Document:

Exhibit
10.1

 

MASTER

CREDIT
AGREEMENT

 

dated as
of August 10, 2007

 

between

 

GREAT
PLAINS ETHANOL, LLC

 

as
Borrower

 

and

 

AGCOUNTRY
FARM CREDIT SERVICES, FLCA

 

as Lender

 

 

TABLE OF
CONTENTS

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE I. GENERAL TERMS

  	
  1

  
	
   

  	
   

  	
   

  
	
  Section 1.01

  	
  Definitions

  	
  1

  
	
  Section 1.02

  	
  Master Agreement/Supplements

  	
  1

  
	
  Section 1.03

  	
  Notes

  	
  2

  
	
  Section 1.04

  	
  Default Interest

  	
  2

  
	
  Section 1.05

  	
  Interest Generally; Maximum Rate

  	
  2

  
	
  Section 1.06

  	
  Payments Generally

  	
  2

  
	
  Section 1.07

  	
  Computations

  	
  3

  
	
  Section 1.08

  	
  Prepayments

  	
  3

  
	
  Section 1.09

  	
  Advances

  	
  4

  
	
  Section 1.10

  	
  Fees

  	
  4

  
	
  Section 1.11

  	
  Termination of Existing Loan Documents

  	
  4

  
	
  Section 1.12

  	
  Collateral

  	
  4

  
	
  Section 1.13

  	
  Priority

  	
  4

  
	
  Section 1.14

  	
  Proceeds of Collateral

  	
  4

  
	
   

  	
   

  	
   

  
	
  ARTICLE II. CONDITIONS PRECEDENT

  	
  5

  
	
   

  	
   

  	
   

  
	
  Section 2.01

  	
  Conditions To Effectiveness

  	
  5

  
	
   

  	
   

  	
   

  
	
  ARTICLE III. REPRESENTATIONS AND
  WARRANTIES

  	
  8

  
	
   

  	
   

  	
   

  
	
  Section 3.01

  	
  Existence; Power

  	
  8

  
	
  Section 3.02

  	
  Organizational Power; Authorization

  	
  9

  
	
  Section 3.03

  	
  Governmental Approvals; No Conflicts

  	
  9

  
	
  Section 3.04

  	
  Financial Statements

  	
  9

  
	
  Section 3.05

  	
  Litigation and Environmental Matters

  	
  9

  
	
  Section 3.06

  	
  Compliance with Laws and Agreements

  	
  10

  
	
  Section 3.07

  	
  Investment Company Act, Etc

  	
  10

  
	
  Section 3.08

  	
  Taxes

  	
  10

  
	
  Section 3.09

  	
  Margin Regulations

  	
  10

  
	
  Section 3.10

  	
  ERISA

  	
  10

  
	
  Section 3.11

  	
  Ownership of Property

  	
  10

  
	
  Section 3.12

  	
  Disclosure

  	
  11

  
	
  Section 3.13

  	
  Labor Relations

  	
  11

  
	
  Section 3.14

  	
  Subsidiaries

  	
  11

  
	
  Section 3.15

  	
  Permits

  	
  11

  
	
  Section 3.16

  	
  Projections

  	
  11

  
	
  Section 3.17

  	
  Material Contracts

  	
  11

  
	
  Section 3.18

  	
  Anti-Terrorism Laws

  	
  12

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV. AFFIRMATIVE COVENANTS

  	
  12

  
	
   

  	
   

  	
   

  
	
  Section 4.01

  	
  Financial Statements and Other Information

  	
  12

  
	
  Section 4.02

  	
  Notices of Material Events

  	
  13

  
	
  Section 4.03

  	
  Existence; Conduct of Business; Eligible Borrower

  	
  14

  
				

 

 

	
  Section 4.04

  	
  Compliance with Laws, Etc

  	
  14

  
	
  Section 4.05

  	
  Payment of Obligations

  	
  14

  
	
  Section 4.06

  	
  Books and Records

  	
  14

  
	
  Section 4.07

  	
  Visitation, Inspection, Audit, Etc

  	
  15

  
	
  Section 4.08

  	
  Maintenance of Properties; Insurance

  	
  15

  
	
  Section 4.09

  	
  Use of Proceeds

  	
  15

  
	
  Section 4.10

  	
  Subsidiaries

  	
  15

  
	
  Section 4.11

  	
  Assignment of Material Contracts

  	
  15

  
	
  Section 4.12

  	
  Compliance with Certain Laws

  	
  16

  
	
  Section 4.13

  	
  Farm Products

  	
  16

  
	
   

  	
   

  	
   

  
	
  ARTICLE V. FINANCIAL COVENANTS

  	
  16

  
	
   

  	
   

  	
   

  
	
  Section 5.01

  	
  Fixed Charge Coverage Ratio

  	
  16

  
	
  Section 5.02

  	
  Working Capital

  	
  17

  
	
  Section 5.03

  	
  Tangible Net Worth

  	
  17

  
	
  Section 5.04

  	
  Capital Expenditures

  	
  17

  
	
  Section 5.05

  	
  Owners’ Equity Ratio

  	
  17

  
	
  Section 5.06

  	
  Current Ratio

  	
  17

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI. NEGATIVE COVENANTS

  	
  18

  
	
   

  	
   

  	
   

  
	
  Section 6.01

  	
  Indebtedness

  	
  18

  
	
  Section 6.02

  	
  Negative Pledge

  	
  18

  
	
  Section 6.03

  	
  Fundamental Changes

  	
  18

  
	
  Section 6.04

  	
  Investments, Loans, Etc

  	
  19

  
	
  Section 6.05

  	
  Restricted Payments

  	
  19

  
	
  Section 6.06

  	
  Sale of Assets

  	
  20

  
	
  Section 6.07

  	
  Transactions with Affiliates

  	
  20

  
	
  Section 6.08

  	
  Restrictive Agreements

  	
  20

  
	
  Section 6.09

  	
  Sale and Leaseback Transactions

  	
  21

  
	
  Section 6.10

  	
  Hedging Agreements

  	
  21

  
	
  Section 6.11

  	
  Amendment to Material Documents

  	
  21

  
	
  Section 6.12

  	
  Accounting Changes

  	
  21

  
	
  Section 6.13

  	
  Deposit and Investment Accounts

  	
  21

  
	
  Section 6.14

  	
  Use of Proceeds

  	
  21

  
	
  Section 6.15

  	
  Legal Status; Eligible Borrower

  	
  21

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII. EVENTS OF DEFAULT
  AND REMEDIES

  	
  21

  
	
   

  	
   

  	
   

  
	
  Section 7.01

  	
  Events of Default

  	
  21

  
	
  Section 7.02

  	
  Remedies

  	
  24

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII. MISCELLANEOUS

  	
  24

  
	
   

  	
   

  	
   

  
	
  Section 8.01

  	
  Notices

  	
  24

  
	
  Section 8.02

  	
  Waiver; Amendments

  	
  26

  
	
  Section 8.03

  	
  Expenses; Indemnification

  	
  26

  
	
  Section 8.04

  	
  Successors and Assigns

  	
  27

  
	
  Section 8.05

  	
  Governing Law; Jurisdiction; Consent to Service of
  Process

  	
  28

  
	
  Section 8.06

  	
  WAIVER OF JURY TRIAL

  	
  28

  

 

 

	
  Section 8.07

  	
  Right of Setoff

  	
  28

  
	
  Section 8.08

  	
  Counterparts; Integration

  	
  29

  
	
  Section 8.09

  	
  Survival

  	
  29

  
	
  Section 8.10

  	
  Severability

  	
  29

  
	
  Section 8.11

  	
  Transferable Record

  	
  29

  
	
  Section 8.12

  	
  Confidentiality

  	
  30

  
	
  Section 8.13

  	
  Copies

  	
  30

  
	
  Section 8.14

  	
  Notice of Claims Against Lender; Limitation of
  Certain Damages

  	
  30

  
	
  Section 8.15

  	
  Termination

  	
  30

  
	
   

  	
   

  	
   

  
	
  Attachment I –
  Definitions

  	
  I-1

  
	
   

  	
   

  	
   

  
	
  Exhibit A – Consent and
  Waiver of Borrower Rights

  	
  A

  
	
   

  	
   

  	
   

  
	
  Exhibit 2.01(c)(6) –
  Opinion Requirements

  	
  2.01(c)(6)

  
	
   

  	
   

  	
   

  
	
  Exhibit 4.08 –
  Insurance Requirements

  	
  4.08

  
	
   

  	
   

  	
   

  
	
  Schedule 3.15 – Permits

  	
  3.15-1

  
	
   

  	
   

  	
   

  
	
  Schedule 3.17 –
  Material Contracts

  	
  3.17-1

  
	
   

  	
   

  	
   

  
	
  Schedule 4.10 – List of
  Subsidiaries

  	
  4.10

  
	
   

  	
   

  	
   

  
	
  Schedule 6.01(b) –
  Permitted Indebtedness

  	
  6.01(b)

  
	
   

  	
   

  	
   

  
	
  Schedule 6.04(a) –
  Existing Investments

  	
  6.04(a)

  
	
   

  	
   

  	
   

  
	
  Schedule 6.13 – Deposit
  and Investment Accounts

  	
  6.13

  

 

 

MASTER CREDIT AGREEMENT

 

THIS MASTER CREDIT AGREEMENT is
made and entered into as of August 10, 2007, by and between GREAT PLAINS
ETHANOL, LLC, d/b/a POET Biorefining – Chancellor, a South Dakota limited
liability company, (“Borrower”)
and AGCOUNTRY FARM CREDIT SERVICES, FLCA, a federal land credit association
organized under the Farm Credit Act of 1971, as amended (“Lender”).

 

RECITALS:

 

A.            Borrower and Lender
are parties to a Credit Agreement dated as of June 19, 2002, as amended by the
First Amendment to the Credit Agreement dated September 1, 2004, and amended
and restated pursuant to the terms of the Amended and Restated Credit Agreement
dated July 12, 2005 (collectively, the “Original Credit Agreement”), and promissory
notes, instruments and other documents and agreements, pursuant to which Lender
has made certain loans, credit facilities and other credit accommodations
available to Borrower.

 

B.            Borrower has
undertaken an expansion of its production facilities and requests credit
accommodations from Lender to finance a portion of the costs associated therewith.

 

C.            Subject to the terms
and conditions hereof and under the other Loan Documents, Lender agrees to
refinance amounts owing under the Original Credit Agreement, provide a
revolving credit facility, and provide a construction loan facility for use in
expansion of Borrower’s production facilities.

 

D.            Borrower may request,
and Lender in its discretion may provide to Borrower, additional loans and
other credit accommodations from time to time.

 

AGREEMENT:

 

In consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:

 

ARTICLE I.

GENERAL TERMS

 

Section 1.01         Definitions.
Capitalized terms used herein have the meanings set forth on Attachment I
hereto.

 

Section 1.02         Master
Agreement/Supplements. Additional terms of each loan, credit facility
and other credit accommodation are set forth in supplements (“Supplements”) to
this Master Credit Agreement (“Master Agreement”). The terms of this Master
Agreement and the Supplements supersede all prior agreements and arrangements
between Borrower and Lender related to the Loans and govern the relationship
and agreements between Borrower and Lender. In the event Borrower and Lender
agree to additional loans, credit facilities, and/or other credit
accommodations from time to time in the future, Borrower and Lender will enter
into additional 

 

 

Supplements to this Master Agreement. Each Supplement
will set forth additional terms and conditions specific to such loans and
credit facilities, including without limitation, the applicable:

 

(a)           amount of
the loan and/or credit facility;

 

(b)           interest
rate and rate options,

 

(c)           fees, costs
and expenses; and

 

(d)           repayment
terms.

 

In the event of any inconsistency between the terms
set forth in the Master Agreement and any Supplement, the terms of the
applicable Supplement will control to the extent provided in such Supplement. Unless
otherwise provided in a Supplement, each Supplement applies solely to the Loans
described therein. The Supplements, including all Supplements entered into as
the date hereof and all future Supplements (when they become effective) are
hereby incorporated by reference.

 

Section 1.03         Notes.
Each Supplement may be accompanied by one or more Notes made by Borrower.

 

Section 1.04         Default
Interest. Upon the occurrence and during the continuance of a Default
or Event of Default or after acceleration, Borrower will pay interest (“Default Interest”) with
respect to the Loans at the rate otherwise applicable plus
an additional two hundred basis points per annum (2.00%). Default Interest is
payable on demand. The Default Interest rate will apply whether or not Lender
has exercised its option to accelerate the maturity of the Loans and declare
the entire principal balance due and payable.

 

Section 1.05         Interest
Generally; Maximum Rate. Lender’s internal records of applicable
interest rates are determinative in the absence of manifest error. In the event
any Governmental Authority subjects Lender to any new or additional charge,
fee, withholding or tax of any kind with respect to any Loan, or changes the
method of taxation of any Loan, or changes the reserve, capital or deposit
requirements applicable to any Loan, Borrower will pay such additional amounts
as will compensate Lender for such cost (including opportunity cost) or lost
income resulting therefrom as reasonably determined by Lender. Notwithstanding
anything to the contrary herein or in any Supplement, if at any time the
interest rate applicable to any Loan, together with all fees, charges and other
amounts which may be treated as interest on such Loan under applicable law
(collectively, the “Charges”)
exceed the maximum lawful rate of interest (the “Maximum Rate”) which may be contracted for, charged, taken,
received or reserved by Lender, the rate of interest payable in respect of the
Loans, together with all Charges payable in respect thereof, will be limited to
the Maximum Rate; provided, such Charges may be applied by Lender and collected
over a longer period of time to avoid application of a rate that exceeds the
Maximum Rate. Any amount paid in excess of the Maximum Rate will be applied to
principal and other amounts outstanding in the order Lender deems appropriate.

 

Section 1.06         Payments
Generally. All payments will be made to Lender at the address set forth
in Section 8.01 in U.S. Dollars and in immediately available funds,
without set-off, deduction, or counterclaim, not later than 11:00 A.M.
(Fargo, North Dakota time) on the date on 

 

2

 

which such payment is due, and each payment made after
such time on such due date will be deemed to have been made on the next
succeeding Business Day. All payments may be applied by Lender to principal,
interest, fees and other amounts in any order which Lender elects in its sole
reasonable discretion. Whenever any payment is stated to be due on a day that
is not a Business Day, such payment will be due and payable on the next
succeeding Business Day, not later than 11:00 A.M., and such extension of
time will in such case be included in the computation of the payment of
interest and fees, as the case may be.

 

Section 1.07         Computations.
Computations of interest and fees (to the extent computed on the basis of days
elapsed) hereunder will be made on the basis of a year of 360 days with
twelve 30 day months, including the first day but excluding the last day,  occurring in the period for which such
interest or fees are payable. Each determination by Lender of an interest
amount or fee hereunder will be final, conclusive, and binding for all
purposes, except in the event of manifest error. All interest and fees will be
considered earned when due.

 

Section 1.08         Prepayments.
(a)  Subject to applicable fees and
charges and such other terms and conditions as set forth in any applicable
Supplement, Borrower may prepay the Loans, in whole or in part at any time and
from time to time, by giving irrevocable written notice (or telephonic notice
promptly confirmed in writing) to Lender not less than sixty days prior to any
such prepayment; provided, that the amount of any such prepayment may
not be less than $100,000. Each such notice will be irrevocable and will
specify the proposed date of such prepayment (which shall be any regularly
scheduled monthly payment date) and the principal amount to be prepaid. The
amount specified in such notice will be due and payable on the date designated
in such notice, together with accrued interest on the amount so prepaid and any
prepayment fee or premium payable in connection therewith.

 

(b)           If
Borrower issues any membership interests, any other equity interests, or any
debt securities, then no later than the Business Day following the date of
receipt of the proceeds thereof, Borrower must prepay the Loans in an amount
equal to all such proceeds, net of underwriting discounts and commissions and
other reasonable costs paid to non-Affiliates in connection therewith;  provided, that no such prepayment is
required in the event Borrower issues membership interests or other equity
interests and the proceeds of such issuance are invested in assets that
constitute either plant or equipment of Borrower and such assets become
Collateral subject to Lender’s first priority Lien under the Loan Documents. Any
such prepayment will applied in accordance with paragraph (d) below.

 

(c)           Borrower
will pay to Lender a prepayment premium in connection with any prepayment of
the Loans as a result of a refinance or payoff through sources other than from
Borrower’s cash flow from operating activities as follows:

 

(i)            2.0% of
the outstanding Indebtedness under the Loans during the first year following
the Closing Date;

 

(ii)           1.0% of
the outstanding Indebtedness under the Loans during the second year following
the Closing Date; and

 

(iii)          0.0%
thereafter.

 

3

 

Borrower agrees that the prepayment premium is paid as
a fee for the right to prepay, and that the prepayment premium does not
constitute liquidated damages or a prepayment penalty.

 

(d)           Any
prepayments will be applied as follows: first to fees and reimbursable
expenses of Lender then due and payable pursuant to any of the Loan Documents; second
to interest then due and payable on the Loans; third pro rata to the
principal balance of each term loan outstanding in inverse order of maturity,
until each loan is paid in full; and fourth pro rata to the principal
balance outstanding under each revolving credit facility until all such amounts
are paid in full.

 

Section 1.09         Advances.
Lender is authorized and directed to credit the account Borrower designates in
writing for all Advances made hereunder. Lender is authorized, in Lender’s sole
discretion, to advance Loan funds for any amount Borrower is obligated to pay
hereunder.

 

Section 1.10         Fees.
Borrower agrees to pay to Lender the fees set forth in the letter of Lender to
Borrower dated May 21, 2007, relating to the commitments made and the services
rendered by Lender in connection with the Loans (the “Fees”).
Borrower agrees that the Fees were fully earned by Lender upon execution by
Borrower of Lender’s conditional commitment and fee letters dated May 21, 2007.

 

Section 1.11         Termination
of Existing Loan Documents. Except to the extent otherwise provided
herein or in any other Loan Documents, the Original Credit Agreement and all
other agreements executed and delivered in connection therewith are terminated
and of no further force and effect. However, nothing herein relieves either
party of its indemnification obligations under the Original Credit Agreement or
any agreement, document, or instrument delivered in connection therewith.

 

Section 1.12         Collateral.
The Obligations are secured by Lender’s first priority Lien on the Collateral. Borrower
hereby pledges, mortgages, transfers, assigns, sets aside, and grants a
security interest to Lender in the Collateral.

 

Section 1.13         Priority. Except to the extent any Loan is specifically
subordinated to one or more other Loans, each Loan will be pari passu
with all other Loans in all respects.

 

Section 1.14         Proceeds
of Collateral. All proceeds received by Lender from the sale or other
liquidation of the Collateral when an Event of Default exists will be applied
in accordance with Section 1.08(d). After all the Obligations (including
without limitation, all contingent Obligations) have been paid and satisfied in
full, all Commitments have been terminated and all other obligations of Lender
to Borrower have been otherwise satisfied, any remaining proceeds of Collateral
will be delivered to the Person entitled thereto as directed by Borrower or as
otherwise determined by applicable law or applicable court order.

 

4

 

ARTICLE II.

CONDITIONS PRECEDENT

 

Section 2.01         Conditions
To Effectiveness. Lender will have no obligation under this Agreement
or any other Loan Document until each of the following conditions is satisfied
(or waived in accordance with Section 8.02):

 

(a)           Lender has
received all fees and other amounts due and payable on or prior to the date hereof,
including the fees and amounts for reimbursement or payment of all
out-of-pocket expenses required to be reimbursed or paid by Borrower pursuant
to this Agreement, under any other Loan Document, or any other agreement with
Lender.

 

(b)           Borrower
has delivered to Lender duly executed counterparts of the following, each in
form and substance acceptable to Lender in all respects:

 

(1)           the
Master Agreement;

 

(2)           each of
the First Supplement, Second Supplement and Third Supplement to this Master
Agreement, along with all Notes and other documents, instruments and agreements
required thereunder;

 

(3)           the duly
executed Security Agreement, together with UCC-1 financing statements and other
applicable documents under the laws of the jurisdictions with respect to the
perfection of the Liens granted under the Security Agreement in order to
perfect such Liens, duly authorized for filing by Borrower;

 

(4)           all
Control Agreements required under Section 6.13, if any;

 

(5)           the
Mortgage, fully notarized, together with evidence that it has been recorded in
all places to the extent necessary or desirable, in the judgment of Lender, to
create a valid and enforceable first priority Lien (subject to Permitted
Encumbrances) on the fee simple estate (or leasehold or other interest if
agreeable to Lender) of the Real Estate, together with UCC fixture financing
statements, as applicable;

 

(6)           collateral
Assignments of all Material Contracts, together with copies of such Material
Contracts, certified by a Responsible Officer as being in full force and
effect, and not subject to a default by any party thereto; and

 

(7)           the
Consent and Waiver of Borrower Rights.

 

(c)           Lender has
received as of the Closing Date (or such other date specified in this Section
2.01(c)) the following, each in form and substance acceptable to Lender in
all respects:

 

5

 

(1)           a
commitment from a title company acceptable to Lender, in its sole discretion,
to issue a title insurance policy assuring Lender that the Mortgage creates a
valid and enforceable encumbrance on the Real Estate, free and clear of all
defects and encumbrances except Permitted Encumbrances;

 

(2)           copies of
favorable UCC, tax, judgment, bankruptcy and fixture lien search reports (or
other evidence of the same satisfactory to Lender) in all necessary or
appropriate jurisdictions and under all legal and trade names of Borrower and
all other parties requested by Lender, indicating that there are no prior Liens
on any of the Collateral other than Permitted Encumbrances;

 

(3)           duly
executed landlord waivers and/or warehouseman, or bailee agreements with
respect to all inventory of Borrower located at leased locations or other
locations not owned by Borrower in fee simple, if any, along with a certified
copy of all leases of Borrower, if any;

 

(4)           certified
copies of the articles of organization or other charter documents of Borrower,
together with certificates of good standing or existence, as are available from
the Secretary of State (or other applicable Governmental Authority) of the
jurisdiction of organization of Borrower and each other jurisdiction where
Borrower is required to be qualified to do business as a foreign entity;

 

(5)           a
certificate, dated as of the date hereof and signed by an appropriate Responsible
Officer, attaching and certifying copies of the bylaws or similar documents,
and appropriate resolutions authorizing the execution, delivery and performance
of the Loan Documents and certifying the name, title and the signature of each
officer executing the Loan Documents;

 

(6)           one or
more favorable written opinions of counsel to Borrower, addressed to Lender,
addressing the matters set forth on Exhibit 2.01(c)(6);

 

(7)           certificates
of insurance, in form and substance acceptable to Lender, describing the types
and amounts of insurance (property and liability) carried by Borrower, in each
case insuring Lender as a first mortgagee under a standard mortgagee clause,
and naming Lender as lender loss payee or additional insured, as the case may
be, and which include a stipulation that coverages will not be cancelled or
diminished without at least 30 days’ prior written notice to Lender, together
with a lender’s loss payable endorsement;

 

6

 

(8)           an assignment of the Borrower’s business
interruption insurance policy, duly executed by Borrower and pursuant to which
the Borrower assigns to Lender all of Borrower’s right, title and interest in
and to its business interruption insurance policy, and which assignment shall
have been consented to and certified in writing by the other party(ies) to such
insurance policy;

 

(9)           satisfactory
appraisals of all Real Estate (including an “as built” appraisal), together
with satisfactory collateral audits of all accounts, inventory and other
personal property requested by Lender (including field audit and survey
conducted by Lender);

 

(10)         copies of
duly executed payoff letters, in form and substance satisfactory to Lender,
executed by each existing lender, together with (a) UCC-3 or other appropriate
termination statements, in form and substance satisfactory to Lender, releasing
all liens of the existing lenders upon any of the personal property of
Borrower, (b) cancellations and releases, in form and substance satisfactory to
Lender, releasing all liens of the existing lenders upon any of the Real
Estate, and (c) any other releases, terminations or other documents reasonably
required by Lender to evidence the payoff of Indebtedness owed to existing
lenders;

 

(11)         certified
copies of all material consents, permits, approvals, authorizations,
registrations and filings and orders required or advisable to be made or
obtained under any requirement of law or by any material contractual obligation
of Borrower, in connection with the operation of Borrower’s business, including
the production of ethanol and by-products thereof, certified by a Responsible
Officer or appropriate official of the applicable Governmental Authority, as
the case may be, as being in full force and effect, and not being subject to
any condition precedent;

 

(12)         three
copies of a survey and maps or plats of the Real Estate certified to the Lender
and the Title Company in a manner reasonably satisfactory to each of Lender and
the Title Company, dated a date reasonably satisfactory to each of Lender and
the Title Company by an independent professional licensed land surveyor, which
maps or plats and the surveys on which they are based are sufficient to delete
any standard printed survey exception contained in the applicable title
insurance policy;

 

(13)         Federal
Emergency Management Agency Standard Flood Hazard Determination Certificates
certifying, among other things, that none of the Real Estate is located within
a flood hazard area;

 

7

 

(14)         Phase I
Environmental Site Assessment Reports on all of the Real Estate, along with
such further environmental review and audit reports as Lender requests (which
may include Phase II reports), and letters by the firms preparing such environmental
reports authorizing Lender to rely on such reports;

 

(15)         a
certificate dated the Closing Date and signed by an appropriate Responsible
Officer, confirming and certifying the solvency of Borrower before and after
giving effect to all transactions contemplated by the Loan Documents, together
with (A) the Projections and (B) the Pro Forma Balance Sheet for Borrower as of
the Closing Date;

 

(16)         copies of
Borrower’s audited financial statements as of its most recent fiscal year end
and internally prepared financial statements as of the last day of the
immediately preceding quarter, each in form and substance satisfactory to
Lender;

 

(17)         a
certificate dated the Closing Date and signed by a Responsible Officer,
confirming notice to Borrower pursuant to section 326 of the USA Patriot Act of
2001, 31 U.S.C. sec. 5318; and

 

(18)         an
Agreement with POET Management, LLC acceptable to Lender in all respects.

 

(d)           The
representations and warranties set forth in the Loan Documents are true and
correct in all material respects.

 

(e)           All
conditions precedent in the other Loan Documents have been satisfied or waived
in accordance with Section 8.02.

 

(f)            No Default
or Event of Default has occurred and is continuing.

 

ARTICLE III.

REPRESENTATIONS AND WARRANTIES

 

Borrower represents and warrants to Lender, as of the
date hereof, the date of each Supplement, and the date of each Advance (unless
otherwise specified) as follows:

 

Section 3.01         Existence;
Power. Borrower (a) is
duly organized, validly existing and in good standing as a limited liability
company under the laws of the State of South Dakota, (b) has all requisite
power and authority to carry on its businesses as now conducted, and (c) is
duly qualified to do business, and is in good standing, in each jurisdiction
where such qualification is required, except where a failure to be so qualified
could not reasonably be expected to result in a Material Adverse Effect.

 

8

 

Section 3.02         Organizational
Power; Authorization. The
execution, delivery and performance by Borrower of the Loan Documents to which
it is a party are within its limited liability company powers and have been
duly authorized by all necessary board, manager, and if required, member action.
This Agreement and the other Loan Documents have been duly executed and
delivered by Borrower, and  constitute
valid and binding obligations of Borrower, enforceable against it in accordance
with their respective terms, except as may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, or similar laws affecting the
enforcement of creditors’ rights generally and by general principles of equity.

 

Section 3.03         Governmental
Approvals; No Conflicts. The
execution, delivery and performance by Borrower of the Loan Documents (a) does
not require any consent or approval of, registration or filing with, or any
action by, any Governmental Authority, except those as have been obtained or
made and are in full force and effect or where the failure to do so, individually
or in the aggregate, could not reasonably be expected to result in a Material
Adverse Effect, (b) will not violate any applicable law or regulation or
the charter, articles of incorporation, bylaws, or other organization documents
of Borrower or any order of any Governmental Authority, (c) will not violate or
result in a default under any indenture, material agreement or other material
instrument binding on Borrower or any of its assets or give rise to a right
thereunder to require any payment to be made by Borrower, and (d) will not
result in the creation or imposition of any Lien on any asset of Borrower
except Liens created under the Loan Documents.

 

Section 3.04         Financial
Statements. Borrower has
furnished to Lender copies of Borrower’s (a) audited financial statements
(consistent with the requirements of Section 4.01(a)) as of its most
recent fiscal year end and (b) internally prepared financial statements
(consistent with the requirements of Section 4.01(b)) as of the last day
of the most recent quarter. Such financial statements fairly present the
financial condition of Borrower as of such dates and the results of operations
for such periods in conformity with GAAP consistently applied, subject in the
case of interim financial statements, to year-end audit adjustments and the
absence of footnotes. Since the date of such financial statements, there have
been no changes with respect to Borrower which have had or could  reasonably be expected to have, singly or in the aggregate,
a Material Adverse Effect on the business, results of operations, financial
condition, assets, liabilities or prospects of Borrower.

 

Section 3.05         Litigation
and Environmental Matters.

 

(a)           No
litigation, investigation or proceeding of or before any arbitrator or
Governmental Authority is pending against or, to the knowledge of Borrower,
threatened against or affecting Borrower (1) as to which there is a reasonable
possibility of an adverse determination that could reasonably be expected to
have, either individually or in the aggregate, a Material Adverse Effect or (2)
which in any manner draws into question the validity or enforceability of this
Agreement or any other Loan Document.

 

(b)           Borrower
(1) has not failed to comply with any Environmental Law or to obtain, maintain or
comply with any permit, license or other approval required under any
Environmental Law, (2) has not become subject to any Environmental Liability,
(3) has 

 

9

 

not
received notice of any claim with respect to any Environmental Liability, or
(4) does not know of any basis for any Environmental Liability.

 

Section 3.06         Compliance
with Laws and Agreements. Borrower
is in compliance with all (a) applicable laws, rules, and regulations, (b)
orders of any Governmental Authority, and (c) all indentures, agreements or
other instruments binding upon it or its properties; except where
non-compliance, either singly or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect.

 

Section 3.07         Investment
Company Act, Etc. Borrower
is not (a) an “investment company,” as defined in, or subject to regulation
under, the Investment Company Act of 1940, as amended, (b) a “holding company”
as defined in, or subject to regulation under, the Public Utility Holding Company
Act of 2005, as amended, or (c) otherwise subject to
any other regulatory scheme limiting its ability to incur debt.

 

Section 3.08         Taxes. Borrower and each other Person for
whose taxes Borrower could become liable have timely filed or caused to be
filed all tax returns and other filings that are required to be filed by any of
them, and have paid all taxes shown to be due and payable (or with respect to
real estate taxes, have paid all taxes prior to the time the same become
delinquent) on such returns or on any assessments made against it or its
property and all other taxes, fees or other charges imposed on it or any of its
property by any Governmental Authority, except (a) to the extent the failure to
do so would not have a Material Adverse Effect or (b)  where
the same are currently being contested in good faith by appropriate proceedings
and for which Borrower has set aside adequate reserves on its books in
accordance with GAAP. The charges, accruals and reserves on the books of Borrower
in respect of such taxes are adequate, and no tax liabilities that could be
materially in excess of the amount so provided are anticipated.

 

Section 3.09         Margin
Regulations. None of the
proceeds of the Loans have been used, directly or indirectly, for “purchasing”
or “carrying” any “margin stock” with the respective meanings of each of such
terms under Regulation U of the Board of Governors of the Federal Reserve
System as now and from time to time hereafter in effect, or for any purpose
that violates the provisions of Regulation U, T or X of the Board of Governors
of the Federal Reserve System.

 

Section 3.10         ERISA. No ERISA Event has occurred or is
reasonably expected to occur that, when taken together with all other such
ERISA Events for which liability is reasonably expected to occur, could
reasonably be expected to result in a Material Adverse Effect. The present
value of all accumulated benefit obligations under each Plan (based on the
assumptions used under GAAP) did not, as of the date of the most recent
financial statements reflecting such amounts, exceed the fair market value of
the assets of such Plan, and the present value of all accumulated benefit
obligations of all underfunded Plans (based on the assumptions used under GAAP)
did not, as of the date of the most recent financial statements reflecting such
amounts, exceed by more than $10,000 the fair market value of the assets of all
such underfunded Plans.

 

Section 3.11         Ownership
of Property. Borrower
has good title to or a valid leasehold interest in all of the real and personal
property material to operation of Borrower’s businesses. Borrower owns, or is
licensed or otherwise has the right to use, all patents, trademarks, service 

 

10

 

marks, tradenames, copyrights and other intellectual
property material to its business, and the use thereof by Borrower does not
infringe on the rights of any other Person, except for any such infringements
that, individually or in the aggregate, could not reasonably be expected to
result in a Material Adverse Effect.

 

Section 3.12         Disclosure. Borrower has disclosed to Lender all
agreements, instruments, and corporate or other restrictions to which Borrower
is subject, and all other matters known to it, that, individually or in the
aggregate, could reasonably be expected to result in a Material Adverse Effect.
None of the reports, financial statements, certificates or other information
furnished by or on behalf of Borrower pursuant to this Agreement or any other
Loan Document or delivered hereunder or thereunder (as modified or supplemented
by any other information so furnished) contains any material misstatement of
fact or omits to state any material fact necessary to make the statements
therein, not misleading.

 

Section 3.13         Labor
Relations. There are no
strikes, lockouts or other material labor disputes or grievances against
Borrower, or, to the knowledge of Borrower, threatened against or affecting
Borrower, and no significant unfair labor practice, charges or grievances are
pending against Borrower, or to the knowledge of Borrower, threatened against
Borrower before any Governmental Authority. All payments due from Borrower
pursuant to any collective bargaining agreement have been paid or accrued as a
liability except where the failure to do so could not reasonably be expected to
result in a Material Adverse Effect.

 

Section 3.14         Subsidiaries. Borrower has no Subsidiaries other
than those for which Borrower has complied with the requirements of Section
4.10.

 

Section 3.15         Permits.
Borrower has, and Schedule 3.15 sets forth, all of the material
licenses, consents, approvals, authorizations and permits of Governmental
Authorities which Borrower is required to maintain in connection with the
operation of Borrower’s business, including but not limited to any of the
foregoing related to Environmental Laws, zoning and land-use laws (including
any requirement to obtain a special exception, if applicable), water use laws,
waste disposal laws, laws requiring construction permits, and occupancy
certificates. Borrower has provided true and correct copies of such licenses,
consents, approvals, authorizations and permits to Lender.

 

Section 3.16         Projections.
As of the Closing Date, the
Projections fairly present Borrower’s reasonable forecast of the results of
operations and changes in cash flows for the periods covered thereby, based on
the assumptions set forth therein, which assumptions are reasonable based on
historical experience and presently known facts.

 

Section 3.17         Material
Contracts. Borrower is a party to, and Schedule 3.17 sets forth
a complete and accurate listing of, all Material Contracts which are required
to be in effect to operate the Project. Material Contracts shall include but
not be limited to the Construction Agreement (and any material subcontracts
thereof, and separate construction contracts with other contractors for
improvements not covered by the Construction Agreement), management agreements,
supply and procurement agreements, sales and marketing agreements,
transportation agreements (including agreements for railroad services, rail car
leases, and the like), and utility 

 

11

 

agreements. Borrower is in compliance with all
Material Contracts, and to Borrower’s knowledge, all other parties thereto are
in compliance with all Material
Contracts.

 

Section 3.18         Anti-Terrorism
Laws. Neither Borrower nor any of its Affiliates is in violation of (a)
any of the foreign assets control regulations of the United States Treasury
Department (31 CFR, Subtitle B, Chapter V, as amended) or any enabling
legislation or executive order relating thereto, (b) Executive Order No.
13,224, 66 Fed Reg 49,079 (2001), issued by the President of the United States
(Executive Order Blocking Property and Prohibiting Transactions with Persons
Who Commit, Threaten to Commit or Support Terrorism) or (c) the anti-money
laundering provisions of the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT
ACT) Act of 2001, Public Law 107-56 (October 26, 2001) amending the Bank
Secrecy Act, 31 U.S.C. Section 5311 et seq.

 

ARTICLE IV.

AFFIRMATIVE COVENANTS

 

Borrower covenants and agrees that so long as any
commitment is in effect or the principal of or interest on any Loan or any fee
remains unpaid:

 

Section 4.01         Financial
Statements and Other Information. Borrower will deliver to Lender:

 

(a)           as soon as
available and in any event (1) within 120 days after the end of each fiscal
year of Borrower, a copy of the annual audited report for such fiscal year for
Borrower as of the end of such fiscal year and the related consolidated balance
sheets, statements of income, owners’ equity and cash flows (together with all
footnotes thereto) of Borrower for such fiscal year, (2) setting forth in
comparative form (for all reports delivered after Borrower’s first fiscal year
of plant operations) the figures for the previous fiscal year, all in
reasonable detail and reported on by a firm of independent public accountants
acceptable to Lender (without a “going concern” or like qualification,
exception or explanation and without any qualification or exception as to scope
of such audit), and a statement from such accountants to the effect that such
financial statements present fairly in all material respects the financial
condition and the results of operations of Borrower for such fiscal year in
accordance with GAAP, that the examination by such accountants in connection
with such financial statements has been made in accordance with GAAP;

 

(b)           as soon as
available and in any event within 45 days after the end of each quarter, an
unaudited balance sheet of Borrower as of the end of such quarter and the
related unaudited statements of income, owner’s equity and cash flow of
Borrower for such quarter and the then elapsed portion of such fiscal year,
setting forth in each case in comparative form the figures for the
corresponding quarter and the corresponding portion of Borrower’s previous
fiscal year; in either case all certified by an appropriate Responsible Officer
of Borrower as presenting fairly in all material respects the financial 

 

12

 

condition
and results of operations of Borrower in accordance with GAAP, subject to
normal year-end audit adjustments and the absence of footnotes;

 

(c)           within 45
days of the last day of each quarter, a certificate, in form and substance
satisfactory to Lender in all respects, of a Responsible Officer,
(1) certifying as to whether there exists a Default or Event of Default on
the date of such certificate, and if a Default or an Event of Default then
exists, specifying the details thereof and the action which Borrower has taken
or proposes to take with respect thereto, (2) setting forth in reasonable
detail calculations demonstrating compliance with Article V, (3) stating
whether any change in GAAP or the application thereof has occurred since the
date of Borrower’s most recent previously delivered audited financial
statements and, if any change has occurred, specifying the effect of such
change on the financial statements accompanying such certificate; and (4)
attaching a production report, certified as to accuracy, which sets forth
pertinent information in respect of the amount of ethanol produced and other
information as Lender may request from time to time;

 

(d)           concurrently
with the financial statements referred to in clause (a) above, a certificate of
the accounting firm that reported on such financial statements stating whether
it obtained any knowledge during the cause of its examination of such financial
statements of the occurrence of any Default or Event of Default (which
certificate may be limited to the extent required by accounting rules or
guidelines);

 

(e)           promptly
after the same become available, copies of all periodic reports distributed by
Borrower to its members generally, or to any national securities exchange, as
applicable;

 

(f)            concurrently
with the delivery of the financial statements referred to in clause (a) above,
a copy of Borrower’s pro forma
budget and business plan for the subsequent fiscal year for Borrower,
containing a pro forma
consolidated balance sheet of Borrower as of the end of such subsequent fiscal
year and the related pro forma
consolidated statements of income, owners’ equity and cash flows (together with
all footnotes thereto) of Borrower for such subsequent fiscal year; and

 

(g)           promptly
following any request therefor, such other information regarding the results of
operations, business affairs and financial condition of Borrower as Lender may
reasonably request.

 

Section 4.02         Notices
of Material Events. Borrower will promptly furnish written notice to
Lender of the following, in each case accompanied by a written statement of a
Responsible Officer setting forth the details of the event or development
requiring such notice and any action taken or proposed to be taken with respect
thereto:

 

(a)           the
occurrence of any Default or Event of Default;

 

(b)           the filing
or commencement of any action, suit or proceeding by or before any arbitrator
or Governmental Authority against or, to the knowledge of Borrower, affecting
Borrower which, if adversely determined, could reasonably be expected to result
in a Material Adverse Effect;

 

13

 

(c)           the
occurrence of any event or any other development by which Borrower (1) fails to
comply with any Environmental Law or to obtain, maintain or comply with any permit,
license or other approval required under any Environmental Law, (2) becomes
subject to any Environmental Liability, (3) receives notice of any claim with
respect to any Environmental Liability, or (4) becomes aware of any basis for
any Environmental Liability and in each of the preceding clauses, which individually
or in the aggregate, could reasonably be expected to result in a Material
Adverse Effect;

 

(d)           the
occurrence of any ERISA Event that alone, or together with any other ERISA
Events that have occurred, could reasonably be expected to result in a Material
Adverse Effect;

 

(e)           the
incurrence of any Indebtedness, including Indebtedness permitted under this
Agreement; and

 

(f)            any other
development that results in, or could reasonably be expected to result in, a
Material Adverse Effect.

 

Section 4.03         Existence;
Conduct of Business; Eligible Borrower. Borrower will do all things
necessary to preserve, renew and maintain in full force and effect its legal
existence and its rights, licenses, permits, privileges, franchises, patents,
copyrights, trademarks and trade names material to the conduct of its business,
and will continue to engage in the same business as presently conducted or such
other businesses that are reasonably related thereto. Borrower shall maintain
at all time its status as an entity eligible to borrow from Lender and the farm
credit system of lending institutions.

 

Section 4.04         Compliance
with Laws, Etc. Borrower
will comply with all laws, rules, regulations and requirements of any
Governmental Authority applicable to it or its properties, except where the
failure to do so, either individually or in the aggregate, could not reasonably
be expected to result in a Material Adverse Effect. Borrower will in all
respects conform to and comply with all applicable covenants, conditions,
restrictions and reservations, and with all requirements of Governmental
Authorities, including, without limitation, all building codes and zoning,
environmental, hazardous substance, energy and pollution control laws,
ordinances and regulations affecting Borrower’s business, and the Real Estate
and the related improvements.

 

Section 4.05         Payment
of Obligations. Borrower will pay and discharge all of its obligations
and liabilities (including without limitation all tax liabilities and claims
that could result in a statutory Lien) before the same become delinquent or in
default, except where (a) the validity or amount thereof is being contested in
good faith by appropriate proceedings, (b) Borrower has set aside on its books
adequate reserves with respect thereto in accordance with GAAP, and (c) the
failure to make payment pending such contest could not reasonably be expected
to result in a Material Adverse Effect.

 

Section 4.06         Books
and Records. Borrower will keep proper books of record and account in
which full, true and correct entries are made of all dealings and transactions
in relation to its business and activities to the extent necessary to prepare
the consolidated financial statements of Borrower in conformity with GAAP.

 

14

 

Section 4.07         Visitation,
Inspection, Audit, Etc.

 

(a)           Borrower
will permit any representative or agent of Lender to visit and inspect its
properties, to conduct audits of the Collateral, to examine its books and
records and to make copies and take extracts therefrom, and to discuss its
affairs, finances and accounts with any of its officers, employees and its
independent certified public accountants, all at such reasonable times and as
often as Lender, may reasonably request after reasonable prior notice to
Borrower; provided, if a Default or an Event of Default has occurred and
is continuing, no prior notice will be required. Borrower will bear all
expenses incurred by Lender in connection with any such visit, inspection,
audit, examination, or discussion.

 

(b)           Borrower
will deliver to Lender such appraisals of the Real Estate and other fixed
assets of Borrower as Lender may request at any time and from time to time,
such appraisals to be conducted by an appraiser, and to be presented in form
and substance, reasonably satisfactory to Lender, in each case conducted at the
expense of Borrower if the appraisal is delivered in connection with a request
by Borrower for an accommodation, waiver, or other credit action.

 

Section 4.08         Maintenance
of Properties; Insurance. Borrower will (a) keep and maintain all
property material to the conduct of its business in good working order and
condition, ordinary wear and tear expected, except where the failure to do so,
either individually or in the aggregate, could not reasonably be expected to
result in a Material Adverse Effect, and (b) maintain with financially sound
and reputable insurance companies, insurance with respect to its properties and
business against loss or damage of the kinds and in the amounts customarily
carried by companies in the same or similar business operating in the same of
similar locations and under the same or similar circumstances, and in any
event, with coverages no less than and subject to the terms described on Exhibit
4.08.

 

Section 4.09         Use
of Proceeds. No part of the proceeds of any Loan will be used, directly
or indirectly, for any purpose that would violate Regulation T, U or X of the
Board of Governors of the Federal Reserve System or for speculative purposes,
including, without limitation, speculating in the commodities and/or futures
markets.

 

Section 4.10         Subsidiaries.
Schedule 4.10 lists Subsidiaries of Borrower as of the date hereof. Within
10 Business Days after Borrower acquires or forms any Subsidiary, Borrower will
notify Lender and will cause such Subsidiary to execute a Guarantee of the
Obligations, a joinder to the Security Agreement, and a joinder to such other
instruments, agreements, and documents as Lender requires, each in form and
substance satisfactory to Lender, and will cause such Subsidiary to deliver
simultaneously therewith similar documents applicable to such Subsidiary
required under Section 2.01 as requested by Lender.

 

Section 4.11         Assignment
of Material Contracts. Borrower will notify Lender of the existence of
any Material Contract promptly upon entering into the same. Borrower agrees to
promptly execute and deliver to Lender such Collateral Assignments and take
such other actions as Lender requests in furtherance of Borrower’s collateral
assignment of Borrower’s rights under such Material Contracts.

 

15

 

Section 4.12         Compliance
with Certain Laws. Borrower will (a) ensure that no Person that
Controls Borrower is or will be listed on the Specially Designated Nationals
and Blocked Person List or other similar list maintained by the Office of
Foreign Assets Control (“OFAC”), the
Department of Treasury or included in any executive order or other similar list
of such Persons published by a Governmental Authority, (b) not use or permit
the use of any proceeds of any Loan to violate any of the foreign asset control
regulations of OFAC or any enabling statute, executive order, or requirement of
a Governmental Authority relating thereto, and (c) comply with all applicable
Bank Secrecy Act (“BSA”) laws and regulations,
as amended.

 

Section 4.13         Farm
Products. If Borrower acquires any Collateral which may have
constituted Farm Products in the possession of the seller or supplier thereof,
Borrower will, at its sole expense, use its best efforts to take such steps to
insure that all Liens (except the security interests granted to Lender) in such
acquired Collateral are terminated or released, including, without limitation,
in the case of such Farm Products produced in a state which has established a
Central Filing System (as defined in the Food Security Act), registering with
the Secretary of State of such state (or such other party or office designed by
such state) and otherwise take such reasonable actions necessary, as prescribed
by the Food Security Act, to purchase Farm Products free of liens, security
interest and encumbrances of any kind (except the security interests granted to
Lender); provided, however, that
Borrower may contest and need not obtain the release or termination of any
lien, security interest or encumbrance asserted by any creditor of any seller
of such Farm Products, so long as it contests the same by proper proceedings
and maintain appropriate accruals and reserves therefore in accordance with
GAAP. Upon the Lender’s request, Borrower agrees to forward to Lender promptly
after receipt copies of all notices of Liens and master lists of effective
financing statements delivered to Borrower pursuant to the Food Security Act,
which notices and/or lists pertain to any of the Collateral. Upon Lender’s
request, Borrower agrees to provide Lender with the names of Persons who supply
Borrower with such Farm Products and such other information as Lender may
reasonably request with respect to such Persons.

 

If any warehouse receipt or receipts in the nature of
a warehouse receipt is/are issued in respect of any portion of the Collateral,
then Borrower (a) will not permit such warehouse receipt or receipts in the
nature thereof to be “negotiable” as such term is used in Article 7 of the UCC
and (b) will deliver all such receipts to Lender (or a Person designated by
Lender) within five days of Lender’s request and from time to time thereafter. If
no Default or Event of Default then exists, Lender agrees to deliver to Borrower
any receipt so held by Lender upon Borrower’s request in connection with
Borrower’s sale or other disposition of the underlying Collateral, if such
disposition is in the ordinary course of Borrower’s business.

 

ARTICLE V.

FINANCIAL COVENANTS

 

Borrower covenants and agrees that so long as any
Obligation remains unpaid or any Commitment is in effect:

 

Section 5.01         Fixed
Charge Coverage Ratio. On the Closing Date, and at the end of each
fiscal year following the Closing Date, Borrower will maintain a Fixed Charge
Coverage 

 

16

 

Ratio of not less than 1.15:1.00. After the first
fiscal year of operations after the completion of the Project (as defined in
the Third Supplement), which includes the year construction of the Project is
completed, Borrower will maintain a Fixed Charge Coverage Ratio of 1.00:1.00
increasing to 1.15:1.00 after the second fiscal year after the Project is
completed, and each year thereafter. When an Owners’ Equity Ratio of 60% and
working capital of $12,000,000 is reached and maintained, then the minimum
Fixed Charge Coverage Ratio will be maintained or reduced, as the case may be,
to 1.0:1.0. Should the Owners’ Equity Ratio decline below 60% or working
capital decline below $12,000,000 the minimum Fixed Charge Coverage Ratio of
1.15:1.0 will be reinstated.

 

Section 5.02         Working
Capital. On the Closing Date, and at the end of the fiscal year
following the Closing Date, Borrower will maintain working capital of at least
(a) $5,000,000. After the first fiscal year of operations after the completion
of the Project (as defined in the Third Supplement), which includes the year
construction of the Project is completed, Borrower will maintain working
capital of $10,000,000, increasing to $12,000,000 after the second fiscal year
after the Project is completed. The amount of Lender’s unfunded Revolving
Commitment Amount (as defined in the Second Supplement) will be considered
working capital for purposes of the determination of compliance with this covenant.

 

Section 5.03         Tangible
Net Worth. Borrower’s Tangible Net Worth will be, and will not fall
below, at any time, $70,000,000 as of December 31, 2007. Borrower’s minimum
Tangible Net Worth shall increase annually by an amount equal to 25% of
Borrower’s Net Income measured as of each fiscal year end until an Owners’
Equity Ratio of not less than 50% is maintained.

 

Section 5.04         Capital
Expenditures.
During the Funding Period
(as defined in the Third Supplement), Borrower will not make Capital
Expenditures unrelated to the Project (as defined in the Third
Supplement) in excess of $750,000
without the prior written consent of Lender. Following completion of the
Project, Borrower will not make Capital Expenditures in excess of $2,000,000 in
any fiscal year without Lender’s prior written approval.

 

Section 5.05         Owners’
Equity Ratio. Borrower must maintain an Owners’ Equity Ratio of at
least (a) 45% on the Closing Date and on December 31, 2007, (b) 47% on
December 31, 2008, (c) 49% on December 31, 2009, and (d) 50% on
December 31, 2010, and at all times thereafter.

 

Section 5.06         Current
Ratio. On the Closing Date, and at the end of each fiscal year
following the Closing Date, Borrower will maintain a ratio of current assets to
current liabilities of not less than 1.20:1.00. The amount of Lender’s unfunded
Revolving Commitment Amount (as defined in the Second Supplement) will be
considered working capital for purposes of the determination of compliance with
this covenant.

 

Compliance with the financial covenants set forth in
this Article V will be measured based on financial statements dated as
of the close of business on the last day of the immediately preceding quarter
for the related period.

 

17

 

ARTICLE VI.

NEGATIVE COVENANTS

 

Borrower covenants and agrees that so long as Lender
has a commitment hereunder or the principal of or interest on any Loan or any
fee remains unpaid:

 

Section 6.01         Indebtedness.
Borrower will not create, incur, assume or suffer to exist any Indebtedness,
except:

 

(a)           Indebtedness
created pursuant to the Loan Documents;

 

(b)           Indebtedness
acceptable to Lender in its sole discretion and existing on the date hereof and
set forth on Schedule 6.01(b) and extensions and renewals of any such
Indebtedness that do not increase the outstanding principal amount thereof
(immediately prior to giving effect to such extension, renewal or replacement)
or shorten the maturity or the weighted average life thereof;

 

(c)           Indebtedness
subordinate to the Obligations in an amount not to exceed $5,000,000 on terms
and conditions acceptable to Lender in its sole discretion, provided
such Indebtedness (i) is advanced prior to any disbursement of the Loans by
Lender under the Expansion Loan Facility by Lender, (ii) is unsecured, (iii)
accrues interest at an annual interest rate of 12% or less, (iv) does not
require interest payments until the date Substantial Completion occurs, (v)
does not require principal payments until at least one year from the date
Substantial Completion (as defined in the Third Supplement) occurs, and then
only if after such payment is made, Borrower is in compliance with the
financial covenants set forth in Article V of the Master Agreement, (vi)
requires deferral of all payments during the continuance of a Default or Event
of Default, (vii) does not contain any provision providing for a premium for
prepayment of such subordinate debt, and (viii) is subject to an intercreditor
agreement acceptable to Lender in its sole discretion; and

 

(d)           Indebtedness
in an amount not to exceed $2,500,000 for the purpose of obtaining one or more
letters of credit in connection with supply and transportation contracts
related to the procurement of utilities; provided such Indebtedness shall be on
terms and conditions satisfactory to Lender in is sole discretion and
subordinate to Indebtedness created pursuant to the Loan Documents under this
Agreement, and is subject to an intercreditor agreement acceptable to Lender in
its sole discretion.

 

Section 6.02         Negative
Pledge. Except Permitted Encumbrances, Borrower will not create, incur,
assume or suffer to exist any Lien on any of its assets or property now owned
or hereafter acquired.

 

Section 6.03         Fundamental
Changes. Borrower will not, and will not permit any Subsidiary to,
engage in any business other than businesses of the type conducted by Borrower
on the date hereof and businesses reasonably related thereto.

 

18

 

Section 6.04         Investments,
Loans, Etc. Borrower will not purchase, hold or acquire any common
stock, evidence of indebtedness or other securities (including any option,
warrant, or other right to acquire any of the foregoing) of, make or permit to
exist any loans or advances to, Guarantee any obligations of, or make or permit
to exist any investment or any other interest in, any other Person (all of the
foregoing being collectively called “Investments”),
or purchase or otherwise acquire (in one transaction or a series of
transactions) any assets of any other Person that constitute a business unit,
or create or form any Subsidiary, except:

 

(a)           Investments
(other than Permitted Investments) existing on the date hereof and set forth on
Schedule 6.04(a);

 

(b)           Permitted
Investments in which Lender maintains a first priority, perfected security
interest therein;

 

(c)           loans or
advances to employees, officers or directors of Borrower in the ordinary course
of business for travel, relocation and related expenses; provided, however,
that the aggregate amount of all such loans and advances does not exceed
$200,000 at any time;

 

(d)           Investments
in other business organizations whose primary business is the production of
ethanol and byproducts related thereto and in which Lender maintains a first
priority, perfected security interest in such Investments; provided, at the time any such Investment
is made, the aggregate book value of the sum of all such Investments may not,
without the prior written consent of Lender, exceed five percent (5.0%) of the
Net Worth of Borrower; and

 

(e)           other
Investments which in the aggregate do not exceed $250,000 in any fiscal year of
Borrower.

 

Section 6.05         Restricted
Payments. Other than dividends or distributions by Borrower solely in
units of any class of its membership interests, Borrower will not pay, declare
or make, or agree to pay, declare or make, directly or indirectly, any dividend
or distribution on any class of its membership interests, or make any payment
on account of, or set apart assets for a sinking or other analogous fund for,
the purchase, redemption, retirement, defeasance or other acquisition of, any
membership interest, or any options, warrants, or other rights to purchase any
of the foregoing, whether now or hereafter outstanding, or any payment in respect
of Indebtedness subordinated to the Obligations (each such dividend,
distribution, set aside or payment, a “Restricted Payment”), except, prior to
Substantial Completion (as defined in the Third Supplement), which includes the
remainder of the fiscal year in which Substantial Completion occurs, and so
long as no Default or Event of Default has occurred and is then continuing or
would result from such payment, Borrower may distribute an amount not to exceed
40% of its Net Income for such fiscal year. In the fiscal years following
Substantial Completion, and so long as no Default or Event of Default has
occurred and is then continuing or would result from such payment:

 

(a)           Borrower
may distribute an amount of up to 75% of its Net Income; and

 

19

 

(b)           So
long as Borrower achieves and maintains an Owners’ Equity Ratio that exceeds
60% and working capital that exceeds $12,000,000 (in each case as reported on
audited fiscal year end financial statements), Borrower may distribute up to
100% of its Net Income; provided, the limitations set forth in (a) above will
be reinstated if Borrower’s Owners’ Equity Ratio falls below 60% or working
capital falls below $12,000,000 at any quarterly reporting period.

 

Distributions for any prior fiscal year must be
declared by Borrower’s board of managers within 120 days of such fiscal year
end or allowance hereunder to declare and pay the distribution for such fiscal
year will be deemed waived by Borrower and disallowed. In addition,
distributions for any current fiscal year may be declared and paid by Borrower’s
board of managers at any time during such fiscal year. Minutes of Borrower’s
board of managers’ meeting, or a writing in lieu of meeting signed by all
members of the board of managers, for which any distribution is declared must,
at a minimum, state the fiscal year period for which any distribution will be
made.

 

Distributions in respect of Net Income for the prior
year may not be paid until after confirmation of Net Income in Borrower’s
financial statements submitted pursuant to Section 4.01(a). Distributions
in respect of Net Income for the current period may be paid in accordance with
Borrower’s internally prepared year-to-date financial statements reflecting its
Net Income for the year; provided, Borrower must promptly provide for
additional capital in the event the amount of distributions exceeds the amount
allowed based on Borrower’s audited financial statements for such year. In
addition, notwithstanding the foregoing, Borrower may make payments on
subordinate Indebtedness to the extent such payments are allowed under an
intercreditor agreement between Lender and the other lender or creditor to
which such payments are made.

 

Section 6.06         Sale
of Assets. Borrower will
not convey, sell, lease, assign, transfer or otherwise dispose of, any of its
assets, business or property, whether now owned or hereafter acquired, to any
Person except (a) the sale or other disposition for fair market value of
obsolete or worn out property or other property not necessary for operations
disposed of in the ordinary course of business; and (b) the sale of inventory
and Permitted Investments in the ordinary course of business.

 

Section 6.07         Transactions
with Affiliates. Borrower
will not sell, lease or otherwise transfer any property or assets to, or
purchase, lease or otherwise acquire any property or assets from, or otherwise
engage in any other transactions with, any of its Affiliates, except (a) in the
ordinary course of business at prices and on terms and conditions not less
favorable to Borrower than could be obtained on an arm’s-length basis from
unrelated third parties in comparable transactions, and (b) transactions solely
between Borrower and any wholly-owned Subsidiary of Borrower.

 

Section 6.08         Restrictive
Agreements. Borrower
will not directly or indirectly, enter into, incur or permit to exist any
agreement that prohibits, restricts or imposes any condition upon the ability
of Borrower to create, incur or permit any Lien upon any of its assets or
properties, whether now owned or hereafter acquired, except restrictions or
conditions imposed 

 

20

 

by any agreement relating to secured Indebtedness
permitted under this Agreement if such restrictions and conditions apply only
to the property or assets securing such Indebtedness.

 

Section 6.09         Sale
and Leaseback Transactions. Borrower
will not enter into any arrangement, directly or indirectly, whereby it sells
or transfers any property, real or personal, used or useful in its business,
whether now owned or hereinafter acquired, and thereafter rent or lease such
property or other property that it intends to use for substantially the same
purpose or purposes as the property sold or transferred.

 

Section 6.10         Hedging
Agreements. Borrower
will not enter into any Hedging Agreement other than Hedging Agreements
approved by Lender and entered into in the ordinary course of business to hedge
or mitigate risks to which Borrower is exposed in the conduct of its business
or the management of its liabilities.

 

Section 6.11         Amendment
to Material Documents. Except to the extent as could not reasonably be
expected to result in a Material Adverse Effect, Borrower will not amend,
modify or waive any of its rights or any other terms or condition under (a) its
certificate or articles of organization, operating agreement, bylaws or other
organizational documents or (b) any Material Contract.

 

Section 6.12         Accounting
Changes. Borrower will not make any significant change in accounting
treatment or reporting practices, except as required by GAAP, or change its
fiscal year.

 

Section 6.13         Deposit
and Investment Accounts. Borrower will not maintain, deposit or invest
funds into any Deposit Account or Investment Account other than those listed on
Schedule 6.13 without the prior written consent of Lender.

 

Section 6.14         Use
of Proceeds. Borrower will not use the proceeds of any Loan, directly
or indirectly, for “purchasing” or “carrying” any “margin stock” with the
respective meanings of each of such terms under Regulation U of the Board of
Governors of the Federal Reserve System as now and from time to time hereafter
in effect, or for any purpose that violates the provisions of Regulation U, T
or X of the Board of Governors of the Federal Reserve System.

 

Section 6.15         Legal
Status; Eligible Borrower. Borrower will not (a) change its
jurisdiction of organization, or (b) take or permit any action that would
result in (i) Borrower’s discontinuance as a limited liability company in good
standing under the jurisdiction of Borrower’s organization, or (ii) Borrower
becoming ineligible to borrow from Lender or any Farm Credit System lending
institutions.

 

ARTICLE VII.

EVENTS OF DEFAULT AND REMEDIES

 

Section 7.01         Events
of Default. The following will be considered events of default (each an
“Event of Default”)
hereunder:

 

21

 

(a)           Borrower
fails to pay or deposit, as the case may be, any amount payable or required
under this Agreement or any other Loan Document within 10 days of when such
amount becomes due;

 

(b)           any
representation or warranty made or deemed made by or on behalf of Borrower in
or in connection with this Agreement or any other Loan Document (including the
Schedules attached hereto and thereto) and any amendments or modifications
hereof or waivers hereunder, or in any certificate, report, financial statement
or other document submitted to Lender by Borrower or any representative of
Borrower pursuant to or in connection with this Agreement or any other Loan
Document proves to be materially incorrect when made or deemed made or
submitted;

 

(c)           Borrower
fails to observe or perform any covenant or agreement in (i) Sections 4.01,
4.02, or 4.03, or Article V or VI, of this Master Agreement,
(ii) any Amendment Document, or (iii) any Material Contract beyond any
applicable cure period, if any (including any payment default under such
Material Contracts);

 

(d)           Borrower
fails to observe or perform any covenant or agreement in this Agreement (other
than those referred to in clauses (a), (b), or (c) above) or in any other Loan
Document, and such failure continues for 30 days after the earlier of the date
(1) Borrower becomes aware of such failure, or (2) written notice
thereof is given to Borrower by Lender; or any Event of Default otherwise
occurs under any Loan Document;

 

(e)           Borrower or
any guarantor of any portion of the Obligations, (whether as primary obligor or
as guarantor or other surety) fails to pay any principal of or premium or interest
on any Material Indebtedness that is outstanding, when and as the same becomes
due and payable (whether at scheduled maturity, required prepayment,
acceleration, demand or otherwise), and such failure continues after the
applicable grace period, if any, specified in the agreement or instrument
evidencing such Indebtedness; or any other event occurs or condition exists
under any agreement or instrument relating to such Indebtedness and continues
after the applicable grace period, if any, specified in such agreement or
instrument, if the effect of such event or condition is to accelerate, or
permit the acceleration of, the maturity of such Indebtedness; or any such
Indebtedness is declared to be due and payable; or required to be prepaid or
redeemed (other than by a regularly scheduled required prepayment or
redemption), purchased or defeased, or any offer to prepay, redeem, purchase or
defease such Indebtedness is required to be made, in each case prior to the
stated maturity thereof;

 

(f)            Borrower or
any guarantor of any portion of the Obligations, (1) commences a voluntary case
or other proceeding or files any petition seeking liquidation, reorganization
or other relief under any federal, state or foreign bankruptcy, insolvency or
other similar law now or hereafter in effect or seeking the appointment of a
custodian, trustee, receiver, liquidator or other similar official of it or any
substantial part of its property, (2) consents to the institution of, or fails
to contest in a timely and appropriate manner, any proceeding or petition
described in clause (1) of this Section 7.01(f), (3) applies for or
consents to the appointment of a custodian, trustee, receiver, liquidation or 

 

22

 

other
similar official for Borrower or such guarantor or for a substantial part of
the assets of Borrower or such guarantor, (4) files an answer admitting the
material allegations of a petition filed against it in any such proceeding, (5)
makes a general assignment for the benefit of creditors, or (6) takes any action
for the purpose of effecting any of the foregoing;

 

(g)           an
involuntary proceeding is commenced or an involuntary petition is filed seeking
(1) liquidation, reorganization or other relief in respect of Borrower or any guarantor
of any portion of the Obligations, or the debts, or any substantial part of the
assets of Borrower or such guarantor under any federal, state or foreign
bankruptcy, insolvency or other similar law now or hereafter in effect or (2)
the appointment of a custodian, trustee, receiver, liquidator or other similar
official for Borrower or any guarantor of any portion of the Obligations, or
for a substantial part of the assets of Borrower or such guarantor, and in any
such case, such proceeding or petition remains undismissed for a period of 60
days or an order or decree approving or ordering any of the foregoing is
entered;

 

(h)           Borrower or
any guarantor of any portion of the Obligations becomes unable to pay, admits
in writing its inability to pay, or fails to pay, its debts as they become due;

 

(i)            an ERISA
Event occurs with respect to Borrower or any guarantor of any portion of the
Obligations that, in the opinion of Lender, when taken together with other
ERISA Events that have occurred, could reasonably be expected to result in a
Material Adverse Effect;

 

(j)            any  judgment or order for the payment of money
in excess of $250,000  in the aggregate is rendered against
Borrower or any guarantor of any portion of the Obligations, and either (1)
such judgment or order is final and enforcement proceedings have been commenced
by any creditor upon such judgment or order, or (2) there is a period of
30 consecutive days during which a stay of enforcement of such judgment or
order, by reason of a pending appeal or otherwise, is not in effect;

 

(k)           any  non-monetary  judgment or order is rendered against Borrower or any
guarantor of any portion of the Obligations that could reasonably be expected
to result in a Material Adverse Effect, and there is a period of
30 consecutive days during which a stay of enforcement of such judgment or
order, by reason of a pending appeal or otherwise, is not in effect;

 

(l)            a Change in
Control occurs or exists;

 

(m)          Borrower
ceases to exist or any guarantor of any portion of the Obligation ceases to
exist;

 

(n)           Borrower or
any guarantor of any portion of the Obligations becomes the subject of any
out-of-court settlement with its creditors for the payment of money in excess
of $250,000;

 

23

 

(o)           any
guarantor of any portion of the Obligations attempts to revoke such Guarantee,
or any such Guarantee becomes unenforceable in whole or in part for any reason;

 

(p)           an Event of
Default occurs under any other agreement with (or instrument in favor of) Lender
that could reasonably be expected to result in a Material Adverse Effect; or

 

(q)           any other
event occurs or exists which could reasonably be expected to result in a
Material Adverse Effect.

 

Section 7.02         Remedies.
Upon the occurrence of an Event of Default (other than an event described in
clause (f), (g) or (h) of Section 7.01), and at any time thereafter,
Lender may take any one or more or all of the following actions, at the same or
different times:

 

(a)           terminate
the Commitments, whereupon the Commitments will terminate immediately;

 

(b)           declare the
principal of and any accrued interest on the Loans, and all other Obligations
to be due and payable, whereupon the same will become due and payable
immediately, without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by Borrower;

 

(c)           Setoff;

 

(d)           take other
steps to protect or preserve Lender’s interest in any Collateral, including,
without limitation, notifying account debtors to make payments directly to
Lender, advancing funds to protect any Collateral, and insuring Collateral;
and/or

 

(e)           exercise
all remedies provided for in any other Loan Document or as otherwise provided
by law.

 

If an Event of Default specified in either clause (e),
(f) or (g) of Section 7.01 occurs, all Commitments will automatically
terminate and the principal of the Loans then outstanding, together with
accrued interest thereon, and all fees, and all other Obligations will
automatically become due and payable, without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by Borrower.

 

ARTICLE VIII.

MISCELLANEOUS

 

Section 8.01         Notices.

 

Except in the case of notices and other communications
expressly permitted to be given by telephone, all notices and other
communications to any party herein to be effective will be in writing and
delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy, as follows:

 

24

 

	
  To Borrower:

  	
   

  	
  Great
  Plains Ethanol, LLC

  
	
   

  	
   

  	
  Attention: Rick Serie

  
	
   

  	
   

  	
  27716
  462 Avenue

  
	
   

  	
   

  	
  Chancellor, South Dakota 57015

  
	
   

  	
   

  	
  Facsimile: No.
  (605) 647-2442

  
	
   

  	
   

  	
   

  
	
  And to:

  	
   

  	
  Great Plains Ethanol,
  LLC

  
	
   

  	
   

  	
  c/o POET, LLC

  
	
   

  	
   

  	
  4615 North Lewis Avenue

  
	
   

  	
   

  	
  Sioux Falls, South Dakota
  57104

  
	
   

  	
   

  	
  Attn: Vice President of
  Project Development

  
	
   

  	
   

  	
  Facsimile No. (605) 965-2203

  
	
   

  	
   

  	
   

  
	
  With a copy to:

  	
   

  	
  James M. Wiederrich,
  Esq.

  
	
   

  	
   

  	
  Woods, Fuller, Shultz
  & Smith P.C.

  
	
   

  	
   

  	
  300 South Phillips
  Avenue, Suite 300

  
	
   

  	
   

  	
  Post Office Box 5027

  
	
   

  	
   

  	
  Sioux Falls, South
  Dakota 57117-5027

  
	
   

  	
   

  	
  Facsimile No. (605)
  339-3357

  
	
   

  	
   

  	
   

  
	
  To Lender:

  	
   

  	
  AgCountry Farm Credit
  Services, FLCA

  
	
   

  	
   

  	
  Attention: Randolph L.
  Aberle, Vice President

  
	
   

  	
   

  	
  Post
  Office Box 6020

  
	
   

  	
   

  	
  1900 44th Street South

  
	
   

  	
   

  	
  Fargo, North Dakota
  58108

  
	
   

  	
   

  	
  Facsimile No. (701) 277-9054

  
	
   

  	
   

  	
   

  
	
  With a copy to:

  	
   

  	
  Ronald K. Vaske,
  Esq.

  
	
   

  	
   

  	
  Lindquist & Vennum P.L.L.P.

  
	
   

  	
   

  	
  4200 IDS Center

  
	
   

  	
   

  	
  80 South Eighth
  Street

  
	
   

  	
   

  	
  Minneapolis,
  Minnesota 55402

  
	
   

  	
   

  	
  Facsimile: (612)
  371-3207

  

 

Any party hereto may change its address or facsimile
number for notices and other communications hereunder by notice to the other
parties. All notices and other communications delivered to Borrower will, when
transmitted by overnight delivery, or faxed, be effective when delivered for
overnight (next-day) delivery, or transmitted in legible form by facsimile
machine, respectively, or if mailed, upon the third Business Day after the date
deposited in the mail or if delivered, upon delivery. Notices delivered to
Lender will not be effective until actually received at its address specified
in this Section 8.01.

 

Any agreement of Lender to receive certain notices by
telephone or facsimile is solely for the convenience and at the request of
Borrower. Lender will be entitled to rely on the authority of any Person
purporting to be a Person authorized by Borrower to give such notice and Lender
will not have any liability to Borrower or any other Person as a result of any
action taken or not taken by Lender in reliance upon such telephonic or
facsimile notice. The obligation of 

 

25

 

Borrower to repay the Loans and all other Obligations
hereunder will not be affected in any way or to any extent by any failure of
Lender to receive written confirmation of any telephonic or facsimile notice or
the receipt by Lender of a confirmation which is at variance with the terms
understood by Lender to be contained in any such telephonic or facsimile
notice.

 

Section 8.02         Waiver;
Amendments.

 

(a)           No failure
or delay by Lender in exercising any right or power hereunder or any other Loan
Document, and no course of dealing between Borrower and Lender, will operate as a waiver, nor will any
single or partial exercise of any such right or power or any abandonment or
discontinuance of steps to enforce such right or power, preclude any other or
further exercise thereof or the exercise of any other right or power hereunder
or thereunder. The rights and remedies of Lender hereunder and under the other
Loan Documents are cumulative and are not exclusive of any rights or remedies
provided by law. No waiver of any provision of this Agreement or any other Loan
Document or consent to any departure by Borrower therefrom will in any event be
effective unless the same is permitted by paragraph (b) of this Section, and
then such waiver or consent will be effective only in the specific instance and
for the purpose for which given. Without limiting the generality of the
foregoing, the making of an Advance will not be construed as a waiver of any
Default or Event of Default, regardless of whether Lender had notice or
knowledge of such Default or Event of Default at the time.

 

(b)           No
amendment or waiver of any provision of this Agreement or any other Loan
Document, nor consent to any departure by Borrower therefrom, will in any event
be effective unless the same is in writing and signed by Borrower and Lender
and then such waiver or consent will be effective only in the specific instance
and for the specific purpose for which given.

 

Section 8.03         Expenses;
Indemnification.

 

(a)           Borrower
indemnifies Lender and each Participant against, and holds Lender and each
Participant harmless from, any and all costs, losses, liabilities, claims,
damages and related expenses, including the fees, charges and disbursements of
any engineers, consultants, agents and counsel for Lender and/or any
Participant, which are incurred by or asserted against Lender and/or any
Participant arising out of, in connection with or as a result of (1) the
execution, delivery and documentation of the conditional commitment letter
dated May 21, 2007, the fee letter dated May 21, 2007, this Master Agreement,
any Supplement, any other Loan Document, or any other agreement or instrument
contemplated hereby, the performance by the parties hereto of their respective
obligations hereunder or the consummation of any of the transactions
contemplated hereby or thereby, (2) any Advances or any actual or proposed use
of the proceeds therefrom, (3) any actual or alleged presence or release of
Hazardous Materials on or from any property owned by Borrower or any
Subsidiary, or any Environmental Liability related in any way to Borrower or
any Subsidiary,  or (4)  actual or prospective claim, litigation,
investigation or proceeding relating to any of the foregoing, whether based on
contract, tort or any other theory and regardless of whether Lender is a party
thereto, including attorneys’ fees and all other costs and fees (i) incurred
before or after 

 

26

 

commencement
of litigation or at trial, on appeal or in any other proceeding, and (ii)
incurred in any bankruptcy proceeding; provided, that Borrower is not
obligated to indemnify Lender or any Participant for any of the foregoing
arising out of Lender’s or such Participant’s gross negligence or willful
misconduct as determined by a court of competent jurisdiction in a final and
nonappealable judgment.

 

(b)           Borrower
will pay, and hold Lender and each Participant harmless from and against, any
and all Taxes with respect to this Agreement and any other Loan Document, any
Collateral described therein, or any payments due thereunder, and will save
Lender and each Participant harmless from and against any and all liabilities
with respect to or resulting from any delay or omission to pay such Taxes.

 

(c)           To the
extent permitted by applicable law, Borrower will not assert, and Borrower
hereby waives, any claim against Lender and/or any Participant, on any theory
of liability, for special, indirect, consequential or punitive damages (as
opposed to actual or direct damages) arising out of, in connection with or as a
result of, this Agreement or any agreement or instrument contemplated hereby,
the transactions contemplated therein, any Advance or the use of proceeds
thereof.

 

(d)           All amounts
due under this Section 8.03 are due and payable promptly on demand.

 

Section 8.04         Successors
and Assigns.

 

(a)           The
provisions of this Agreement are binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns, except that
Borrower may not assign or transfer any of its rights hereunder without the
prior written consent of Lender (and any attempted assignment or transfer by
Borrower without such consent will be considered null and void).

 

(b)           Lender may
at any time, without the consent of Borrower, assign to one or more assignees
all or a portion of its rights and obligations under this Agreement and the
other Loan Documents, including all or a portion of any Commitment and/or all
or any portion of any Loan.

 

(c)           Lender and
each Participant may at any time, without the consent of Borrower, sell
participation interests to one or more Persons (a “Participant”) in all or a portion of Lender’s rights and
obligations under this Agreement, including all or a portion of any Commitment
and/or all or any portion of any Loan. In the event Lender or any Participant
sells one or more participation interests, Lender’s (and such Participant’s)
obligations under this Agreement will remain unchanged, and Borrower will
continue to deal solely and directly with Lender in connection with Lender’s
rights and obligations under this Agreement and the other Loan Documents.

 

(d)           Lender may
at any time pledge or assign a security interest in all or any portion of its
rights under this Agreement and the Notes without complying with this Section. No
such pledge or assignment will release Lender from any of its obligations
hereunder or substitute any such pledgee or assignee for Lender as a party
hereto.

 

27

 

Section 8.05         Governing
Law; Jurisdiction; Consent to Service of Process.

 

(a)           This
Agreement and the other Loan Documents (except to the extent otherwise provided
therein) will be construed in accordance with and be governed by the law
(without giving effect to the conflict of law principles thereof) of the State
of North Dakota.

 

(b)           Borrower
hereby irrevocably and unconditionally submits, for itself and its property, to
the non-exclusive jurisdiction of the United States District Court of the
District of North Dakota, and of any state court of the State of North Dakota
located in Cass County, in any action or proceeding arising out of or relating
to this Agreement or any other Loan Document or the transactions contemplated
hereby or thereby, or for recognition or enforcement of any judgment. Each of
the parties irrevocably and unconditionally agrees that all claims in respect
of any such action or proceeding may be heard and determined in such North
Dakota state court or, to the extent permitted by applicable law, such federal
court. Each of the parties hereto agrees that a final judgment in any such
action or proceeding will be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Agreement or any other Loan Document will affect any right
Lender may otherwise have to bring any action or proceeding relating to this
Agreement or any other Loan Document against Borrower or its properties in the
courts of any jurisdiction.

 

(c)           Borrower
irrevocably and unconditionally waives any objection which it may now or
hereafter have to the laying of venue of any such suit, action or proceeding
described in paragraph (b) of this Section and brought in any court referred to
in paragraph (b) of this Section. Each of the parties hereto 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.

 

Section 8.06         WAIVER
OF JURY TRIAL. EACH PARTY HERETO 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 THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY
(WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A)
CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT
OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, AND (B) ACKNOWLEDGES THAT
IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT
AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION.

 

Section 8.07         Right
of Setoff. As additional security for payment of the Obligations,
Borrower grants to Lender a security interest in, a lien on, and an express
contractual right, at any time or from time to time upon the occurrence and during
the continuance of a Default or 

 

28

 

Event of Default, without prior notice to Borrower,
any such notice being expressly waived by Borrower to the extent permitted by
applicable law, to set off and apply against all deposits (general or special,
time or demand, provisional or final) of Borrower at any time held or other
obligations at any time owing by Lender to or for the credit or the account of
Borrower against any and all Obligations held by Lender or any Participant (“Setoff”),
irrespective of whether Lender or any Participant has made demand hereunder and
although such Obligations may be unmatured. Lender or any Participant, as
applicable, agrees to notify Borrower after any Setoff and any application made
by Lender or any Participant; provided,
that the failure to give such notice will not affect the validity of such
Setoff and application. The rights of Lender and the Participants under this Section
8.07 are in addition to any rights now or hereafter granted under
applicable law and do not limit any such rights.

 

Section 8.08         Counterparts;
Integration. This Agreement may be executed in any number of separate
counterparts (including by telecopy or other electronic mail, or any other
electronic means), and all of said counterparts taken together will be deemed
to constitute one and the same instrument. This Agreement, the other Loan
Documents, and any separate letter agreement(s) relating to any fees payable to
the Lender constitute the entire agreement among the parties hereto and thereto
regarding the subject matters hereof and thereof and supersede all prior
agreements and understandings, oral or written, regarding such subject matters.

 

Section 8.09         Survival.
All covenants, agreements, representations and warranties made by Borrower
herein and in the certificates or other instruments delivered in connection
with or pursuant to this Agreement will be considered to have been relied upon
by Lender and will survive the execution and delivery of this Agreement,
regardless of any investigation made by any such other party or on its behalf
and notwithstanding that Lender may have had notice or knowledge of any Default
or incorrect representation or warranty at the time any credit is extended
hereunder, and will continue in full force and effect as long as the principal
of or any accrued interest on the Loans or any fee or any other amount payable
under this Agreement is outstanding and unpaid and so long as any Commitment is
in effect. The provisions of Section 8.09 will survive and remain in
full force and effect regardless of the consummation of the transactions
contemplated hereby, the repayment of the Loans, and termination of the
Commitments, or this Agreement or any provision hereof. All representations and
warranties made herein, in the certificates, reports, notices, and other
documents delivered pursuant to this Agreement will survive the execution and
delivery of this Agreement and the other Loan Documents.

 

Section 8.10         Severability.
Any provision of this Agreement or any other Loan Document held to be illegal,
invalid or unenforceable in any jurisdiction, will, as to such jurisdiction, be
ineffective to the extent of such illegality, invalidity or unenforceability
without affecting the legality, validity or enforceability of the remaining
provisions hereof or thereof; and the illegality, invalidity or
unenforceability of a particular provision in a particular jurisdiction will
not invalidate or render unenforceable such provision in any other jurisdiction.

 

Section 8.11         Transferable
Record. This Agreement, the Notes and the other Loan Documents, as
amended, are “transferable records” as defined in applicable law relating to
electronic transactions. Therefore, Lender may, on behalf of Borrower, create a
microfilm, optical disk or electronic image of such Loan Documents that are
authoritative copies under 

 

29

 

applicable law. Lender may store such authoritative
copies in microfilm or electronic form and destroy the paper original as part
of its normal business practices. Lender, on its own behalf, may control and
transfer such authoritative copies as permitted by applicable law.

 

Section 8.12         Confidentiality.
Lender agrees to take normal and reasonable precautions to maintain the
confidentiality of any information designated in writing as confidential and
provided to it by Borrower or any Subsidiary, except that such information may
be disclosed (a) to any Affiliate, Participant or advisor of Lender, including
without limitation accountants, legal counsel and other advisors, provided that
Lender shall have taken reasonable steps to assure that such Affiliates,
participants, and advisors will maintain such information in confidence to the
same extent required of Lender hereunder, (b) to the extent required by
applicable laws or regulations or by any subpoena or similar legal process, (c)
to the extent requested by any regulatory agency or authority, (d) to the
extent that such information becomes publicly available, other than as a result
of a breach of this Section 8.12, or which becomes available to Lender
on a nonconfidential basis from a source other than Borrower, (e) in connection
with the exercise of any remedy hereunder or any suit, action or proceeding relating
to this Agreement or the enforcement of rights hereunder, and (f) subject to
provisions substantially similar to this Section 8.12, to any actual or
prospective assignee or Participant, or (g) with the consent of Borrower. Any
Person required to maintain the confidentiality of any information as provided
for in this Section shall be considered to have complied with its obligation to
do so if such Person has exercised the same degree of care to maintain the
confidentiality of such information as such Person would accord its own
confidential information.

 

Section 8.13         Copies.
Borrower hereby acknowledges the receipt of a copy of this Agreement and all
other Loan Documents.

 

Section 8.14         Notice
of Claims Against Lender; Limitation of Certain Damages. In order to
allow Lender to mitigate any damages to Borrower from Lender’s alleged breach
of its duties under the Loan Documents or any other duty, if any, to Borrower,
the Borrower agrees to give Lender immediate written notice of any claim or
defense it has against Lender, whether in tort or contract, relating to any
action or inaction by Lender under any Loan Document, or the transactions
related thereto, or of any defense to payment of the Obligations for any reason.
The requirement of providing timely notice to Lender represents the parties’
agreed-upon standard of performance regarding claims against Lender. Notwithstanding
any claim that Borrower may have against Lender, and regardless of any notice
Borrower may have given Lender, Lender will not be liable to Borrower for
consequential, punitive and/or special damages.

 

Section 8.15         Termination.
Upon satisfaction of all of Borrower’s obligations hereunder, and the related
documents and instruments, Lender will (a) mark all Notes “PAID” and return the
same to Borrower, (b) release its security interests and file appropriate
documentations of the same, and (c) redeem the Required Stock.

 

SIGNATURE PAGE FOLLOWS

 

30

 

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

 

 

	
   

  	
  BORROWER:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  GREAT PLAINS ETHANOL,
  LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Darrin Ihnen

  	
   

  
	
   

  	
  Name:

  	
  Darrin Ihnen

  
	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  LENDER:

  
	
   

  	
   

  	
   

  
	
   

  	
  AGCOUNTRY FARM CREDIT
  SERVICES, FLCA

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Randolph L. Aberle

  	
   

  
	
   

  	
  Name:

  	
  Randolph L. Aberle

  
	
   

  	
  Title:

  	
  Vice President 

  
								

 

SIGNATURE PAGE TO

MASTER CREDIT
AGREEMENT

 

 

ATTACHMENT I

DEFINITIONS

 

A.  Accounting
Terms and Determination. Unless otherwise defined or
specified herein, all accounting terms used herein will be interpreted, all
accounting determinations hereunder will be made, and all financial statements
required to be delivered hereunder will be prepared, in accordance with GAAP as
in effect from time to time.

 

B.  Terms
Generally. The definitions of terms herein apply equally to
the singular and plural forms of the terms defined. The words “include,” “includes”
and “including” are herein deemed to be followed by the phrase “without
limitation.”  Unless the context requires
otherwise (a) any definition of or reference to any agreement, instrument or
other document herein will be construed as referring to such agreement,
instrument or other document as it was originally executed or as it may from
time to time be amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth
herein), (b) any reference herein to any Person will be construed to include
such Person’s successors and permitted assigns, (c) the words “hereof,” “herein”
and “hereunder” and words of similar import will be construed to refer to this
Agreement as a whole and not to any particular provision hereof, (d) all
references to Articles, Sections, Exhibits and Schedules will be construed
to refer to Articles, Sections, Exhibits and Schedules to this Agreement, and
(e) all references to a specific time will be construed to refer to the time in
the city provided herein for Lender’s receipt of notices hereunder, unless
otherwise indicated.

 

C.  Supplements.
Certain terms are defined specifically in one or more Supplements. If there is
an inconsistency between the terms hereof and a Supplement, the definitions in
the Supplement will control to the extent provided therein.

 

D.  Defined
Terms. In addition to the other terms defined in the
Agreement, the following terms have the meanings herein specified.

 

“Advance” means an
advance of Loan funds by Lender to or for the benefit of Borrower.

 

“Affiliate” means, as
to any Person, any other Person that directly, or indirectly through one or
more intermediaries, Controls, is Controlled by, or is under common Control
with, such Person.

 

“Agreement”
means, collectively, the Master Agreement and each of the Supplements in effect
from time to time.

 

“Borrower”  means Great Plains Ethanol, LLC,
d/b/a POET Biorefining – Chancellor, a South Dakota limited liability company.

 

“Business Day” means any
day other than a Saturday, Sunday or other day on which commercial banks in the
city of Fargo, North Dakota, are authorized or required by law to close.

 

“Capital
Expenditures” means, for any period, without
duplication, (a) the additions to property, plant and equipment and other
capital expenditures of Borrower that are (or would be) 

 

I-1

 

set forth on a consolidated statement of cash flows of
Borrower for such period prepared in accordance with GAAP and (b) Capital Lease
Obligations incurred by Borrower during such period.

 

“Capital Lease Obligations” of any
Person means the capitalized amount, determined in accordance with GAAP, of all
obligations of such Person to pay rent or other amounts under any lease (or
other arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP.

 

“Change in Control” means the
occurrence of one or more of the following events: (a) any sale, lease,
exchange or other transfer (in a single transaction or a series of related
transactions) of all or substantially all of the assets of Borrower or any
guarantor of any portion of the Obligations to any Person or “group” (within
the meaning of the Securities Exchange Act of 1934 and the rules of the
Securities and Exchange Commission thereunder in effect on the date hereof),
(b) acquisition of Control of the Borrower or any guarantor of any portion of
the Obligations by any Person who does not Control the Borrower or such
guarantor on the date of this Agreement, or (c) occupation of a majority of the
seats on the board of directors of Borrower or any guarantor of any portion of
the Obligations by Persons who were neither (1) nominated by the immediately
previous board of directors or (2) appointed by directors so nominated.

 

“Charges”
has the meaning set forth in Section 1.05.

 

“Closing Date” means
August 10, 2007, and with respect to each Supplement, the date specified in
such supplement if a different closing date is specified.

 

“Code” means the
Internal Revenue Code of 1986, as amended and in effect from time to time.

 

“Collateral” means all of Borrower’s tangible and
intangible property, real and personal, including without limitation, all
casualty insurance proceeds and condemnation awards.

 

“Collateral Assignment” means
each collateral assignment by Borrower in favor of Lender of a Material
Contract, including all such collateral assignments made prior to the date
hereof and all of those made hereafter.

 

“Commitment” means any
commitment by Lender to advance funds to Borrower as set forth in this Master
Agreement or any Supplement.

 

“Consent and Waiver of Borrower
Rights” means the consent and waiver in the form attached
hereto as Exhibit A.

 

“Control” means the power, directly or
indirectly, either to (a) vote 10% or more of securities having ordinary voting
power for the election of directors (or persons performing similar functions)
of a Person or (b) direct or cause the direction of the management and policies
of a Person, whether through the ability to exercise voting power, by contract
or otherwise. The terms “Controls,”
“Controlling,” “Controlled by,” and “under common Control with”
have meanings correlative thereto.

 

I-2

 

“Control Agreements” means the agreements requested by
Lender, if any, to perfect Lender’s security interest in Deposit Accounts and
Investment Accounts, as the same may be amended, restated, supplemented or
otherwise modified from time to time.

 

“Default” means any
condition or event that, with the giving of notice or the lapse of time, or
both, would constitute an Event of Default.

 

“Default
Interest” has the meaning set forth in Section 1.04.

 

“Deposit Accounts” means all
demand, time, savings, passbook or similar depository accounts of Borrower with
any Person, including Borrower’s operating, payroll, and other bank or
depository accounts.

 

“EBITDA” for
any period means an amount equal to (a) Net Income plus (b) to the extent deducted
in determining Net Income, the sum of (i) Interest Expense, (ii) income taxes,
(iii) depreciation and amortization, and (iv) all other non-cash charges.

 

“Environmental Laws”
means all laws, rules, regulations, codes, ordinances, orders, decrees, judgments,
injunctions, notices or binding agreements issued, promulgated or entered into
by or with any Governmental Authority, relating in any way to the environment,
preservation or reclamation of natural resources, the management, Release or
threatened Release of any Hazardous Material or to health and safety matters.

 

“Environmental Liability”
means any liability, contingent or otherwise (including any liability for
damages, costs of environmental investigation and remediation, costs of
administrative oversight, fines, related attorneys’ fees, natural resource
damages, penalties or indemnities), directly or indirectly resulting from or
based upon (a) any actual or alleged violation of any Environmental Law, (b)
the generation, use, handling, transportation, storage, treatment or disposal
of any Hazardous Materials, (c) any actual or alleged exposure to any Hazardous
Materials, (d) the Release or threatened Release of any Hazardous Materials, or
(e) any contract, agreement or other consensual arrangement pursuant to which
liability is assumed or imposed with respect to any of the foregoing.

 

“ERISA” means the
Employee Retirement Income Security Act of 1974, as amended from time to time,
and any successor statute.

 

“ERISA Affiliate” means any
trade or business (whether or not incorporated), which, together with Borrower,
is treated as a single employer under Section 414(b) or (c) of the Code or,
solely for the purposes of Section 302 of ERISA and Section 412 of the Code, is
treated as a single employer under Section 414 of the Code.

 

“ERISA Event”  means (a) any “reportable
event,” as defined in Section 4043 of ERISA or the regulations issued
thereunder with respect to a Plan (other than an event for which the 30-day
notice period is waived); (b) the existence with respect to any Plan of an “accumulated
funding deficiency” (as defined in Section 412 of the Code or Section 302 of
ERISA), whether or not waived; (c) the filing pursuant to Section 412(d) of the
Code or Section 303(d) of ERISA of an application for a waiver of the minimum
funding standard with respect to any Plan; (d) the incurrence by Borrower or
any of its ERISA Affiliates of any liability under Title IV of ERISA 

 

I-3

 

with respect to the termination of any Plan; (e) the
receipt by Borrower or the ERISA Affiliate from the PBGC or a plan
administrator appointed by the PBGC of any notice relating to an intention to
terminate any Plan or Plans or to appoint a trustee to administer any Plan; (f)
the incurrence by Borrower or any of its ERISA Affiliates of any liability with
respect to the withdrawal or partial withdrawal from any Plan or Multiemployer
Plan; or (g) the receipt by Borrower or any ERISA Affiliate of any notice, or
the receipt by any Multiemployer Plan from Borrower or any ERISA Affiliate of
any notice, concerning the imposition of Withdrawal Liability or a
determination that a Multiemployer Plan is, or is expected to be, insolvent or
in reorganization, within the meaning of Title IV of ERISA.

 

“Event of Default” has the
meaning set forth in Section 7.01.

 

“Farm Products”
has the meaning ascribed thereto in the UCC.

 

“First Supplement”
means the First Supplement to the Master Credit Agreement (Refinance Term Loan)
between Borrower and Lender dated the date hereof, as amended, restated,
supplemented, or otherwise modified from time to time.

 

“Fixed Charges”
means, for any period determined on a consolidated basis in accordance with
GAAP, the sum of (a) interest expense, (b) scheduled principal payments made on
Total Debt, (c) income tax expense for such period, (d) Restricted Payments
declared or otherwise allocated, and (e) the lesser of $1,000,000 of
maintenance Capital Expenditures or actual maintenance Capital Expenditures.

 

“Fixed Charge Coverage
Ratio” means for any period of four consecutive quarters, the
ratio of (a) EBITDA to (b) Fixed Charges.

 

“Food Security Act”
means the Food Security Act of 1985, 7 U.S.C. §  1631, as amended, and the
regulations promulgated thereunder.

 

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

 

“Governmental Authority”
means the government of the United States of America, any other nation or any
political subdivision thereof, whether state or local, and any agency,
authority, instrumentality, regulatory body, court, central bank or other
entity exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government.

 

“Guarantee”
of or by any Person, including without limitation any Governmental Authority
providing a guarantee of any portion of the Obligations, (the “guarantor”) means any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic
effect of guaranteeing any Indebtedness or other obligation of any other Person
(the “primary obligor”) in any
manner, whether directly or indirectly and including any obligation, direct or
indirect, of the guarantor (a) to purchase or pay (or advance or supply funds
for the purchase or payment of) such Indebtedness or other obligation or to
purchase (or to advance or supply funds for the purchase of) any security for
the payment thereof, (b) to purchase or lease property, securities or services
for the purpose of assuring the owner of such Indebtedness or other obligation
of the 

 

I-4

 

payment thereof, (c) to maintain working capital,
equity capital or any other financial statement condition or liquidity of the
primary obligor so as to enable the primary obligor to pay such Indebtedness or
other obligation, or (d) as an account party in respect of any letter of credit
or letter of guarantee issued in support of such Indebtedness or obligation. The
term “Guarantee” does not include endorsements for collection or deposits in
the ordinary course of business. The amount of any Guarantee is deemed to be an
amount equal to the stated or determinable amount of the primary obligation in
respect of which Guarantee is made or, if not so stated or determinable, the
maximum reasonably anticipated liability in respect thereof (assuming such
Person is required to perform thereunder) as determined by such Person in good
faith. The term “Guarantee” used as a verb has a corresponding meaning.

 

“Hazardous Materials” means all explosive or radioactive
substances or wastes and all hazardous or toxic substances, wastes or other
pollutants, including petroleum or petroleum distillates, asbestos or asbestos
containing materials, polychlorinated biphenyls, radon gas, infectious or
medical wastes and all other substances or wastes of any nature regulated
pursuant to any Environmental Law.

 

“Hedging Agreements”
means interest rate swap, cap or collar agreements, interest rate future or option
contracts, currency swap agreements, currency future or option contracts,
commodity agreements and other similar agreements or arrangements designed to
protect against fluctuations in interest rates, currency values or commodity
values, in each case to which Borrower is a party.

 

“Indebtedness”
of any Person means, without duplication (a) all obligations of such
Person for borrowed money, (b) all obligations of such Person evidenced by
bonds, debentures, notes or other similar instruments, (c) all obligations of
such Person in respect of the deferred purchase price of property or services
(other than trade payables incurred in the ordinary course of business; provided,
that for purposes of Section 7.01(e), trade payables overdue by more
than 120 days are included in this definition except to the extent that any of
such trade payables are being disputed in good faith and by appropriate
measures), (d) all obligations of such Person under any conditional sale or
other title retention agreement(s) relating to property acquired by such
Person, (e) all Capital Lease Obligations of such Person, (f) all
obligations, contingent or otherwise, of such Person in respect of letters of
credit, acceptances or similar extensions of credit, (g) all Guarantees of
such Person, (h) all Indebtedness of a third party secured by any Lien on
property owned by such Person, whether or not such Indebtedness has been
assumed by such Person, (i) all obligations of such Person, contingent or
otherwise, to purchase, redeem, retire or otherwise acquire for value any
common stock, membership unit or other capital interest of such Person, (j)
Off-Balance Sheet Liabilities, and (k) all capital interests of such person
(such as preferred units) which call for a fixed or formulaic amount to be paid
to the holder thereof or that have a maturity date. The Indebtedness of any
Person includes the Indebtedness of any partnership or joint venture in which
such Person is a general partner or a joint venturer, except to the extent that
the terms of such Indebtedness provide that such Person is not liable therefor.

 

“Inventory”
has the meaning ascribed thereto in the UCC, and shall include, without
limitation, grain, grain sorghum, corn, soybeans, wheat, ethanol, dried
distiller’s grains and solubles, and other goods, held by Borrower for sale or
for processing and sale.

 

I-5

 

“Investment Accounts” means all securities or investment
accounts of Borrower with brokerage firms and other Persons.

 

“Investments” has the meaning set forth in Section 6.04.

 

“Lender”
means AgCountry Farm Credit Services, FLCA, a federal land credit association
organized under the Farm Credit Act of 1971, as amended, and its successors and
assigns.

 

“Lien” means
any mortgage, pledge, security interest, lien (statutory or otherwise), charge,
encumbrance, hypothecation, assignment, deposit arrangement, or other
arrangement having the practical effect of the foregoing or any preference,
priority or other security agreement or preferential arrangement of any kind or
nature whatsoever (including any conditional sale or other title retention
agreement and any capital lease having the same economic effect as any of the
foregoing).

 

“Loan” means
a loan, commitment, credit facility or accommodation made or available to
Borrower under this Agreement as more fully described in a Supplement.

 

“Loan Documents”
means collectively this Master Agreement, the Supplements, the Mortgage, the
Security Agreement, the Notes, the Collateral Assignments, all UCC financing
statements filed by Lender in connection with perfection of Lender’s security
interest in the Collateral, and any Control Agreements, draw requests, and any
and all other instruments, agreements, documents and writings executed pursuant
to any of the foregoing which have been delivered in fulfillment of a condition
precedent to effectiveness or to Lender’s obligations under any of the
foregoing, or which have otherwise been executed by Borrower and delivered to
Lender in connection with the Obligations or the Collateral.

 

“Master
Agreement” means solely this Master Credit Agreement, not
including the Supplements, as amended, restated, or otherwise modified (other
than by Supplements entered into pursuant to Section 1.02) from time to
time.

 

“Material Adverse Effect”
means, with respect to any event, act, condition or occurrence of whatever
nature (including any adverse determination in any litigation, arbitration, or
governmental investigation or proceeding), whether singularly or in conjunction
with any other event or events, act or acts, condition or conditions,
occurrence or occurrences whether or not related, a material adverse change in,
or a material adverse effect on, (a) the business, results of operations,
financial condition, assets, or liabilities, of Borrower, (b) the ability of
Borrower to perform any of its obligations under the Loan Documents, (c) the rights
and remedies of Lender under any of the Loan Documents or (d) the legality,
validity or enforceability of any of the Loan Documents.

 

“Material Contract” means an
agreement to which Borrower is or hereafter becomes a party which is material
to the operation of Borrower’s business.

 

“Material Indebtedness”
means Indebtedness (other than the Loans) or obligations in respect of one or
more Hedging Agreements in an aggregate principal amount of $500,000 or more. For purposes of determining Material
Indebtedness, the “principal amount” of the 

 

I-6

 

obligations in respect to any Hedging Agreement at any
time is the maximum aggregate amount (giving effect to any netting agreements)
that Borrower would be required to pay if such Hedging Agreement were
terminated at such time.

 

“Maximum Rate”
has the meaning set forth in Section 1.05.

 

“Mortgage”
means the Future Advance Mortgage and Security Agreement, and Fixture Financing
Statement and Assignment of Leases and Rents  between
Borrower and Lender dated the date hereof, as further amended, restated,
revised or otherwise modified from time to time hereafter.

 

“Multiemployer Plan”
has the meaning set forth in Section 4001(a)(3) of ERISA.

 

“Net Income”
means net income (or loss) determined on a consolidated basis in accordance
with GAAP, but excluding (a) extraordinary gains or losses, (b) gains
attributable to write-up of assets, (c) any equity interest in unremitted
earnings of any Person that is not a Subsidiary, and (d) income (or loss) of
any Person which accrued prior to the date such Person becomes a Subsidiary or
is merged into or consolidated with Borrower or any Subsidiary on the date such
Person’s assets are acquired by the Borrower or a Subsidiary. Net Income shall
include USDA Bio Energy program payments and other payments and benefits
received by Borrower in respect of incentives provided by the State of South
Dakota or any other Governmental Authority.

 

“Net Worth”
means, as of any date, (a) the total assets of Borrower that would be reflected
on Borrower’s consolidated balance sheet as of such date prepared in accordance
with GAAP, after eliminating all amounts properly attributable to minority
interests, if any, in the stock and surplus of Subsidiaries, less (b) the sum of (1) the total liabilities of Borrower
that would be reflected on a consolidated balance sheet of Borrower as of such
date prepared in accordance with GAAP, and (2) the amount of appraisal surplus
or any write-up in the book value of any assets resulting from a revaluation
thereof or any write-up in excess of the cost of such assets acquired reflected
on the consolidated balance sheet of Borrower as of such date prepared in
accordance with GAAP.

 

“Notes”
means, collectively, all notes of Borrower in favor of Lender issued pursuant
to a Supplement.

 

“Obligations”
means all amounts owed by Borrower to Lender pursuant to or in connection with
this Agreement or any other Loan Document, and any other obligation of Borrower
to Lender of any nature whatsoever, including without limitation, all
principal, interest (including any interest accruing after the filing of any
petition in bankruptcy or the commencement of any insolvency, reorganization or
like proceeding relating to Borrower, whether or not a claim for post-filing or
post-petition interest is allowed in such proceeding), all reimbursement
obligations, fees, prepayment premiums, expenses, indemnification and
reimbursement payments, costs and expenses (including all fees and expenses of
counsel to Lender incurred pursuant to this Agreement or any other Loan
Document), whether direct or indirect, absolute or contingent, liquidated or
unliquidated, now existing or hereafter arising 

 

I-7

 

hereunder or thereunder, together with all renewals,
extensions, modifications or refinancings thereof.

 

“Off-Balance Sheet Liabilities” of any Person means (a) any
repurchase obligation or liability of such Person with respect to accounts or
notes receivable sold by such Person, (b) any liability of such Person
under any sale and leaseback transactions which do not create a liability on
the balance sheet of such Person, (c) any liability of such Person under any
so-called “synthetic” lease transaction, or (d) any obligation arising with
respect to any other transaction which is the functional equivalent of or takes
the place of borrowing but which does not constitute a liability on the balance
sheet of such Person.

 

“Original
Credit Agreement” has the meaning set forth in the Recitals.

 

“Owners’
Equity Ratio” means the product of Net Worth plus subordinate
Indebtedness authorized in writing by Lender divided by total assets, expressed
as a percentage of total assets.

 

“Participant”
has the meaning set forth in Section 8.04(c).

 

“PBGC”  means
the Pension Benefit Guaranty Corporation referred to and defined in ERISA, and
any successor entity performing similar functions.

 

“Permitted Encumbrances”
means:

 

(a)           Liens
imposed by law for taxes not yet due (or with respect to real estate taxes, not
yet delinquent) or which are being contested in good faith by appropriate
proceedings and with respect to which adequate reserves are being maintained in
accordance with GAAP;

 

(b)           statutory
Liens of landlords and Liens of carriers, warehousemen, mechanic, materialmen
and other Liens imposed by law created in the ordinary course of business for
amounts not yet due or which are being contested in good faith by appropriate
proceedings and with respect to which adequate reserves are being maintained in
accordance with GAAP;

 

(c)           pledges and
deposits made in the ordinary course of business in compliance with workers’
compensation, unemployment insurance and other social security laws or
regulations;

 

(d)           deposits to
secure the performance of bids, trade contracts, leases, statutory obligations,
surety and appeal bonds, performance bonds and other obligations of a like
nature, in each case in the ordinary course of business;

 

(e)           judgment
and attachment liens not giving rise to an Event of Default or Liens created by
or existing from any litigation or legal proceeding that are currently being
contested in good faith by appropriate proceedings and with respect to which
adequate reserves are being maintained in accordance with GAAP;

 

I-8

 

(f)            easements,
zoning restrictions, rights-of-way and similar encumbrances on real property
imposed by law or arising in the ordinary course of business that do not secure
any monetary obligations and do not materially detract from the value of the
affected property or materially interfere with the ordinary conduct of business
of Borrower and its Subsidiaries taken as a whole; and

 

(g)           Liens in
favor of Lender.

 

“Permitted Investments”  means:

 

(a)           direct
obligations of, or obligations the principal of and interest on which are
unconditionally guaranteed by, the United States of America (or by any agency
thereof to the extent such obligations are backed by the full faith and credit
of the United States), in each case maturing within one year from the date of
acquisition thereof;

 

(b)           commercial
paper having the highest rating, at the time of acquisition thereof, of S&P
or Moody’s and in either case maturing within six months  from the date of acquisition thereof;

 

(c)           certificates
of deposit, bankers’ acceptances and time deposits maturing within 180 days of
the date of acquisition thereof issued or guaranteed by or placed with, and
money market deposit accounts issued or offered by, any domestic office of any
commercial bank organized under the laws of the United States of America or any
state thereof which has a combined capital and surplus and undivided profits of
not less than $500,000,000;

 

(d)           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 described in clause (c) above;

 

(e)           mutual
funds investing solely in any one or more of the Permitted Investments
described in clauses (a) through (d) above; and

 

(f)            Hedging
Agreements entered into in the ordinary course of business solely to hedge or
mitigate risks to which Borrower is exposed in the conduct of its business or
management of its liabilities.

 

“Person”
means any individual, partnership, firm, corporation, association, joint
venture, limited liability company, trust or other entity, or any Governmental
Authority.

 

“Projections” means Borrower’s
forecasted (a) balance sheets; (b) profit and loss statements; and (c) cash flow
statements; all prepared on a consolidated basis and otherwise consistent with
the historical financial statements of Borrower, together with appropriate
supporting details and a statement of underlying assumptions which are believed
by Borrower to be reasonable and fair in light of the current condition and
past performance of Borrower and to reflect a reasonable estimate of the
projected balance sheets, results of operations, cash flows and other
information presented therein for five (5) years following the Closing Date.

 

I-9

 

“Plan” means
any employee pension benefit plan (other than a Multiemployer Plan) subject to
the provisions of Title IV of ERISA or Section 412 of the Code or Section 302
of ERISA, and in respect of which Borrower or any ERISA Affiliate is (or, if
such plan were terminated, would under Section 4069 of ERISA be deemed to be)
an “employer” as defined in Section 3(5) of ERISA.

 

“Real Estate”
means all real property owned or leased by Borrower that is intended as
collateral for any Loan.

 

“Release”
means any release, spill, emission, leaking, dumping, injection, pouring,
deposit, disposal, discharge, dispersal, leaching or migration into the
environment (including ambient air, surface water, groundwater, land surface or
subsurface strata) or within any building, structure, facility or fixture.

 

“Responsible Officer”
means Borrower’s general manager or chief financial officer, or such other duly
authorized Person as may be designated in writing with the prior written
consent of Lender.

 

“Second Supplement”
means the Second Supplement to the Master Credit Agreement (Revolving Facility)
between Borrower and Lender dated the date hereof, as amended, restated,
supplemented, or otherwise modified from time to time.

 

“Security Agreement”
means the Security Agreement between Lender and Borrower dated as of the date
hereof, as amended, restated, supplemented or otherwise modified from time to
time.

 

“Setoff”
has the meaning set
forth in Section 8.07.

 

“Subsidiary”
means, with respect to any Person (the “parent”),
any corporation, partnership, joint venture, limited liability company,
association or other entity the accounts of which would be consolidated with
those of the parent in the parent’s consolidated financial statements if such
financial statements were prepared in accordance with GAAP as of such date, as
well as any other corporation, partnership, joint venture, limited liability
company, association or other entity (a) of which securities or other ownership
interests representing more than 50% of the equity or more than 50% of the
ordinary voting power, or in the case of a partnership, more than 50% of the
general partnership interests are, as of such date, owned, Controlled or held,
or (b) that is, as of such date, otherwise Controlled (as set forth in clause
(b) of the definition thereof), by the parent or one or more subsidiaries of
the parent or by the parent and one or more subsidiaries of the parent. Unless
otherwise indicated, all references to “Subsidiary” hereunder mean a Subsidiary
of Borrower (including Subsidiaries formed after the Closing Date).

 

“Supplements”
has the meaning set forth in Section 1.02.

 

“Tangible
Net Worth”
means, as of any date (a) the total assets of Borrower that should be reflected
on Borrower’s consolidated balance sheet as of such date prepared in accordance
with GAAP, after eliminating all amounts properly attributable to minority
interests, if any, in the stock and surplus of Subsidiaries, less (b) the sum of (i) Total Debt as of such date, (ii) the
amount of appraisal surplus or any write-up in the book value of any assets
resulting from a 

 

I-10

 

revaluation thereof or any write-up in excess of the
cost of such assets acquired reflected on the consolidated balance sheet of
Borrower as of such date prepared in accordance with GAAP, and (iii) the net
book amount of all assets of Borrower that should be classified as intangible
assets (including investments in other entities) on a consolidated balance
sheet of Borrower as of such date prepared in accordance with GAAP.

 

“Taxes”
means any and all present or future taxes, levies, imposts, duties, deductions,
charges or withholdings imposed by any Governmental Authority arising from
payment hereunder or from the execution, delivery, or enforcement of, any Loan
Document, including, without limitation, all present or future stamp or
documentary taxes or any other excise or property taxes. “Taxes” does not
include taxes based on (or determined solely by) Lender’s net income.

 

“Third Supplement”
means the Third Supplement to the Master Credit Agreement (2007 Expansion Loan
Facility) between Borrower and Lender dated the date hereof, as amended,
restated, supplemented, or otherwise modified from time to time.

 

“Title Company”
means Dakota Homestead Title Insurance Company.

 

“Total Debt”
means all Indebtedness that should be reflected on Borrower’s consolidated
balance sheet prepared in accordance with GAAP.

 

“Uniform Commercial Code”
or “UCC” means the Uniform Commercial
Code as in effect from time to time in the State of North Dakota.

 

“Withdrawal Liability”
means liability to a Multiemployer Plan as a result of a complete or partial
withdrawal from such Multiemployer Plan, as such terms are defined in Part I of
Subtitle E of Title IV of ERISA.

 

I-11

 

EXHIBIT
A

 

CONSENT AND WAIVER OF BORROWER
RIGHTS

 

Reference is made to the Master Credit Agreement dated
as of August 10, 2007 (the “Credit Agreement”), by and between Great Plains Ethanol,
LLC, d/b/a POET Biorefining – Chancellor, a South Dakota limited liability
company (“Borrower”)
and AgCountry Farm Credit Services, FLCA. Terms defined in the Credit Agreement
are used herein with the same meanings.

 

The Borrower does hereby consent to the sale or
participation of the Loans to one or more Participants and waives the Borrower
Rights, a copy of which are set forth on Exhibit 1 attached hereto.

 

This Consent and Waiver is being delivered pursuant to
Farm Credit Administration Regulations, Section 617.7015 (69 FR 10908, March 9,
2004).

 

IN WITNESS WHEREOF, I have hereunto signed my name
this            day of
August, 2007.

 

	
   

  	
  Great Plains Ethanol,
  LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
						

 

A-1

 

EXHIBIT 1

BORROWER
RIGHTS

 

1.             At loan closing,
Borrower shall receive copies of Loan Documents signed by Borrower. Upon
request thereafter Borrower is entitled to copies of documents signed or
delivered by Borrower, copies of Lender’s, or the Lender’s parent association’s,
charter and by laws, as applicable, and copies of Lender’s appraisals of the
collateral.

 

2.             If the Loans have an
adjustable or variable interest rate, Borrower will be notified in writing of
any change in interest rate. The notice will be given not later than any
deadline date required by regulations promulgated by the Farm Credit
Administration.

 

3.             If Borrower’s Loans
are in a differential interest rate program, Borrower may request that Lender
review the Loans to verify that the proper interest rate category has been
assigned, and also to explain in writing to Borrower the basis for the interest
rate charged and how the credit status of the Borrower may be improved to
receive a lower interest rate on the Loans.

 

4.             If Lender places
Borrower’s Loans in nonaccrual status and such action results in an adverse
action being taken against Borrower (such as revocation of any undisbursed loan
commitment), the Lender shall notify Borrower in writing of such change in
status and the reasons therefore. If Borrower was not delinquent in any
payments under the Loans at the time and Borrower’s request to have the Loans
reinstated to accrual status is denied, Borrower may obtain a review of such denial
before the Lender’s credit review committee.

 

5.             Lender may not
commence foreclosure or other legal action against any collateral securing the
Loans unless at least 45 days before such commencement Lender has provided
Borrower with a copy of Lender’s restructuring policy and forms on which
Borrower may submit a request for restructuring. If Borrower’s request for
restructuring is denied, Borrower may appeal the denial to Lender’s credit
review committee, and may also obtain an independent appraisal of any
collateral (at Borrower’s expense) for consideration by the credit review
committee.

 

If Lender acquires agricultural real estate by
enforcement of Lender’s lien, when Lender elects to sell or lease the acquired
property, Borrower shall have a right of first refusal on the property. Lender
shall notify Borrower in writing and Borrower may purchase or lease the
property, as appropriate, at the appraised fair market value or fair rental
value, or if the property is sold by public offering, at the price of the
highest qualified bid.

 

A-2

 

EXHIBIT
2.01(c)(6)

 

OPINION
REQUIREMENTS

 

1.             Borrower (a) is a
limited liability company duly organized, validly existing, and in good
standing under the laws of the jurisdiction of its organization, (b) has the
power and authority and the legal right to own and operate its property and to
conduct its business.

 

2.             Borrower has the
power and authority to execute, deliver and perform the Loan Documents to which
it is a party and has taken all necessary organizational action to authorize
the execution, delivery and performance of the Loan Documents to which it is a
party.

 

3.             No consent, approval
or authorization of, or registration or filing with, any Person (including,
without limitation, any Governmental Authority) is required in connection with
the execution, delivery or performance by Borrower of the Loan Documents.

 

4.             Borrower has duly
executed and delivered the Loan Documents to which it is a party, and the Loan
Documents constitute, legal, valid and binding obligations of Borrower
enforceable against it in accordance with their respective terms, except as may
be limited by applicable bankruptcy, insolvency, reorganization, moratorium, or
similar laws affecting the enforcement of creditors’ rights generally and by
general principles of equity.

 

5.             The execution,
delivery and performance by Borrower of the Loan Documents to which it is a
party will not (a) violate the articles of organization or the operating
agreement of Borrower, (b) violate any law applicable to Borrower, (c) insofar
as known to us, violate any determination of an arbitrator or a court or other
Governmental Authority applicable to Borrower, (d) insofar as known to us,
cause a breach or default under any contractual obligation of Borrower, or
(e) result in the creation or imposition of any Lien on any of the
property or revenues of Borrower.

 

6.             To the best of our
knowledge, no litigation, investigation or proceeding of or before any
Governmental Authority are pending or threatened by or against Borrower, or
against any of its properties or revenues, existing or future (a) with respect
to any Loan Document or any of the transactions contemplated thereby, or (b)
which, if adversely determined, would reasonably be expected to have a Material
Adverse Effect.

 

7.             The rates of interest
and the fees provided for in the Credit Agreement and the description thereof
provided in the Credit Agreement and the Notes do not violate any laws of the
State of South Dakota relating to interest and usury, and will not violate any
such law by virtue of any fluctuations in any base, prime, index or equivalent
rate or rates on which interest charges may be based under such agreements.

 

8.             Under the laws of the
State of South Dakota, the Loan Documents will be governed by the internal laws
of the State of North Dakota, including all such laws relating to interest and
usury.

 

9.             To the extent
Borrower has rights in the “Collateral” described in the Security Agreement and
Collateral Assignments, the provisions of the Security Agreement and the 

 

2.01(c)(6)-1

 

Collateral Assignments are sufficient to grant to Lender, a security
interest in all right, title and interest of the Borrower in those items and
types of Collateral in which a security interest may be created under Article 8
or Article 9 of the UCC. To the extent that the Borrower has rights in the “Collateral”
described in the Security Agreement and the Collateral Assignments and to the
extent that such Collateral consists of types of items of property in which a
security interest may be perfected by the filing of financing statements in the
State of South Dakota, such security interests have been perfected by the
filing of the Financing Statements in the offices of the South Dakota Secretary
of State and the Fixture Financing Statements in the office of the Recorder in
Turner County, South Dakota.

 

10.           The Mortgage, upon due
recordation in the office of the Recorder in Turner County, South Dakota, will
constitute in favor of Lender, a valid and continuing lien on the property
described therein as security for the Obligations and will be enforceable in
accordance with its terms, except to the extent that enforceability may be
limited by applicable bankruptcy, insolvency and other similar laws, and equity
principles of general application, relating to or affecting the enforcement of
creditors’ rights generally.

 

2.01(c)(6)-2

 

EXHIBIT
4.08

 

Insurance
Requirements

 

Insurance – Borrower shall carry
insurance containing the following coverages:

 

(1)           Borrower shall keep the
buildings, structures, fixtures, personal property, and other improvements now
existing or hereafter erected or placed on the Project insured against loss by
fire, perils of extended coverage, and such other hazards, casualties, and
contingencies as required by Lender in an amount at least equal to the unpaid
indebtedness secured by the mortgage outstanding at any given time. The
policies shall include “all risk” coverage, and shall be satisfactory in form
and substance to Lender. All insurance shall be carried with companies approved
by Lender, and the policies and renewals thereof shall (i) contain a waiver of
defense based on co-insurance (ii) be assigned and pledged to Lender as
additional security, and (iii) have attached thereto standard mortgagee and
loss payee clauses in form acceptable to Lender.

 

(2)           If steam boilers or
similar equipment for the generation of steam are located in, on or about the
Project, Borrower shall maintain insurance against loss or damage by explosion,
rupture or bursting of such equipment and appurtenances thereto, without a
co-insurance clause, in an amount satisfactory to Lender, and containing a
standard mortgagee clause in form acceptable to Lender.

 

(3)           If the Project or any
part thereof is located in a flood hazard area for which flood insurance is
available, Borrower shall maintain flood insurance insuring the existing and
contemplated improvements on the Project to the maximum limit of coverage made
available, or in such lesser amount as Lender may in writing consent, and
containing standard mortgagee and lender loss payee clauses in form acceptable
to Lender.

 

(4)           Borrower shall maintain
comprehensive general liability insurance naming Lender as an additional
insured in an amount acceptable to Lender, insuring against claims arising from
any accident or occurrence in or upon the Project.

 

All insurance policies shall be issued by companies approved
by Lender, and shall provide at least thirty (30) days notice to Lender prior
to cancellation or non-renewal thereof. Borrower shall provide copies of all
such insurance policies to Lender.

 

4.08-1

 

Schedule
3.15

 

Permits

 

1.             Turner County
Building Permit

 

2.             South Dakota DENR Air
Quality Permit #28.0501-61

 

3.             South Dakota DENR
General Permit for Storm Water Discharges Associated with Industrial Activity,
Permit No. SDR00B310

 

4.             South Dakota DENR Surface
Water Discharge Permit No. SD0027901

 

5.             BATF Alcohol Fuel
Producer Permit No. AFP-SD-111

 

6.             South Dakota Grain
Dealers License No. 1943

 

3.15-1

 

Schedule
3.17

 

Material
Contracts

 

1.         Ethanol
Marketing and Services Agreement, dated December 18, 2000, as amended on
November 28, 2002, and November 30, 2006

 

2.         RINS
Software License and Services Agreement, dated September 1, 2007

 

3.         Technology
and Patent Rights License Agreement and Addendum, both dated April 5, 2005

 

4.         DDGS
Marketing Agreement, dated January 7, 2003

 

5.         Agreements
Between Owner and Design Builder, dated August 28, 2006 and May 9, 2007

 

6.         Corn and
Natural Gas Price Risk Management Agreement, dated April 1, 2007

 

7.         Data
Management Systems Agreement, dated May 13, 2002

 

8.         Trademark
and Service Mark Sublicense Agreement, dated April 1, 2007

 

9.         South
Lincoln Rural Water Purchase Agreement, dated May 24, 2002

 

10.       Southeastern
Electric Cooperative Electric Service Agreement, dated September 25, 2002

 

11.       Northwestern
Energy Natural Gas Supply Agreement, dated April 20, 2007, as amended on April
27, 2007

 

12.       Centerpoint
Energy Base Contract for Sale and Purchase of Natural Gas, dated November 22,
2006

 

13.       Friessen
Construction Co., Inc., Lease Agreement dated November 1, 2006, as amended

 

3.17-1

 

Schedule
4.10

 

List of
Subsidiaries

 

None.

 

4.10-1

 

Schedule
6.01(b)

 

Permitted
Indebtedness

 

Irrevocable Letter of
Credit issued by Home Federal in favor of Northwestern Services Corporation in
the original amount of $1,600,000

 

6.01(b)-1

 

Schedule
6.04(a)

 

Existing
Investments

 

None.

 

6.04(a)-1

 

Schedule
6.13

 

Deposit
and Investment Accounts

 

The following deposit and
investment accounts held at Home Federal Bank:

 

1.             Checking account
number 3348637

2.             Money market account
number 3348646

3.             Investment sweep
account number 3530393

 

6.13-1Exhibit 10.2

 

FIRST
SUPPLEMENT

TO THE 

MASTER CREDIT AGREEMENT

(Refinance Term Loan)

 

THIS FIRST SUPPLEMENT TO THE MASTER CREDIT AGREEMENT  (“First Supplement”) is made and entered into
as of August 10, 2007, by and between GREAT PLAINS ETHANOL, LLC, d/b/a POET
Biorefining - Chancellor, a South
Dakota limited liability company, and AGCOUNTRY FARM CREDIT SERVICES,
FLCA, a federal land credit association organized under the Farm Credit Act of
1971, as amended. This First Supplement supplements the Master Credit Agreement
between Lender and Borrower dated as of even date herewith (as the same may be
amended, restated, supplemented or otherwise modified (other than by
Supplements entered into pursuant to Section 1.02 thereof) from time to
time, the “Master Agreement”).

 

RECITALS:

 

A.            Pursuant
to the Original Credit Agreement (as defined in the Master Agreement), Lender
has made certain loans and other credit accommodations available to Borrower,
including a construction and term loan referred to as loan number 7572905400 in
Lender’s records and a 2005 term loan referred to as loan number 7602761100 in
Lender’s records (collectively, the “Original Term Loan”).

 

B.            As
of the date hereof, the aggregate principal amount outstanding under the Original
Term Loan is approximately $20,649,482.81, and Borrower wishes to refinance
$20,000,000 of this amount with a new term loan from Lender.

 

C.            Lender
is willing to refinance the Original Term Loan subject to the terms and
conditions hereof.

 

AGREEMENT:

 

1.             Definitions.
Capitalized terms used and not otherwise defined in this First Supplement have
the meanings attributed to them below or in the Master Agreement. Definitions
in this First Supplement control over inconsistent definitions in the Master
Agreement, but only to the extent the defined terms apply to Loans under this
First Supplement. Definitions set forth in the Master Agreement control for all
other purposes. As used in this First Supplement, the following terms have the
following meanings:

 

“Closing Date”
means August 10, 2007, for purposes of this First Supplement.

 

“Interest Election”
has the meaning set forth in Section 5 of this First Supplement.

 

“LIBOR”
means the one month London interbank rate reported on the tenth day of the
month by the Wall Street Journal
from time to time in its daily listing of money rates, defined therein as “the
average of interbank offered rates for dollar deposits in the London market
based on quotations at five major banks.” 
If a one month LIBOR rate is not reported on the tenth day of such
month, the one month LIBOR rate reported on the first Business Day preceding
the tenth 

 

 

day of such month will be used. If this index is no
longer available, Lender will select a new index which is based on comparable
information.

 

“Margin” means
three percentage points (3.00%) (300 basis points) as the same may be adjusted
pursuant to Section 5(c) of the First Supplement.

 

“Refinance
Term Loan” means the Loan made by Lender to
Borrower under this First Supplement.

 

“Refinance
Term Loan Maturity Date” means the earlier of (a)
July 1, 2013, and (b) the date on which the Obligations have been declared or
have automatically become due and payable, whether by acceleration or
otherwise.

 

 “Refinance Term Loan Note” means the Refinance Term
Loan Note made by Borrower payable to the order of Lender, dated the date
hereof, in the initial aggregate principal amount of $20,000,000 in
substantially the form of Exhibit 1A attached hereto.

 

“Variable Rate”
has the meaning set forth in Section 5 of this First Supplement.

 

2.             Effect of First Supplement. This
First Supplement supplements the Master Agreement, and along with the Master
Agreement, sets forth the terms and conditions applicable to the Refinance Term
Loan.

 

3.             Conditions Precedent. Lender
will have no obligation under this First Supplement until each of the following
conditions precedent is satisfied or waived in accordance with Section 8.02
of the Master Agreement:

 

(a)           Lender
has received all fees and other amounts due and payable on or prior to the date
hereof, including the fees and amounts for reimbursement or payment of all
out-of-pocket expenses required to be reimbursed or paid by Borrower pursuant
to any Loan Document or any other agreement with Lender;

 

(b)           Lender
has received Borrower’s counterpart of this First Supplement and the Refinance
Term Loan Note duly executed and delivered by Borrower;

 

(c)           Lender
has received Borrower’s counterparts of the Master Agreement and all Loan Documents
contemplated thereby, in each case duly executed and delivered by Borrower, as
well as all other duly executed and delivered instruments, agreements, opinion
letters, and documents as Lender may require;

 

(d)           the
representations and warranties set forth in the Master Agreement are true and
correct in all material respects as of the date hereof;

 

(e)           all
conditions precedent in the Master Agreement and each other Loan Document have
been satisfied or waived;

 

(f)            no
Default or Event of Default has occurred and is continuing; and

 

2

 

(g)           all
amounts outstanding on the Original Term Loan in excess of $20,000,000 have
been paid in full.

 

4.             Repayment.
Borrower will pay to Lender on the first day of the first calendar quarter
following the Closing Date, and on the first day of each calendar quarter
thereafter, through and including the Refinance Term Loan Maturity Date, equal
quarterly principal payments of $833,333.33 plus accrued interest (consisting
of 24 quarterly payments) with a balloon payment on the Refinance Term Loan Maturity
Date. All remaining principal and accrued and unpaid interest outstanding on
the Refinance Term Loan is due and payable on the Refinance Term Loan Maturity
Date.

 

5.             Interest.

 

(a)           Interest
on the Refinance Term Loan will accrue at a variable interest rate equal to
LIBOR plus the Margin (the “Variable Rate”). Alternatively,
Borrower may elect (an “Interest
Election”), from time to time, any one or more of the fixed or
adjustable interest rate available from Lender at the time of the election. The
elected rate must be applied to amounts of not less than $1,000,000 owing on
the Refinance Term Loan, as set forth below, and interest on such amounts shall
accrue at such rate selected by Borrower during the related interest period. Interest
shall accrue at the Variable Rate for any portion of the Refinance Term Loan
for which no Interest Election is in effect. The rates available to Borrower
for election will be based on Lender’s cost of funds plus the Margin in effect
from time to time.

 

(b)           To
make an Interest Election, Borrower will give Lender prior written notice (or
telephonic notice promptly confirmed in writing) of its Interest Election, in
the form of Exhibit 1B attached hereto, no later than five (5) Business
Days prior to the desired effective date (which shall be a Business Day) of
such election. Borrower may make such Interest Elections at any time and from
time to time, without penalty, except as otherwise provided in the Loan
Documents; provided, that Borrower may not elect an interest rate in
which the related Interest Period for such interest rate would extend beyond
the Refinance Term Loan Maturity Date. Lender will determine the rate of
interest in effect from time to time pursuant to this Section 5 and will
notify Borrower of the same, in writing, upon any request by Borrower. Lender’s
determination of the rate of interest hereunder shall be deemed conclusive,
absent manifest error. Borrower acknowledges that the terms of the Master
Agreement, this First Supplement or any other Loan Document may require
Borrower to pay a prepayment premium.

 

(c)           The
Margin applicable to the Refinance Term Loan will be reduced by (x) twenty-five
basis points (0.25%) per annum at such time as Borrower has reached and
maintained an Owners’ Equity Ratio of 55%, and (y) an additional twenty-five
basis points (0.25%) per annum at such time as Borrower has reached and
maintained an Owners’ Equity Ratio of 60%. Such reductions will be applied from
the date of receipt of Borrower’s audited financial statements pursuant to Section
4.01(a) of the Master Agreement. For purposes of this paragraph, Borrower’s
Owners’ Equity Ratio will be based on audited financial statements after taking
into account such adjustments as necessary to reflect reductions resulting from
the annual dividend declaration. Subsequent to any Margin reduction pursuant to
this Section 5, the Margin applicable to the Refinance Term Loan will be
increased by (x) 25 basis points (0.25%) per annum if Borrower’s Owners’ Equity
Ratio falls below 60% as of any quarterly period following 

 

3

 

application of any
reduction in the Margin pursuant to this paragraph, and (y) an additional 25
basis points (0.25%) per annum (for a total increase of 50 basis points) if
Borrower’s Owners’ Equity Ratio falls below 55% as of any such quarterly
period.

 

6.             Refinance Term
Loan Note. The Refinance
Term Loan will be evidenced by Borrower’s Refinance Term Loan Note and repaid
in accordance with this First Supplement and the Refinance Term Loan Note.

 

7.             Prepayment Fees. In addition to the prepayment
provisions set forth in the Master Agreement, in the event the Refinance Term
Loan is paid, in whole or in part, at any time prior to the Refinance Term Loan
Maturity Date, whether voluntarily or involuntarily (including any prepayment
effected by Lender’s exercise of any right to accelerate), or if Borrower
changes its Interest Election under Section 5(b) of the First Supplement
with respect to the Refinance Term Loan prior to the end of the related
Interest Period, Borrower will pay to Lender a prepayment fee in an amount
which would result in Lender being made whole (on a present value basis) for
the actual or imputed funding losses incurred by Lender as a result of such
early repayment. Such fees will be calculated in accordance with methodology
established by Lender (a copy of which will be made available to the Borrower
upon request). This prepayment fee is due and payable immediately upon receipt
of any such prepayment. Borrower agrees that this prepayment fee is paid as a
fee for the right to prepay and not as liquidated damages or a penalty.

 

8.             Counterparts.
This document may be executed in one or more counterparts, each of which shall
be deemed to be an original, but all of which taken together shall be one and
the same document.

 

SIGNATURE
PAGE FOLLOWS

 

4

 

IN WITNESS WHEREOF,
the parties have caused this First Supplement to be duly executed by their
respective authorized officers as of the day and year first written above.

 

	
   

  	
  BORROWER:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  GREAT PLAINS
  ETHANOL, LLC

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Darrin Ihnen

  	
   

  
	
   

  	
  Name:

  	
  Darrin Ihnen

  
	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  LENDER:

  
	
   

  	
   

  	
   

  
	
   

  	
  AGCOUNTRY FARM
  CREDIT SERVICES,

  FLCA

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Randolph L. Aberle

  	
   

  
	
   

  	
  Name:

  	
  Randolph L.
  Aberle

  
	
   

  	
  Title:

  	
  Vice President

  
						

 

SIGNATURE PAGE TO
FIRST SUPPLEMENT TO THE

MASTER CREDIT AGREEMENT

 

 

EXHIBIT 1A

REFINANCE TERM LOAN NOTE

 

	
  $20,000,000

  	
   

  	
  August 10, 2007

  
	
   

  	
   

  	
  Fargo, North Dakota

  

 

FOR
VALUE RECEIVED, the undersigned, Great Plains Ethanol, LLC, d/b/a POET
Biorefining – Chancellor, a South Dakota limited liability company (“Borrower”), hereby promises to pay
to the order of AgCountry Farm Credit Services, FLCA (together with any
subsequent holder hereof, “Lender”) or its successors and assigns, at
Post Office Box 6020, 1900 44th Street South, Fargo, North Dakota 58108, (a) on the Refinance Term Loan Maturity
Date (as defined in the Master Credit Agreement between Borrower and Lender
dated as of August 10, 2007 and the First Supplement to the Master Credit
Agreement (Refinance Term Loan) between Borrower and Lender dated the same date
(as the same may be amended, restated, supplemented or otherwise modified from
time to time), collectively known as the “Credit Agreement”), the
principal sum of Twenty Million and No/100 Dollars ($20,000,000.00) or so much
of the unpaid principal amount of the Refinance Term Loan (as defined in the
Credit Agreement) as has advanced by Lender to Borrower pursuant to the Credit
Agreement, and (b) on each date specified in the Credit Agreement prior to the Refinance
Term Loan Maturity Date, the principal amount of the Refinance Term Loan
payable to Lender on such date as specified therein, in lawful money of the
United States of America in immediately available funds, and to pay interest
from the Closing Date on the unpaid principal amount thereof from time to time
outstanding, in like funds, at said office, at the rate or rates per annum and
payable on such dates as provided in the Credit Agreement. Borrower also
promises to pay Default Interest (as defined in the Credit Agreement), on
demand, on the terms and conditions set forth in the Credit Agreement. In
addition, should legal action or an attorney-at-law be utilized to collect any
amount due hereunder, Borrower further promises to pay all costs of collection,
including the reasonable attorneys’ fees of Lender.

 

All
borrowings evidenced by this Refinance Term Loan Note and all payments and
prepayments of the principal hereof and the date thereof shall be recorded by
Lender in its internal records; provided, that the failure of Lender to
make such a notation or any error in such notation will not affect the
obligations of Borrower to make the payments of principal and interest in
accordance with the terms of this Refinance Term Loan Note and the Credit
Agreement.

 

This
Refinance Term Loan Note is issued in connection with, and is entitled to the
benefits of, the Credit Agreement which, among other things, contains
provisions for the acceleration of the maturity hereof upon the happening of
certain events, all upon the terms and conditions therein specified.

 

THIS
REFINANCE TERM LOAN NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE LAWS OF THE STATE OF NORTH DAKOTA AND ANY APPLICABLE LAWS OF THE UNITED
STATES OF AMERICA.

 

	
   

  	
  GREAT PLAINS ETHANOL, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Darrin Ihnen

  	
   

  
	
   

  	
  Name:

  	
  Darrin Ihnen

  
	
   

  	
  Title:

  	
  President

  
					

 

1

 

EXHIBIT 1B

INTEREST
ELECTION

 

 

[Date]

 

AgCountry Farm Credit Services,
FLCA

Post Office Box 6020

1900 44th Street South

Fargo, North Dakota 58108

 

Attention:  Randolph L. Aberle

 

Dear Sir:

 

Reference is made to the Master
Credit Agreement and First Supplement thereto, each dated as of August 10, 2007
(as amended, restated, supplemented or otherwise modified from time to time and
in effect on the date hereof, the “Credit Agreement”),
between the undersigned, as Borrower, and AgCountry Farm Credit Services, FLCA,
as Lender. Terms defined in the Credit Agreement are used herein with the same
meanings. This notice constitutes an Interest Election pursuant to Section
5(b) of the First Supplement to the Credit Agreement, and Borrower hereby
elects [a rate available from Lender at the time of the election] for
application to $                              
in principal amount now outstanding under the Refinance Term Loan, and in that
connection Borrower specifies the following information with respect to the
amount to be converted or continued as requested hereby:

 

The effective date of
election (which is a Business Day) (1):

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  GREAT
  PLAINS ETHANOL, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  

 

(1) Not less than $100,000 and an integral multiple of $100,000.

 

1

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