Document:

Exhibit
10.5

 

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

  

 

 

REVOLVING CREDIT NOTE

 

	
  $15,000,000

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

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 arid assigns, at Post Office Box 6020, 1900 44th Street
South, Fargo, North Dakota 58108, (a) on the Revolving Facility Maturity Date
(as defined in the Master Credit Agreement between Borrower and Lender dated as
of August 10, 2007 and the Second Supplement to the Master Credit Agreement
(Revolving Facility) 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 Fifteen
Million and No/100 Dollars ($15,000,000.00) or so much of the unpaid principal
amount of the Revolving Facility (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 Revolving Facility
Maturity Date, the principal amount of the Revolving Loans 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 Revolving Credit 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 Revolving Credit Note and the Credit Agreement.

 

This Revolving Credit 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 REVOLVING CREDIT 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

  

 

 

2007 EXPANSION LOAN

NOTE

 

	
  $70,000,000

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

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
2007 Expansion Loan Maturity Date (as defined in the Master Credit Agreement between
Borrower and Lender dated as of August 10,
2007 and the Third Supplement to the Master Credit Agreement (2007
Expansion Loan Facility) 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 Seventy Million and No/100 Dollars ($70,000,000.00) or so
much of the unpaid principal amount of the 2007 Expansion 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 2007 Expansion Loan Maturity Date, the principal amount of the 2007
Expansion 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 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 Leader.

 

All borrowings evidenced by this 2007 Expansion 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 2007 Expansion Loan Note and the Credit
Agreement.

 

This 2007 Expansion Loan Note is issued in connection with, and is
entitled to the benefits of, the Credit Agreement which, among other things,
contains provisions far the acceleration of the maturity hereof upon the
happening of certain events, all upon the terms and conditions therein
specified.

 

THIS 2007 EXPANSION 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:
  PresidentExhibit 10.6

 

THIS INSTRUMENT WAS PREPARED BY:

 

Lindquist & Vennum P.L.L.P. (LLK)

4200 IDS Center

80 South Eighth Street

Minneapolis, MN 55402

(612) 371-3211

 

FUTURE ADVANCE MORTGAGE

AND

SECURITY AGREEMENT

AND

FIXTURE FINANCING
STATEMENT

AND

ASSIGNMENT OF LEASES AND
RENTS

 

MORTGAGE – COLLATERAL
REAL ESTATE MORTGAGE

 

THIS INDENTURE (the “Mortgage”), made and given this [10th] day of August, 2007, by Great Plains
Ethanol, LLC, a South Dakota limited liability company (“Borrower”), whose
address is 27716 462nd Avenue, Chancellor, South Dakota 57015 to
AgCountry Farm Credit Services, FLCA (“Lender”), whose address is 1900 44th
Street South, Fargo, North Dakota 58108.

 

PRELIMINARY RECITALS:

 

A.            The Borrower is the
owner in fee simple of certain real property more fully described on Exhibit A
attached hereto (the “Land”).

 

B.            Pursuant to a certain
Master Credit Agreement between the Borrower and Lender dated of even date
herewith (as amended, restated, supplemented or otherwise modified from time to
time and in effect on the date hereof, “Credit Agreement”) the Lender has
agreed to make certain loans secured by this Mortgage to the Borrower in the
amount of up to One Hundred Five Million and no/100 Dollars ($105,000,000.00) (“Loan”).

 

C.            The Loan is evidenced
by certain promissory Notes executed and delivered by the Borrower to the
Lender in the aggregate principal sum of One Hundred Five Million and no/100
Dollars ($105,000,000.00) (collectively, the “Notes”).

 

D.            The Notes bear
interest at a per annum rate of interest all as more fully set forth in the
Notes (“Interest Rate”) except that during the period of and continuance of a
default under

 

 

the Notes or Credit
Agreement or an Event of Default under this Mortgage, the Notes shall bear
interest at a per annum rate of interest of 200 basis points (2.0%) greater
than the Interest Rate whether or not the Lender has exercised its option to
accelerate the maturity of the Notes and declare the entire unpaid Indebtedness
Secured Hereby due and payable as more fully set forth in the Notes (“Default
Interest”).

 

E.             As a requirement to
making the Loan the Lender requires among other things that the Borrower
execute and deliver this Mortgage on the fee simple title to the Land and the
building, buildings and other improvements located and/or to be constructed
upon the Land.

 

F.             The Notes are payable
in installments with a final payment of principal and interest due as set forth
in the Notes (the “Maturity Date”).

 

G.            As used herein, the
term “Note Rate” shall mean the rate of interest then in effect on the Notes
whether the Interest Rate or Default Interest, as the case may be.

 

H.            The Borrower is
executing and delivering this Mortgage for the purpose of subjecting and
subordinating all of its right, title and interest in and to the Premises (as
defined below) to the lien of this Mortgage. It is expressly understood and
agreed by acceptance of this Mortgage by the Lender that the Borrower has
executed this Mortgage for the purpose of mortgaging, granting, bargaining,
selling and conveying to the Lender and granting to the Lender a security
interest in all of its right, title and interest in the Premises as security
for the performance of the obligations which are secured hereby.

 

NOW, THEREFORE, in consideration of the debt hereinafter
described and the sum of One and 00/100 Dollars ($1.00) to Borrower in hand
paid by Lender, the receipt whereof is hereby acknowledged, Borrower does
hereby GRANT, BARGAIN, SELL, CONVEY AND CONFIRM, MORTGAGE AND WARRANT unto
Lender, its successors and assigns, AND GRANTS TO LENDER A SECURITY INTEREST IN
all of the following properties now or hereafter owned by the Borrower and
hereinafter set forth (all of the following being hereafter collectively
referred to as the “Premises”), WITH POWER OF SALE, to secure payment of the
Notes and all amounts owing under the Notes and any documents securing the
Notes:

 

A

LAND

 

All right, title and interest in the tracts or parcels
of real property lying and being in the County of Turner, State of South
Dakota, all as more fully described in Exhibit A attached hereto
and made a part hereof, together with all the estates and rights in and to the
real property and in and to lands lying in streets, alleys and roads adjoining
the real property and all buildings, structures, improvements, fixtures and
annexations, access rights, easements, rights of way or use, servitudes,
licenses, tenements, hereditaments and appurtenances now or hereafter belonging
or pertaining to the real property, and all water, mineral and oil rights now
or hereafter belonging or pertaining to the Land and all proceeds and products
derived therefrom whether now owned, leased or hereafter acquired.

 

2

 

B

BUILDINGS

 

All buildings and improvements now or hereafter built,
erected on, or existing on the Land.

 

C

PERSONAL PROPERTY

 

All buildings, improvements, personal property,
fixtures, fittings and furnishings, now or hereafter attached to, located at,
or placed in the improvements on the Land described herein including, without
limitation all machinery, fittings, fixtures, apparatus, equipment or articles
used to supply heating, gas, electricity, air conditioning, water, light, waste
disposal, power, refrigeration, ventilation, and fire and sprinkler protection;
all maintenance supplies and repair equipment; all draperies, carpeting, floor
coverings, screens, storm windows and window coverings, blinds, awnings,
shrubbery and plants; all elevators, escalators and shafts, motors, machinery,
fittings and supplies necessary for their use; all building materials and
supplies now or hereafter delivered to the Premises (it being understood that
the enumeration of any specific articles of property shall in no way be held to
exclude any items of property not specifically enumerated), as well as
renewals, replacements, proceeds, additions, accessories, increases, parts,
fittings, insurance payments, awards and substitutes thereof, together with all
interest of Borrower in any such items hereafter acquired, as well as the
Borrower’s interest in any lease, or conditional sales agreement under which
the same is acquired, all of which personal property mentioned herein shall be
deemed fixtures and accessory to the freehold and a part of the realty and not
severable in whole or in part without material injury to the Premises.

 

D

RENTS, INCOME, LEASES AND
PROFITS

 

All rents, income, contract rights, leases and profits
now due or which may hereafter become due under or by virtue of any lease,
sublease, license or agreement, whether written or verbal, for the use or
occupancy of the Premises or any part thereof together with all tenant security
deposits.

 

E

INSURANCE PROCEEDS

 

All awards, payments, proceeds now or hereafter
payable under any policy of insurance insuring the Premises including but not
limited to the proceeds of casualty insurance, title insurance, business
interruption/rents insurance or other insurance maintained with respect to the
Premises.

 

3

 

F

JUDGMENTS AND AWARDS

 

All awards, compensation and settlements in lieu
thereof made as a result of the taking by power of eminent domain of the whole
or any part of the Premises, including any awards for damages sustained to the
Premises, for a temporary taking, change of grade of streets or taking of
access.

 

G

INTANGIBLES

 

All contracts, licenses, permits, management records,
files, consents, governmental approvals and intangibles used, useful or
required in the ownership and management of the Premises together with all soil
reports, building permits, variances, licenses, utility permits and other
permits and agreements relating to the construction or equipping of the
improvements on the Premises, or the operation or maintenance of the Premises,
including, without limitation, all warranties and contract rights.

 

H

CONSTRUCTION CONTRACTS

 

Each contract or agreement for the design,
construction and equipping of the improvements to be constructed on the
Premises, together with all rights, title and interest of Borrower in and to
any existing or future changes, extensions, revisions, modifications,
guarantees or performance, or warranties of any kind thereunder.

 

I

PLANS AND SPECIFICATIONS

 

All plans and specifications, all surveys, site plans,
working drawings and papers, relating to the Premises and the construction and
equipping of the improvements on the Premises, including without limitation,
all architectural and site plans prepared.

 

J

BUILDING SUPPLIES

 

All building supplies and materials ordered or
purchased for use in connection with the construction and equipping of the
improvements on the Premises.

 

K

SERVICE AGREEMENTS

 

All rights and interests of Borrower in and under any
and all service and other agreements relating to the operation, maintenance,
and repair of the Premises or the buildings and improvements thereon.

 

4

 

It is specifically understood that the enumeration of
any specific articles of property shall not exclude or be held to exclude any
items of property not specifically mentioned. All of the Premises hereinabove
described, real, personal and mixed, whether affixed or annexed or not, and all
rights hereby conveyed and secured are intended to be as a unit and are hereby
understood and agreed and declared to be appropriated to the use of the
Premises, and shall for the purposes of this Mortgage be deemed to be part of
the Premises and conveyed and secured hereby.

 

TO HAVE AND TO HOLD THE SAME, together with the
possession and right of possession of the Premises, unto the Lender, its
successors and assigns, forever.

 

PROVIDED NEVERTHELESS, that if the Borrower, its
successors or assigns, shall:

 

i)                                         pay
to the Lender all amounts owing under the Notes and the Loan Documents (as
defined in the Credit Agreement) according to the terms thereof, the terms and
conditions of which are incorporated herein by reference and made a part
hereof, together with any extensions or renewals thereof, due and payable with
interest thereon at the Note Rate, the balance of said principal sum together
with interest thereon being due and payable in any event on the Maturity Date;
and

 

ii)                                      pay
to the Lender, its successors or assigns, at the times demanded and with
interest thereon at the Note Rate, all sums advanced (a) in protecting the lien
of this Mortgage, (b) in payment of taxes on the Premises, (c) in payment of
insurance premiums covering improvements thereon, (d) in payment of principal
and interest on prior liens, in payment of expenses and attorney’s fees herein
provided for and (e) all sums advanced for any other purpose authorized herein;
and

 

iii)                                   keep
and perform all of the covenants and agreements herein contained; and

 

iv)                                  keep
and perform all of the terms and conditions of any instrument given as
collateral for the Loan; and

 

v)                                     keep
and perform all of the terms and conditions of the Credit Agreement;

 

then this Mortgage shall become null and void, and shall be released at
Borrower’s expense. The Notes, all such sums and all such obligations, together
with interest thereon, are herein collectively referred to as the “Indebtedness
Secured Hereby”.

 

AND IT IS FURTHER COVENANTED AND AGREED AS FOLLOWS:

 

1.

GENERAL COVENANTS,
AGREEMENTS, WARRANTIES

 

1.1           Payment
of Indebtedness:  Observance of Covenants.
Borrower shall duly and punctually pay each and every installment of principal
and interest on the Notes and all other

 

5

 

Indebtedness Secured Hereby, as and when the same shall become due, and
shall duly and punctually perform and observe all of the covenants, agreements
and provisions contained herein, in the Notes and any other instrument given as
security for the payment of the Notes.

 

1.2           Maintenance:  Repairs. Borrower shall not abandon the
Premises, shall keep and maintain the Premises in good condition, repair and
operating condition, normal wear and tear excluded, free from any waste or
misuse, and shall promptly repair or restore any buildings, improvements or
structures now or hereafter on the Premises which may become damaged or
destroyed to their condition prior to any such damage or destruction. Borrower
further agrees that excepting the requirements imposed upon it under the Credit
Agreement to complete the improvements as defined therein it will not expand
any improvements on the Premises, erect any new improvements or make any
material alterations in any improvements which shall alter the basic structure,
adversely affect the market value or change the existing architectural
character of the Premises, nor remove or demolish any improvements without
suitable replacement thereof, and shall complete within a reasonable time any
buildings now or at any time in the process of remodeling on the Premises;
provided nothing herein shall preclude Borrower from constructing improvements
necessary or desirable to the use of the Premises for Borrower’s business
purposes which are non-structural in nature and which do not constitute
material alterations to the Premises or affect the nature of use, structure or
utility of the Premises or decrease the market value of the Premises.

 

1.3           Compliance
with Laws. Borrower shall comply with all requirements of law, municipal
ordinances and regulations affecting the Premises, shall comply with all
private restrictions and covenants affecting the Premises and shall not
acquiesce in or seek any rezoning classification affecting the Premises.

 

1.4           Payment
of Operating Costs: Prior Mortgages and Liens. Borrower shall pay all
operating costs and expenses of the Premises, shall keep the Premises free from
levy, attachment, mechanics’, materialmen’s and other liens (“Liens”) and shall
pay when due all indebtedness which may be secured by mortgage, lien or charge
on the Premises.

 

1.5           Payment
of Impositions. Borrower shall pay when due (or with respect to real estate
taxes, prior to becoming delinquent) and in any event before any penalty
attaches all taxes, assessments, governmental charges, water charges, sewer
charges, and other fees, taxes, charges and assessments of every kind and
nature whatsoever assessed or charged against or constituting a lien on the
Premises or any interest therein (“Impositions”) and will upon demand furnish
to the Lender proof of the payment of any such Impositions. In the event of a
court decree or an enactment after the date hereof by any legislative authority
of any law imposing upon a mortgagee the payment of the whole or any part of
the Impositions herein required to be paid by the Borrower, or changing in any
way the laws relating to the taxation of mortgages or debts secured by
mortgages or a lender’s interest in the Premises, so as to impose such
Imposition on the Lender or on the interest of the Lender in the Premises,
then, in any such event, Borrower shall bear and pay the full amount of such
Imposition, provided that if for any reason payment by Borrower of any such
Imposition would be unlawful, or if the payment thereof would constitute usury
or render the Indebtedness Secured Hereby wholly or partially usurious, Lender,
at its option, may declare the whole sum secured by this Mortgage with interest
thereon to be

 

6

 

immediately due and payable, without prepayment premium, or Lender, at
its option, may pay that amount or portion of such Imposition as renders the
Indebtedness Secured Hereby unlawful or usurious, in which event Borrower shall
concurrently therewith pay the remaining lawful and non-usurious portion or
balance of said Imposition.

 

1.6           Contest
of Impositions, Liens and Levies. Borrower shall not be required to pay,
discharge or remove any Imposition or any Lien so long as the Borrower shall in
good faith contest the same or the validity thereof by appropriate legal
proceedings which shall operate to prevent the collection of the Lien or
Imposition so contested and the sale of the Premises, or any part thereof, to
satisfy the same, provided that the Borrower shall, prior to the date such Lien
or Imposition is due and payable, have given such reasonable security as may be
demanded by the Lender to insure such payments plus interest or penalties
thereon, and prevent any sale or forfeiture of the Premises by reason of such
nonpayment. Any such contest shall be prosecuted with due diligence and the
Borrower shall promptly after final determination thereof pay the amount of any
such Lien or Imposition so determined, together with all interest and penalties
which may be payable in connection therewith. Notwithstanding these provisions
Borrower shall (and if Borrower shall fail so to do, Lender, may but shall not
be required to) pay any such Lien or Imposition notwithstanding such contest if
in the reasonable opinion of the Lender, the Premises shall be in jeopardy or
in danger of being forfeited or foreclosed.

 

1.7           Protection
of Security. Borrower shall promptly notify Lender of and appear in and
defend any suit, action or proceeding that affects the Premises or the rights
or interest of Lender hereunder and the Lender may elect to appear in or defend
any such action or proceeding. Borrower agrees to indemnify and reimburse Lender
from any and all loss, damage, expense or cost arising out of or incurred in
connection with any such suit, action or proceeding, including costs of
evidence of title and reasonable attorney’s fees and such amounts together with
interest thereon at the Note Rate shall become additional “Indebtedness Secured
Hereby” and shall become immediately due and payable.

 

1.8           Annual
Statements. Borrower shall furnish to the Lender the financial statements,
and such other information, as may be required by the Credit Agreement.

 

1.9           Additional
Assurances. Borrower agrees upon reasonable request by the Lender to
execute and deliver such further instruments, deeds and assurances including
financing statements under the Uniform Commercial Code and will do such further
acts as may be necessary or proper to carry out more effectively the purposes
of this Mortgage and without limiting the foregoing, to make subject to the
lien hereof any property agreed to be subjected hereto or covered by the
granting clause hereof, or intended so to be. Borrower agrees to pay any
recording fees, filing fees, taxes, or other charges arising out of or incident
to the filing or recording of this Mortgage, such further assurances and
instruments and the issuance and delivery of the Notes.

 

1.10         Title.
Borrower is the lawful owner of and has a good and marketable fee simple
absolute title to the Premises and will warrant and defend its title to the
same free of all liens and encumbrances, other than the Permitted Encumbrances
set forth on attached Exhibit B and has

 

7

 

good right and lawful authority to grant, bargain, sell, convey,
mortgage and grant a security interest in the Premises as provided herein.

 

1.11         Credit
Agreement. This Mortgage secures an obligation incurred for the
construction of an improvement on land and is a “Construction Mortgage” as that
term is used in the Uniform Commercial Code. This Mortgage is the Mortgage
referred to in and is also given as security for the due and punctual
performance, observance and payment by the Borrower of the terms and conditions
set forth in the Credit Agreement, the terms and conditions of which are
incorporated herein by reference. In addition to its remedies hereunder, the
Lender may, but shall not be required to, avail itself of any or all of the
rights and remedies available to it under the Credit Agreement, and any sums
expended by the Lender in availing itself of such rights and remedies shall
bear interest thereon at the rate specified in the Credit Agreement and shall
be so much additional Indebtedness Secured Hereby, and shall be payable to the
Lender immediately upon demand; provided that, no such payment by the Lender
shall be considered as waiving the event of default.

 

2.

UNIFORM COMMERCIAL CODE
SECURITY AGREEMENT

 

2.1           Security
Agreement. This Mortgage shall constitute a security agreement as defined
in the Uniform Commercial Code (“Code”) in the items described in the Granting
Clauses of this Mortgage (“Collateral”). Any Collateral installed in or used in
the Premises are to be used by the Borrower solely for Borrower’s business
purposes or as the equipment and fixtures leased or furnished by the Borrower,
as landlord, to tenants of the Premises and such Collateral will be kept at the
buildings on the Premises and will not be removed therefrom without the consent
of the Lender and may be affixed to such buildings but will not be affixed to
any other real estate. The remedies of the Lender hereunder are cumulative and
separate, and the exercise of any one or more of the remedies provided for
herein or under the Uniform Commercial Code shall not be construed as a waiver
of any of the other rights of the Lender including having any Collateral deemed
part of the realty upon any foreclosure thereof. If notice to any party of the
intended disposition of the Collateral is required by law in a particular
instance, such notice shall be deemed commercially reasonable if given at least
ten (10) days prior to such intended disposition and may be given by
advertisement in a newspaper accepted for legal publications either separately
or as part of a notice given to foreclose the real property or may be given by
private notice if such parties are known to Lender. Neither the grant of a
security interest pursuant to this Mortgage nor the filing of a financing
statement pursuant to the Code shall ever impair the stated intention of this
Mortgage that all Collateral comprising the Premises and at all times and for
all purposes and in all proceedings both legal or equitable shall be regarded
as part of the real property conveyed and secured hereunder irrespective of
whether such item is physically attached to the real property or any such item
is referred to or reflected in a financing statement. Borrower will on demand
deliver all financing statements that may from time to time be required by
Lender to establish, perfect and continue the priority of Lender’s security
interest in the Collateral and shall pay all expenses incurred by Lender in
connection with the renewal or extensions of any financing statements executed
in connection with the Premises; and shall give advance written notice of any
proposed change in Borrower’s name, identity or structure and will execute and
deliver to Lender prior to or concurrently with such

 

8

 

change all additional financing statements that Lender may require to
establish and perfect the priority of Lender’s security interest.

 

2.2           Maintenance
of Property. Subject to the provisions of this section, in any instance
where Borrower in its sound discretion determines that any Collateral subject
to a security interest under this Mortgage has become inadequate, obsolete,
worn out, unsuitable, undesirable or unnecessary for the operation of the
Premises, Borrower may, at its expense, remove and dispose of it and substitute
and install other items not necessarily having the same function, provided,
that such removal and substitution shall not impair the operating utility and
unity of the Premises. All substituted items shall become a part of the
Premises and subject to the lien of the Mortgage. Any amounts received or
allowed Borrower upon the sale or other disposition of the removed items of
Collateral shall be applied first against the cost of acquisition and
installation of the substituted items. Nothing herein contained shall be
construed to prevent any tenant from removing from the Premises trade fixtures,
furniture and equipment installed by the tenant and removable by the tenant
under its terms of the lease, on the condition, however, that the tenant shall
at its own cost and expense, repair any and all damages to the Premises
resulting from or caused by the removal thereof.

 

2.3           Fixture
Filing. THIS MORTGAGE SHALL BE EFFECTIVE AS A FINANCING STATEMENT FILED AS
A FIXTURE FILING WITH RESPECT TO ALL GOODS CONSTITUTING A PART OF THE
COLLATERAL WHICH ARE OR ARE TO BECOME FIXTURES RELATED TO THE PREMISES. FOR
PURPOSES OF THE UNIFORM COMMERCIAL CODE THE FOLLOWING INFORMATION IS FURNISHED:

 

(a)                                  The
name and address of the record owner of the real estate described in this
instrument is:

 

Great Plains Ethanol, LLC

27716 462nd Avenue

Chancellor, South Dakota 57015

 

(b)           The
name and address of the Debtor is:

 

Great Plains Ethanol, LLC

27716 462nd Avenue

Chancellor, South Dakota 57015

 

(c)           Debtor’s
Federal Tax ID No. 46-0459188

 

(d)           The
name and address of the Secured Party is:

 

AgCountry Farm Credit
Services, FLCA

1900 44th
Street South

P.O. Box 6020

Fargo, North Dakota 58108

 

9

 

(e)                                  Information
concerning the security interest evidenced by this instrument may be obtained
from the Secured Party at its address above.

 

(f)            This
document covers goods which are or are to become fixtures.

 

3.

INSURANCE AND ESCROWS

 

3.1           Insurance.
Borrower shall obtain, pay for and keep in full force and effect during the
term of this Mortgage at its sole cost and expense the following policies of
insurance:

 

(a)                                  All
risk/open perils special form property insurance with extended coverages
including any building contents, sprinkler coverage, Ordinance of Law coverage
(including demolition cost, loss to undamaged portions of any buildings and
increased cost of construction) with limits of 100% replacement cost and with
no co-insurance provision or if the insurance carrier requires, co-insurance
provisions with an agreed amount endorsement in amount acceptable to Lender;

 

(b)                                 Insurance
against loss or damage from (i) leakage of sprinkler systems and
(ii) explosion of steam boilers, air conditioning equipment, high pressure
piping, machinery and equipment, pressure vessels or similar apparatus now or
hereafter installed in any improvements on the Premises and including broad
form boiler and machinery insurance (without exclusion for explosion) covering
all boilers or other pressure vessels, machinery and equipment (including
electrical equipment, sprinkler systems, heating and air conditioning
equipment, refrigeration equipment and piping) located in, on or about the
Premises and any improvements thereon in an amount at least equal to the full
replacement cost of such equipment and the building or buildings housing the
same;

 

(c)                                  Flood
insurance if any part of the Premises now (or subsequently determined to be) is
located in an area identified by the Federal Emergency Management Agency as an
area having special flood hazards and in which flood insurance has been made
available under the National Flood Insurance Act of 1968 (and amendment or
successor act thereto) in an amount at least equal to the lesser of the full
replacement cost of all buildings and equipment on the Premises, the
outstanding principal amount of the Notes or the maximum limits of coverage
available with respect to the buildings and equipment under said Act;

 

(d)                                 Sinkhole
insurance, if available in the area where the Premises are located, in an
amount at least equal to principal balance of the Notes or the maximum limit of
coverage available, whichever is less;

 

(e)                                  Rents
Loss or Business Interruption insurance covering risk of loss due to the
occurrence of any hazards insured against under the required fire and extended
coverage insurance in an meant equal to one (1) year’s loss of income as such

 

10

 

income may change from time to time due to changes in
income from the Premises;

 

(f)                                    Commercial
general public liability insurance (including product liability, completed
operations, contractual liability, host liquor liability, broad form property
damage, and personal injuries, including death resulting therefrom) and with
single limit coverage for personal and bodily injury and property damage of at
least $5,000,000.00 for each occurrence;

 

(g)                                 Such
other coverages appropriate to the Premises, its location and use as Lender may
from time to time require such as earthquake, mine subsidence, sinkhole,
personal property supplemental liability, or coverages of other property -
specific risks.

 

and while any improvements are in the process of construction on the
Premises:

 

aa)                                Builder’s
Risk Insurance written on a completed value basis in an amount equal to the
full replacement cost of the Improvements at the date of completion with
coverage available on the so-called non-reporting “all risk” form of  policy, including coverage against collapse
and water damage, with standard non-contributing mortgagee clauses, such
insurance to be in such amounts and form and written by such companies as shall
be approved by Lender, and the originals of such policies (together with
appropriate endorsement thereto, evidence of payment of premiums thereon and
written agreements by the insurer or insurers therein to give Lender ten (10)
days’ prior written notice of any intention to cancel).

 

bb)                              Contractor’s
Comprehensive General Liability Insurance including operations, product
liability, contingent liability operations, operations of subcontractors,
completed operations, contractual liability insurance and comprehensive
automobile liability insurance (including hired and non-owned liability) and
with single limit coverage for personal and bodily injury and property damage
of at least $5,000,000.00 for each occurrence.

 

cc)                                Statutory
workmen’s compensation coverage in the required amounts.

 

Such insurance policies shall be written on forms and
with insurance companies satisfactory to Lender, shall be in amounts sufficient
to prevent the Borrower from becoming a co-insurer of any loss thereunder, and
shall bear a satisfactory mortgagee clause in favor of the Lender with loss
proceeds under any such policies to be made payable to the Lender. Blanket
policies must include limits by property location. All required policies of
insurance or acceptable certificates thereof together with evidence of the
payment of current premiums therefor shall be delivered to and be held by the
Lender. The Borrower shall, within thirty (30) days prior to the expiration of
any such policy, deliver other original policies or certificates of the insurer
evidencing the renewal of such insurance together with evidence of the payment of
current premiums therefor. In the event of a foreclosure of this Mortgage or
any acquisition of

 

11

 

the Premises by the Lender all such policies and any proceeds payable
therefrom, whether payable before or after a foreclosure sale, or during the
period of redemption, if any, shall become the absolute property of the Lender
to be utilized at its discretion. In the event of foreclosure or the failure to
obtain and keep any required insurance the Borrower empowers the Lender to
effect the above insurance upon the Premises at Borrower’s expense and for the
benefit of the Lender in the amounts and types aforesaid for a period of time
covering the time of redemption from foreclosure sale, and if necessary therefor,
to cancel any or all existing insurance policies. Borrower agrees to pay Lender
such fees as may be permitted under applicable law for the costs incurred by
Lender in determining, from time to time, whether the Premises are located
within an area having special flood hazards. Such fees shall include the fees
charged by any organization providing for such services.

 

3.2           Escrows.
Upon demand, Borrower shall deposit with the Lender, or at Lender’s request,
with its servicing agent, on the first day of each and every month hereafter as
a deposit to pay the costs of taxes, assessments and insurance premiums next
due (“Charges”):

 

(a)                                  Initially
a sum such that the amounts to be deposited pursuant to (b) next and such
initial sum shall equal the estimated Charges for the next due payment; and

 

(b)                                 Thereafter
an amount equal to one-twelfth (1/12th) of the estimated annual Charges due on
the Premises.

 

Lender will, upon the presentation to the Lender by the Borrower of the
bills therefor, pay the Charges from such deposits or will upon presentation of
receipted bills therefor, reimburse the Borrower for such payments made by the
Borrower. In the event the deposits on hand shall not be sufficient to pay all
of the estimated Charges when the same shall become due from time to time, or
the prior deposits shall be less than the currently estimated monthly amounts,
then the Borrower shall pay to the Lender on demand any amount necessary to
make up the deficiency. The excess of any such deposits shall be credited to
subsequent payments to be made for such items. If a default or an event of
default shall occur under the terms of this Mortgage the Lender may, at its
option, without being required so to do, apply any deposits on hand to the
Indebtedness Secured Hereby, in such order and manner as the Lender may elect. When
the Indebtedness Secured Hereby has been fully paid any remaining deposits
shall be returned to the Borrower as its interest may appear. All deposits are
hereby pledged as additional security for the Indebtedness Secured Hereby,
shall be held for the purposes for which made as herein provided, may be held
by Lender or its servicing agent and may be commingled with other funds of the
Lender, or its servicing agent, shall be held without any allowance of interest
thereon and shall not be subject to the decision or control of the Borrower. Neither
Lender nor its servicing agent shall be liable for any act or omission made or
taken in good faith. In making any payments, Lender or its servicing agent may
rely on any statement, bill or estimate procured from or issued by the payee
without inquiry into the validity or accuracy of the same. If the taxes shown
in the tax statement shall be levied on property more extensive than the
Premises, then the amounts escrowed shall be based on the entire tax bill and
Borrower shall have no right to require an apportionment and Lender or its
servicing agent may pay the entire tax bill notwithstanding that such taxes
pertain in part to other property and the Lender shall be under no duty to seek
a tax division or apportionment of the tax bill.

 

12

 

4.

APPLICATION OF INSURANCE
AND AWARDS

 

4.l            Damage
or Destruction of the Premises. Borrower shall give the Lender prompt
notice of any damage to or destruction of the Premises and in case of loss
covered by policies of insurance the Lender is hereby authorized at its option
to settle and adjust any claim arising out of such policies and collect and
receipt for the proceeds payable therefrom; provided, that the Borrower may
itself adjust and collect for any losses arising out of a single occurrence
aggregating not in excess of Twenty-five Thousand and 00/100 ($25,000.00)
Dollars. Any expense incurred by the Lender in the adjustment and collection of
insurance proceeds (including the cost of any independent appraisal of the loss
or damage on behalf of Lender) shall be reimbursed to the Lender first out of
any proceeds. The proceeds or any part thereof shall be applied to reduction of
the Indebtedness Secured Hereby then most remotely to be paid, whether due or
not, without the application of any prepayment premium, or to the restoration
or repair of the Premises, the choice of application to be solely at the
discretion of Lender.

 

4.2           Condemnation.
Borrower shall give the Lender prompt notice of any actual or threatened
condemnation or eminent domain proceedings affecting the Premises and hereby
assigns, transfers, and sets over to the Lender the entire proceeds of any
award or claim for damages or settlement in lieu thereof for all or any part of
the Premises taken or damaged under such eminent domain or condemnation
proceedings, the Lender being hereby authorized to intervene in any such action
and to collect and receive from the condemning authorities and give proper
receipts and acquittances for such proceeds. Borrower will not enter into any
agreements with the condemning authority permitting or consenting to the taking
of the Premises or agreeing to a settlement unless prior written consent of Lender
is obtained. Any expenses incurred by the Lender in intervening in such action
or collecting such proceeds, including reasonable attorney’s fees, shall be
reimbursed to the Lender first out of the proceeds. The proceeds or any part
thereof shall be applied upon or in reduction of the Indebtedness Secured
Hereby then most remotely to be paid, whether due or not, without the
application of any prepayment premium, or to the restoration or repair of the
Premises, the choice of application to be solely at the discretion of Lender.

 

4.3           Disbursement
of Insurance and Condemnation Proceeds. Any restoration or repair shall be
done under the supervision of an architect acceptable to Lender and pursuant to
plans and specifications approved by the Lender. In any case where Lender may
elect to apply the proceeds to repair or restoration or permit the Borrower to
so apply the proceeds they shall be held by Lender for such purposes and will
from time to time be disbursed by Lender to defray the costs of such restoration
or repair under such safeguards and controls as Lender may establish to assure
completion in accordance with the approved plans and specifications and free of
liens or claims. Borrower shall on demand deposit with Lender any sums
necessary to make up any deficits between the actual cost of the work and the
proceeds and provide such lien waivers and completion bonds as Lender may
reasonably require. Any surplus which may remain after payment of all costs of
restoration or repair may at the option of the Lender be applied on account of
the Indebtedness Secured Hereby then most remotely to be paid, whether

 

13

 

due or not, without application of any prepayment premium or shall be
returned to Borrower as its interest may appear, the choice of application to
be solely at the discretion of Lender.

 

5.

LEASES AND RENTS

 

5.1           Borrower
to Comply with Leases. Borrower will, at its own cost and expense:

 

(a)           Provide
the Lender copies of all lease(s) of the Premises (whenever the term “lease” is
used herein in the context where Borrower is the lessor/sublessor, the term “lease”
includes any sublease);

 

(b)                                 Faithfully
abide by, perform and discharge each and every obligation, covenant and
agreement under any lease(s) to be performed by the lessor/sublessor
thereunder;

 

(c)                                  Enforce
or secure the performance of each and every material obligation, covenant,
condition and agreement of said lease(s) by the tenants thereunder to be
performed;

 

(d)                                 Not
borrow against, pledge or further assign any rents due under said lease(s);

 

(e)                                  Not
permit the prepayment of any rents for more than the next accruing installment
of Rents, nor anticipate, discount, compromise, forgive or waive any Rents;

 

(f)                                    Not
consent to a subordination of any lease(s) to any party other than Lender and
then only if specifically required by the Lender; and

 

(g)                                 Not
permit any tenant to assign or sublet its interest in its lease unless required
to do so by the terms of its lease.

 

5.2           Lender’s
Right to Perform Under Leases. Should the Borrower fail to perform, comply
with or discharge any obligations of Borrower under any lease or should the
Lender become aware of or be notified by any tenant under any lease of a
failure on the part of Borrower to so perform, comply with or discharge its
obligations under said lease, Lender may, but shall not be obligated to, and
without further demand upon the Borrower, and without waiving or releasing
Borrower from any obligation in this Mortgage contained, remedy such failure, and
the Borrower agrees to repay upon demand all sums incurred by the Lender in
remedying any such failure together with interest at the then rate in effect on
the Notes. All such sums, together with interest as aforesaid shall become so
much additional Indebtedness Secured Hereby, but no such advance shall be
deemed to relieve the Borrower from any default hereunder.

 

5.3           Assignment
of Leases and Rents. To further secure the Indebtedness Secured Hereby the
Borrower does hereby sell, assign and transfer unto Lender all of the leases,
rents, income and profits now due and which may hereafter become due under or
by virtue of any

 

14

 

lease, whether written or verbal, or any agreement for the use or
occupancy of the Premises, it being the intention of this Mortgage to establish
an absolute transfer and assignment of all such leases and agreements and all
of the rents, income and profits from the Premises unto the Lender and the
Borrower does hereby appoint irrevocably the Lender its true and lawful
attorney in its name and stead, which appointment is coupled with an interest,
to collect all of said rents, income and profits; provided, Lender grants the
Borrower the privilege, revocable, to collect and retain such rents, income,
and profits unless and until an Event of Default exists under this Mortgage. Upon
an Event of Default and whether before or after the institution of legal
proceedings to sell the Premises or to foreclose the lien hereof or before or
after sale of the Premises or during any period of redemption the Lender, and
without regard to waste, adequacy of the security or solvency of the Borrower,
may revoke the licenses granted Borrower hereunder and may, at its option,
without notice:

 

(a)                                  in
person or by agent, with or without taking possession of or entering the
Premises, with or without bringing any action or proceeding, give, or require
Borrower to give, notice to any or all tenants under any lease authorizing and
directing the tenant to pay such rents and profits to Lender; collect all of
the rents, income and profits; enforce the payment thereof and exercise all of
the rights of the landlord under any lease and all of the rights of Lender
hereunder; may enter upon, take possession of, manage and operate said
Premises, or any part thereof, may cancel, enforce or modify any leases, and
fix or modify rents, and do any acts which the Lender deems proper to protect
the security hereof with or without taking possession of said Premises; or

 

(b)                                 apply
for the appointment of a receiver in accordance with the statutes and law made
and provided for, which receivership Borrower hereby consents to, who shall
collect the rents, profits and all other income of any kind; manage the
Premises so as to prevent waste; execute leases within or beyond the period of
receivership, and apply the rents, profits and income in the following order:

 

(i)                                     to
payment of all reasonable fees of any receiver appointed hereunder,

 

(ii)                                  to
application of tenant’s security deposits as may be required by law,

 

(iii)                               to
payment when due of prior or current real estate taxes or special assessments
with respect to the Premises or, if the Mortgage so requires, to the periodic
escrow for payment of the taxes or special assessments then due,

 

(iv)                              to
payment when due of premiums for insurance of the type required by the Mortgage
or, if the Mortgage so requires, to the periodic escrow for the payment of
premiums then due,

 

(v)                                 to
payment of all expenses for normal maintenance of the Premises,

 

15

 

(vi)                              if
received prior to a foreclosure sale to the Indebtedness Secured Hereby;
provided, if the Premises shall be foreclosed and sold pursuant to a
foreclosure sale, then during the period of redemption from such foreclosure
sale:

 

(aa)                            If the
Lender is the purchaser at the foreclosure sale, the rents shall be paid to the
Lender to be applied to the extent of any deficiency remaining after the sale,
the balance to be retained by the Lender, and if the Premises be redeemed by
the Borrower or any other party entitled to redeem, to be applied as a credit
against the redemption price provided, if the Premises not be redeemed, any
remaining excess rents to belong to the Lender, whether or not a deficiency
exists; or

 

(bb)                          If the
Lender is not the purchaser at the foreclosure sale, the rents shall be paid to
the Lender to be applied, to the extent of any deficiency remaining after the
sale, and the balance, if any, to the Purchaser to be applied as a credit
against the redemption price provided, if the Premises not be redeemed any
remaining excess rents shall be paid to the purchaser.

 

The entering upon and taking possession of the Premises, the collection
of such rents and profits and the application thereof as aforesaid shall not
cure or waive any defaults under this Mortgage nor in any way operate to
prevent the Lender from pursuing any other remedy which it may now or hereafter
have under the terms of this Mortgage nor shall it in any way be deemed to
constitute the Lender a mortgagee-in-possession. The rights and powers of the
Lender hereunder shall remain in full force and effect both prior to and after
any foreclosure of the Mortgage and any sale pursuant thereto and until
expiration of the period of redemption from said sale, regardless of whether a
deficiency remains from said sale. The purchaser at any foreclosure sale,
including the Lender, shall have the right, at any time and without limitation,
to advance money to any receiver appointed hereunder to pay any part or all of
the items which the receiver would otherwise be authorized to pay if cash were
available from the Premises and the sum so advanced, with interest at the rate
then in effect in the Notes, or if the Notes have been extinguished, at the
highest rate set forth in the Notes, shall be a part of the sum required to be
paid to redeem from any foreclosure sale. The rights hereunder shall in no way
be dependent upon and shall apply without regard to whether the Premises are in
danger of being lost, materially injured or damaged or whether the Premises are
adequate to discharge the Indebtedness Secured Hereby. The rights contained
herein are in addition to and shall be cumulative with the rights given in any
separate instrument, if any, assigning any leases, rents and profits of the
Premises and shall not amend or modify the rights in any such separate
agreement.

 

5.4           Present
Assignment and License. The assignment of the rents and leases contained
herein is a perfected, absolute and present assignment of the rents and
lease(s), provided the Lender grants to the Borrower a revocable license to:

 

16

 

(a)                                  collect,
but not prior to accrual, the rents, and to retain, use and enjoy the same; and

 

(b)                                 take
“in the ordinary course of business” Leasing Actions (as defined below)
provided prompt notification is given to the Lender of any such Leasing Action.

 

As used herein the term “in the ordinary course of business” means
acting as a prudent and responsible landlord would under similar circumstances
with due regard for the maintenance of the income stream provided by the
lease(s). As used herein the term “Leasing Actions” shall mean all of the
following rights of the Borrower:

 

(i)                                     the
right to waive, excuse, condone or in any manner release or discharge the
tenants of or from the obligations, covenants, conditions and agreements by any
tenant to be performed under the lease(s);

 

(ii)           the
right to terminate any lease(s);

 

(iii)                               the
right to amend or modify any lease(s) or alter the obligations of the parties thereunder
without the consent of the Lender;

 

(iv)                              the
right to accept a surrender of any lease(s) prior to its expiration date; and

 

(v)                                 the
right to exercise the remedies of the landlord under the lease(s) by reason of
any default by the tenant(s) thereunder.

 

The Lender at its sole election may revoke any such licenses granted to
Borrower upon the occurrence of a Event of Default. In the event this Mortgage
is foreclosed, by action or advertisement, Borrower agrees to immediately
forfeit, surrender and deliver to Lender all rights of possession of the
Premises and shall deliver to Lender all rents and profits accruing  from the Premises

 

6.

RIGHTS OF LENDER

 

6.1           Right
to Cure Default. If the Borrower shall fail to comply with any of the
covenants or obligations of this Mortgage, the Lender may, but shall not be
obligated to, without further notice to Borrower, and without waiving or
releasing Borrower from any obligation in this Mortgage contained, remedy such
failure, and the Borrower agrees to repay upon demand all sums incurred by the
Lender in remedying any such failure together with interest at the then rate in
effect on the Notes. All such sums, together with interest as aforesaid shall
become so much additional Indebtedness Secured Hereby, but no such advance
shall be deemed to relieve the Borrower from any failure hereunder.

 

6.2           No
Claim Against the Lender. Nothing contained in this Mortgage shall
constitute any consent or request by the Lender, express or implied, for the
performance of any

 

17

 

labor or services or for the furnishing of any materials or other
property in respect of the Premises or any part thereof, nor as giving the
Borrower or any party in interest with Borrower any right, power or authority
to contract for or permit the performance of any labor or services or the
furnishing of any materials or other property in such fashion as would create
any personal liability against the Lender in respect thereof or would permit
the making of any claim that any lien based on the performance of such labor or
services or the furnishing of any such materials or other property is prior to
the lien of this Mortgage.

 

6.3           Inspection.
Borrower will permit the Lender’s authorized representatives to enter the
Premises at reasonable times for the purpose of inspecting the same; provided
the Lender shall have no duty to make such inspections and shall not incur any
liability or obligation for making or not making any such inspections.

 

6.4           Waivers;
Releases;  Resort to Other Security, Etc.
Without affecting the liability of any party liable for payment of any
Indebtedness Secured Hereby or performance of any obligation contained herein,
and without affecting the rights of the Lender with respect to any security not
expressly released in writing, the Lender may, at any time, and without notice
to or the consent of the Borrower or any party in interest with the Premises or
the Notes:

 

(a)                                  release
any person liable for payment of all or any part of the Indebtedness Secured
Hereby or for performance of any obligation herein;

 

(b)                                 make
any agreement extending the time or otherwise altering the terms of payment of
all or any part of the Indebtedness Secured Hereby or modifying or waiving any
obligation, or subordinating, modifying or otherwise dealing with the lien or
charge hereof;

 

(c)                                  accept
any additional security;

 

(d)                                 release
or otherwise deal with any property, real or personal, including any or all of
the Premises, including making partial releases of the Premises; or

 

(e)                                  resort
to any security agreements, pledges, contracts of guarantee, assignments of
rents and leases or other securities, and exhaust any one or more of said
securities and the security hereunder, either concurrently or independently and
in such order as it may determine.

 

6.5           Waiver
of Appraisement, Homestead, Marshaling. Borrower hereby waives to the full
extent lawfully allowed the benefit of any homestead, appraisement, evaluation,
stay and extension laws now or hereinafter in force. Borrower hereby waives any
rights available with respect to marshaling of assets so as to require the
separate sales of any portions of the Premises, or so as to require Lender to
exhaust its remedies against a specific portion of the Premises before
proceeding against other portions of the Premises, or so as to require Lender
to exhaust its remedies against the Premises or any other real property or
personal property securing the Notes (whether located in the State of South
Dakota or any other state) before proceeding against the Premises or any such
other real property or personal property securing the Notes. Borrower does

 

18

 

hereby expressly consent to and authorize the sale of the Premises or
any part thereof as a single unit or parcel. Borrower also hereby waives any
and all rights of reinstatement and redemption from sale under any order or
decree of  foreclosure pursuant to rights
herein granted, on behalf of Borrower, and each and every person acquiring any
interest in, or title to the Premises described herein subsequent to the date
of this Mortgage, and on behalf of all other persons to the extent permitted by
applicable law. Borrower specifically consents to Lender’s foreclosure of this
Mortgage and of any other mortgages, deeds of trust, and instruments securing
the Notes, whether by advertisement, by judicial action in one or more courts,
or by any other manner provided by law, and such foreclosures may occur
simultaneously or in any order that Lender may determine in its sole
discretion.

 

6.6           Business
Loan Representation. Borrower represents and warrants to Lender that the
Indebtedness evidenced by the Notes is a business loan transacted solely for
the purpose of carrying on the business of Borrower and not a consumer
transaction and that the Premises do not constitute the homestead of Borrower.

 

7.

EVENTS OF DEFAULT AND
REMEDIES

 

7.1           Events
of Default. It shall be an event of default (“Event of Default”) under this
Mortgage upon the happening of any of the following:

 

(a)                                  failure
to make any payment on the Notes whether principal, interest, premium or late
charge, when and as the same becomes due (whether at the stated maturity or at
a date fixed for any installment payment or any accelerated payment date or
otherwise) and such failure shall continue for a period of ten (10) days; or

 

(b)                                 a
“Default” as defined therein shall occur under the Credit Agreement or Notes
and shall not have been cured within the time permitted therein to cure; or

 

(c)                                  failure
to pay, perform or comply with when due any other Indebtedness Secured Hereby
and such failure shall continue for a period of ten (10) days after notice
thereof to the Borrower; or

 

(d)                                 failure
to comply with or perform any of the other terms, conditions or covenants of
this Mortgage and such failure shall continue for a period of thirty (30) days
after notice thereof to Borrower; provided, if the same is not susceptible of
cure within said time limits and the same may be cured within a reasonable
period of time thereafter the time period shall be extended for such additional
time as is reasonably necessary to effectuate such cure provided such curative
action is promptly taken in good faith and diligently prosecuted to completion
and the security afforded hereby and the interest of the Lender is not in
jeopardy or be subject to forfeiture; or

 

(e)                                  Borrower
shall fail to pay its debts as they become due, make an assignment for the
benefit of its creditors, or shall admit in writing its inability to pay its
debts as

 

19

 

they become due, or shall file a petition under any
chapter of the Federal Bankruptcy Code or any similar law, state or federal,
now or hereafter existing, or shall become “insolvent” as  that term is generally defined under the
Federal Bankruptcy Code, or shall in any involuntary bankruptcy case commenced
against it file an answer admitting insolvency or inability to pay its debts as
they become due, or shall fail to obtain a dismissal of such case within sixty
(60) days after its commencement or convert the case from one chapter of the
Federal Bankruptcy Code to another chapter, or be the subject of an order for
relief in such bankruptcy case, or be adjudged a bankrupt or insolvent, or
shall have a custodian, trustee or receiver appointed for, or have any court
take jurisdiction of its property, or any part thereof, in any proceeding for
the purpose of reorganization, arrangement, dissolution or liquidation, and
such custodian, trustee or receiver shall not be discharged, or such
jurisdiction shall not be relinquished, vacated or stayed within sixty (60)
days of the appointment; or

 

(f)                                    an
event of default shall occur under any other instrument issued by Borrower in
connection with the Credit Agreement or Notes and shall not have been cured
within the time permitted therein to cure; or

 

(g)                                 a
judgment, writ or warrant of attachment or execution, or similar process shall
be entered and become a lien or be issued or levied against the Premises and
shall not be released or fully bonded within forty-five (45) days after its
entry, issue or levy; or

 

(h)                                 any
representation or warranty made by Borrower herein, in the Credit Agreement or
in any other instrument issued by Borrower in connection therewith shall be
false, materially breached or dishonored; or

 

(i)                                     the
Borrower shall be dissolved, liquidated or wound up or shall fail to maintain
its existence as a going concern in good standing.

 

7.2           Lender’s
Right to Accelerate. If an Event of Default shall occur the Lender may
declare the entire unpaid principal balance of the Notes together with all
other Indebtedness Secured Hereby to be immediately due and payable and
thereupon all such unpaid principal balance of the Notes together with all
secured interest thereon at the Default Interest and all other Indebtedness
Secured Hereby shall be and become immediately due and payable.

 

7.3           Remedies of Lender
and Right to Foreclose. Upon the occurrence of an Event of Default,
Borrower hereby authorizes and fully empowers Lender to invoke the power of
sale, foreclose this Mortgage by action or advertisement by judicial or
non-judicial proceedings, or obtain any other remedy permitted by applicable
law. Lender shall be entitled to collect all expenses incurred in pursuing the
remedies provided in this paragraph 7.3, including but not limited to
attorneys’ fees and costs of title evidence.

 

If Lender invokes the
power of sale, Lender shall give notice of the sale to Borrower in the manner
required by law. Lender shall publish the notice of sale, and the Premises
shall be sold in

 

20

 

the manner prescribed by
law. Lender shall sell the Premises in one or more parcels and in any order
Lender determines. Lender or its designee may purchase the Premises at any sale.
The proceeds of the sale shall be applied in the following order:  (a) to all expenses of the sale,
including, but not limited to, attorneys’ fees; (b) to all sums secured by
this Mortgage; and (c) any excess to the clerk of the court subject to the
order of the court.

 

No remedy granted or
conferred by this Mortgage is intended to be exclusive of any other remedy or
remedies and each and every remedy shall be cumulative and shall be in addition
to every remedy given hereunder or now or hereafter existing at law or in
equity or by statute.  No delay or omission of Lender to exercise any
right or power accruing upon an Event of Default shall impair any such right or
power or shall be construed to be a waiver of any such Event of Default or any
acquiescence therein and every right, power and remedy given by this Mortgage
or now or hereafter existing at law or in equity or by statute may be exercised
from time to time and as often as may be deemed expedient by the Lender.

 

7.4           Receiver.
If an Event of Default shall occur, the Lender shall be entitled as a matter of
right without notice and without giving bond and without regard to the solvency
or insolvency of the Borrower, or waste of the Premises or adequacy of the
security of the Premises, to apply for the appointment of a Receiver,
(a) under SDCL § 21-21-2, or any successor or supplementary statute
thereto who shall have all the rights, powers and remedies as provided by such
statute and who shall apply the rents, income and profits as provided by
statute and thereafter to all expenses for maintenance of the Premises and to
the costs and expenses of the receivership, including reasonable attorneys fees
and to the repayment of the Indebtedness Secured Hereby or (b) pursuant to
the Assignment of Rents executed by the Borrower to the Lender given
contemporaneously with this Mortgage who shall in addition to the rights,
powers and remedies as provided by statute have such rights, powers and
remedies as provided in such Assignment of Rents and who shall apply the rents,
income and profits as provided therein.

 

7.5           Rights
Under Uniform Commercial Code. In addition to the rights available to a
mortgagee of real property Lender shall also have all the rights, remedies and
recourse available to a secured party under the Uniform Commercial Code
including the right to proceed under the provisions of the Uniform Commercial
Code governing default as to any property which is subject to the security
interest created by the Mortgage or to proceed as to such personal property in
accordance with the procedures and remedies available pursuant to a foreclosure
of real estate.

 

7.6           Due
on Sale or Mortgaging, Etc. In the event of a Transfer (as defined below)
without the written consent of the Lender being first obtained, whether
voluntarily, involuntarily, or by operation of law, then at the sole option of
the Lender, the Lender may upon notice to the Borrower declare the entire
Principal Balance together with accrued interest, due and payable in full. Any
such payment shall be subject to the requirements, if any, in the Notes
providing for the payment of a prepayment premium in the event of a
non-permitted Transfer. A consent by the Lender as to any one Transfer shall
not be deemed to be a waiver of the right to require consent to a future
Transfer. As used herein, the term “Transfer” shall include any sale, pledge,
assignment, Mortgage, encumbrance, security interest, consensual lien,
hypothecation, transfer or divesture or otherwise of or in i) the Borrower’s
legal or equitable interest in the Premises or

 

21

 

ii) the Borrower, either directly or indirectly, including an
interest taken as security; whether or not of record and whether or not for
consideration shall be deemed a Transfer.

 

7.7           Rights
Cumulative. Each right, power or remedy herein conferred upon the Lender is
cumulative and in addition to every other right, power or remedy, express or
implied, now or hereafter arising, available to Lender, at law or in equity, or
under any other agreement, and each and every right, power and remedy herein
set forth or otherwise so existing may be exercised from time to time as often
and in such order as may be deemed expedient by the Lender and shall not be a waiver
of the right to exercise at any time thereafter any other right, power or
remedy. No delay or omission by the Lender in the exercise of any right, power
or remedy arising hereunder or arising otherwise shall impair any such right,
power or remedy or the right of the Lender to resort thereto at a later date or
be construed to be a waiver of any default or event of default under this
Mortgage or the Notes.

 

7.8           Right
to Discontinue Proceedings. In the event Lender shall have proceeded to
invoke any right, remedy or recourse permitted under this Mortgage and shall
thereafter elect to discontinue or abandon the same for any reason, Lender
shall have the unqualified right to do so and in such event Borrower and Lender
shall be restored to their former positions with respect to the Indebtedness
Secured Hereby. This Mortgage, the Premises and all rights, remedies and
recourse of the Lender shall continue as if the same had not been invoked.

 

7.9           Acknowledgment
of Waiver of Hearing Before Sale. Borrower understands and agrees that if
any Event of Default is made under the terms of this Mortgage, Lender has the
right, inter alia, to foreclose this Mortgage
pursuant to SDCL chapters 21-47, 21-48 and 21-48A, as hereafter amended, or
pursuant to any similar or replacement statute hereafter enacted; that if the
Lender elects to foreclose by power of sale, the Lender may cause the Premises,
or any part thereof, to be sold at public auction; that notice of such sale
must be published as required by law and that a notice specified by law may not
be required to be served upon Borrower. Borrower further understands that in
the event of such Event of Default the Lender may also elect its rights under
the Uniform Commercial Code and take possession of the Personal Property (as
defined in this Mortgage) and dispose of the same by sale or otherwise in one
or more parcels provided that at least ten (10) days’ prior notice of such
disposition must be given, all as provided for by the Uniform Commercial Code,
as hereafter amended or by any similar or replacement statute hereafter enacted.
Borrower further understands that under the Constitution of the United States
and the Constitution of the State of South Dakota it may have the right to
notice and hearing before the Premises may be sold and that the procedure for
foreclosure described above does not insure that notice will be given to the
Borrower and neither said procedure for foreclosure nor the Uniform Commercial
Code requires any hearing or other judicial proceeding. BORROWER HEREBY
EXPRESSLY CONSENTS AND AGREES  THAT THE
PREMISES MAY BE FORECLOSED AND THAT THE PERSONAL PROPERTY MAY BE DISPOSED OF
PURSUANT TO THE UNIFORM COMMERCIAL CODE WITHOUT NOTICE TO BORROWER, ALL AS
DESCRIBED ABOVE. BORROWER ACKNOWLEDGES THAT IT IS REPRESENTED BY LEGAL COUNSEL;
THAT BEFORE SIGNING THIS DOCUMENT THIS PARAGRAPH AND BORROWER’S CONSTITUTIONAL
RIGHTS WERE FULLY EXPLAINED BY SUCH COUNSEL AND THAT BORROWER UNDERSTANDS THE

 

22

 

NATURE AND EXTENT OF THE RIGHTS WAIVED HEREBY AND THE EFFECT OF SUCH
WAIVER.

 

8.

HAZARDOUS MATERIALS

 

8.1           Definitions.
As used herein, the following definition shall apply:

 

(a)                                  “Hazardous
Substance” shall mean any hazardous or toxic material, substance or waste,
pollutant or contaminant which is regulated under any statute, law, ordinance,
rate or regulation of any local, state, regional or Federal authority having
jurisdiction over the property of the Borrower, or its use, including but not
limited to any material, substance or waste which is (a) defined as a hazardous
substance under any Environmental Laws; (b) a petroleum hydrocarbon, including
crude oil or any fraction thereof and all petroleum products; (c)
polychlorinated biphenyls; (d) lead; (e) urea formaldehyde; (f) asbestos; (g)
flammable explosives; (h) infectious materials; (i) radioactive materials; or
(j) defined or regulated as a hazardous substance or hazardous waste under any
rules or regulations promulgated under any of the foregoing Environmental Laws.

 

(b)                                 “Environmental
Laws” shall mean any international, federal, state or local statute, law,
regulation, order, consent, decree, judgment, permit, license, code, covenant,
deed restriction, common law, treaty, convention, ordinance or other
requirement relating to public health, safety or the environment, including,
without limitation, those relating to releases, discharges or emissions to air,
water, land or groundwater, to the withdrawal or use of groundwater, to the use
and handling of polychlorinated biphenyls or asbestos, to the disposal,
treatment, storage or management of hazardous or solid waste, or Hazardous
Substances or crude oil, or any fraction thereof, or to exposure to toxic or
hazardous materials to the handling, transportation, discharge or release of
gaseous or liquid Hazardous Substances and any regulation, order, notice or
demand issued pursuant to such law, statute or ordinance, in each case
applicable to the property of the Borrower or its affiliates, if any, including
without limitation the following:  the
Comprehensive Environmental Response, Compensation and Liability Act of 1980,
as amended by the Superfund Amendments and Reauthorization Act of 1986, the
Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery
Act of 1976 and the Hazardous and Solid Waste Amendments of 1984, the Hazardous
Materials Transportation Act, as amended, the Federal Water Pollution Control
Act, as amended by the Clean Water Act of 1976, the Safe Drinking Water Act,
the Clean Air Act, as amended, the Toxic Substances Control Act of 1976, the
Occupational Safety and Health Act of 1977, as amended, the Emergency Planning
and Community Right-to-Know Act of 1986, the National Environmental Policy Act
of 1975, the Oil Pollution Act of 1990, and any similar or implementing state
law, and any state statute and any further amendments to these laws providing
for financial responsibility for cleanup or other actions with respect to the
release or threatened release of Hazardous

 

23

 

Substances or crude oil, or any fraction thereof and
all rules and regulations promulgated thereunder.

 

8.2           Covenants
of Borrower. Borrower hereby covenants to Lender that Borrower shall
(a) comply and shall cause all occupants of the Premises to comply with
all federal, state and local laws, rules, regulations and orders with respect
to the discharge, generation, removal, transportation, storage and handling of
Hazardous Substances; (b) remove any Hazardous Substances released into
the environment immediately upon discovery of same, in accordance with
applicable laws, ordinances and orders of governmental authorities having
jurisdiction thereof; (c) pay or cause to be paid all costs associated
with such removal; (d) prevent the migration of Hazardous Substances from
or through the Premises onto or under other properties; (e) keep the
Premises free of any lien imposed pursuant to any state or federal law, rule,
regulation or order in connection with the existence of Hazardous Substances on
the Premises; (f) not install or permit to be incorporated into any
improvements in the Premises or to exist in or on the Premises any asbestos,
asbestos-containing materials, area formaldehyde insulation or any other
chemical or substance which has been determined to be a hazard to health and
environment; (g) not cause or permit to exist, as a result of an
intentional or unintentional act or omission on the part of Borrower or any
occupant of the Premises, a releasing, spilling, leaking, pumping, emitting,
pouring, emptying or dumping of any Hazardous Substances onto the Premises or
into water or other lands; and (h) give all notifications and prepare all
reports required by Environmental Laws or any other law with respect to
Hazardous Substances existing on, released from or emitted from the Premises.

 

8.3           Representations
of Borrower. The Borrower represents that (i) the Premises has been
and is free from contamination by Hazardous Substances but including neither
(A) immaterial quantities of automotive motor oil leaked inadvertently
from vehicles in the ordinary course of the operation of the Premises and
cleaned up in accordance with reasonable property management procedures and any
applicable law nor (B) immaterial quantities of substances customarily and
prudently used in the cleaning and maintenance of the Premises in accordance
with any applicable law, (ii) no release of any such Hazardous Substance
has occurred on or about the Premises, (iii) that the Premises currently
complies, and will comply based on its anticipated use, with all current
Environmental Laws, (iv) that, in connection with the operation and use of
the Premises, all necessary notices have been filed and all required permits,
licenses and other authorizations have been obtained, including those relating
to the generation, treatment, storage, disposal or use of Hazardous Substances,
(v) that there is no present, past or threatened investigation, inquiry or
proceeding relating to the environmental condition of, or to events on or about,
the Premises, and (vi) there are no underground storage tanks currently
existing and to the extent such underground storage tanks are existing they are
registered under the required Environmental Laws and do not contain any
leakages, and (vii) Borrower has not received any summons, citation,
directive, letter or other communication, written or oral, from any local,
state or federal governmental agency concerning (A) the existence of
Hazardous Substances on the Premises or in the immediate vicinity, (B) the
releasing, spilling, leaking, pumping, pouring, emitting, emptying, or dumping
of Hazardous Substances onto the Premises or into water or other lands or
(C) violation of Environmental Laws.

 

24

 

8.4           Environmental
Indemnification, The Borrower indemnifies and holds harmless the Lender,
its officers, directors, employees, agents, contractors, subcontractors,
licensees, invitees, successors and assigns (“Indemnified Parties”) from and
against any and all claims, losses, liabilities (including without limitation
strict liability), suits, obligations, fines, damages, judgments, injuries,
administrative orders, consent agreements and orders, penalties, actions,
causes of action, charges, costs and expenses, including without limitation
attorneys’ fees and consultants’ fees (i) arising out of the inclusion in
the Premises of Hazardous Substances or the presence on, the release from, the
generation, manufacture, refining, treatment, storage, handling or disposal on,
in or from the Premises of any Hazardous Substances, or any underground or
above ground storage tanks containing Hazardous Substances and the cost of
removal and remediation of the foregoing, or (ii) arising out of the
transportation, discharge or removal from the Premises of any Hazardous
Substance, or (iii) arising out of the inclusion in any product
manufactured on the Premises of a Hazardous Substance; or (iv) arising out
of the failure to perform the removal or abatement of or to institute a safe,
effective and environmentally approved control plan for any Hazardous Substance
or the replacement or removal of any soil, water, surface water, or ground
water containing Hazardous Substance in accordance with Environmental Laws; or
(v) arising out of the existence of any environmental lien against the
Premises pursuant to any Environmental Laws; or (vi) arising out of any
violation or claim of violation of Environmental Laws with respect to the
Premises; or (vii) arising out of any breach of any of the representations
and covenants contained herein relating to Hazardous Substances and
Environmental Laws (collectively the “Indemnified Loss”). Borrower shall bear,
pay and discharge such Indemnified Loss as and when the same becomes due and
payable.

 

8.5           Run
with Land. These covenants, representations, warranties and indemnities
shall be deemed continuing covenants, representations, warranties and
indemnities running with the Land for the benefit of the Lender, and any
successors and assigns of the Lender, including any purchaser at a mortgage
foreclosure sale, any transferee of the title of the Lender or any subsequent
purchaser at a foreclosure sale, and any subsequent owner of the Premises
claiming through or under the title of Lender and shall survive any foreclosure
of this Mortgage and any acquisition of title of Lender. The amount of all such
indemnified loss, damage, expense or cost, shall bear interest thereon at the
Default Interest and shall become so much additional Indebtedness Secured
Hereby and shall become immediately due and payable in full on demand of the
Lender, its successors or assigns. The indemnification contained herein shall
be a personal monetary obligation of the Borrower notwithstanding any
provisions of this Mortgage to the contrary that limit or exculp the personal
liability of the Borrower and/or require the Lender to look solely to the
security of the Premises.

 

9.

MISCELLANEOUS

 

9.1           Release
of Mortgage. When all Indebtedness Secured Hereby has been paid, this
Mortgage and all assignments herein contained shall be void and this Mortgage
shall be released by the Lender at the cost and expense of the Borrower,
otherwise to remain in full force and effect.

 

25

 

9.2           Choice
of Law. Notwithstanding the place of execution of this instrument, the
parties to this instrument have contracted for North Dakota law to govern this
instrument and it is controllingly agreed that this instrument is made pursuant
to and shall be construed and governed by the laws of the State of North Dakota
without regard to the principles of conflicts of law. However, to the extent
necessary for Lender to pursue remedies, South Dakota law shall govern and
apply.

 

9.3           Successors
and Assigns. This Mortgage and each and every covenant, agreement and other
provision hereof shall be binding upon the Borrower and its successor and
assigns including without limitation each and every from time to time the owner
of the Premises or any other person having an interest therein, shall ran with
the land and shall inure to the benefit of the Lender and its successor and
assigns. As used herein the words “successors and assigns” shall also be deemed
to include the heirs, representatives, administrator and executors of any
natural person who is or becomes a party to this Mortgage. In the event that
the ownership of the Premises becomes vested in a person or persons other than
the Borrower, the Lender shall not have any obligation to deal with such
successor or successor in interest unless such transfer is permitted by this
Mortgage and then only upon being notified in writing of such change of
ownership. Upon such notification, the Lender may thereafter deal with such
successor in place of Borrower without any obligation to thereafter deal with
Borrower and without waiving any liability of Borrower hereunder or under the
Notes. No change of ownership of the Premises shall in any way operate to
release or discharge the liability of the Borrower hereunder unless such
release or discharge is expressly agreed to in writing by the Lender.

 

9.4           Unenforceability
of Certain Clauses. The unenforceability or invalidity of any provisions
hereof shall not render any other provision or provisions herein contained
unenforceable or invalid.

 

9.5           Captions
and Headings. The captions and headings of the various sections of this
Mortgage are for convenience only and are not to be construed as confining or
limiting in any way the scope or intent of the provisions hereof. Whenever the
context requires or permits the singular shall include the plural, the plural
shall include the singular and the masculine, feminine and neuter shall be
freely interchangeable.

 

9.6           Savings
Clause. It is expressly stipulated and agreed to be the intent of Borrower,
and Lender at all times to comply with applicable state law or applicable
United States federal law (to the extent that it permits the Lender to contract
for, charge, take, reserve, or receive a greater amount of interest than under
state law) and that this section shall control every other covenant and
agreement in the Notes, this Mortgage and any other loan documents delivered in
connection with this instrument (“Loan Documents”). If the applicable law is
ever judicially interpreted so as to render usurious any amount called for under
the Notes, this Mortgage or under any of the other Loan Documents, or
contracted for, charged, taken, reserved, or received with respect to the
indebtedness by the Notes (“Indebtedness”), or if the Lender’s exercise of the
option to accelerate the maturity of the Notes, or if any prepayment by
Borrower results in Borrower having paid any interest in excess of that
permitted by applicable law, then it is Borrower’s and Lender’s express intent
that all excess amounts theretofore collected by Lender shall be credited on
the principal balance of the Notes and all other Indebtedness (or, if the Notes

 

26

 

and all other indebtedness have been or would thereby be paid in full,
refunded to Borrower), and the provisions of the Notes and this Mortgage and
the other Loan Documents immediately be deemed reformed and the amounts
thereafter collectible hereunder and thereunder reduced, without the necessity
of the execution of any new documents, so as to comply with the applicable law,
but so as to permit the recovery of the fullest amount otherwise called for
hereunder or thereunder. All sums paid or agreed to be paid to Lender for the
use, forbearance, or detention of the Indebtedness shall, to the extent
permitted by applicable law, be amortized, prorated, allocated, and spread
throughout the full stated term of the Indebtedness until payment in full so
that the rate or amount of interest on account of the Indebtedness does not
exceed the maximum lawful rate from time to time in effect and applicable to
the Indebtedness for so long as the Indebtedness is outstanding. Notwithstanding
anything to the contrary contained herein or in any of the other Loan
Documents, it is not the intention of the Lender to accelerate the maturity of
any interest that is not secured by this Mortgage at the time of such
acceleration or to collect unearned interest at the time of such acceleration.

 

9.7           Notices.
Any notices and other communications permitted or required by the provisions of
this Mortgage (except for telephonic notices expressly permitted) shall be in
writing and shall be deemed to have been properly given or served by depositing
the same with the United States Postal Service, or any official successor
thereto, designated as Certified Mail, Return Receipt Requested, bearing
adequate postage, or deposited with reputable private courier or overnight
delivery service, and addressed as hereinafter provided. Each such notice shall
be effective upon being deposited as aforesaid. The time period within which a
response to any such notice must be given, however, shall commence to run from
the date of receipt of the notice by the addressee thereof. Rejection or other
refusal to accept or the inability to deliver because of changed address of which
no notice was given shall be deemed to be receipt of the notice sent. By giving
to the other party hereto at least ten (10) days’ notice thereof, either party
hereto shall have the right from time to time to change its address and shall
have the right to specify as its address any other address within the United
States of America.

 

27

 

Each notice to Lender shall be addressed as follows:

 

AgCountry Farm Credit
Services, FCLA

1900 44th
Street South

P. O. Box 6020

Fargo, North Dakota 58108

Attn:  Randolph
L. Aberle, Vice President

 

Each notice to Borrower shall be addressed as follows:

 

Great Plains Ethanol, LLC

27716 462nd Avenue

Chancellor, South Dakota  57015

Attn: Rick Serie

Facsimile: No. (605)                      

 

With a copy 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

 

And a copy to:

 

James L. Wiederrich, Esq.

Woods, Fuller, Schultz & Smith P.C.

300 South Phillips Avenue

Sioux Falls, South Dakota  57117

 

9.8           Amendment.
Amendment to, waiver of, or modification of any provision of this Mortgage must
be made in writing. No oral waiver, amendment, or modification may be implied.

 

9.9           Use
of Premises. During the entire term of the Notes and this Mortgage,
Borrower agrees not to convert the Premises to any use other than as an ethanol
production, storage and distribution facility. Any other use of the Premises
shall constitute an Event of Default.

 

9.10         Priority
of Future Advances. Any advance or further agreement made between Lender
and Borrower pursuant to this Mortgage shall be superior to the rights of the
holder of any intervening lien or encumbrance. This Mortgage secures all future
advances by Lender to Borrower and all future obligations of Borrower to Lender
pursuant to the Notes up to and including the stated principal indebtedness of
$105,000,000.00. THE PARTIES AGREE THAT

 

28

 

THIS MORTGAGE CONSTITUTES A COLLATERAL REAL ESTATE MORTGAGE PURSUANT TO
SDCL § 44-8-26.

 

9.11         Adjustable
Rate Notes. The Notes secured by this Mortgage provide for adjustments in
their interest rate from time to time in accordance with their terms. Reference
is made to the Notes for the times, terms and conditions of the adjustment in
the interest rate. Such times, terms and conditions are incorporated herein by
reference.

 

9.12         Entire
Agreement. The parties acknowledge that the written terms of the Notes,
this Mortgage, and the other documents issued in connection with the Loan,
accurately reflect the mutual understanding of Borrower and Lender, as to all
matters addressed therein, and Borrower further represents and warrants that
there are no other agreements or understandings, written or oral, which exist
between Borrower and Lender relating to the matters addressed in said
documents.

 

9.13         Lender’s
Expense. Should Lender make any payments hereunder or under the Notes or
under any other loan document, or incur any liability, loss or damage under or
by reason of this Mortgage, the Notes or any other loan document, or in the
defense of any claims or demands, the amount thereof, and all costs and
expenses, including all filing, recording, and title fees and any other
expenses relating to the Indebtedness Secured Hereby, including without
limitation filing fees for UCC continuation statements and any expense
involving modification thereto, attorneys’ fees, and any and all costs and
expenses incurred in connection with making, performing, or collecting the
Indebtedness or exercising any of Lender’s rights under the Notes, this
Mortgage or any other loan document, including attorneys’ fees, the cost of
appraisals and the cost of any environmental inspections in connection
therewith, and all claims for brokerage and finder’s fees which may be made in
connection with the making of the loan, together with interest thereon, at the
Default Interest, shall become part of the Indebtedness Secured Hereby and
shall be secured by this Mortgage and the other loan document and Borrower
hereby agrees to reimburse Lender therefor immediately upon demand. Such sums,
costs and expenses shall be, until so paid, part of the Indebtedness Secured
Hereby and Lender shall be entitled, to the extent permitted by law, to receive
and retain the full amount of the Indebtedness Secured Hereby in any action for
redemption by Borrower, for an accounting for the proceeds of a foreclosure
sale or of insurance proceeds or for apportionment of an eminent domain damage
award.

 

9.14         Lender’s
Right to Counsel. If Lender retains attorneys to enforce any of the terms
hereof or the Notes or of any other loan Document or because of the breach by
Borrower of any of the terms hereof or other loan document or the Lease, or for
the recovery of any Indebtedness Secured Hereby, Borrower shall pay to Lender
attorneys’ fees and all costs and expenses, whether or not an action is
actually commenced and the right to such attorneys’ fees and all costs and
expenses shall be deemed to have accrued on the date such attorneys are
retained, shall include fees and costs in connection with litigation,
arbitration, mediation, bankruptcy and/or administrative proceedings, and shall
be enforceable whether or not such action is prosecuted to judgment and shall
include all appeals. Attorneys’ fee and expenses shall for purposes of this
Mortgage include all paralegal, electronic research, legal specialists and all
other costs in connection with that performance of Lender’s attorneys.

 

29

 

If Lender is, by reason of being the holder of this
Mortgage, made a party defendant in any litigation concerning this Mortgage or
the Premises or any part thereof or therein, or the construction, maintenance,
operation or the occupancy or use thereof by Borrower, then Borrower shall
indemnify, defend and hold Lender harmless from and against all liability by
reason of said litigation, including attorneys’ fees and all costs and expenses
incurred by Lender in any such litigation or other proceedings, whether or not
any such litigation or other proceedings is prosecuted to judgment or other
determination.

 

9.15         Other
Representations and Warranties. All statements contained in any loan
application, certificate or other instrument delivered by or on behalf of
Borrower to Lender or Lender’s representatives in connection with the
Indebtedness Secured Hereby shall constitute representations and warranties
made by Borrower hereunder. Such representation and warranties made hereunder
and thereunder shall survive the delivery of this Mortgage, and any
misrepresentations thereunder shall be deemed as misrepresentations hereunder.

 

9.16         Time
of the Essence. Borrower agrees that time is of the essence with respect to
all of the covenants, agreements and representations under this Mortgage.

 

9.17         Survival
of Representations, Warranties and Covenants. All representations covenants
and warranties contained herein, or in any of the other Loan Documents shall
survive the delivery of the Notes, this Mortgage and all other Loan Documents
and the provisions hereof shall continue to inure to the benefit of Lender, its
successors and assigns.

 

9.18         Waiver
of Jury Trial. No party to this Mortgage or any assignee, successor, heir
or personal representative of a party shall seek a jury trial in any lawsuit,
proceeding, counterclaim, or any other litigation proceedings based upon or
arising out of this Mortgage, any related agreement or instrument, any other
collateral for the Indebtedness or the dealings or the relationship between or
among the parties, or any of them. No party will seek to consolidate any such
action, in which a jury trial has been waived, with any other action in which a
jury trial cannot or has not been waived. The provisions of this paragraph have
been fully discussed by the parties hereto, and these provisions shall be
subject to no exceptions. No party has in any way agreed with or represented to
any other party that the provisions of this paragraph will not be fully
enforced in all instances.

 

9.19         Minimum
Requirement. Borrower recognizes that the requirements imposed upon
Borrower hereunder, including, without limitation, insurance requirements, are
minimum requirements as determined by Lender and do not constitute a
representation that the requirements are complete or adequate. Borrower
understands that it is Borrower’s duty and responsibility to act prudently and
responsibly at all times for Borrower’s protection and for the protection of
the Premises.

 

SIGNATURE
PAGE FOLLOWS

 

30

 

IN WITNESS WHEREOF, the Borrower has caused these
presents to be executed as of the date first above written.

 

	
   

  	
  GREAT PLAINS ETHANOL, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Darrin Ihnen

  	
   

  
	
   

  	
   

  	
  Its: President

  
	
   

  	
  Tax Identification No. 46-0459188

  
	
   

  	
   

  
	
   

  	
   

  
	
  STATE OF SOUTH DAKOTA

  	
  )

  
	
   

  	
  ) ss.

  
	
  COUNTY OF

  	
  )

  
					

 

On this        day of
August, 2007, before me personally appeared                                                 ,
to me known, who being by me duly sworn, did say that (s)he is the                                                       
of Great Plains Ethanol, LLC, a South Dakota limited liability company, that
said instrument was signed on behalf of said limited liability company, and
acknowledged said instrument to be the free act and deed of said limited
liability company.

 

IN WITNESS WHEREOF, I have hereunto set my hand and
affixed my notarial seal the day and year last above written.

 

 

	
   

  	
   

  
	
   

  	
  Print Name:

  	
   

  
	
   

  	
  Notary Public in and for said County and State

  
	
   

  	
   

  
	
  My Commission Expires:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
				

 

 

SIGNATURE PAGE TO
MORTGAGE

 

 

EXHIBIT A

 

Legal Description

 

Parcel 1:  The Northwest Quarter (NW 1⁄4) less Plucker’s
Tract 1 in the South Half of the Northwest Quarter (S 1⁄2 NW 1⁄4) and except the
Substation Addition in the Northwest Quarter (NW 1⁄4) and except the South Dakota
Central Railroad Right-of-Way and except Lot H-1, all in Section Twenty-six
(26), Township Ninety-Nine (99) North, Range Fifty-Two (52) West of the 5th
P.M., Turner County, South Dakota.

 

Parcel 2:  Tract 1 in the Northeast Quarter (NE 1⁄4) of
Section Twenty-Six (26), Township Ninety-Nine (99) North, Range Fifty-Two (52)
West of the 5th P.M., Turner County, South Dakota, according to the
recorded plat thereof.

 

Parcel 3:  Tract 3 in the Southeast Quarter (SE 1⁄4) of Section
Twenty-Six (26), Township Ninety-Nine (99) North, Range Fifty-Two (52) West of
the 5th P.M., Turner County, South Dakota, according to the recorded
plat thereof.

 

Parcel 4:  Tract 1 and Tract 2 of Great Plains Ethanol
Addition in the Northeast Quarter (NE 1⁄4) of Section Thirty (30), Township
Ninety-Eight (98) North, Range Fifty-Two (52) West of the 5th P.M.,
Turner County, South Dakota, according to the recorded plat thereof.

 

1

 

EXHIBIT B

 

Permitted Encumbrances

 

None

 

1

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