Document:

Exhibit 10.7

 

SECURITY
AGREEMENT

 

THIS SECURITY AGREEMENT, dated
as of August 10, 2007, between GREAT PLAINS ETHANOL, LLC, a South Dakota
limited liability d/b/a POET Biorefining – Chancellor company (“Borrower”), and AGCOUNTRY FARM
CREDIT SERVICES, FLCA (“Lender”).

 

Recitals:

 

A.            Borrower has entered
into a Master Credit Agreement dated as of the date hereof (as amended,
restated, supplemented or otherwise modified and in effect from time to time,
the “Credit Agreement”) with Lender,
pursuant to which Lender, subject to the terms and conditions contained
therein, is to make loans to Borrower; and

 

B.            It is a condition
precedent to Lender’s making any Loans to Borrower that Borrower execute and
deliver to Lender a security agreement in substantially the form hereof; and

 

C.            Borrower wishes to
grant security interests in favor of Lender as herein provided.

 

Agreement:

 

In consideration of
the promises herein and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, Borrower and Lender agree as
follows:

 

1.             Definitions.
All capitalized terms which are not defined herein have the meanings
provided for in the Credit Agreement. The term “State”
as used herein means the State of North Dakota. All terms defined in Article 9
of the Uniform Commercial Code of the State and used herein shall have the same
meanings as specified therein. The term “Event of Default”
as used herein means any Event of Default described or listed in the Credit
Agreement, including the failure of Borrower to pay or perform any of the
Obligations as and when due to be paid or performed.

 

2.             Grant
of Security Interest. Borrower hereby grants to Lender, to secure the
payment and performance in full of all of the Obligations, a security interest
in, and pledges and assigns to Lender, the following properties, assets and
rights of Borrower, wherever located, whether now owned or hereafter acquired
or arising, and all proceeds (including casualty insurance proceeds) and
products thereof (all of the same being hereinafter called the “Collateral”): all personal and
fixture property of every kind and nature including without limitation all
goods (including inventory, equipment and any accessions thereto), instruments
(including notes), documents, accounts (including health-care-insurance
receivables), chattel paper (whether tangible or electronic), deposit accounts,
letter-of-credit rights (whether or not the letter of credit is evidenced by a
writing), commercial tort claims, securities and all other investment property,
supporting obligations, any other contract rights or rights to the payment of
money (including without limitation all United States Department of Agriculture
payments and

 

 

Commodity Credit Corporation payments such as payments
related to the bioenergy program described at 7 C.F.R. Part 1424), including
without limitation all Material Contracts, insurance claims and proceeds, tort
claims, and all general intangibles including, without limitation, all payment
intangibles, patents, patent applications, trademarks, trademark applications,
trade names, copyrights, copyright applications, software, engineering
drawings, service marks, customer lists, goodwill, and all licenses, permits,
agreements of any kind or nature pursuant to which Borrower possesses, uses or
has authority to possess or use property (whether tangible or intangible) of
others or others possess, use or have authority to possess or use property
(whether tangible or intangible) of Borrower, and all recorded data of any kind
or nature, regardless of the medium of recording including, without limitation,
all software, writings, plans, specifications and schematics. Lender
acknowledges that the attachment of its security interest in any commercial
tort claim as original collateral is subject to Borrower’s compliance with Section 4.07.

 

3.             Authorization
to File Financing Statements. Borrower hereby irrevocably authorizes
Lender at any time and from time to time to file in any Uniform Commercial Code
jurisdiction any initial financing statements and amendments thereto that (a)
indicate the Collateral (i) as all assets of Borrower or words of similar
effect, regardless of whether any particular asset comprised in the Collateral
falls within the scope of Article 9 of the Uniform Commercial Code of the State
or such jurisdiction, or (ii) as being of an equal or lesser scope or with
greater detail, and (b) contain any other information required by Article 9 of
the Uniform Commercial Code of the State or any other state for the sufficiency
or filing office acceptance of any financing statement or amendment, including
(i) whether Borrower is an organization, the type of organization and any
organization identification number issued to Borrower 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. Borrower agrees to furnish any such
information to Lender promptly upon request. Borrower also ratifies its
authorization for Lender 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. Further to insure the attachment, perfection and first
priority of, and the ability of Lender to enforce, Lender’s security interest
in the Collateral, Borrower agrees, in each case at Borrower’s own expense, to
take the following actions with respect to the following Collateral:

 

4.01        Notes
and Tangible Chattel Paper. If Borrower at any time holds or acquires
any notes or tangible chattel paper, Borrower will forthwith endorse, assign
and deliver the same to Lender, accompanied by such instruments of transfer or
assignment duly executed in blank as Lender may from time to time specify.

 

4.02        Deposit
Accounts. For each deposit account that Borrower at any time opens or
maintains, Borrower will, at Lender’s request and option, pursuant to an
agreement in form and substance satisfactory to Lender, either (a) cause the
depositary bank to agree to comply at any time with instructions from Lender to
such depositary bank directing the disposition of funds from time to time
credited to such deposit account, without further consent of Borrower, or (b) arrange
for Lender to become the

 

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customer of the
depositary bank with respect to the deposit account, with Borrower being
permitted, only with the consent of Lender, to exercise rights to withdraw
funds from such deposit account. The provisions of this paragraph do not apply
to any deposit account for which Borrower, the depositary bank and Lender have
entered into a cash collateral agreement specially negotiated among Borrower,
the depositary bank and Lender for the specific purpose set forth therein.

 

4.03        Investment
Property. If Borrower at any time holds or acquires any certificated
securities, Borrower will forthwith endorse, assign and deliver the same to
Lender, accompanied by such instruments of transfer or assignment duly executed
in blank as Lender may from time to time specify. If any securities now or
hereafter acquired by Borrower are uncertificated and are issued to Borrower or
its nominee directly by the issuer thereof, Borrower will immediately notify
Lender thereof and, at Lender’s request and option, pursuant to an agreement in
form and substance satisfactory to Lender, either (a) cause the issuer to agree
to comply with instructions from Lender as to such securities, without further
consent of Borrower or such nominee, or (b) arrange for Lender to become the
registered owner of the securities. If any securities, whether certificated or
uncertificated, or other investment property now or hereafter acquired by
Borrower are held by Borrower or its nominee through a securities intermediary
or commodity intermediary, Borrower will immediately notify Lender thereof and,
at Lender’s request and option, pursuant to an agreement in form and substance
satisfactory to Lender, either (i) cause such securities intermediary or (as
the case may be) commodity intermediary to agree to comply with entitlement
orders or other instructions from Lender 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
Lender to such commodity intermediary, in each case without further consent of
Borrower or such nominee, or (ii) in the case of financial assets or other
investment property held through a securities intermediary, arrange for Lender
to become the entitlement holder with respect to such investment property, with
Borrower being permitted, only with the consent of Lender, to exercise rights
to withdraw or otherwise deal with such investment property. The provisions of
this paragraph shall not apply to any financial assets credited to a securities
account for which Lender is the securities intermediary.

 

4.04        Collateral
in the Possession of a Bailee. If any goods are at any time in the
possession of a bailee, Borrower will promptly notify Lender thereof and, if
requested by Lender, will promptly obtain an acknowledgment from the bailee, in
form and substance satisfactory to Lender, that the bailee holds such
Collateral for the benefit of Lender and will act upon the instructions of
Lender, without the further consent of Borrower.

 

4.05        Electronic
Chattel Paper and Transferable Records. If Borrower 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, or in Section 16 of the Uniform
Electronic Transactions Act as in effect in any relevant jurisdiction, Borrower
will promptly notify Lender thereof and, at the request of Lender, will take
such action as Lender may

 

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reasonably request
to vest control in Lender, 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. Lender agrees with Borrower
that Lender will arrange, pursuant to procedures satisfactory to Lender and so
long as such procedures will not result in Lender’s loss of control, for
Borrower to make 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 Borrower with
respect to such electronic chattel paper or transferable record.

 

4.06        Letter-of-Credit
Rights. If Borrower is at any time a beneficiary under a letter of
credit now or hereafter issued in favor of Borrower, Borrower will promptly
notify Lender thereof and, at the request and option of Lender, Borrower will,
pursuant to an agreement in form and substance satisfactory to Lender, either
(i) arrange for the issuer and any confirmer of such letter of credit to
consent to an assignment to Lender of the proceeds of any drawing under the
letter of credit or (ii) arrange for Lender to become the transferee
beneficiary of the letter of credit.

 

4.07        Commercial
Tort Claims. If Borrower at any time holds or acquires a commercial
tort claim, Borrower will immediately notify Lender in a writing signed by
Borrower of the brief details thereof and grant to Lender 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
Lender.

 

4.08        Other
Actions as to any and all Collateral. Borrower further agrees to take
any other action reasonably requested by Lender to insure the attachment,
perfection and first priority of, and the ability of Lender to enforce, Lender’s
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,
(b) causing Lender’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 Lender to enforce, Lender’s 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 Lender to enforce, Lender’s security interest in such Collateral,
(d) obtaining governmental and other third party consents and approvals,
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 Lender and (f) taking all
actions required by any earlier versions of the Uniform Commercial Code or by other
law, as applicable in any relevant Uniform Commercial Code jurisdiction, or by
other law as applicable in any foreign jurisdiction.

 

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5.             Relation
to Other Security Documents. The provisions of this Agreement
supplement the provisions of any real estate mortgage or deed of trust granted
by Borrower to Lender and securing the payment or performance of any of the
Obligations. Nothing contained in any such real estate mortgage or deed of
trust derogates from any of the rights or remedies of Lender hereunder.

 

6.             Representations
and Warranties Concerning Borrower’s Legal Status. Borrower represents
and warrants to Lender as follows: (a) Borrower’s exact legal name is that
indicated on the signature page hereof, (b) Borrower is a limited liability
company organized under the laws of the State of South Dakota, (c) Borrower’s
organizational identification number is DL003422, (d) Borrower’s federal
taxpayer identification number is 46-0459188 and (e) Borrower’s place of
business, chief executive office, as well as mailing address is 27716 – 462nd
Avenue, Chancellor, South Dakota 57015. Borrower
hereby certifies that the Taxpayer Identification Number shown in this Section
6 is correct and that Borrower is not subject to backup withholding either
because it is exempt, has not been notified that it is subject to backup
withholding due to failure of reporting interest or dividends, or the Internal
Revenue Service has notified it that it is no longer subject to backup withholding.
Borrower is a U.S. person (including U.S. resident alien).

 

7.             Covenants
Concerning Borrower’s Legal Status. Borrower covenants with Lender as
follows:  (a) without providing at least
30 days prior written notice to Lender, Borrower 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 Borrower
does not have an organizational identification number and later obtains one, Borrower
will forthwith notify Lender of such organizational identification number, and
(c) Borrower will not change its type of organization, jurisdiction of
organization or other legal structure.

 

8.             Representations
and Warranties Concerning Collateral, Etc. Borrower further represents
and warrants to Lender as follows:  (a)
Borrower is the owner of the Collateral, free from any adverse lien, security
interest or other encumbrance, except for the security interest created by this
Agreement and other liens permitted by the Credit Agreement, (b) to the
extent that any of the Collateral constitutes, or is the proceeds of, “farm
products” as defined in Section 9-102(a)(34) of the Uniform Commercial
Code of the State or any other relevant state, Borrower has taken all required
acts to ensure that Lender’s security interest in such Collateral is first and
prior, (c) none of the account debtors or other persons obligated on any of the
Collateral is a governmental authority subject to the Federal Assignment of
Claims Act or like federal, state or local statute or rule in respect of such
Collateral, (d) Borrower holds no commercial tort claim except as set forth on Schedule
8(d), and (e) Borrower has at all times operated 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.

 

9.             Covenants
Concerning Collateral, Etc. Borrower further covenants with Lender as
follows:  (a) the Collateral, to the
extent not delivered to Lender pursuant to Section 4, will be kept at
the address of Real Estate which is subject to the Mortgage and Borrower will
not remove the Collateral from such locations, without providing at least 30
days prior written notice to Lender, (b) except for the security interest
herein granted and liens permitted by the Credit

 

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Agreement, Borrower will be the owner of the
Collateral free from any lien, security interest or other encumbrance, and
Borrower will defend the same against all claims and demands of all persons at
any time claiming the same or any interests therein adverse to Lender, (c)
Borrower will not pledge, mortgage or create, or suffer to exist a security
interest in the Collateral in favor of any person other than Lender except for
liens permitted by the Credit Agreement, (d) Borrower 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) Borrower will permit Lender, or its designee,
to inspect the Collateral at any reasonable time, wherever located, (f)
Borrower will pay promptly when due all taxes, assessments, governmental
charges and levies upon the Collateral or incurred in connection with the use
or operation of such Collateral or incurred in connection with this Agreement,
(g) Borrower will 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, and (h) Borrower will not sell or otherwise dispose, or offer to
sell or otherwise dispose, of the Collateral or any interest therein except for
(i) sales of inventory and licenses of general intangibles in the ordinary
course of business and (ii) sales or other dispositions of obsolescent items of
equipment in the ordinary course of business consistent with past practices and
permitted by the Credit Agreement.

 

10.          Insurance.

 

10.01      Maintenance
of Insurance. Borrower will maintain with financially sound and
reputable insurers insurance with respect to its properties and business
against such casualties and contingencies as shall be in accordance with
general practices of businesses engaged in similar activities in similar
geographic areas. Such insurance shall be in such minimum amounts that Borrower
will not be deemed a co-insurer under applicable insurance laws, regulations
and policies and otherwise shall be in such amounts, contain such terms, be in
such forms and be for such periods as may be reasonably satisfactory to Lender.
In addition, all such insurance shall be payable to Lender as loss payee under
a standard loss payee clause. Without limiting the foregoing, Borrower will (i)
keep all of its physical property insured with casualty or physical hazard
insurance on an “all risks” basis, with electronic data processing coverage,
with a full replacement cost endorsement and in an amount equal to 100% of the
full replacement cost of such property, (ii) maintain all such workers’
compensation or similar insurance as may be required by law and (iii) maintain,
in amounts and with deductibles equal to those generally maintained by
businesses engaged in similar activities in similar geographic areas, general
public liability insurance against claims of bodily injury, death or property
damage occurring, on, in or about the properties of Borrower; business
interruption insurance; and product liability insurance.

 

10.02      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 a prior interest in the property covered thereby, (i) so
long as no Default or Event of Default has occurred and is continuing and to
the extent that the amount of such proceeds is less than $100,000, be disbursed
to Borrower for direct application by Borrower solely to the repair or
replacement of Borrower’s property so damaged or destroyed and (ii) in all
other circumstances, be held by Lender as cash collateral for the

 

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Obligations. Lender
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 Lender
may reasonably prescribe, for direct application by Borrower solely to the
repair or replacement of Borrower’s property so damaged or destroyed, or Lender
may apply all or any part of such proceeds to the Obligations with the
Commitments (if not then terminated) being reduced by the amount so applied to
the Obligations.

 

10.03      Notice
of Cancellation, etc. All policies of insurance will provide for at
least 30 days prior written cancellation notice to Lender. In the event of
failure by Borrower to provide and maintain insurance as herein provided,
Lender may, at its option, provide such insurance and charge the amount thereof
to Borrower. Borrower will furnish Lender with certificates of insurance and
copies policies evidencing compliance with the foregoing insurance provision.

 

11.          Collateral
Protection Expenses; Preservation of Collateral.

 

11.01      Expenses
Incurred by Lender. In its discretion, Lender may discharge taxes and
other encumbrances at any time levied or placed on any of the Collateral, make
repairs thereto and pay any necessary filing fees or, if the debtor fails to do
so, insurance premiums. Borrower agrees to reimburse Lender on demand for any
and all expenditures so made. Lender has no obligation to Borrower to make any
such expenditures, and the making thereof will not relieve Borrower of any
default.

 

11.02      Lender’s
Obligations and Duties. Anything herein to the contrary
notwithstanding, Borrower will remain liable under each contract or agreement
comprised in the Collateral to be observed or performed by Borrower thereunder.
Lender shall not have any obligation or liability under any such contract or
agreement by reason of or arising out of this Agreement or the receipt by
Lender of any payment relating to any of the Collateral, nor shall Lender be
obligated in any manner to perform any of the obligations of Borrower under or
pursuant to any such contract or agreement, to make inquiry as to the nature or
sufficiency of any payment received by Lender 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 Lender or to which Lender may be entitled at any time or times. Lender’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, is to deal with such Collateral in
the same manner as Lender deals with similar property for its own account.

 

12.          Securities
and Deposits. Lender may at any time 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, Lender may 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

 

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Lender to Borrower may at any time be applied to or
set off against any of the Obligations then due and owing.

 

13.          Notification
to Account Debtors and Other Persons Obligated on Collateral. If a
Default or an Event of Default has occurred and is continuing, Borrower will,
at the request of Lender, notify account debtors and other persons obligated on
any of the Collateral of the security interest of Lender in any account,
chattel paper, general intangible, instrument or other Collateral and that
payment thereof is to be made directly to Lender or to any financial
institution designated by Lender as Lender’s agent therefor, and Lender may
itself, if a Default or an Event of Default has occurred and is continuing
beyond the applicable cure period, if any, without notice to or demand upon
Borrower, so notify account debtors and other persons obligated on Collateral. After
the making of such a request or the giving of any such notification, Borrower
will hold any proceeds of collection of accounts, chattel paper, general
intangibles, instruments and other Collateral received by Borrower as trustee
for Lender without commingling the same with other funds of Borrower and will
turn the same over to Lender in the identical form received, together with any
necessary endorsements or assignments. Lender will apply the proceeds of
collection of accounts, chattel paper, general intangibles, instruments and
other Collateral received by Lender to the Obligations, such proceeds to be
immediately entered after final payment in cash or other immediately available
funds of the items giving rise to them.

 

14.          Power
of Attorney.

 

14.01      Appointment
and Powers of Lender. Borrower hereby irrevocably constitutes and
appoints Lender 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 Borrower or in Lender’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 desirable 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 Borrower, without notice to or
assent by Borrower, to do the following:

 

(a)           upon
the occurrence and during the continuance of an Event of Default beyond the
applicable cure period, if any, generally to sell, transfer, pledge, make any
agreement with respect to or otherwise 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 Lender were the absolute owner thereof for all
purposes, and to do at Borrower’s expense, at any time, or from time to time,
all acts and things which Lender deems necessary to protect, preserve or
realize upon the Collateral and Lender’s security interest therein, in order to
effect the intent of this Agreement, all as fully and effectively as Borrower
might do, including, without limitation, (i) the filing and prosecuting of
registration and transfer applications with the appropriate federal or local
agencies or authorities with respect to trademarks, copyrights and patentable
inventions and processes, (ii) upon written notice to Borrower, the exercise of
voting rights with respect to voting securities, which rights may be exercised,
if Lender so elects, with a view to causing the liquidation in a commercially
reasonable manner of assets of the issuer of any such securities and (iii) the
execution, delivery and recording, in connection with any sale

 

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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 Borrower’s authorization given in Section 3 is not
sufficient, to file such financing statements with respect hereto, with or
without Borrower’s signature, or a photocopy of this Agreement in substitution
for a financing statement, as Lender may deem appropriate and to execute and/or
file in Borrower’s name such financing statements and amendments thereto and
continuation statements which may require Borrower’s signature.

 

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

 

14.03      No
Duty on Lender. The powers conferred on Lender hereunder are solely to
protect its interests in the Collateral and do not impose any duty upon it to
exercise any such powers. Lender will 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
Borrower for any act or failure to act, except for Lender’s own gross
negligence or willful misconduct.

 

15.          Remedies.
If an Event of Default has occurred and continues beyond the applicable
cure period, if any, Lender may, without notice to or demand upon Borrower,
declare this Agreement to be in default, and Lender shall thereafter have in
any jurisdiction in which enforcement hereof is sought, in addition to all
other rights and remedies, the rights and remedies of a secured party under the
Uniform Commercial Code of the State or of any jurisdiction in which Collateral
is located, including, without limitation, the right to take possession of the
Collateral, and for that purpose Lender may, so far as Borrower can give
authority therefor, enter upon any premises on which the Collateral may be
situated and remove the same therefrom. Lender may in its discretion require
Borrower to assemble all or any part of the Collateral at such location or
locations within the jurisdictions of Borrower’s principal office(s) or at such
other locations as Lender 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, Lender will give to Borrower at least
10 Business 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. Borrower hereby acknowledges that 10 Business Days
prior written notice of such sale or sales is reasonable notice. In addition,
Borrower waives any and all rights that it may have to a judicial hearing in
advance of the enforcement of any of Lender’s rights hereunder, including,
without limitation, its right following an Event of Default to take immediate
possession of the Collateral and to exercise its rights with respect thereto.

 

16.          Standards
for Exercising Remedies. To the extent that applicable law imposes
duties on Lender to exercise remedies in a commercially reasonable manner,
Borrower acknowledges and agrees that it is not commercially unreasonable for
Lender (a) to fail to incur expenses reasonably deemed significant by Lender to
prepare Collateral for disposition or otherwise to complete raw material or
work in process into finished goods or other finished

 

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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 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 Borrower, for expressions of interest in 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 Lender against risks of loss, collection or
disposition of Collateral or to provide to Lender a guaranteed return from the
collection or disposition of Collateral, or (l) to the extent deemed
appropriate by Lender, to obtain the services of other brokers, investment
bankers, consultants and other professionals to assist Lender in the collection
or disposition of any of the Collateral. Borrower acknowledges that the purpose
of this Section 16 is to provide non-exhaustive indications of what
actions or omissions by Lender would not be commercially unreasonable in Lender’s
exercise of remedies against the Collateral and that other actions or omissions
by Lender shall not be deemed commercially unreasonable 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 Borrower or to impose any duties on Lender 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 Lender, etc. Lender shall not be deemed to have waived any of
its rights upon or under the Obligations or the Collateral unless such waiver
shall be in writing and signed by Lender. No delay or omission on the part of
Lender in exercising any right shall operate as a waiver of such right or any
other right. A waiver on any one occasion will not be construed as a bar to or
waiver of any right on any future occasion. All rights and remedies of Lender
with respect to the Obligations or the Collateral, whether evidenced hereby or
by any other instrument or papers, will be cumulative and may be exercised
singularly, alternatively, successively or concurrently at such time or at such
times as Lender deems expedient.

 

18.          Suretyship
Waivers by Borrower. Borrower 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, Borrower 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
Lender may deem advisable. Lender will have no duty as to the collection or
protection of the Collateral or any income thereon, nor as to the preservation
of

 

10

 

rights against prior parties, nor as to the
preservation of any rights pertaining thereto beyond the safe custody thereof
as set forth in Section 11.02. Borrower further waives any and all other
suretyship defenses.

 

19.          Marshaling.
Lender will not be required to marshal any present or future collateral
security (including but not limited to this Agreement and 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 hereunder and in respect of such collateral
security and other assurances of payment are cumulative and in addition to all
other rights, however existing or arising. To the extent that it lawfully may,
Borrower 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 Lender’s rights 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, Borrower hereby
irrevocably waives the benefits of all such laws.

 

20.          Proceeds
of Dispositions; Expenses. Borrower will pay to Lender on demand any
and all expenses, including reasonable attorneys’ fees and disbursements,
incurred or paid by Lender in protecting, preserving or enforcing Lender’s
rights 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 of the Obligations or Collateral shall, to the extent actually received in
cash, be applied to the payment of the Obligations in such order or preference
as Lender 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 Borrower, and Borrower shall remain liable for any
deficiency in the payment of the Obligations.

 

21.          Overdue
Amounts. Until paid, all amounts due and payable by Borrower hereunder
are 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 Credit Agreement.

 

22.          Governing
Law; Consent to Jurisdiction. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE. Borrower agrees that any
suit for the enforcement of this Agreement may be brought in the courts of the
State or any federal court sitting therein and consents to the non-exclusive
jurisdiction of such court. Borrower 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 PARTIES WAIVE THEIR RIGHT TO A JURY TRIAL WITH
RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN CONNECTION WITH
THIS AGREEMENT, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THE PERFORMANCE OF ANY
SUCH RIGHTS OR OBLIGATIONS. Except as prohibited by law, Borrower waives any
right which it may have to claim or recover in any litigation referred to in
the preceding sentence any special, exemplary, punitive or

 

11

 

consequential damages or any damages other than, or in
addition to, actual damages. Borrower (i) certifies that neither Lender nor any
representative, agent or attorney of Lender has represented, expressly or
otherwise, that Lender would not, in the event of litigation, seek to enforce
the foregoing waivers and (ii) acknowledges that, in entering into the Credit
Agreement and the other loan documents to which Lender is a party, Lender 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 are binding upon Borrower and its respective
successors and assigns, and will inure to the benefit of Lender and its
successors and assigns. If any term of this Agreement is 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. Borrower acknowledges receipt of a copy of this Agreement.

 

SIGNATURE PAGE FOLLOWS

 

12

 

IN WITNESS WHEREOF, the parties
hereto have caused this Agreement to be duly executed by their respective
authorized officers as of the day and year first above written.

 

	
   

  	
  BORROWER:

  
	
   

  	
   

  
	
   

  	
  GREAT PLAINS ETHANOL,
  LLC

  
	
   

  	
  D/B/A POET BIOREFINING –
  CHANCELLOR

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Darrin Ihnen

  
	
   

  	
  Name:

  	
  Darrin Ihnen

  
	
   

  	
  Title:

  	
  President

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LENDER:

  
	
   

  	
   

  
	
   

  	
  AGCOUNTRY FARM CREDIT
  SERVICES, FLCA

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Randolph L. Aberle

  
	
   

  	
  Name:

  	
  Randolph L. Aberle

  
	
   

  	
  Title:

  	
  Vice President

  
					

 

 

SIGNATURE
PAGE TO SECURITY AGREEMENT

 

 

SCHEDULE
8(d)

 

Tort Claims

 

None

 

1Exhibit
10.16(v)

 

SECOND AMENDMENT TO

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

 

THIS SECOND
AMENDMENT TO AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT (this  “Amendment”) is entered into this 9th day of November, 2007,
but effective as of September 29, 2007, by and among SILICON VALLEY BANK (“Bank”),
MEDECISION, INC., a Pennsylvania corporation (“MEDecision”), and MEDECISION
INVESTMENTS, INC., a Delaware corporation (“MEDecision Investments”; and
together with MEDecision, jointly, severally and collectively, “Borrower”)
whose address is 601 Lee Road, Wayne, Pennsylvania 19087.

 

RECITALS

 

A.                                    Bank
and Borrower have entered into that certain Amended and Restated Loan and
Security Agreement dated as of September 28, 2006 (as the same has been
amended, modified, supplemented or restated, the “Loan Agreement”).

 

B.                                    Bank
has extended credit to Borrower for the purposes permitted in the Loan
Agreement.

 

C.                                    Borrower
has requested that Bank amend the Loan Agreement to (i) extend the Revolving
Line Maturity Date and (ii) make certain other revisions to the Loan Agreement
as more fully set forth herein.

 

D.                                    Bank
has agreed to so amend certain provisions of the Loan Agreement, but only to
the extent, in accordance with the terms, subject to the conditions and in reliance
upon the representations and warranties set forth below.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the
foregoing recitals and other good and valuable consideration, the receipt and
adequacy of which is hereby acknowledged, and intending to be legally bound,
the parties hereto agree as follows:

 

1.                                      Definitions. Capitalized terms used but not defined in this
Amendment shall have the meanings given to them in the Loan Agreement.

 

2.                                      Amendments to Loan Agreement.

 

2.1                               Section
6.8 (Financial Covenants). Notwithstanding the requirements of Section 6.8
of the Loan Agreement to the contrary, Bank agrees that (i) the adjusted quick
ratio covenant contained in Section 6.8(a) will not be tested for the month ended
September 30, 2007, and (ii) the Tangible Net Worth covenant contained in
Section 6.8(b) will not be tested for the quarter ended September 30, 2007.

 

 

2.2                               Section
13 (Definitions). The following term and its definition set forth in
Section 13.1 is amended in its entirety and replaced with the following:

 

“Revolving
Line Maturity Date” is December 15, 2007.

 

2.3                               Compliance Certificate. The Compliance Certificate to the Loan
Agreement is replaced in its entirety with Exhibit D attached hereto.

 

3.                                      Limitation of Amendments.

 

3.1                               The
amendments set forth in Section 2, above, are effective for the purposes
set forth herein and shall be limited precisely as written and shall not be
deemed to (a) be a consent to any amendment, waiver or modification of any
other term or condition of any Loan Document, or (b) otherwise prejudice
any right or remedy which Bank may now have or may have in the future under or
in connection with any Loan Document.

 

3.2                               This
Amendment shall be construed in connection with and as part of the Loan
Documents and all terms, conditions, representations, warranties, covenants and
agreements set forth in the Loan Documents, except as herein amended, are
hereby ratified and confirmed and shall remain in full force and effect.

 

4.                                      Representations and Warranties. To induce Bank to enter into this Amendment,
Borrower hereby represents and warrants to Bank as follows:

 

4.1                               Immediately
after giving effect to this Amendment (a) the representations and
warranties contained in the Loan Documents are true, accurate and complete in
all material respects as of the date hereof (except to the extent such
representations and warranties relate to an earlier date, in which case they
are true and correct as of such date), and (b) no Event of Default has
occurred and is continuing;

 

4.2                               Borrower
has the power and authority to execute and deliver this Amendment and to
perform its obligations under the Loan Agreement, as amended by this Amendment;

 

4.3                               The
organizational documents of Borrower delivered to Bank on the Effective Date
remain true, accurate and complete and have not been amended, supplemented or
restated and are and continue to be in full force and effect;

 

4.4                               The
execution and delivery by Borrower of this Amendment and the performance by
Borrower of its obligations under the Loan Agreement, as amended by this
Amendment, have been duly authorized;

 

4.5                               The
execution and delivery by Borrower of this Amendment and the performance by
Borrower of its obligations under the Loan Agreement, as amended by this
Amendment, do not and will not contravene (a) any law or regulation
binding on or affecting Borrower, (b) any contractual restriction with a
Person binding on Borrower, (c) any order, judgment or decree of any court
or other governmental or public body or authority, or subdivision thereof,
binding on Borrower, or (d) the organizational documents of Borrower;

 

2

 

4.6                               The
execution and delivery by Borrower of this Amendment and the performance by
Borrower of its obligations under the Loan Agreement, as amended by this
Amendment, do not require any order, consent, approval, license, authorization
or validation of, or filing, recording or registration with, or exemption by
any governmental or public body or authority, or subdivision thereof, binding on
Borrower, except as already has been obtained or made; and

 

4.7                               This
Amendment has been duly executed and delivered by Borrower and is the binding
obligation of Borrower, enforceable against Borrower in accordance with its
terms, except as such enforceability may be limited by bankruptcy, insolvency,
reorganization, liquidation, moratorium or other similar laws of general
application and equitable principles relating to or affecting creditors’
rights.

 

5.                                      Counterparts. This Amendment may be executed in any number of
counterparts and all of such counterparts taken together shall be deemed to
constitute one and the same instrument.

 

6.                                      Effectiveness. This Amendment shall be deemed effective upon
(a) the due execution and delivery to Bank of this Amendment by each party
hereto, (b) Borrower’s payment of a non refundable amendment fee in an amount
equal to Nine Thousand Five Hundred Dollars ($9,500) and (c) payment of
Bank’s legal fees and expenses in connection with the negotiation and
preparation of this Amendment.

 

[Signature page follows.]

 

3

 

IN WITNESS WHEREOF, the parties hereto have
caused this Amendment to be duly executed and delivered as of the date first
written above.

 

	
  BANK

  	
   

  
	
   

  	
   

  
	
  SILICON VALLEY BANK

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Richard White

  	
   

  	
   

  
	
  Name: Richard White

  	
   

  
	
  Title: Relationship Manager

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  BORROWERS

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  MEDECISION, INC.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   /s/
  Carl E. Smith

  	
   

  	
   

  
	
  Name: Carl E. Smith

  	
   

  
	
  Title: Executive Vice President and Chief 

  	
   

  
	
  Financial Officer

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  MEDECISION INVESTMENTS, INC.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Harold F. Kalbach, Jr.

  	
   

  	
   

  
	
  Name: Harold F. Kalbach, Jr.

  	
   

  
	
  Title: Treasurer

  	
   

  
						

 

 

[Signature Page to Second Amendment to Amended and Restated L&SA]

 

 

EXHIBIT D

 

COMPLIANCE CERTIFICATE

 

	
  TO:

  	
  SILICON VALLEY BANK

  	
   

  	
  Date:

  
	
  FROM: MEDECISION, INC.

  	
   

  	
   

  	
   

  
					

 

The undersigned authorized officer of
MEDecision, Inc. (“Borrower”) certifies that under the terms and conditions of
the Amended and Restated Loan and Security Agreement between Borrower and Bank
(the “Agreement”), (1) Borrower is in complete compliance for the period ending                     
with all required covenants except as noted below, (2) there are no Events of
Default, (3) all representations and warranties in the Agreement are true
and correct in all material respects on this date except as noted below; provided, however, that such materiality qualifier shall not
be applicable to any representations and warranties that already are qualified
or modified by materiality in the text thereof; and provided,
further that those representations and warranties expressly
referring to a specific date shall be true, accurate and complete in all
material respects as of such date, (4) Borrower, and each of its Subsidiaries,
has timely filed all required tax returns and reports, and Borrower has timely
paid all foreign, federal, state and local taxes, assessments, deposits and
contributions owed by Borrower except as otherwise permitted pursuant to the
terms of Section 6.8 of the Agreement, and (5) no Liens have been levied or
claims made against Borrower or any of its Subsidiaries relating to unpaid
employee payroll or benefits of which Borrower has not previously provided
written notification to Bank. Attached are the required documents supporting
the certification. The undersigned certifies that these are prepared in
accordance with GAAP consistently applied from one period to the next except as
explained in an accompanying letter or footnotes. The undersigned acknowledges
that no borrowings may be requested at any time or date of determination that
Borrower is not in compliance with any of the terms of the Agreement, and that
compliance is determined not just at the date this certificate is delivered. Capitalized
terms used but not otherwise defined herein shall have the meanings given them
in the Agreement.

 

Please indicate compliance status by circling Yes/No under “Complies”
column.

 

	
  Reporting Covenant

  	
   

  	
  Required

  	
   

  	
  Complies

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Monthly financial statements with
  Compliance Certificate

  	
   

  	
  Monthly
  within 30 days

  	
   

  	
  Yes No

  	
   

  
	
  Annual financial statement (CPA Audited) +
  CC

  	
   

  	
  FYE within
  120 days

  	
   

  	
  Yes No

  	
   

  
	
  Field Audits

  	
   

  	
  1x a year

  	
   

  	
  Yes No

  	
   

  
	
  10-Q

  	
   

  	
  Within 45
  days after filing with SEC

  	
   

  	
  Yes No

  	
   

  
	
  10-K and 8-K

  	
   

  	
  Within 90
  days after filing with SEC

  	
   

  	
  Yes No

  	
   

  
	
  Borrowing Base Certificate A/R & A/P
  Agings

  	
   

  	
  Monthly
  within 30 days

  	
   

  	
  Yes No

  	
   

  
	
  Board Projections (Annual internal
  operating plans)

  	
   

  	
  Annually, 30
  days prior to FYE

  	
   

  	
  Yes No

  	
   

  
	
  Board Projections (Annual financial
  projections)

  	
   

  	
  Annually, 15
  days prior to FYE

  	
   

  	
  Yes No

  	
   

  

 

The following Intellectual Property was registered after the Effective
Date (if no registrations, state “None”)    

 

 

	
  Financial Covenant

  	
   

  	
  Required

  	
   

  	
  Actual

  	
   

  	
  Complies

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  *

  	
  Minimum Tangible Net Worth (Tested
  Quarterly):

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  March 31 2007

  	
   

  	
  $

  	
  9,000,000

  	
   

  	
  $

  	
   

  	
   

  	
  Yes No

  	
   

  
	
   

  	
  June 30, 2007

  	
   

  	
  $

  	
  9,000,000

  	
   

  	
  $

  	
   

  	
   

  	
  Yes No

  	
   

  
	
   

  	
  September 30, 2007

  	
   

  	
  $

  	
  9,000,000

  	
   

  	
  $

  	
   

  	
   

  	
  Yes No

  	
   

  
	
   

  	
  December 31, 2007

  	
   

  	
  $

  	
  12,000,000

  	
   

  	
  $

  	
   

  	
   

  	
  Yes No

  	
   

  
	
   

  	
  At all times thereafter

  	
   

  	
  $

  	
  12,000,000

  	
   

  	
  $

  	
   

  	
   

  	
  Yes No

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  *

  	
  *Adjusted Quick Ratio (Tested Monthly):

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  February 28, 2007 through September 30,
  2007

  	
   

  	
  1.50:1.00

  	
   

  	
  :1.00

  	
   

  	
  Yes No

  	
   

  
	
   

  	
  October 31, 2007 and at all times
  thereafter

  	
   

  	
  1.75:1.00

  	
   

  	
  :1.00

  	
   

  	
  Yes No

  	
   

  

 

*
not tested for the quarter ended September 30, 2007

 

**
not tested for the month ended September 30, 2007

 

The following financial covenant analyses and
information set forth in Schedule 1 attached hereto are true and accurate as of
the date of this Certificate.

 

The following are the exceptions with respect to the
certification above:  (If no exceptions
exist, state “No exceptions to note.”)

 

 

 

 

 

	
  MEDECISION, INC.

  	
  BANK
  USE ONLY

  
	
   

  	
   

  
	
   

  	
  Received by:

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
  AUTHORIZED
  SIGNER

  
	
  Name:

  	
   

  	
   

  	
  Date:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
   

  
	
   

  	
  Verified

  	
   

  	
   

  
	
   

  	
   

  	
  AUTHORIZED
  SIGNER

  	
   

  
	
   

  	
  Date:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Compliance
  Status:  Yes  No

  
											

 

 

Schedule 1 to Compliance
Certificate

 

Financial Covenants of Borrower

 

Dated:                               

 

I.                                         Adjusted
Quick Ratio (Section 6.8(a))

 

Required:

 

	
  February 28, 2007 through September 30,
  2007

  	
   

  	
  1.50:1.00

  
	
  October 31, 2007 and at all times
  thereafter

  	
   

  	
  1.75:1.00

  

 

Actual:

 

	
  A.

  	
   

  	
  Aggregate
  value of the unrestricted cash and cash equivalents of Borrower and its
  Subsidiaries

  	
   

  	
  $

  	
   

  	
   

  
	
  B.

  	
   

  	
  Aggregate
  value of accounts receivable of Borrower and its Subsidiaries

  	
   

  	
  $

  	
   

  	
   

  
	
  C.

  	
   

  	
  Aggregate
  value of the Investments with maturities of fewer than 12 months of Borrower
  and it Subsidiaries

  	
   

  	
  $

  	
   

  	
   

  
	
  D.

  	
   

  	
  Quick Assets
  (the sum of lines A through C)

  	
   

  	
  $

  	
   

  	
   

  
	
  E.

  	
   

  	
  Aggregate
  value of Obligations to Bank

  	
   

  	
  $

  	
   

  	
   

  
	
  F.

  	
   

  	
  Aggregate
  value of liabilities that should, under GAAP, be classified as liabilities on
  Borrower’s consolidated balance sheet, including all Indebtedness, and not
  otherwise reflected in line E above that matures within one (1 year)

  	
   

  	
  $

  	
   

  	
   

  
	
  G.

  	
   

  	
  Current
  Liabilities (the sum of lines E and F)

  	
   

  	
  $

  	
   

  	
   

  
	
  H.

  	
   

  	
  50% of deferred
  revenues

  	
   

  	
  $

  	
   

  	
   

  
	
  I.

  	
   

  	
  Line G minus
  line H

  	
   

  	
  $

  	
   

  	
   

  
	
  J.

  	
   

  	
  Adjusted
  Quick Ratio (line D divided by line I)

  	
   

  	
   

  	
   

  

 

Is
line E equal to or greater than         :1:00?

 

              No,
not in compliance                                                                                                                                                           Yes,
in compliance

 

 

II.                                     Tangible
Net Worth (Section 6.8(b))

 

Required:

 

	
  March 31 2007

  	
   

  	
  $

  	
  9,000,000

  	
   

  
	
  June 30, 2007

  	
   

  	
  $

  	
  9,000,000

  	
   

  
	
  September 30, 2007

  	
   

  	
  $

  	
  9,000,000

  	
   

  
	
  December 31, 2007

  	
   

  	
  $

  	
  12,000,000

  	
   

  
	
  At all times thereafter

  	
   

  	
  $

  	
  12,000,000

  	
   

  

 

Actual:

 

	
  A.

  	
   

  	
  Aggregate value of total assets of Borrower and its Subsidiaries

  	
   

  	
  $

  	
   

  
	
  B.

  	
   

  	
  Aggregate value of goodwill of Borrower and its Subsidiaries

  	
   

  	
  $

  	
   

  
	
  C.

  	
   

  	
  Aggregate value of intangible assets of Borrower and its Subsidiaries
  (including unamortized debt discount and expense, capitalized software,
  deferred tax assets, patents, trade and service marks and names, copyrights
  and research and development expenses except prepaid expenses)

  	
   

  	
  $

  	
   

  
	
  D.

  	
   

  	
  Aggregate value of all notes, accounts receivable and other
  obligations owing to Borrower from its officers or other Affiliates

  	
   

  	
  $

  	
   

  
	
  E.

  	
   

  	
  Aggregate value of any reserves not already deducted from assets

  	
   

  	
  $

  	
   

  
	
  F.

  	
   

  	
  Aggregate value of liabilities that should, under GAAP, be classified
  as liabilities on Borrower’s consolidated balance sheet, including all
  Indebtedness and current portion of Subordinated Debt permitted by Bank to be
  paid by Borrower, but excluding all other Subordinated Debt

  	
   

  	
  $

  	
   

  
	
  G.

  	
   

  	
  Tangible Net Worth (line A minus line B minus line C minus line D
  minus line E minus line F)

  	
   

  	
  $

  	
   

  
									

 

Is
line G equal to or greater than required amount?

 

           No,
not in compliance                                                                                                                                                    Yes,
in compliance

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00132-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00132-of-00352.parquet"}]]