Document:

exv10w6

 

Exhibit 10.6

SECURITY AGREEMENT

     This Security Agreement (“Agreement”), dated as of September 20, 2007, is between ONE EARTH
ENERGY, LLC, an Illinois limited liability company (the “Debtor”), and FIRST NATIONAL BANK OF
OMAHA, a national banking association (the “Secured Party”), as collateral agent for the Banks.

     WHEREAS, the Debtor has entered into a Construction Loan Agreement dated of even date with
this Agreement (as amended, restated and in effect from time to time, the “Loan Agreement”), with
the Secured Party as a Bank and as Agent, and the other Banks a party thereto, pursuant to which
the Banks, subject to the terms and conditions contained therein, are to make loans or otherwise to
extend credit to the Debtor; and

     WHEREAS, it is a condition precedent to the Banks’ extending the Obligations to the Debtor
under the Loan Agreement that the Debtor execute and deliver to the Secured Party, as collateral
agent for the Banks, a security agreement in substantially the form hereof; and

     WHEREAS, the Debtor wishes to grant a security interest in favor of the Secured Party, as
collateral agent for the Banks, as herein provided.

     NOW, THEREFORE, in consideration of the promises contained herein and for other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties
hereto agree as follows:

     1. Definitions. All capitalized terms used herein without definitions shall have the
respective meanings provided therefor in the Loan Agreement. The term “State,” as used herein,
means the State of Nebraska. All terms defined in the Uniform Commercial Code of the State and
used herein shall have the same definitions herein as specified therein. However, if a term is
defined in Article 9 of the Uniform Commercial Code of the State differently than in another
Article of the Uniform Commercial Code of the State, the term has the meaning specified in Article
9. The term “Obligations,” as used herein, means all of the indebtedness, obligations and
liabilities of the Debtor to the Banks under the Loan Agreement and the other Loan Documents, of
every kind, nature or description, individually or collectively, whether direct or indirect, joint
or several, absolute or contingent, primary or secondary, due or to become due, now existing or
hereafter arising, whether provided for under or in respect of the Loan Agreement or otherwise or
under any promissory notes or other instruments or agreements executed and delivered pursuant
thereto or in connection therewith or this Agreement or otherwise and any overdrafts or other
deposit account liabilities of the Debtor to the Secured Party, and the term “Event of Default,” as
used herein, means the failure of the Debtor to pay or perform any of the Obligations as and when
due to be paid or performed under the terms of the Loan Agreement and the other Loan Documents and
shall also have the meaning given to such term in the Loan Agreement or any other Loan Document.

     2. Grant of Security Interest. The Debtor hereby grants to the Secured Party, as
collateral agent for the Banks, to secure the payment and performance in full of all of the

 

 

Obligations, a first priority security interest in and so pledges and assigns to the Secured Party,
as collateral agent for the Banks, in all goods, property and assets of the Debtor, including, but
not limited to the following goods, property, assets and rights of the Debtor, wherever located,
whether now owned or hereafter acquired or arising, and all proceeds and products thereof (all of
the same being hereinafter called the “Collateral”):

     2.1. All personal and fixture property of every kind and nature including, without limitation,
all goods, equipment, inventory, grain, furniture and fixtures, all of every kind and nature
(including any accessions, additions, improvements, attachments and accessories thereto and
products and proceeds thereof, and all operating manuals, service records, maintenance logs and
warranties applicable thereto), and including all inventory, including, but not limited to, all
corn, grain and ethanol inventory, in which the Debtor has an interest in mass or a joint or other
interest or right of any kind.

     2.2. All instruments (including promissory notes, notes receivable and supporting
obligations), documents, negotiable and non-negotiable documents of title, negotiable and
non-negotiable warehouse receipts, bills of lading, transit receipts or other documents of title,
however denominated (collectively, “Warehouse Receipts”), and the goods underlying or relating to
Warehouse Receipts, including, but not limited to, the Debtor’s present and future rights to take
possession and delivery of goods underlying or relating to any Warehouse Receipt.

     2.3. All accounts, all of the Debtor’s rights to goods represented by or securing any
accounts, all proceeds from the disposition or collection of accounts, all of the Debtor’s rights
as an unpaid vendor, including the right to reclaim goods, the right to stop goods in transit and
the right to replevy goods, and all guaranties, letters of credit and other supports to the payment
of accounts, chattel paper (whether tangible or electronic), deposit accounts (whether maintained
with the Secured Party or other financial institutions), certificates of deposit (whether
negotiable or non-negotiable), letter-of-credit rights (whether or not the letter of credit is
evidenced by a writing), supporting obligations, any other contract rights or rights to the payment
of money, insurance claims and proceeds, trademarks, service marks, copyrights, patents and other
intellectual property rights and all of the Debtor’s rights therein or thereto, software, general
intangibles (including all payment intangibles), all payments and rights to payments whether or not
earned by performance including, but not limited to, accounts and payments from the USDA Commodity
Credit Corporation Bioenergy Program and other similar programs, price support payments, subsidy
payments, guaranty payments, payments in kind, deficiency payments, letters of entitlements,
storage payments, emergency assistance, diversion payments, production flexibility contracts,
contract reserve payments, grain insurance fund claim rights, grain insurance fund proceeds and all
similar programs of any and every kind, whether federal, state or local, and any other rights to
payment under or from any preexisting, current or future federal, state or local government
program, and the products and proceeds of all the foregoing.

     2.4. All farm products, including, but not limited to, all poultry and livestock and their
young, together with all products and replacements for such poultry and livestock; all crops,
annual or perennial, and all products of such crops; and all grain, feed, seed, fertilizer,
chemicals, medicines, and other supplies used or produced in the Debtor’s operations or sold as
inventory, and the products and proceeds and rights to payments associated with all or any of the
foregoing.

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     2.5. All books, records, ledger sheets or cards, reports, invoices, purchase orders, customer
lists, mailing lists, files, correspondence, computer programs, tapes, disks and other documents or
data processing software that at any time relates to any of the foregoing or are otherwise
necessary or helpful in realizing on or collecting on any Collateral.

     2.6. All investment property, securities, securities accounts (including, but not limited to,
all accounts maintained with First National Capital Markets, Inc.) and the securities entitlements,
securities and investment property contained therein, all hedging accounts and all commodity and
securities entitlements, investment property, commodities and other rights associated with such
hedging accounts, and all commodity accounts and all the commodities, securities and investment
property contained therein.

     2.7. All commercial tort claims now existing or hereafter arising. The Secured Party
acknowledges that the attachment of its security interest in any additional commercial tort claim
as original collateral is subject to the Debtor’s compliance with Section 4.7 below.

     3. Authorization to File Financing Statements. The Debtor hereby irrevocably
authorizes the Secured Party at any time and from time to time to file in any filing office in any
Uniform Commercial Code jurisdiction any initial financing statements and amendments thereto that
(a) indicate and describe the Collateral, including, but not limited to, descriptions of the
Collateral as all assets of the Debtor, or words of similar effect, and (b) provide any other
information required by part 5 of Article 9 of the Uniform Commercial Code of the State, or such
other jurisdiction, for the sufficiency or filing office acceptance of any financing statement or
amendment, including (i) whether the Debtor is an organization, the type of organization and any
organizational identification number issued to the Debtor and, (ii) in the case of a financing
statement filed as a fixture filing or indicating Collateral as as-extracted collateral or timber
to be cut, a sufficient description of real property to which the Collateral relates. The Debtor
agrees to furnish any such information to the Secured Party promptly upon the Secured Party’s
request. In addition, the Debtor hereby authorizes the Secured Party to file all effective
financing statements pursuant to 7 U.S.C. Section 1631, and amendments to effective statements,
describing the Collateral in any offices as the Secured Party, in its sole discretion, may
determine. If requested by the Secured Party, the Debtor will provide the Secured Party with a
list of the buyers, commission merchants and selling agents to or through whom the Debtor may sell
farm products or grain and a list of all elevators, warehousemen or others where the Debtor stores
corn. The Debtor authorizes the Secured Party to notify all such buyers, commission merchants,
selling agents, elevators, warehousemen or any other person, of the Secured Party’s security
interest in the Debtor’s farm products, corn or grain unless prohibited by law. The Debtor also
ratifies its authorization for the Secured Party to have filed in any Uniform Commercial Code
jurisdiction any like initial financing statements or amendments thereto if filed prior to the date
hereof.

     4. Other Actions. To further the attachment, perfection and first priority of, and
the ability of the Secured Party to enforce, the Secured Party’s, as collateral agent for the
Banks, security interest in the Collateral, and without limitation on the Debtor’s other
obligations in this Agreement, the Debtor agrees, in each case at the Debtor’s expense, to take the
following actions with respect to the following Collateral:

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     4.1. Promissory Notes, Instruments and Tangible Chattel Paper. If the Debtor
shall at any time hold or acquire any instruments, promissory notes or tangible chattel
paper, the Debtor shall, upon request of the Secured Party, forthwith endorse, assign and
deliver the same to the Secured Party, accompanied by such instruments of transfer or
assignment duly executed in blank as the Secured Party may from time to time specify. The
Debtor will not deliver possession of, endorse or assign any instruments, promissory notes
or tangible chattel paper to any person or entity other than the Secured Party.

     4.2. Deposit Accounts. For each deposit account that the Debtor at any time
opens or maintains, the Debtor shall, at the Secured Party’s request and option, pursuant to
an agreement in form and substance satisfactory to the Secured Party, either (a) cause the
depositary bank to comply at any time with instructions from the Secured Party to such
depositary bank directing the disposition of funds from time to time credited to such
deposit account, without further consent of the Debtor, or (b) arrange for the Secured Party
to become the customer of the depositary bank with respect to the deposit account, with the
Debtor being permitted, only with the consent of the Secured Party, to exercise rights to
withdraw funds from such deposit account. The Secured Party agrees with the Debtor that the
Secured Party shall not give any such instructions or withhold any withdrawal rights from
the Debtor, unless an Event of Default has occurred and is continuing, or would occur, if
effect were given to any withdrawal not otherwise permitted by the Loan Documents. The
provisions of this paragraph shall not apply to (i) any deposit account for which the
Debtor, the depositary bank and the Secured Party have entered into a cash collateral
agreement specially negotiated among the Debtor, the depositary bank and the Secured Party
for the specific purpose set forth therein, (ii) a deposit account for which the Secured
Party is the depositary bank and is in automatic control, and (iii) deposit accounts
specially and exclusively used for payroll, payroll taxes and other employee wage and
benefit payments to or for the benefit of the Debtor’s salaried employees.

     4.3. Investment Property. If the Debtor shall at any time hold or acquire any
certificated securities, the Debtor shall forthwith endorse, assign and deliver the same to
the Secured Party, accompanied by such instruments of transfer or assignment duly executed
in blank as the Secured Party may from time to time specify. If any securities now or
hereafter acquired by the Debtor are uncertificated and are issued to the Debtor or its
nominee directly by the issuer thereof, the Debtor shall immediately notify the Secured
Party thereof and, at the Secured Party’s request and option, pursuant to an agreement in
form and substance satisfactory to the Secured Party, either (a) cause the issuer to agree
to comply with instructions from the Secured Party as to such securities, without further
consent of the Debtor or such nominee, or (b) arrange for the Secured Party to become the
registered owner of the securities. If any commodity interests or securities, whether
certificated or uncertificated, or other investment property now or hereafter acquired by
the Debtor are held by the Debtor or its nominee through a securities intermediary or
commodity intermediary, the Debtor shall immediately notify the Secured Party thereof and,
at the Secured Party’s request and option, pursuant to an agreement in form and substance
satisfactory to the Secured Party, either (i) cause such

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securities intermediary or (as the case may be) commodity intermediary to agree to comply
with entitlement orders or other instructions from the Secured Party to such securities
intermediary as to such securities or other investment property, or (as the case may be) to
apply any value distributed on account of any commodity contract as directed by the Secured
Party to such commodity intermediary, in each case without further consent of the Debtor or
such nominee, or (ii) in the case of financial assets or other investment property held
through a securities intermediary, arrange for the Secured Party to become the entitlement
holder with respect to such investment property, with the Debtor being permitted, only with
the consent of the Secured Party, to exercise rights to withdraw or otherwise deal with such
investment property. The Secured Party agrees with the Debtor that the Secured Party shall
not give any such entitlement orders or instructions or directions to any such issuer,
securities intermediary or commodity intermediary, and shall not withhold its consent to the
exercise of any withdrawal or dealing rights by the Debtor, unless an Event of Default has
occurred and is continuing, or, after giving effect to any such investment and withdrawal
rights not otherwise permitted by the Loan Documents, would occur.

     4.4. Collateral in the Possession of a Bailee. If any Collateral is at any
time in the possession of a bailee, warehouseman or elevator, the Debtor shall promptly
notify the Secured Party thereof and, at the Secured Party’s request and option, shall
promptly obtain an acknowledgement from the bailee, warehouseman or elevator, in form and
substance satisfactory to the Secured Party, that the bailee, warehouseman or elevator holds
such Collateral for the benefit of the Secured Party as collateral agent for the Banks, and
that such bailee, warehouseman or elevator agrees to comply, without further consent of the
Debtor, with instructions from the Secured Party as to such Collateral, including, but not
limited to, the delivery of such Collateral to the Secured Party or as the Secured Party
directs, or the payment of the sale proceeds of such Collateral to the Secured Party, or as
the Secured Party directs. The Secured Party agrees with the Debtor that the Secured Party
shall not give any such instructions unless an Event of Default has occurred and is
continuing or would occur after taking into account any action by the Debtor with respect to
the bailee, warehouseman or elevator.

     4.5. Electronic Chattel Paper and Transferable Records. If the Debtor at any
time holds or acquires an interest in any electronic chattel paper or any “transferable
record,” as that term is defined in Section 201 of the federal Electronic Signatures in
Global and National Commerce Act (as hereafter amended), or in Section 16 of the Uniform
Electronic Transactions Act as in effect in any relevant jurisdiction, the Debtor shall
promptly notify the Secured Party thereof and, at the request and option of the Secured
Party, shall take such action as the Secured Party may reasonably request to vest in the
Secured Party control, under Section 9-105 of the Uniform Commercial Code, of such
electronic chattel paper or control under Section 201 of the federal Electronic Signatures
in Global and National Commerce Act or, as the case may be, Section 16 of the Uniform
Electronic Transactions Act, as so in effect in such jurisdiction, of such transferable
record. The Secured Party agrees with the Debtor that the Secured Party will arrange,
pursuant to procedures satisfactory to the Secured Party and so long as such procedures will
not result in the Secured Party’s loss of control, for the Debtor to make

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alterations to the electronic chattel paper or transferable record permitted under UCC
Section 9-105 or, as the case may be, Section 201 of the federal Electronic Signatures in
Global and National Commerce Act or Section 16 of the Uniform Electronic Transactions Act
for a party in control to make without loss of control, unless an Event of Default has
occurred and is continuing or would occur after taking into account any action by the Debtor
with respect to such electronic chattel paper or transferable record.

     4.6. Letter-of-Credit Rights. If the Debtor is at any time a beneficiary under
a letter of credit, the Debtor shall promptly notify the Secured Party thereof and, at the
request and option of the Secured Party, the Debtor shall, pursuant to an agreement in form
and substance satisfactory to the Secured Party, either (i) arrange for the issuer and any
confirmer or other nominated person of such letter of credit to consent to an assignment to
the Secured Party of the proceeds of the letter of credit, or (ii) arrange for the Secured
Party to become the transferee beneficiary of the letter of credit, with the Secured Party
agreeing, in each case, that the proceeds of the letter to credit are to be applied to the
Obligations in such order and priority as the Secured Party.

     4.7 Commercial Tort Claims. If the Debtor shall at any time hold or acquire a
commercial tort claim, the Debtor shall immediately notify the Secured Party in a writing
signed by the Debtor of the particulars thereof and grant to the Secured Party in such
writing a security interest therein and in the proceeds thereof, all upon the terms of this
Agreement, with such writing to be in form and substance satisfactory to the Secured Party.

     4.8 Other Actions as to Any and All Collateral. The Debtor further agrees, at
the request and option of the Secured Party, to take any and all other actions the Secured
Party may determine to be necessary or useful for the attachment, perfection and first
priority of, and the ability of the Secured Party to enforce, the Secured Party’s (as
collateral agent for the Banks) security interest in any and all of the Collateral,
including, without limitation, (a) executing, delivering and, where appropriate, filing
financing statements and amendments relating thereto under the Uniform Commercial Code, to
the extent, if any, that the Debtor’s signature thereon is required therefor, (b) causing
the Secured Party’s name to be noted as secured party on any certificate of title for a
titled good if such notation is a condition to attachment, perfection or priority of, or
ability of the Secured Party to enforce, the Secured Party’s (as collateral agent for the
Banks) security interest in such Collateral, (c) complying with any provision of any
statute, regulation or treaty of the United States as to any Collateral if compliance with
such provision is a condition to attachment, perfection or priority of, or ability of the
Secured Party to enforce, the Secured Party’s (as collateral agent for the Banks) security
interest in such Collateral, (d) obtaining governmental and other third party waivers,
consents and approvals in form and substance satisfactory to Secured Party, including,
without limitation, any consent of any licensor, lessor or other person obligated on
Collateral, (e) obtaining waivers from mortgagees and landlords in form and substance
satisfactory to the Secured Party and (f) taking all actions under any earlier versions of
the Uniform Commercial Code or under any other law, as reasonably determined by the Secured
Party

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to be applicable in any relevant Uniform Commercial Code or other jurisdiction, including
any foreign jurisdiction.

     4.9. Warehouse Receipts.

     (a) The Debtor has delivered or will deliver to the Secured Party any and all
documents, instruments and writings in any way relating to the Warehouse Receipts or in any
way relating to the property evidenced thereby. As long as this Agreement remains in
effect, the Debtor shall immediately deliver to the Secured Party any and all future
documents, instruments, or other writings applicable or in any way relating to the foregoing
in the Debtor’s possession. In the event that the Debtor is unable to deliver original
Warehouse Receipts, and such other documents, to the Secured Party at the time this
Agreement is executed, as required above, the Debtor agrees to deliver immediately such
Warehouse Receipts to the Secured Party upon issuance of the same.

     (b) The Debtor further agrees that the Secured Party shall have the right at any time,
and from time to time, whether or not one or more Event of Default exist under the Loan
Agreement, to demand that the Debtor immediately deliver to the Secured Party any and all
Warehouse Receipts held in the Debtor’s possession or control for or representing all or any
part of the Collateral that is then or may thereafter be issued in the name of the Debtor.
The Debtor unconditionally agrees to deliver such Warehouse Receipts to the Secured Party on
demand.

     (c) In addition to Warehouse Receipts, the Secured Party may require the Debtor from
time to time, one or more times, to deliver to the Secured Party such lists, descriptions
and designations of any applicable Collateral not represented by Warehouse Receipts as the
Secured Party may require to identify the nature, extent and location of the same.

     (d) The Debtor represents and warrants to the Secured Party that all of the Debtor’s
grain at any time, and from time to time, represented by Warehouse Receipts or included in
any list, description or designation referred to above, will at all times be owned by the
Debtor free and clear of all liens, encumbrances and security interests of any kind
whatsoever, excepting only the security interest of the Secured Party pursuant hereto.

     (e) As long as no Event of Default exists, the Debtor may sell or use in its operations
the property under Warehouse Receipts, as well as the Debtor’s property not represented by
Warehouse Receipts, in carrying on the Debtor’s business in the ordinary course,
substantially in the same manner as now conducted; but a sale in the ordinary course of
business shall not include any transfer or sale in satisfaction, partial or complete, of a
debt owed by the Debtor.

     4.10. Farm Products. After the occurrence of an Event of Default, the Debtor
shall not store, transfer or consign any farm products without the prior written consent of
the Secured Party. The Debtor shall not store, transfer or consign any farm products
without first obtaining a written acknowledgment from any person to whom physical

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possession of any such farm products are delivered (a) of the Secured Party’s security
interest in such farm products, (b) that it holds possession of such farm products for the
Secured Party’s (as collateral agent for the Banks) benefit, (c) that it will not issue
negotiable documents with respect to such farm products and (d) that it agrees to follow the
Secured Party’s instructions as to disposition of farm products upon its receipt of such
instructions. The Debtor will comply with the provisions of all federal, state or local
government programs, agreements and contracts to which the Debtor is a party.

     4.11. Proceeds. The Debtor shall transfer all proceeds of all Collateral into
the Debtor’s main operating account established and maintained by the Debtor with the
Secured Party, or in such other deposit account as required by the Secured Party. The
Debtor shall not grant any other person or entity a security interest, lien or other
encumbrance in or on such deposit account.

     5. Relation to Other Security Documents. The provisions of this Agreement supplement
the provisions of the Loan Agreement, Mortgage and other Loan Documents. Nothing contained in the
Loan Agreement, Mortgage or other Loan Documents shall derogate from any of the rights or remedies
of the Secured Party (as collateral agent for the Banks) hereunder.

     6. Representations and Warranties Concerning Debtor’s Legal Status. The Debtor
represents and warrants to the Secured Party as follows: (a) the Debtor’s exact legal name is that
indicated on the first page and on the signature page hereof, (b) the Debtor is an organization of
the type, and is organized in the jurisdiction set forth on the first page of this Agreement, (c)
the Debtor’s tax identification number is 20-3852246 and the Debtor’s organizational identification
number is                      or if left blank, then the Debtor has none, and (d) each of the Debtor’s
places of business and, if more than one, its chief executive office, as well as the Debtor’s
mailing address, if different, are listed in Schedule A attached to this Agreement and incorporated
herein by reference.

     7. Covenants Concerning Debtor’s Legal Status. The Debtor covenants with the Secured
Party as follows: (a) without the consent of Secured Party, which consent shall not be unreasonably
withheld, the Debtor will not change its name, its place of business or, if more than one, chief
executive office, or its mailing address or organizational identification number if it has one, (b)
if the Debtor does not have an organizational identification number and later obtains one, the
Debtor shall forthwith notify the Secured Party of such organizational identification number, and
(c) the Debtor will not change its type of organization, jurisdiction of organization or other
legal structure.

     8. Representations and Warranties Concerning Collateral, Etc. The Debtor further
represents and warrants to the Secured Party as follows: (a) the Debtor is the owner of the
Collateral, free from any right or claim or any person or any adverse lien, security interest or
other encumbrance, except for the security interest created by this Agreement and other liens
permitted by the Loan Agreement, (b) except as disclosed to the Secured Party, none of the account
debtors or other persons obligated on any of the Collateral is a governmental authority covered by
the Federal Assignment of Claims Act or like federal, state or local statute or rule in

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respect of such Collateral, (c) the Debtor holds no commercial tort claim except as indicated on
Schedule A attached to this Agreement, and (d) the Debtor has at all times operated its business in
material compliance with all applicable provisions of the federal Fair Labor Standards Act, as
amended, and with all applicable provisions of federal, state and local statutes and ordinances
dealing with the control, shipment, storage or disposal of hazardous materials or substances.

     9. Covenants Concerning Collateral, Etc. The Debtor further covenants with the
Secured Party (as collateral agent for the Banks) as follows: (a) the Collateral, to the extent not
delivered to the Secured Party pursuant to Section 4, will be kept at those locations listed on
Schedule A and the Debtor will not move any Collateral to any location not shown in Schedule A
without providing at least thirty (30) days prior written notice to the Secured Party, which notice
shall include the new location, (b) except for the security interest herein granted and liens
permitted by the Loan Agreement, the Debtor shall be the owner of the Collateral free from any
right or claim of any other person, lien, security interest or other encumbrance, and the Debtor
shall defend the same against all claims and demands of all persons at any time claiming the same
or any interests therein adverse to the Secured Party (as collateral agent for the Banks), (c) the
Debtor shall not pledge, mortgage or create, or suffer to exist any right of any person in or claim
by any person to the Collateral, or any security interest, lien or encumbrance in the Collateral in
favor of any person, other than the Secured Party (as collateral agent for the Banks) except for
liens permitted by the Loan Agreement, (d) the Debtor will keep the Collateral in good order and
repair and will not use the same in violation of law or any policy of insurance thereon, (e) the
Debtor will permit the Secured Party, or its designee, to inspect and audit the Collateral at any
reasonable time, wherever located, according to the terms of the Loan Agreement, (f) the Debtor
will pay promptly when due all taxes, assessments, governmental charges and levies upon the
Collateral according to the terms of the Loan Agreement or incurred in connection with the use or
operation of such Collateral or incurred in connection with this Agreement, (g) the Debtor will
continue to operate, its business in compliance with all applicable provisions of the federal Fair
Labor Standards Act, as amended, and with all applicable provisions of federal, state and local
statutes and ordinances dealing with the control, shipment, storage or disposal of hazardous
materials or substances, (h) the Debtor will apply for all subsidies, price support payments,
guaranty payments and other payments of any kind available to the Debtor under any federal, state
or local governmental program relating to the use of corn to produce ethanol, the production of
ethanol, the sale of ethanol and any other activities of the Debtor, will file for all tax credits
and deductions available for any of the foregoing, and will take no action, or omit to take any
action, which would preclude or jeopardize in any manner the Debtor’s ability to participate in any
such payments, programs, tax credits or deductions and (i) the Debtor will not discount, factor,
sell or otherwise dispose, or offer to sell or otherwise dispose, of any of the Collateral,
including, but not limited to, instruments, general intangibles, tangible or electronic chattel
paper, promissory notes and/or accounts, or any interest therein except for (i) sales and leases of
inventory in the ordinary course of business and (ii) so long as no Event of Default has occurred
and is continuing, sales or other dispositions of obsolescent items of equipment consistent with
past practices; provided, however, that permitted sales under this Section are also permitted under
the Loan Agreement. In the event that such sales are not permitted under the Loan Agreement, then
such sales are also not permitted hereunder. In addition, the Debtor will only store grain owned
by the Debtor not evidenced by a Warehouse Receipt in facilities owned by the Debtor at locations
set forth on Schedule A.

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     10. Insurance.

     10.1. Maintenance of Insurance. The Debtor will maintain the insurance
required in the Loan Agreement. All such insurance covering the Collateral shall be payable
to the Secured Party (as collateral agent for the Banks) as loss payee under a “standard” or
“New York” loss payee clause.

     10.2. Insurance Proceeds. The proceeds of any casualty insurance in respect of
any casualty loss of any of the Collateral shall, subject to the rights, if any, of other
parties with an interest having priority in the property covered thereby, (i) so long as no
Event of Default has occurred and is continuing, the damaged Collateral can be economically
repaired or replaced in the sole discretion of the Secured Party and the casualty loss is
$1,000,000 or less and the conditions precedent in the Loan Agreement with respect to the
disbursement of insurance proceeds to the Debtor have been satisfied, be disbursed to the
Debtor for direct application by the Debtor solely to the repair or replacement of the
Debtor’s property so damaged or destroyed, and (ii) in all other circumstances, be held by
the Secured Party (as collateral agent for the Banks) as cash collateral for the
Obligations. Subject to the foregoing, the Secured Party may, at its sole option, disburse
from time to time all or any part of such proceeds so held as cash collateral, upon such
terms and conditions as the Secured Party may reasonably prescribe, for direct application
by the Debtor solely to the repair or replacement of the Debtor’s property so damaged or
destroyed, or the Secured Party may apply all or any part of such proceeds to the
Obligations with the amount of the Loans, as described in the Loan Agreement (if not then
terminated) being reduced by the amount so applied to the Obligations.

     10.3. Continuation of Insurance. All policies of insurance shall provide for
at least 20 days prior written cancellation notice to the Secured Party. In the event of
failure by the Debtor to provide and maintain insurance as herein provided, the Secured
Party may, at its option, provide such insurance and charge the amount thereof to the
Debtor, subject to the terms of the Loan Agreement. The Debtor shall furnish the Secured
Party with certificates of insurance and policies evidencing compliance with the foregoing
insurance provision.

     11. Collateral Protection Expenses; Preservation of Collateral.

     11.1. Expenses Incurred by Secured Party. In the Secured Party’s discretion,
if the Debtor fails to do so, the Secured Party (as collateral agent for the Banks) may
discharge taxes and other encumbrances at any time levied or placed on any of the
Collateral, maintain any of the Collateral, make repairs thereto and pay any necessary
filing fees or insurance premiums. The Debtor agrees to reimburse the Secured Party on
demand for all expenditures so made. The Secured Party shall have no obligation to the
Debtor to make any such expenditures, nor shall the making thereof be construed as the
waiver or cure of any Event of Default.

10

 

     11.2. Secured Party’s Obligations and Duties. Anything herein to the contrary
notwithstanding, the Debtor shall remain obligated and liable under each contract or
agreement comprised in the Collateral to be observed or performed by the Debtor thereunder.
Neither the Secured Party nor any other Bank shall have any obligation or liability under
any such contract or agreement by reason of or arising out of this Agreement or the receipt
by the Secured Party of any payment relating to any of the Collateral, nor shall the Secured
Party or any other Bank be obligated in any manner to perform any of the obligations of the
Debtor under or pursuant to any such contract or agreement, to make inquiry as to the nature
or sufficiency of any payment received by the Secured Party in respect of the Collateral or
as to the sufficiency of any performance by any party under any such contract or agreement,
to present or file any claim, to take any action to enforce any performance or to collect
the payment of any amounts which may have been assigned to the Secured Party or to which the
Secured Party may be entitled at any time or times. The Secured Party’s sole duty with
respect to the custody, safe keeping and physical preservation of the Collateral in its
possession, under Section 9-207 of the Uniform Commercial Code of the State or otherwise,
shall be to deal with such Collateral in the same manner as the Secured Party deals with
similar property for its own account.

     12. Securities and Deposits. The Secured Party may at any time following and during
the continuance of an Event of Default, at its option, transfer to itself or any nominee any
securities constituting Collateral, receive any income thereon and hold such income as additional
Collateral or apply it to the Obligations. Whether or not any Obligations are due, the Secured
Party may following and during the continuance of an Event of Default demand, sue for, collect, or
make any settlement or compromise which it deems desirable with respect to the Collateral.
Regardless of the adequacy of Collateral or any other security for the Obligations, any deposits or
other sums at any time credited by or due from the Secured Party to the Debtor may at any time be
applied to or set off against any of the Obligations.

     13. Notification to Account Debtors and Other Persons Obligated on Collateral. If an
Event of Default shall have occurred and be continuing, the Debtor shall, at the request and option
of the Secured Party, notify account debtors and other persons obligated on any of the Collateral
of the security interest of the Secured Party in any account, chattel paper, general intangible,
instrument or other Collateral and that payment thereof is to be made directly to the Secured Party
or to any financial institution designated by the Secured Party as the Secured Party’s agent
therefor, and the Secured Party may itself, if an Event of Default shall have occurred and be
continuing, without notice to or demand upon the Debtor, so notify account debtors and other
persons obligated on Collateral. After the making of such a request or the giving of any such
notification, the Debtor shall hold any proceeds of collection of accounts, chattel paper, general
intangibles, instruments and other Collateral received by the Debtor as trustee for the Secured
Party (as collateral agent for the Banks) without commingling the same with other funds of the
Debtor and shall turn the same over to the Secured Party in the identical form received, together
with any necessary endorsements or assignments. The Secured Party shall apply the proceeds of
collection of accounts, chattel paper, general intangibles, instruments and other Collateral
received by the Secured Party to the Obligations, such proceeds to be

11

 

immediately credited after final payment in cash or other immediately available funds of the items
giving rise to them.

     14. Power of Attorney.

     14.1. Appointment and Powers of Secured Party. The Debtor hereby irrevocably
constitutes and appoints the Secured Party and any officer or agent thereof, with full power
of substitution, as its true and lawful attorneys-in-fact with full irrevocable power and
authority in the place and stead of the Debtor or in the Secured Party’s own name, for the
purpose of carrying out the terms of this Agreement, to take any and all appropriate action
and to execute any and all documents and instruments that may be necessary or useful to
accomplish the purposes of this Agreement and, without limiting the generality of the
foregoing, hereby gives said attorneys the power and right, on behalf of the Debtor, without
notice to or assent by the Debtor, to do the following:

     (a) upon the occurrence and during the continuance of an Event of Default,
generally to sell, transfer, pledge, make any agreement with respect to or otherwise
dispose of or deal with any of the Collateral in such manner as is consistent with
the Uniform Commercial Code of the State and as fully and completely as though the
Secured Party were the absolute owner thereof for all purposes, and to do, at the
Debtor’s expense, at any time, or from time to time, all acts and things which the
Secured Party deems necessary or useful to protect, preserve or realize upon the
Collateral and the Secured Party’s security interest therein, in order to effect the
intent of this Agreement, all at least as fully and effectively as the Debtor might
do, including, without limitation, (i) the filing and prosecuting of registration
and transfer applications with the appropriate federal, state, local or other
agencies or authorities with respect to trademarks, copyrights and patentable
inventions and processes, (ii) upon written notice to the Debtor, the exercise of
voting rights with respect to voting securities, which rights may be exercised, if
the Secured Party so elects, with a view to causing the liquidation of assets of the
issuer of any such securities, and (iii) the execution, delivery and recording, in
connection with any sale or other disposition of any Collateral, of the
endorsements, assignments or other instruments of conveyance or transfer with
respect to such Collateral; and

     (b) to the extent that the Debtor’s authorization given in Section 3 is not
sufficient, to file such financing statements with respect hereto, with or without
the Debtor’s signature, or a photocopy of this Agreement in substitution for a
financing statement, as the Secured Party may deem appropriate and to execute in the
Debtor’s name such financing statements and amendments thereto and continuation
statements which may require the Debtor’s signature.

     14.2. Ratification by Debtor. To the extent permitted by law, the Debtor
hereby ratifies all that said attorneys shall lawfully do or cause to be done by virtue
hereof. This power of attorney is a power coupled with an interest and is irrevocable.

12

 

     14.3. No Duty on Secured Party. The powers conferred on the Secured Party
hereunder are solely to protect its interests in the Collateral and shall not impose any
duty upon it to exercise any such powers. The Secured Party shall be accountable only for
the amounts that it actually receives as a result of the exercise of such powers, and
neither it nor any of its officers, directors, employees or agents shall be responsible to
the Debtor for any act or failure to act, except for the Secured Party’s own negligence or
willful misconduct.

     15. Rights and Remedies. If an Event of Default shall have occurred and be continuing
beyond any applicable grace or notice and cure period provided for in the Loan Agreement, the
Secured Party, without any other notice to or demand upon the Debtor have in any jurisdiction in
which enforcement hereof is sought, in addition to all other rights and remedies, whether conferred
in the Loan Agreement or at law or in equity, the rights and remedies of a secured party under the
Uniform Commercial Code of the State and any additional rights and remedies which may be provided
to a secured party in any jurisdiction in which Collateral is located, including, without
limitation, the right to take possession of the Collateral, and for that purpose the Secured Party
may, so far as the Debtor can give authority therefor, enter upon any premises on which the
Collateral may be situated and remove the same therefrom. The Secured Party may in its discretion
require the Debtor to assemble all or any part of the Collateral at such location or locations
within the jurisdiction(s) of the Debtor’s principal office(s) or at such other locations as the
Secured Party may reasonably designate. Unless the Collateral is perishable or threatens to
decline speedily in value or is of a type customarily sold on a recognized market, the Secured
Party shall give to the Debtor at least ten (10) days prior written notice of the time and place of
any public sale of Collateral or of the time after which any private sale or any other intended
disposition is to be made. The Debtor hereby acknowledges that ten (10) days prior written notice
of such sale or sales shall be reasonable notice. In addition, the Debtor waives any and all
rights that it may have to a judicial hearing in advance of the enforcement of any of the Secured
Party’s rights and remedies hereunder, including, without limitation, its right following an Event
of Default to take immediate possession of the Collateral and to exercise its rights and remedies
with respect thereto.

     16. Standards for Exercising Rights and Remedies. To the extent that applicable law
imposes duties on the Secured Party to exercise remedies in a commercially reasonable manner, the
Debtor acknowledges and agrees that it is not commercially unreasonable for the Secured Party (a)
to fail to incur expenses reasonably deemed significant by the Secured Party to prepare Collateral
for disposition or otherwise to fail to complete raw material or work in process into finished
goods or other finished products for disposition, (b) to fail to obtain third party consents for
access to Collateral to be disposed of, or to obtain or, if not required by other law, to fail to
obtain governmental or third party consents for the collection or disposition of Collateral to be
collected or disposed of, (c) to fail to exercise collection remedies against account debtors or
other persons obligated on Collateral or to fail to remove liens or encumbrances on or any adverse
claims against Collateral, (d) to exercise collection remedies against account debtors and other
persons obligated on Collateral directly or through the use of collection agencies and other
collection specialists, (e) to advertise dispositions of Collateral through publications or media
of general circulation, whether or not the Collateral is of a specialized nature, (f) to contact
other persons, whether or not in the same business as the Debtor, for expressions of interest in

13

 

acquiring all or any portion of the Collateral, (g) to hire one or more professional auctioneers to
assist in the disposition of Collateral, whether or not the collateral is of a specialized nature,
(h) to dispose of Collateral by utilizing Internet sites that provide for the auction of assets of
the types included in the Collateral or that have the reasonable capability of doing so, or that
match buyers and sellers of assets, (i) to dispose of assets in wholesale rather than retail
markets, (j) to disclaim disposition warranties, (k) to purchase insurance or credit enhancements
to insure the Secured Party against risks of loss, collection or disposition of Collateral or to
provide to the Secured Party a guaranteed return from the collection or disposition of Collateral,
or (l) to the extent deemed appropriate by the Secured Party, to obtain the services of other
brokers, investment bankers, consultants and other professionals to assist the Secured Party in the
collection or disposition of any of the Collateral. The Debtor acknowledges that the purpose of
this Section 16 is to provide non-exhaustive indications of what actions or omissions by the
Secured Party would fulfill the Secured Party’s duties under the Uniform Commercial Code or other
law of the State or any other relevant jurisdiction in the Secured Party’s exercise of remedies
against the Collateral and that other actions or omissions by the Secured Party shall not be deemed
to fail to fulfill such duties solely on account of not being indicated in this Section 16.
Without limitation upon the foregoing, nothing contained in this Section 16 shall be construed to
grant any rights to the Debtor or to impose any duties on the Secured Party that would not have
been granted or imposed by this Agreement or by applicable law in the absence of this Section 16.

     17. No Waiver by Secured Party, Etc. The Secured Party shall not be deemed to have
waived any of its rights or remedies in respect of the Obligations or the Collateral unless such
waiver shall be in writing and signed by the Secured Party. No delay or omission on the part of
the Secured Party in exercising any right or remedy shall operate as a waiver of such right or
remedy or any other right or remedy. A waiver on any one occasion shall not be construed as a bar
to or waiver of any right or remedy on any future occasion. All rights and remedies of the Secured
Party with respect to the Obligations or the Collateral, whether evidenced hereby or by any other
instrument or papers, shall be cumulative and may be exercised singularly, alternatively,
successively or concurrently at such time or at such times as the Secured Party deems expedient.

     18. Suretyship Waivers by Debtor. The Debtor waives demand, notice, protest, notice
of acceptance of this Agreement, notice of loans made, credit extended, Collateral received or
delivered or other action taken in reliance hereon and all other demands and notices of any
description. With respect to both the Obligations and the Collateral, the Debtor assents to any
extension or postponement of the time of payment or any other indulgence, to any substitution,
exchange or release of or failure to perfect any security interest in any Collateral, to the
addition or release of any party or person primarily or secondarily liable, to the acceptance of
partial payment thereon and the settlement, compromising or adjusting of any thereof, all in such
manner and at such time or times as the Secured Party may deem advisable. The Secured Party shall
have no duty as to the collection or protection of the Collateral or any income therefrom, the
preservation of rights against prior parties, or the preservation of any rights pertaining thereto
beyond the safe custody thereof as set forth in Section 11.2. The Debtor further waives any and
all other suretyship defenses.

14

 

     19. Marshalling. The Secured Party shall not be required to marshal any present or
future collateral security (including but not limited to the Collateral) for, or other assurances
of payment of, the Obligations or any of them or to resort to such collateral security or other
assurances of payment in any particular order, and all of its rights and remedies hereunder and in
respect of such collateral security and other assurances of payment shall be cumulative and in
addition to all other rights and remedies, however existing or arising. To the extent that it
lawfully may, the Debtor hereby agrees that it will not invoke any law relating to the marshalling
of collateral which might cause delay in or impede the enforcement of the Secured Party’s rights
and remedies under this Agreement or under any other instrument creating or evidencing any of the
Obligations or under which any of the Obligations is outstanding or by which any of the Obligations
is secured or payment thereof is otherwise assured, and, to the extent that it lawfully may, the
Debtor hereby irrevocably waives the benefits of all such laws.

     20. Proceeds of Dispositions; Expenses. The Debtor shall pay to the Secured Party on
demand any and all expenses, including reasonable attorneys’ fees and disbursements, incurred or
paid by the Secured Party in protecting, preserving or enforcing the Secured Party’s rights and
remedies under or in respect of any of the Obligations or any of the Collateral. After deducting
all of said expenses, the residue of any proceeds of collection or sale or other disposition of the
Collateral shall, to the extent actually received in cash, be applied to the payment of the
Obligations in such order or preference as the Secured Party may determine, proper allowance and
provision being made for any Obligations not then due. Upon the final payment and satisfaction in
full of all of the Obligations and after making any payments required by Sections 9-608(a)(1)(C) or
9-615(a)(3) of the Uniform Commercial Code of the State, any excess shall be returned to the
Debtor. In the absence of final payment and satisfaction in full of all of the Obligations, the
Debtor shall remain liable for any deficiency.

     21. Overdue Amounts. Until paid, all amounts due and payable by the Debtor hereunder
shall be a debt secured by the Collateral and shall bear, whether before or after judgment,
interest at the rate of interest for overdue principal set forth in the Loan Agreement.

     22. Governing Law; Consent to Jurisdiction. THIS AGREEMENT IS INTENDED TO TAKE EFFECT
AS A SEALED INSTRUMENT AND SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEBRASKA. The Debtor agrees that any action or claim arising out of, or any dispute in
connection with, this Agreement, any rights, remedies, obligations, or duties hereunder, or the
performance or enforcement hereof or thereof, may be brought in the courts of any federal court
sitting therein and consents to the non-exclusive jurisdiction of such court and to service of
process in any such suit being made upon the Debtor by mail at the address specified in the notice
provision of the Loan Agreement. The Debtor hereby waives any objection that it may now or
hereafter have to the venue of any such suit or any such court or that such suit is brought in an
inconvenient court.

     23. Waiver of Jury Trial. THE DEBTOR WAIVES ITS RIGHT TO A JURY TRIAL WITH RESPECT TO
ANY ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS AGREEMENT, ANY RIGHTS,
REMEDIES, OBLIGATIONS, OR DUTIES HEREUNDER, OR THE PERFORMANCE OR ENFORCEMENT HEREOF OR THEREOF.
Except as prohibited by law, the Debtor waives any right which it may have to

15

 

claim or recover in any litigation referred to in the preceding sentence any special, exemplary,
punitive or consequential damages or any damages other than, or in addition to, actual damages. The
Debtor (i) certifies that neither the Secured Party nor any representative, agent or attorney of
the Secured Party has represented, expressly or otherwise, that the Secured Party would not, in the
event of litigation, seek to enforce the foregoing waivers or other waivers contained in this
Agreement, and (ii) acknowledges that, in entering into the Loan Agreement and the other Loan
Documents to which the Secured Party is a party, the Secured Party is relying upon, among other
things, the waivers and certifications contained in this Section 23.

     24. Miscellaneous. The headings of each section of this Agreement are for convenience
only and shall not define or limit the provisions thereof. This Agreement and all rights and
obligations hereunder shall be binding upon the Debtor and its respective successors and assigns,
and shall inure to the benefit of the Secured Party and its successors and assigns. If any term of
this Agreement shall be held to be invalid, illegal or unenforceable, the validity of all other
terms hereof shall in no way be affected thereby, and this Agreement shall be construed and be
enforceable as if such invalid, illegal or unenforceable term had not been included herein. The
Debtor acknowledges receipt of a copy of this Agreement.

[SIGNATURE PAGE FOLLOWS]

16

 

     IN WITNESS WHEREOF, intending to be legally bound, the Debtor has caused this Agreement to be
duly executed as of the date first above written.

	 	 	 	 	 	 	 
	 	 	ONE EARTH ENERGY, LLC, an Illinois limited liability company	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Steve Kelly	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	President, [title]	 	 
	 
	 	 	 	 	 	 
	 	 	Accepted:	 	 

	 	 	 	 	 	 	 
	 	 	FIRST NATIONAL BANK OF OMAHA, a national banking
association,	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Fallon Savage	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Fallon Savage, Commercial Loan Officer	 	 

17

 

CERTIFICATE OF ACKNOWLEDGMENT

	 	 	 	 	 	 	 	 	 
	STATE OF ILLINOIS

	 	 	)	 	 	 	 	 
	 

	 	 	)	 	 	ss.	 	 
	COUNTY OF WINNEBAGO

	 	 	)	 	 	 	 	 

     Before me, the undersigned, a Notary Public in and for the county aforesaid, on this
20th day of September, 2007, personally appeared Steven Kelly, to me known personally,
and who, being by me duly sworn, deposes and says that he is the President of One Earth Energy,
LLC, and that said instrument was signed on behalf of said limited liability company by authority
of its Directors, and said officers acknowledged said instrument to be the free act and deed of
said limited liability company.

	 	 	 	 	 
	 	 	 
	 	      Kelly Nicholas
 	 
	 	Notary Public 	 
	 	 	 
	 

My commission expires:

9-23-09

18

 

SCHEDULE A

Locations/Commercial Tort Claims

     I. Debtor Locations:

1306 West 8th Street

Gibson City, Illinois 60936-0546

The Land and Improvements as such terms are defined in the Mortgage

     II. Commercial Tort Claims:

Noneexv10w7

 

Exhibit 10.7

DESIGN/BUILD

CONSTRUCTION CONTRACT

(LUMP SUM COST)

THIS AGREEMENT, made this  21st  day of  December , 2007
, by and between Hogenson Construction Company, a North Dakota corporation, hereinafter called
“Contractor”, and One Earth Energy, of Gibson City, Illinois hereinafter called “Owner”.

WITNESSETH, that the Contractor and the Owner for the considerations hereinafter named agree as
follows:

ARTICLE 1 — SCOPE OF WORK

The Contractor shall furnish all of the materials and perform all of the work as described in the
Specifications entitled “SPECIFICATIONS for AUGER CAST PILE SYSTEM UNDER CORN AND DDG SILOS, C0730”
and shall do everything required by this Agreement and the Specifications.

ARTICLE 2 — TIME OF COMPLETION

The engineering and purchasing required under this Contract shall be commenced immediately.
Construction installation is to be commenced in early January with the use of cold weather expenses
and/or cold weather protection costs, and shall be continuous on a timely basis, as weather allows,
through to substantial completion and final completion of the Scope of Work contracted herein.
Final completion is projected by March 1st.

ARTICLE 3 — THE CONTRACT SUM

The “LUMP SUM” price for this Contract shall be One Million Seventy Two Thousand One Hundred Ninety
Eight and 00/100 Dollars ($1,072,198.00).

ARTICLE 4 — CHANGE ORDERS

	 	 	Change orders may be added to this Contract in written form only. Change order pricing by the
Contractor to the Owner will include the following items:

 

 

	 	1.	 	All Engineering costs (based on published hourly rates and direct expenses).
	 
	 	2.	 	All Material direct costs including Freight.
	 
	 	3.	 	All Labor direct costs including Supervision.
	 
	 	4.	 	All Subcontractor direct costs.
	 
	 	5.	 	All Construction Equipment Rental costs that the Contractor may incur in performing
the change.
	 
	 	6.	 	All Taxes and Insurance costs that the Contractor may incur on direct materials,
labor, subcontracts, or other areas.
	 
	 	7.	 	Any reasonable General Condition costs that the Contractor may incur in performing
the change.
	 
	 	8.	 	The Contractor’s Overhead of 10% on total costs.

	 
	 	9.	 	The Contractor’s Commission of 10% on total costs.

The Contractor and the Owner will agree to the Lump Sum amount for each change order to be added to
this Contact based on the above listed items.

Each change order will be signed in duplicate with one (1) original being for the Owner and one (1)
original being for the Contractor. To not deter construction progress, change orders may be
handled via fax with originals to be mailed in order to expedite their handling.

ARTICLE 5 — DOWN PAYMENT ADVANCES

Upon signing of the Contract, the Owner shall immediately make a $107,220.00 down payment advance
to the Contractor for the initiation of the Contract and the continuation of engineering and
procurement for the Project.

ARTICLE 6 — PROGRESS PAYMENTS

The Owner shall make payments to the Contractor on account of the Contract as follows:

Progress billings by the Contractor to the Owner, shall be submitted on timely intervals of not
less than two (2) weeks and not more than one (1) month. Each billing shall be certified by the
Contractor to be true and accurate, shall be based on the percentage of Project completion as of
the date of billing, and shall include all engineering, material, labor, equipment, construction
equipment rental, and direct Project related expenses, plus overhead expenses and commission. The
Contractor will bill on the 15th of each month throughout the project’s completion.

Payments shall be due upon receipt. Amounts past due over fifteen (15) days shall be subject to
interest at 2% over prime as adjusted monthly by State Bank of West Fargo, West Fargo, North
Dakota.

 

 

ARTICLE 7 — ACCEPTANCE AND FINAL PAYMENT

Upon receipt of written notice from the Contractor that the Project is completed and ready for
final inspection and acceptance, the Owner shall promptly, but not later than three (3) days after
receipt of such notice, make such final inspection and write a final punch list of any and all
outstanding items found to exist that are to be completed under the Contract. The Contractor shall
then promptly correct or complete the final punch list items. When the Owner finds the Project
acceptable and the Contract performed in full, meaning the Owner has no punch list to submit, the
Owner shall promptly, but not later than two (2) days after acceptance, issue a final certificate
for payment, over his own signature, stating that the Project provided for in this Contract has
been completed and is accepted under the terms and conditions thereof, and the entire balance due
to the Contractor is due and payable immediately.

If after the Project is substantially completed, and final completion thereof is materially delayed
by the Owner, the Owner shall, without terminating the Contract, make payment to the Contractor on
the balance due for that portion of the Project fully completed and accepted, and make extra
payment to the Contractor for all reasonable costs as a result of the delay. Such payment shall be
made under the terms and conditions governing final payment, except that it shall not constitute a
waiver of claims.

ARTICLE 8 — NOTICE TO OWNER OF LIEN RIGHTS

THE CONTRACTOR RESERVES ALL LIEN RIGHTS ALLOWED UNDER ILLINOIS STATE LAW.

Any person or company supplying labor or materials for improving the Owner’s property, may file a
lien against the Owner’s property, if that person or company is not paid for their contributions.
This shall be no responsibility of the Contractor, if the Owner, at the time the lien is filed, has
not paid the Contractor in full for all invoices billed and due to the Contractor.

ARTICLE 9 — THE CONTRACT DOCUMENTS

This Agreement, the Specifications and the proposal submitted by Contractor shall form the
Contract. The Specifications and Contract Drawings are as fully a part of the Contract as if
hereto attached or herein repeated.

In the event of any conflict in and between the Contract Documents, the following order of Final
Authority between the Contract Documents shall be followed:

Highest Final Authority — Contract Change Orders

Second Level of Final Authority — Contract Specifications

Third Level of Final Authority — Contract Agreement

Fourth Level of Final Authority — Contractor Proposal

 

 

IN WITNESS WHEREOF, the parties hereto have set their hands the day and year first above written.

	 	 	 	 	 	 	 	 	 
	ACCEPTED BY:
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	/s/ Dunnley Mattke	 	 	 	/s/ Steve Kelly	 	 
	 	 	 	 	 	 	 
	Dunnley Mattke

	 	 	 	Title: General Manager	 	 
	President

	 	 	 	One Earth Energy 12-26-2007	 	 
	Hogenson Construction Company
	 	 	 	 	 	 	 	 

 

 

SPECIFICATIONS

AUGER CAST PILE SYSTEM TO SUPPORT

CORN AND DDGS SILOS

C0730

     1. PROJECT

     1-1 GENERAL

It is understood that where the word “Owner” appears, it shall mean the company known in
these Specifications as ONE EARTH ENERGY, GIBSON CITY, IL being the party of the second
part in the Contract and where the word “Contractor” appears, it shall mean HOGENSON
CONSTRUCTION COMPANY being the party of the first part of the Contract.

The plans and specifications are intended to conform to each other. Errors, omissions, or
transposition of figures and descriptions in either the plans or specifications shall not
relieve the Contractor from any part of this Contract obligation or entitle him to claim
for extra compensation. The Contractor, presumed to be sufficiently experienced and
familiar with Auger Cast Pile Systems, shall observe and correct any discrepancies in the
figures and descriptions on either the plans or specifications.

In all cases, the figures on the scale drawings shall govern in preference to either scale,
dimensions, or figures in the Specifications.

The Contractor shall establish the plot lines and indicate the desired location of the piles.

The Contractor shall set a datum point for heights.

The building will be located as per the Contractor’s plot plan and approved by the Owner
before any construction activity on the site begins. If a surveyor is required to locate
the position of the building, the Contractor will coordinate this survey, but the location
will remain the responsibility of the Owner as if he had contracted the surveyor directly.

     1-2 SCOPE OF WORK

This Specification covers the design, fabrication, furnishing, and construction of a complete auger
cast pile system to support the concrete grain storage and the concrete DDG storage. These
Specifications are not intended to specify all details of the design requirements and construction.
The Project is also subject to all the attachments of this Specification.

The Contractor shall accept full responsibility for his work and for the work of his
subcontractors, including performance qualifications, specifications,

 

 

documentation, fabrication, testing, examination, inspection, cleaning, and compliance with
this Specification.

The Contractor shall provide all labor, materials, equipment, incidentals, tools,
insurance, services, and skills in such quantities as may be necessary to complete the
Project within the intent of these Specifications.

The Contractor has excluded daily inspection by an independent testing laboratory.

The Contractor has not included any sales and / or use taxes. If the tax exemption
certificate cannot be made available, a change order reflecting the costs will be added to
the owners account.

The auger cast pile system will include (361) 16” diameter piles placed at a depth of
62’-0” below grade for the corn silo and (118) 16” diameter piles placed at a depth of
62’-0” for the DDG silo. All engineering and testing will be provided by Contractor as
well as material and labor to dewater and remove the spoils from the piling area.

We have not included any costs associated with concealed conditions. Prices are given
going down to refusal, which is defined as a rate of penetration of 3’-0” per minute or
less. Adding piles because of obstructions will be charged at the unit prices given below.

Add: $17.00 / LF for pile lengths in excess of base bid quantities.

Deduct: $5.00 / LF for pile lengths less than base bid quantities.

Add: $25,000 for each additional static load test required. (One included in base bid)

Add: $950 / HR for lost time caused by natural or man-made obstructions, rock, boulders or
for delay time caused by others.

     1-3 PERMITS

The Owner shall furnish at his own expense, all necessary permits required by city, county,
state, federal, and railroad authorities. The Contractor shall assist the Owner in
obtaining all necessary permits.

     1-4 RESPONSIBILITY

The Contractor shall comply with all local, state, and federal laws and ordinances
governing this class of work, including OSHA.

The Contractor shall confine its operations to the building site and shall not unreasonably
encumber the Owner’s premises or plant operations.

The Contractor shall keep the building site reasonably clean and free from waste material
and rubbish. Upon final completion, the Contractor shall remove all

 

 

temporary buildings; all owned and rented equipment, and all unused materials from the
building site.

     1-5 CONTRACTOR’S INSURANCE AND INDEMNITY

The Contractor shall carry public liability and property damage insurance, same to be paid
for by the Contractor. The Contractor agrees to protect, defend, hold harmless, and
indemnify the Owner, his agents, and employees from all such bodily injury or property
damage claims for which the Owner may be or may be claimed to be liable, and legal fees and
disbursements paid or incurred as a result of work done during the duration of the Project.
The Contractor further agrees to obtain, maintain, and pay for such general liability
insurance coverage as will insure the provision of this paragraph. The Contractor shall
also carry workmen’s compensation insurance, and submit contributions as required by law
for social security benefits and unemployment compensation, same to be paid for by the
Contractor.

     1-6 ACCESS TO THE PROJECT

The Owner or his authorized representative shall have access to the Project at all times
for the inspection of the whole Project or any part thereof. The Owner or his authorized
representative shall conform to all safety regulations required by OSHA and the Contractor.

     1-7 BUILDING INSURANCE

During the construction of the Project, the Owner shall carry builder’s risk insurance
covering the buildings and all materials and equipment used or about to be used in the
construction, which insurance shall be increased or renewed as required to cover the value
of the Project. Coverage shall include all formwork and the Contractor’s equipment. Loss
shall be payable to the Owner and the Contractor as their respective interests shall appear
at the time of the loss.

Railroad protective liability insurance (if required) is an addition to this Contract.

     1-8 ALTERATIONS AND/OR ADDITIONS

If the Owner desires to make any changes or additions, he may do so and in no way
invalidate the Contract, except that sufficient time shall be given to the Contractor in
which to perform the work. For construction related changes or additions, the Contractor
shall be reimbursed for all material, equipment, and labor costs plus 10% for overhead
expenses and 10% commission. Additional work shall be agreed to by both parties with the
scope of work and estimated costs thereof, if desired, documented in writing. One
representative of the Owner, STEVEN KELLY, and one representative of the Contractor, JOE
FINK, shall be authorized to sign additional work authorization forms.

     1-9 CHARACTER OF WORKMEN

The Contractor shall employ only competent and skillful men in the different

 

 

trades to do the work. Men who are unfaithful, incompetent, or disorderly shall be
discharged from the Project and not again employed upon it.

     1-10 EARTHWORK

Excavation from and backfilling to the existing grade in the immediate building area will
be by the Contractor.

Any and all underground obstructions or overhead obstructions shall be moved at the Owner’s
expense (telephone lines, electrical power lines, old foundations, tile, gas lines, water
lines, sewer lines, pump stations, etc.). Specific underground obstructions or overhead
obstructions to be moved by the Contractor are listed in Section 2.

All temporary and finished roadwork, if required, shall remain the responsibility of the
Owner.

     1-11 SOIL DATA

The Owner shall coordinate the soil test. The contents of the soils report will remain the
responsibility of the Owner and all associated costs will be for the Owner’s account. The
Contract will be based on the soil test. The Contractor shall not be responsible for any
deviations, errors, or omissions in the soil test or soils report, which affect the
structure during or after construction. This includes, but is not limited to, high water
table, excessive vertical or differential settlement, and pockets of untested material.
The removal of soils disturbed by rainfall shall be for the Owner’s account.

The Contractor will provide a standard de-watering pump. Any specialized excavating or
de-watering equipment, if required, will be an addition to the Contract (draglines, well
points, shoring, coffer dams, soil solidification, etc.).

     1-12 SURFACE DRAINAGE

The Contractor will be responsible for surface drainage grading within the building
construction lines. The Owner will be responsible for all grading outside the building
construction lines and all associated expenses will be for the Owner’s account. All future
maintenance of grades within the building construction lines or outside shall be the
responsibility of the Owner.

     1-13 SUBCONTRACTS

No subcontract entered into by the Contractor, as part of the Contractor’s direct Scope of
Work, shall under any circumstances relieve the Contractor from his liabilities and
obligations under this Contract.

     1-14 GUARANTEE OF WORK

The Contractor guarantees that the plans and specifications are adequate and proper for the
construction of a auger cast pile system on the Owner’s site. The

 

 

Contractor agrees that for a period of one year from the date of completion or first use by
the Owner, whichever occurs first, it will be responsible for any failure in the structural
components of the auger cast pile system, either partial or complete, caused by faulty
design.

     1-15 GUARANTEE AND WARRANTY WORK

If defects occur which fall within the guarantee or warranty period, the Contractor shall
be notified and shall be given sufficient time to make corrections.

     1-16 ARBITRATION

All claims, disputes, and other matters in question between the Owner and the Contractor
relating to the Contract Documents (except for claims which have been waived by the making
or acceptance of final payment as provided by the Contract) shall be decided by arbitration
in accordance with the Construction Industry Arbitration Rules of the American Arbitration
Association. This agreement to arbitrate and any other agreement or consent to arbitrate
will be specifically enforceable under the prevailing arbitration law of any court having
jurisdiction.

Notice of the demand for arbitration shall be filed in writing with the other party to the
Agreement and with the American Arbitration Association. The demand for arbitration shall
be made within a reasonable time after the claim, dispute, or other matter in question has
arisen, and in no event shall any such demand be made after institution of legal or
equitable proceedings based on such claim, dispute, or other matter in question would be
barred by the applicable statute of limitations.

     1-17 DESIGN RESPONSIBILITY

The Contractor shall be responsible for all design associated with this Contract’s direct
Scope of Work for the Project, including, but not limited to structures and material
handling systems.

     1-18 CHANGES IN CODES

The Contractor is not responsible for costs that may result from code changes occurring
after the Contract date. This specifically includes, but is not limited to, the OSHA
Standards for Grain Facilities. Resulting changes in the Project due to code changes shall
be considered as an alteration and/or addition as noted in these Specifications.

     1-19 STRUCTURAL DESIGN CODES:

	 	1.	 	American Concrete Institute (ACI).

	 	•	 	Building Code Requirements for Reinforced Concrete (ACI 318-91).

	 	2.	 	OSHA Safety and Health Standards.

 

 

     1-20 REINFORCING STEEL

     All reinforcing steel shall be new, deformed ASTM A615 — Grade 60 (Fy-60,000 psi) bars. All
reinforcing steel shall be designed to conform to standards prescribed by the American Concrete
Institute (ACI 318-91). All reinforcing steel shall be placed as shown on the final design
drawings. Reinforcing steel shall be inspected prior to major pours, including but not limited to,
auger cast piles.

     1-21 CONCRETE

The concrete mix design used by the supplier shall be approved by the Contractor.

Cold weather protection shall be used when the mean daily temperature falls below 40
degrees F. Heating of materials, protection temperature, curing methods, etc., shall
comply with ACI Standard, “Recommended Practice of Cold Weather Concreting”, (ACI 306).
Detailed specifications will be made if required. Costs associated with cold weather
protection are included in this Contract.

Hot weather concrete production, delivery, placement, and protection shall comply with the
American Concrete Institute standard, “Recommended Practice of Hot Weather Concreting”,
(ACI 305). Detailed specifications will be made if required. Costs associated with hot
weather production are not included in this Contract.

     1-22 CONCRETE MIXING AND PLACEMENT

Concrete will be mixed and placed by the standards for installation of auger cast pile systems.

     1-23 CONCRETE TESTING

The Contractor will prepare test cylinders in sets of three for each 100 cubic yards in the
mat pour, or day’s pour for subsequent concreting. Slump tests are to be made at the time
the cylinders are cast. Care in preparation, storage, labeling, and subsequent
transportation of the test cylinders is required.

 

 

	 	 	 	 	 	 	 	 	 
	ACCEPTED BY:
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	/s/ Dunnley Mattke	 	 	 	/s/ Steve Kelly	 	 
	 	 	 	 	 	 	 
	Dunnley Mattke

	 	 	 	Title: General Manager	 	 
	President

	 	 	 	One Earth Energy	 	 
	Hogenson Construction Company
	 	 	 	 	 	 	 	 
	 
	 	 	 	Date of Acceptance:  December 26, 2007

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