv10w2

Exhibit 10.2

BACKSTOP COMMITMENT AGREEMENT

          BACKSTOP COMMITMENT AGREEMENT (this “Agreement”) dated as of April 7, 2010, by and
between Advanced BioEnergy, LLC, a Delaware limited liability company (“ABE”) and Hawkeye
Energy Holdings, LLC, a Delaware limited liability company (“Hawkeye”).

          WHEREAS, Hawkeye owns 3,333,333 membership units of ABE (“ABE Units”), which is equal
to approximately 18.7% of the ABE Units outstanding as of the date hereof (the percentage of the
ABE Units owned by Hawkeye as of the date hereof, “Existing Hawkeye Percentage”);

          WHEREAS, Heartland Grain Fuels, L.P., a Delaware limited partnership (“HGF”) is a
subsidiary of ABE;

          WHEREAS, HGF is the borrower under (a) the Senior Credit Agreement, dated as of October 1,
2007, among HGF, as Borrower, the Lenders referred to therein and WestLB AG, New York Branch, as
Administrative Agent for the Lenders (the “Administrative Agent”), Collateral Agent for the
Senior Secured Parties (together with the Lenders, the Administrative Agent and the other lender
parties thereto, the “Senior Credit Agreement Lender Parties”), (as amended and
supplemented, the “Senior Credit Agreement”), and (b) the Subordinate Solid Waste
Facilities Revenue Bonds (Heartland Grain Fuels, L.P. Ethanol Plant Project) Series 2007A (the
“Bonds” and together with the Senior Credit Agreement the “HGF Debt”) issued by
Brown County, South Dakota;

          WHEREAS, HGF is in default under the HGF Debt;

          WHEREAS, ABE and HGF propose to restructure the HGF Debt (the “Restructuring”) in
accordance with the terms set forth on the Proposed Terms attached hereto as Exhibit A (the
“Restructuring Term Sheet”);

          WHEREAS, the Restructuring would be effected pursuant to a lock-up agreement (the “Lock-Up
Agreement”) that contemplates either (a) approval of the Restructuring by the requisite Senior
Credit Agreement Lender Parties (a “Contractual Restructuring”) or (b) if such requisite
approval is not obtained, a voluntary petition commencing a prepackaged or prenegotiated case under
Chapter 11 of Title 11 of the U.S. Code (the “Bankruptcy Code”) in a United States
Bankruptcy Court (the “Bankruptcy Court”) (a “Chapter 11 Restructuring” and the
plan of reorganization implementing the terms set forth on the Restructuring Term Sheet, the
“Plan”);

          WHEREAS, the Restructuring would require ABE to invest $10.0 million in cash in HGF;

          WHEREAS, ABE proposes to raise net proceeds of up to $10.0 million to invest in HGF by
offering for sale in a private placement newly-issued ABE Units with a purchase price of $1.50 per
unit (the “Purchase Price”) and an aggregate purchase price of up to $10.0 million (as
further described in this Agreement, the “Private Offering”);

          WHEREAS, the Private Offering would offer ABE Units to each of the members of ABE who has
established to ABE’s satisfaction that it is an accredited investor on a pro-rata basis and may
offer ABE Units to other accredited investors at the discretion of ABE’s Board;

 

 

          WHEREAS, the Senior Credit Agreement Lender Parties require as a condition to the Lock-Up
Agreement that ABE have evidence of its ability to invest $10.0 million in cash in HGF;

          WHEREAS, in order to facilitate the Restructuring and the Private Offering, pursuant to this
Agreement and subject to the terms, conditions and limitations set forth herein, Hawkeye agrees to
purchase, and ABE agrees to issue and sell, for the Purchase Price per ABE Unit, (a) its pro-rata
portion of the ABE Units offered in the Private Offering (“Hawkeye Pro-Rata Units”) and (b)
all ABE Units offered in the Private Offering that are not purchased by others pursuant to the
Private Offering and this Agreement (the “Unsubscribed Units” and, together with the
Hawkeye Pro-Rata Units, the “Hawkeye Additional Units”);

          WHEREAS, the $10 million Private Offering would require amendment of ABE’s Limited Liability
Company Agreement to increase the number of ABE Units authorized thereby (the “LLC Agreement
Amendment”);

          WHEREAS, members of ABE with 49.9% of the ABE Units entitled to vote have entered into
Amendment No. 1 to the Voting Agreement dated as of August 28, 2009, pursuant to which such members
agree to vote in favor of the LLC Agreement Amendment;

          WHEREAS, simultaneous with the execution of this Agreement, HGF and all of HGF’s subsidiaries,
as applicable, are entering into with Hawkeye Gold, LLC Exclusive Ethanol Marketing Agreements (the
“Ethanol Agreements”) in the form attached hereto as Exhibit B, which such Ethanol
Agreements shall apply to substantially all ethanol produced by HGF and its subsidiaries and shall
become effective, subject to the transition period terms set forth therein, simultaneous with the
closing of the Restructuring (the “Restructuring Closing,” which such term, with respect to
the Ethanol Agreements and Distillers Grain Agreement (as defined below), shall include the closing
of any material restructuring of the HGF Debt, regardless of whether such restructuring is on the
terms set forth on the Restructuring Term Sheet); and

          WHEREAS, simultaneous with the execution of this Agreement, HGF and all of HGF’s subsidiaries,
as applicable, are entering into with Hawkeye Gold, LLC Exclusive Distiller Grains Marketing
Agreement (the “Distillers Grain Agreements”) substantially in the form attached hereto as
Exhibit C, which such Distillers Grain Agreement shall apply to all distiller grains
produced by HGF and its subsidiaries at its Aberdeen, South Dakota plant and shall become effective
simultaneous with the Restructuring Closing.

          NOW, THEREFORE, in consideration of the foregoing, and the representations, warranties and
covenants set forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, ABE and Hawkeye agree as follows:

          1. The Private Offering. The Private Offering will be conducted as follows:

          (a) Subject to the terms and conditions of this Agreement, ABE hereby undertakes to
offer ABE Units for subscription by the members of ABE as set forth in this Agreement.

          (b) Each member of ABE who has established to ABE’s satisfaction that it is an
accredited investor (a “Qualified Investor”)shall be offered the opportunity to

2

 

purchase ABE Units in the Private Offering for $1.50 per ABE Unit. ABE intends to
endeavor to make such units available to Qualified Investors on a pro rata basis, however,
subject to Hawkeye’s rights hereunder, the Board of ABE will have discretion as to the
actual number of ABE Units issued to any Qualified Investor. The exact number of ABE Units
offered will be determined by the Board of ABE based on its determination of the amount of
equity needed by ABE to invest $10.0 million in HGF, net of expenses.

          (c) The Hawkeye Pro-Rata Units will be determined by dividing the number of ABE Units
owned by Hawkeye as of the date hereof by the total number of ABE Units determined by the
Board of ABE to be owned by all Qualified Investors as of the date hereof.

          (d) In the event that in connection with the Restructuring any Qualified Investor other
than Hawkeye desires to acquire a number of ABE Units (or other equity interests, or rights
to receive equity interests, of ABE) in excess of the Qualified Investor’s pro-rata share
(determined in the same manner as the Hawkeye Pro-Rata Units) or ABE elects to offer ABE
Units to any accredited investor who is not a member of ABE, ABE will consult with Hawkeye
prior to the acceptance of subscription agreements for amounts in excess of the Qualified
Investor’s pro-rata share or from any accredited investor who is not a member of ABE.
Notwithstanding anything to the contrary in this Agreement or elsewhere, without Hawkeye’s
prior written consent, such consent not to be unreasonably withheld, no participant in the
Private Offering shall be given the right to purchase a number of ABE Units that is greater
than 666,000 ABE Units more than its pro-rata share of the Private Offering (or in the case
of a purchaser that is not a member of ABE as of the date hereof, the right to purchase more
than 666,000 ABE Units).

          (e) ABE will distribute subscription forms for the ABE Units as promptly as reasonably
practicable. The date of such distribution is herein referred to as the “Distribution
Date”. ABE will be responsible for effecting the distribution of any materials related
to the Private Offering to each Qualified Investor or other offeree.

          (f) The offering period (the “Offer Period”) will commence on the Distribution
Date and will end not later than May 14, 2010, (the “Subscription Expiration Date”),
subject to ABE’s right to alter such date with the prior consent of Hawkeye (which consent
shall not be unreasonably withheld).

          (g) Hawkeye will furnish to ABE the funds necessary to purchase the Hawkeye Additional
Units required to be purchased hereunder simultaneous with the Restructuring Closing (the
date of the Restructuring Closing, the “Closing Date”).

          (h) ABE will issue the Hawkeye Additional Units to Hawkeye simultaneous with the
Restructuring Closing, and in any event in compliance with the terms of the Private
Offering.

          (i) ABE hereby agrees and undertakes to give Hawkeye written notice by electronic
facsimile transmission of a certification by an executive officer of ABE of either (i) the
number of Unsubscribed Units and the aggregate Purchase Price therefor (a “Purchase
Notice”) or (ii) in the absence of any Unsubscribed Units, of the fact that there are no
Unsubscribed Units and that the Backstop Commitment (as defined below) is

3

 

terminated (a “Satisfaction Notice”) as soon as practicable after the
Subscription Expiration Date and, in any event, not later than 12:00 p.m. New York City time
on the seventh Business Day following the Subscription Expiration Date (the date of
transmission confirmation of a Purchase Notice or a Satisfaction Notice, the
“Determination Date”). For the purposes of this Agreement, “Business Day”
means each Monday, Tuesday, Wednesday, Thursday and Friday that is not a day on which
banking institutions in New York City are generally authorized or obligated by law or
executive order to close.

     2. The Backstop Commitment.

          (a) On the basis of the representations and warranties herein contained, but subject to
the conditions set forth in Section 7, on the Closing Date (i) Hawkeye agrees to subscribe
for and purchase, and ABE agrees to issue and sell, at the aggregate Purchase Price, all of
the Hawkeye Pro-Rata Units and (ii) Hawkeye agrees to subscribe for and purchase, and ABE
agrees to issue and sell, at the aggregate Purchase Price therefor, all Unsubscribed Units
as of the Subscription Expiration Date (the commitments set forth in clauses (i) and (ii)
above, collectively, the “Backstop Commitment”).

          (b) In exchange for the Backstop Commitment, on or as soon as practicable after the
Closing Date, ABE will reimburse Hawkeye for all reasonable costs and expenses, including
professional fees and expenses, incurred in connection with the Private Offering. These
obligations are in addition to, and do not limit, ABE’s obligations under Section 8.

          (c) ABE will provide a Purchase Notice or a Satisfaction Notice to Hawkeye as provided
above, setting forth a true and accurate determination of the aggregate number of
Unsubscribed Units, if any, provided, that on the Closing Date Hawkeye will
purchase, and ABE will sell, only such number of Unsubscribed Units as are listed in the
Purchase Notice, without prejudice to the rights of Hawkeye to seek later an upward or
downward adjustment if the number of Unsubscribed Units in such Purchase Notice is
inaccurate.

          (d) All Hawkeye Additional Units will be delivered with any and all issue, stamp,
transfer or similar taxes or duties payable in connection with such delivery duly paid by
ABE.

          (e) Notwithstanding anything to the contrary in this Agreement, Hawkeye, in its sole
discretion, may designate that some or all of Hawkeye Additional Units be issued in the name
of, and delivered to, one or more of its Affiliates (as defined herein) as long as any such
Affiliate is an “accredited investor” within the meaning of rule 501 under the Securities
Act.

          3. Representations and Warranties of ABE. Each capitalized term used but not
otherwise defined in this Section 3 shall have the meaning of such term set forth in the letter
agreement, dated August 21, 2009, by and between ABE and Hawkeye (the “Letter Agreement”).
Except as disclosed in writing to Hawkeye on the date hereof (such writing, the “Disclosure
Letter”), ABE represents and warrants to Hawkeye as of the date hereof and as of the Closing
Date:

4

 

          (a) Authorization. ABE has the requisite limited liability company power to
execute and deliver the Offering Documents (as defined in Section 7 below) to which
ABE is a party and to perform its obligations under the Offering Documents. The execution
and delivery by ABE of the Offering Documents to which ABE is a party and the performance by
it of its obligations under the Offering Documents, including, without limitation, the
investment of the Private Offering proceeds in HGF and the issuance of the Hawkeye
Additional Units to Hawkeye, have been duly authorized, or as applicable, will have been
duly authorized when executed, by all necessary limited liability company action on the part
of ABE. The Offering Documents to which ABE is a party have been duly executed and
delivered, or as applicable, will be duly executed and delivered, by duly authorized
officers of ABE, and, assuming the due execution and delivery of the Offering Documents by
the other party or parties thereto, constitute valid and binding obligations of ABE
enforceable against ABE in accordance with their respective terms, except as may be limited
by bankruptcy, insolvency, reorganization, moratorium, or other similar laws affecting the
enforcement of creditors’ rights in general and subject to general principles of equity
(regardless of whether such enforceability is considered in a proceeding at law or in
equity).

          (b) No Conflicts. The execution and delivery of each of the Offering Documents
does not, and neither the performance by ABE of its obligations under the Offering
Documents, nor the consummation of the transactions contemplated by the Offering Documents,
including, without limitation, the investment of the Private Offering proceeds in HGF and
the issuance of the Hawkeye Additional Units to Hawkeye, will, (i) conflict with the
certificate of formation or limited liability company agreement of ABE, (ii) conflict with,
result in any violation of, constitute a default under, or give rise to a right of
termination, cancellation, or acceleration of, or any obligation or to loss of a benefit
under, any material contract of ABE, (iii) violate, constitute a default under, or cause the
forfeiture, impairment, non-renewal, revocation, or suspension of any permit of ABE, (iv)
violate any citation, order, judgment, decree, writ, or injunction, or require the consent
or approval, of any governmental entity applicable to ABE, (v) to the knowledge of ABE,
violate any law applicable to ABE, or (vi) result in the creation of any encumbrance upon
any of the assets or properties of ABE.

          (c) SEC Reports and the Memorandum.

               (i) ABE has previously made available to Hawkeye an accurate and complete copy of each
(i) registration statement, prospectus, report, schedule and definitive proxy statement
filed by ABE with the SEC since January 1, 2007 pursuant to the Securities Act or the
Exchange Act (the “SEC Reports”), and prior to the date hereof and (ii)
communication mailed by ABE to its unitholders since January 1, 2007 and prior to the date
hereof (including the Memorandum), and no such SEC Report or communication, as of the date
thereof, contained any untrue statement of a material fact or omitted any material fact
required to be stated therein or necessary in order to make the statements therein, in light
of the circumstances in which they were made, not misleading, except that information as of
a later date (but before the date hereof) shall be deemed to modify information as of an
earlier date. The SEC Reports complied in all material respects with all applicable
requirements of the Securities Act and the Exchange Act as in effect on the dates such SEC
Reports were filed. The statements in the Memorandum accurately apply to the Hawkeye
Additional

5

 

Units in the same manner and respect they apply to the ABE Units previously purchased
by Hawkeye.

               (ii) The consolidated financial statements of ABE included in the SEC Reports or the
Memorandum complied as to form in all material aspects with applicable accounting
requirements and the published rules and regulations of the SEC with respect thereto and
fairly present, in accordance with U.S. generally accepted accounting principles
consistently applied (“GAAP”), the consolidated financial position of ABE as of the
dates thereof and its consolidated results of operations and changes in financial position
for the periods then ended (subject, in the case of the unaudited interim financial
statements, to the absence of notes and normal year-end adjustments that are not expected to
be material).

          (d) Absence of Undisclosed Liabilities, Indebtedness. ABE and its subsidiaries
have no Liabilities that are required to be reflected in, reserved against, or otherwise
described in a consolidated balance sheet of ABE and its subsidiaries (or the notes thereto)
prepared in accordance with GAAP except (i) those Liabilities provided for or reserved
against in the financial statements included in the most recent SEC Report or (ii)
Liabilities arising in the ordinary course of business consistent with past practice since
March 31, 2009, which are not individually or in the aggregate material. Schedule 1
attached hereto sets forth a true and complete description of all Indebtedness of ABE and
its subsidiaries as of the date hereof and as of the time immediately following the
effectiveness of the Restructuring.

          (e) HGF Liabilities. Neither ABE nor any of its subsidiaries other than HGF
and its subsidiaries has or will have any liability or other responsibility with respect to
the Liabilities of HGF and its subsidiaries or arising from ABE’s ownership or management of
HGF and its subsidiaries, other than liabilities of ABE arising in the ordinary course of
business out of the management services provided by ABE to HGF and its subsidiaries.

          (f) Litigation. There is no claim or judicial or administrative action, suit,
proceeding, or investigation pending or, to the knowledge of ABE, threatened (i) that
questions the validity of this Agreement or the Private Offering, the performance by ABE of
the obligations to be performed by it hereunder or thereunder or the consummation of the
transactions contemplated hereby or thereby, or (ii) relating to the business of ABE or any
of its subsidiaries (as now conducted or as proposed to be conducted) or materially
affecting ABE or any of its subsidiaries or any of their respective assets or properties.

          (g) Exclusive Representations and Warranties. The representations and
warranties set forth in this Agreement and the other Offering Documents are the sole and
exclusive representations and warranties made by ABE with respect to the subject matter
hereof. Nothing in this Agreement or the other Offering Documents shall exclude or
otherwise limit in any manner any available claims Hawkeye or its Affiliates may have
against ABE, including without limitation, pursuant to SEC Rule 10b-5.

          4. Representations and Warranties of Hawkeye. Hawkeye represents and warrants to, and
agrees with, ABE as set forth below. Each representation, warranty and agreement is made as of the
date hereof and as of the Closing Date:

6

 

          (a) Authorization. Hawkeye has the requisite limited liability company power
to execute and deliver the Offering Documents to which Hawkeye is a party and to perform its
obligations under such Offering Documents. The execution and delivery by Hawkeye of the
Offering Documents to which Hawkeye is a party and the performance by it of its obligations
under such Offering Documents have been duly authorized, or as applicable, will have been
duly authorized when executed, by all necessary limited liability company action on the part
of Hawkeye. The Offering Documents to which Hawkeye is a party have been duly executed and
delivered, or as applicable, will be duly executed and delivered, by duly authorized
officers of Hawkeye, and, assuming the due execution and delivery of such Offering Documents
by the other party or parties thereto, constitute valid and binding obligations of Hawkeye
enforceable against Hawkeye in accordance with their respective terms, except as may be
limited by bankruptcy, insolvency, reorganization, moratorium, or other similar laws
affecting the enforcement of creditors’ rights in general and subject to general principles
of equity (regardless of whether such enforceability is considered in a proceeding at law or
in equity).

          (b) No Conflicts. The execution and delivery of each of the Offering Documents
to which Hawkeye is a party does not, and neither the performance by Hawkeye of its
obligations under such Offering Documents, nor the consummation of the transactions
contemplated by such Offering Documents, will, (i) conflict with the certificate of
formation or limited liability company agreement of Hawkeye, (ii) conflict with, result in
any violation of, constitute a default under, or give rise to a right of termination,
cancellation, or acceleration of, or any obligation or to loss of a benefit under, any
material contract of Hawkeye, (iii) violate, constitute a default under, or cause the
forfeiture, impairment, non-renewal, revocation, or suspension of any permit of Hawkeye,
(iv) violate any citation, order, judgment, decree, writ, or injunction, or require the
consent or approval, of any governmental entity applicable to Hawkeye, (v) to the knowledge
of Hawkeye, violate any law applicable to Hawkeye, or (vi) result in the creation of any
encumbrance upon any of the assets or properties of Hawkeye.

          (c) Litigation. There is no claim or judicial or administrative action, suit,
proceeding, or investigation pending or, to the knowledge of Hawkeye, threatened that
questions the validity of this Agreement, the performance by Hawkeye of the obligations to
be performed by it hereunder or the consummation of the transactions contemplated hereby.

          (d) Available Funds. Hawkeye has and will have on the Closing Date the funds
necessary to satisfy its obligations under this Agreement.

          5. Additional Covenants of ABE.

          (a) ABE agrees that the Contractual Restructuring or the Chapter 11 Restructuring
(including the Plan), as applicable, (i) will be consistent with the Restructuring Term
Sheet and (ii) will contain only such other terms and conditions that are reasonably
acceptable to Hawkeye. ABE will provide to Hawkeye and its counsel a copy of the proposed
Confirmation Order or Contractual Restructuring documentation, as applicable, and a
reasonable opportunity to review and comment on such order prior to such Confirmation Order
being filed with the Bankruptcy Court or such Contractual Restructuring documentation
becoming effective.

7

 

          (b) ABE agrees with Hawkeye to use reasonable best efforts to effectuate the Private
Offering as provided herein and to use best efforts to obtain each of the approvals set forth on the Disclosure Letter (and any other approvals that should have been set forth on the Disclosure
Letter). All proceeds from the Private Offering will be invested in HGF
and used by HGF to pay-down HGF debt in accordance with the Restructuring Term Sheet.

          (c) ABE agrees to notify Hawkeye as and when requested by Hawkeye of the aggregate
number of ABE Units known by ABE to have been subscribed for pursuant to the Private
Offering.

          (d) ABE agrees with Hawkeye to determine the number of Unsubscribed Units, if any, in
good faith, to provide a Purchase Notice or a Satisfaction Notice that accurately reflects
the number of Unsubscribed Units as so determined and to provide to Hawkeye a certification
by the Subscription Agent of the Unsubscribed Units or, if such certification is not
available, such backup to the determination of the Unsubscribed Units as Hawkeye may
reasonably request.

          6. Additional Covenants of Hawkeye. Hawkeye agrees with ABE:

          (a) To provide ABE with such information as ABE reasonably requests regarding Hawkeye
for inclusion in the Disclosure Statement or in any Offering Document.

          (b) Not to file any pleading or take any other action in the Bankruptcy Court with
respect to this Agreement, the Plan, the Disclosure Statement or the Confirmation Order or
the consummation of the transactions contemplated hereby or thereby that is inconsistent
with this Agreement or ABE’s efforts to obtain the entry of the Court Orders consistent with
this Agreement.

          7. Conditions to the Obligations of Hawkeye. The obligation of Hawkeye to purchase
Hawkeye Additional Units pursuant to the Backstop Commitment on the Closing Date are subject to the
following conditions:

          (a) ABE shall have entered into a Registration Rights Agreement (the “Registration
Rights Agreement”) with respect to the Hawkeye Additional Units that gives Hawkeye
registration rights with respect to the Hawkeye Additional Units that are substantially the
same as the registration rights granted to Hawkeye pursuant to that Registration Rights
Agreement, dated August 28, 2009, as amended or supplemented from time to time, by and
between ABE and Hawkeye or such other terms as ABE and Hawkeye may mutually agree;

          (b) Hawkeye shall have received enforceable pro-rata participation rights and
anti-dilution rights with respect to the Hawkeye Additional Units that are substantially the
same as the pro-rata participation rights and anti-dilution rights set forth in Sections 2
and 3, respectively, of the Letter Agreement or such other terms as ABE and Hawkeye may
mutually agree;

          (c) following the Restructuring Closing, each of the Ethanol Agreements and the
Distillers Grain Agreements shall be in full force and effect;

          (d) the Registration Rights Agreement, the Ethanol Agreements, the Distillers Grain
Agreements and all other agreements or arrangements referenced in this

8

 

Section 7 (collectively, including this Agreement, the “Offering Documents”)
shall have been approved by all, if any, third parties from whom consent to such respective
agreements or arrangements is necessary;

          (e) ABE shall have commenced the Private Offering, the Private Offering shall have been
conducted in all respects in accordance with this Agreement and the Subscription Expiration
Date shall have occurred;

          (f) Hawkeye shall have received a Purchase Notice in accordance with Section 1(i) from
ABE, dated as of the Determination Date, certifying as to the number of Unsubscribed Units
to be purchased pursuant to the Backstop Commitment;

          (g) the Hawkeye Additional Units shall be, upon payment of the aggregate Purchase Price
as provided herein, validly issued, fully paid, non-assessable and free and clear of all
taxes, liens, pre-emptive rights, rights of first refusal, subscription and similar rights;

          (h) no judgment, injunction, decree or other legal restraint shall prohibit, or have
the effect of rendering unachievable, the consummation of the Restructuring, the Private
Offering or the transactions contemplated by this Agreement;

          (i) this Agreement shall be valid and enforceable against ABE and ABE shall not be in
breach of this Agreement;

          (j) the representations and warranties of ABE in Section 3 shall be true and correct in
all material respects as if made on the Closing Date (except for representations and
warranties made as of a specified date, which shall be true and correct in all material
respects as of such specified date);

          (k) ABE and each of its subsidiaries (other than HGF and its subsidiaries) shall be in
full compliance with, and following the closing of the transactions contemplated by the
Offering Documents will be in full compliance with, all credit agreements and similar
documents to which they are parties, including, without limitation, all financial covenants
therein, and HGF and each of its subsidiaries will be in full compliance with all credit
agreements and similar documents to which they are parties, including, without limitation,
all financial covenants therein, following the effectiveness of the Restructuring on the
Closing Date;

          (l) all proceeds (net of offering expenses) from the Private Offering will be invested
in HGF and used by HGF to pay-down HGF debt in accordance with the Restructuring Term Sheet,
and Hawkeye shall have received documentation reasonably satisfactory to Hawkeye that such
use of proceeds is in compliance with the credit agreements and similar documents of ABE and
each of its subsidiaries.

          (m) subsequent to the execution and delivery of this Agreement and prior to the Closing
Date, there shall not have been any Material Adverse Effect. For purposes of this
Agreement, a “Material Adverse Effect” shall mean any change, effect, event,
occurrence, development, circumstance, or state of facts which, either alone or in
combination, has had, or would reasonably be expected to have, a materially adverse effect

9

 

on the business, properties, operations, financial condition or results of operations
of ABE and its subsidiaries taken as a whole, or which would reasonably be expected to
materially impair its or their ability to perform its or their obligations under this
Agreement or the Plan, or have a materially adverse effect on or prevent or materially delay
the consummation of the transactions contemplated by this Agreement or the Plan (it being
acknowledged by Hawkeye that a Restructuring on the terms contemplated by this Agreement
does not in itself constitute a Material Adverse Effect);

          (n) the Restructuring shall have been successfully completed, or will be successfully
completed on the Closing Date, in accordance with the terms of the Restructuring Term Sheet,
which terms shall result in ABE owning in excess of 99% of the equity interests of HGF and
its subsidiaries; and if the Restructuring is not a Contractual Restructuring, then:

               (i) if approval of this Agreement by the Bankruptcy Court is necessary, an entry of
orders of the Bankruptcy Court approving this Agreement (the “Agreement Order”)
shall have been entered by the Bankruptcy Court and shall not have been reversed, stayed,
modified, or amended;

               (ii) The Confirmation Order shall have been entered by the Bankruptcy Court and such
order shall be nonappealable, shall not have been appealed within ten calendar days of entry
or, if such order is appealed, shall not have been stayed pending appeal, and there shall
not have been entered by any court of competent jurisdiction any reversal, modification or
vacatur, in whole or in part, of the Confirmation Order;

               (iii) The Plan, as approved, and the Confirmation Order as entered, by the Bankruptcy
Court, shall (A) be consistent in all material respects with the Restructuring Term Sheet
and (B) contain only such other terms and conditions that are reasonably acceptable to
Hawkeye;

               (iv) The conditions to confirmation and the conditions to the effective date of the
Plan have been satisfied or waived by HGF in accordance with the Plan, and the effective
date of the Plan shall have occurred or will occur on the Closing Date; and

               (v) the Chapter 11 Case of HGF shall not have been converted to one or more cases under
chapter 7 of the Bankruptcy Code or to one or more liquidating chapter 11 cases thereunder
or have been dismissed; and

          (p) the LLC Agreement Amendment shall have become effective to permit the issuance of
additional Units contemplated by the Private Offering.

          8. Indemnification.

               (a) Whether or not the Private Offering is consummated or this Agreement or the
Backstop Commitment is terminated, ABE will indemnify Hawkeye, its Affiliates and their
respective officers, directors, employees, advisors, shareholders, members, managers,
partners, attorneys, agents and representatives (the “Indemnitees”), from and
against all losses, claims, damages, liabilities, costs (including, without limitation,

10

 

the costs of investigation and attorneys’ fees) and expenses (collectively,
“Losses”) to which any of the Indemnitees becomes subject arising out of or in
connection with any third-party claim, challenge, litigation, investigation or proceedings
with respect to the Private Offering, the Backstop Commitment, this Agreement, the
Restructuring, any Plan, any Agreement Order, any Confirmation Order or the transactions
contemplated by the foregoing, including, without limitation, reimbursement of Hawkeye fees
and expenses, offer of the ABE Units, purchase and sale of ABE Units in the Private Offering
and purchase and sale of ABE Units pursuant to the Backstop Commitment, or any breach by ABE
of this Agreement, or to reimburse each of the Indemnitees for any legal or other costs and
expenses incurred in connection with investigating or defending, participating or testifying
in any of the foregoing, provided, however, that the foregoing indemnity
will not apply to Losses to the extent that they are found by a final, nonappealable
judgment of a court of competent jurisdiction to have resulted from (A) a breach by Hawkeye
of the Restructuring Documents or (B) bad faith, the willful misconduct or gross negligence
of such Indemnitees. Such legal or other expenses shall be promptly reimbursed as and when
they are incurred.

          (b) In case any proceeding shall be instituted in respect of which indemnity may be
sought pursuant to the paragraph above, the Indemnitee shall promptly notify ABE. In any
event, failure to notify ABE will not relieve ABE from any liability which it may have on
account of this indemnity or otherwise, except to the extent ABE is materially prejudiced by
such failure. Upon ABE’s prompt written notice to Hawkeye, ABE may retain counsel
reasonably satisfactory to Hawkeye to represent Hawkeye and any Indemnitee and will pay the
fees and disbursements of such counsel related to such proceeding. In any such proceeding,
any Indemnitee will have the right to retain its own counsel, but the fees and expenses of
such counsel shall be at the expense of such Indemnitee unless (i) ABE and Hawkeye have
mutually agreed to the retention of such counsel or (ii) the Indemnitee has been advised by
counsel that there are actual or potential conflicting interests between ABE and the
Indemnitee, including situations in which there are one or more legal defenses available to
the Indemnitee that are different from or additional to those available to ABE. It is
understood that ABE shall not, in connection with any proceeding or related proceedings in
the same jurisdiction, be liable for the fees and expenses of more than one separate firm
(in addition to any local counsel) for all such Indemnitees in any matter or series of
related matters.

          9. Survival of Representations and Warranties, Etc. Notwithstanding any investigation
at any time made by or on behalf of any party hereto, all representations and warranties made in
this Agreement will survive the execution and delivery of this Agreement and the issuance of the
Hawkeye Additional Units.

          10. Termination.

          (a) Either ABE or Hawkeye may terminate this Agreement in the event the Lock-Up
Agreement is not entered into within two Business Days after the date of this Agreement or
in the event the Lock-Up Agreement is terminated. In the event the total number of ABE
Units included in the Private Offering or the allocation of such ABE Units among purchasers
has not been fully and finally determined on or prior to May 17, 2010,
Hawkeye may terminate this Agreement on or after May 18, 2010. In the event the
Restructuring is structured as a Contractual Restructuring and the Hawkeye Additional Units
are not issued on or prior to May 28, 2010, Hawkeye may terminate this

11

 

Agreement on or after May 29, 2010. In the event the Restructuring is structured as a
Chapter 11 Restructuring but one or more of the approvals set forth on the Disclosure Letter
(and any other approvals that should have been set forth on the Disclosure Letter) has not
been obtained on or prior to May 28, 2010, it being acknowledged that such approvals may be conditioned, in a manner
reasonably acceptable to Hawkeye, on the effectiveness of a restructuring of the HGF debt substantially on the terms set
forth in the Restructuring Term Sheet,
 Hawkeye may terminate this Agreement on or after
May 29, 2010. In the event the Restructuring is structured to be effected as a Chapter 11
Restructuring, the Hawkeye Additional Units are not issued on or prior to July 31, 2010 and
this Agreement has not previously been terminated, Hawkeye may terminate this Agreement on
or after August 1, 2010.

          (b) Notwithstanding the termination of this Agreement pursuant to Section 10(a), each
party shall remain liable for the breach of this Agreement.

          11. Notices. All notices and other communications in connection with this Agreement
will be in writing and will be deemed given (and will be deemed to have been duly given upon
receipt) if delivered personally, sent via electronic facsimile (with confirmation), mailed by
registered or certified mail (return receipt requested) or delivered by an express courier (with
confirmation) to the parties at the following addresses (or at such other address for a party as
will be specified by like notice):

	 	 	 	 	 	 	 
	If to Hawkeye:	 	with a copy to:
	 
	 

	 	Hawkeye Energy Holdings, LLC
	 	 	 	Weil, Gotshal & Manges LLP
	 

	 	224 S. Bell Ave.
	 	 	 	100 Federal Street, 34th Floor
	 

	 	Ames, Iowa 50010
	 	 	 	Boston, Massachusetts 02110
	 

	 	Attention: Timothy B. Callahan
	 	 	 	Attention: Steven M. Peck
	 

	 	Fax: (515) 233-5577
	 	 	 	Fax: (617) 772-8333
	 
	If to ABE:	 	with a copy to:
	 
	 

	 	Advanced BioEnergy, LLC
	 	 	 	Faegre & Benson LLP
	 

	 	10201 Wayzata Boulevard, Suite 250
	 	 	 	2200 Wells Fargo Center
	 

	 	Minneapolis, Minnesota 55305
	 	 	 	90 South Seventh Street
	 

	 	Attention: Richard Peterson
	 	 	 	Minneapolis, Minnesota 55402
	 

	 	Fax: (763) 226-2725
	 	 	 	Attention: Peter J. Ekberg
	 

	 	 	 	 	 	Fax: (612) 766-1600

          12. Assignment; Third Party Beneficiaries. Neither this Agreement nor any of the
rights, interests or obligations under this Agreement will be assigned by any of the parties
(whether by operation of law or otherwise) without the prior written consent of the other party.
Notwithstanding the previous sentence, this Agreement, or Hawkeye’s obligations hereunder, may be
assigned, delegated or transferred, in whole or in part, by Hawkeye to any Affiliate (as defined in
Rule 12b-2 under the Exchange Act) of Hawkeye which is an “accredited investor” within the meaning
of rule 501 under the Securities Act, provided, that any such assignee assumes the
obligations of Hawkeye hereunder and agrees in writing to be bound by the terms of this Agreement
in the same manner as Hawkeye. Notwithstanding the foregoing or any other provisions herein, no
such assignment will relieve Hawkeye of its obligations hereunder if such assignee fails to perform
such obligations. This Agreement will be binding upon, inure to the benefit of and be enforceable
by each of the parties and their respective successors and assigns.

12

 

This Agreement (including the documents and instruments referred to in this Agreement) is not
intended to and does not confer upon any person other than the parties hereto any rights or
remedies under this Agreement; provided, however, that each of the Indemnitees
shall be considered an explicit third-party beneficiary of the provisions set forth in Section 8.

          13. Prior Negotiations; Entire Agreement. This Agreement (including the agreements
attached as exhibits to and the documents and instruments referred to in this Agreement)
constitutes the entire agreement of the parties and supersedes all prior agreements and
understandings, whether written or oral, between the parties with respect to the subject matter of
this Agreement, except that the parties hereto acknowledge that any confidentiality agreements
heretofore executed among the parties will continue in full force and effect.

          14. Governing Law, Jurisdiction. This Agreement and all actions arising out of or
relating to this Agreement shall be governed by and construed in accordance with the internal laws
of the State of Delaware without regard to any conflicts of law provision that would require the
application of the law of any other jurisdiction. Each party hereto agrees that it shall bring any
action or proceeding in respect of any claim arising out of or related to this Agreement or the
transactions contained in or contemplated by this Agreement, whether in tort or contract or at law
or in equity, exclusively in a court in the State of Delaware or, as applicable, the Bankruptcy
Court.

          15. Counterparts. This Agreement may be executed in any number of counterparts, all
of which will be considered one and the same agreement and will become effective when counterparts
have been signed by each of the parties and delivered to the other party (including via facsimile
or other electronic transmission), it being understood that each party need not sign the same
counterpart.

          16. Waivers and Amendments. This Agreement may be amended, modified, superseded,
cancelled, renewed or extended, and the terms and conditions of this Agreement may be waived, only
by a written instrument signed by the parties or, in the case of a waiver, by the party waiving
compliance. No delay on the part of any party in exercising any right, power or privilege pursuant
to this Agreement will operate as a waiver thereof, nor will any waiver on the part of any party of
any right, power or privilege pursuant to this Agreement, nor will any single or partial exercise
of any right, power or privilege pursuant to this Agreement, preclude any other or further exercise
thereof or the exercise of any other right, power or privilege pursuant to this Agreement. The
rights and remedies provided pursuant to this Agreement are cumulative and are not exclusive of any
rights or remedies which any party otherwise may have at law or in equity.

          17. Headings. The headings in this Agreement are for reference purposes only and will
not in any way affect the meaning or interpretation of this Agreement.

          18. Specific Performance. The parties acknowledge and agree that any breach of the
terms of this Agreement would give rise to irreparable harm for which money damages would not be an
adequate remedy, and, accordingly, the parties agree that, in addition to any other remedies, each
will be entitled to enforce the terms of this Agreement by a decree of specific performance without
the necessity of proving the inadequacy of money damages as a remedy and without the necessity of
posting bond.

          19. No Solicitation, Etc. This Agreement is not and shall not be deemed to be a
solicitation for votes in favor of the Plan in any Chapter 11 Case. Each party hereto acknowledges

13

 

that it has been represented by counsel in connection with this Agreement and the transactions
contemplated hereby. The provisions of this Agreement shall be interpreted in a reasonable manner
to effectuate the intent of the parties hereto.

          20. Further Assurances. Each of the parties hereto agrees to execute and deliver, or
to cause to be executed and delivered, all such instruments, and to take all such action as the
other parties hereto may reasonably request, in order to effectuate the intent and purposes of, and
to carry out the terms of, this Agreement.

[Signature Page Follows]

14

 

     IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be executed and
delivered by its duly authorized officer as of the date first above written.

	 	 	 	 	 
	 	Advanced BioEnergy, LLC

 	 
	 	By:  	/s/ Richard R. Peterson
 	 
	 	 	Name:  	Richard R. Peterson 	 
	 	 	Its:  	Chief Executive Officer, President and 

Chief Financial Officer  	 
	 

	 	 	 	 	 
	 	Hawkeye Energy Holdings, LLC

 	 
	 	By:  	/s/ Timothy B. Callahan
 	 
	 	 	Name:  	Timothy B. Callahan 	 
	 	 	Its:	  Chief Financial Officer  	 
	 

(SIGNATURE PAGE TO BACKSTOP COMMITMENT AGREEMENT)

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