Document:

exv4w4

 

EXHIBIT 4.4

ESCROW AGREEMENT

     This Escrow Agreement (the “Agreement”) dated as of                                         , 2007 is by and between
Agassiz Energy, LLC, a Minnesota limited liability company (the “Company”) and Bremer Bank, N.A.
(the “Escrow Agent”), (the “Escrow Agent” and the “Company” may also be hereinafter referred to as
the “Parties”).

RECITALS

     WHEREAS, the Company intends to conduct an offering of a minimum of 50,000,000 and a maximum
of 77,878,000 of its membership units (the “Units”) at a price of $1.00 per Unit, in minimum blocks
of twenty thousand (20,000) Units, subject to waiver, with a 5,000 additional Unit minimum purchase
requirement, in an offering in the States of North Dakota, South Dakota, Minnesota and possibly
other states, made pursuant to a federal registration under the provisions of the Securities Act of
1933, as amended (the “Offering”);

     WHEREAS, the Company desires to retain the Escrow Agent to act as escrow agent and to hold the
cash proceeds received in the Offering pursuant to the terms hereof.

     NOW, THEREFORE, in consideration of the premises the Parties agree as follows:

     1. ACCEPTANCE OF APPOINTMENT: Escrow Agent hereby agrees to act as escrow agent under
this Agreement. The Escrow Agent shall have no duty to enforce any provision hereof requiring
performance by any other party hereunder.

     2. ESTABLISHMENT OF ESCROW ACCOUNT: An escrow account (the “Escrow Account”) is
hereby established with the Escrow Agent for the benefit of the investors in the Offering. Except
as specifically provided in this Agreement, the Escrow Account shall be created and maintained
subject to the customary rules and regulations of the Escrow Agent pertaining to such accounts.

     3. OWNERSHIP OF ESCROW ACCOUNT: Until such time as the cash proceeds deposited in the
Escrow Account (the “Deposited Funds”) shall equal the Minimum Escrow Deposit (as hereinafter
defined), all cash proceeds deposited in the Escrow Account by the Company shall not become the
property of the Company or be subject to the debts of the Company or any other person but shall be
held by the Escrow Agent solely for the benefit of the investors who have purchased Units in the
Offering.

     4. ESCROW FEES: The Company hereby agrees to pay the Escrow Agent an advance payment
for ordinary services rendered hereunder in the amount of $                     (the “Escrow Fee”).
Thereafter, Company shall pay to Escrow Agent a monthly fee during the term of this Agreement in
the amount of ___% of the balance of the Escrow Account on the eighth day of each month divided by
twelve (the “Monthly Fee”). Notwithstanding the foregoing, the Monthly Fee shall in no event
exceed the amount of interest on the Escrow Account and shall be paid from interest only and not
from principal.

 

 

     5. DEPOSIT OF PROCEEDS: All proceeds from sales of Units in the Offering shall be
delivered by the Company to the Escrow Agent, within forty-eight hours of the receipt thereof from
investors, endorsed (if appropriate) to the order of the Escrow Agent, together with an appropriate
written statement setting forth the name, address and social security number/taxpayer
identification number of each person or entity purchasing Units, the number of Units purchased, and
the amount paid by each such purchaser. Any such proceeds deposited with the Escrow Agent in the
form of uncollected checks shall be promptly presented by the Escrow Agent for collection through
customary banking and clearing house facilities. Checks are not considered full payment until the
fund collection, as the proceeds of each sale are deposited with the Escrow Agent, the Company
shall reserve the number of Units confirmed to the purchaser thereof in connection with such sale.
All such deposited proceeds are referred to herein as the “Escrow Funds.”

     6. INVESTMENT OF ESCROW FUNDS: The Escrow Funds shall be credited by Escrow Agent and
recorded in the Escrow Account. The Escrow Agent shall be permitted, and is hereby authorized to
deposit transfer, hold and invest all funds received under this Agreement, including principal and
interest, in short term certificates of deposits by the Escrow Agent or short term securities
issued by the United States government, at the Escrow Agent’s reasonable discretion. Any interest
received by Escrow Agent with respect to the Escrow Funds shall be paid pursuant to the terms of
this Agreement.

     7. TERMINATION OF ESCROW: This Agreement and the Escrow created hereunder shall be
terminated as provided in paragraph 8 hereof or as of the date (the “Termination Date”) one year
and one day following the date upon which the Securities and Exchange Commission authorizes the
Offering (the “Offering’s Effective Date”), provided; however, that if prior to Termination Date,
the Company has sold membership units equal to the minimum offering amount and the Company has
advised the purchasers of those membership units to remit to the Escrow Agent the balance of the
purchase price, then the Escrow may continue beyond the Termination Date until all Funds have been
paid and the conditions for releasing the Funds have been satisfied. In no event shall this date
be later than three (3) months following the Termination Date and shall not exceed one year from
the Offering’s Effective Date in any event. The Company shall notify Escrow Agent of the
Offering’s Effective Date within thirty (30) days of the receipt of notice of the Offering’s
Effective Date from the Securities and Exchange Commission.

     8. DISPOSITION OF ESCROW FUNDS: The Escrow Agent shall have the following duties and
obligations under this Agreement:

	 	A.	 	The Escrow Agent shall send a written notice acknowledging the receipt of the
Deposited Funds every seven days to the Company.
	 
	 	B.	 	The Escrow Agent shall give the Company prompt written notice when the
Deposited Funds equal $5,000,000 (exclusive of interest). Following receipt of such
notice, the Company will advise the purchasers of Units to remit to the Escrow Agent
the balance of the purchase price within thirty (30) days. Thereafter, Escrow Agent
shall give the Company written notice acknowledging the receipt of the Deposited Funds
every seven days. The Escrow Agent shall

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	 	 	 	give the Company prompt written notice when the Deposited Funds total $50,000,000
(exclusive of interest).
	 
	 	C.	 	At the time (and in the event) that: (a) the Deposited Funds shall, during the
term of this Agreement, equal $50,000,000 in subscription proceeds (exclusive of
interest) (the “Minimum Escrow Deposit”); (b) the Escrow Agent shall have received
written confirmation from the Company that the Company has obtained (i) written debt
financing commitments for debt financing ranging from a minimum of approximately
$49,500,000 to a maximum of $77,378,000 (ii) an executed construction agreement; and
(iii) confirmation of the finalized EAW process from the Minnesota Pollution Control
Agency; (c) the Company has affirmatively elected in writing to terminate this
Agreement; and (d) the Escrow Agent shall have provided the states in which the Company
has registered an affidavit stating that the foregoing requirements (a), (b) and (c) of
this subsection 8C have been satisfied, and has provided to the Minnesota Department of
Commerce a copy of the documents listed in (b) above, then this Agreement shall
terminate, and the Escrow Agent shall promptly disburse the funds on deposit, including
interest, to the Company to be used in accordance with the provisions set out in the
Registration Statement. The Company will deliver a copy of the Registration Statement
to the Escrow Agent upon execution of this Agreement. The Escrow Agent will have no
responsibility to examine the Registration Statement with regard to the Escrow Account
or otherwise, nor shall Escrow Agent have any duty to ensure that Company complies with
the Registration Statement. Upon the making of such disbursement, the Escrow Agent
shall be completely discharged and released of any and all further responsibilities
hereunder.
	 
	 	D.	 	In the event the Deposited Funds do not equal or exceed the Minimum Escrow
Deposit on or before the Termination Date or if the Company has not received the
agreement as described in Section 8.C.(b) above on or before the Termination Date, the
Escrow Agent shall return to each of the purchasers of the Units in the Offering, as
promptly as possible after such Termination Date and on the basis of its records
pertaining to the Escrow Account: (a) the sum which each purchaser initially paid in
on account of purchases of the Units in the Offering and (b) each purchaser’s portion
of the total interest earned on the Escrow Account as of the Termination Date, (c)
reduced by the transaction fees provided in paragraph 10 hereof. Computation of any
purchaser’s share of the net interest earned will be a weighted average based on the
proportion of such purchaser’s deposit in the Escrow Account from the Offering to all
such purchasers’ deposits held by the Escrow Agent and upon the length of time in days
such deposit was held in the Escrow Account as compared to all such deposits. All
computations with respect to each purchaser’s allocable share of net interest shall be
made by the Escrow Agent, which determinations shall be final and conclusive. Any
amount paid or payable to a purchaser pursuant to this paragraph shall be deemed to be
the property of such purchaser, free and clear of any and all claims of the Company or
its agents or creditors; and the respective purchases of the Units made and entered
into in the Offering shall thereupon be deemed, ipso facto, to be cancelled without

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	 	 	 	any further liability of the purchasers or any of them to pay for the Units
purchased. At such time as the Escrow Agent shall have made all the payments called
for in this paragraph, the Escrow Agent shall be completely discharged and released
of any and all further responsibilities hereunder, and the Units reserved (as
provided in paragraph 5) shall be released from such reservation, except that Escrow
Agent shall be required to prepare and issue a single IRS Form 1099 to each investor
in the event that funds are returned to investors.

     9. LIABILITY OF ESCROW AGENT: In performing any duties under the Escrow Agreement,
the Escrow Agent shall not be liable to the Company, any subscriber/purchaser or any Party for
damages, losses, or expenses, except for gross negligence or willful misconduct on the part of the
Escrow Agent. The Escrow Agent shall not incur any such liability for (I) any act or failure to
act made or omitted in good faith, or (II) any action taken or omitted in reliance upon any
instrument, including any written statement or affidavit provided for in this Agreement that the
Escrow Agent shall in good faith believe to be genuine, nor will the Escrow Agent be liable or
responsible for forgeries, fraud, impersonations, or determining the scope of any representative’s
authority. In addition, the Escrow Agent may consult with legal counsel in connection with the
Escrow Agent’s duties under this Agreement and shall be fully protected in any action taken,
suffered, or permitted by it in good faith in accordance with the advice of counsel. The Escrow
Agent is not responsible for determining and verifying the authority of any person acting or
purporting to act on behalf of any party to this Agreement.

     10. FEES AND EXPENSES: In the event the Deposited Funds do not equal or exceed the
Minimum Escrow Deposit before the Termination Date or the Company does not receive a written debt
financing commitment as described herein before the Termination Date, the Escrow Agent shall be
entitled to a fee of $10.00 per purchaser, which fees shall be paid from the interest on the Escrow
Account only and not from principal. In the event the Escrow Agent renders any service not
provided for in this Agreement, or if the Company requests a substantial modification of its terms,
or if any controversy arises, or if the Escrow Agent is made a party to, or intervenes in, any
litigation pertaining to this escrow or its subject matter, the Escrow Agent shall be reasonably
compensated for such extraordinary services and reimbursed for all costs, attorney’s fees,
including allocated costs of in-house counsel, and expenses occasioned by such default, delay,
controversy or litigation and the Escrow Agent shall have the right to retain all documents and/or
other things of value at any time held by the Escrow Agent in this escrow until such compensation,
fees, costs and expenses are paid. The Company promises to pay these sums upon demand. Unless
otherwise provided, the Company will pay all of the Escrow Agent’s usual charges and the Escrow
Agent may deduct such sums from the interest on the Escrow Account only and not from principal
deposited to the Escrow Account.

     11. CONTROVERSIES: If any controversy arises between the Parties to this Agreement,
or with any other Party, concerning the subject matter of this Agreement, its terms or conditions,
the Escrow Agent will not be required to determine the controversy or to take any action regarding
it. The Escrow Agent may hold all documents and funds and may wait for settlement of any such
controversy by final appropriate legal proceedings or other means as, in the Escrow Agent’s
discretion, the Escrow Agent may require, despite what may be set forth elsewhere in this
Agreement. In such event, the Escrow Agent will not be liable for interest or

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damage. Furthermore, the Escrow Agent may at its option file an action of interpleader
requiring the Parties to answer and litigate any claims and rights among themselves. The Escrow
Agent is authorized to deposit with the clerk of the court all documents and funds held in escrow,
except all costs, expenses, charges and reasonable attorney fees incurred by the Escrow Agent due
to the interpleader action and which the Company agrees to pay. Upon initiating such action, the
Escrow Agent shall be fully released and discharged of and from all obligations and liability
imposed by the terms of this Agreement.

     12. INDEMNIFICATION OF ESCROW AGENT: The Company and its successors and assigns agree
jointly and severally to indemnify and hold the Escrow Agent harmless against any and all losses,
claims, damages, liabilities, and expenses, including reasonable costs of investigation, counsel
fees, including allocated costs of in-house counsel and disbursements that may be imposed on the
Escrow Agent or incurred by the Escrow Agent in connection with the performance of its duties under
this Agreement, including but not limited to any litigation arising from this Agreement or
involving its subject matter. The Escrow Agent shall have a first lien on the property and papers
held under this Agreement for such compensation and expenses.

     13. RESIGNATION OF ESCROW AGENT: The Escrow Agent may resign at any time upon giving
at least (30) days written notice to the Company provided, however, that no such resignation shall
become effective until the appointment of a successor escrow agent which shall be accomplished as
follows: The Company shall use its best efforts to obtain a successor escrow agent within thirty
(30) days after receiving such notice. If the Company fails to agree upon a successor escrow agent
within such time, the Escrow Agent shall have the right to appoint a successor escrow agent
authorized to do business in the state of Minnesota. The successor escrow agent shall execute and
deliver an instrument accepting such appointment and it shall without further acts, be vested with
all the estates, properties, rights, powers, and duties of the predecessor escrow agent as if
originally named as escrow agent. The Escrow Agent shall thereupon be discharged from any further
duties and liability under this Agreement.

     14. AUTOMATIC SUCCESSION: Any company into which the Escrow Agent may be merged or
with which it may be consolidated, or any company to whom the Escrow Agent may transfer a
substantial amount of its global escrow business, shall be the Successor to the Agent without the
execution or filing of any paper or any further act on the part of any of the Parties, anything
herein to the contrary notwithstanding.

     15. MISCELLANEOUS:  

	 	a.	 	GOVERNING LAWS: This Agreement is to be construed and interpreted
according to Minnesota law.
	 
	 	b.	 	COUNTERPART: This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which together
shall constitute one and the same instrument. The exchange of copies of this Agreement
and of signature pages by facsimile transmission shall constitute effective execution
and delivery of this Agreement as to the parties and may be used in lieu of the
original Agreement for all purposes. Signatures of the parties

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	 	 	 	transmitted by facsimile shall be deemed to be their original signatures for all
purposes.
	 
	 	c.	 	NOTICES: All instructions, notices and demands herein provided for
shall be in writing and shall be deemed to have been duly given (a) on the date of
service if served personally on the party to whom notice is to be given; (b) on the day
of transmission if sent by facsimile transmission to the facsimile number given below
and telephonic confirmation of receipt is promptly obtained after completion of
transmission; (c) on the next day on which such deliveries are made in Crookston,
Minnesota, when delivery is to Federal Express or similar overnight courier or the
Express Mail service maintained by the United States Postal Service; or (d) on the
fifth day after mailing if mailed to the party to whom notice is to be given, by first
class mail, registered or certified, postage prepaid and properly addressed, return
receipt requested, to the party as follows:

	 	 	 
	                   If to the Company:

	 	If to the Escrow Agent:

Agassiz Energy, LLC

510 County Road 71

Valley Technology Park

Crookston, MN 56716

(218) 281-8442

With a required copy to:

Todd A. Taylor, Esq.

Fredrikson & Byron, P.A.

200 South Sixth Street, Ste. 4000

Minneapolis, MN 55402-1425

(612) 492-7355

	 	d.	 	AMENDMENTS: This Agreement may be amended or modified and any of the
terms, covenants, representations, warranties or conditions hereof may be waived, only
by a written instrument executed by the parties hereto, or in the case of a waiver, by
the party waiving compliance. Any waiver by any party of any condition or of the
breach of any provision, term, covenant, representation or warranty contained in the
Agreement, in any one or more instances, shall not be deemed to be nor construed as
further or continuing waiver of any such conditions or of the breach of any other
provision, term, covenant, representation or warranty of this Agreement.
	 
	 	e.	 	ENTIRE AGREEMENT: This Agreement contains the entire understanding
among the parties hereto with respect to the escrow contemplated hereby and supersedes
and replaces all prior and contemporaneous agreements and understandings, oral or
written, with regard to such escrow.
	 
	 	f.	 	NON-ENDORSEMENT: The Company represents and agrees that it has not
made nor will it in the future make any representation that states or implies that

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	 	 	 	the Escrow Agent has endorsed, recommended or guaranteed the purchase, value, or
repayment of the Securities offered for sale by the Company. The Company further
agrees that it will insert in any prospectus, offering circular, advertisement,
subscription agreement or other document made available to prospective purchasers of
the Securities the following statement in bold face type: “Bremer Bank, N.A. is
acting only as an escrow agent in connection with the Offering described herein, and
has not endorsed, recommended or guaranteed the purchase, value or repayment of such
Securities,” and will furnish to the Escrow Agent a copy of each such prospectus,
offering circular, advertisement, subscription agreement or other document at least
5 business days prior to its distribution to prospective Subscribers.

The undersigned acknowledges that Bremer Bank, N.A. is acting only as an escrow agent in connection
with the offering of the Securities described herein, and has not endorsed, recommended or
guaranteed the purchase, value or repayment of such Securities.

     IN WITNESS WHEREOF, the parties hereto have hereunto affixed their signatures as of the day
and year first above written.

	 	 	 	 	 	 	 	 	 	 	 	 	 
	The Company	 	 	 	Escrow Agent	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	AGASSIZ ENERGY, LLC	 	 	 	BREMER BANK, N.A.	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 

	 	Donald Sargeant, President
	 	 	 	 	 	Its:	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 

	 	 

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Exhibit 10.9

BUSINESS LOAN AGREEMENT

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	Officer	 	 
	Principal	 	Loan Date	 	Maturity	 	Loan No.	 	Call/Coll.	 	Account	 	PBlake	 	Initials
	$970,000.00
	 	03-09-2007
	 	03-06-2008
	 	8000845380	 	 	 	 	 	 	 	 

References in the shaded area are for Lender’s use only and do not limit the applicability of this document to any particular loan or item.

Any item above containing “***” has been omitted due to text length limitations.

	 	 	 	 	 	 	 
	Borrower:

	 	Agassiz Energy, LLC (TIN: 80-0130330)
	 	Lender:
	 	American Federal Bank   COPY
	 

	 	510 County Road 71
	 	 	 	215 North 5th Str
	 

	 	Crookston, MN 56716
	 	 	 	Fargo, ND 58102

THIS BUSINESS LOAN AGREEMENT dated March 9, 2007, is made and executed between Agassiz Energy, LLC
(“Borrower”) and American Federal Bank (“Lender”) on the following terms and conditions. Borrower
has received prior commercial loans from Lender or has applied to Lender for a commercial loan or
loans or other financial accommodations, including those which may be described on any exhibit or
schedule attached to this Agreement (“Loan”). Borrower understands and agrees that: (A) in
granting, renewing, or extending any Loan, Lender is relying upon Borrower’s representations,
warranties, and agreements as set forth in this Agreement; (B) the granting, renewing, or extending
of any Loan by Lender at all times shall be subject to Lender’s sole judgment and discretion; and
(C) all such Loans shall be and remain subject to the terms and conditions of this Agreement.

TERM. This Agreement shall be effective as of March 9, 2007, and shall continue in full force and
effect until such time as all of Borrower’s Loans in favor of Lender have been paid in full,
Including principal, interest, costs, expenses, attorneys’ fees, and other fees and charges, or
until March 6, 2008.

ADVANCE AUTHORITY. The following persons currently are authorized to request advances and authorize
payments under the line of credit until Lender receives from Borrower, at Lender’s address shown
above, written notice of revocation of their authority: Donald Sargeant, President of Agassiz
Energy LLC; Larry Altringer, Treasurer of Agassiz Energy LLC; and Wayne Wagner, Vice President of
Agassiz Energy LLC.

CONDITIONS PRECEDENT TO EACH ADVANCE. Lender’s obligation to make the initial Advance and each
subsequent Advance under this Agreement shall be subject to the fulfillment to Lender’s
satisfaction of all of the conditions set forth in this Agreement and in the Related Documents.

Loan Documents. Borrower shall provide to Lender the following documents for the Loan: (1) the
Note; (2) Security Agreements granting to Lender security interests in the Collateral; (3)
financing statements and all other documents perfecting Lender’s Security Interests; (4) evidence
of insurance as required below; (5) together with all such Related Documents as Lender may require
for the Loan; all in form and substance satisfactory to Lender and Lender’s counsel.

Borrower’s Authorization. Borrower shall have provided in form and substance satisfactory to Lender
properly certified resolutions, duly authorizing the execution and delivery of this Agreement, the
Note and the Related Documents. In addition, Borrower shall have provided such other resolutions,
authorizations, documents and instruments as Lender or its counsel, may require.

Payment of Fees and Expenses. Borrower shall have paid to Lender all fees, charges, and other
expenses which are then due and payable as specified in this Agreement or any Related Document.

Representations and Warranties. The representations and warranties set forth in this Agreement, in
the Related Documents, and in any document or certificate delivered to Lender under this Agreement
are true and correct.

No Event of Default. There shall not exist at the time of any Advance a condition which would
constitute an Event of Default under this Agreement or under any Related Document.

REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants to Lender, as of the date of this
Agreement, as of the date of each disbursement of loan proceeds, as of the date of any renewal,
extension or modification of any Loan, and at all times any Indebtedness exists:

Organization. Borrower is a limited liability company which is, and at all times shall be, duly
organized, validly existing, and in good standing under and by virtue of the laws of Borrower’s
state of organization. Borrower is duly authorized to transact business in all other states in
which Borrower is doing business, having obtained all necessary filings, governmental licenses and
approvals for each state in which Borrower is doing business. Borrower maintains an office at 510
County Road 71, Crookston, MN 56716. Unless Borrower has designated otherwise in writing, the
principal office is the office at which Borrower keeps its books and records including its records
concerning the Collateral. Borrower will notify Lender prior to any change in the location of
Borrower’s state of organization or any change in Borrower’s name.

Assumed Business Names. Borrower has filed or recorded all documents or filings required by
law relating to all assumed business names used by Borrower. Excluding the name of Borrower, the
following is a complete list of all
assumed business names under which Borrower does business: None.

Authorization. Borrower’s execution, delivery, and performance of this Agreement and all the
Related Documents have been duly authorized by all necessary action by Borrower and do not conflict
with, result in a violation of, or constitute a default under (1) any provision of (a) Borrower’s
articles of organization or membership agreements, or (b) any agreement or other instrument
binding upon Borrower or (2) any law, governmental regulation, court decree, or order applicable
to Borrower or to Borrower’s properties.

Properties. Except as contemplated by this Agreement or as previously disclosed in Borrower’s
financial statements or in writing to Lender and as accepted by Lender, and except for property tax
liens for taxes not presently due and payable, Borrower owns and has good title to all of
Borrower’s properties free and clear of all liens and security interests, and has not executed any
security documents or financing statements relating to such properties. All of Borrower’s
properties are titled in Borrower’s legal name, and Borrower has not used or filed a financing
statement under any other name for at least the last five (5) years.

AFFIRMATIVE COVENANTS. Borrower covenants and agrees with Lender that, so long as this Agreement
remains in effect, Borrower will:

Notices of Claims and Litigation. Promptly inform Lender in writing of (1) all material adverse
changes in Borrower’s financial condition, and (2) all existing
and all threatened litigation, claims, investigations, administrative proceedings or similar actions affecting Borrower or any Guarantor which could materially affect the financial condition
of Borrower or the financial condition of any Guarantor.

Financial Records. Maintain its books and records in accordance with accounting principles
acceptable to Lender, applied on a consistent basis, and permit Lender to examine and audit
Borrower’s books and records at all reasonable times.

Financial Statements. Furnish Lender with the following:

Annual statements. As soon as available, but in no event later than sixty (60) days after the
end of each fiscal year, Borrower’s balance sheet and income statement for the year ended, prepared
by Borrower.

Tax Returns. As soon as available, but in no event later than sixty (60) days after the applicable
filing date for the tax reporting period ended, Federal and other governmental tax returns,
prepared by a professional accountant satisfactory to Lender.

 

BUSINESS LOAN AGREEMENT

					
	Loan No: 8000845380
	 	(Continued)
	 	Page 2

All financial reports required to be provided under this Agreement shall be prepared in accordance
with GAAP, applied on a consistent basis, and certified by Borrower as being true and correct.

Loan Proceeds. Use all Loan proceeds solely for Borrower’s business operations, unless specifically
consented to the contrary by Lender in writing.

Taxes,
Charges and Liens. Pay and discharge when due all of its indebtedness and obligations,
including without limitation all assessments, taxes, governmental charges, levies and liens, of
every kind and nature, imposed upon Borrower or its properties, income, or profits, prior to the
date on which penalties would attach, and all lawful claims that, if unpaid, might become a lien or
charge upon any of Borrower’s properties, income, or profits.

Performance. Perform and comply, in a timely manner, with all terms, conditions, and provisions set
forth in this Agreement, in the Related Documents, and in all other instruments and agreements
between Borrower and Lender. Borrower shall notify Lender immediately in writing of any default in
connection with any agreement.

Operations. Maintain executive and management personnel with substantially the same qualifications
and experience as the present executive and management personnel; provide written notice to Lender
of any change in executive and management personnel; conduct its business affairs in a reasonable
and prudent manner.

Compliance with Governmental Requirements. Comply with all laws, ordinances and regulations, now or
hereafter in effect, of all governmental authorities applicable to the conduct of Borrower’s
properties, businesses and operations, and to the use or occupancy of the Collateral, including
without limitation, the Americans With Disabilities Act. Borrower may
contest in good faith any
such law, ordinance, or regulation and withhold compliance during any proceeding, including
appropriate appeals, so long as Borrower has notified Lender in writing prior to doing so and so
long as, in Lender’s sole opinion, Lender’s interests in the Collateral are not jeopardized. Lender
may require Borrower to post adequate security or a surety bond, reasonably satisfactory to Lender,
to protect Lender’s interest.

Inspection. Permit employees or agents of Lender at any reasonable time to inspect any and all
Collateral for the Loan or Loans and Borrower’s other properties and to examine or audit Borrower’s
books, accounts, and records and to make copies and memoranda of Borrower’s books, accounts, and
records. If
Borrower now or at any time hereafter maintains any records (including without limitation computer
generated records and computer software programs for the generation of such records) in the
possession of a third party, Borrower, upon request of Lender, shall notify such party to permit
Lender free access to such records at all reasonable times and to provide Lender with copies of any
records it may request, all at Borrower’s expense.

LENDER’S
EXPENDITURES. If any action or proceeding is commenced that would materially affect
Lender’s interest in the Collateral or if Borrower fails to comply with any provision of the
Agreement or any Related Documents, including but not limited to Borrower’s failure to discharge or
pay when due any amounts Borrower is required to discharge or pay under this Agreement or any
Related Documents, Lender on Borrower’s behalf may (but shall not be obligated to) take any action
that Lender deems appropriate on any Collateral and paying all costs for insuring, maintaining and
preserving any Collateral. All such expenditures incurred or paid by Lender for such purposes will
then bear interest at the rate charged under the Note from the date incurred or paid by Lender to
the date of repayment by Borrower. All such expenses will become a part of the indebtedness and, at
Lender’s option, will (A) be payable on demand; (B) be added to the balance of the Note and be
apportioned among and be payable with any installment payment to become due during either (1) the
term of any applicable insurance policy, or (2) the remaining term of the Note; or (C) be treated
as a balloon payment which will be due and payable at the Note’s maturity.

NEGATIVE COVENANTS. Borrower covenants and agrees with Lender that while this Agreement is in
effect, Borrower shall not, without the prior written consent of Lender:

Continuity of Operations. (1) Engage in any business activities substantially different than those
in which Borrower is presently engaged, (2) cease operations, liquidate, merge, transfer, acquire
or consolidate with any other entity, change its name, dissolve or transfer or sell Collateral out
of the ordinary course of business, or (3) make any distribution with respect to any capital
account, whether by reduction of capital or otherwise.

Agreements. Borrower will not enter into any agreement containing any provisions which would be
violated or breached by the performance of Borrower’s obligations under this agreement or in
connection herewith.

CESSATION OF ADVANCES. If Lender has made any commitment to make any Loan to Borrower, whether
under this Agreement or under any other agreement, Lender shall have no obligation to make Loan
advances or to disburse Loan proceeds if; (A) Borrower or any guarantor is in default under the
terms of this Agreement or any other agreement that Borrower or any guarantor has with Lender; (B)
Borrower or any guarantor dies, becomes incompetent or becomes
insolvent, files a petition in bankruptcy or similar proceedings, or is adjudged a bankrupt; (C)
there occurs a material adverse change in Borrower’s financial condition, in the financial
condition of any guarantor, or in the value of any collateral securing any Loan; or (D) any
guarantor seeks, claims or otherwise attempts to limit, modify or revoke such guarantor’s guaranty
of the Loan or any other loan with Lender; or (E) Lender in good faith deems itself insecure, even
though no Event of Default shall have occurred.

RIGHT OF SETOFF. To the extent permitted by applicable law, Lender reserves a right of setoff in
all Borrower’s accounts with Lender (whether checking, savings, or some other account). This
includes all accounts Borrower holds jointly with someone else and all accounts Borrower may open
in the future. However this does not include any IRA or Keogh accounts, or any trust accounts for
which setoff would be prohibited by law. Borrower authorizes Lender, to the extent permitted by
applicable law, to charge or setoff all sums owing on the indebtedness against any and all such
accounts.

DEFAULT. Each of the following shall constitute an Event of Default under this Agreement.

Payment Default. Borrower fails to make any payment when due under the Loan.

Other Default. Borrower fails to comply with any other term, obligation, covenant or condition
contained in this Agreement or in any of the Related Documents.

False Statements. Any representation or statement made by Borrower to Lender is false in any
material respect.

Death or Insolvency. The dissolution of Borrower (regardless of whether election to continue is
made), any member withdraws from Borrower, or any other termination of borrower’s existence as a
going business or the death of any member, the insolvency of Borrower, the appointment of a
receiver for any part of Borrower’s property, any assignment for the benefit of creditors, any type
of creditor workout, or the commencement of any proceeding under any bankruptcy or insolvency laws
by or against Borrower.

Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether
by judicial proceeding, self-help, repossession or any other method, by any creditor of Borrower or
by any governmental agency against any collateral securing the Loan.

Events
Affecting Guarantor. Any of the preceding events occurs with respect to any Guarantor of any
of the indebtedness or any Guarantor dies or becomes incompetent, or
revokes or disputes the validity of, or liability under, any Guaranty
of the indebtedness. In the event of a death, Lender, at its option, may, but shall not be required
to, permit the guarantor’s estate to assume
unconditionally the obligations arising under the guaranty in a manner satisfactory to Lender, and,
in doing so, cure any Event of Default.

 

					
	 
	 	BUSINESS LOAN AGREEMENT	 	 
	Loan No: 8000845380
	 	(Continued)
	 	Page 3

     Insecurity. Lender in good faith believes itself insecure.

EFFECT OF AN EVENT OF DEFAULT. If any Event of Default shall occur, except where otherwise provided
in this Agreement or the Related Documents, all commitments and obligations of Lender under this
Agreement immediately will terminate (including any obligation to
make further Loan Advances or
disbursements), and, at Lender’s option, all Indebtedness immediately will become due and payable,
all without notice of any kind to Borrower, except that in the case of an Event of Default of the
type described in the “Insolvency” subsection above, such acceleration shall be automatic and not
optional. In addition, Lender shall have all the rights and remedies provided in the Related
Documents or available at law, In equity, or otherwise. Except as may be prohibited by applicable
law, all of Lender’s rights and remedies shall be cumulative and may be exercised singularly or
concurrently. Election by Lender to pursue any remedy shall not exclude pursuit of any other
remedy, and an election to make expenditures or to take action to perform an obligation of Borrower
or of any Grantor shall not affect Lender’s right to declare a default and to exercise its rights
and remedies.

DEFINITIONS. The following capitalized words and terms shall have the following meanings when used
in this Agreement. Unless specifically stated to the contrary, all references to dollar amounts
shall mean amounts in lawful money of the United States of America. Words and terms used in the
singular shall include the plural, and the plural shall include the singular, as the context may
require. Words and terms not otherwise defined in this Agreement shall have the meanings attributed
to such terms in the Uniform Commercial Code. Accounting words and terms not otherwise defined in
this Agreement shall have the meanings assigned to them in accordance with generally accepted
accounting principles as in effect on the date of this Agreement:

Advance.
The word “Advance” means a disbursement of Loan funds made, or to be made, to
Borrower or on Borrower’s behalf on a line of credit or multiple advance basis under the
terms and conditions of this Agreement.

Agreement. The word “Agreement” means this Business Loan Agreement, as this Business Loan
Agreement may be amended or modified from time to time, together with all exhibits and
schedules attached to this Business Loan Agreement from time to time.

Borrower. The word “Borrower” means Agassiz Energy, LLC and includes all co-signers and
co-makers signing the Note and all their successors and assigns.

Collateral. The word “Collateral” means all property and assets granted as collateral
security for a Loan, whether real or personal property, whether granted directly or
indirectly, whether granted now or in the future, and whether granted in the form of a
security interest, mortgage, collateral mortgage, deed of trust,
assignment, crop pledge, pledge, chattel
mortgage, collateral chattel mortgage, chattel trust, factor’s lien, equipment trust,
conditional sale, trust receipt, lien, charge, lien or title retention contract, lease or
consignment intended as a security device, or any other security or lien interest whatsoever,
whether created by law, contract, or otherwise.

Event of Default. The words “Event of Default” mean any of the events of default set forth
in this Agreement in the default section of this Agreement.

GAAP. The word “GAAP” means generally accepted accounting principles.

Grantor.
The word “Grantor” means each and all of the persons or entities granting a
Security Interest in any Collateral for the Loan, including without limitation all
Borrowers granting such a Security Interest.

Guarantor.
The word “Guarantor” means any guarantor, surety, or accommodation party of any
or all of the Loan.

Indebtedness. The word “Indebtedness” means the indebtedness evidenced by the Note or
Related Documents, including all principal and interest together with all other
indebtedness and costs and expenses for which Borrower is responsible under this Agreement
or under any of the Related Documents.

Lender. The word “Lender” means American Federal Bank, its successors and assigns.

Loan. The word “Loan” means any and all loans and financial accommodations from Lender to
Borrower whether now or hereafter existing, and however evidenced, including without
limitation those loans and financial accommodations described herein or described on any
exhibit or schedule attached to this Agreement from time to time.

Note. The word “Note” means the Note executed by Agassiz Energy, LLC in the principal
amount of $970,000.00 dated March 9, 2007, together with all renewals of, extensions of,
modifications of, refinancings of, consolidations of, and substitutions for the note or
credit agreement.

Related Documents. The words “Related Documents” mean all promissory notes, credit
agreements, loan agreements, environmental agreements, guaranties, security agreements,
mortgage, deeds of trust, security deeds, collateral mortgages, and all other instruments,
agreements and documents, whether now or hereafter existing, executed in connection with
the Loan.

Security Agreement. The words “Security Agreement” mean and include without, limitation any
agreements, promises, covenants, arrangements, understandings or other agreements, whether
created by law, contract, or otherwise, evidencing, governing, representing, or creating a
Security Interest.

Security Interest. The words “Security Interest” mean, without limitation, any and all
types of collateral security, present and future, whether in the form of a lien, charge,
encumbrance, mortgage, deed of trust, security deed, assignment, pledge, crop pledge,
chattel mortgage, collateral chattel mortgage, chattel trust, factor’s lien, equipment
trust, conditional sale, trust receipt, lien or title retention contract, lease or
consignment intended as a security device, or any other security or lien interest
whatsoever whether created by law, contract, or otherwise.

 

BUSINESS LOAN AGREEMENT

					
	Loan No: 8000845380
	 	(Continued)
	 	Page 4

BORROWER ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS BUSINESS LOAN AGREEMENT AND BORROWER
AGREES TO ITS TERMS. THIS BUSINESS LOAN AGREEMENT IS DATED MARCH 9, 2007.

BORROWER:

AGASSIZ ENERGY, LLC

	 	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Donald Sargeant
	 	 	 	By:
	 	/s/ Larry Altringer	 	 
	 

	 	 

Donald Sargeant, President of Agassiz Energy, LLC
	 	 	 	 	 	 

Larry Altringer, Treasurer of Agassiz Energy, LLC
	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Wayne Wagner	 	 	 	 	 	 	 	 
	 

	 	 

Wayne Wagner, Vice President of Agassiz Energy, LLC
	 	 	 	 	 	 	 	 

LENDER:

AMERICAN FEDERAL BANK

	 	 	 	 	 
	By:

	 	/s/ Percy Blake	 	 
	 

	 	 

Authorized Signer

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