Document:

Exhibit 10.2 - Amendment No.1 to Agreement and Plan of Merger

    
      

      

    

    

      AMENDMENT
        NO. 1 to

      AGREEMENT
        AND PLAN OF MERGER

      

      THIS
        IS
        AMENDMENT NO. 1 to the AGREEMENT AND PLAN OF MERGER, dated March 1, 2007,
        by and
        among SFG Financial Corporation, a Delaware corporation ("SFG"), COESfx
        Acquisition Corp., a New York , corporation and wholly-owned subsidiary of
        SFG
        ("Merger Subsidiary"), and COESfx Holdings, Inc., a New York corporation
        ("COESfx") (the “Amendment Agreement”).

      

      

      

      RECITALS

      

      COESfx,
        SFG and Merger Subsidiary have previously entered into an Agreement and Plan
        of
        Merger (the “Merger Agreement”) and wish to change one of the provisions of the
        Merger Agreement. 

      

      NOW
        THEREFORE, in consideration of the mutual covenants and agreements hereinafter
        set forth, the receipt and sufficiency of which are hereby acknowledged,
        the
        Parties, intending to be legally bound, agree as follows:

      

      1.   Section
        1.3(b) of the Merger Agreement shall be amended to read in its entirety as
        follows:

      

      “(b)
        All
        stock options, warrants, convertible debt, other convertible securities or
        other
        rights to acquire COESfx Common Stock at an exercise or conversion, as
        applicable, price of no less than $0.20 per share (collectively, the “COES
        Convertible Securities”) and Non-Exempt COESfx Convertible Securities
        outstanding at the Effective Time, whether or not vested (all of which are
        listed on Schedule 1.3(b) hereto), shall remain outstanding following the
        Effective Time but shall be assumed by SFG. Non-Exempt COESfx Convertible
        Securities and COESfx Convertible Securities shall continue to have, and
        be
        subject to, the same terms and conditions as set forth in the documents
        underlying such Non-Exempt COESfx Convertible Securities and COESfx Convertible
        Securities. Non-Exempt COESfx Convertible Securities and COESfx Convertible
        Securities will be convertible into SFG Shares at the rate of 8.0808554 SFG
        Shares for each share of COESfx Common Stock to which they would otherwise
        be
        entitled, which shares shall be issued from a reserve set aside for such
        purpose
        from the Merger Consideration. COESfx Convertible Securities will be exercisable
        or convertible, as appropriate, as set forth in the underlying documents
        and
        shall be an obligation of SFG without regard to the reserve set aside from
        the
        Merger Consideration. Notwithstanding anything else contained in this Agreement,
        shares of COESfx Series A Participating Convertible Preferred Stock (the
        “Preferred Stock”) shall remain issued and outstanding and registered and owned
        by the holder thereof immediately prior to the Effective Time and shall not
        be
        considered “Non-Exempt COESfx Convertible Securities.”

      

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      2.   Section
        1.4(e) of the Merger Agreement shall be amended to read in its entirety as
        follows:

      

      “(e)
        Immediately prior to the Effective Time, SFG will have no more than 5,513,856
        shares of SFG common stock outstanding. Immediately prior to the Closing,
        SFG
        will have no stocks, options, warrants, convertible debt, other convertible
        securities or other rights to acquire any equity of SFG shares outstanding
        other
        than rights granted to COESfx shareholders and Concord pursuant to this
        Agreement, rights to receive SFG Shares upon conversion of the Preferred
        Stock
        described in Section 6.2(m), the irrevocable rights to Concord in Section
        1.3(c), rights to Concord as described Section 6.2(m) upon completion of
        the
        Financing and warrants issued to Concord and SFG as described in Section
        6.2(n).
        Immediately after the Closing, there will be approximately 367,590,400 common
        shares of SFG Shares issued and outstanding (including shares to be issued
        under
        the Irrevocable Rights) and the Concord rights described in Section 1.3(c)
        exclusive of shares held in a reserve for issuance in connection with the
        exercise or conversion, as appropriate, of the COESfx Convertible Securities,
        the warrants issued pursuant to Section 6.2(n) and the Preferred Stock. In
        addition, upon the filing of the Amend COI, additional shares will be issued
        to
        Concord pursuant to Section 6.2(m).”

      

      3.   Section
        1.9 of the Merger Agreement shall be amended to read in its entirety as
        follows:

      

      “1.9
        Amendments to SFG’s Articles of Incorporation. As soon as practicable after the
        Effective Time, SFG shall amend its Articles of Incorporation to (i) change
        its
        name to XLFX Holdings Inc. (ii) increase its authorized capital stock from
        100,000,000 to 500,000,000 common shares; and (iii) approve a 1 for 7.351808
        reverse split of the issued and outstanding SFG shares outstanding immediately
        after the Effective Time (“Reverse Split”). The Articles of Amendment to be
        filed pursuant to this. Section 1.9 shall be substantially in the form of
        Exhibit B attached hereto (the “Amended COI”).”

      

      4.   Section
        3.6 of the Merger Agreement shall be amended to read in its entirety as
        follows:

      

      “3.6
        Best
        Efforts to Obtain Shareholder Approval. Each party shall promptly upon execution
        of this Merger Agreement use its best efforts, to the extent required by
        this
        Agreement, to prepare all documents and prepare all filings necessary to
        obtain
        the approval of its respective shareholders of the transactions contemplated
        by
        this Agreement and the approval of the Amended COI. SFG shall promptly AFTER
        THE
        Effective Time prepare and file with the United States Securities and Exchange
        Commission (“SEC”) a preliminary proxy statement with respect to seeking
        approval of the shareholders of SFG of the Amended COI. Each party will as
        soon
        as possible hold a shareholders’ meeting of its respective shareholders to
        approve the transactions and other requirements of each party contemplated
        by
        this Agreement.”

      

      5.   Section
        4.3 of the Merger Agreement shall be amended to read in its entirety as
        follows:

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      “4.3
        Capitalization. The authorized capital stock of COESfx consists of (i)
        100,000,000 shares of common stock, $0.001 par value, of which 43,478,874
        shares
        are issued and outstanding, and (ii) 5,071,816 shares to be issued upon the
        exercise of outstanding warrants and options. No shares of COESfx preferred
        stock have been issued. On or prior to the Closing Date it is anticipated
        that
        2,000 shares of Series A Participating Preferred Stock (“COESfx Preferred
        Stock”) shall be outstanding. All of the issued and outstanding shares of COESfx
        capital stock are duly authorized, validly issued, fully paid, non-assessable
        and free of preemptive rights. At the Effective Time, all of the issued and
        outstanding shares of COESfx Common Stock will be converted into the right
        to
        receive SFG Shares issued or issuable as part of the Merger Consideration.
        Shares of COESfx Preferred Stock shall remain outstanding. There are no voting
        trusts or any other agreements or understandings with respect to the voting
        of
        COESfx's capital stock except as contemplated in this Agreement.”

      

      6.   The
        Initial paragraph of Section 5.3 of the Merger Agreement shall be amended
        to
        read in its entirety as follows:

      

      5.3
        Capitalization. (a) SFG's authorized capital stock consists of 100,000,000
        shares of common stock, of which 5,513.856 shares are issued and outstanding.
        As
        soon as practicable after the Closing, SFG shall amend its Articles of
        Incorporation by the filing of the Amended COI subject to compliance with
        all
        applicable Legal Requirements. Immediately prior to the Effective Time, SFG
        will
        have no more than 5,513,856 shares of SFG common stock outstanding. Immediately
        prior to the Closing, SFG will have no stocks, options, warrants, convertible
        debt, other convertible securities or other rights to acquire any equity
        of SFG
        outstanding, other than rights granted to COESfx shareholders pursuant to
        this
        Agreement, rights to issue common stock upon conversion of the Preferred
        Stock
        described in Section 6.2(m), the irrevocable rights issued to Concord as
        described in Section 1.3(c), rights to Concord as described in Section 6.2(m)
        upon completion of the Financing and warrants issued to Concord and SFG as
        described in Section 6.2(n). Immediately after the Closing, there will be
        approximately 367,590,400 common shares of SFG issued and outstanding (including
        shares to be issued under the Irrevocable Rights, SFG Shares held in reserve
        for
        the exercise of Non-Exempt COES Convertible Securities and the Concord
        irrevocable rights described in Section 1.3(c), exclusive of shares issuable
        in
        connection with the exercise or conversion, as appropriate, of the COES
        Convertible Securities, the warrants issued pursuant to Section 6.2(n), the
        Ppreferred Stock and SFG Shares issuable to Concord pursuant to Section
        6.2(m).

      

      7.   Section
        5.3(c) of the Merger Agreement shall be amended to read in its entirety as
        follows:

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      “(c)
        Except for SFG Shares to be issued upon the Merger and SFG Shares to be issued
        on the filing of the Amended COI to COESfx shareholders, SFG Shares to be
        issued
        upon the exercise of the COESfx Convertible Securities, shares of common
        stock
        to be issued upon conversion of the Preferred Stock issued in the Financing
        described in Section 6.2(m), the irrevocable rights issued to Concord as
        described in Section 1.3(c) and warrants issued to Concord and SFG as described
        in Section 6.2(n), there are no outstanding or authorized options, rights,
        warrants, calls, convertible securities, rights to subscribe, conversion
        rights,
        or other agreements or commitments to which SFG is a party or which are binding
        upon SFG providing for the issuance or transfer by SFG of additional shares
        of
        SFG's capital stock and SFG has not reserved any shares of its capital stock
        for
        issuance, nor are there any outstanding stock option rights, phantom equity
        or
        similar rights, contracts, arrangements or commitments to issue capital stock
        of
        SFG. There are no voting trusts or any other agreements or understandings
        with
        respect to the voting of SFG's capital stock. There are no obligations of
        SFG to
        repurchase, redeem, or otherwise re-acquire any shares of its capital stock
        as
        of the Closing.”

      

      8.   Section
        6.1 (b) of the Merger Agreement shall be amended to read in its entirety
        as
        follows:

      

      

      “(b)
        At
        or prior to the Closing, the Financing shall have been successfully completed
        and COESfx shall receive proceeds from the Financing of no less than $1,800,000
        in net cash free and clear of any Encumbrance. 

      

      

      9.    Section
        6.2 (m) of the Merger Agreement shall be amended to read in its entirety
        as
        follows:

      

      

      “(m)
        The
        New Board will agree in writing that in the event that on or before the Closing
        Date, Concord and/or parties affiliated with them (“Concord Affiliates”) provide
        or arrange for the purchase of $2,000,000 of Preferred Stock of COESfx (on
        terms
        and conditions set forth in the form of Amendment to Certificate of
        Incorporation attached hereto as Exhibit D)(the “Financing”), Concord or parties
        designated by it, immediately after the filing of the Amended COI, will be
        issued post reverse split shares of SFG Common Stock in a number which when
        combined with the number of SFG Shares receivable upon conversion of the
        Preferred Stock equals a total of 14,666,322 and paid a maximum of $200,000
        in
        cash. If any funding is provided after the Termination Date (as defined below),
        the parties will mutually agree on the compensation to be paid to the Concord
        Affiliates. For purposes of this section, the “Termination Date” shall be
        defined as the date which is the earlier of (i) that date which is 60 days
        after
        the Closing or (ii) the closing date of any material non-recurring transaction
        (such as a business combination transaction, merger, acquisition and/or
        reorganization other than the Financing, but specifically excluding any internal
        efforts resulting in sales growth) that materially increases the assets,
        income
        and/or equity value of SFG and/or COESfx.”

      

      All
        other
        terms and conditions of the Merger Agreement remain in full force and effect,
        without addition, deletion or modification.

      

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      IN
        WITNESS WHEREOF, SFG and COESfx have executed, or caused to be executed by
        their
        duly authorized representatives, this Agreement as of March , 2007.

      
         

        
          
            
              

                
                  	
                          SFG
                            FINANCIAL CORPORATION

                        	
                          COESFX
                            HOLDINGS, INC.

                        
	
                          A
                            Delaware corporation

                        	
                          A
                            New York corporation

                        
	 	 
	
                          By:
                            /s/ John A.
                            Dugan                       
                            

                        	
                          By:
                            /s/ Michael
                            Frey                      
                            

                        
	 	 
	
                          Title:
                            Chairman                                  

                        	
                          Title:
                            Chief Executive
                            Officer         
                            

                        

                

                 

                 

              

            

            
              COESFX
                ACQUISITION CORP.

              A
                to be
                Formed New York corporation

               

              By: 
                /s/ Michael
                Frey                         

               

              Title: 
                Chief Executive
                OfficerEXHIBIT 10.44

MLA No. RIA475

MASTER LOAN AGREEMENT

THIS MASTER LOAN AGREEMENT is entered into as of October 27, 2005,
between CoBANK, ACB (“CoBank”) and DAKOTA FUELS, INC., Aberdeen, South Dakota (the “Company”).

BACKGROUND

From time to time CoBank may make loans to the
Company.  In order to reduce the amount
of paperwork associated therewith, CoBank and the Company would like to enter
into a master loan agreement.  For that
reason, and in consideration of CoBank making one or more loans to the Company,
CoBank and the Company agree as follows:

SECTION 1.  Supplements.  In
the event the Company desires to borrow from CoBank and CoBank is willing to
lend to the Company, or in the event CoBank and the Company desire to
consolidate any existing loans hereunder, the parties will enter into a
Supplement to this agreement (a “Supplement”). 
Each Supplement will set forth the amount of the loan, the purpose of
the loan, the interest rate or rate options applicable to that loan, the
repayment terms of the loan, and any other terms and conditions applicable to
that particular loan.  Each loan will be
governed by the terms and conditions contained in this agreement and in the
Supplement relating to the loan.

SECTION 2.  Availability.  Loans
will be made available on any day on which CoBank and the Federal Reserve Banks
are open for business upon the telephonic or written request of the
Company.  Requests for loans must be
received no later than 12:00 Noon Company’s local time on the date the loan is
desired.  Loans will be made available by
wire transfer of immediately available funds to such account or accounts as may
be authorized by the Company.  The
Company shall furnish to CoBank a duly completed and executed copy of a CoBank
Delegation and Wire and Electronic Transfer Authorization Form, and CoBank
shall be entitled to rely on (and shall incur no liability to the Company in
acting on) any request or direction furnished in accordance with the terms
thereof.

SECTION 3.  Repayment.  The
Company’s obligation to repay each loan shall be evidenced by the promissory
note set forth in the Supplement relating to that loan or by such replacement
note as CoBank shall require.  CoBank
shall maintain a record of all loans, the interest accrued thereon, and all
payments made with respect thereto, and such record shall, absent proof of
manifest error, be conclusive evidence of the outstanding principal and
interest on the loans.  All payments
shall be made by wire transfer of immediately available funds, by check, or by
automated clearing house or other similar cash handling processes as specified
by separate agreement between the Company and CoBank.  Wire transfers shall be made to ABA
No. 307088754 for advice to and credit of CoBank (or to such other account
as CoBank may direct by notice).  The
Company shall give CoBank telephonic notice no later than 12:00 Noon Company’s
local time of its intent to pay by wire and funds received after 3:00 p.m.
Company’s local time shall be credited on the next business day.  Checks shall be mailed to CoBank, Department
167, Denver, Colorado 80291-0167 (or to such other place as CoBank may direct
by notice).  Credit for payment by check
will not be given until the later of: (a) the day on which CoBank receives
immediately available funds; or (b) the next business day after receipt of
the check.

SECTION 4.  Capitalization.  The
Company agrees to purchase such equity in CoBank as CoBank may from time to
time require in accordance with its Bylaws. 
However, the maximum amount of equity which the Company shall be
obligated to purchase in connection with any loan may not exceed 

the maximum amount permitted by the Bylaws at the time the Supplement
relating to that loan is entered into or such loan is renewed or refinanced by
CoBank.

SECTION 5.  Security.  The
Company’s obligations under this agreement, all Supplements (whenever
executed), and all instruments and documents contemplated hereby or thereby,
shall be secured by a statutory first lien on all equity which the Company may
now own or hereafter acquire in CoBank. 
In addition, the Company agrees to grant to CoBank, by means of such
instruments and documents as CoBank shall require, a first lien (subject only
to exceptions approved in writing by CoBank) on all personal property of the
Company, whether now existing or hereafter acquired.

SECTION 6.  Conditions Precedent.

(A)          Conditions to Initial Supplement. 
CoBank’s obligation to extend credit under the initial Supplement hereto
is subject to the conditions precedent that CoBank receive, in form and content
satisfactory to CoBank, each of the following:

(i)            This Agreement, Etc.  A
duly executed copy of this agreement and all instruments and documents
contemplated hereby.

(ii)           Opinion of Counsel.  An
opinion of counsel to the Company (which counsel must be acceptable to CoBank).

(iii)         Guaranty and Related Documents. 
(a) A guarantee of payment from Heartland Grain Fuels, LP, (“Heartland”);
(b) such certified board resolutions, evidence of incumbency, and other
evidence as CoBank may require that the guarantee and all instruments and
documents executed in connection therewith have been duly authorized and
executed; (c) a Security Agreement granting to CoBank a first lien on all
personal property of the guarantor, whether now existing or hereafter acquired;
(d) a mortgage or deed of trust granting to CoBank a first lien on the
guarantor’s property located in Beadle and Brown Counties, South Dakota; and
(e) such evidence as CoBank may require that it has a duly perfected first
lien on all security for the guarantor’s obligations.

(iv)          Loan Agreements.  The duly executed loan
agreements between the Company and Heartland, and such certified board
resolutions, evidence of incumbency, and other evidence as CoBank may require
that such agreements have been duly authorized and executed.

(B)          Conditions to Each Supplement. 
CoBank’s obligation to extend credit under each Supplement, including
the initial Supplement, is subject to the conditions precedent that CoBank
receive, in form and content satisfactory to CoBank, each of the following:

(i)            Supplement.  A duly executed copy of the
Supplement and all instruments and documents contemplated thereby.

(ii)           Evidence of Authority.  Such
certified board resolutions, certificates of incumbency, and other evidence
that CoBank may require that the Supplement, all instruments and documents
executed in connection therewith, and, in the case of initial Supplement
hereto, this agreement and all instruments and documents executed in connection
herewith, have been duly authorized and executed.

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(iii)         Fees and Other Charges.  All
fees and other charges provided for herein or in the Supplement.

(iv)          Evidence of Perfection, Etc.  Such
evidence as CoBank may require that CoBank has a duly perfected first priority
lien on all security for the Company’s obligations, and that the Company is in
compliance with Section 8(D) hereof.

(C)          Conditions to Each Loan. 
CoBank’s obligation under each Supplement to make any loan to the
Company thereunder is subject to the condition that no “Event of Default” (as
defined in Section 11 hereof) or event which with the giving of notice and/or
the passage of time would become an Event of Default hereunder (a “Potential
Default”), shall have occurred and be continuing.

SECTION 7.  Representations and Warranties.

(A)          This Agreement.  The Company represents and
warrants to CoBank that as of the date of this Agreement:

(i)            Compliance.  The Company and, to the extent
contemplated hereunder, each “Subsidiary” (as defined below), is in compliance
with all of the terms of this agreement, and no Event of Default or Potential
Default exists hereunder.

(ii)           Subsidiaries.  The Company has no “Subsidiary(ies)”
(as defined below).  For purposes hereof,
a “Subsidiary” shall mean a corporation of which shares of stock having ordinary
voting power to elect a majority of the board of directors or other managers of
such corporation are owned, directly or indirectly, by the Company.

(B)          Each Supplement.  The execution by the Company of
each Supplement hereto shall constitute a representation and warranty to CoBank
that:

(i)            Applications.  Each representation and
warranty and all information set forth in any application or other documents
submitted in connection with, or to induce CoBank to enter into, such
Supplement, is correct in all material respects as of the date of the
Supplement.

(ii)           Conflicting Agreements, Etc.  This
agreement, the Supplements, and all security and other instruments and
documents relating hereto and thereto (collectively, at any time, the “Loan
Documents”), do not conflict with, or require the consent of any party to, any
other agreement to which the Company is a party or by which it or its property
may be bound or affected, and do not conflict with any provision of the Company’s
bylaws, articles of incorporation, or other organizational documents.

(iii)         Compliance.  The Company and, to the extent
contemplated hereunder, each Subsidiary, is in compliance with all of the terms
of the Loan Documents (including, without limitation, Section 8(A) of this
agreement on eligibility to borrow from CoBank).

(iv)          Binding Agreement.  The Loan Documents create
legal, valid, and binding obligations of the Company which are enforceable in
accordance with their terms, except to the extent that enforcement may be
limited by applicable bankruptcy, insolvency, or similar laws affecting
creditors’ rights generally.

 3
 

SECTION 8.  Affirmative Covenants. 
Unless otherwise agreed to in writing by CoBank while this agreement is
in effect, the Company agrees to and with respect to Subsections 8(B) through
8(G) hereof, agrees to cause each Subsidiary to:

(A)          Eligibility.  Maintain its status as an
entity eligible to borrow from CoBank.

(B)          Corporate Existence, Licenses, Etc. 
(i) Preserve and keep in full force and effect its existence and good
standing in the jurisdiction of its incorporation or formation;
(ii) qualify and remain qualified to transact business in all
jurisdictions where such qualification is required; and (iii) obtain and
maintain all licenses, certificates, permits, authorizations, approvals, and
the like which are material to the conduct of its business or required by law,
rule, regulation, ordinance, code, order, and the like (collectively, “Laws”).

(C)          Compliance with Laws. 
Comply in all material respects with all applicable Laws, including,
without limitation, all Laws relating to environmental protection and any
patron or member investment program that it may have.  In addition, the Company agrees to cause all
persons occupying or present on any of its properties, and to cause each
Subsidiary to cause all persons occupying or present on any of its properties,
to comply in all material respects with all environmental protection Laws.

(D)          Insurance.  Maintain insurance with
insurance companies or associations acceptable to CoBank in such amounts and
covering such risks as are usually carried by companies engaged in the same or
similar business and similarly situated, and make such increases in the type or
amount of coverage as CoBank may request. 
All such policies insuring any collateral for the Company’s obligations
to CoBank shall have mortgagee or lender loss payable clauses or endorsements
in form and content acceptable to CoBank. 
At CoBank’s request, all policies (or such other proof of compliance
with this Subsection as may be satisfactory to CoBank) shall be delivered to
CoBank.

(E)           Property Maintenance. 
Maintain all of its property that is necessary to or useful in the
proper conduct of its business in good working condition, ordinary wear and
tear excepted.

(F)           Books and Records.  Keep
adequate records and books of account in which complete entries will be made in
accordance with generally accepted accounting principles (“GAAP”) consistently
applied.

(G)          Inspection.  Permit CoBank or its agents,
upon reasonable notice and during normal business hours or at such other times
as the parties may agree, to examine its properties, books, and records, and to
discuss its affairs, finances, and accounts, with its respective officers,
directors, employees, and independent certified public accountants.

(H)          Reports and Notices. 
Furnish to CoBank:

(i)            Annual Financial Statements.  As
soon as available, but in no event more than 90 days after the end of each
fiscal year of the Company occurring during the term hereof, annual consolidated
and consolidating financial statements of the Company and its consolidated
Subsidiaries, if any, prepared in accordance with GAAP consistently
applied.  Such financial statements
shall: (a) be audited by independent certified public accountants selected
by the Company and acceptable to CoBank; (b) be accompanied by a report of
such accountants containing an opinion thereon acceptable to CoBank;
(c) be prepared in reasonable detail and in comparative form; and
(d) include a balance sheet, 

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a statement of income, a statement of retained earnings, a statement of
cash flows, and all notes and schedules relating thereto.

(ii)           Reserved.

(iii)         Notice of Default.  Promptly after becoming aware
thereof, notice of the occurrence of an Event of Default or a Potential
Default.

(iv)          Notice of Non-Environmental Litigation. 
Promptly after the commencement thereof, notice of the commencement of
all actions, suits, or proceedings before any court, arbitrator, or
governmental department, commission, board, bureau, agency, or instrumentality
affecting the Company or any Subsidiary which, if determined adversely to the
Company or any such Subsidiary, could have a material adverse effect on the
financial condition, properties, profits, or operations of the Company or any
such Subsidiary.

(v)            Notice of Environmental Litigation, Etc. 
Promptly after receipt thereof, notice of the receipt of all pleadings,
orders, complaints, indictments, or any other communication alleging a
condition that may require the Company or any Subsidiary to undertake or to
contribute to a cleanup or other response under environmental Laws, or which
seek penalties, damages, injunctive relief, or criminal sanctions related to
alleged violations of such Laws, or which claim personal injury or property
damage to any person as a result of environmental factors or conditions.

(vi)          Bylaws and Articles. 
Promptly after any change in the Company’s bylaws or articles of
incorporation (or like documents), copies of all such changes, certified by the
Company’s Secretary.

(vii)         Annual Financial Statements for Heartland.  As
soon as available, but in no event more than 90 days after the end of each
fiscal year of Heartland occurring during the term hereof, annual consolidated
and consolidating financial statements of Heartland and its consolidated
subsidiaries, if any, prepared in accordance with GAAP consistently
applied.  Such financial statements
shall: (a) be audited by independent certified public accountants selected
by Heartland and acceptable to CoBank; (b) be accompanied by a report of
such accountants containing an opinion thereon acceptable to CoBank;
(c) be prepared in reasonable detail and in comparative form; and
(d) include a balance sheet, a statement of income, a statement of retained
earnings, a statement of cash flows, and all notes and schedules relating
thereto.

(viii)        Interim Financial Statements for Heartland.  As
soon as available, but in no event more than 30 days after the end of each
month (other than the last month in each fiscal year of the Heartland), a
consolidated balance sheet of Heartland and its consolidated Subsidiaries, if
any, as of the end of such month, a consolidated statement of income for
Heartland and its consolidated Subsidiaries, if any, for such period and for
the period year to date, and such other interim statements as CoBank may
specifically request, all prepared in reasonable detail and in comparative form
in accordance with GAAP consistently applied and, if required by written notice
from CoBank, certified by an authorized officer or employee of Heartland
acceptable to CoBank.

(ix)          Other Information.  Such other information
regarding the condition or operations, financial or otherwise, of the Company
or any Subsidiary as CoBank may from time to time reasonably request, including
but not limited to copies of all pleadings, notices, and communications
referred to in Subsections 8(H)(iv) and (v) above.

 5
 

SECTION 9.  Negative Covenants. 
Unless otherwise agreed to in writing by CoBank, while this agreement is
in effect the Company will not:

(A)          Borrowings.  Create, incur, assume, or allow
to exist, directly or indirectly, any indebtedness or liability for borrowed
money (including trade or bankers’ acceptances), letters of credit, or the
deferred purchase price of property or services (including capitalized leases),
except for: (i) debt to CoBank; (ii) accounts payable to trade
creditors incurred in the ordinary course of business; and (iii) current
operating liabilities (other than for borrowed money) incurred in the ordinary
course of business.

(B)          Liens.  Create, incur, assume, or allow
to exist any mortgage, deed of trust, pledge, lien (including the lien of an
attachment, judgment, or execution), security interest, or other encumbrance of
any kind upon any of its property, real or personal (collectively, “Liens”).  The foregoing restrictions shall not apply
to: (i) Liens in favor of CoBank; (ii) Liens for taxes, assessments,
or governmental charges that are not past due; (iii) Liens and deposits
under workers’ compensation, unemployment insurance, and social security Laws;
(iv) Liens and deposits to secure the performance of bids, tenders,
contracts (other than contracts for the payment of money), and like obligations
arising in the ordinary course of business as conducted on the date hereof;
(v) Liens imposed by Law in favor of mechanics, materialmen, warehousemen,
and like persons that secure obligations that are not past due; and
(vi) easements, rights-of-way, restrictions, and other similar
encumbrances which, in the aggregate, do not materially interfere with the
occupation, use, and enjoyment of the property or assets encumbered thereby in
the normal course of its business or materially impair the value of the
property subject thereto.

(C)          Mergers, Acquisitions, Etc.  Merge
or consolidate with any other entity or acquire all or a material part of the
assets of any person or entity, or form or create any new Subsidiary or
affiliate, or commence operations under any other name, organization, or
entity, including any joint venture.

(D)          Transfer of Assets.  Sell,
transfer, lease, or otherwise dispose of any of its assets, except in the
ordinary course of business.

(E)           Loans and Investments.  Make
any loan or advance to any person or entity, or purchase any capital stock,
obligations or other securities of, make any capital contribution to, or
otherwise invest in any person or entity, or form or create any partnerships or
joint ventures except: (i) trade credit extended in the ordinary course of
business; and (ii) loans or advances by the Company to Heartland, provided
that such loans or advances are evidenced by secured promissory notes with
terms and conditions acceptable to CoBank, and that all promissory notes and
security are pledged to CoBank as collateral.

(F)           Contingent Liabilities. 
Assume, guarantee, become liable as a surety, endorse, contingently
agree to purchase, or otherwise be or become liable, directly or indirectly
(including, but not limited to, by means of a maintenance agreement, an asset
or stock purchase agreement, or any other agreement designed to ensure any
creditor against loss), for or on account of the obligation of any person or
entity, except by the endorsement of negotiable instruments for deposit or
collection or similar transactions in the ordinary course of the Company’s
business.

(G)          Change in Business. 
Engage in any business activities or operations substantially different
from or unrelated to the Company’s present business activities or operations.

 6
 

(H)          Dividends, Etc.  Declare or pay any dividends or
retire capital equities or other written notices of allocation or make any
other distribution or allocation of its earnings, surplus or assets to any
holder of stock, allocated equities or other written notices of allocation,
except that the Company may distribute patronage-sourced earnings annually in
the form of cash and qualified written notices of allocation, so long as the
cash portion is the minimum amount required to qualify the distribution as a
deductible patronage distribution for federal income tax purposes and such
written notices constitute equity and not debt.

(I)            Changes to Loan Agreements.  Amend
or otherwise make any changes to the loan agreements between the Company and
Heartland.

SECTION 10.  Reserved.

SECTION 11.  Events of Default.  Each
of the following shall constitute an “Event of Default” under this agreement:

(A)          Payment Default.  The Company should fail to make
any payment to, or to purchase any equity in, CoBank when due.

(B)          Representations and Warranties.  Any
representation or warranty made or deemed made by the Company herein or in any
Supplement, application, agreement, certificate, or other document related to
or furnished in connection with this agreement or any Supplement, shall prove
to have been false or misleading in any material respect on or as of the date
made or deemed made.

(C)          Certain Affirmative Covenants.  The
Company or, to the extent required hereunder, any Subsidiary should fail to
perform or comply with Sections 8(A) through 8(H)(ii), 8(H)(vi), 8(H)(vii),
8(H)(viii) or any reporting covenant set forth in any Supplement hereto, and
such failure continues for 15 days after written notice thereof shall have been
delivered by CoBank to the Company.

(D)          Other Covenants and Agreements.  The
Company or, to the extent required hereunder, any Subsidiary should fail to
perform or comply with any other covenant or agreement contained herein or in
any other Loan Document or shall use the proceeds of any loan for an
unauthorized purpose.

(E)           Cross-Default.  The Company should, after any
applicable grace period, breach or be in default under the terms of any other
agreement between the Company and CoBank.

(F)           Other Indebtedness.  The
Company or any Subsidiary should fail to pay when due any indebtedness to any
other person or entity for borrowed money or any long-term obligation for the
deferred purchase price of property (including any capitalized lease), or any
other event occurs which, under any agreement or instrument relating to such
indebtedness or obligation, has the effect of accelerating or permitting the
acceleration of such indebtedness or obligation, whether or not such
indebtedness or obligation is actually accelerated or the right to accelerate
is conditioned on the giving of notice, the passage of time, or otherwise.

(G)          Judgments.  A judgment, decree, or order
for the payment of money shall be rendered against the Company or any
Subsidiary and either (i) enforcement proceedings shall have been
commenced; (ii) a Lien prohibited under Section 9(B) hereof shall have
been obtained; or (iii) such 

 7
 

judgment, decree, or order shall continue unsatisfied and in effect for
a period of 20 consecutive days without being vacated, discharged, satisfied,
or stayed pending appeal.

(H)          Insolvency, Etc.  The Company or any Subsidiary
shall: (i) become insolvent or shall generally not, or shall be unable to,
or shall admit in writing its inability to, pay its debts as they come due; or
(ii) suspend its business operations or a material part thereof or make an
assignment for the benefit of creditors; or (iii) apply for, consent to,
or acquiesce in the appointment of a trustee, receiver, or other custodian for
it or any of its property or, in the absence of such application, consent, or
acquiescence, a trustee, receiver, or other custodian is so appointed; or
(iv) commence or have commenced against it any proceeding under any
bankruptcy, reorganization, arrangement, readjustment of debt, dissolution, or
liquidation Law of any jurisdiction.

(I)            Material Adverse Change.  Any
material adverse change occurs, as reasonably determined by CoBank, in the
Company’s financial condition, results of operation, or ability to perform its
obligations hereunder or under any instrument or document contemplated hereby.

(J)           Revocation of Guaranty.  Any
guaranty, suretyship, subordination agreement, maintenance agreement, or other
agreement furnished in connection with the Company’s obligations hereunder and
under any Supplement shall, at any time, cease to be in full force and effect,
or shall be revoked or declared null and void, or the validity or
enforceability thereof shall be contested by the guarantor, surety or other
maker thereof (the “Guarantor”), or the Guarantor shall deny any further
liability or obligation thereunder, or shall fail to perform its obligations
thereunder, or any representation or warranty set forth therein shall be
breached, or the Guarantor shall breach or be in default under the terms of any
other agreement with CoBank (including any loan agreement or security
agreement), or a default set forth in Subsections (F) through (H) hereof shall
occur with respect to the Guarantor.

(K)          Cross Default.  Any default by Heartland on its
obligations to the Company or any default by any guarantor on any guaranty of
the Company’s obligations hereunder.

SECTION 12.  Remedies.  Upon
the occurrence and during the continuance of an Event of Default or any
Potential Default, CoBank shall have no obligation to continue to extend credit
to the Company and may discontinue doing so at any time without prior
notice.  For all purposes hereof, the
term “Potential Default” means the occurrence of any event which, with the
passage of time or the giving of notice or both would become an Event of
Default, In addition, upon the occurrence and during the continuance of any
Event of Default, CoBank may, upon notice to the Company, terminate any
commitment and declare the entire unpaid principal balance of the loans, all
accrued interest thereon, and all other amounts payable under this agreement,
all Supplements, and the other Loan Documents to be immediately due and
payable.  Upon such a declaration, the
unpaid principal balance of the loans and all such other amounts shall become
immediately due and payable, without protest, presentment, demand, or further
notice of any kind, all of which are hereby expressly waived by the
Company.  In addition, upon such an
acceleration:

(A)          Enforcement.  CoBank may proceed to protect,
exercise, and enforce such rights and remedies as may be provided by this
agreement, any other Loan Document or under Law.  Each and every one of such rights and
remedies shall be cumulative and may be exercised from time to time, and no
failure on the part of CoBank to exercise, and no delay in exercising, any
right or remedy shall operate as a waiver thereof, and no single or partial
exercise of any right or remedy shall preclude any other or future exercise
thereof, or the exercise of any other right. 
Without limiting the foregoing, CoBank may hold 

 8
 

and/or set off and apply against the Company’s obligations to CoBank
the proceeds of any equity in CoBank, any cash collateral held by CoBank, or
any balances held by CoBank for the Company’s account (whether or not such
balances are then due).

(B)          Application of Funds. 
CoBank may apply all payments received by it to the Company’s
obligations to CoBank in such order and manner as CoBank may elect in its sole
discretion.

In addition to the rights and remedies set forth above: (i) if the
Company fails to purchase any equity in CoBank when required or fails to make
any payment to CoBank when due, then at CoBank’s option in each instance, such
payment shall bear interest from the date due to the date paid at 4% per annum
in excess of the rate(s) of interest that would otherwise be in effect on that
loan; and (ii) after the maturity of any loan (whether as a result of
acceleration or otherwise), the unpaid principal balance of such loan
(including without limitation, principal, interest, fees and expenses) shall
automatically bear interest at 4% per annum in excess of the rate(s) of
interest that would otherwise be in effect on that loan.  All interest provided for herein shall be
payable on demand and shall be calculated on the basis of a year consisting of
360 days.

SECTION 13.  Broken Funding Surcharge. 
Notwithstanding any provision contained in any Supplement giving the
Company the right to repay any loan prior to the date it would otherwise be due
and payable, the Company agrees to provide three Business Days’ prior written
notice for any prepayment of a fixed rate balance and that in the event it
repays any fixed rate balance prior to its scheduled due date or prior to the
last day of the fixed rate period applicable thereto (whether such payment is
made voluntarily, as a result of an acceleration, or otherwise), the Company
will pay to CoBank a surcharge in an amount equal to the greater of:
(i) an amount which would result in CoBank being made whole (on a present
value basis) for the actual or imputed funding losses incurred by CoBank as a
result thereof; or (ii) $300.00. 
Notwithstanding the foregoing, in the event any fixed rate balance is
repaid as a result of the Company refinancing the loan with another lender or
by other means, then in lieu of the foregoing, the Company shall pay to CoBank
a surcharge in an amount sufficient (on a present value basis) to enable CoBank
to maintain the yield it would have earned during the fixed rate period on the
amount repaid.  Such surcharges will be
calculated in accordance with methodology established by CoBank (a copy of
which will be made available to the Company upon request).

SECTION 14.  Complete Agreement, Amendments.  This
agreement, all Supplements, and all other instruments and documents
contemplated hereby and thereby, are intended by the parties to be a complete
and final expression of their agreement. 
No amendment, modification, or waiver of any provision hereof or
thereof, and no consent to any departure by the Company herefrom or therefrom,
shall be effective unless approved by CoBank and contained in a writing signed
by or on behalf of CoBank, and then such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which
given.  In the event this agreement is
amended or restated, each such amendment or restatement shall be applicable to
all Supplements hereto.

SECTION 15.  Other Types of Credit.  From
time to time, CoBank may issue letters of credit or extend other types of
credit to or for the account of the Company. 
In the event the parties desire to do so under the terms of this
agreement, such extensions of credit may be set forth in any Supplement hereto
and this agreement shall be applicable thereto.

 9
 

SECTION 16.  Applicable Law. 
Except to the extent governed by applicable federal law, this agreement and
each Supplement shall be governed by and construed in accordance with the laws
of the State of Colorado, without reference to choice of law doctrine.

SECTION 17.  Notices.  All
notices hereunder shall be in writing and shall be deemed to be duly given upon
delivery if personally delivered or sent by telegram or facsimile transmission,
or three days after mailing if sent by express, certified or registered mail,
to the parties at the following addresses (or such other address for a party as
shall be specified by like notice):

	
  If to CoBank, as follows:

  	
   

  	
  If to the Company, as follows:

  
	
   

  	
   

  	
   

  
	
  For general
  correspondence purposes:

  	
   

  	
  Dakota Fuels, Inc.

  
	
  P.O. Box 5110

  	
   

  	
  38469 133rd Street

  
	
  Denver, Colorado
  80217-5110

  	
   

  	
  Aberdeen, South Dakota 57401-8855

  
	
   

  	
   

  	
   

  
	
  For direct
  delivery purposes, when desired:

  	
   

  	
  Attention: Manager

  
	
  5500 South
  Quebec Street

  	
   

  	
  Fax No.: (605)229-5744

  
	
  Greenwood
  Village, Colorado 80111-1914

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Attention:
  Credit Information Services

  	
   

  	
   

  
	
  Fax No.:
  (303)224-6101

  	
   

  	
   

  

 

SECTION 18.  Taxes and Expenses.  To
the extent allowed by law, the Company agrees to pay all reasonable
out-of-pocket costs and expenses (including the fees and expenses of counsel
retained or employed by CoBank) incurred by CoBank and any participants from
CoBank in connection with the origination, administration, collection, and
enforcement of this agreement and the other Loan Documents, including, without
limitation, all costs and expenses incurred in perfecting, maintaining,
determining the priority of, and releasing any security for the Company’s
obligations to CoBank, and any stamp, intangible, transfer, or like tax payable
in connection with this agreement or any other Loan Document.

SECTION 19.  Effectiveness and Severability.  This
agreement shall continue in effect until: (i) all indebtedness and
obligations of the Company under this agreement, all Supplements, and all other
Loan Documents shall have been paid or satisfied; (ii) CoBank has no
commitment to extend credit to or for the account of the Company under any
Supplement; and (iii) either party sends written notice to the other
terminating this agreement.  Any
provision of this agreement or any other Loan Document which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof or thereof.

SECTION 20.  Successors and Assigns.  This
agreement, each Supplement, and the other Loan Documents shall be binding upon
and inure to the benefit of the Company and CoBank and their respective
successors and assigns, except that the Company may not assign or transfer its
rights or obligations under this agreement, any Supplement or any other Loan
Document without the prior written consent of CoBank.

SECTION 21.  Participations, Etc.  From
time to time, CoBank may sell to one or more banks, financial institutions or
other lenders a participation in one or more of the loans or other extensions
of credit made pursuant to this agreement. 
However, no such participation shall relieve CoBank of any commitment
made to the Company under any Supplement hereto.  In connection with the foregoing, 

 10
 

CoBank may disclose information concerning the Company and its
Subsidiaries to any participant or prospective participant, provided that such
participant or prospective participant agrees to keep such information
confidential.  A sale of participation
interest may include certain voting rights of the participants regarding the
loans hereunder (including without limitation the administration, servicing and
enforcement thereof).  CoBank agrees to
give written notification to the Company of any sale of participation
interests.

IN WITNESS WHEREOF, the parties have caused this agreement to be
executed by their duly authorized officers as of the date shown above.

	
  CoBANK, ACB

  	
  DAKOTA FUELS, INC.

  
	
   

  	
   

  
	
  By: /s/ Pat
  Schulz

  	
  By: /s/ Dale L. Locken

  
	
   

  	
   

  
	
  Title: Assistant
  Corporate Secretary

  	
  Title: Chairman

  

 

 

 11

Amendment No. RIA475A

AMENDMENT

TO THE

MASTER LOAN AGREEMENT

THE AMENDMENT is entered into as of November 7, 2006,
between CoBANK, ACB (“CoBank”) and DAKOTA FUELS, INC., Aberdeen, South Dakota (the “Company”).

BACKGROUND

CoBank and the Company are parties to a Master Loan
Agreement dated October 27, 2005 (such agreement, as previously amended, is
hereinafter referred to as the “MLA”). 
CoBank and the Company now desire to amend the MLA.  For that reason, and for valuable
consideration (the receipt and sufficiency of which are hereby acknowledged),
CoBank and the Company agree as follows:

1.             Section 8 of the
MLA shall be amended by adding Subsections (I), (J) and (K) as follows:

SECTION 8.  Affirmative Covenants. 
Unless otherwise agreed to in writing by CoBank while this agreement is
in effect, the Company agrees to, and with respect to Subsections 8(B) through
8(G) hereof, agrees to cause each Subsidiary to:

(I)            Mortgage.  On or before May 1, 2007,
provide to CoBank evidence of the execution by Heartland Grain Fuels, L.P. of
an amended real estate mortgage in favor of CoBank (the “Mortgage”), in form
and content acceptable to CoBank.

(J)           Title Insurance.  Ono or before May 1, 2007,
provide to CoBank an ALTA lender’s form of title insurance in the face amount
of no less than $42,000,000.00 insuring the mortgage referred to above as a
first lien on the property, subject only to the exceptions approved in writing
by CoBank.

(K)          Refinance Plan.  On or before May 1, 2007,
provide to CoBank a refinance plan in form and content acceptable to CoBank.

2.             Except as set forth
in this amendment, the MLA, including all amendments thereto, shall continue in
full force and effect as written.

IN WITNESS WHEREOF, the parties have caused this amendment to be
executed by their duly authorized officers as of the date shown above.

	
  CoBANK, ACB

  	
   

  	
  DAKOTA FUELS, INC.

  
	
   

  	
   

  	
   

  
	
  By: /s/ Pat
  Schulz

  	
   

  	
  By: /s/ Bill Paulsen

  
	
   

  	
   

  	
   

  
	
  Title: Assistant
  Corporate Secretary

  	
   

  	
  Title: Treasurer

  

 

Amendment No. RIA475B

AMENDMENT

TO THE

MASTER LOAN AGREEMENT

THIS AMENDMENT is entered
into as of April 3, 2007, between CoBANK, ACB (“CoBank”)
and DAKOTA FUELS, INC., Aberdeen, South Dakota (the “Company”).

BACKGROUND

CoBank and the Company are parties to a
Master Loan Agreement dated October 27, 2005 (such agreement, as previously
amended, is hereinafter referred to as the “MLA”).  CoBank and the Company now desire to amend
the MLA.  For that reason, and for
valuable consideration (the receipt and sufficiency of which are hereby
acknowledged), CoBank and the Company agree as follows:

1.     Sections 8(J) and (K) of
the MLA are hereby amended and restated to read as follows:

SECTION
8.         Affirmative Covenants.  Unless otherwise agreed to in
writing by CoBank while this agreement is in effect, the Company agrees to, and
with respect to Subsections 8(B) through 8(G) hereof, agrees to cause each
Subsidiary to:

(J)   Title Insurance.  On or before July 1, 2007,
provide to CoBank an ALTA lender’s form of title insurance in the face amount
of no less than $42,000,000.00 insuring the mortgage referred to above as a
first lien on the property, subject only to those exceptions approved in
writing by CoBank.

(K)  Refinance Plan.  On or before July 1, 2007, provide to CoBank
a refinance plan in form and content acceptable to CoBank.

2.     Except as set forth in this
amendment, the MLA, including all amendments thereto, shall continue in full
force and effect as written.

IN WITNESS WHEREOF, the parties
have caused this amendment to be executed by their duly authorized officers as
of the date shown above.

	
   CoBANK, ACB

  	
   

  	
  DAKOTA FUELS, INC.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Tom D. Houser

  	
   

  	
  By:

  	
  /s/ Craig Schaunaman

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
  Vice President

  	
   

  	
  Title:

  	
  Secretary

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