Document:

exv10w20

 

Exhibit 10.20

AMENDED AND RESTATED OPERATING AGREEMENT

OF

UNITED BIO ENERGY FUELS, LLC

     THIS AMENDED AND RESTATED OPERATING AGREEMENT (“Agreement”) is adopted and effective as of the
31st day of March 2006, by the members of United Bio Energy Fuels, LLC, a Kansas limited liability
company (the “Company”).

SECTION 1.

DEFINITIONS

SECTION 1.1. Definitions. For purposes of this Agreement, capitalized terms shall have
the meaning ascribed to them in Appendix I attached hereto.

SECTION 1.2. References and Construction.

(a) Words of the masculine gender shall be deemed to include the feminine and neuter
genders, and vice versa, where applicable. Words of the singular number shall be
deemed to include the plural number, and vice versa, where applicable.

(b) Unless otherwise indicated, any reference herein to a “Section”, “Exhibit”,
“Appendix”, “Subsection”, “Paragraph”, or to a subpart of any of them, shall be to
the applicable section, exhibit, appendix, subsection or paragraph of or to this
Agreement or subpart thereof.

(c) The words “this Agreement”, “herein”, “hereof”, “hereby”, “hereunder”, and words
of similar import refer to this Agreement as a whole and not to any particular
subdivision unless expressly so limited.

(d) The word “includes” and its derivatives means “includes, but is not limited to”
and corresponding derivative expressions.

(e) Unless the context otherwise requires or unless otherwise provided herein, the
terms defined in this Agreement which refer to a particular agreement, instrument,
or document also refer to and include all renewals, extension, modifications,
amendments, or restatements of such agreement, instrument, or document.

SECTION 2.

ORGANIZATION; GOVERNANCE; CONDUCT OF OPERATIONS

SECTION 2.1. Formation. The Company has been formed under and pursuant to the provisions
of the Act. Except as otherwise required by the Act or the Articles, the rights, duties and
obligations of the Members and Manager, and the operation of the Company shall be governed by the
provisions of this Agreement. The Members shall execute and acknowledge any and all certificates
and instruments and do all filing, recording and other acts as may be appropriate to comply with
the requirements of the Act relating to the formation, operation and maintenance of the Company in
accordance with the terms of this Agreement.

 

 

SECTION 2.2. Name and Principal Office. The Company shall conduct its business under the
name of “United Bio Energy Fuels, LLC”, or such other name or names as the Manager may determine.
The Company’s principal office shall be located at 5500 Cenex Drive, Inver Grove Heights, MN 55077
or at such place as the Manager may, from time to time, determine.

SECTION 2.3. Members and Percentage Interests. The Members of the Company are CHS Inc.
(“CHS”) and US Bio Energy, LLC (“UBE”) and the persons who are hereafter admitted as Substitute
Members of the Company in accordance with this Agreement until CHS, UBE or any such persons shall
cease to be members of the Company pursuant to this Agreement. Ownership rights in the Company are
reflected in Units and Percentage Interest. “Percentage Interest” means, with respect to any
Member on any date, the ratio of the number of Units held by such Member on such date to the total
number of outstanding Units held by all Members on such date. On matters subject to a vote of the
Members, each Membership Unit has one vote.

SECTION 2.4. Term. The Company’s existence commenced on the effective date of this
Agreement and shall continue until dissolved as provided herein.

SECTION 2.5. Business Purpose. The Company is organized for profit and it may engage in
any and all lawful business for which limited liability companies may be organized under the Act,
and engage in any or all activities related or incidental thereto.

SECTION 2.6. Ratification of Prior Acts. All contracts, agreements, letters of intent, and
all other actions heretofore undertaken and performed on behalf of the Company by its Manager,
officers, or by any Member are hereby ratified, approved and confirmed.

SECTION 2.7. Governance. Except as set forth herein or otherwise required by the Act, the
Company shall be governed by the Members as set forth in Section 2.3.

SECTION 2.8. Intended Treatment. The Members intend that the Company shall be operated in
a manner consistent with its treatment as a “partnership” for federal and state income tax
purposes. No Member shall take any action inconsistent with the express intent of the parties
hereto. It is expressly provided, however, that the Members do not intend that the Company be
treated as a “partnership” for purposes of Section 303 of the Bankruptcy Code.

SECTION 3.

CAPITAL CONTRIBUTIONS

SECTION 3.1. Units. Until such time as additional classes or series of Units of the
Company are created and issued pursuant to Section 10.1 hereof, the Company shall have one class of
Units. Immediately following the transactions contemplated by that certain Purchase Agreement
dated of date even herewith, CHS Inc. shall hold 500 Units of the Company and United Bio Energy,
LLC shall hold 500 Units of the Company, which represents the total number of Units authorized by
and issued to the Members.

SECTION 3.2. Additional Capital Contributions. If approved by all Members, the Company
may demand additional Capital Contribution by the Members (“Additional Capital Contributions”),
provided that, unless waived by all Members, each Member must make a

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Additional Capital Contribution according to such Member’s Percentage Interest. The Additional
Capital Contribution shall be due on such date or dates and on such other terms and conditions as
all Members may agree. All Capital Contributions to the Company must be in the form of cash unless
otherwise agreed to by all Members.

SECTION 3.3. Capital Accounts. A separate capital account (“Capital Account”) shall be
maintained for each Member. Each Member’s Capital Account shall be maintained as follows:

     (a) To each Member’s Capital Account there shall be credited such Member’s Capital
Contributions, such Member’s distributive share of Profits and any items in the nature of income or
gain which are specially allocated pursuant to Section 4.4 or Section 4.5, and the amount of any
Company liabilities assumed by such Member or which are secured by any asset distributed by the
Company to such Member;

     (b) To each Member’s Capital Account there shall be debited the amount of cash and the Gross
Asset Value of any asset distributed to such Member pursuant to any provision of this Agreement,
such Member’s distributive share of Losses and any items in the nature of expenses or losses which
are specially allocated pursuant to Section 4.4 or Section 4.5, and the amount of any liabilities
of such Member assumed by the Company or which are secured by any property contributed by such
Member to the Company;

     (c) In the event all or a portion of an interest in the Company is transferred in accordance
with the provisions of this Agreement, the transferee shall succeed to the Capital Account of the
transferor to the extent it relates to the transferred interest; and

     (d) In determining the amount of any liability for purposes of clauses (a) and (b) above,
there shall be taken into account Code § 752(c) and any other applicable provisions of the Code and
Regulations. This Section and the other provisions of this Agreement relating to the maintenance
of Capital Accounts are intended to comply with Regulations § 1.704-1(b), and shall be interpreted
and applied in a manner consistent therewith. In the event the Manager shall determine that it is
prudent to modify the manner in which the Capital Accounts, or any debits or credits thereto
(including, without limitation, debits or credits relating to liabilities which are secured by
contributed or distributed property or which are assumed by the Company or the Members), are
computed in order to comply with such Regulations, the Manager may make such modification, provided
that it is not likely to have a material effect on the amounts distributable to any Member upon the
dissolution of the Company. The Manager also shall (i) make any adjustments that are necessary or
appropriate to maintain equality between the Capital Accounts of the Members and the amount of
Company capital reflected on the Company’s balance sheet as computed for book purposes, in
accordance with Regulations § 1.704-1(b)(2)(iv)(g), and (ii) make any appropriate modifications in
the event unanticipated events (for example, the acquisition by the Company of oil and gas
properties) might otherwise cause this Agreement not to comply with Regulations §1.704-1(b).

SECTION 3.4. Capital Withdrawal Rights, Interest and Priority. Except as otherwise
provided herein, no Member shall be entitled to (i) a return of any part of such Member’s Capital
Contributions or Capital Account, (ii) be paid any interest on such Member’s Capital

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Contributions or Capital Account or (iii) priority over any other Member as to the return of such
Member’s Capital Contributions or Capital Account.

SECTION 3.5. Loans. No Member shall be required to make any loan to the Company. A
Member may make a loan to the Company in such amounts, at such times and on such terms and
conditions as may be determined by the Manager. A loan by a Member to the Company shall not be
considered a Capital Contribution nor entitle such Member to any increase in his, her or its share
of the Profits and Losses and cash distributions of the Company.

SECTION 4.

ALLOCATIONS AND DISTRIBUTIONS

SECTION 4.1. Distributions. The amount, if any, of Available Cash shall be distributed to
the Members in proportion to their Units at such time or times as the Manager deems appropriate.

SECTION 4.2. Allocations of Profit and Losses. After giving effect to the special
allocations set forth in Sections 4.3 and 4.4, Profits or Losses for any Fiscal Year shall be
allocated to the Members in proportion to their Units.

SECTION 4.3. Special Allocations. The following special allocations shall be made in the
following order:

     (a) Minimum Gain Chargeback. Except as otherwise provided in Regulations §1.704-2(f),
notwithstanding any other provision of this Section 4, if there is a net decrease in Company
Minimum Gain during any Fiscal Year, each Member shall be specially allocated items of Company
income and gain for such Fiscal Year (and, if necessary, subsequent Fiscal Years) in an amount
equal to such Member’s share of the net decrease in Company Minimum Gain, determined in accordance
with Regulations § 1.704-2(g). Allocations pursuant to the previous sentence shall be made in
proportion to the respective amounts required to be allocated to each Member pursuant thereto. The
items to be so allocated shall be determined in accordance with Regulations §§ 1.704-2(f)(6) and
1.704-2(j)(2) of the Regulations. This Subsection is intended to comply with the minimum gain
chargeback requirement in Regulation § 1.704-2(f) and shall be interpreted consistently therewith.

     (b) Member Minimum Gain Chargeback. Except as otherwise provided in Regulations §
1.704-2(i)(4), notwithstanding any other provision of this Section 4, if there is a net decrease in
Member Nonrecourse Debt Minimum Gain attributable to a Member Nonrecourse Debt during any Fiscal
Year, each Member who has a share of the Member Nonrecourse Debt Minimum Gain attributable to such
Member Nonrecourse Debt determined in accordance with Regulation § 1.704-2(i)(5), shall be
specially allocated items of Company income and gain for such Fiscal Year (and, if necessary,
subsequent Fiscal Years) in an amount equal to such Member’s share of the net decrease in Member
Nonrecourse Debt Minimum Gain attributable to such Member Nonrecourse Debt determined in accordance
with Regulations §l.704-2(i)(4). Allocations pursuant to the previous sentence shall be made in
proportion to the respective amounts required to be allocated to each Member pursuant thereto. The
items to be so allocated shall be determined in accordance with Regulations §§ 1.704-2(i)(4) and
1.704-2(j)(2). This Subsection

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is intended to comply with ‘the minimum gain chargeback requirement in Regulations §
l.704-2(i)(4) and shall be interpreted consistently therewith.

     (c) Qualified Income Offset. In the event any Member unexpectedly receives any
adjustments, allocations, or distributions described in Regulations § l.704-1(b)(2)(ii)(d)(4),
Regulations § 1.704-1(b)(2)(ii)(d)(5) or Regulations § 1.704-1(b)(2)(ii)(d)(6), items of Company
income and gain shall be specially allocated to each such Member in an amount and manner sufficient
to eliminate, to the extent required by the Regulations, the Adjusted Capital Account Deficit of
such Member as quickly as possible, provided that an allocation pursuant to this Section 4.4(c)
shall be made only if and to the extent that such Member would have an Adjusted Capital Account
Deficit after all other allocations provided for in this Section 4 have been tentatively made as if
this Section 4.4(c) were not in the Agreement. This Subsection is intended to comply with the
qualified income offset requirement in Regulations § 1.704-1(b)(2)(ii)(d) and shall be interpreted
consistently therewith.

     (d) Nonrecourse Deductions. Nonrecourse Deductions for any Fiscal Year shall be
specially allocated among the Members in proportion to their Units.

     (e) Member Nonrecourse Deductions. Any Member Nonrecourse Deductions for any Fiscal
Year shall be specially allocated to the Member who bears the economic risk of loss with respect to
the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in
accordance with Regulations § 1.704-2(i)(1).

     (f) Code § 754 Adjustment. To the extent an adjustment to the adjusted tax basis of
any Company asset pursuant to Code § 734(b) or Code § 743(b) is required, pursuant to Regulations §
1.704-1(b)(2)(iv)(m)(2) or Regulations § 1.704-1(b)(2)(iv)(m)(4), to be taken into account in
determining Capital Accounts as the result of a distribution to a Member in complete liquidation of
such Member’s interest in the Company, the amount of such adjustment to the Capital Accounts shall
be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the
adjustment decreases such basis) and such gain or loss shall be specially allocated to the Members
in accordance with their interests in the Company in the event Regulations §
1.704-1(b)(2)(iv)(m)(2) applies, or to the Member to whom such distribution was made in the event
Regulations § 1.7041(b)(2)(iv)(m)(4) applies.

SECTION 4.4. Curative Allocations. The allocations set forth in Section 4.3 (the
“Regulatory Allocations”) are intended to comply with certain requirements of the Regulations. It
is the intent of the Members that, to the extent possible, all Regulatory Allocations shall be
offset either with other Regulatory Allocations or with special allocations of other items of
Company income, gain, loss, and deduction pursuant to this Section 4.4. Therefore, notwithstanding
any other provision of this Section 4 (other than the Regulatory Allocations), the Members shall
make such offsetting special allocations of the Company income, gain, loss or deduction, in
whatever manner the Members determine appropriate so that, after such offsetting allocations are
made, each Member’s Capital Account balance is, to the extent possible, equal to the Capital
Account balance such Member would have had if the Regulatory Allocations were not part of this
Agreement and all Company items were allocated pursuant to Sections 4.2. In exercising the
discretion under this Section 4.4, the Member shall take into account Regulatory Allocations

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under Sections 4.3(a) and 4.3(b) that, although not yet made, are likely to offset other Regulatory
Allocations previously made under Sections 4.3(d) and 4.3(e).

SECTION 4.5. Other Allocation Rules.

     (a) For purposes of determining the Profits, Losses, or any other items allocable to any
period, Profits, Losses, and any such other items shall be determined on a daily, monthly, or other
basis, as determined by the Manager using any permissible method under Code § 706 and the
Regulations thereunder.

     (b) Solely for purposes of determining a Member’s proportionate share of the “excess
nonrecourse liabilities” of the Company, within the meaning of Regulations § 1.752-3(a)(3), the
Members’ interests in Company profits are in proportion to their Units.

     (c) To the extent permitted by Regulations § l.704-2(h)(3), the Members shall endeavor to
treat distributions of Available Cash as having been made from the proceeds of a Nonrecourse
Liability or a Member Nonrecourse Debt only to the extent that such distributions would cause or
increase an Adjusted Capital Account Deficit for any Member.

SECTION 4.6. Tax Allocations: Code § 704(c). In accordance with Code § 704(c) and the
Regulations thereunder, income, gain, loss, and deduction with respect to any property contributed
to the capital of the Company shall, solely for federal income tax purposes, be allocated among the
Members so as to take account of any variation between the adjusted basis of such property to the
Company for federal income tax purposes and its initial Gross Asset Value (computed in accordance
with Paragraph (m)(i) of Appendix I).

     In the event the Gross Asset Value of any Company asset is adjusted pursuant to Paragraph
(m)(ii) of Appendix I, subsequent allocations of income, gain, loss, and deduction with respect to
such asset shall take account of any variation between the adjusted basis of such asset for federal
income tax purposes and its Gross Asset Value in the same manner as under Code § 704(c) and the
Regulations thereunder.

     The Members hereby agree that any allocations described in this Section relating to tax
allocations under Section 704(c) shall be determined in accordance with the traditional method of
making Code Section 704(c) allocations as described in Regulation Section 1.704-3(b). Allocations
pursuant to this Section are solely for purposes of federal, state, and local taxes and shall not
affect, or in any way be taken into account in computing, any Member’s Capital Account or share of
Profits, Losses, other items, or distributions pursuant to any provision of this Agreement.

SECTION 5.

BOOKS AND RETURNS

SECTION 5.1. Books and Records. The Company shall maintain at its principal office, or at
such other place as the Manager may designate, full and accurate books and records. A Member shall
have the right at such Member’s expense to examine and make copies of such books and records at
reasonable times. The Company shall use the accrual method for tax and accounting purposes unless
otherwise decided by the Manager. As soon as practicable after the end of each

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Fiscal Year, each Member shall be furnished with an income statement and balance sheet for or as of
the end of such Fiscal Year.

SECTION 5.2. Audit. Either Member may, at its sole cost and expense, request an audit of
the books and records of the Company at any time.

SECTION 5.3. Tax Returns and Annual Report. The Company shall prepare and timely file all
federal, state and local income tax returns required by applicable law. As soon as practicable
after the end of each Fiscal Year, each Member shall be furnished with all necessary tax
information for such Fiscal Year. The Company shall prepare and timely file the annual report
required by the Act.

SECTION 5.4. Section 754 Election. In the event a distribution of Company assets occurs
which satisfies the provisions of Code § 734 or in the event a transfer of an interest in the
Company occurs which satisfies the provisions of Code § 743, the Company shall, if requested to do
so by the distributee or transferee, elect, pursuant to Code § 754, to adjust the basis of the
Company’s assets to the extent allowed by Code § 734 or Code § 743. Any expenses incurred by the
Company in connection with making or maintaining such basis adjustment shall be reimbursed to the
Company by the distributee of such assets or the transferee of such interest who benefits from the
making and maintenance of such basis adjustment.

SECTION 5.5. Bank Accounts. The Company’s funds shall be deposited in the name of the
Company in one or more bank or similar accounts designated by the Manager. Withdrawals therefrom
shall be made by Persons authorized to do so by the Manager.

SECTION 6.

MANAGEMENT

SECTION 6.1. Designation of Manager. The Members shall elect a Person to manage the
business and affairs of the Company (the “Manager”) by unanimous consent. The Members hereby
designate CHS Inc. as the Manager of the Company in accordance with and for the compensation
provided in the Management Agreement attached and incorporated herein as Schedule 6.1 (“Management
Agreement”). A Manager shall serve until such Manager resigns, ceases to serve because of death or
disability, or is removed, with or without cause, by the Members. In the event a Manager hereafter
ceases to act as a Manager, the Members shall elect by unanimous consent a new Manager to replace
such Manager. The Manager need not be a Member of the Company.

SECTION 6.2. Powers, Duties and Compensation of Manager. Except as otherwise provided
herein or in the Management Agreement, the Manager shall have the right and power to manage,
direct, control and conduct the business and affairs of, and enter into contracts, incur
liabilities, borrow money and give collateral therefor, and buy, sell and lease assets on behalf of
the Company, all without joinder of the Members. The Manager shall supervise and direct the
business and operations of the Company efficiently and with proper economy. The Manager’s duties
hereunder shall include: (a) maintaining the Company’s books and records, (b) preparing and filing
the Company’s tax returns and annual report, (c) hiring and firing all personnel necessary to
perform and carry out the Company’s business or affairs, including paying and

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withholding all necessary taxes and filing all necessary forms in relation to such employees, and
(d) performing such other activities and tasks as are necessary or appropriate for the business or
affairs of the Company. The Company (and not the Manager) may, from time to time, designate
officers of the Company, with titles including but not limited to “chief executive officer”,
“chairman”, “chief operating officer”, “chief financial officer”, “president”, “vice president”,
“secretary”, “treasurer” and “controller”. Any officer so designated shall have such authority and
perform such duties as the Company may, from time to time, delegate to such officer. Any officer
may be removed from office, with or without cause, by the Company and/or any other officer of the
Company who is delegated such authority by the Company. Any number of offices may be held by the
same Person. Officers need not be Members of the Company. The compensation, if any, of officers
of the Company shall be determined by the Manager, in consultation with the Company. The Manager
and officers shall be reimbursed by the Company for all reasonable and necessary expenses incurred
in carrying out and discharging their duties hereunder in accordance with the terms of the
Management Agreement.

SECTION 6.3. Powers of Members. Except as otherwise expressly provided herein, nothing in
this Agreement shall be deemed to restrict in any way the freedom of any of the Members to conduct
any other business or activity whatsoever. Except as expressly provided herein, no Member shall
have any authority to act for, or to assume any obligations or responsibilities on behalf of, the
Company or any other Member. The creation of the Company shall not convey to a Member, by operation
of law or otherwise, any interest in, right to, or ownership of any asset or property of the other
Member. No Member shall become responsible for any of the debts, obligations or liabilities of the
other, and no Member shall be constituted the agent or attorney in fact of the other. Any
transaction unrelated to the purposes of the Company engaged in by a Member shall be solely the
liability and responsibility of such Member, who shall not be authorized to bind any other Member
as agent or otherwise with respect to such transaction.

SECTION 6.4. Liability of Manager and Members. Except in the case where the Manager is
guilty of fraud, gross negligence, or willful or wanton misconduct, the Manager shall not be liable
to the Company or any Member for any loss, damage, liability or expense suffered by the Company or
any Member on account of any action taken or omitted to be taken by the Manager. Except as
otherwise expressly provided by the Act, the debts, obligations and liabilities of the Company,
whether arising in contract, tort or otherwise, shall be solely the debts, obligations and
liabilities of the Company. No Member, Manager or officer of the Company, solely by reason of such
status, shall be personally liable, under a judgment, decree or order of a court, or in any other
manner, for the acts, debts, obligations or liabilities of the Company, whether arising in
contract, tort or otherwise.

SECTION 6.5. Indemnification.

(a) The Company, to the fullest extent permitted by law, shall indemnify and hold
harmless the Manager, each Member, and all officers, directors, trustees, partners,
members, principals, employees, and agents of the Manager, and Members
(individually, an “Indemnitee”) from and against any and all losses, claims,
demands, costs, damages, liabilities, expenses of any nature (including attorneys’
fees and disbursements), judgments, fines, settlements, and other amounts arising
from any and all claims, demands, or proceedings in which an Indemnitee may be

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involved, or threatened to be involved, as a party or otherwise, arising out of or
incidental to the business of the Company, including liabilities under the federal
and state securities laws, regardless of whether an Indemnitee continues to be the
Manager, Member, or an officer, director, trustee, partner, member, principal,
employee, or agent of the Manager, or Member at the time any such liability or
expense is paid or incurred, if (i) the Indemnitee acted in good faith and in a
manner he, she or it reasonably believed to be in, or not opposed to, the interests
of the Company, and, with respect to any criminal proceeding, had no reason to
believe its, his, or her conduct was unlawful, and (ii) the Indemnitee’s conduct did
not constitute fraud, gross negligence, or willful or wanton misconduct.

(b) The indemnification provided by this Section shall be in addition to any other
rights to which each Indemnitee may be entitled under the Act or under any agreement
as a matter of law or otherwise, both as to action in the Indemnitee’s capacity as
the Manager, Member, or as an officer, director, trustee, partner, member,
principal, employee, or agent of the Manager, or Member, and to action in another
capacity, and shall continue as to an Indemnitee who has ceased to serve in such
capacity and shall inure to the benefit of the heirs, successors, assigns,
administrators, and personal representatives of such Indemnitee.

(c) The Company may purchase and maintain insurance on behalf of any one or more
Indemnitees, and other such Persons in such Person’s official capacity against any
liability asserted against and incurred by such Indemnitee or Person in or arising
from that capacity, whether or not the Company would otherwise be required to
indemnify the Indemnitee or Person against the liability.

(d) Any indemnification hereunder shall be satisfied solely out of the property of
the Company, and the Manager and Members shall not be subject to personal liability
by reason of these indemnification provisions.

(e) An Indemnitee shall not be denied indemnification in whole or in part under this
Section because the Indemnitee had an interest in the transaction with respect to
which the indemnification applies if the transaction was otherwise permitted by the
terms of this Agreement.

(f) The provisions of this Section are for the benefit of the Indemnitees and the
heirs, successors, assigns, administrators, and personal representatives of the
Indemnitees and shall not be deemed to create any rights for the benefit of any
other Persons.

(g) The right to indemnification conferred in this Section shall include the right
to be paid or reimbursed by the Company the reasonable expenses (including attorney
fees, disbursements and expenses) incurred by a Person entitled to be indemnified
who was, is or is threatened to be made a named defendant or respondent in a
proceeding in advance of the final disposition of the proceeding and without any
determination as to the Person’s ultimate entitlement to indemnification;
provided, however, that the payment of such expenses incurred

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by any such Person in advance of the final disposition of a proceeding shall be made
only upon delivery to the Company of a written affirmation by such Person of his,
her or its good faith belief that such Person has met the standard of conduct
necessary for indemnification and a written undertaking, by or on behalf of such
Person, to repay all amounts so advanced if it shall ultimately be determined that
such indemnified Person is not entitled to be indemnified under this Section or
otherwise.

SECTION 6.6. Other Business Ventures. The Manager and Members may engage in or possess an
interest in other business ventures of every nature and description, independently or with others,
whether or not similar to or in competition with the business of the Company, and neither the
Company nor the Members shall have any right by virtue of this Agreement in or to such other
business ventures or to the income or profits derived therefrom. The Manager shall not be required
to devote all of his, her or its time nor business efforts to the affairs of the Company, but the
Manager shall devote so much of his, her or its time and attention to the Company as is reasonably
necessary and advisable to manage the business and affairs of the Company to the best advantage of
the Company and to perform his, her or its duties hereunder.

SECTION 6.7. Conflicts. The Company may enter into various agreements or transactions
with the Manager or one or more of the Members on terms determined by the Manager to be in the best
interest of the Company.

SECTION 6.8. Confidential Information. The Manager and Members will hold in confidence
all confidential, proprietary and/or trade secret information of the Company (“Confidential
Information”) and shall use such care to safeguard the Confidential Information and protect it from
disclosure as such Manager or Member uses with respect to its own confidential information. The
Manager and Members will use such Confidential Information only for purposes of performing their
respective obligations under this Agreement and will not disclose such information to any third
party other than as may be required by law. The Manager and Members will have no confidentiality
obligations with respect to any information which (i) is already known to public at the time of the
disclosure; (ii) which later becomes known to the public without fault on the disclosing party’s
part; or (iii) which lawfully becomes known other than through disclosure by the owner of the
Confidential Information. These provisions shall survive termination or expiration of this
Agreement.

SECTION 6.9. Other Matters Concerning the Manager.

(a) The Manager and officers shall -have no fiduciary duty (including, but not
limited to, any duty of loyalty or duty of care) to the Company or to any Member,
except (i) a duty to act in good faith, (ii) a general obligation of fair dealing
with respect to the Company and its property, (iii) any duty expressly set forth in
this Agreement, and (iv) any duty expressly set forth in the Management Agreement or
any other written agreements.

(b) The Manager and officers may rely and shall be protected in acting or refraining
from acting upon any resolution, certificate, statement, instrument,

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opinion, report notice, request, consent, order, bond, debenture, or other paper or
document believed in good faith by the Manager or officer to be genuine and to have
been signed or presented by the proper party or parties.

(c) The Manager and officers may consult with legal counsel, accountants,
appraisers, management consultants, investment bankers, and other consultants and
advisers selected by the Manager or officers, and any opinion of such Person as to
matters which the Manager or officers believe in good faith to be within such
Person’s professional or expert competence shall be full and complete authorization
in respect of any action taken or suffered or omitted by the Manager or officers
hereunder in good faith and in accordance with such opinion.

SECTION 7.

MEMBER MEETINGS

SECTION 7.1. Quarterly Meetings. Quarterly meetings of the Members shall be held at the
time and place determined by all Members, at which the Members shall transact such business as may
be brought before the quarterly meeting.

SECTION 7.2. Quorum. All Member Representatives (as hereinafter defined) shall constitute
a quorum at all meetings of Members for the transaction of any business.

SECTION 7.3. Special Meetings. Special meetings of the Members, for any purpose or
purposes, may be called upon the written request of the Manager or any Member. Such request shall
state the purpose or purposes of the special meeting. Business transacted at any special meeting
of the Members shall be limited to the purpose or purposes stated in the notice.

SECTION 7.4. Notice of Meetings. Unless otherwise provided by law, written notice stating
the time and place of any quarterly or special meeting of the Members and, in the case of a special
meeting, the purpose or purposes for which the meeting is called, shall be delivered to each Member
entitled to vote at such meeting not less than ten (10) days before the date of such meeting.
Attendance of a Member at a meeting shall constitute a waiver of notice of such meeting, except
when the Member attends a meeting for the express purpose of objecting, at the beginning of the
meeting, to the transaction of any business because the meeting is not lawfully called or convened.
Written waiver by a Member of notice of a meeting, signed by such Member, whether before or after
the time for notice to be given, shall be deemed equivalent to notice.

SECTION 7.5. Voting at Meetings. At all meetings of the Members every Member entitled to
vote in person, or by proxy appointed by an instrument in writing subscribed by such Member and
bearing a date not more than one (1) year prior to said meeting, unless said instrument provides
for a longer period, shall be entitled to a vote equal to the number of Units then entitled to vote
that registered in such Member’s name on the books of the Company. All questions to be decided by
the Members shall be decided by a Majority in Interest unless otherwise required by this Agreement.

SECTION 7.6. Members Shall Register Address. It shall be a condition on the right of each
Member to receive any notice from the Company that such Member shall have furnished to the

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Company, from time to time, over such Member’s signature, the address to which notices to such
Member shall be mailed.

SECTION 7.7. Consent of Members in Lieu of Meeting. Any action required or permitted to
be taken at any meeting of the Members maybe taken without a meeting, prior notice or a vote, if a
written consent, setting forth the action so taken, shall be signed by a Majority in Interest, or
if such act requires the unanimous consent of the Members, then by all Members.

SECTION 7.8. Telephonic or Video Meeting. Members of the Company may participate in any
meeting of the Members by means of conference telephone, video conference or similar communication
if all Members participating in such meeting can hear one another for the entire discussion of the
matters to be voted upon. Participation in a meeting pursuant to this Section shall constitute
presence in person at such meeting.

SECTION 7.9. Adjournments. Any meeting of the Members may be adjourned from time to time to
another date, time and place within 30 days after the date fixed for the original meeting. If any
meeting of the Members is so adjourned, no notice as to such adjourned meeting need be given if the
date, time and place at which the meeting will be reconvened are announced at the time of
adjournment.

SECTION 7.10. Member Representatives. Each Member shall elect two (2) representatives who
shall vote and act on such Member’s behalf at membership meetings (“Member Representative(s)”) and
with respect to all matters to be acted upon by the Members under the terms of this Agreement. The
Company and each Member may treat an approval by any Member Representatives as approval by such
Member. Concurrently with the execution of this Agreement, each Member shall designate its Member
Representatives and such persons shall serve in that capacity until all Members are notified in
writing to the contrary.

SECTION 8.

TRANSFER OF UNITS

SECTION 8.1. General Restrictions. No Person shall Transfer all or any part of such
Person’s Units, except as provided in Section 8.2 or 8.4. Any purported Transfer of all or any
part of a Unit in violation of the terms of this Agreement shall be null and void and of no effect.
Nothing in this Agreement shall be construed or interpreted as limiting or restricting the
Transfer of any ownership interest in a Member. In the event of a Transfer, the parties agree to
amend this Agreement accordingly.

SECTION 8.2. Permitted Transfers. A Person shall have the right to Transfer, by written
instrument, all or part of such Person’s Units provided that such Transfer (i) would not be in
violation of any applicable law, rule or regulation (for example, federal or state securities
laws), or (ii) such Transfer has been approved in writing by a Majority in Interest of the Members
(determined by excluding the transferor’s Units). The rights of first refusal and Tag-along Right
described in Sections 8.4 and 8.5 shall not apply to permitted transfers.

SECTION 8.3. Substitute Members. No transferee of all or part of a Unit shall become a
Substitute Member unless and until:

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     (a) the transferee has executed an instrument reasonably satisfactory to the remaining Members
accepting and adopting the terms and provisions of this Agreement and any other instrument or
instruments that the remaining Members may be necessary or desirable to effect such Transfer; and

     (b) the transferor or transferee has paid all reasonable expenses of the Company in connection
with the admission of the transferee as a Substitute Member.

SECTION 8.4. Right of First Refusal. Before any Unit may be Transferred, the Member
proposing the Transfer of any Unit must first obtain a bona fide written offer. Such offer shall
be signed by the prospective transferee and shall state the name and address of such prospective
transferee, and an aggregate purchase price payable in the form of cash and/or a promissory note
(with the terms and conditions of such promissory note being stated) and conditioned only upon
assignment of good title to the Unit free and clear of liens and encumbrances. The prospective
transferor Member shall indicate his, her or its conditional acceptance of the offer in writing on
the offer itself, which acceptance shall be conditioned solely upon the compliance with the
provisions of this Section. The prospective transferor shall give written notice of the bona fide
written offer to the Company and all Members together with a copy of such offer and an affidavit of
such prospective transferor stating that such offer is subject to no terms or conditions other than
those set forth therein. For a period of thirty (30) days thereafter, the Company shall have an
option to acquire all (but not less than all) of the Units to be Transferred upon the same terms
and conditions set forth in the offer. The Company, by a vote of Majority in Interest (determined
by excluding the prospective transferor’s Units), may exercise the option by giving written notice
thereof to the prospective transferor. In the event the Company fails to exercise its option
within such period, the Members (other than the prospective transferor) shall have an option for an
additional twenty (20) day period thereafter to purchase all (but not less than all) of the Units
to be Transferred upon the same terms and conditions set forth in the bona fide written offer. A
Member may exercise the option by giving written notice thereof to the prospective transferor.
Each Member who desires to purchase part of the Units shall be entitled to purchase (i) the number
of Units proposed to be Transferred multiplied by such Member’s Percentage Interest, or (ii) such
part of the Units available for purchase as shall be agreed upon by all of the Members who desire
to purchase part of the Units. In the event the foregoing options are not exercised to purchase
all (but not less than all) of the Units to be Transferred, then the prospective transferor shall
have the right to Transfer all (but not less than all) of the Units upon the same terms and
conditions and to the same Person as specified in the bona fide written offer.

SECTION 8.5. Tag Along Right. If the right of first refusal described above is not
exercised as to all of the Units proposed to be Transferred, then each other Member will have the
right to sell to same Person as specified in the bona fide written offer, from such other Member’s
Units, a portion of the number of Units proposed to be Transferred equal to the number of Units
proposed to be Transferred multiplied by such other Member’s Percentage Interest (“Tag-along
Right”), provided that no Member that has breached its obligations under this Agreement may
exercise any Tag-along Right with respect to such Member’s Units. A Member electing to exercise
its Tag-along Right shall provide to the Company and the prospective transferor written notice of
such election within the twenty (20) day period referred to above specifying the number of Units to
be included in the sale to same Person as specified in the bona fide written offer. The
consideration payable per Unit to any Member electing to exercise its Tag-along Rights shall be

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equitably adjusted to give effect to the difference the Members would be entitled to receive with
respect to such Units if there were a dissolution of the Company.

SECTION 8.6. Put and Call Right. After a period of three (3) years from the Effective Date
and so long as each Member owns an equal Percentage Interest, each Member (an “Initiating Member”)
shall have the right as to any other Member (the “Responding Member”) to either: (a) call and
purchase all, but not less than all, of the Units of the Responding Member at the Purchase Price,
or (b) put and cause Responding Member to purchase all, but not less than all, of the Units of the
Initiating Member at the Purchase Price. The Initiating Member shall notify the Responding Member
of its exercise of the call and put right by written notice. The Responding Member shall have
thirty (30) days to notify the Initiating Member of its election to effect the put or call, as the
case may be. If the Responding Member does not so elect within the thirty (30) day period, the
Responding Member shall have the right to elect whether the transaction effected shall be a put or
call, as the case may be. The parties shall close the transaction within sixty (60) days of the
Initiating Member’s notice to the Responding Member of its exercise of its rights under this
Section.

SECTION 8.7. Rights of Transferee. Unless and until a transferee shall become a
Substitute Member, the transferee shall have no right to participate in the management and affairs
of the Company (including, but not limited to, the right to vote or inspect the Company’s books and
records), but shall be entitled to receive only the share of profits or other compensation by way
of income (including allocations of Profits and Losses) and the return of contributions to which
the transferor would be entitled to with respect to the acquired Units. A transferee, however,
shall be obligated to make, and treated as a Member for purposes of, Additional Capital
Contributions approved under Section 3.2.

SECTION 8.8. Redemption of Units. The Company may purchase one or more Units from any
Person on such terms and conditions mutually acceptable to such Person and the Manager. Any Units
acquired by the Company shall be canceled.

SECTION 8.9. Subsequent Transfers. The Transfer of all or any part of a Member’s Units
shall not affect the status of such Units as being subject to this Section 8 and the right of first
refusal granted herein on any subsequent Transfer of such Units, and such Units shall in all
respects remain subject to this Section 8 and the right of first refusal granted in Section 8.4
upon the Transfer to any transferee of such Units.

SECTION 8.10. Membership Certificates. The Company may issue to each Member or transferee
one or more certificates evidencing the Units owned by such Person. All certificates issued by the
Company shall contain the following statement which shall be conspicuously printed or typed on the
front or back of the certificate:

“The Units represented by this Certificate are subject to transfer
restrictions and certain buyout rights in accordance with the terms
of the Company’s Operating Agreement, as amended from time to time.”

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     If issued, the Company shall develop procedures for the issuance of new certificates upon (i)
the Transfer of Units or (ii) the loss or destruction of previously issued certificates.

SECTION 9.

DISSOLUTION

SECTION 9.1. Dissolution. The Company shall be dissolved upon the occurrence of any of
the following events:

          (a) Written consent of a Majority in Interest; or

          (b) The entry of a decree of judicial dissolution under the Act.

SECTION 9.2. Winding Up. The Company shall cease to carry on its business, except insofar
as may be necessary for the winding up of its business and affairs, but its separate existence
shall continue until a certificate of dissolution has been issued by the Kansas Secretary of State
or until a decree dissolving the Company has been entered by a court of competent jurisdiction.
The Manager (or, in the event there is no Manager, a Person authorized by a Majority in Interest)
shall proceed to collect the Company’s assets; convey and dispose of such assets as are not to be
distributed in kind to the Members; pay, satisfy, or discharge the Company’s liabilities and
obligations or make adequate provisions for the payment or discharge thereof; and do all other acts
required to liquidate its business and affairs.

SECTION 9.3. Resignation or Withdrawal. Each Member agrees not to resign or otherwise
voluntarily withdraw from the Company except (i) with the written consent of all Members, or (ii)
in connection with a Transfer of all of its Units in a manner permitted under Section 8.

SECTION 9.4. Distribution of Assets Upon Dissolution. In settling accounts after
dissolution, the assets of the Company shall be applied and distributed in the following order of
priority:

     (a) First, to the payment of liquidation expenses and debts owing to creditors, in the order
provided by law, except those expenses and debts owing to the Members;

     (b) Second, to the setting up of any reserves that the liquidators may deem necessary or
appropriate for any anticipated obligation or contingencies of the Company;

     (c) Third, to debts owing to the Members; and

     (d) Fourth, to the Members in accordance with their respective Capital Accounts.

This Section is intended to comply with the Act and Regulations § l.704-l(b)(2)(ii)(b)(2) and shall
be interpreted consistently therewith.

SECTION 9.5. Deficit Capital Accounts. In the event the Company is “liquidated” within
the meaning of Regulations § l.704-l(b)(2)(ii)(g), if any Member’s Capital Account has a deficit
balance (after giving effect to all contributions, distributions, and allocations for all Fiscal
Years, including the Fiscal Year during which such liquidation occurs), such Member shall have no
obligation to make any contribution to the capital of the Company with respect to such deficit

15

 

balance, and such deficit shall not be considered a debt owed the Company or any other Person for
any purpose whatsoever.

SECTION 10.

MISCELLANEOUS

SECTION 10.1. Non-Competition. So long as both CHS and UBE hold a Membership Interest in
the Company, neither the UBE nor CHS Energy Division will directly or indirectly, engage in the
sale or marketing of ethanol as it concerns an order for and delivery of 10,000 gallons or more of
ethanol to one buyer at one location; provided, however, that this Section 10.1
does not prohibit (i) CHS (including CHS Energy Division), UBE or US BioEnergy Corporation from
performing their respective obligations or exercising any of their respective rights under that
certain (A) Purchase Agreement dated as of March 31, 2006 by and between CHS and US BioEnergy
Corporation relating to membership interest in UBE, (B) Management Agreement dated as of March 31,
2006 by and between CHS and US BioEnergy Corporation relating to the management of UBE, (C) Ethanol
Marketing Agreement dated as of March 31, 2006 by and between UBE and US BioEnergy Corporation or
(D) this Agreement; (ii) CHS (including CHS Energy Division) from engaging in any business activity
relating to the marketing, sale and distribution of ethanol related products, including but not
limited to E85 or biodiesel; or (iii) any ethanol sales procured by CHS (including CHS Energy
Division) for subsequent resale to the Company.

SECTION 10.2. Issuance of Additional Units. The Company, by the written consent of all
Members, may issue additional Units (including new classes or series thereof having rights that are
different than the rights of any then-existing class or series) upon such terms and conditions as
such consent may specify.

SECTION 10.3. Certain Changes Affecting Members. Each Member shall promptly notify the
Company and the other Members upon the occurrence of any of the following:

(a) the commencement by any Person or by the Member of any claim, suit, proceeding,
or administrative or governmental action relating to the Company or such Member’s
ownership interest in the Company;

(b) the commencement of any administrative or governmental action or measure that
suspends or terminates such Member’s business and such suspension or termination is
not vacated within 30 days;

(c) the insolvency of such Member or the failure of such Member to meet its debts as
they become due or such Member’s general assignment for the benefit of creditors or
commencement of liquidation, bankruptcy or receivership;

(d) such Member’s sale or lease of all or substantially all of its assets to any
Person; or

(e) a change of control of such Member by merger, consolidation, share exchange,
division or other transaction or series of any of the foregoing transactions with
any person resulting in the shareholders of such Member

16

 

immediately prior to such transaction beneficially owning, directly or indirectly,
50% or less of the combined voting power of the outstanding voting securities of
such Member; or

(f) any binding agreement with any Person with respect to the transactions described
in (d) or (e) above.

SECTION 10.4. Mediation and Arbitration.

(a) To the maximum extent permitted by law, the parties mutually consent to the
resolution by arbitration, and not litigation, of all claims, causes of action and
disputes which may arise out of or in connection with this Agreement. In the event
of any such dispute, the parties agree they shall attempt to resolve such dispute by
good faith negotiations prior to the institution of mediation or arbitration
proceedings. If the dispute cannot be resolved by such negotiations, then any
party, by written notice to the other party, may call for private mediation of the
issue before a mediator to be agreed upon by the parties. The parties agree to
conclude such private mediation within thirty (30) days of the filing by a party of
a request for such mediation. In the event the dispute cannot be resolved by such
mediation, either party may, by written notice to the other party, may commence
arbitration proceedings as provided below.

(b) Disputes to be resolved by arbitration shall be submitted to binding arbitration
to be held in a neutral location to be mutually agreed upon by and between the
parties, by either one or three independent arbitrators in accordance with the
Federal Arbitration Act, Title 9 of the U.S. Code, and the Commercial Arbitration
Rides of the American Arbitration Association pursuant to the procedure set forth
below.

(c) Any aggrieved party may demand such arbitration in writing by notice, which
demand shall include the name of the arbitrator appointed by the party demanding
arbitration and a statement of the matter in controversy.

(d) If there are two parties to the dispute, then unless the parties have agreed on
a single arbitrator within ten (10) days after such demand, the other party shall
name its arbitrator, and the two arbitrators so selected shall select a third
arbitrator within ten (10) days or, in lieu of an agreement on the third arbitrator
by the two arbitrators so appointed, a third arbitrator shall be appointed by the
American Arbitration Association. If a second arbitrator is not selected within the
time provided, the first arbitrator shall serve as sole arbitrator. If there are
more than two parties to the dispute, then an independent single arbitrator shall be
appointed by the American Arbitration Association to resolve the dispute.

(e) The arbitrators shall have the power to determine the procedure to be followed,
whether discovery is to be allowed and to what extent and to establish a schedule
for resolving the controversy and allocating costs of arbitration among the parties
as they shall solely determine in their discretion, including the power

17

 

to award costs and attorney fees of the prevailing party against the losing party.
The arbitrators shall have the power to award punitive or exemplary damages, but
only when, in their sole discretion, they determine that a dispute brought or claim
pursued by a party was not brought in good faith. The decision of a majority of the
arbitrators shall be the decision of the arbitrators. All decisions shall be in
writing. The decision of the arbitrators shall be final and binding upon the pates
and shall not be appealable. The parties understand and agree that they are waiving
all right to have all claims, causes of action or disputes adjudicated by a court or
jury.

(f) The parties agree that the provisions of this Section 10.3 shall be a complete
defense to any suit, action, or other proceeding instituted in any federal, state,
or local court or before any administrative tribunal with respect to any controversy
or dispute arising out of this Agreement, that judgment may be rendered in any court
of competent jurisdiction on any award made by the arbitrators pursuant to this
Agreement, and that the arbitration provisions hereof shall survive the termination
of this Agreement for any reason.

SECTION 10.5. Title to Assets. Title to all assets acquired by the Company shall be held
in the name of the Company. No Member shall individually have any ownership interest or rights in
the assets of the Company, except indirectly by virtue of such Member’s ownership of one or more
Units. No Member shall have any right to seek or obtain a partition of the assets of the Company,
nor shall any Member have the right to any specific assets of the Company upon the liquidation of
or any distribution from the Company.

SECTION 10.6. Grant of Power of Attorney. Each Member constitutes and appoints the
Manager as the Member’s true and lawful attorney-in-fact, and in the Member’s name, place and
stead, to make, execute, sign, acknowledge, and file:

(a) All documents (including amendments to the Articles) which the attorney-in-fact
deems appropriate to reflect any written amendment, change or modification of this
Agreement approved in accordance with this Agreement;

(b) Upon the requisite approval, if any, required elsewhere in this Agreement, any
and all other certificates or other instruments required to be filed by the Company
under the laws of the State of Kansas or of any other state or jurisdiction,
including, without limitation, any certificate or other instruments necessary m
order for the Company to continue to qualify as a limited liability company under
the laws of the State of Kansas;

(c) One or more applications to use an assumed name; and

(d) All documents which may be required to dissolve and terminate the Company and to
cancel its Articles upon the requisite approval required elsewhere in this
Agreement.

The foregoing power of attorney is irrevocable and is coupled with an interest, and, to the extent
permitted by applicable law, shall survive the death or disability of a Member. It also shall

18

 

survive the Transfer of a Unit, except that if the transferee is approved for admission as a
Substitute Member, this power of attorney shall survive the delivery of the assignment for the sole
purpose of enabling the attorney-in-fact to execute, acknowledge and file any documents needed to
effectuate the substitution. Each Member shall be bound by any representations made by the
attorney-in-fact acting in good faith pursuant to this power of attorney, and each Member hereby
waives any and all defenses which may be available to contest, negate or disaffirm the action of
the attorney-in-fact taken in good faith under this power of attorney.

SECTION 10.7. Headings. Section and other headings contained in this Agreement are for
reference purposes only and are not intended to describe, interpret define, or limit the scope,
extent, or intent of this Agreement or any provision herein.

SECTION 10.8. Survival. All rights of contribution and indemnity contained in this
Agreement shall survive and remain in full force and effect notwithstanding any dissolution of the
Company or this Agreement.

SECTION 10.9. Notices. Except as otherwise provided by this Agreement or by law, any
notice required or permitted to be given by this Agreement shall be sufficient if in writing and
shall be deemed effective only if transmitted by personal delivery or mailed by certified mail,
return receipt requested, postage prepaid, to the address of the Member as it appears on the
records of the Company; provided that a waiver in writing signed by any person entitled to notice,
whether made before or after the time for notice to be given, is equivalent to the giving of
notice. Any such notice shall be deemed to be delivered and received as of the date so delivered,
if delivered personally, or as of the second business day following the day sent, if sent by
certified mail.

SECTION 10.10. Entire Agreement. This Agreement contains the entire agreement between the
Members relative to the operation of the Company, and it shall not be altered, modified or changed
except by a written document duly executed by all of the Members at the time of such alteration,
modification or change.

SECTION 10.11. Severability. In the event any provision of this Agreement is held to be
illegal, invalid or unenforceable to any extent, the legality, validity and enforceability of the
remainder of this Agreement shall not be affected thereby and shall remain in full force and effect
and shall be enforced to the greatest extent permitted by law.

SECTION 10.12. Binding Agreement. The provisions of this Agreement shall be binding upon,
and inure to the benefit of, the parties hereto and their respective heirs, personal
representatives, successors and assigns.

SECTION 10.13. Jointly Negotiated. The parties hereto have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or
interpretation arises, no presumption or burden of proof shall arise favoring or disfavoring any
party by virtue of the authorship of any of the provisions of this Agreement.

SECTION 10.14. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which shall constitute

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one agreement that is binding upon all of the pates hereto, notwithstanding that all parties are
not signatories to the same counterpart.

SECTION 10.15. Governing Law. The laws of the State of Kansas shall govern the validity
of this Agreement, the construction of its terms, and the interpretation of the rights and duties
of the parties hereto.

SECTION 10.16. Additional Documents and Acts. Each Member agrees to execute and deliver
such additional documents and instruments and to perform such additional acts as may be necessary
or appropriate to effectuate, carry out and perform all of the terms, provisions and conditions of
this Agreement and the transactions contemplated hereby.

SECTION 10.17. No Third Party Beneficiary. This Agreement is made solely and specifically
among and for the benefit of the parties hereto, and their respective successors and assigns, and
no other person will have any rights, interest or claims hereunder or be entitled to any benefits
under or on account of this Agreement as a third party beneficiary or otherwise.

* * * * * * * * * * * * *

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     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of
the 31st day of March, 2006.

	 	 	 	 	 	 	 
	 	 	United Bio Energy, LLC, a Kansas limited liability company	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ BRIAN D. THOME
 

	 	 
	 	 	Its: PRESIDENT	 	 
	 
	 	 	 	 	 	 
	 	 	CHS Inc., a Minnesota corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Its:
	 	/s/ DONALD W. OLSON
 

	 	 
	 

	 	 	 	 

	 	 

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Appendix I

DEFINITIONS

     Terms Defined Herein. Unless the context otherwise requires, the following terms
shall have the following meanings:

(a) “Act” means the Kansas Revised Limited Liability Company Act, as amended from time to time (or
any corresponding provision of succeeding law).

(b) “Adjusted Capital Account Deficit” means, with respect to any Member, the deficit balance, if
any, in such Member’s Capital Account as of the end of the relevant Fiscal Year, after giving
effect to the following adjustments:

(i) Credit to such Capital Account any amounts which such Member is obligated to restore
pursuant to any provision of this Agreement or is deemed to be obligated to restore pursuant
to the penultimate sentences of Regulations §§ l.704-2(g)(l) and l.704-2(i)(5); and

(ii) Debit to such Capital Account the items described in Regulations § §1.704-1
(b)(2)(ii)(d)(4), 1 .704-l(b)(2)(ii)(d)(5), and 1.704-1 (b)(2)(ii)(d)(6).

The foregoing definition of Adjusted Capital Account Deficit is intended to comply with the
provisions of Regulations § 1.704-1 (b)(2)(ii)(d) and shall be interpreted consistently
therewith.

(c) “Agreement” means this Operating Agreement, as amended from time to time.

(d) “Articles” means the Articles of Organization of the Company filed with the Kansas Secretary of
State, as amended or restated from time to time.

(e) “Available Cash” means the aggregate amount of cash on hand or in bank, money market or similar
accounts of the Company derived from any source which the Manager determines is available for
distribution after taking into account any amount required or appropriate to maintain a reasonable
amount of working capital and reserves for outstanding obligations and anticipated future
expenditures of the Company.

(f) “Capital Account” means the capital account maintained for each Member in accordance with
Section 3.3.

(g) “Capital Contributions” means, with respect to any Member, the amount of cash and the initial
Gross Asset Value of any property (other than cash) contributed to the capital of the Company. The
principal amount of a promissory note which is not readily traded on an established securities
market and which is contributed to the Company by the maker of the note (or a person related to the
maker of the note within the meaning of Regulations § 1.704-1(b)(2)(ii)(c)) shall not be included
in the Capital Account of any Member until the Company makes a taxable disposition of the note or
until (and to the extent) principal payments are made on the note, all in accordance with
Regulations § 1 .704-l(b)(2)(iv)(d)(2).

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(h) “Code” means the Internal Revenue Code of 1986, as amended from time to time (or any
corresponding provisions of succeeding law).

(i) “Company Minimum Gain” means “partnership minimum gain” as that term is defined in Regulations
§§ l.704-2(b)(2) and 1.704-2(d).

(j) “Depreciation” means, for each Fiscal Year, an amount equal to the depreciation, amortization,
or other cost recovery deduction allowable with respect to an asset for such Fiscal Year, except
that if the Gross Asset Value of an asset differs from its adjusted basis for federal income tax
purposes at the beginning of such Fiscal Year, Depreciation shall be an amount which bears the same
ratio to such beginning Gross Asset Value as the federal income tax depreciation, amortization, or
other cost recovery deductions for such year or other period bears to such beginning adjusted tax
basis; provided, however, that if the adjusted basis for federal income tax purposes of an asset at
the beginning of such Fiscal Year is zero, Depreciation shall be determined with reference to such
beginning Gross Asset Value using any reasonable method selected by the Manager.

(k) “Fiscal Year” means (i) the period commencing on the Effective Date of this Agreement, and
ending on August 31, 2006, (ii) any subsequent twelve (12) month period commencing on September 1st
and ending on August 31st, or (iii) any portion of the period described in clause (ii) for which
the Company is required to allocate Profits, Losses, and other items of Company income, gain, loss,
or deduction pursuant to Section 4.

(l) “Gross Asset Value” means, with respect to any asset, the asset’s adjusted basis for federal
income tax purposes, except as follows:

(i) The initial Gross Asset Value of any asset contributed by a Member to the Company shall
be the gross fair market value of such asset, as determined by the Members;

(ii) The Gross Asset Values of all Company assets shall be adjusted to equal their
respective gross fair market values as of the following times: (a) the acquisition of an
additional interest in the Company by any new or existing Member in exchange for more than a
de minimis Capital Contribution; (b) the distribution by the Company to a Member of more
than a de minimis amount of Company assets as consideration for an interest in the Company;
and (c) the liquidation of the Company within the meaning of Regulations §
l.704-l(b)(2)(ii)(g); provided, however, that adjustments pursuant to clauses (a) and (b)
above shall be made only if the Manager reasonably determine that such adjustments are
necessary or appropriate to reflect the relative economic interests of the Members in the
Company;

(iii) The Gross Asset Value of any Company asset distributed to any Member shall be adjusted
to equal the gross fair market value of such asset on the date of distribution as determined
by the Members; and

(iv) The Gross Asset Values of Company assets shall be increased (or decreased) to reflect
any adjustments to the adjusted basis of such assets pursuant to Code § 734(b) or Code §
743(b), but only to the extent that such adjustments are taken into

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account in determining Capital Accounts pursuant to Regulations § l.704-l(b)(2)(iv)(m) and
subparagraph (vi) of the definition of “Profits” and “Losses”; provided, however, that Gross
Asset Values shall not be adjusted pursuant to this clause (iv) to the extent the Member
determine that an adjustment pursuant to clause (ii) above is necessary or appropriate in
connection with a transaction tat would otherwise result in an adjustment pursuant to this
clause (iv).

If the Gross Asset Value of an asset has been determine or adjusted pursuant to clauses (ii)
or (iv) above, such Gross Asset Value shall thereafter be adjusted by the Depreciation taken
into account with respect to such asset for purposes of computing Profits and Losses.

(m) “Indemnitee” means a Person entitled to be indemnified by the Company pursuant to Section 6.5.

(n) “Majority in Interest” means any Member or group of Members holding an aggregate of more than
fifty percent (50%) of the Units then entitled to vote.

(o) “Manager” means the Person designated as the manager of the Company in accordance with Section
6.1.

(p) “Member” means any Person who is a party hereto or who is hereafter admitted as a new Member or
Substitute Member of the · Company pursuant to the provisions of this Agreement. “Members” mean all
such Persons.

(q) “Member Nonrecourse Debt” means “partner nonrecourse debt” as that term is defined in
Regulations § l.704-2(b)(4).

(r) “Member Nonrecourse Debt Minimum Gain” means an amount, with respect to each Member Nonrecourse
Debt equal to the Company Minimum Gain that would result if such Member Nonrecourse Debt were
treated as a Nonrecourse Liability, determined in accordance with Regulations § 1 .704-2(i)(3).

(s) “Member Nonrecourse Deductions” means “partner nonrecourse deductions” as that term is defined
in Regulations §§ l.704-2(i)(l) and 1.704-2(i)(2).

(t) “Nonrecourse Deductions” has the meaning set forth in Regulations § 1.704-2(b)(l).

(u) “Nonrecourse Liability” has the meaning set forth in Regulations § 1.704-2(b)(3).

(v) “Person” means any individual, corporation, partnership’ limited liability company, trust or
other legal entity.

(w) “Profits” and “Losses” means, for each Fiscal Year, an amount equal to the Company’s taxable
income or loss for such Fiscal Year, determined in accordance with Code §703(a) (for this purpose,
all items of income, gain, loss, or deduction required to be stated separately

24

 

pursuant to Code § 703(a)(l) shall be included in taxable income or loss), with the following
adjustments (without duplication):

(i) Any income of the Company that is exempt from federal income tax and not otherwise taken
into account in computing Profits or Losses pursuant to this Subsection shall be added to
such taxable income or loss;

(ii) Any expenditures of the Company described in Code § 705(a)(2)(B) or treated as Code §
705(a)(2)(B) expenditures pursuant to Regulations § 1.704— 1(b)(2)(iv)(i), and not otherwise
taken into account in computing Profits or Losses pursuant to this Subsection shall be
subtracted from such taxable income or loss;

(iii) In the event the Gross Asset Value of any Company asset is adjusted pursuant to
Paragraph (ii) or (iii) of the definition of Gross Asset Value, the amount of such
adjustment shall be taken into account as gain or loss from the disposition of such asset
for purposes of computing Profits or Losses;

(iv) Gain or loss resulting from any disposition of a Company asset with respect to which
gain or loss is recognized for federal income tax purposes shall be computed by reference to
the Gross Asset Value of the asset disposed of, notwithstanding that the adjusted tax basis
of such asset differs from its Gross Asset Value;

(v) In lieu of the depreciation, amortization, and other cost recovery deductions taken into
account in computing such taxable income or loss, there shall be taken into account
Depreciation for such Fiscal Year or other period, computed in accordance with the
definition of Depreciation;

(vi) To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to
Code § 734(b) or Code § 743(b) is required pursuant to Regulations §l.704-l(b)(2)(iv)(m)(4)
to be taken into account in determining Capital Accounts as a result of a distribution other
than in liquidation of a Member’s interest in the Company, the amount of such adjustment
shall be treated as an item of gain (if the adjustment increases the basis of the asset) or
loss (if the adjustment decreases the basis of the asset) from the disposition of the asset
and shall be taken into account for purposes of computing Profits or Losses; and

(vii) Notwithstanding any other provision of this Subsection, any items are specifically
allocated pursuant to Section 4.4 or Section 4.5 shall not be taken in o account in
computing Profits or Losses.

The amounts of the items of Company income, gain, loss, or deduction available to be
specially allocated pursuant to Sections 4.4 and 4.5 shall be determined by applying rules
analogous to those set forth in clauses (i) through (vi) above.

(x) “Purchase Price” means an amount equal to a Member’s Percentage Interest multiplied by a
minimum of three times the Company’s earnings before interest, taxes, depreciation and
amortization, as measured at the end of a 12-month rolling period, which shall be the last day of
the last full month prior to the provisions of Sections 8.6 being initiated.

25

 

(y) “Regulations” means the Income Tax Regulations, including Temporary Regulations, promulgated
under the Code, as amended from time to time (including corresponding provisions of succeeding
Regulations).

(z) “Regulatory Allocations” mean the allocations pursuant to Section 4.4.

(aa) “Substitute Member” means a Person admitted to the Company as a Member and entitled to all the
rights and bound by all the obligations of the Member for which such Person is substituted.

(bb) “Transfer”, “Transferred”, etc. means, with respect to a Unit, to sell, transfer, assign,
give, bequeath, mortgage, alienate, pledge, hypothecate or otherwise encumber or dispose of such
Unit.

(cc) “Unit” means a Unit issued by and representing an ownership interest in the Company and any
other class or series of Units created and issued pursuant to Section 10.1. “Units” mean all such
Units.

26

 

Schedule 6.1

Management Agreement

27exv10w21

 

Exhibit 10.21

MANAGEMENT AGREEMENT

     THIS AGREEMENT is made as of March 31, 2006, by and between United Bio Energy Fuels, LLC, a
Kansas limited liability company (the “Company”), and CHS Inc., a Minnesota corporation
(“Manager”).

W I T N E S S E T H:

     WHEREAS, the Company engages in the marketing of ethanol and biodiesel fuels (the “Business”);
and

     WHEREAS, effective March 31, 2006, CHS Inc. purchased a membership interest in the Company,
and the members of the Company (the “Members”) simultaneously therewith amended and restated the
Company’s operating agreement in the form of that certain Amended and Restated Operating Agreement
dated March 31, 2006 (the “Operating Agreement”); and

     WHEREAS, the Operating Agreement authorizes the Members to elect a manager to operate and
manage the Business and pursuant to Section 6.1 of the Operating Agreement, the Members have so
elected Manager; and

     WHEREAS, this Agreement describes the terms and conditions, including compensation, under
which Manager will act as the manager of the Company.

     NOW, THEREFORE, in consideration of the premises and mutual covenants and agreements herein
contained, and intending to be legally bound, the Company and Manager agree as follows:

ARTICLE I

Engagement

     1.1 Engagement. Subject to the terms and conditions set forth herein and in the
Operating Agreement, the Company hereby designates and appoints Manager, and Manager accepts such
designation and appointment, as the Company’s sole and exclusive agent, to operate and manage the
Business.

ARTICLE II

Management Services

     2.1 General. Manager hereby agrees that it will use its best efforts to operate and
manage the Business. Manager shall, subject to the authority of the Members of the Company under
the Operating Agreement, have full authority and power to perform such services and take such
actions as are necessary to the operation and management of the Business or as are customary to the
operation and management of businesses of the same type as the Business including, without
limitation:

 

 

     (i) to oversee operations of the Business, including budget preparation in accordance
with Section 2.2 hereof, supervision of personnel (as hereinafter defined), strategic
planning, and establishment of employee and Business productivity objectives;

     (ii) to establish policies, direction and strategies on products, pricing and sales
commitments, as applicable;

     (iii) to enter into contracts on behalf of the Company, including but not limited to
marketing agreements, sales agreements and leases, and to otherwise conduct sales
activities;

     (iv) to assist personnel with advertising and promotion of Business, and all customer
relations matters;

     (v) subject to Section 2.2, to purchase in the name of the Company any items required
in connection with the operation of the Business;

     (vi) to select, purchase, lease and arrange on behalf of the Company for the storage
and transportation of ethanol and biodiesel fuels;

     (vii) to inspect, store and control the inventory of ethanol and biodiesel fuels and
other materials of the Business;

     (viii) to supervise maintenance, bulk loading, administration, transfers of ethanol and
biodiesel fuels from storage related to the Business, laboratory services and quality
assurance;

     (ix) to develop, maintain, manage and review the Company’s financial records and
controls and manage the Company’s finances generally;

     (x) To provide corporate services to the Company, including but not limited to legal,
financial, accounting, human resource, administrative and other services;

     (xi) to purchase in the name of the Company property and casualty insurance as provided
in Section 2.4 hereof ;

     (xii) to prepare and file the Company’s tax returns, pay from the Company’s assets any
and all income, property and payroll taxes of the Company and to collect excise taxes and
submit the same to the federal and state governments;

     (xiii) to engage in customer credit control and management activities, including
collection activities;

     (xiv) to bill and supervise the collection for the benefit of the Company of all
payments due from customers and otherwise due with respect to the Business;

2

 

     (xv) to disburse, from the Company’s assets, amounts due and payable as expenses of the
Business, including fees payable to Manager pursuant to Article IV of the Agreement;

     (xvi) to obtain and maintain all licenses and permits required in connection with the
management and the operation of the Business and the undertaking of the Business;

     (xvii) subject to Article III hereof, to borrow, in the Company’s name, money or
otherwise obtain credit and other financial accommodations;

     (xviii) subject to the provisions of Section 2.2, to take any steps necessary to ensure
compliance with any and all statutes, regulations orders or requirements affecting the
Business issued or adopted by any federal, state, county or municipal authority having
jurisdiction over the Company and to execute and file when due all reports and returns
required to be filed by such regulators, orders or requirements;

     (xix) to perform internal audit review and accounting services related to the
foregoing;

     (xx) to prepare and make reports to the Members regarding the foregoing as described in
Section 2.7(c); and

     (xxi) to retain outside expertise, including but not limited to tax advisors,
independent consultants, or contractors when deemed necessary by the Manager.

     2.2 Preparation of Annual Business Plan.

          (a) Not less than thirty (30) days before the beginning of each new fiscal year of the
Company, Manager shall prepare and deliver to the Member Representatives (as defined in the
Operating Agreement) a proposed business plan (the “Proposed Business Plan”), which shall include
an operating budget setting forth an itemized statement of the estimated revenues and expenses for
the following year for the Company, a proposed capital budget setting forth the estimated capital
expenditures of the Company for the following year, a projection of the earnings before taxes for
the following year (after application of the Management Fee, as hereinafter defined). Not more
than twenty (20) days after submission, the Members of the Company shall meet to consider and
approve the Proposed Business Plan. If the Company acting in good faith requests modifications to
the Proposed Business Plan, Manager shall prepare a revision to the Proposed Business Plan
reflecting such modifications. Until the Proposed Business Plan is approved by the Company,
Manager shall operate on the basis of the operating budgets approved for the prior fiscal year,
except for expenses related to personnel, which may be increased based upon existing competitive
conditions, and expenses relating to ethanol and biodiesel fuels, taxes, insurance and utilities,
which may be increased based upon existing competitive conditions. Until the Proposed Business
Plan is approved by the Company, Manager shall have authority only to expend funds on previously
approved projects or on capital items of a recurring nature in an amount consistent with the prior
year’s capital budget. The

3

 

Proposed Business Plan, as approved or modified, as the case may be, shall be referred to
herein as the “Business Plan.” The operating and capital budgets included in the Business Plan
shall constitute the operating and capital budgets under which Manager shall provide services to
the Company for the following year. Manager makes no guaranty or warranty as to the accuracy of
any Business Plan, which the Company acknowledges and agrees is based only on good faith estimates
of the future financial condition and operating performance of the Company.

          (b) With respect to the operating budget, Manager shall use its commercially reasonable
efforts to operate within the amounts budgeted therein and, except as provided in Section 2.2(c)
below, shall not knowingly cause actual operating expenses to exceed the budgeted annual operating
expenses by more than 5% of such budgeted operating expenses without the prior written approval of
the Company. With respect to the capital budget, Manager shall not knowingly cause capital
expenditures to exceed the scope and levels provided for therein without the prior written approval
of the Company.

          (c) Notwithstanding the foregoing provisions, the parties hereby agree that if, in Manager’s
good faith opinion, an emergency threatens the Business, Manager is authorized to act reasonably to
remedy such emergency or mitigate the effects of such emergency without regard to such budgets.
Manager shall promptly notify the Company as promptly as practicable of the existence of any such
emergency or any such action.

     2.3 Employees. Employees of Manager shall perform all of the functions necessary to
manage and operate the day-to-day activities of the Business, and to maintain the Business in
conformity with the best industry practices and applicable law. Manager shall have the authority
to hire, train, supervise and discharge employees as it deems appropriate in order to operate and
manage the Business. The day-to-day activities at the Business include, but are not limited to,
general management, selling and marketing activities of products and by-products, and all of the
operational functions of the Business necessary to market ethanol and biodiesel fuels. All
employees of Manager shall be bound by the same standard of care imposed on Manager by this
Agreement and a breach by any employee of Manager of such standard of care shall be deemed to be a
breach by Manager.

     2.4 Insurance. Manager shall cause to be placed and kept in force, at the Company’s
expense, such insurance as shall be deemed necessary or appropriate by Manager for the Business,
with Manager named as additional insured, including but not limited to commercial general liability
insurance, casualty insurance and worker’s compensation insurance. In connection with the
preparation of the Company’s annual budget, Manager shall report to the Company on the nature and
scope of the Company’s insurance coverage. Manager shall promptly investigate and make a full
written report to the Company and any insurance carrier as to all accidents, claims for damage
relating to operations of the Business and the ownership of its property, and any damage or
destruction to such property and the estimated cost of repair thereof, and shall prepare any and
all reports required by any insurance company in connection therewith. Manager is authorized to
settle or adjust any claim not in excess of an aggregate of $50,000 in any fiscal year, but for
claims greater than such amount, Manager shall act only with the prior written approval of the
Company. Manager shall promptly notify the Company of all settlements or adjustments of claims.

4

 

     2.5 No Guaranty by Manager. The Company acknowledges that Manager does not guaranty
the payment of any obligations due to, or payable by, the Company.

     2.6 Records. Manager shall maintain a system of office records, books and accounts
relating to its management of the Business. Manager is authorized to maintain some of such
records, books and accounts at its offices. All such records, books and accounts shall be
maintained on a basis that is consistent with the Company’s fiscal year. The Company shall have at
all reasonable times access to and the right to make copies of such records, books and accounts and
all vouchers, files and other material pertaining to the Business, all of which Manager agrees to
use its commercially reasonable efforts to keep safe, available and separate from any records not
having to do with the Business.

     2.7 Reports.

          (a) Monthly Reports and Other Reports. Not later than twenty (20) days after the end
of each month, Manager shall provide to the Company income statements, balance sheets and
statements of cash flow, all prepared in accordance with generally accepted accounting principles.
Manager shall promptly prepare and deliver to the Company such other reports as the Company may
reasonably request. Manager shall promptly deliver to the Company any notice Manager receives
regarding any default under any contractual arrangement of the Company, and copies of notices or
any legal process addressed to or intended for the Company or its successors, with respect to any
claim or legal action affecting the Business.

          (b) Annual Report. Within thirty (30) days after the end of each fiscal year of the
Company, Manager shall deliver to the Company sufficient financial information regarding the
Company showing the results of operations of the Company, including income statements, balance
sheets and statements of cash flow, all prepared in accordance with generally accepted accounting
principles.

          (c) Reports on Demand. Within a reasonable time upon written request, Manager shall
promptly prepare and deliver to all Members any report, information, or document relating to the
Business reasonable requested by any Member.

     2.8 Legal Proceedings. Manager shall have the authority to adjust, compromise, settle
or refer to arbitration any claim by or against the Company or any of its assets, and to institute,
preserve and defend any legal action or arbitration proceeding involving the Company, provided that
such claim, legal action or arbitration proceeding arises in the ordinary course of the Business
and involves a claim for monetary damages not in excess of $50,000. For claims greater than
$50,000 or for claims not involving monetary damages, Manager shall act only with the prior written
approval of the Company.

     2.9 Force Majeure. Manager shall not be liable for any failure to perform its
obligations under this Agreement if such failure is due to fire, act of God, strike, lock-out or
other industrial disturbance, war, riot, civil insurrection or other cause beyond the control of
Manager.

5

 

ARTICLE III

Actions Requiring Consent of the Company

     3.1 Notwithstanding anything to the contrary in this Agreement, Manager agrees that it shall
not take any of the following actions without prior written approval of the Company:

          (a) The purchase or other acquisition by the Company of (other than in the ordinary course of
business or as contemplated in the Business Plan) (i) any personal property with a cost or market
value, whichever is greater (or aggregate cost or market value in the case of related items or
transactions) in excess of $50,000, or (ii) any real property;

          (b) The borrowing of funds or the pledge, mortgage or other encumbrance of the Company assets,
in excess of $50,000;

          (c) The assignment, transfer, pledge, settlement, compromise, release or discharge of any
claim held by or debt due the Company, other than in the ordinary course of business;

          (d) The creation of any obligation of the Company as a surety, guarantor or accommodation
party to any obligation;

          (e) The making of any assignment for the benefit of creditors, filing of bankruptcy or similar
action;

          (f) The formation of or participation by the Company in any further limited liability
companies, limited or general partnerships, joint ventures or other relationships;

          (g) the merger or consolidation of the Company with or into any other entity;

          (h) The sale, lease or other disposition by the Company of (other than in the ordinary course
of business) (i) any personal property with a cost or market value, whichever is greater (or
aggregate cost or market value in the case of related items or transaction) in excess of $50,000,
or (ii) any real property; and

          (i) The approval for the Company to enter into any transaction with any Member of the Company
or with any affiliate of a Member other than this Agreement.

6

 

ARTICLE IV

Compensation

     4.1 Management Fee. The Company shall pay to Manager a management fee equal to the
cost to Manager of providing all services hereunder including, but not limited to the cost of
corporate services and all costs of employees and others and a reasonable allocation of
administrative and corporate overhead (the “Management Fee”), with the Management Fee determined
(a) on an annual basis and by mutual agreement of the Company and Manager in connection with the
evaluation and approval of the Proposed Business Plan and (b) for the period from the date of this
Agreement to the approval of the first Proposed Business Plan following the date of this Agreement,
the Manager shall deliver to the Company for review and approval no later than April 30, 2006 a
statement of the Management Fee for such period and such statement shall set forth in reasonable
detail the elements of, and dollar value associated with, the Management Fee for such period. The
Management Fee shall be paid monthly.

     4.2 Expense Reimbursement. The Company shall reimburse Manager for all reasonable
expenditures (whether incurred directly by Manager or indirectly in connection with the provision
of goods and services by third parties) which are attributable to the Company in connection with
Manager’s operation and management of the Business and that are not otherwise costs included in the
Management Fee.

ARTICLE V

Term and Termination

     5.1 Term. The term of this Agreement shall be for the period commencing on the date
of execution of this Agreement and terminating on the earlier of (i) the date of any termination
pursuant to Section 5.2 or Section 5.3 below; or (ii) the dissolution of the Company.

     5.2 Termination by the Company. This Agreement shall, at the option of Company by
sixty (60) days’ written notice to Manager, terminate upon occurrence of any one of the following
events:

          (a) The filing of a petition in bankruptcy or arrangement of reorganization by or against
Manager, or the making of an assignment by Manager for the benefit of creditors or the taking
advantage of any insolvency act by Manager; or

          (b) the violation by Manager of any material provision of this Agreement which is not cured
within thirty (30) days of written notice of such violation, or, if such violation is not
reasonably curable within such thirty (30) day period, the failure by Manager to commence the
curing thereof and to pursue the same to completion;

          (c) upon CHS Inc. ceasing to be a Member of the Company.

     5.3 Termination by Manager. This Agreement shall, at the option of Manager, by sixty
(60) days’ written notice to the Company, terminate upon occurrence of any one of the following
events:

7

 

          (a) the filing of a petition in bankruptcy or an arrangement of reorganization by or against
the Company, or the making an assignment by the Company for the benefit of creditors or the taking
advantage of any insolvency act by the Company; or

          (b) the violation by the Company of any material provision of this Agreement, not caused by
Manager, which is not cured within thirty (30) days of written notice of such violation, or, if
such violation is not reasonably curable within such thirty (30) day period, the failure by the
Company to commence the curing thereof and to pursue the same to completion.

ARTICLE VI

Miscellaneous Provisions

     6.1 Limitation of Liability. Neither party shall be liable to the other party for any
error of judgment or mistake of law or of fact or for any loss incurred by such other party in
connection with matters to which this Agreement relates, except a loss resulting from gross
negligence or willful misconduct on the part of such party.

     6.2 Indemnification. The Company shall indemnify, defend and hold harmless Manager
and its officers, directors, employees, agents and other persons or entities from and against any
and all losses, liabilities, claims, damages, costs and expenses, including reasonable attorneys’
fees and other expenses of litigation (collectively, “Losses”) to which Manager or such other
person may become subject to in connection with the provision by Manager or such other person of
services hereunder, including, without express or implied limitation, any Losses relating to (i)
any claims of, or actions brought by, third parties which relate to the Business and (ii) claims or
actions of or against any employee of the Company which relate to the Business or such employee’s
employment; provided, however, that such indemnity shall not be available in the
event of gross negligence, fraud or willful or intentional misconduct on the part of Manager in its
operation and management of the Business.

     Manager shall indemnify, defend and hold harmless the Company and its officers, directors,
managers, employees, agents and other persons or entities from and against any and all Losses to
which the Company or such other person may become subject to in connection with or as a result of
the provision by Manager or such other person of services hereunder to the extent such Losses
relate to (i) gross negligence, fraud or willful or intentional misconduct by Manager and/or (ii)
claims or actions of or against any employee, customer, officer, director or agent of Manager which
relate to the Business or such employee’s employment by Manager; provided,
however, that such indemnity shall not be available in the event of gross negligence, fraud
or intentional or willful misconduct on the part of Company.

     6.3 Working Capital Financing. Manager shall obtain working capital financing
options to be reviewed by the Company, and Manager may provide working capital financing to the
Company at cost including interest and related fees paid by Manager and subject to a loan agreement
containing a maximum disbursement amount and other covenants, terms and conditions to be mutually
agreed upon.

8

 

     6.4 Relationship of Manager to Company. Manager’s services under the provisions of
this Agreement shall be performed by Manager as an independent contractor, and nothing contained in
this Agreement shall be deemed to render Manager, solely by virtue of this Agreement, a Member,
joint venture partner, associate, or employee of the Company, or create any other relationship
between Manager and the Company, expressed or implied.

     6.5 Assignment. Neither party hereto may assign its rights or its duties hereunder,
without the prior written consent of the other party hereto, except that Manager may assign its
rights and duties hereunder without first obtaining such consent in connection with an assignment
to any entity controlled solely by Manager. Furthermore, Manager may assign its rights or its
duties hereunder, directly or indirectly, with the written consent of the Company, which consent
shall not be unreasonably withheld.

     6.6 Governing Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of Minnesota without giving effect to the conflict of laws provisions
thereof.

     6.7 Notices. Any notice, request, consent, approval, waiver or other communication to
a party hereunder shall be in writing and shall be deemed duly provided to such party if sent to
such party at the address listed below via certified mail, return receipt requested, hand delivery,
overnight courier, or facsimile transmission with confirmation copies sent by one of the other
means listed:

	 	 	 	 	 
	 

	 	If to Manager:
	 	CHS Inc.
	 

	 	 	 	5500 Cenex Drive
	 

	 	 	 	Inver Grove Heights, MN 55077
	 

	 	 	 	Attn: Don Olson
	 

	 	 	 	Facsimile: 866-498-9738
	 
	 	 	 	 
	 

	 	With a copy to:
	 	CHS Inc.
	 

	 	 	 	5500 Cenex Drive
	 

	 	 	 	Inver Grove Heights, MN 55077
	 

	 	 	 	Attn: Lisa A. Zell
	 

	 	 	 	Facsimile: 651-355-4554
	 
	 	 	 	 
	 

	 	If to the Company:
	 	United Bio Energy Fuels, LLC
	 

	 	 	 	5500 Cenex Drive
	 

	 	 	 	Inver Grove Heights, MN 55077
	 

	 	 	 	Attn: Chief Executive Officer
	 

	 	 	 	Facsimile:                     
	 
	 	 	 	 
	 

	 	With a copy to:
	 	US BioEnergy Corporation
	 

	 	 	 	111 Main Avenue, Suite 200
	 

	 	 	 	Brookings, SD 57006
	 

	 	 	 	Attn: Gorden W. Ommen
	 

	 	 	 	Facsimile: 605-696-3153 and

9

 

	 	 	 	 	 
	 

	 	 	 	Lindquist & Vennum P.L.L.P.
	 

	 	 	 	4200 IDS Center
	 

	 	 	 	80 South 8th Street
	 

	 	 	 	Minneapolis, MN 55402-2274
	 

	 	 	 	Attn: April Hamlin
	 

	 	 	 	Facsimile: 612-371-3207

     6.8 Amendments. This Agreement may not be modified or amended except by a written
agreement signed by the parties hereto.

     6.9 Authority. Each party hereto represents that it has full power and authority to
enter into and perform this Agreement, and the person signing this Agreement on behalf of it has
been properly authorized and empowered to enter into this Agreement. Each party further
acknowledges that it has read this Agreement, understands it and agrees to be bound by it.

     6.10 Binding Effect. This Agreement shall inure to the benefit of, and be binding
upon, the Company and Manager and their respective successors and permitted assigns.

     6.11 Waiver. The waiver by any party of a default or a breach of any provision of
this Agreement by the other party shall not operate or be construed as a waiver of any subsequent
default or breach of the same provision or of any other provision of this Agreement.

     6.12 Headings. The headings of the various articles and sections of this Agreement
are inserted merely for the purpose of convenience and do not expressly or by implication limit,
define or extend the specific terms of the section so designated.

     6.13 Entire Agreement. This Agreement constitutes the entire understanding and
agreement between the parties hereto with respect to the matters covered hereby, and all prior
agreements, negotiations and commitments, if any, between the parties with respect to the matters
covered hereby and are superseded by this Agreement.

     6.14 Severability. If any provision (or part thereof) of this Agreement shall be
adjudicated to be invalid or unenforceable in any action or proceeding then such provision (or part
thereof) shall be deemed amended, if possible, or deleted, as the case may be, from the Agreement
in order to render the remainder of the Agreement both valid and enforceable.

     6.15 Counterparts. This Agreement may be executed in two or more counterparts, each
of which shall be an original, with the same effect as if the signatures thereto were upon the same
instrument. This Agreement shall become effective when each party hereto shall have received a
counterpart hereof signed by their other parties hereto.

     6.16 Attorney Fees. In the event a suit or action is filed to enforce this Agreement
or with respect to this Agreement, the prevailing party or parties shall be entitled to
reimbursement by the other party or parties for all costs and expenses incurred in connection with
the suit or action, including without limitation, reasonable attorney fees.

10

 

     IN WITNESS WHEREOF, the parties hereto have executed and delivered this Management Agreement
as of the date first above written.

	 	 	 	 	 
	CHS INC.	 	 
	 
	 	 	 	 
	By: 

Name:

	 	/s/ DONALD W. OLSON
 

	 	 
	Title:
	 	 	 	 
	 
	 	 	 	 
	UNITED BIO ENERGY, LLC	 	 
	 
	 	 	 	 
	By:

	 	/s/ BRIAN D. THOME
 

	 	 
	Name: Brian D. Thome	 	 
	Title: President	 	 

11

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00110-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00110-of-00352.parquet"}]]