Document:

EXHIBIT 10.3

 

LOAN AGREEMENT

 

THIS LOAN AGREEMENT
(“Agreement”) is executed as of the 9th day of May, 2008 (the
“Effective Date”), by and between FIFTH THIRD BANK,
a Michigan banking corporation, and its successors and assigns (hereinafter
referred to as “Lender”), having an address at 8000 Maryland Avenue, Suite 1400,
St. Louis, Missouri 63105, and BLACKHAWK BIOFUELS, LLC,
a Delaware limited liability company (hereinafter referred to as “Borrower”),
with an address of 22 Chicago Avenue, Freeport, Illinois 61032-4230.

 

Recitals

 

The following recitals are a
material part of this Agreement:

 

A.            Borrower intends to acquire all of the assets of Biofuels
Company of America, LLC, an Illinois limited liability company (“BCA”) pursuant
that certain Asset Purchase Agreement dated March 14, 2008 (the “Asset
Purchase Agreement”), by and among Borrower, BCA, Renewable Energy Group, Inc.,
a Delaware corporation, Biodiesel Investment Group, LLC, a Delaware limited
liability company and Bunge North America, Inc., a New York corporation;
and

 

B.            In connection with the purchase of the assets of BCA,
Borrower will assume BCA’s leasehold interest in that certain property located
in the City of Danville, County of Vermilion, State of Illinois, which property
is located at 300 N. Anderson Street and more particularly described in Exhibit A attached hereto,
which by this reference is made a  part
hereof (the “Property”); and

 

C.            Borrower desires to further develop the Property for
utilization as an industrial plant for the production of biodiesel fuel (the
“Biodiesel Plant”); and

 

D.            Borrower has applied to Lender for (a) a
construction/term loan in the aggregate maximum amount of $24,650,000
(the “Construction/Term Loan”) for the purpose of financing (i) the
purchase of the assets of BCA,  (ii) the
completion of the first stage of construction of the Biodiesel Plant at the
Property, and  (iii) related
development costs, and (b) a revolving line of credit loan in the
aggregate maximum amount of $5,000,000 (the “Revolving Credit Loan”) for the
purpose of financing the short-term working capital needs of Borrower; and

 

E.             The Property is to be developed in accordance with the
plans and specifications for the Biodiesel Plant which are generally described
in Exhibit B-1 attached hereto (such
plans and specifications, together with such additional plans and
specifications and all amendments and modifications thereof in accordance with
the terms of this Agreement are herein referred to collectively as the “Project
Plans and Specifications”) and the plans and specifications for the Biodiesel
Plant which are generally described in Exhibit B-2
attached hereto (such plans and specifications, together with such additional
plans and specifications and all amendments and modifications thereof in accordance
with the terms of this Agreement are herein referred to collectively as the
“Project Addition Plans and Specifications”); and

 

 

F.             Lender
has agreed to make the Construction/Term Loan and the Revolving Credit Loan to
Borrower upon and subject to all of the terms, covenants and agreements of this
Agreement.

 

Contractual
Provisions

 

NOW, THEREFORE, in consideration
of the mutual promises and agreements hereinafter contained and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:

 

SECTION 1.           GENERAL DEFINITIONS.

 

1.1           Definitions.  All terms as used in this Agreement shall,
unless otherwise defined in the body of this Agreement, have the following
meanings (terms defined in the singular to have the same meaning when used in
the plural and vice versa):

 

Account Debtor shall mean any Person who is or may become
obligated under or on account of an Account.

 

Accounts shall mean all accounts (as defined in the
Code), contract rights, chattel paper, instruments and documents, in which
Borrower now has or hereafter acquires an interest.

 

Advances shall mean each disbursement of money by Lender
to Borrower under the Construction/Term Loan and the Revolving Credit Loan.

 

Affiliate shall mean (i) a Person which owns or
otherwise has an interest in 5% or more of any stock of Borrower, or (ii) 5%
or more of the stock or other ownership units of which Borrower (or any
shareholder, director, officer, employee or direct or indirect subsidiary of
Borrower or any combination thereof) owns or otherwise has an interest in, or (iii) which,
directly or through one or more intermediaries, is controlled by, controls, or
is under common control with Borrower. 
For purposes of subpart (iii) above, “control” means the ability,
directly or indirectly, to affect the management or policies of a Person by
virtue of an ownership interest, by right of contract or any other means.

 

Applicable Margin shall mean the amount set
forth below that shall be added to LIBOR to determine the applicable per annum
interest rate under the Construction/Term Loan after the Conversion Date, which
amount shall be based upon (i) Borrower’s EBITDA on an annualized basis
until the Biodiesel Plant has been in operation for four (4) full fiscal
quarters and (ii) Borrower’s Rolling Four-Quarter EBITDA when the
Biodiesel Plant has been in operation for four (4) full fiscal quarters
and thereafter:

 

	
  Annualized EBITDA/Rolling
  Four-Quarter EBITDA

  	
   

  	
  Applicable Margin

  
	
  Equal to or greater than $7,000,000

  	
   

  	
  225 bps

  
	
  Equal to or greater than $6,000000 but less
  than $7,000,000

  	
   

  	
  250 bps

  
	
  Equal to or greater than $5,000000 but less
  than $6,000,000

  	
   

  	
  275 bps

  
	
  Equal to or greater than $4,000000 but less
  than $5,000,000

  	
   

  	
  300 bps

  
	
  Less than $4,000,000

  	
   

  	
  325 bps

  

 

2

 

Upon delivery of the quarterly statements and the compliance
certificate pursuant to Section 7.12, the Lender will review and confirm
the Borrower’s calculation of its annualized EBITDA or Rolling Four-Quarter
EBITDA, as applicable, for such fiscal quarter. 
The Applicable Margin shall automatically be adjusted in accordance with
the annualized EBITDA or Rolling Four-Quarter EBITDA, as applicable, of the
Borrower as of the end of each fiscal quarter, such automatic adjustment to
take effect as of the first day of the second calendar month after the end of
the fiscal quarter to which the quarterly financial statement and compliance
certificate relate.  If the Borrower
fails to deliver such financial statements and compliance certificate for a
particular fiscal quarter, which set forth the Rolling Four-Quarter EBITDA of the Borrower for that quarter,
within the period of time required by Section 7.12 (and said failure to
deliver said financial statements is not waived by Lender in writing) or if a
Default occurs, then the Applicable Margin shall be automatically adjusted to
the highest Applicable Margin listed above, with such automatic adjustments (a) to
take effect immediately and (b) to remain in effect until subsequently
adjusted in accordance herewith upon the delivery of the required financial
statements and compliance certificate for the following fiscal quarter or, in
the event of a Default, when such Default shall have been cured or waived by
the Lender.  Any automatic adjustment in
the Applicable Margin due to (i) Borrower’s failure to deliver its
financial statements and compliance certificate for a particular quarter or (ii) the
occurrence of a Default, shall not be deemed to be a waiver by Lender of any
such Default.

 

Asset Purchase Agreement shall
have the meaning set forth in the Recitals to this Agreement.

 

Assignment and Assumption of
Construction Management Services Agreement shall mean that certain Assignment and
Assumption Agreement dated as of May 9, 2008 by and between Borrower and
BCA, and consented to in writing by Project General Contractor.

 

Assignment and Assumption of
Equipment Purchase and Sale Agreement shall mean that certain Assignment and
Assumption Agreement dated as of May 9, 2008 by and between Borrower and
BCA, and consented to in writing by De Smet.

 

Assignment and Assumption of
Ground Lease
shall mean that certain First Amendment, Assignment and Assumption and Consent
to Assignment of Ground Lease and Conveyance of Leasehold Improvements dated May 9,
2008 by and among Landlord, Borrower and BCA.

 

Assignment of Construction Documents shall mean that certain Assignment of
Contracts, Ancillary Documents and Other Rights of even date herewith executed
by Borrower in favor of Lender to secure the Obligations, and consented to by
the Project General Contractor, the Project Addition General Contractor, such
Major Subcontractors as Lender may reasonably require, and any and all other
consents to such assignment as may be reasonably required by Lender, and all
amendments, modifications, replacements and restatements thereof.

 

Assignment of
Equipment Purchase and Sale Agreement shall mean that certain Assignment of Equipment
Purchase and Sale Agreement of even date herewith executed by Borrower in favor
of Lender to secure the Obligations, which
assignment collaterally assigns all

 

3

 

of Borrower’s rights under the
Equipment Purchase and Sale Agreement (as assigned to and assumed by Borrower
pursuant to the Assignment and Assumption of Equipment Purchase and Sale
Agreement) to Lender, and any and all consents to such assignment as may be
reasonably required by Lender, and all amendments, modifications, replacements
and restatements thereof.

 

Assignment of Management and Operational
Services Agreement  shall mean that certain
Assignment of Management and Operational Services Agreement dated as of even
date herewith by Borrower in favor of Lender to secure the Obligations, which
assignment collaterally assigns all of Borrower’s rights under the Management
and Operational Services Agreement to Lender, and any and all consents to such
assignment as may be reasonably required by Lender, and all amendments,
modifications, replacements and restatements thereof.

 

Assignment of Oil
Feedstock Supply Agreement shall mean that certain Assignment of Oil Feedstock Supply Agreement dated as of even
date herewith executed by Borrower in favor of Lender to secure the Obligations, which assignment collaterally assigns all of
Borrower’s rights under the Oil Feedstock Supply Agreement to Lender, and any and all consents to such
assignment as may be reasonably required by Lender, and all amendments,
modifications, replacements and restatements thereof.

 

Assignment of Representations, Warranties and Indemnities
shall mean that certain Certificate and Collateral Assignment dated as of even
date herewith executed by Borrower in favor of Lender to secure the
Obligations, which assignment collaterally
assigns all of Borrower’s rights with respect to the representations,
warranties and indemnities contained in the Asset Purchase Agreement to Lender,
and all amendments, modifications,
replacements and restatements thereof.

 

Assignment of
Services Agreement
shall mean that certain Assignment of Services
Agreement dated as of even date herewith executed by Borrower in favor of
Lender to secure the Obligations, which
assignment collaterally assigns all of Borrower’s rights under the Services
Agreement to Lender, and any and all
consents to such assignment as may be reasonably required by Lender, and all
amendments, modifications, replacements and restatements thereof.

 

Availability shall mean the difference of (i) the
Borrowing Base and (ii) the outstanding principal balance of each Advance
under the Revolving Credit Loan.

 

Average Quarterly Loan Balance shall mean the amount obtained by adding the
outstanding principal balance of all Advances under Revolving Credit Loan owing
by Borrower to Lender outstanding at the end of each day for each day of the
quarter in question and by dividing such sum by the number of days in such
quarter.

 

Biodiesel Plant shall have the meaning set forth in the
Recitals to this Agreement.

 

Borrower shall have the meaning set forth in the Recitals
to this Agreement.

 

Borrowing Base shall mean, at any date of determination, an
amount equal to:  (a) the Eligible
Account Advance Amount, plus (b) the Eligible Inventory Advance
Amount.  In no event, however, shall the
Borrowing Base exceed Five Million and 00/100 Dollars ($5,000,000.00).

 

4

 

Budget shall mean (a) the detailed budget setting
forth (i) the costs for the acquisition of the assets of BCA, including,
without limitation, the leasehold interest in the Property, and (ii) the
projected Project Costs for the remaining construction of the Project in
accordance with the Project Plans and Specifications, attached hereto as Exhibit C-1, as the same may
be amended and modified from time to time (the “Project Budget”), and (ii) the
detailed budget setting forth the projected Project Addition Costs for the
construction of the Project Addition in accordance with the Project Addition
Plans and Specifications, attached hereto as Exhibit C-2,
as the same may be amended and modified from time to time (the “Project
Addition Budget”).

 

Business Day shall mean any day other than a Saturday,
Sunday or a legal holiday on which banks are authorized or required to be
closed for the conduct of commercial banking business in St. Louis, Missouri.

 

Capital Expenditures shall mean expenditures made and liabilities
incurred for the direct or indirect acquisition of any fixed assets or
improvements, replacements, substitutions or additions thereto which have a
useful life of more than one year, including, without limitation, payments with
respect to capitalized lease obligations.

 

Cash Portion of the Debt Service Fund Amount
shall have the meaning set forth in Section 3.6(a) of this Agreement.

 

CDBG Grant
shall mean that certain Community Development Block Grant from the City to BCA
in an amount not less than $225,000, as assigned by BCA to Borrower pursuant to
the Asset Purchase Agreement.

 

City
shall mean the City of Danville, Illinois.

 

Closing Date shall
mean the date on which all of the conditions precedent set forth in Sections
5.1, 5.2 and 5.4 are satisfied and the Initial
Construction/Term Loan Disbursement  is
made hereunder.

 

Code shall mean the Uniform Commercial Code as
adopted and in force in the State of Missouri (or, if deemed applicable, the
State of Delaware), as from time to time amended.

 

Collateral shall mean all real and personal property of
Borrower in which a security interest or other lien has been granted to or for
the benefit of Lender pursuant to the Security Agreement, the Leasehold
Mortgage, or the other Loan Documents or which otherwise secures the payment or
performance of any of the Obligations.

 

Collateral Documents shall mean the following (including all
amendments, modifications, replacements, restatements, renewals and extensions
thereof):

 

(i)            Leasehold
Mortgage;

 

(ii)           Security Agreement;

 

(iii)          the
Assignment of Oil Feedstock Supply Agreement;

 

5

 

(iv)          the
Assignment of Services Agreement;

 

(v)           the
Assignment of Management and Operational Services Agreement;

 

(vi)          the
Assignment of Equipment Purchase and Sale Agreement;

 

(vii)         the
Assignment of Construction Documents;

 

(viii)                        the Assignment of Representations, Warranties and Indemnities;

 

(ix)                                the Renewable Fuels Grant Account Agreement;

 

(x)                                   the Debt Service Fund Account Agreement;

 

(xi)                                the Construction Escrow Account Agreement;

 

(xii)                             the Working Capital Escrow Acount Agreement; and

 

(xiii)                          the Project Addition Escrow Account Agreement.

 

Commencement of Production shall mean the date that the Biodiesel Plant
begins producing biodiesel fuel at its normal operating capacity, as determined
by Lender in its sole discretion.

 

Construction Documents shall mean, collectively, the Project General
Construction Contract, the Project Addition General Construction Contract, the
Equipment Purchase and Sale Agreement and all Subcontracts.

 

Construction Escrow Account shall mean an escrow account held by Lender,
containing certain funds of Borrower, to be controlled by Lender and paid out
as Advances hereunder, if required by Lender in accordance with Section 5.2(f) hereof.

 

Construction Escrow Account Agreement shall mean that certain Construction Loan Escrow Loan Account Agreement and Pledge dated as of the Effective
Date by and between Borrower and Lender.

 

Construction/Term Loan shall have the meaning set forth in the
Recitals to this Agreement.

 

Construction/Term Loan
Commitment shall
mean the maximum principal amount of $24,650,000.

 

Construction/Term Loan Maturity
Date shall mean November 3,
2011.

 

Construction/Term Loan Note shall mean that certain Construction/Term Loan
Note from Borrower to Lender in the principal amount of $24,650,000, and all
amendments, modifications, replacements, restatements, renewals and extensions
thereof, which Construction/Term Loan Note shall mature on the
Construction/Term Loan Maturity Date.

 

6

 

Contract Price of Project
General Construction Contract shall mean $29,321,000.

 

Contract Price of Project
Addition General Construction Contract shall mean $11,767,633.

 

Conversion Date shall mean the date of Lender’s receipt of
Borrower’s compliance certificate for the fiscal quarter ended June 30,
2009.

 

DCEO shall mean the Illinois Department of Commerce
and Economic Opportunity.

 

Debt Service Fund Account shall mean that certain escrow account
established on behalf of Borrower with Lender whereby Borrower shall deposit
the required cash portion of the Debt Service Fund Amount, such cash portion to
be in the amount of $2,000,000, which amount represents four-sevenths (4/7) of
the Debt Service Fund Amount.

 

Debt Service Fund Account Agreement shall mean that certain Debt Service Fund Account Agreement and Pledge dated as of the Effective
Date by and between Borrower and Lender.

 

Debt Service Fund Amount shall mean
$3,500,000.

 

Debt Service Fund Guaranty
shall mean that certain Guaranty given by
REG to Lender and dated on or about the date hereof, which Guaranty guarantees
three-sevenths (3/7) of the obligations of Borrower pertaining to the Debt
Service Fund (in lieu of a cash deposit) in accordance with Section 3.6
hereof, and all amendments, modifications, replacements, restatements,
extensions and renewals thereof.

 

Default means an event that, with giving of
notice or passage of time or both, would constitute an Event of Default.

 

Default Rate shall mean a variable rate of interest per
annum equal to the Prime Rate plus four percent (4%).

 

De Smet shall mean De Smet Ballestra North America, Inc.

 

Disbursements shall
have the meaning set forth in Section 6.2 of this Agreement.

 

EBITDA shall mean,
for any period, the Net Income for such period, plus (to the extent deducted in
computing net income) Interest Expense (including imputed interest on capital
leases), taxes, depreciation and amortization, and further adjusted to exclude (i) any
non-cash gain or loss on the sale of assets, (ii) any gains or losses with
respect to hedging or similar transactions, (iii) extraordinary gains or
losses determined in accordance with GAAP, and (iv) any other
extraordinary gains or losses as determined by Lender in its sole discretion.

 

Economic Development Programming Assistance
Grant shall mean that certain grant from IDOT to the
City of Danville pursuant to that certain Economic Development/TARP Agreement
in an amount not less than $751,167, which proceeds shall be used by the City
of Danville for the construction of infrastructure improvements supporting the
Biodiesel Plant.

 

7

 

Effective Date shall have the meaning set forth in the opening
paragraph to this Agreement.

 

Eligible Account shall mean an Account arising in the ordinary
course of a Borrower’s business from the sale of goods or the rendering of services
which Lender, in its reasonable discretion, deems to be an Eligible
Account.  To be an Eligible Account, such
Account must be subject to Lender’s perfected first priority security interest
and no other lien other than a Permitted Lien, and must be evidenced by an
invoice or other documentary evidence satisfactory to Lender.  Without limiting the generality of the
foregoing, no Account shall be an Eligible Account if:

 

(i)            it remains unpaid
more than ninety (90) days after the original invoice date; or

 

(ii)           twenty-five percent
(25%) of its balance on a current invoice remains unpaid more than ninety (90)
days after the original invoice date; or

 

(iii)          twenty-five percent
(25%) or more of the Accounts from the Account Debtor are not Eligible
Accounts; or

 

(iv)          the Account Debtor
is also Borrower’s creditor or supplier, or has disputed liability with respect
to such Account, or has made any claim with respect to any other Account due
from such Account Debtor to Borrower, or the Account otherwise is or may become
subject to any right of setoff by the Account Debtor; or

 

(v)           the Account Debtor
has commenced a voluntary case under the federal bankruptcy laws, as now  constituted or hereafter amended, or made an
assignment for the benefit of creditors, or a decree or order for relief has
been entered by a court having jurisdiction in the premises in respect of the
Account Debtor in an involuntary case under the federal bankruptcy laws, as now
constituted or hereafter amended, or any other petition or other application
for relief under the federal bankruptcy laws has been filed against the Account
Debtor, or if the Account Debtor has failed, suspended business, ceased to be
solvent, or consented to or suffered a receiver, trustee, liquidator or
custodian to be appointed for it or for all or a significant portion of its
assets or affairs; or

 

(vi)          it arises from a
sale to an Account Debtor outside the United States, unless the sale is on
letter of credit, guaranty or acceptance terms, in each case acceptable to Lender
in its sole discretion; or

 

(vii)         it arises from a
sale to the Account Debtor on a bill-and-hold, guaranteed sale,
sale-or-return, sale-on-approval, consignment or any
other repurchase or return basis; or

 

(viii)        Lender believes, in
its reasonable credit judgment, that collection or payment of such Account is
doubtful or will be delayed by reason of the Account Debtor’s financial
condition; or

 

8

 

(ix)           the Account Debtor
is the United States of America, or any state, or any department, agency,
instrumentality or subdivision thereof, unless Borrower to whom such Account is
due assigns its right to payment of such Account to Lender, in form and
substance satisfactory to Lender, so as to comply with the Assignment of Claims
Act, as amended (31 U.S.C. Section 3727 et  seq.), or the
comparable state statute, as the case may be; or

 

(x)            the goods giving
rise to such Account have not been shipped to the Account Debtor in accordance
with the Account Debtor’s instructions in respect of such goods, or such goods
are otherwise nonconforming goods, or the services giving rise to such Account
have not been properly performed by Borrower to whom such Account is due; or

 

(xi)           the total unpaid
Accounts of the Account Debtor exceed a credit limit determined by Lender in
its reasonable discretion (which credit limit may be based upon the extent to
which the total unpaid Accounts of such Account Debtor are excessive relative
to all other unpaid Accounts and upon such other customary credit criteria as
Lender deems appropriate), to the extent such Account exceeds such limit; or

 

(xii)          the Account is
evidenced by chattel paper or an instrument of any kind, or has been reduced to
judgment; or

 

(xiii)         Borrower has made
any agreement with the Account Debtor for any deduction therefrom, except for
discounts or allowances which are made in the ordinary course of the Borrower’s
business for prompt payment and which discounts or allowances are reflected in
the calculation of the face value of each invoice related to such Account; or

 

(xiv)        it arises out of a
sale made by Borrower to any subsidiary, direct or indirect, of the Borrower or
any Affiliate of the Borrower or to a Person controlled by an Affiliate of the
Borrower, and said sale is not in the ordinary course of and pursuant to the
reasonable requirements of the Borrower’s Business or upon fair and reasonable
terms substantially as favorable to the Borrower as those which would be
obtained in a comparable arms-length transaction with a non-Affiliate.

 

Eligible Account Advance Amount shall mean an amount equal to the lesser of (i) $2,000,000
or (ii) the product of (a) the Eligible Account Advance Rate, times
(b) the net amount of Borrower’ Eligible Accounts.

 

Eligible Account Advance Rate shall mean up to seventy-five percent (75%), as
determined by Lender in its reasonable discretion.

 

Eligible Inventory shall mean such raw and finished Inventory of a
Borrower which Lender, in the exercise of its reasonable discretion, deems to
be Eligible Inventory.  Without limiting
the generality of the foregoing, no inventory shall be Eligible Inventory
unless, in Lender’s reasonable opinion, it (i) is in good and saleable
condition, (ii) is not obsolete or unmerchantable, (iii) meets all
standards imposed by any governmental agency or authority, (iv) conforms
in all respects to the warranties and representations set forth in this
Agreement and the

 

9

 

Security Agreement, (v) is at all times subject to Lender’s duly
perfected, first priority security interest and no other lien other than a
Permitted Lien, and (vi) is situated at the Property.  Eligible Inventory shall not include any
Off-Grade Product.  As used herein,
“Off-Grade Product” shall include biodiesel that fails to meet the
specifications contained in ASTM D6751 as it may be amended or modified (or
such other standards for biodiesel as may in the future develop in the
biodiesel industry) or if for any other reason a customer of Borrower reasonably
rejects biodiesel.  With respect to
products other than biodiesel, for purposes of this Agreement, Off-Grade
Product shall include product that fails to meet specifications reasonably
required by Lender, or if for any other reason a customer reasonably rejects
such Product.

 

Eligible Inventory Advance Amount shall mean the product of (a) the Eligible
Inventory Advance Rate, times (b) the net amount of Borrower’
Eligible Inventory, calculated on the lower of cost or market, on a first-in,
first-out basis.

 

Eligible Inventory Advance Rate shall mean up to fifty percent (50%), as
determined by Lender in its reasonable discretion.

 

Environmental Laws shall mean any and all laws, statutes,
ordinances, rules, regulations, orders, or determinations of any governmental
authority pertaining to health or the environment in effect in any and all
jurisdictions in which Borrower is or at any time may be doing business, or
where the real property of Borrower is located, including without limitation,
the Clean Air Act, as amended; the Comprehensive, Environmental, Response,
Compensation, and Liability Act of 1980, as amended (“CERCLA”), the Federal
Water Pollution Control Act Amendments; the Occupational Safety and Health Act
of 1970, as amended (“OSHA”); the Resource Conservation and Recovery Act of
1976, as amended (“RCRA”); the Safe Drinking Water Act, as amended; and the
Toxic Substances Control Act, as amended.

 

Equipment Purchase and Sale
Agreement shall
mean that certain Equipment Purchase and Sale Agreement dated September 7,
2006 by and between BCA and De Smet for the purchase from De Smet of certain
equipment used in the construction of the Project and/or the operation of
Biodiesel Plant, and all amendments, modifications, replacements and
restatements thereof, as assigned to Borrower pursuant to that certain
Assignment and Assumption of Equipment Purchase and Sale Agreement dated as of May 9,
2008 by and between BCA and Borrower and consented to in writing by De Smet.

 

Equity Interests
shall mean shares of capital stock, partnership interests, membership interests
in a limited liability company, beneficial interests in a trust or other equity
ownership interests in a Person, and any warrants, options or other rights
entitling the holder thereof to purchase or acquire any such equity interest.

 

ERISA shall mean the Employee Retirement Income
Security Act of 1974, as amended from time to time, and all rules and
regulations from time to time promulgated thereunder.

 

Event of Default shall mean those events set forth in Section 8.1.

 

Financial Covenant Commencement
Date shall have
the meaning set forth in Section 7.33.

 

10

 

Fixed Charge Coverage Ratio shall mean the ratio of (i) sum of
Borrower’s EBITDA, minus taxes, minus dividends and
distributions, minus maintenance Capital Expenditures, plus or minus
any non-cash items, minus any Net Income Bonus (as defined under
Management and Operational Services Agreement) payments or any other bonus or
incentive payments made under the Management and Operational Services Agreement
(to the extent such payments have not already been subtracted in determining
EBITDA) to (ii) the sum of the principal on long-term Indebtedness due
during the twelve month period ending as of the applicable measurement date, plus
Interest Expense, all calculated for the Borrower and its Subsidiaries
on a consolidated basis in accordance with GAAP.

 

Funded Debt shall
mean the sum of (a) the outstanding principal balance of the Loans
hereunder, (b) the aggregate outstanding principal balance of all other
Indebtedness of the Borrower for Money Borrowed, including capital lease
obligations, but excluding Subordinated Indebtedness and (c) guaranties,
as determined in accordance with GAAP.

 

Funded Debt to EBITDA
shall mean the ratio of (i) Funded Debt to (ii) EBITDA.

 

GAAP means generally accepted accounting principles,
applied on a basis consistent with the accounting practices applied in the
financial statements of the Borrower, except for any change in accounting
practices to the extent that, due to a promulgation of the Financial Accounting
Standards Board changing or implementing any new accounting standard, the
Borrower either (i) is required to implement such change, or (ii) for
future periods will be required to and for the current period may in accordance
with generally accepted accounting principles implement such change, for its
financial statements to be in conformity with generally accepted accounting
principles (any such change is herein referred to as a “Required GAAP
Change”),  provided that the Borrower
shall fully disclose in such financial statements any such Required GAAP Change
and the effects of the Required GAAP Change on the Borrower’s income, retained
earnings or other accounts, as applicable.

 

Governmental Approvals shall have the meaning set forth in Section 4.12.

 

Ground Lease shall mean that certain Amended and Restated Ground Lease Agreement dated
as of November 3, 2006 by and
between Bunge Milling, Inc. and BCA, as assigned by BCA and assumed by
Borrower pursuant to that certain First Amendment, Assignment and Assumption
and Consent to Assignment of Ground Lease and Conveyance of Leasehold
Improvements dated May 9, 2008.

 

Guarantor shall mean REG, or any other Person who
becomes a guarantor of all or any portion of the Obligations, each referred to
individually as Guarantor and collectively as the Guarantors.  For purposes of the Loan Documents,
“Guarantor” shall not include the IFA or any governmental unit or agency.  Furthermore, Lender and Borrower acknowledge
and agree that the IFA Guaranty is not a guarantee of Borrower’s obligations to
Lender, but instead an agreement by the IFA to participate in the
Construction/Term Loan under certain circumstances and pursuant to the terms
and conditions set forth in IFA Guaranty Documents.

 

11

 

Guaranty shall mean each Guaranty of the Guarantors,
including, without limitation, the Debt Service Fund Guaranty, and all
amendments, modifications, replacements, restatements, extensions and renewals
thereof.

 

Hazardous Materials shall mean and include gasoline,
petroleum, asbestos (asbestiform varieties of chrysotile; crocidolite; amosite;
anthophyllite; tremolite; and actinolite), explosives, radioactive materials or
any hazardous or toxic material, substance or waste which is defined by those
or similar terms or is regulated as such under any law, statutes, ordinances, rules and
regulations of any governmental authority having jurisdiction over the Property
or any portion thereof or its use, including: (i) any “hazardous
substance” defined as such in (or for purposes of) the Comprehensive
Environmental Response, Compensation and Liability Act, 42 U.S.C.A.
§ 9601(14) as may be amended from time to time, or any so-called
“superfund” or “superlien” Law, including the judicial interpretation thereof; (ii) any
“pollutant or contaminant” as defined in 42 U.S.C.A. § 9601(33); (iii) any
material now defined as “hazardous waste” pursuant to 40 C.F.R. Part 260;
(iv) any petroleum, including crude oil or any fraction thereof; (v) natural
gas, natural gas liquids, liquefied natural gas, or synthetic gas usable for
fuel; (vi) any “hazardous chemical” as defined pursuant to 29 C.F.R. Part 1910;
and  (vii) any other substance,
regardless of physical form, that is subject to any other Law or other past or
present requirement of any governmental authority regulating, relating to, or
imposing obligations, liability, or standards of conduct concerning the
protection of human health, plant life, animal life, natural resources,
property, or the reasonable enjoyment of life or property from the presence in
the environment of any solid, liquid, gas, odor, any form of energy, any form
of contaminant, or from any other source.

 

IDOT shall mean the Illinois Department of
Transportation.

 

IFA shall mean the Illinois Finance Authority.

 

IFA Guaranty shall mean that certain guaranty issued by the
IFA for the benefit of Lender, which guarantees the repayment of at least
60.85% of the outstanding principal balance of the Construction/Term Loan,
provided, that such guaranteed amount shall not exceed Fifteen Million and
00/100 Dollars ($15,000,000).

 

IFA Guaranty Documents shall mean the IFA Guaranty, the Lender’s
Agreement executed by Lender and the IFA, and any other agreements entered into
by Borrower, the IFA and/or Lender in connection with the IFA Guaranty.

 

Improvements shall mean the improvements for the development
of the Property for utilization as a Biodiesel Plant, including, without
limitation, the Project, the Project Addition, the equipment to be purchased by
Borrower for such Biodiesel Plant pursuant to the terms of the Equipment
Purchase and Sale Agreement, and all other improvements in connection with the
construction of the Biodiesel Plant.

 

Indebtedness shall
mean, without duplication, (i) obligations for borrowed money or for the
deferred purchase price of property or services in respect of which the
Borrower is liable, contingently or otherwise, as an obligor, guarantor or
otherwise, or in respect of which the Borrower otherwise assures a creditor
against loss; (ii) all other obligations or items which, in

 

12

 

accordance
with GAAP, would be shown on the liability side of a balance sheet as of the
date of occurrence thereof; (iii) the face amount of all letters of credit
issued and, without duplication, all drafts drawn thereunder; (iv) all
obligations secured by any lien on any property or asset; (v) obligations
under leases which shall have been or should be, in accordance with GAAP,
recorded as capital leases in respect of which, obligations the Borrower is
liable, contingently or otherwise, as an obligor, guarantor or otherwise, or in
respect of which obligations the Borrower otherwise assures a creditor against
loss; and (vi) unfunded vested benefits under each Plan maintained for
employees of the Borrower.

 

Infrastructure Grants shall mean, collectively, the CDBG Grant, the Economic
Development Programming Assistance Grant, and the TARP Grants.

 

Initial Construction/Term Loan
Disbursement
shall mean the first Advance under the Construction/Term Loan on or after the
date of this Agreement, which Advance shall be used for partial payment of the
purchase price for the assets of BCA as set forth in the Asset Purchase
Agreement and for such other uses as approved by Lender.

 

Inspecting Engineer shall mean DAI Management Consultants.

 

Interest Expense
shall mean, for a fiscal year-to-date period, the total gross interest expense
of Borrower and its Subsidiaries during such period, and shall in any event
include (i) interest expensed (whether or not paid) on all Indebtedness, (ii) the
amortization of debt discounts, (iii) the amortization of all fees payable
in connection with the incurrence of Indebtedness to the extent included in
interest expense, and (iv) the portion of any capitalized lease obligation
allocable to interest expense.

 

Inventory shall mean
all of the Borrower’s inventory, as such term is defined in the Code, whether
now owned or hereafter acquired, whether consisting of whole goods, spare parts
or components, supplies or materials, whether acquired, held or furnished for
sale, for lease or under service contracts or for manufacture or processing,
and wherever located.

 

Landlord shall mean
Bunge Milling, Inc.

 

Landlord and Mortgagee Agreement
shall mean that certain Landlord and Mortgagee Agreement dated as of even date
herewith executed by Landlord in favor of Lender, upon terms and conditions
satisfactory to Lender.

 

Laws shall mean, collectively, all federal,
state and local laws, statutes, codes, ordinances, orders, rules and
regulations, including judicial opinions or precedential authority in the
applicable jurisdiction.

 

Leasehold Mortgage shall mean the Mortgage of Leasehold, Security
Agreement, Assignment of Rents and Leases and Fixture Filing of even date
herewith given by Borrower to Lender encumbering Borrower’s leasehold interest
in the Property and securing the Obligations, all amendments, modifications,
replacements and restatements thereof.

 

Lender shall have the meaning set forth in the
Recitals to this Agreement.

 

13

 

LIBOR shall mean the fluctuating rate of
interest (rounded upwards, if necessary, to the next 1/8 of 1% and adjusted for
reserves if Lender is required to maintain reserves with respect to relevant
advances) being asked on thirty (30) day Eurodollar deposits, as reported on page Reuters
Screen LIBOR01 Page or any successor thereto, (or any successor) as
determined by Lender at approximately 10:00 a.m. Cincinnati, Ohio time on
the relevant date of determination.  In
the event that the Board of Governors of the Federal Reserve System shall
impose a Reserve Percentage with respect to LIBOR deposits of Lender then for
any period during which such Reserve Percentage shall apply, LIBOR shall be equal
to the amount determined above divided by an amount equal to 1 minus the
Reserve Percentage.

 

Loans shall mean the Construction/Term Loan and the
Revolving Credit Loan, and each is a “Loan”.

 

Loan Account shall
mean the loan accounts established on the books of Lender pursuant to Section 2.4
hereof and in which Lender will record all Advances under the Loans, payments
made on the Loans and other appropriate debits and credits as provided by this
Agreement with respect to the Borrower.

 

Loan Documents shall mean this Agreement, the
Construction/Term Loan Note, the Revolving Credit Loan Note, the Leasehold
Mortgage, the Debt Service Fund Guaranty, the IFA Guaranty Documents, the
Landlord’s Agreement and Consent, the Project Construction Disbursing Agreement,
the Project Addition Construction Disbursing Agreement, the Rate Management
Agreement, the Assignment of Oil Feedstock Supply Agreement, the Assignment of
Services Agreement, the Assignment of Management and Operational Services
Agreement, the Assignment of Equipment Purchase and Sale Agreement, and the
Assignment of Construction Documents, the Assignment of Representations,
Warranties and Indemnities, the Project Addition Escrow Account Agreement, the
Renewable Fuels Grant Account Agreement, the Debt Service Fund Account
Agreement, the Working Capital Escrow Account Agreement, the Construction
Escrow Account Agreement, the Subordination Agreement, the Oil Supply Cure
Rights Agreement, the Post-Closing Letter, financing statements and all other
documents, instruments and agreements which evidence, secure or are otherwise
executed in connection with the Loan, including all amendments, modifications,
replacements, restatements, renewals and extensions thereof.

 

Major Subcontract shall mean any individual Subcontract which
provides for work or materials with a cost in excess of $250,000; provided that
multiple Subcontracts with the same contractor shall be treated collectively as
one Subcontract for purposes of this definition of Major Subcontract.

 

Major Subcontractor shall mean any subcontractor holding a Major
Subcontract.

 

Management and Operational
Services Agreement
or, in the alternative, the MOSA shall mean that certain Management and
Operational Services Agreement dated May 9, 2008 by and between Borrower,
REG Services Group, LLC, an Iowa limited liability company (“REG Services”),
and REG Marketing & Logistics Group, LLC, an Iowa limited liability
company (“REG Marketing”), and all amendments, modifications, replacements and
restatements thereof.

 

14

 

Money Borrowed shall mean the sum of (i) Indebtedness arising from the lending of money by any
Person to Borrower; (ii) Indebtedness, whether or not in any such case
arising from the lending by any Person of money to Borrower, (A) which is
represented by notes payable or drafts accepted that evidence extensions of
credit, (B) which constitutes obligations evidenced by bonds, debentures,
notes or similar instruments, or (C) upon which interest charges are customarily
paid (other than accounts payable) or that was issued or assumed as full or
partial payment for Property and/or the Improvements; (iii) Indebtedness
that constitutes a capitalized lease obligation; (iv) reimbursement
obligations with respect to letters of credit or guaranties of letters of
credit and (v) Indebtedness of Borrower under any guaranty of obligations
that would constitute Indebtedness for Money Borrowed under clauses (i) through
(iii) hereof, if owed directly by Borrower.

 

Net Income shall mean, for any period of calculation, the
net income of Borrower and its Subsidiaries as determined in accordance with
GAAP.

 

Notes shall mean the Construction/Term Loan Note and
the Revolving Credit Note, and each is a “Note”.

 

Obligations shall mean the Loans and all other advances,
debts, liabilities, obligations, covenants and duties owing, arising, due or
payable from Borrower to Lender of any kind or nature, present or future,
whether or not evidenced by any note, letter of credit, guaranty or other
instrument, whether arising under this Agreement or any of the other Loan
Documents or otherwise and whether direct or indirect (including, without
limitation, those acquired by assignment), absolute or contingent, primary or
secondary, due or to become due, now existing or hereafter arising and however
acquired, and all replacements, renewals, extensions and other modifications of
any of the foregoing.  The term includes,
without limitation, all interest, charges, expenses, fees, attorneys’ fees and
any other sums chargeable to Borrower under any of the Loan Documents.  The term also includes any of the foregoing
that arise after the filing of a petition by or against the Borrower under any
bankruptcy or similar law, even if the Obligations do not accrue because of the
automatic stay under Bankruptcy Code §362 or otherwise.  The term also includes any obligations of Borrower and/or the Lender to the IFA
pursuant to the IFA Guaranty Documents, whether due to any recovery by Lender
under the IFA Guaranty or otherwise.

 

Oil Feedstock Supply Agreement shall mean that certain Oil Feedstock Supply
Agreement dated May 9, 2008 by and between Borrower and Bunge North
America, Inc., and all amendments, modifications, replacements and
restatements thereof.

 

Oil Supply Cure Rights Agreement shall mean that certain Oil Supply Cure Rights
Agreement dated as of May 9, 2008 by and between Lender, REG, and Bunge
North America, Inc., a New York corporation, and all amendments,
modifications, replacements and restatements thereof.

 

Operation Documents shall mean, collectively, the Oil Feedstock
Supply Agreement, the Management and Operational Services Agreement and the
Services Agreement.

 

15

 

Pass-Through
Tax Liabilities shall mean the amount of state and federal income
tax paid or to be paid by Borrower’s owners on taxable income earned by
Borrower and attributable to the owners as a result of Borrower’s
“pass-through” tax status, assuming the highest marginal income tax rate for federal
and state (for the state or states in which any owner is liable for income
taxes with respect to such income) income tax purposes, after taking into
account any deduction for state income taxes in calculating the federal income
tax liability and all other deductions, credits, deferrals and other reductions
available to the owners from or through Borrower.

 

Permitted
Indebtedness shall mean, without
duplication, any of the following:

 

(i)            Indebtedness to
trade creditors incurred in the ordinary course of Borrower’s business;

 

(ii)           Indebtedness to
Lender, including, without limitation, the Obligations;

 

(iii)          Indebtedness
secured by Permitted Liens (other than the REG Ventures Subordinated
Indebtedness), to the extent such Indebtedness exists on the Closing Date after
the funding of the initial Loan hereunder and is set forth on Schedule 1.1 attached hereto;

 

(iv)          Indebtedness,
including, without limitation, notes payable from Borrower to any members of
Borrower, which are subordinated to the Obligations pursuant to the terms of a
subordination agreement satisfactory to Lender in its sole discretion;

 

(v)           Indebtedness
relating to hedging agreements in the ordinary course of Borrower’s business;

 

(vi)          REG Ventures
Subordinated Indebtedness, so long as payment of such Indebtedness is
subordinated in writing to Lender;

 

(vii)         any other
Indebtedness of Borrower in any amount not exceeding an outstanding amount of
$250,000 at any one time;

 

(viii)        Indebtedness under
the Ground Lease and under personal property leases permitted pursuant to this
Agreement or otherwise consented to by Lender in writing;

 

(ix)           Indebtedness under
the contracts related to the Biodiesel Plant and consented to in writing by
Lender if said contract is (i) material or (ii) the Indebtedness
under said contract exceeds $100,000;

 

(x)            Indebtedness
incurred from the final resolution of the Dispute (as defined in the Working
Capital Escrow Account Agreement) to the extent that such

 

16

 

Indebtedness does not exceed the Dispute
Reserve (as defined in the Working Capital Escrow Account Agreement; and

 

(xi)           other Indebtedness
approved in advance by Lender in writing.

 

Permitted Liens shall mean any of the following:

 

(i)            the encumbrances and
other exceptions raised in the Title Commitment ,which Lender or its counsel
shall have not objected to in writing;

 

(ii)           liens for taxes, assessments or
governmental charges not delinquent or being contested in good faith and by
appropriate proceedings and for which adequate reserves in accordance with GAAP
are maintained on the Borrower’s books;

 

(iii)          liens arising out of deposits in
connection with workers’ compensation, unemployment insurance, old age pensions
or other social security or retirement benefits legislation;

 

(iv)          deposits or pledges to secure bids,
tenders, contracts (other than contracts for the payment of money), leases,
statutory obligations, surety and appeal bonds, and other obligations of like
nature arising in the ordinary course of the Borrower’s business;

 

(v)           liens imposed by law, such as
mechanics’, workers’, materialmen’s, carriers’ or other like liens arising in
the ordinary course of the Borrower’s business which secure the payment of
obligations which are not past due or which are being diligently contested in
good faith by appropriate proceedings and for which adequate reserves in
accordance with GAAP are maintained on the Borrower’s books;

 

(vi)          purchase money security interests for
the purchase of equipment to be used in the Borrower’s business, securing
solely the equipment so purchased, and which do not exceed in the aggregate at
any one time outstanding $250,000, and which do not violate any provision of
this Agreement, provided, however that such purchase money security interest shall
be deemed Indebtedness for purposes of part (vi) of the definition of
Permitted Indebtedness;

 

(vii)         liens securing the REG Ventures Subordinated Indebtedness, so
long as said liens are subordinated in writing to the liens of Lender;

 

(viii)        leases of equipment and other personal
property permitted pursuant to this Agreement; and

 

(ix)           rights of way, zoning restrictions,
easements and similar encumbrances affecting the Borrower’s real property which
do not materially interfere with the use of such property.

 

Person shall mean an individual, corporation, partnership, trust, governmental entity or any
other entity, organization or group whatsoever.

 

17

 

Plan shall mean an employee benefit plan (as defined
in Section 3(3) of ERISA) now or hereafter maintained for employees
of Borrower.

 

Plans and Specifications shall mean, collectively, the Project Plans and
Specifications and the Project Addition Plans and Specifications.

 

Post-Closing Letter shall mean that certain Post-Closing Letter
dated as of the date hereof by and between Borrower and Lender.

 

Prime Rate shall mean the rate of interest announced
publicly by Lender from time to time as its prime rate or other designation in
replacement of the prime rate announced by Lender.  Such rate may not necessarily be the lowest
interest rate offered by Lender.

 

Project shall mean the construction of the Improvements
on the Property in accordance with the Project Plans and Specifications, the
Project General Construction Contract, the Equipment Purchase and Sale
Agreement and this Agreement.

 

Project Addition shall mean the construction of the Improvements
on the Property in accordance with the Project Plans and Specifications, the
Project Addition General Construction Contract and this Agreement.

 

Project Addition Completion Date shall mean June 1, 2009.

 

Project Addition Construction
Disbursing Agreement shall mean that certain Disbursing Agreement dated on or about the
Effective Date by and among Borrower, Lender, Project Addition General
Contractor and Title Company.

 

Project Addition Costs shall mean the total amount, without
duplication, of (a) the amounts payable under the Project Addition General
Construction Contract and all Subcontracts, including the costs of any other
labor, materials, equipment, appliances, fixtures, supplies and services
required to render the Project Addition ready and suitable for their intended
use; (b) the fees and disbursements of all architects, engineers,
accountants, attorneys, developers and consultants in respect of the planning,
construction and construction financing of the Project Addition (including,
without limitation, the fees and disbursements of the Project Addition General
Contractor); and (c) any other items of cost or expense incurred by
Borrower in connection with the Project Addition set forth in the Budget.

 

Project Addition Escrow Account shall mean that certain escrow account
established by Borrower with Lender, whereby Borrower shall deposit cash equity
on the Closing Date in an amount equal to the cost of the Project Addition as
set forth in the Project Addition Budget approved by Lender.

 

Project Addition Escrow Account Agreement shall mean that certain Project Addition Escrow Account Agreement
and Pledge dated as of the Effective Date by and between Borrower and Lender.

 

Project Addition General Construction Contract shall mean that certain Standard Form of Design-Build Agreement
and General Conditions Between Owner and Contractor dated as of

 

18

 

May 9,
2008 by and between Borrower and Project Addition General Contractor for the
construction of the certain additional Improvements to the Project as set forth
therein, and all amendments, modifications, replacements and restatements
thereof.

 

Project
Addition General Contractor
shall mean REG Construction & Technology Services, LLC.

 

Project Addition Plans and Specifications shall have the meaning set forth in the Recitals hereto.

 

Project Completion Date shall mean December 31, 2008.

 

Project Construction Disbursing
Agreement shall
mean that certain Disbursing Agreement dated on or about the Effective Date by
and among Borrower, Lender, Project General Contractor and Title Company.

 

Project Costs  shall
mean the total amount, without duplication, of (a) the amounts payable
under the Project General Construction Contract and all Subcontracts, including
the costs of any other labor, materials, equipment, appliances, fixtures,
supplies and services required to render the Project ready and suitable for
their intended use; (b) the fees and disbursements of all architects,
engineers, accountants, attorneys, developers and consultants in respect of the
planning, construction and construction financing of the Project (including, without
limitation, the fees and disbursements of the Project General Contractor); (c) interest
on the Construction/Term Loan Note and all other sums payable to Lender
pursuant to the Construction/Term Loan or the Loan Documents; (d) the
amounts of the mortgage recording taxes, charges and any other costs, expenses
and amounts payable by Borrower to Lender in connection with obtaining, closing
and continuing the Construction/Term Loan; (e) mortgagee’s and other title
insurance premiums and other Title Company costs and charges payable by
Borrower in connection with obtaining, closing and continuing the
Construction/Term Loan; (f) the costs and expenses of maintaining the
Property and the Project prior to the Project Completion Date including,
without limitation, real estate taxes, service charges, water and sewer rent
and charges, utility deposits and charges, and insurance premiums; and (g) any
other items of cost or expense incurred by Borrower in connection with the
Property or the Project set forth in the Budget.

 

Project General Construction
Contract shall
mean that certain Construction Management Services Agreement dated September 8,
2006 by and between BCA and Project General Contractor for the construction of
the Project, and all amendments, modifications, replacements and restatements
thereof, as assigned to Borrower pursuant to that certain Assignment and
Assumption Agreement dated as of May 9, 2008 by and between BCA and
Borrower and consented to in writing by Project General Contractor.

 

Project General Contractor shall mean Fagen, Inc.

 

Project Plans and Specifications shall have the meaning set forth in the
Recitals hereto.

 

19

 

Property shall have the meaning set forth in the
Recitals to this Agreement.

 

Rate Management Agreement shall mean any
agreement, device or arrangement providing for payments which are related to
fluctuations of interest rates, exchange rates, exchange rates, forward rates,
or equity prices, including, but not limited to, dollar-denominated or
cross-currency interest rate exchange agreements, forward currency exchange
agreements, interest rate cap or collar protection agreements, forward rate
currency or interest rate options, puts and warrants, and any agreement
pertaining to equity derivative transactions (e.g., equity or equity index
swaps, options, caps, floors, collars and forwards), including, without
limitation any ISDA Master Agreement between Borrower and Lender or any
affiliate of Lender, and any schedules, confirmations and documents and other
confirming evidence between the parties confirming transactions thereunder, all
whether now existing or hereafter arising, and in each case as amended,
modified or supplemented from time to time.

 

Rate Management Obligations shall mean any and
all obligations of Borrower to Lender or any affiliate of Lender, whether
absolute, contingent or otherwise and howsoever and whensoever (whether now or
hereafter) created, arising, evidenced or acquired (including all renewals,
extensions and modifications thereof and substitutions therefore), under or in
connection with (i) any and all Rate Management Agreements, and (ii) any
and all cancellations, buy-backs, reversals, terminations or assignments of any
Rate Management Agreement.

 

REG shall mean Renewable Energy Group, Inc., a
Delaware corporation.

 

REG Ventures shall mean REG Ventures, LLC, an Iowa limited
liability company.

 

REG Ventures Subordinated
Indebtedness shall
mean that certain indebtedness of Borrower to REG Ventures in an amount not to
exceed $21,700,000 pursuant to that certain Subordinated Loan Agreement dated
as of May 9, 2008 (the “Subordinated Loan Agreement”), and
evidenced by that certain Convertible Secured Subordinated Note dated as of May 9,
2008 (the “Convertible Subordinated Note”).

 

Renewable Fuels Grant
shall mean a grant from the DCEO to BCA under the DCEO’s Renewable Fuels Grant
program in an amount not less than $4,000,000, as assigned to Borrower pursuant
to the Asset Purchase Agreement and that certain Novation and Assignment
Agreement dated as of May 9, 2008 by and among Borrower, BCA and DCEO.

 

Renewable Fuels Grant Account
shall mean that certain interest bearing escrow account of Borrower with Lender
whereby Borrower shall (i) cause the DCEO to directly deposit all proceeds
of the Renewable Fuels Grant and (ii) cause the transfer all proceeds of
the Renewable Fuels Grant previously disbursed to BCA and not yet applied to
Project Costs.

 

Renewable
Fuels Grant Account Agreement shall mean that certain Renewable Fuels Grant
Account Agreement and Pledge dated as of
the Effective Date by and between Borrower and Lender.

 

Renewable
Fuels Grant Agreement shall mean that certain agreement dated as
of November 1, 2006 by and between BCA and DCEO governing the Renewable Fuels
Grant, as

 

20

 

assigned to Borrower
pursuant to that certain Novation and Assignment Agreement dated as of May 9,
2008 by and among Borrower, BCA and DCEO, and as amended and/or modified from
time to time, including, without limitation, pursuant to that certain Request
for Modification/Waiver dated May 9, 2008 from Borrower to DCEO.

 

Reserve
Percentage shall mean the maximum aggregate reserve
requirement (including all basic, supplemental, marginal and other reserves)
which is imposed on member banks of the Federal Reserve System against
“Euro-currency Liabilities” as defined in Regulation D.

 

Restricted
Payment shall mean any dividend or other distribution (whether in cash,
securities or other property) with respect to any Equity Interests in the
Borrower, or any payment (whether in cash, securities or other property),
including any sinking fund or similar deposit, on account of the purchase,
redemption, retirement, acquisition, cancellation or termination of any such
Equity Interests in the Borrower or any option, warrant or other right to
acquire any such Equity Interests in the Borrower, except as permitted in this
Agreement.

 

Retainage shall mean (a) with respect to the
Project, the greater of (i) 10% of the labor, material, furniture, fixture
and equipment Project Costs actually incurred by Borrower for work in place as
part of the Project (but not to exceed more than five percent (5%) of the
Contract Price of Project General Construction Contract) or (ii) the
amount actually held back by Borrower from the Project General Contractor and
all subcontractors and materialmen engaged in the construction of the Project,
and (b) with respect to the Project Addition, the greater of (i) 10%
of the labor, material, furniture, fixture and equipment Project Addition Costs
actually incurred by Borrower for work in place as part of the Project Addition
(but not to exceed more than five percent (5%) of the Contract Price of Project
Addition General Construction Contract) or (ii) the amount actually held
back by Borrower from the Project Addition General Contractor and all
subcontractors and materialmen engaged in the construction of the Project
Addition.

 

Revolving
Credit Loan shall mean the loan made by
Lender as provided in Section 2.2 of this Agreement.

 

Revolving
Credit Loan Commitment shall have the meaning
set forth in Section 2.2(a) of this Agreement.

 

Revolving
Credit Loan Note shall mean the Revolving
Credit Loan Note to be executed by Borrower on the Closing Date in favor of
Lender to evidence the Revolving Credit Loan made pursuant to Section 2.2
of this Agreement, as the same may be amended, renewed, replaced, consolidated
or otherwise modified from time to time after execution and delivery thereof.

 

Revolving
Credit Loan Termination Date shall
mean May 8, 2009.

 

Rolling
Four-Quarter EBITDA shall mean, as to any
Person, such Person’s EBITDA for the previous four (4) fiscal quarters
measured as of the last day of the last fiscal quarter then ended.

 

21

 

Schedule of Construction
shall mean (a) that certain schedule of construction of the Project,
containing specific dates and times of performance for each line item of the
Project Budget, attached hereto as Exhibit D-1
and (b) that certain schedule of construction of the Project Addition,
containing specific dates and times of performance for each line item of the
Project Addition Budget, attached hereto as Exhibit D-2.

 

Security Agreement
shall mean the Security Agreement to be executed by Borrower on the Effective
Date in favor of Lender and by which such party shall grant to Lender, as
security for the Obligations, a security interest in all presently owned or
hereafter acquired personal property of the Borrower, including, without
limitation, all Inventory, Accounts, equipment and general intangibles of the
Borrower.

 

Services Agreement
shall mean that certain Services Agreement dated May 9, 2008 by and
between Borrower and Bunge North America, Inc., and all amendments,
modifications, replacements and restatements thereof.

 

Subcontracts shall
mean any contract or contracts entered into with any single subcontractor or
materialman employed by Borrower, the Project General Contractor, or the
Project Addition General Contractor in connection with the construction of the
Improvements, and all amendments, modifications, replacements and restatements
thereof.

 

Subordination Agreement
shall mean that certain Subordination Agreement dated as of the date hereof by
REG Ventures and REG in favor of Lender, and consented to by Borrower.

 

Subordinated Indebtedness
shall mean Indebtedness which is subordinated to the Obligations pursuant to
the terms of a subordination agreement satisfactory to lender in its sole
discretion, including, but not limited to, the REG Ventures Subordinated
Indebtedness.

 

Subsidiary shall
mean any subsidiary of the Borrower.

 

TARP
Grants shall mean thatcertain certain grant from IDOT to the City of Danville
pursuant to that certain Economic Development/TARP Agreement Borrower in a
collective amount not less than $9,000, which proceeds shall be used by the
City of Danville for the construction of infrastructure improvements supporting
the Biodiesel Plant.

 

Tax
Distributions shall mean distributions declared and paid by
Borrower to its members in an amount not to exceed the Pass-Through Tax
Liabilities.

 

Title
Commitment shall have the meaning set forth in Section 5.1(r).

 

Title
Company shall mean First American Title Insurance Company.

 

Unavoidable
Delays shall mean any delays due to any strike, lockout or other labor
disturbance, nuclear accident, plague, epidemic, windstorm, fire, hurricane,
earthquake or other casualty, war, rebellion, civil insurrection or other civil
disturbance, banking moratorium or declaration of national emergency, other Act
of God or act of governmental authority (other than a consequence of failure by
Borrower to comply with any applicable Laws), or any other cause beyond the
control of Borrower; provided, however, that (i) any lack of funds shall
not be 

 

22

 

deemed
a cause beyond the control of Borrower, (ii) any such delay and the
aggregate time of all such delays shall in no event exceed two months, and (iii) if
such an event occurs, Borrower shall deliver to Lender notice of such a cause
not later than fifteen (15) days after the event claimed to cause the
delay has occurred.

 

Verified
Project Costs shall mean the aggregate from time to time, of all
Project Costs actually incurred by Borrower for work in place as part of the
Project , as certified by the Inspecting Engineer, from time to time, pursuant
to the provisions of this Agreement minus a sum equal to the aggregate
of (i) the aggregate deficiency, if any, from time to time between the
undistributed Construction/Term Loan proceeds and the amount sufficient to
complete construction of the Project , in Lender’s reasonable discretion, and (ii) the
Retainage.

 

Verified
Project Addition Costs shall mean the aggregate from time to time,
of all Project Addition Costs actually incurred by Borrower for work in place
as part of the Project Addition, as certified by the Inspecting Engineer, from
time to time, pursuant to the provisions of this Agreement minus a sum
equal to the aggregate of (i) the aggregate deficiency, if any, from time
to time between the undistributed proceeds remaining Project Addition Escrow
Account and the amount sufficient to complete construction of the Project
Addition, in Lender’s reasonable discretion, and (ii) the Retainage.

 

Warranty
Deed shall mean that certain Warranty Deed dated as of the date hereof from
BCA to Borrower evidencing the fee conveyance of the Improvements to Borrower.

 

Working
Capital Escrow Account shall mean that certain escrow account
established on behalf of Borrower with Lender whereby Borrower shall deposit
funds in the amount of $5,500,000.

 

Working
Capital Escrow Account Agreement shall mean that certain
Working Capital Escrow Account Agreement and Pledge dated as of the Effective
Date by and between Borrower and Lender.

 

1.2                     Accounting Terms. 
All accounting terms not specifically defined herein shall be construed
in accordance with GAAP consistent with that applied in preparation of the
financial statements referred to in this Agreement, and all financial data
pursuant to the Agreement shall be prepared in accordance with such principles.

 

1.3                     Computation of Time. 
In this Agreement, in the computation of a period of time from a
specified date to a later specified date, the word “from” means “from and
including” and the word “to” means “to but excluding”.

 

SECTION 2.                                THE
LOANS

 

2.1                     Construction/Term Loan.

 

(a)                                  Loan Amount. 
On the basis of the representations, warranties and covenants of
Borrower contained herein and subject to the terms and conditions set forth
herein and in the other Loan Documents, Lender agrees to make a
Construction/Term Loan to Borrower in the 

 

23

 

aggregate maximum amount
of Twenty-Four Million Six Hundred Fifty Thousand and 00/100 Dollars
($24,650,000), or so much thereof as may be advanced at the times and in the
manner hereinafter set forth, for the purpose of financing the Borrower’s
acquisition of assets of BCA pursuant to the Asset Purchase Agreement and
financing the development of the Project at the Property.  All Advances of the Construction/Term Loan
shall be evidenced by, and subject to the terms of, the Construction/Term Loan
Note.  Lender shall not be obligated to
make any Advances of the Construction/Term Loan Note subsequent to December 31,
2008.

 

(b)                                 Construction/Term Loan Disbursement. 
The Construction/Term Loan shall be disbursed as follows:

 

(i)                                     Following the satisfaction of all of the
conditions precedent set forth in Sections 5.1, 5.2 and 5.4 hereof Lender shall
make the Initial Construction/Term Loan Disbursement.

 

(ii)                                  Following the Initial Construction/Term
Loan Disbursement and subject to the provisions of the Loan Documents
(including, without limitation, satisfaction of all of the conditions precedent
set forth in Sections 5.2 and 5.4 of this Agreement), disbursement shall be
made not more often than once each calendar month in an amount not to exceed
the aggregate Verified Project Costs incurred during the preceding draw period;
provided, however that each individual line item of such Verified Project
Costs, along with all Verified Project Costs for such item previously incurred,
shall not exceed the percentage of completion for such item (as determined by
Lender or the Inspecting Engineer) multiplied by the corresponding line
item set forth in the Budget.

 

(c)                                  Use
of Construction/Term Loan Proceeds. 
The proceeds of the Construction/Term Loan shall be used only to (i) finance
the Borrower’s purchase of the assets of Biofuels Company of America, LLC,
including, without limitation, the Biodiesel Plant, pursuant to the Asset
Purchase Agreement and (ii) financing the development of the Project at
the Property.

 

2.2                                 Revolving Credit Loan.

 

(a)                                  Revolving Credit Loan Commitment. 
Lender agrees, subject to the terms and conditions of this Agreement, to
make Revolving Credit Loans to Borrower from time to time during the period
commencing with the Closing Date and ending on the Revolving Loan Termination
Date, and for so long as there exists no Default or Event of Default, up to an
aggregate principal amount at any one time outstanding not to exceed the lesser
of (i) Five Million and 00/100 Dollars ($5,000,000.00), as the same may be
reduced from time to time in accordance with the terms of this Agreement (the “Revolving
Credit Loan Commitment”) and (ii) the Borrowing Base.  All Advances of the Revolving Credit Loan
shall be evidenced by, and subject to the terms of, the Revolving Credit Loan
Note.  Borrower may use the Revolving
Credit Loan Commitment by borrowing, repaying and reborrowing, all in
accordance with the terms and conditions hereof.

 

24

 

(b)                                 Revolving Credit Loan Requests. 
A request for an Advance under the Revolving Credit Loan shall be made,
or shall be deemed to be made, in the following manner:  (i) Borrower may give Lender notice
(whether in writing, by telephone or otherwise) of its intention to borrow, in
which notice the Borrower shall specify the amount of the proposed Advance, the
proposed date of the Advance, and whether said Advance will be a “LIBOR
Revolving Credit Loan Advance” or a “Prime Rate Revolving Credit Loan Advance”.

 

(c)                                  Use of Revolving Credit Loan Proceeds. 
The Revolving Credit Loans shall be used by Borrower solely for (i) repaying
certain indebtedness of Borrower, and (ii) the Borrower’s general
operating capital needs to the extent not inconsistent with the terms of this
Agreement.

 

(d)                                 Establishment
of Borrowing Base Reserves. 
Notwithstanding anything in this Agreement to the contrary, Lender may
elect at any time and from time to time to establish such reserves against the
Borrowing Base as Lender, in the exercise of its good faith credit judgment,
deems appropriate.  The amount of such
reserves shall be subtracted from the Borrowing Base.

 

(e)                                  Notification
of Account Debtors.  After and during
the continuance of an Event of Default, Lender may notify the Account Debtors
at any time that Accounts have been assigned to Lender and collect the Accounts
directly in its own name and may charge the collection costs and expenses,
including attorneys’ fees, to Borrower. 
Lender has no duty to protect, insure, collect or realize upon the
Accounts or preserve rights in them.

 

2.3                                 All Loans to Constitute One Obligation.

 

(a)                                  All Loans and all other Obligations of
Borrower shall constitute one general obligation of Borrower and shall be
secured by Lender’s security interest in and lien upon all of the Collateral,
and by all other security interests and liens heretofore, now or at any time or
times hereafter granted by Borrower to Lender. 
Notwithstanding the foregoing, Lender shall not apply the proceeds from
the foreclosure, sale or other disposition of any of Borrower’s Collateral that
is not Inventory or Accounts to Borrower’s obligations under the Revolving
Credit Loan until all of Borrower’s obligations under the Construction/Term
Loan have been satisfied in full and all payments required to be made to the
IFA pursuant to the IFA Guaranty and the IFA Collateral Agreement have been
paid in full.

 

(b)                                 To the fullest extent permitted by law,
the Borrower hereby waives promptness, diligence, notice of acceptance, and any
other notices of any nature whatsoever with respect to any of the Obligations,
and any requirement that Bank protect, secure, perfect or insure any security
interest or lien or any property subject thereto or exhaust any right or take
any action against any Guarantor or any other Person or any Collateral.  The liability of the Borrower under this Section 2.3
shall be absolute and unconditional irrespective of:

 

(i)                                     any change in the time, manner or place
of payment of, or in any other term of, any of the Obligations, or any other
amendment or waiver of or any consent to departure from this Agreement, any
Note or any of the other Loan Documents;

 

25

 

(ii)                                  any exchange, release or non-perfection
of any Collateral or any release or amendment or waiver of or consent to
departure from any other guaranty, for all or any of the Obligations; or

 

(iii)                               any other circumstance which might
otherwise constitute a defense available to, or discharge of, a Guarantor.

 

2.4                                 Loan Account.

 

(a)                                  Lender shall enter all Advances made
under the Construction/Term Loan as debits to the Loan Account and shall also
record in the Loan Account all payments made by a Borrower on account of the
Construction/Term Loan and all proceeds of Collateral which are finally paid to
Lender, and may record therein, in accordance with customary accounting
practice, all charges and expenses properly chargeable to a Borrower hereunder.

 

(b)                                 Lender shall enter all Advances made
under the Revolving Credit Loan as debits to the Loan Account and shall also
record in the Loan Account all payments made by a Borrower on account of the
Revolving Credit Loan and all proceeds of Collateral which are finally paid to
Lender, and may record therein, in accordance with customary accounting
practice, all charges and expenses properly chargeable to a Borrower hereunder.

 

2.5                                 Rate
Management Agreement.  On or before May 31,
2008, Borrower shall enter into a Rate Management Agreement with Lender in form
and substance satisfactory to Lender, whereby Borrower shall fix the rate of
interest of at least forty percent (40%) of the Construction/Term Loan
Commitment via an interest rate swap through Lender, which interest rate swap
shall be for a period of at least up to and including the Construction/Term
Loan Maturity Date.

 

2.6                                 Oral
and Written Advance Requests.  Unless
Borrower specifically directs Lender in writing not to accept or act upon
telephonic or electronic communications from Borrower, (i) Lender is
authorized to rely on oral or written requests for Advances, including
facsimile, telecopy or telegraphic loan requests, which Lender believes in its
good faith judgment to emanate from a properly authorized representative of
Borrower, whether or not that is in fact the case, (ii) Lender shall have
no liability to Borrower for any loss or damage suffered by Borrower as a
result of Lender’s honoring of any requests for an Advance, execution of any
instructions, authorizations or agreements or reliance on any reports
communicated to it telephonically or electronically and purporting to have been
sent to Lender by Borrower, and (iii) Lender shall have no duty to verify
the origin of any such communication or the authority of the person sending it.

 

SECTION 3.                                INTEREST; PAYMENTS;
FEES AND RESERVES; TERM

 

3.1                                 Interest Rate.

 

(a)                                  Construction/Term Loan. 
Subject to the terms and provisions of this Agreement, the principal
amount of each Advance outstanding at the end of each day the Construction/Term
Loan Note shall bear interest (i) from and after the date hereof until and
including the 

 

26

 

Conversion Date, at a
fluctuating rate per annum equal to the LIBOR rate plus 2.75% and (ii) after
the Conversion Date until the Construction/Term Loan Maturity Date, at a
fluctuating rate per annum equal to the LIBOR rate plus the Applicable
Margin.  Lender shall not be obligated to
give notice of any change in the LIBOR rate. Any adjustment to the interest
rate pursuant to the terms of this Agreement shall be determined solely by the
Lender one banking day prior to the date of adjustment.

 

(b)                                       Revolving
Credit Loans. Subject to the terms and provisions of this Agreement, the
principal amount outstanding at the end of each day under each (i) LIBOR
Revolving Credit Loan Advance shall bear interest at a fluctuating rate per
annum equal to the LIBOR plus 3.00% and (ii) Prime Rate Revolving Credit
Loan Advance shall bear interest at a fluctuating rate per annum equal to the
Prime Rate plus 0.25%.

 

(c)                                        Default
Rate.  Upon or after the occurrence
and during the continuation of any Event of Default, the principal amount of
the Obligations shall bear interest, calculated daily (computed on the actual
days elapsed over a year of 360 days), at a rate per annum equal to the Default
Rate.

 

(d)                                       Computation
of Interest.  All interest payable
under the Construction/Term Loan and the Revolving Credit Loan shall be
computed for the actual number of days elapsed on the basis of a year
consisting of three hundred sixty (360) days.

 

(e)                                        Change
in Law.  Notwithstanding any other
provision hereof, if any applicable law, treaty, regulation or directive, or
any change therein or in the interpretation or application thereof, shall make
it unlawful for Lender (for purposes of this subsection, the term “Lender”
shall include the office or branch where Lender or any corporation or bank then
controlling Lender makes or maintains any Loans) to make or maintain Loans, or
if Lender is unable to determine LIBOR, or adverse or unusual conditions in, or
changes in applicable law relating to, the London interbank market make it, in
the reasonable judgment of Lender, impracticable to fund therein any of the
Loans at the rate described above, or make the projected LIBOR unreflective of
the actual costs of funds therefor to Lender, then interest shall accrue on the
Loans outstanding at the end of each day at a fluctuating rate per annum equal
to the Prime Rate plus 0.25%.

 

3.2                                       Payments.

 

(a)                                  Construction/Term Loan. 
The principal amount and accrued interest of the Construction/Term Loan
Note shall be due and payable on the dates and in the manner hereinafter set
forth:  (i) from the Effective Date
until March 31, 2009, Borrower shall make monthly payments of accrued
interest on the first (1st) day of each calendar month, with the
first such monthly payment of interest commencing on June 1, 2008, (ii) commencing
on April 1, 2009 and on the first day of each month thereafter until (but
not including) the Construction/Term Loan Maturity Date, Borrower shall make
equal monthly payments of principal in the amount of $205,417, plus accrued
interest, and (iii)  on the Construction/Term Loan Maturity Date, the
entire outstanding principal balance and accrued interest on the
Construction/Term Loan Note shall be due and payable.

 

27

 

(b)                                 Revolving
Credit Loans.  Subject to any
Mandatory Prepayment, the principal amount and accrued interest of the
Revolving Credit Loan Note shall be due and payable on the dates and in the
manner hereinafter set forth:

 

(i)                                     Borrower shall
make payments of accrued interest monthly on the first (1st) day of each
calendar month for the immediately preceding month’s accrued interest (computed
through the last calendar day of the preceding month), with the first of such
payments commencing on the first (1st) day of the first month after the first
Advance under the Revolving Credit Loan, and

 

(ii)                                  on the Revolving
Credit Loan Termination Date, the entire outstanding principal balance and
accrued interest on the Revolving Credit Loan Note shall be due and payable.

 

(c)                                  Lender Advances Against Revolving Credit Loan. 
Lender shall have the authority, but not the obligation, to charge the
fees, interest and/or principal due to it in connection with the Obligations
and costs, fees and expenses against the Revolving Credit Loan Note and to
treat the same as an Advance against the Revolving Credit Loan without the
consent or approval by Borrower.  Lender
shall further have the authority, but not the obligation, to charge the fees,
interest and/or principal due it in connection with the Obligations against any
account maintained by Borrower with Lender. 
Any Revolving Credit Loan Advance made by Lender pursuant to this Section 3.2(c) shall
be a Prime Rate Revolving Credit Advance.

 

(d)                                 Business Day
Payment Date.  In the event the date
of any required payment falls on a non-Business Day, then such payment may be
made on the next succeeding Business Day.

 

3.3                                 Voluntary Prepayment.

 

(a)                                  Construction/Term
Loan.  Borrower may prepay the
Construction/Term Loan in full or in part at any time, provided, that any
prepayment of principal shall be accompanied by (1) a payment of interest
accrued to date thereon and (2) any applicable prepayment fee pursuant to
the terms of Section 3.5(f) of this Agreement.  Any prepayment shall be applied to the
principal installments in the inverse order of their maturities.

 

(b)                                 Revolving
Credit Loan.   Borrower may terminate
the Revolving Credit Loan credit facility in full, provided, that upon
termination of the Revolving Credit Loan credit facility, Borrower shall pay in
full the amounts outstanding thereunder. 
Borrower shall not be permitted to make any partial terminations of the
Revolving Credit Loan credit facility.

 

3.4                                 Mandatory Prepayment of Revolving Credit Loan.    Borrower shall not permit or allow the aggregate
unpaid principal amount of Revolving Credit Loan Advances to exceed the lesser
of (i) $5,000,000 and (ii) the Borrowing Base at such time, and
Borrower shall repay the Revolving Credit Loan by an amount equal to and to the
extent of any such excess, immediately upon obtaining notice or knowledge
thereof.

 

28

 

3.5                                 Fees.

 

(a)                                  Loan Commitment Fee. 
On the Effective Date and to the extent not already paid by Borrower,
the Borrower shall pay to the Lender a fully earned and non-refundable loan
commitment fee in an amount equal to $246,500, which amount
represents one hundred (100) basis points of the Construction/Term Loan
Commitment.  Such fee shall compensate
Lender for the origination, structuring, processing, approving and closing of
the transactions contemplated by this Agreement, including, but not limited to,
administrative, general overhead and lost opportunity costs.  Such fee does not compensate Lender for
out-of-pocket or other costs, fees or expenses for which Borrower has agreed to
reimburse Lender pursuant to any other provision of this Agreement or the other
Loan Documents or any commitment letter, letter of intent or similar agreement.

 

(b)                                 Construction Monitoring Fee. 
On the Effective Date, the Borrower shall pay to the Lender a
construction monitoring fee in an amount equal to $61,625, which amount
represents twenty-five (25) basis points of the Construction/Term Loan
Commitment.  Said construction disbursing
fee shall be deemed fully earned and nonrefundable on the Effective Date and
shall be exclusive of any Title Company disbursing charges.

 

(c)                                  Administration Fee. 
Commencing on the Effective Date and on each anniversary of the
Effective Date thereafter until the Construction/Term Loan Maturity Date, the
Borrower shall pay to the Lender an annual administration fee in an amount equal to $123,250,
which amount represents fifty (50) basis points of the Construction/Term Loan
Commitment.

 

(d)                                 Late Fee.  If any payment of principal, interest or any other amount
hereunder is not paid within fifteen (15) days after it is due, whether at
stated maturity, by acceleration or otherwise, the Borrower shall pay to the
Lender a late charge equal to five percent (5%) of the amount of such payment.

 

(e)                                  Unused Line Fee.  Borrower
agrees to pay to Lender, on the first day of each calendar quarter for the
immediately preceding calendar quarter, a fee equal to thirty-five (35) basis
points per annum (calculated on the basis of a 360-day year) of the difference
between Five Million and 00/100 Dollars ($5,000,000.00) and the Average
Quarterly Loan Balance.

 

(f)                                    Prepayment
Fee.   If Borrower, on or before the second anniversary of the Closing Date,
refinances all or any portion of the Construction/Term Loan with a financial
institution other than Lender, then Borrower shall pay the Lender a prepayment
fee in the amount of one percent (1%) of the prepaid principal amount of the
Construction/Term Loan.

 

(g)                                 Advances Against
Loan for Payment of Fees; Debiting Accounts with Lender for Payment of Fees.  The Borrower authorizes the Lender to make
Advances against the Revolving Credit Loan for any and all fees and charges due
hereunder.  In addition, the Borrower
authorizes the Lender to debit any account maintained by Borrower with Lender
for any and all fees and charges due hereunder.  The Lender agrees to provide written notice to
Borrower of all such fees and charges; provided, however, that Lender’s failure
to provide such notice shall in no way reduce or affect such fees and charges.

 

29

 

3.6                                 Debt
Service Fund.

 

(a)          On or before the Effective Date, Borrower shall (i) cause
to be deposited $2,000,000 into the Debt Service Fund Account, which amount
represents four-sevenths (4/7) of the Debt Service Fund Amount (the “Cash
Portion of the Debt Service Fund Amount”), and (ii) cause REG to deliver
the Debt Service Fund Guaranty to Lender, which Debt Service Fund Guaranty
shall guarantee the payments to be made by REG pursuant to the terms of this Section 3.6.

 

(b)                                 Upon
the failure of Borrower to make any payment of principal and/or interest under
the Construction/Term Loan when due under this Agreement (each a “Missed
Payment”), Lender, at its option, may elect to both (i) apply the portion
of Debt Service Fund Amount then in the Debt Service Fund Account to the
payment of four-sevenths (4/7) of such Missed Payment and (ii) demand
payment under the Debt Service Fund Guaranty for three-sevenths (3/7) of such
Missed Payment, provided, that such amount does not exceed three-sevenths (3/7)
of the Debt Service Fund Amount.   If
Lender applies any portion of Debt Service Fund Amount in the Debt Service Fund
Account to the payment of a Missed Payment, Borrower shall cause to be
deposited sums sufficient to ensure that four-sevenths (4/7) of the Debt Service
Fund Amount is maintained in the Debt Service Fund Account within ten (10) days
of such application (the “Debt Service Fund Replenishment Deposits).  Borrower’s failure to deposit such sums
within such ten (10) day period shall be an Event of Default.

 

(c)                                  Upon
the occurrence of a Default or Event of Default under this Agreement, Lender
shall have the right to (i) liquidate all of the Debt Service Fund Amount
in the Debt Service Fund Account, (ii) demand payment from Borrower as to
any Debt Service Fund Replenishment Deposits required pursuant to Section 3.6(b) but
that have not been made by Borrower, (iii) demand payment under the Debt
Service Fund Guaranty as to (X) three-sevenths (3/7th) of the
Debt Service Fund Amount plus (Y) any amounts that REG has failed to pay
pursuant to Section 3.6(b), and apply such amounts to the Borrower’s
Obligations with respect to the Construction/Term Loan only.

 

(d)                                 Interest
income earned on amounts deposited in the Debt Service Fund Account shall
remain in said Debt Service Fund Account until the Debt Service Fund is either (i) liquidated
pursuant to the terms of this Agreement or (ii) released to Borrower upon
payment in full of Borrower’s Obligations with respect to the Construction/Term
Loan; provided, however, that, upon the request of Borrower, which request
shall be permitted no more often that once per calendar quarter, Lender shall
transfer such interest income to an operating account of Borrower maintained
with Lender pursuant to Section 7.26 hereof.

 

(e)                                  Borrower
and Lender each agree, for the benefit of REG, not to modify or amend this Section 3.6
without the prior written consent of REG, which consent shall not be
unreasonably conditioned, withheld, delayed, or denied.

 

3.7                                 Working
Capital Escrow Account.  On the
Closing Date, Borrower shall (i) establish a working capital escrow
account (the “Working Capital Escrow Account”) at Lender and (ii) deposit
funds in the amount of $5,500,000 into the Working Capital Escrow Account.
Borrower shall not withdraw any amounts from the Working Capital Escrow Account
without the prior written consent of Lender or except as otherwise expressly
permitted pursuant to the 

 

30

 

Working Capital Escrow Account Agreement.  All
interest income earned on such funds deposited in the Working Capital
Escrow Account shall remain in said account
and the use of said interest income shall be subject to the terms and
provisions of the Working Capital Escrow Account Agreement.

 

3.8                                 Increased
Costs.  In the event that any
governmental authority subjects Lender to any new or additional charge, fee,
withholding or tax of any kind with respect to any Loans hereunder or changes
the method of taxation of such Loans or changes the reserve or deposit requirements
applicable to such loans, the Borrower shall pay to the Lender such additional
amounts as will compensate the Lender for such cost of lost income resulting
therefrom as reasonably determined by the Lender.

 

3.9                                 Term
of Agreement.  Subject to the terms
of this Agreement and Lender’s right to cease making Loans to Borrower at any
time upon or after the occurrence and during the continuation of any Default or
Event of Default, Bank’s obligation to make (i) the Revolving Credit Loan
hereunder shall be in effect for a period from the Closing Date through and
including the Revolving Credit Loan Termination Date, (ii) the
Construction/Term Loan hereunder shall be in effect for a period from the
Closing Date through and including the Construction/Term Loan Maturity
Date.   All indemnities given by Borrower
to Bank under any of the Loan Documents shall survive the repayment of the
Loans and the termination of this Agreement.

 

SECTION 4.                                REPRESENTATIONS AND
WARRANTIES OF BORROWER. To induce Lender to enter into this Agreement, and
to make the Initial Construction/Term Loan Disbursement and Advances under the
Construction/Term Loan and Revolving Credit Loan to Borrower, Borrower
represents and warrants and, so long as any amount of the Loan remains unpaid
or this Agreement remains in effect, shall be deemed to continuously represent
and warrant as follows:

 

4.1                     Organizational Status; Authorizations. 
Borrower is limited liability company duly formed, validly existing and
in good standing under the laws of the State of Delaware, with full power and
authority to consummate the transactions contemplated hereby.  Borrower has full power and authority to
execute, deliver and perform all Loan Documents, and such execution, delivery
and performance (a) has been duly authorized by all requisite action on
the part of Borrower, (b) does not contravene (i) the Borrower’s
articles of incorporation or by-laws, or (ii) any law or contractual
restriction binding on or affecting the Borrower or its properties and (c) does
not result in or require the creation of any lien, security interest or other
charge or encumbrance upon or with respect to any of the Collateral other than
any such lien in favor of Lender. 
Borrower is duly authorized to own and develop the Property and the Improvements,
to operate the Biodiesel Plant to enter into the transactions contemplated by
the Loan Documents and to pledge and assign and grant liens and security
interests as contemplated by the Loan Documents.  To the extent required for the current stage
of construction of the Improvements, Borrower has obtained all licenses and
permits and has filed all registrations necessary to the operation of its
business (except where the failure to so qualify or to obtain such licenses or
permits would not materially and adversely affect the actual or prospective
business, financial condition or operations of the Borrower).  This Agreement and the other Loan Documents
and the provisions contained herein and therein are and will be the valid and
legally enforceable 

 

31

 

obligations of Borrower
in accordance with their terms.  Borrower
has done everything necessary to comply with all applicable Laws in all
material respects.  Borrower’s federal
tax identification number is 20-2760722.

 

4.2                     Plans and Specifications; Ownership of
Plans and Specifications.  The Plans and Specifications
are satisfactory to Borrower and have been or will be approved by any
governmental authority whose approval is required.  The Plans and Specifications comply in all
material respects with the requirements of all applicable Laws.  All construction shall be performed in
substantial accordance with the Plans and Specifications, all applicable Laws,
appropriate set back requirements, restrictive covenants and the requirements
of any governmental authority.  Following
an Event of a Default hereunder and upon Lender’s exercise of its rights under Section 9
of this Agreement, the Plans and Specifications (or any license of such Plans
and Specifications to the extent that such Plans and Specifications are not
owned by Borrower) shall be the absolute property of Lender.

 

4.3                     No Actions.  Other than
the Dispute (as defined in the Working Capital Escrow Account Agreement), there
are no actions, suits or proceedings pending or, to the knowledge of Borrower,
threatened against or affecting Borrower, the Property or the Improvements, or
involving the validity or enforceability of the Loan Documents or the priority
of the lien of the Leasehold Mortgage, at law or in equity, or before or by a
governmental authority.  To the Borrower’s
knowledge, it is not in default with respect to any order, writ, injunction,
decree or demand of any court or any governmental authority.

 

4.4                     No Breach.  The
consummation of the transactions hereby contemplated and performance of this
Agreement will not result in any breach of, or constitute a default under, any
deed to secure debt, mortgage, deed of trust, indenture, security agreement,
lease, bank loan or credit agreement, contract, articles of organization,
operating agreement, joint venture agreement, partnership agreement or other
instruments to which Borrower is a party or by which it may be bound or subject

 

4.5                     Ownership of Property; No Liens. 
Immediately following the Initial Construction/Term Loan Disbursement
and the closing of the Asset Purchase Agreement (a) Borrower will have (i) good
and marketable title to its leasehold interest in the Property and (ii) good
and marketable title to its fee interest in the Improvements, and (b) the
Property and the Improvements shall be free and clear of all liens, claims,
charges and encumbrances of every type or nature, except for the lien created
by the Loan Documents and Permitted Liens. 
Borrower shall be the owner of the fee interest in the Improvements at
the Property at all times.

 

4.6                     Utilities Available. 
All utility services necessary for the construction of the Improvements
and the operation thereof for their intended purposes are or will be available
at the boundary of the Property including water supply, storm and sanitary
sewer facilities, electric and telephone facilities, and Borrower has the right
to connect to all utility services subject only to normal restrictions.  If such services are not now so available,
the cost of making the same available to the boundary line is included in the
Budget.

 

4.7                     Access.  All roads
necessary for ingress and egress to the Property and for the full utilization
of the Improvements for their intended purposes including all streets, gutters
and 

 

32

 

curbs have been or will
be installed and completed by Borrower (to the extent Borrower is responsible
for same) with the approval of the appropriate governmental authority.

 

4.8                     No Defaults; Complete Copies. 
There is no default on the part of Borrower under this Agreement, the
Notes, the other Loan Documents, the Ground Lease, the Operation Documents, or
the Construction Documents and no event has occurred and is continuing which
with notice or the passage of time or either would constitute a default under
any of the aforesaid instruments.  To the
best of Borrower’s knowledge, (i) there is no default by the Project
General Contractor under the Project General Construction Contract nor any
condition which, given notice or the passage of time or both, would constitute
a default under the Project General Construction Contract, and (ii) there
is no default by the Project Addition General Contractor under the Project
addition General Construction Contract nor any condition which, given notice or
the passage of time or both, would constitute a default under the Project
Addition General Construction Contract. 
The copies of the Construction Documents furnished to date to Lender are
true, correct and complete copies thereof and all of the aforesaid agreements
are all in full force and effect.

 

4.9                     Financial Statements. 
In regards to any financial statements delivered to Lender at any time
with respect to Borrower, Borrower represents that the same are true and
correct in all material respects, and fairly present the respective financial
conditions of Borrower as of the respective dates thereof, no material adverse
change has occurred in the financial conditions reflected therein since the
respective dates thereof and no additional borrowings have been made by
Borrower since the date thereof other than borrowing contemplated hereby or
approved by Lender.

 

4.10               Leases.  Borrower has no
interest in any existing leases (excluding personal property leases where the scheduled
lease payments per calendar year do not exceed $35,000) other than the Ground
Lease and the personal and real property leases described in Schedule 4.10 attached hereto,
which schedule shall be updated by Borrower at the time of any material change
in the leases described therein and which revised schedule shall be promptly
furnished to Lender.

 

4.11               Environmental Matters.

 

(a)                                           Except as discussed in the environmental
reports set forth in Schedule 4.11
attached hereto (i) to the best of
Borrower’s knowledge, the Improvements, the Property and the operations
conducted thereon do not violate any applicable law, statute, ordinance, rule,
regulation, order or determination of any governmental authority or any
restrictive covenant or deed restriction (recorded or otherwise), including
without limitation all applicable zoning ordinances and building codes, flood
disaster laws and Environmental Laws and regulations; (ii) without
limitation of clause (i) above, to the best of Borrower’s knowledge, the
Property and the operations conducted thereon by Borrower or any current or
prior owner or operator of such real property or operation, are not in
violation of or subject to any existing, pending or threatened action, suit,
investigation, inquiry or proceeding by any governmental authority or to any
remedial obligations under any Environmental Laws; (iii) all notices,
permits, licenses or similar authorizations, if any, required to be obtained or
filed in connection with the operation or use of the Property, including
without limitation past or present treatment, storage, disposal or 

 

33

 

release of a
hazardous substance or solid waste into the environment, have been duly
obtained or filed; (iv) to the best of Borrower’s knowledge, all Hazardous
Materials and solid wastes generated at the Property have in the past been and
shall continue to be transported, treated and disposed of only by carriers
maintaining valid permits under RCRA and any other Environmental Laws and only
at treatment, storage and disposal facilities maintaining valid permits under
RCRA, where required, and any other Environmental Laws, which carriers and
facilities have been and are, to the best of Borrower’s knowledge, operating in
compliance with such permits; (v) Borrower has taken reasonable steps
necessary to determine, and has determined, that no Hazardous Materials or
solid wastes have been disposed of or otherwise released and there has been no
threatened release of Hazardous Materials or solid wastes on or to the Property
except in compliance with Environmental Laws and except as disclosed in the
environmental reports furnished to Lender in accordance with Section 5.1(j) below;
(vi) Borrower has no material contingent liability in connection with any
release or threatened release of any Hazardous Materials or solid wastes into
the environment and except as disclosed in the environmental reports furnished
to Lender in accordance with Section 5.1(j) below; and (vii) the
use which Borrower makes or intends to make of the Property will not result in
the unlawful or unauthorized disposal or other release of any Hazardous
Materials or solid wastes on or to the Property.  The terms “release” and “threatened release”
have the meanings specified in CERCLA, and the terms “solid waste” and “disposal”
(or “disposed”) have the meanings specified in RCRA; provided, however,
in the event either CERCLA or RCRA is amended so as to broaden such meanings,
then such broadened meanings shall apply subsequent to the effective date of
such amendment, and provided  further, that, to the extent the
laws of any state in which any of the Property is located establish a meaning
for “release”, “solid waste” or “disposal” which is broader than that specified
in either CERCLA or RCRA, such broader meaning shall apply with regard to the
Property.

 

(b)                                          Borrower is in compliance in all material
respects with all federal, state, and local Environmental Laws applicable to
the Property and has not been cited for any violation of any federal, state,
and local Environmental Laws applicable to the Property and there has been no “release
or threatened release of a hazardous substance” (as defined by CERCLA) or
any other release, emission or discharge into the environment of any hazardous
or toxic substance, pollutant or other materials from the Property other than
as permitted under the applicable Environmental Law.  All Hazardous Materials and solid wastes
generated at the Property have and shall continue to be disposed of at sites
which maintain valid permits under RCRA and any applicable state or local
Environmental Laws where required.

 

4.12               Compliance.  All
Improvements shall be performed in accordance with (i) the Plans and
Specifications (except to the extent that Lender has given its prior written
consent to any changes to such Plans and Specifications), and (ii) all
applicable Laws, including, without limitation, appropriate set back
requirements, restrictive covenants and the requirements of any governmental
authority, except where the failure to so comply would not reasonably be
expected to have a material adverse effect on Borrower, the Improvements or
Borrower’s ability to pay and/or perform the Obligations.  Neither the construction of the Improvements
nor the use of the Improvements when completed as an industrial plant for the
production of biodiesel fuel will violate (i) any Laws (including
subdivision, zoning, building, environmental protection and wetland protection
Laws), or (ii) any building permits, restrictions of record or agreements
affecting the Property, the Improvements or any part thereof.  Neither the zoning authorizations, 

 

34

 

approvals or variances
nor any other right to construct or to use the Improvements is to any extent
dependent upon any real estate other than the Property.  Without limiting the generality of the
foregoing, all consents, licenses and permits and all other authorizations or
approvals (collectively, “Governmental Approvals”) required to
complete the Improvements in accordance with the Plans and Specifications have
been obtained or will be obtained prior to the Initial Construction/Term Loan
Disbursement , except to the extent that failure to obtain any Governmental
Approval would not have a material adverse effect on Borrower, the Improvements
and/or the ability of Borrower pay and/or perform the Obligations, and all Laws
relating to the development, construction and operation of the Improvements
have been complied with in all material respects and all permits and licenses
required for the operation of the Biodiesel Plant which cannot be obtained
until such development and construction is completed can be obtained if the
Improvements are completed in accordance with the Plans and Specifications.  When the Improvements are completed in
accordance with the Plans and Specifications, no building or other improvement
will encroach upon any property line, building line, setback line, side yard
line or any recorded or visible easement (or other easement of which Borrower
is aware or has reason to believe may exist) with respect to the Property,
and the use of the Improvements will comply with all requirements of
governmental authorities and any restrictive covenants to which the Property
may be subject.

 

4.13               Brokerage Fees. No brokerage fees or commissions are payable by or
to any person in connection with this Agreement or the Loan to be disbursed
hereunder.

 

4.14               No Margin Stock; No Plan Assets. 
The Loan is not being made for the purpose of purchasing or carrying “margin
stock” within the meaning of Regulation G, T, U or X issued by the Board
of Governors of the Federal Reserve System, and Borrower agrees to execute all
instruments necessary to comply with all the requirements of Regulation U
of the Federal Reserve System, as at any time amended.  Borrower is not a party in interest to any
plan defined or regulated under ERISA, and the assets of Borrower are not “plan
assets” of any employee benefit plan covered by ERISA or Section 4975 of
the Internal Revenue Code.

 

4.15               Investments.  Borrower has no loans to or investments in
any Person.

 

4.16               Existing
Indebtedness.  Borrower
has no Indebtedness other than Permitted Indebtedness.

 

4.17               Insolvency.  After the
execution and delivery of the Loan Documents and the disbursement of the
initial Loan hereunder, Borrower will not be insolvent within the meaning of
the United States Bankruptcy Code or unable to pay its debts as they mature.

 

4.18               Taxes.  Borrower has filed all required federal,
state, local and other tax returns and has paid, or made adequate provision for
the payment of, any taxes due pursuant thereto or pursuant to any assessment
received by Borrower except such taxes, if any, as are being contested in good
faith and as to which adequate reserves have been provided.

 

4.19               Negative Pledges.  Borrower is not a party to or bound by any
indenture, contract or other instrument or agreement which prohibits the
creation, incurrence or sufferance to exist 

 

35

 

of
any mortgage, pledge, lien, security interest or other encumbrance upon any of
the Collateral in favor of Lender.

 

4.20                           Intellectual
Property.  All of Borrower’s material
licenses, patents, copyrights, trademarks and trade names and all of the Borrower’s
applications for any of the foregoing are set forth on Schedule
4.20.  As of the Effective
Date and after the closing of the Asset Purchase Agreement, Borrower shall not
have any federally registered patents, copyrights or trademarks. There is no
action, proceeding, claim or complaint pending or, to the best of the Borrower’s
knowledge, threatened to be brought against Borrower by any Person which might
jeopardize Borrower’s interest in any of the foregoing licenses, patents,
copyrights, trademarks, trade names or applications.

 

4.21                           Outstanding
Guaranties. Borrower has no guarantees outstanding, other than the
endorsement of instruments for collection in the ordinary course of business.

 

SECTION 5.                                CONDITIONS OF
LENDING

 

5.1                                 Conditions
Precedent to Lender’s Obligation to Make the Initial Construction/Term Loan
Disbursement.  Lender shall not be
obligated to make the Initial Construction/Term Loan Disbursement  under this Agreement unless the following
conditions precedent shall have been satisfied:

 

(a)                                  Request for Advance. 
A request for Advance for the Initial Construction/Term Loan
Disbursement  which shall comply, in all
respects, with the requirements set forth in Section 6 below.

 

(b)                                 Loan Documents. 
Lender shall have received the following documents, duly executed and
delivered by all parties thereto, and otherwise satisfactory in form and
content to Lender and its counsel:

 

(i)                                     the 
Construction/Term Loan Note;

 

(ii)                                  the
Revolving Credit Loan Note;

 

(iii)                               the
Security Agreement;

 

(iv)                              acknowledgement
copies of filed UCC-1 financing statements from the Borrower, as debtor, to
Lender, as secured party, covering the Collateral, from such jurisdictions as
Lender deems necessary or desirable to perfect its security interest in the
Collateral along with copies of searches for each such jurisdiction listing the
UCC-1 financing statement of the Lender and all other effective financing
statements which name Borrower (under its present name and any previous name)
as debtor, together with copies of such other financing statements (none of
which shall cover the Collateral);

 

(v)                                 the
Leasehold Mortgage, and such UCC fixture financing statements and like real
property security documents as the Lender deems necessary or desirable to
create, perfect and preserve a lien in favor of the Lender, as security for the
Obligations, on all real property, improvements and fixtures in which the
Borrower has an interest;

 

36

 

(vi)                              the Assignment of Equipment Purchase and Sale
Agreement, together with a consent to
assignment from De Smet;

 

(vii)                           the Assignment of Oil Feedstock Supply
Agreement, together with a consent to
assignment from Bunge North America, Inc.;

 

(viii)                        the Assignment of Construction Documents, together
with consents from the Project General Contractor, the Project Addition General
Contractor and such Major Subcontractors as Lender may reasonably require;

 

(ix)                                the
Project Construction Disbursing Agreement;

 

(x)                                   the Project Addition
Construction Disbursing Agreement;

 

(x)                                   the Debt Service Fund Guaranty executed by REG;

 

(xi)                                the
Landlord’s Agreement and Consent;

 

(xii)                             the
Subordination Agreement;

 

(xiii)                          the
Project Addition Escrow Account Agreement;

 

(xiv)                         the
Renewable Fuels Grant Account Agreement;

 

(xv)                            the
Debt Service Fund Account Agreement;

 

(xvi)                         the
Working Capital Escrow Account Agreement;

 

(xvii)                      the Construction Escrow Account Agreement;

 

(xviii)                   the
Assignment of Services Agreement;

 

(xix)                           the
Assignment of Representations, Warranties and Indemnities;

 

(xx)                              the Oil Supply Cure Rights Agreement; and

 

(xxi)                           the Post-Closing Letter.

 

(c)                                  Governing
Instruments. Lender shall have received from Borrower a copy of
the Certificate of Formation of Borrower certified as being true and correct by
the Secretary of State of the State of Delaware, a certified copy of Borrower’s
Operating Agreement (and all amendments thereto), a certificate of a member or
manager of Borrower as to the incumbency and signature of each representative
of Borrower that has executed any document on behalf of Borrower in connection
with the transactions contemplated by this Agreement, and such other documents,
instruments, agreements and certificates as Lender may reasonably request with respect
to Borrower.

 

37

 

(d)                                 Good Standing and
Resolutions. Lender shall have received from Borrower: (i) a
good standing certificate from the Secretary of State of the State of Delaware,
(ii) certified resolutions authorizing the transactions contemplated by
the Loan Documents in form and content satisfactory to Lender, and (iii) such
other documents, instruments and certificates as Lender may reasonably request.

 

(e)                                  Legal Opinions.  Lender shall have received the following
legal opinion letters, each in form and content satisfactory to Lender and its
counsel:

 

(i)                                     An opinion letter delivered by counsel for
Borrower and counsel for REG, which opinion shall include, without limitation, (1) an
opinion that Borrower is duly organized, validly existing and duly authorized
to enter into the Loan Documents applicable to Borrower and to perform all of
the transactions contemplated by such Loan Documents, (2) an opinion that
REG is duly organized, validly existing and duly authorized to enter into the
Debt Service Fund Guaranty and to perform all of the transactions contemplated
by the Debt Service Fund Guaranty, (3) the Loan Documents executed and
delivered by Borrower are enforceable against Borrower and REG, as applicable,
subject to and limited by the effect of bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting the
rights of creditors generally, and application of general principles of equity;
and

 

(ii)                                  An opinion letter delivered by Kevin
Cahill as attorney for IFA and addressed to Lender, which opinion shall
include, without limitation, (1) an opinion that the IFA has the authority
to enter into the IFA Guaranty Documents, (2) that the IFA Guaranty
Documents are enforceable against the IFA, and (3) that the IFA Guaranty
is backed by the full faith and credit of the State of Illinois.

 

(f)                                    Construction
Contracts and other Documents.  Lender shall have received and approved the
following, all in form and content satisfactory to Lender:

 

(i)                                     the Project Addition Plans and Specifications;

 

(ii)                                  a copy of the
executed Project Addition General Construction Contract; and

 

(iii)                               a qualification
statement from the Project Addition General Contractor and any other
information which Lender reasonably deems necessary including overall bonding
capacity.

 

(g)                                 Budget; Funds and
Cash Flow.  Lender shall
have received and approved:

 

(i)                                     the Budget;

 

(ii)                                  a final cost
breakdown (including sufficient interest and carry dollars and reserves) which
shall have been approved by the Inspecting Engineer;

 

(iii)                               a Statement of Sources
and Uses of Funds; and

 

38

 

(iv)                              a
final Pro-Forma Project Cash Flow.

 

(h)                                 Financial
Statements and Financial Projections.  Lender shall have received and approved the
financial projections of Borrower and certified copies of current financial
statements of each Guarantor.

 

(i)                                     Asset Purchase
Agreement Documents.  Lender shall have approved and received
executed copies of the following documents in connection with Borrower’s
purchase of the assets of BCA:

 

(i)                                     the
Asset Purchase Agreement;

 

(ii)                                  the
Bill of Sale (as defined in the Asset Purchase Agreement);

 

(iii)                               the
Assignment and Assumption of Construction Management Services Agreement;

 

(iv)                              the Assignment
and Assumption of Equipment Purchase and Sale Agreement;

 

(v)                                 the
Assignment and Assumption of Ground Lease;

 

(vi)                              the
Oil Feedstock Supply Agreement;

 

(vii)                           the
Services Agreement;

 

(viii)                        the
Operation and Management Services Agreement;

 

(ix)                                the
Addendum to the Amended and Restated Stockholder Agreement (as defined in the
Asset Purchase Agreement);

 

(x)                                   the
Registration Rights Agreement (as defined in the Asset Purchase Agreement);

 

(xi)                                the
Confidentiality and Noncompetition Agreement;

 

(xii)                             the
Warranty Deed; and

 

(xiii)                          the
Escrow Agreement (as defined in the Asset Purchase Agreement).

 

(j)                                     Environmental
Report and Plans. Lender shall have received and approved an (i)  environmental
report or reports satisfactory to Lender prepared by a qualified environmental
consultant reasonably satisfactory to Lender, and (ii) an environmental
reliance letter from the qualified environmental consultant who prepared the
environmental report or reports, which environmental reliance letter names
Lender as a party that can rely upon said environmental report or reports.  The environmental report shall, at a minimum,
(i) disclose any existing or potential Hazardous Material contamination,
and physical conditions that may result in such 

 

39

 

contamination, at the
Property, (ii) include the results of all sampling or monitoring to
confirm the extent of existing or potential Hazardous Material contamination at
the Project, including the results of leak detection tests for each underground
storage tank located at the Property, if any, (iii) describe response
actions appropriate to remedy any existing or potential Hazardous Material
contamination, and report the estimated cost of any such appropriate response, (iv) confirm
that any prior removal of Hazardous Material from the Property was completed in
accordance with applicable laws, and (v) confirm whether or not the
Property is located in a wetlands district. 
All costs and charges by Lenders’ environmental consultant will be borne
by Borrower.

 

(k)                                  Utilities, Flood
Zone and Soils Report.  Lender
shall have received and approved from Borrower (i) letters reasonably
satisfactory to Lender from local utility companies and/or governmental authorities
stating that sufficient electric, gas, sewer, water and telephone facilities
will be available to the Improvements upon completion thereof, and (ii) written
evidence satisfactory to Lender that the Property is not located in an area designated
by the Secretary of Housing and Urban Development as a special flood hazard
area.

 

(l)                                     Governmental
Approvals.  Lender shall
have received and approved (i) a letter from the appropriate governmental
authority stating affirmatively that the Property is appropriately zoned for
the operation and use of a Biodiesel Plant, and (ii) copies of all
material authorizations, licenses and permits required by the appropriate
governmental authority to construct the Improvements.

 

(m)                               Insurance Policies.  Lender shall have received and approved
certificates with respect to of all insurance policies, along with any and all
required endorsements and certificates thereto, as required by this Agreement
and the Loan Documents.

 

(n)                                 Compliance.  Neither Borrower nor Lender shall have
received any notice that claims or asserts that there has been a failure to
comply with or a breach of any of the approvals or authorizations required
hereunder.

 

(o)                                 No Default.  There shall be no Event of Default under this
Agreement or any of the Loan Documents and no event has occurred and is
continuing which with notice or the passage of time or either would constitute
a default under any of the aforesaid instruments.

 

(p)                                 Ground Lease and Easement Documents. Lender
shall have received and approved (i) an executed memorandum of Assignment
and Assumption of Ground Lease (the “Memorandum of Ground Lease”), which
shall be recorded with the Recorder of Deeds of Vermilion County, Illinois on
or before the Effective Date and (ii) any and all easements to be granted
to Borrower on about the Closing Date, which shall be recorded with the
Recorder of Deeds of Vermilion County, Illinois on or before the Effective
Date.

 

(q)                                 Intellectual
Property Licenses.  Lender shall
have received evidence satisfactory to Lender, and Borrower hereby represents
and warrants, that all intellectual property licensed to Borrower in connection
with the operation and use of the Biodiesel Plant is and shall be assignable to
Lender, including, without limitation, any intellectual property licensed by De
Smet to Borrower; Lender shall have received complete copies of all such
licenses (excluding software 

 

40

 

licenses
that are not assignable by their terms); and Lender shall have received from
each such licensor all necessary consents to such assignments.

 

(r)                                    Title Commitment.  The Title Company shall have issued to Lender
a title insurance commitment (the “Title Commitment”) (American Land Title
Association, Standard Loan Policy Additional Coverage (1992)) in the
amount of the Construction/Term Loan 
Commitment plus the Revolving Credit Loan Commitment insuring the
Leasehold Mortgage to be a valid first lien on Borrower’s interest in the
Property (including any appurtenant or in gross easements related thereto) and
Improvements, free and clear of all defects and encumbrances, except such as
Lender and its counsel shall approve, and such Title Commitment which shall
contain:

 

(i)                                     full
coverage against mechanic’s liens (or an endorsement up to the aggregate amount
outstanding under the Construction/Term Loan Note as of the current Advance plus
the Revolving Credit Loan Commitment);

 

(ii)                                  the
deletion of all standard exceptions; and

 

(iii)                               such endorsements
thereto required by Lender, including, but not limited to, pending
disbursement, 3.0 zoning, mechanic’s lien, environmental, location, access, tax
parcel, survey, contiguity, creditors’ rights, variable rate and lender’s
comprehensive.

 

The title policy issued pursuant to such Title Commitment must remain
in full force and effect, enforceable against the Title Company in accordance
with its terms, except to the extent that such title policy is canceled or
terminated solely due to Lender’s gross negligence or willful misconduct.

 

(s)                                  Survey.  Lender shall have received and approved from
Borrower a survey prepared by a registered or certified surveyor approved by
Lender and the Title Company showing the dimensions and boundaries of the
Property, the area of the Property in square feet and other matters of interest
to Lender with courses and distances so as to permit a verbal description of
the Property and of any other item noted on the survey (including any and all
easements), all of which shall be reasonably acceptable to Lender.  The survey shall be in compliance with the
minimum standards as adopted by the American Land Title Association and the
American Congress on Surveying and Mapping (2005), with a certificate of the
surveyor in the form attached hereto as Exhibit E.

 

(t)                                    IFA
Guaranty.  Lender shall have received
and approved the following in connection with the IFA Guaranty:

 

(i)                                     An executed
original of the IFA Guaranty executed by the IFA in favor of Lender;

 

(ii)                                  An executed original of that certain
Lender’s Agreement executed by Lender and the IFA (the “Lender’s Agreement”);

 

41

 

(iii)                               An executed original of
that certain Collateral Agreement executed by Lender and the IFA (the “IFA
Collateral Agreement”);

 

(iv)                              An executed resolution passed
by the IFA or other evidence from the IFA satisfactory to Lender that (1) the
terms and provisions of this Agreement, the other Loan Documents, the IFA
Guaranty and the Lender’s Agreement do not violate the Illinois Finance
Authority Act, the Guidelines for the Illinois State Guarantee Programs (the “IFA
Guidelines”), or the Illinois Finance Authority Regulations (currently codified
as 8 Ill. Admin Code 1400) (the “IFA Regulations”), (2) to the extent that
the terms and provisions of this Agreement, the Loan Documents, the Lender’s
Agreement, and/or the IFA Guaranty violate the IFA Guidelines and/or IFA
Regulations, that said Guidelines and/or Regulations are amended to permit said
terms and provisions, and (3) the IFA will not retroactively amend the Guidelines
or Regulations in any manner that would invalidate the IFA Guaranty or
adversely impact the IFA Guaranty in any material manner.

 

(v)                                 DCEO
Grant.  Lender shall have received
and approved the following in connection with the DCEO Grant:

 

(i)                                     Evidence
reasonably satisfactory to Lender of the written consent of DCEO to the
assignment of the Renewable Fuels Grant from BCA to Borrower.

 

(ii)                                  An executed copy of
the Project Labor Agreement entered into by Borrower and DCEO.

 

(iii)                               Evidence reasonably satisfactory
to Lender that all conditions to the issuance of the Renewable Fuels Grant have
been satisfied, other than the closing of the Asset Purchase Agreement,
execution of this Agreement, and the execution of the other Loan Documents.

 

(w)                               Economic Development Programming
Assistance Grant.  Lender shall have received and approved
the following in connection with the Economic Development Programming
Assistance Grant:

 

(i)                                     Lender’s receipt
of that certain Novation and Assignment Agreement dated as of May 9, 2008
by and among Borrower, BCA, IDOT and the City as to the assignment by BCA to
Borrower of all of BCA’s rights, duties, obligations and responsibilities
respect to the Economic Development/TARP Agreement, Section 06-00225-00-BR,
Job # C-95-304-07 and Job # P-95-303-07 entered into between IDOT and City
effective October 24, 2006, and the Agreement entered into between BCA and
the City effective October 17, 2006

 

(ii)                                  an executed copy of
the Company/Local Agency Agreement by and between the City and Borrower

 

42

 

(iii)                               an executed copy of the
State/Local Joint Agreement by and between the City and IDOT.

 

(iv)                              evidence reasonably
satisfactory to Lender that all conditions to the issuance of the Economic Development
Programming Assistance Grant have been satisfied, other than the closing of the
Asset Purchase Agreement, execution of this Agreement, and the execution of the
other Loan Documents.

 

(v)                                 evidence reasonably
satisfactory to Lender that the City will administer the Economic Development
Programming Assistance Grant and manage and build the contemplated
infrastructure improvements.

 

(x)                                   CDBG Grant.  Lender shall have
received evidence reasonably satisfactory to Lender that (i) Borrower has
received written consent from the City as to the assignment of the CDBG Grant
from BCA to Borrower, and (ii) all other conditions precedent to Borrower’s
receipt of proceeds of such CDBG Grant have been satisfied.

 

(y)                                 TARP Grants.  Lender shall have
received evidence reasonably satisfactory to Lender that (i) Borrower has
received written consent from IDOT and City, pursuant to that certain Novation
and Assignment Agreement dated as of May 9, 2008 by and among Borrower,
BCA, IDOT and the City as to the assignment by BCA to Borrower of all of BCA’s
rights, duties, obligations and responsibilities respect to the Economic
Development/TARP Agreement, Section 06-00225-00-BR, Job # C-95-304-07 and
Job # P-95-303-07 entered into between IDOT and City effective October 24,
2006, and the Agreement entered into between BCA and the City effective October 17,
2006, and (ii) that all other conditions precedent to the receipt of
proceeds of such TARP Grants have been satisfied.

 

(z)                                   Establishment
of Accounts  Borrower shall have (i) established
with Lender all of the accounts required under Section 7.26 this
Agreement, including, without limitation, the Construction Escrow Account, the Debt Service Fund Account, the Project
Addition Escrow Account, the Renewable Fuels Grant Account and the Working
Capital Escrow Account Agreement, pursuant to terms satisfactory to Lender, and
(ii) funded the accounts required under Section 7.26 of this
Agreement to the extent required under this Agreement.

 

5.2                                 Conditions
Precedent to Lender’s Obligation to Make Advances Under the Construction/Term
Loan.   Lender’s obligation to make
any and all Advances (including the Initial Construction/Term Loan
Disbursement) under the Construction/Term Loan is subject to the
satisfaction of the following additional conditions precedent:

 

(a)                                  Representations
and Warranties True.  Borrower’s
representations and warranties shall be and remain true and correct in all
material respects.

 

(b)                                 Construction in
Accordance with Plans and Specifications.  The construction of the Project shall be
completed to date substantially in accordance with the Plans and Specifications
and the Schedule of Construction for the Project as adjusted for any
Unavoidable Delay

 

43

 

(c)                                  No Default.  No Event of Default shall have occurred and
be continuing under this Agreement or under any other Loan Document and no
event has occurred and is continuing which with notice or the passage of time
or either would constitute a default or an Event of Default under any of the
aforesaid instruments.

 

(d)                                 Disbursement
of Renewable Fuels Grant Account Proceeds. 
To the extent that any proceeds of the Renewable Fuels Grant have been
released by the DCEO, all such proceeds shall have been disbursed for the
payment of Project Costs, fees and other
expenses set forth in the Budget (to the extent that such payments are
permitted by the Renewable Fuels Grant Agreement).   Prior to the release of the final
installment (i.e.,  the $200,000) with
respect to the Renewable Fuels Grant, Lender shall have received written
confirmation: from the Inspecting Engineer of final completion of the Project,
and from the Borrower and General Contractor and, if required by Lender, the
Inspecting Engineer that all Project Costs have been deemed paid in full.

 

(e)                                  Advances.  The requirements of Section 6.1 with
respect to requests for Advances shall have been complied with.

 

(f)                                    Deficiency.  The undisbursed portion of the
Construction/Term Loan funds shall be sufficient to complete the construction
of the Project.  If the undisbursed
portion of the Construction/Term Loan funds is insufficient to complete
construction on an overall basis and on a line item basis (after giving effect
to any line item adjustments permitted by Lender pursuant to this Agreement) as
determined by Lender (which determination may be made, among other reasons, on
the basis of increased costs and changes), Borrower shall then first expend its
own funds in an amount equal to such estimated deficiency.  Borrower shall provide Lender with paid bills
and lien waivers or other evidence of payment satisfactory to Lender in form
and content, representing the expenditure of Borrower’s own funds to the extent
of this difference between the undisbursed Construction/Term Loan proceeds and
the estimated costs of completion. 
Lender may at its option, require Borrower to pay the amount of any such
deficiency into the Construction Escrow Account to be controlled by Lender and
paid out according to the requirements of Section 6.1 of this Agreement
regarding Advances.

 

Except as provided below, amounts budgeted
for any line item shall not be used to pay amounts applicable for other line
items.  Notwithstanding the foregoing, to
the extent there exists cost savings in any line item in the Budget, Borrower
may, upon written notice to Lender, apply such cost savings to another line
item or shift the same to the contingency reserve, provided, however, that to
the extent that cost savings for any particular line item in the Budget exceeds
$50,000 in the aggregate, Borrower must also obtain Lender’s prior written
consent before applying such cost savings to another line item or shifting the
same to the contingency reserve.

 

(g)                                 Site Plan.  Lender’s receipt and approval of a site plan
including proposed location of the Project, parking areas, drives, utilities
and easements on and off site (if any).

 

(h)                                 Confirmations.  If required by Lender in the exercise of its
commercially reasonable judgment, Lender shall have received and approved
written confirmations from each of the Guarantors reaffirming their respective
obligations under the Guaranties.

 

44

 

5.3                                 Conditions Precedent to Lender’s
Obligation to Make Advances Under the Revolving Credit Loan.    Lender’s obligation to make any and all
Advances under the Revolving Credit Loan is subject to the satisfaction of
the following additional conditions precedent:

 

(a)                                  Except to the extent that any portion in the
Working Capital Escrow Account is restricted as a Dispute Reserve (as defined
in the Working Capital Escrow Account Agreement) at the time that all other
conditions precedent to Lender’s obligation to make any and all Advances under
the Revolving Credit Loan have been satisfied, all amounts deposited in the
Working Capital Escrow Account pursuant to this Agreement shall have
been fully withdrawn and disbursed pursuant to and in accordance with the
Working Capital Escrow Account Agreement.

 

(b)                                 The
Initial Construction/Term Loan
Disbursement shall have been made to Borrower.

 

(c)                                  The following
statements shall be true:  (i) the
representations and warranties contained in this Agreement are correct on and
as of the date of such Advance in all material respects under the Revolving
Credit Loan as though made on and as of such date, and (ii) there exists
no Default or Event of Default as of such date, nor would any Default or Event
of Default result from the making of the Advance of the Revolving Credit Loan
requested by Borrower.

 

(d)                                 Lender shall have received
a completed Borrowing Base Certificate in the form of Exhibit H
hereto, signed by Borrower, and dated as of the date of Borrower’s request for
such Revolving Credit Loan Advance reflecting that Borrower has sufficient
Availability under the Revolving Credit Loan to support the Revolving Credit
Loan Advance request.

 

(e)                                  Lender shall have received satisfactory
Contribution Margin Pro Formas in accordance with section 7.12(a)(x) showing
a positive contribution margin.

 

(f)                                    Lender shall have
received such other approvals, opinions or documents as it may reasonably
request.

 

Borrower agrees that the making of a request
by Borrower for a Revolving Credit Loan, whether in writing, by telephone or
otherwise, shall constitute a certification by all of Borrower and the person(s) executing
or giving the same that all representations and warranties of Borrower herein
are true as of the date thereof and that all required conditions to the making
of the Revolving Credit Loan have been met.

 

5.4                                 Other Conditions Precedent
to Advances.  In addition and
notwithstanding anything in this Agreement to the contrary, Lender shall be
under no duty to make any Advances under either of the Loans until the
following conditions shall have been and shall continue to be satisfied, in the
sole discretion of Lender:

 

(a)                                  No Default or Event
of Default shall exist.

 

(b)                                 No action,
proceeding, investigation, regulation or legislation shall have been
instituted, threatened or proposed before any court, governmental agency or
legislative body to 

 

45

 

enjoin,
restrain or prohibit, or to obtain damages in respect of the transactions
contemplated hereby.

 

(c)                                  There shall not
have occurred any material adverse change in the business, financial condition
or results of operations of Borrower, or the existence or value of any
Collateral, or any event, which would reasonably be expected to materially and
adversely affect the actual or prospective business, financial condition or
operations of Borrower.

 

(d)                                 Lender shall have
received such other further documents, data or information with respect to the
Improvements, and Property, as Lender may reasonably request, including,
without limitation, subordination agreements, attornment agreements and consents
from any entities involved in the Loan transaction, all in form and content
satisfactory to Lender.

 

(e)                                  Borrower shall have
paid all legal fees and other closing or like costs and expenses of Lender
which the Borrower is obligated to pay hereunder.

 

SECTION 6.                                CONSTRUCTION
ADVANCES/DISBURSEMENTS.

 

6.1                                 Project Advances

 

(a)                                  Request for
Advance.  Requests for Advances under the
Construction/Term Loan may not be submitted more frequently than monthly and
must contain the following:

 

(i)                               A request for Advance
executed by Borrower for construction of the Project in the form of Exhibit F, Borrower’s
Affidavit and Request for Advance, and Contractor’s Request for Advance
accompanied by appropriate Schedule A’s, including AIA Document Nos. G702 and
G703, signed by Borrower and the General Contractor.  Such request shall only include Verified
Project Costs, except as expressly set forth herein, of work done or materials
incorporated into the Project between the next preceding Advance and the
Advance being applied for (or other Project Costs approved by Lender and not
theretofore the subject of an Advance).

 

(ii)                            Lien waivers in
form acceptable to Lender, from the Project General Contractor and all
Subcontractors for all work done or material furnished up through and including
the date of the Advance.

 

(iii)                         Original invoices
and bills for all Verified Project Costs for which the Advance is being
requested and a signed request for any other funds.

 

(iv)                        Confirmation from
the Inspecting Engineer to the effect that all of the work done and material
incorporated for which the Advance is being requested, has actually been
satisfactorily done and/or incorporated into the Project, and that the
construction of the Project has proceeded in accordance with the Schedule of Construction
for the Project.

 

(v)                           An endorsement
from the Title Company increasing the amount of the insurance provided by the
Title Commitment, against unrecorded mechanics and materialmen’s 

 

46

 

liens,
up to the amount of the Construction/Term Loan outstanding as of the date of
the Advance plus the Revolving Credit Loan commitment.

 

(b)                                 Off-site Material;
Advance Deposits.  Lender may, at
its discretion, refuse to make an Advance, or any part thereof, for any
material to be incorporated into the Project which is stored off of the
Property or for any advance deposits.  In
the event Lender does agree to pay or reimburse for material stored off the
Property, Lender may impose additional requirements, such as requiring
additional proof of insurance of such material, and requiring that additional
steps be taken to properly perfect a security interest in such off-site
material.

 

(c)                                  Cost Breakdowns.  Advances shall not exceed, on a line item
basis, the amount equal to the percentage of completion of such line item (as
determined by Lender and the Inspecting Engineer) multiplied by the line
item for such Project Costs set forth in the Budget for the Project.

 

(d)                                 Advances at Lender’s
Office.  All Advances are to be made at
the principal office of Lender, or at such other place as Lender may
designate.  Lender may make Advances in
any manner it may elect, including but not limited to depositing the proceeds
in a restricted account of Borrower and requiring individual checks payable to
the Project General Contractor and/or subcontractors, suppliers and
materialmen, prepared and executed by Borrower, to be delivered to Lender for
delivery to the payees thereof.  After
the Initial Construction/Term Loan Disbursement, Lender shall honor and pay
requests for an Advance by Borrower within five (5) business days of (i) Lender’s
actual receipt of such request for an Advance and (ii) satisfaction of all
conditions to such Advance, including, but not limited to, Lender’s receipt of
a report from the Inspecting Engineer satisfactory to Lender.

 

Notwithstanding the foregoing, all disbursements for the construction
of the Project, unless otherwise elected by Lender, shall be made through the
Title Company pursuant to the Project Construction Disbursing Agreement, and no
Advance shall be made to the Title Company until Lender receives written
confirmation from the Title Company that, at the time of each disbursement, the
Title Policy will be endorsed using a Mechanic’s Lien Endorsement acceptable to
Lender reflecting the amount actually disbursed plus the amount of the
Revolving Credit Loan Commitment. 
Further, a disbursement advisor acceptable to Lender in its sole
discretion shall be retained at Borrower’s cost for the purpose of monitoring
all disbursements.

 

(e)                                  Restatement.  Each request for an Advance by Borrower shall
constitute an affirmation that the warranties and representations contained in Section 4
of this Agreement remain true and correct in all material respects and that no
breach of the covenants contained in Section 7 of this Agreement has
occurred as of the date of the Advance, unless Lender is notified to the
contrary prior to the disbursement of the requested Advance.

 

(f)                                    Final Disbursement. The final
disbursement of Construction/Term Loan proceeds shall not be made until Lender
has received advice from the Inspecting Engineer that the Project is complete
and Borrower has delivered or caused to be delivered to Lender (in addition to
all foregoing requirements) all in form and content acceptable to
Lender:  (a) evidence that the
public authorities having jurisdiction over the Project have approved the
Project in its entirety for permanent occupancy to the extent any such approval
is a condition of the lawful use and 

 

47

 

occupancy
of the Project; (b) a confirmation of final completion of the Project from
the Inspecting Engineer; (c) evidence of the insurance required herein; (d) an
endorsement from the Title Company for the full amount of the Construction/Term
Loan, with no exceptions for unrecorded mechanics’ and materialmen’s liens; and
(e) evidence that the Project General Contractor and all subcontractors,
suppliers and materialmen will be fully paid, with respect to work and
materials supplied with respect to said building or phase, out of such final
Advance.

 

(g)                                 Application of
Funds.  Upon the occurrence of an Event
of Default, Lender, in its sole discretion, may advance such amounts to satisfy
any of Borrower’s Obligations, and all amounts so advanced and applied shall be
part of the Loans and shall be secured by the Leasehold Mortgage.

 

6.2                                 Project Addition
Disbursements.

 

(a)                                  Request for
Disbursement.  Requests for
disbursements from the Project Addition Escrow Account (each a “Disbursement”)
may not be submitted more frequently than monthly and must contain the
following:

 

(i)                                 A request for a
Disbursement from the Project Addition Escrow Account executed by Borrower for
construction of the Project in the form of Exhibit H,
Borrower’s Affidavit and Request for Disbursement, and Contractor’s Request for
Disbursement accompanied by appropriate Schedule A’s, including AIA Document
Nos. G702 and G703, signed by Borrower and the Project Addition General
Contractor.  Such request shall only
include Verified Project Addition Costs, except as expressly set forth herein,
of work done or materials incorporated into the Project Addition between the
next preceding Disbursement and the Disbursement being applied for (or other
Project Addition Costs approved by Lender and not theretofore the subject of a
Disbursement).

 

(ii)                              Lien waivers in
form acceptable to Lender, from the Project Addition General Contractor and all
Subcontractors for all work done or material furnished up through and including
the date of the Disbursement.

 

(iii)                           Original invoices
and bills for all Verified Project Addition Costs for which the Disbursement is
being requested and a signed request for any other funds.

 

(iv)                          Confirmation from
the Inspecting Engineer to the effect that all of the work done and material
incorporated for which the Disbursement is being requested, has actually been
satisfactorily done and/or incorporated into the Project Addition in accordance
with the Project Addition Plans and Specifications, and that the construction
of the Project Addition has proceeded in accordance with the Schedule of
Construction for the Project Addition.

 

(v)                             A date down endorsement, in form and substance acceptable to Lender,
from the Title Company to the title policy issued pursuant to the Title
Commitment, updating Lender’s title policy coverage through the date of the
Disbursement.

 

(b)                                 No Default.  No Disbursements shall be made if an Event of
Default shall have occurred and be continuing under this Agreement or under any
other Loan Document or any 

 

48

 

event
has occurred and is continuing which with notice or the passage of time or
either would constitute a default or an Event of Default under any of the
aforesaid instruments.

 

(c)                                  Deficiency.  The undisbursed portion of the Project
Addition Escrow Account shall be sufficient to complete the construction of the
Project Addition.  If the undisbursed
portion of the Project Addition Escrow Account is insufficient to complete
construction of the Project Addition on an overall basis and on a line item
basis (after giving effect to any line item adjustments permitted by Lender
pursuant to this Agreement) as determined by Lender (which determination may be
made, among other reasons, on the basis of increased costs and changes),
Borrower shall then first expend its own additional funds in an amount equal to
such estimated deficiency before any further Disbursements will be made from
the Project Addition Escrow Account.  Borrower
shall provide Lender with paid bills and lien waivers or other evidence of
payment satisfactory to Lender in form and content, representing the
expenditure of Borrower’s additional funds to the extent of this difference
between the undisbursed Project Addition Escrow Account and the estimated costs
of completion of the Project Addition. 
Lender may at its option, require Borrower to pay the amount of any such
deficiency into the Project Addition Escrow Account to be controlled by Lender
and paid out according to the requirements of this Section 6.2.

 

Except as provided below, amounts budgeted
for any line item shall not be used to pay amounts applicable for other line
items.  Notwithstanding the foregoing, to
the extent there exists cost savings in any line item in the Project Addition
Budget, Borrower may, upon written notice to Lender, apply such cost savings to
another line item or shift the same to the contingency reserve, provided,
however, that to the extent that cost savings for any particular line item in
the Project Addition Budget exceeds $50,000 in the aggregate, Borrower must
also obtain Lender’s prior written consent before applying such cost savings to
another line item or shifting the same to the contingency reserve.

 

(d)                                 Site Plan; Building
Permit; Project Addition Documentation.  No
Disbursements shall be made until Lender’s receipt and approval of (i) a
site plan including proposed location of the Project Addition, (ii) a
building permit with respect to the Project Addition, and (iii) the
documents related to the Project Addition set forth in Section 5.1(f) 
and Section 5.1(g) of this Agreement.

 

(e)                                  Cost Breakdowns.  Disbursements shall not exceed, on a line
item basis, the amount equal to the percentage of completion of such line item (as
determined by Lender and the Inspecting Engineer) multiplied by the line
item for such Project Addition Costs set forth in the Budget for the Project
Addition.

 

(f)                                    Advances at Lender’s
Office.  All Disbursements are to be
made at the principal office of Lender, or at such other place as Lender may
designate.  Lender may make Disbursements
in any manner it may elect, including but not limited to depositing the
proceeds in a restricted account of Borrower and requiring individual checks
payable to the Project Addition General Contractor and/or subcontractors,
suppliers and materialmen, prepared and executed by Borrower, to be delivered
to Lender for delivery to the payees thereof. 
After the initial Disbursement from the Project Addition Escrow Account,
Lender shall honor and pay requests for a Disbursement by Borrower within five (5) business
days of (i) Lender’s actual receipt of 

 

49

 

such
request for a Disbursement and (ii) satisfaction of all conditions to such
Disbursement, including, but not limited to, Lender’s receipt of a report from
the Inspecting Engineer satisfactory to Lender.

 

Notwithstanding the foregoing, all disbursements for the construction
of the Project, unless otherwise elected by Lender, shall be made through the
Title Company pursuant to the Project Addition Construction Disbursing
Agreement, and no Disbursement shall be made to the Title Company until Lender
receives written confirmation from the Title Company that, at the time of each
Disbursement, the Title Policy will be endorsed using a date down endorsement
acceptable to Lender.  Further, a
disbursement advisor acceptable to Lender in its sole discretion shall be
retained at Borrower’s cost for the purpose of monitoring all Disbursements for
the Project Addition.

 

(g)                                 Restatement.  Each request for a Disbursement by Borrower
shall constitute an affirmation that the warranties and representations
contained in Section 4 of this Agreement remain true and correct in all
material respects and that no breach of the covenants contained in Section 7
of this Agreement has occurred as of the date of the Advance, unless Lender is
notified to the contrary prior to the disbursement of the requested Advance.

 

(h)                                 Final Disbursement. The final disbursement
of Project Addition Escrow Account proceeds shall not be made until Lender has
received advice from the Inspecting Engineer that the Project Addition is
complete and Borrower has delivered or caused to be delivered to Lender (in
addition to all foregoing requirements) all in form and content acceptable
to Lender:  (a) evidence that the
public authorities having jurisdiction over the Project Addition have approved
the Project Addition in its entirety for permanent occupancy to the extent any
such approval is a condition of the lawful use and occupancy of the Project
Addition; (b) a copy of the survey of the Project and Project Addition, as
built (c) a confirmation of final completion of the Project Addition from
the Inspecting Engineer; (d) evidence of the insurance required herein;
and (e) evidence that the Project Addition General Contractor and all
subcontractors, suppliers and materialmen will be fully paid, with respect to
work and materials supplied with respect to said building or phase, out of such
final Disbursement.

 

SECTION 7.                                COVENANTS OF
BORROWER.

 

Borrower (in addition to and not
in derogation of its covenants contained in any of the other Loan
Documents) covenants and agrees, from the date hereof and for so long as
the Loan or any portion thereof is outstanding or Borrower has the right to
receive Advances under this Agreement (whether or not the conditions to
receiving Advances have been or can be fulfilled), and unless Lender otherwise
consents in writing, as follows:

 

7.1                     Prohibition of
Transfers and Amendments to Borrower’s Operating Agreement.  Borrower shall not (a) convey or, except
for Permitted Liens, further encumber the Property or any Improvements in any
way without the prior written consent of Lender, which consent shall not be
unreasonably withheld for easements or environmental deed restrictions
reasonably required in connection with the development of the Project or the
Project Addition, or (b) dispose of any of the Collateral without the
prior written consent of Lender, except for (i) the sale of Inventory in
the ordinary course of Borrower’s business and (ii) the disposition of 

 

50

 

obsolete
equipment not used or useful in the Borrower’s business, provided, that such
equipment is replaced by equipment of equal or greater value.  Except as provided in this Section, Borrower
shall not (a) materially amend its operating agreement, articles of
organization or any of its organizational documents without the prior written
consent of Lender, or (b) permit (i) REG or any of its Affiliates
that is a member of Borrower or (ii) any member of Borrower with a greater
than eight percent (8%) equity interest in Borrower, to withdraw, voluntarily
or involuntarily, as a member from the Borrower.

 

7.2                     Conduct of
Business.  Borrower shall
maintain in full force and effect its organizational existence, good standing
and right to transact business in those states in which it is now or may
hereafter be doing business. Borrower shall obtain and maintain all
licenses, permits, registrations, bonds, franchises, leases, patents, contracts
and other rights necessary to the operation of its business, including, without
limitation, the operation of the Biodiesel Plant, including, without
limitation, all notices, permits or licenses, if any, filed or obtained with
regard to compliance with Environmental Laws, except where the failure to do
any of the foregoing would not have a material adverse effect on Borrower, the
Improvements or Borrower’s ability to pay and/or perform the Obligations.

 

7.3                     Comply with
Requirements.  Borrower will
comply promptly with any and all Laws and any other requirements of any
governmental authority relating to the Property or the Improvements, except
where the failure to so comply would not reasonably be expected to have a
material adverse effect on Borrower, the Improvements or Borrower’s ability to
pay and/or perform the Obligations.

 

7.4                     Inspection.  Borrower will permit Lender and the
Inspecting Engineer to enter upon the Property, inspect the Improvements and
all materials to be used in the construction thereof and to examine all
detailed Plans and Specifications and shop drawings which are or may be kept at
the construction site.

 

7.5                     Reimbursement of
Expenses.  Borrower shall
pay on demand all costs and expenses in connection with the preparation,
negotiation, execution, delivery, filing, recording and administration of the
Loan Documents.  In addition, but not as
a limitation, Borrower will pay:

 

(a)                                  all taxes and
recording expenses, including all intangible, registration and stamp taxes, if
any;

 

(b)                                 title insurance
premiums, construction disbursement fees, flood determination fees, appraiser
fees and environmental audit fees;

 

(c)                                  fees due to
brokers in connection with the Property or this Agreement;

 

(d)                                 all reasonable
legal fees and expenses, including, without limitation, Lender’s counsel’s fees
and expenses for services performed and sums advanced in connection with this
loan transaction;

 

(e)                                  all reasonable
fees and out-of-pocket expenses of the Inspecting Engineer;

 

51

 

(f)                                    all fees and
out-of-pocket expenses of Lender in connection with any litigation, contest, dispute, suit, proceeding or action (whether
instituted by Lender, Borrower or any other Person) in any way relating to the
Collateral, this Agreement, any of the other Loan Documents or Borrower’s
affairs;

 

(g)                                 all
fees and out-of-pocket expenses of Lender in connection with any attempt to enforce any rights of Lender
against Borrower or any other Person which may be obligated to Lender by virtue
of this Agreement or any of the other Loan Documents,

 

(h)                                 all fees and
out-of-pocket expenses of Lender in connection with any attempt to inspect, verify,
protect, preserve, restore, collect, sell, manufacture, liquidate or otherwise
dispose of or realize upon the Collateral; and

 

(i)                                     any
and all fees assessed against Lender by the IFA in connection with the IFA
Guaranty, except for the annual fee of one-half of one percent (1/2 of 1%) of
the maximum principal amount of the Construction/Term Loan that Lender is
required to pay the IFA pursuant to the terms of 20 ILCS 3501/830-35 of the
Illinois Finance Authority Act.

 

All
costs, expenses and fees (including, without limitation, the fees to be paid
pursuant to Section 3.3 of this Agreement) shall be payable, on demand, by
Borrower to Lender, and shall be additional Obligations hereunder secured by
the Collateral and may be funded, if Lender so elects, by Lender making an
Advance against the Revolving Credit Loan on Borrower’ behalf or by debiting
any account maintained by Borrower with Lender.

 

7.6                     Timetable.  Borrower has (i) commenced construction
of the Project and will cause the construction of the Project to be prosecuted
with diligence and continuity in accordance with the Schedule of Construction
for the Project, and will fully complete the same in substantial accordance
with the Project Plans and Specifications free and clear of liens or claims for
liens for material supplied and for labor or services performed in connection
with the construction of the Project, on or before the Project Completion Date,
and except that such date may be extended for Unavoidable Delays, provided,
that Borrower shall have the right to contest any such lien claim in good faith
so long as Borrower escrows an amount equal to
one hundred twenty-five percent (125%) of the amount of such claim with Lender,
or by obtaining a bond over the same in an amount and from a bonding company
reasonably acceptable to Lender, and (ii) commenced construction of
the Project Addition and will cause the construction of the Project Addition to
be prosecuted with diligence and continuity in accordance with the Schedule of
Construction for the Project Addition, and will complete the same in
substantial accordance with the Project Addition Plans and Specifications free
and clear of liens or claims for liens for material supplied and for labor or
services performed in connection with the construction of the Project Addition,
on or before the Project Addition Completion Date, and except that such date
may be extended for Unavoidable Delays.

 

7.7                     Receipt of
Advances.  Borrower will
receive the Advances to be made under the Construction/Term Loan for the
purpose of paying the Project Costs.

 

52

 

7.8                     Defects; No Waiver.  Borrower will, upon demand of Lender or
Inspecting Engineer, correct (i) any structural defect in the
Improvements, or (ii) subject to the provisions of Section 7.18
below, any departure from the Plans and Specifications not approved by Lender
in writing.  The advance of any Loan
proceeds shall not constitute a waiver of Lender’s right to require compliance
with this covenant.

 

7.9                     Restrictive
Covenants.  Borrower will
comply with all restrictive covenants affecting the Property and/or the
Project.

 

7.10               Insurance.

 

(a)                            Borrower at its
sole cost and expense shall provide or cause to be provided and shall keep in
force at all times for the benefit of Lender, with respect to the Property and
the Improvements the following insurance coverages:

 

(i)                                     builder’s all-risk
completed value, non-reporting form insurance to cover all development and/or
construction work, buildings, improvements and off-site and on-site materials
on properties covered by the Leasehold Mortgage and this Agreement in an amount
equal to the full insurable value of the Improvements;

 

(ii)                                  insurance against
loss of or damage to the Improvements by fire and other hazards covered by
so-called “extended coverage” and such other casualties and hazards as Lender
shall require from time to time;

 

(iii)                               insurance against
loss or damage by earthquake in a commercially reasonable amount;

 

(iv)                              flood insurance in
a commercially reasonable amount if the Property is now or later becomes
designated as located in a flood hazard area as described in the Flood Disaster
Protection Act of 1973;

 

(v)                                 comprehensive
general public liability insurance against claims for bodily injury, death or
property damage;

 

(vi)                              such other
insurance on the Property and the Improvements or any replacements or
substitutions thereof, as Lender may reasonably require.

 

The policies of insurance required by this paragraph shall be with
companies having at least an A- Class VIII rating by BEST Insurance
Reports, and shall be in forms, amounts, limits and coverages and for such
periods and subject to such deductibles, as Lender shall require from time to
time, and shall insure the respective interests of Borrower and Lender.  Such insurance may not be provided in
umbrella policies covering more than one property without the prior written consent
of Lender.  The insurance proceeds
thereof (other than the proceeds from the policy required under clause (v) above) shall
be payable to Lender pursuant to a non-contributing first mortgage endorsement
satisfactory in form and substance to Lender. Original policies and renewals
thereof (or satisfactory certificates of insurance) covering the risks provided
by this Agreement to be insured against, bearing satisfactory evidence of
payment of all premiums thereon, shall be delivered to and held by Lender.  At least ten (10) days prior to the
expiration of 

 

53

 

each policy required to be provided by Borrower, Borrower shall deliver
renewal policies or certificates to Lender with appropriate evidence of payment
of premiums therefore.  All insurance
policies required by this Agreement shall:

 

(1)                                  include effective
waivers by the insurer of all rights of subrogation against any named insured,
the indebtedness secured by the Leasehold Mortgage and the Property and all
claims for insurance premiums against Lender;

 

(2)                                  provide that any
losses shall be payable to Lender notwithstanding (A) any act, failure to
act or negligence of or violation of warranties, declarations or conditions
contained in such policy by any named insured, (B) the occupation or use
of the Premises for purposes more hazardous than permitted by the terms
thereof, or (C) any foreclosure or other action or proceeding taken by
Lender pursuant to any provision of this Agreement.

 

(3)                                  provide that no
cancellation or reduction in amount in coverage thereof shall be effective
until at least twenty (20) days after receipt by Lender of written notice
thereof; and

 

(4)                                  be reasonably
satisfactory in all other respects to Lender.

 

Borrower shall not permit any
activity to occur or condition to exist on or with respect to the Property or
the Improvements that would wholly or partially invalidate any of the insurance
thereon.  Borrower shall promptly notify
Lender of any material change in coverage under any insurance policy of
Borrower.

 

(b)                           Borrower
irrevocably makes, constitutes and appoints Lender (and all officers, employees
or agents designated by Lender) as Borrower’s true and lawful
attorney-in-fact and agent, with full power of substitution, for the purpose of
making and adjusting claims under such policies of insurance, endorsing the
name of Borrower on any check, draft, instrument or other item of payment of
the proceeds of such policies of insurance and for making all determinations
and decisions with respect to such policies of insurance required above or to
pay any premium in whole or in part relating thereto.  Lender, without waiving or releasing any
obligation or default by Borrower hereunder, may (but shall be under no
obligation to do so) at any time or times hereafter maintain such action
with respect thereto as Lender deems advisable. 
All sums disbursed by Lender in connection therewith, including
reasonable attorneys’ fees, court costs, expenses and other charges relating
thereto, shall be payable, on demand, by Borrower to Lender and shall be
additional Obligations hereunder secured by the Leasehold Mortgage and each of
the other Loan Documents which secure the Obligations.  Lender agrees not to exercise the power of
attorney granted in this subparagraph (b) until the occurrence of an Event
of Default.

 

(c)                            All proceeds of
the insurance required to be obtained by Borrower hereunder, other than those
relating to the insurance required under clause (v) of subparagraph (a) hereof,
shall be paid to Lender.  Lender may
deduct from such proceeds any expenses, including, without limitation,
reasonable legal fees, incurred by it in connection with adjusting 

 

54

 

and
obtaining such proceeds (the balance remaining after such deduction being
hereinafter referred to as the “Net Insurance Proceeds”), and thereafter Lender
may, subject to subsection (d) immediately below, apply such proceeds
toward the payment or performance of Borrower’s obligations evidenced by this
Agreement, the Notes or any other Loan Documents, whether or not such
obligations are then due, or release such proceeds to Borrower in accordance
with the terms and conditions of the Leasehold Mortgage.  So long as Borrower shall not be in default hereunder,
Borrower shall have the right to participate with Lender in the adjustment and
compromise of any claims, but the decision of Lender in any such case shall be
binding and conclusive upon Borrower.

 

(d)                           In case of any loss
covered by insurance or in case of any damage caused by a taking or exercise of
eminent domain, notwithstanding anything in this Agreement to the contrary,
provided that (i) no Event of Default then exists, (ii) the Construction/Term
Loan Maturity Date does not fall within the six (6) month period
following the date of the casualty or taking, (iii) in Lender’s good faith
judgment the Improvements can be repaired or restored prior to the Construction/Term
Loan Maturity Date, (iv) Lender reasonably determines
the restoration of the Improvements is economically feasible, (v) Lender
reasonably determines that the Borrower’s operation or financial condition will
materially benefit from restoration of the collateral, (vi) Borrower is a
viable operating entity at the time the loss occurred, and (vii) Borrower
deposits with Lender the amount of deficiency, if any, between the estimated
cost of (x) restoration or repair and completion of the Improvements (as
determined by Lender in its good faith judgment) and (y) the amount
of Net Insurance Proceeds plus the undisbursed proceeds of the Loan, then
Lender shall make the Net Insurance Proceeds available to Borrower on the terms
and conditions set forth in this Agreement for disbursement of the Loan,
together with such additional terms and conditions as are customary and as may
be reasonably required by Lender in the circumstances.  The application of any insurance proceeds
toward the payment or performance of the obligations shall not be deemed a
waiver by Lender of its right to receive payment or performance of the rest of
the obligations and the interest thereon in accordance with the provisions of
this Agreement.

 

(e)                            To the extent
permitted by such policies, in the event of a foreclosure under the Leasehold
Mortgage, the purchaser of Borrower’s interest in the Property and the
Improvements shall succeed to all of the rights of Borrower, including any
right to unearned premiums, in and to all policies of insurance which Borrower
is required to maintain under this paragraph and to all proceeds of such
insurance.

 

(f)                              Pursuant to Mo.
Rev. Stat. §427.120, Borrower acknowledges receipt of the following notice:  “Unless
you [Borrower]
provide evidence of the insurance coverage required by your agreement with us [Lender], we may
purchase insurance at your expense to protect our interests in your
collateral.  This insurance may, but need
not, protect your interests.  The
coverage that we purchase may not pay any claim that you make or any claim that
is made against you in connection with the collateral.  You may later cancel any insurance purchased
by us, but only after providing evidence that you have obtained insurance as
required by our agreement.  If we
purchase insurance for the collateral, you will be responsible for the costs of
that insurance, including the insurance premium, interest and any other charges
we may impose in connection with the placement of the insurance, until the
effective date of the cancellation or expiration of the insurance.  The costs of the insurance may be added to
your total outstanding 

 

55

 

balance or
obligation.  The costs of the insurance
may be more than the cost of insurance you may be able to obtain on your own.”

 

If Borrower fails
to maintain any insurance required hereunder or under the other Loan Documents
or fails to provide evidence of such insurance as required hereunder or under
the other Loan Documents, Lender may, but shall not be obligated to, purchase
such required insurance at Borrower’s expense to protect its interests in the
Property and the Improvements.  This
insurance may, but need not, protect Borrower’s interests in the Property and
the Improvements.  The coverage that
Lender purchases shall not be required to pay any claim that Borrower makes or
any claim that is made against Borrower in connection with the Property and the
Improvements.  Borrower may later cancel
any insurance purchased by Lender, but only after providing evidence that
Borrower has obtained the insurance required hereunder and under any other Loan
Document.  If Lender purchases insurance
for the Property and/or the Improvements, Borrower will be responsible for the
costs of the insurance, including the insurance premiums, interest thereon from
the date of each such payment or expenditure at the then applicable rate under
the Construction/Term Loan Note and any other charges Lender may impose in
connection with the placement of the insurance, until the effective date of the
cancellation or expiration of the insurance. 
All sums so paid or expended by Lender, the interest thereon and the
other charges in connection therewith shall be added to the Loan and shall be
secured by the lien of the Leasehold Mortgage. 
The costs of the insurance obtained by Lender may be more than the cost
of insurance Borrower may be able to obtain on its own.  Unless Lender otherwise agrees in writing,
Borrower shall pay to Lender the full costs of such insurance, together with
the accrued interest thereon and the other charges in connection therewith,
within thirty (30) days after “Notice of Placement of Insurance” as
required by Mo. Rev. Stat. 427.125.

 

(g)                                 In addition to the insurance requirements
under (a) – (f) of this Section 7.10, Borrower shall maintain
all insurance required to be maintained pursuant to the terms of the Ground
Lease.

 

7.11               Governmental
Requirements.  Borrower will
comply with all Environmental Laws and all land use, building, subdivision,
zoning, OSHA, pollution, sales practices laws, regulations and similar laws,
rules, ordinances and regulations promulgated by any governmental authority and
applicable to Borrower’s business, the Property, its development and
construction of Improvements and the operation thereof, except where the
failure to so comply would not reasonably be expected to have a material
adverse effect on Borrower, the Improvements, or the Borrower’s ability to pay
and/or perform the Obligations.

 

7.12               Additional Documents and
Information.

 

(a)                                  Reporting Requirements. 
Borrower shall furnish the following to Lender:

 

(i)                                     Quarterly Financial
Statements.  As soon as
available and in any event within forty-five (45) days after the end of each
fiscal quarter of each fiscal year of Borrower, an unaudited and internally
prepared financial statement certified by Borrower’s chief financial officer;

 

56

 

(ii)                                  Quarterly Covenant
Compliance Certificates. 
Commencing with the fiscal quarter ending June 30, 2009, as soon as
available and in any event within forty-five (45) days after the end of each
quarter of each fiscal year of Borrower, a consolidated compliance certificate,
in the form attached hereto as Exhibit G,
setting forth (A) detailed written calculations for such quarter or as of
the last day of such quarter, as appropriate, computing Borrower’s compliance
(or failure of compliance) with each of the financial covenants set forth in Section 7.33
below, (B) a restatement by reference of each of the representations and
warranties contained in Section 4 hereof (or providing detailed information
why any such representation or warranty cannot be restated), and (C) a
certification that no Default or Event of Default exists as of the date of such
certificate, or if any Default or Event of Default exists, providing detailed
information concerning the nature of all existing Defaults or Events of
Default, which such compliance certificate shall be certified by Borrower and
by Borrower’s chief financial officer or president;

 

(iii)                               Audited Year-End
Statements.  As soon as
available and in any event within one hundred twenty (120) days after the end
of each fiscal year of Borrower, final audited financial statements (as
described above but including a statement of changes in financial position) as
of the end of such fiscal year of Borrower, prepared by independent certified
accountants reasonably satisfactory to Lender and a copy of any management,
operation or other letter or correspondence from such accountant to Borrower in
connection therewith;

 

(iv)                              Annual
Tax Returns.  As soon as available,
but in any event within one hundred twenty
(120) days following the end of each calendar year, copies of current
annual tax returns of Borrower.

 

(v)                                 Construction Progress Reports.  As soon
as available, but in any event by the fifteenth (15th) day of
each month, construction loan progress reports for the Project and the Project
Addition as of the last day of the preceding month;

 

(vi)                              Borrower Reports.  As soon
as available, copies of all reports, financial information and other
information which is required to be distributed to any member under the terms
of the Borrower’s Operating Agreement;

 

(vii)                           Borrowing Base
Certificates.  Furnish to
Lender (A) with each request for an Advance under the Revolving Credit
Loan, a Borrowing Base Certificate in the form of Exhibit H
hereto, showing, as of the date of the Advance request, the Borrowing Base and (B) within
fifteen (15) days of the end of each calendar month during the term of the
Revolving Credit Loan, a Borrowing Base Certificate in the form of Exhibit H hereto, showing, as
of the last day of each month, the Borrowing Base;

 

(ix)                                Accounts Receivable. 
As soon as available and in any event within fifteen (15) days after
each calendar month, Borrower shall deliver to Lender an aging report with
respect to accounts receivable and a listing of accounts payable;

 

(x)                             Contribution Margin Pro Formas. 
Contemporaneous with the delivery of a Borrowing Base Certificate
delivered pursuant to Section 7.12(a)(vii)(B) above, Borrower shall deliver to Lender evidence of
its pro-forma contribution margin, in the form 

 

57

 

attached hereto as Exhibit I
(with such adjustment as to form as may be reasonably requested by Lender).

 

(xi)                          Other.  Such other information
respecting the condition or operations, financial or otherwise, of Borrower or
the Improvements, as Lender may reasonably request from time to time.

 

All financial statements described in clauses (i), (ii), and (iii) shall
be prepared in accordance with GAAP, except that unaudited financial statements
shall be subject to normal year-end audit adjustments, and need not contain
footnotes.

 

(b)                                 Summary of Remaining Improvements.  To
submit to Lender, as often as demanded by Lender, but not more frequently than
monthly and within fifteen (15) days after demand, a written summary of
all on-site and off-site Improvements remaining to be completed, together with
the itemized costs thereof, executed and verified by Borrower and Project
General Contractor or Project Addition General Contractor (as applicable), and
confirmed by the Inspecting Engineer.

 

7.13               Leases, Sale
Agreements, and Subordination, Non-Disturbance and Attornment Agreements.  Without the prior written consent of Lender and except
for the Ground Lease, Borrower shall not enter into any lease, except for
equipment leases which provide for annual payments not exceeding $35,000.  Without the prior written consent of Lender,
which consent may be given or withheld in Lender’s sole discretion, the
Borrower shall not enter into any purchase or sale agreement of the Property
and/or the Improvements.  Without the
prior written consent of Lender, which consent may be given or withheld in
Lender’s sole discretion, the Borrower shall not enter into any subordination,
non-disturbance and attornment agreement with respect to its interest in the
Property and/or the Improvements. 
Borrower shall provide Lender with a copy of any proposed lease,
purchase and sale agreement, or subordination, non-disturbance and attornment
agreement no less than forty-five (45) days prior to the anticipated
execution thereof.  Borrower shall
provide Lender with a certified copy of any fully executed original of any such
lease or purchase and sale agreement promptly following its execution.

 

7.14               Financial Restrictions
on Borrower.

 

(a)  Borrower shall not, without Lender’s prior written approval, (i) merge,
consolidate, liquidate, terminate or voluntarily dissolve, (ii) make any
loans or gifts, or (iii) pay any loans payable to any Person or entity
affiliated with Borrower (other than REG Ventures under the REG Ventures
Subordinated Indebtedness, as restricted by the Subordination Agreement).

 

(b)                                 Borrower
shall not, nor shall it permit any Subsidiary to, declare or make, or agree to
pay or make, directly or indirectly, any Restricted Payment, or incur any
obligation (contingent or otherwise) to do so, except, so long as no Default or
Event of Default has occurred and is continuing, the Borrower may pay dividends
or make distributions to its members either:

 

(i)                                     annually within
thirty (30) days after Lender has received (1) Borrower’s annual Audited
financial statements for the applicable fiscal year on which such dividends and
distributions are based and (2) supporting calculations from Borrower in 

 

58

 

form satisfactory to Lender in its reasonable discretion to support the
amount of the proposed dividends and distributions, or

 

(ii)                                  quarterly within
thirty (30) days after Lender has received (1) for any fiscal quarter
other than the last fiscal quarter of the fiscal year for which such dividends
and distributions are based, Borrower’s quarterly Reviewed financial statements
or internally prepared quarterly financial statements certified by an
accountant, which accountant and certificate shall be acceptable to Lender in
its sole discretion, for the applicable fiscal quarter for which such dividends
and distributions are based, (2) for the last fiscal quarter of the fiscal
year for which such dividends and distributions are based, Borrower’s annual
Audited financial statements for the fiscal year for which such dividends and
distributions are based and (3) supporting calculations from Borrower in form
satisfactory to Lender in its reasonable discretion to support the amount of
the proposed dividends and distributions;

 

provided, however, that:

 

(A)                              no such dividends or
distributions shall be made until the Lender has received Borrower’s financial
statements as of the end of the eighth full fiscal quarter following Commencement
of Production;

 

(B)                                such dividends and
distributions shall be permitted only in an amount and to the extent (i) that
Borrower’s Fixed Charge Coverage Ratio (measured in accordance with Section 7.33
of this Agreement) would not be less than 1.50 to 1.00 after taking into
calculation the amount of the dividends and distributions to be made and (ii) no
Default or Event of Default would result after giving effect to such dividend
and/or distribution;

 

(C)                                for any fiscal year,
such dividends and distributions shall be limited to fifty percent (50%) of
Borrower’s Audited Net Income;

 

(D)                               (i) if any
quarterly or annual financial statement of Borrower shows a Net Income of zero
or less for such fiscal quarter or fiscal year for which the financial
statement applies or (ii) if any quarterly financial statement of Borrower
shows year to date Net Income of zero or less through the end of such fiscal
quarter for which the financial statement applies, Borrower shall be prohibited
from making any dividends or distributions based upon such financial
statement.  By way of illustration, if
Borrower’s quarterly financial statement for first fiscal quarter of fiscal
year 2011 showed a negative Net Income for such fiscal quarter, then Borrower
would be prohibited from making any dividends or distributions until Lender
received a quarterly financial statement for a subsequent fiscal quarter that
showed both (i) Net Income for such quarter greater than zero and  (ii) year to date Net Income through the
end of such fiscal quarter of greater than zero; and

 

(E)                                 If Borrower elects to
make dividends and distributions quarterly, then dividends and distributions
shall be based upon Borrower’s fiscal year to date Net Income as of the end of
such applicable fiscal quarter, provided, that the amount of 

 

59

 

dividends and distributions made during previous fiscal quarters for
the applicable fiscal year shall be subtracted from the amount of dividends and
distributions that would otherwise be permitted based upon the fiscal year to
date Net Income of Borrower as of the end of the applicable fiscal quarter.

 

(c)                                  Notwithstanding anything in this Section 7.14
to the contrary, so long as no Default or Event of Default has occurred
and is continuing and Borrower is a “pass-through” tax entity for United States
federal income tax purposes, and after first providing such supporting
documentation as Lender may request (including Reviewed financial statements
setting forth the tax liabilities of each owner of Borrower), Borrower may make
Tax Distributions.

 

7.15               Encroachments.  Borrower shall not permit any Improvements to
be constructed on the Property which would cause an encroachment upon any
easements, rights-of-way or adjoining properties.  When erected, the Improvements shall be
wholly within any building restriction lines however established.  Borrower shall furnish at the request of
Lender evidence satisfactory to Lender that Borrower is in compliance with this
section including without limitation a survey showing the Improvements erected
on the Property are free from the aforesaid violations.

 

7.16               Certificates.

 

(a)                                  Borrower shall
furnish to Lender prior to final disbursement of funds under the
Construction/Term Loan but not later than one hundred twenty (120) days
after the completion of the Project (i) a copy of the original certificate
of occupancy issued by the governmental authority having jurisdiction over the
Property and all other necessary consents and approvals of any governmental boards,
bureaus or departments having jurisdiction over the Property, (ii) all
material certificates and approvals of the appropriate Board of Fire
Underwriters or other similar body acting in and for the locality in which the
Property is situated, and (iii) all required licenses and agreements in
respect of any easements extending beyond the boundary lines of the Property.

 

(b)                                 Borrower shall
furnish to Lender prior to final disbursement of funds under the Project
Addition Escrow Agreement but not later than sixty (60) days after the
completion of the Project Addition (i) a copy of the original certificate
of occupancy issued by the governmental authority having jurisdiction over the
Property and all other necessary consents and approvals of any governmental boards,
bureaus or departments having jurisdiction over the Property, (ii) all
material certificates and approvals of the appropriate Board of Fire
Underwriters or other similar body acting in and for the locality in which the
Property is situated, and (iii) all required licenses and agreements in
respect of any easements extending beyond the boundary lines of the Property.

 

7.17               Employee Plans.  Borrower shall (i) notify Lender
promptly of the establishment of any Plan, except that prior to the establishment
of any “welfare plan” (as defined in Section 3(1) of ERISA) covering
any employee of Borrower for any period after such employee’s termination of
employment other than such period required by the Consolidated Omnibus Budget
Reconciliation Act of 1986, or “defined benefit plan” (as defined in Section 3(35)
of ERISA), it will obtain Lender’s prior written approval of such
establishment; (ii) at all times make prompt payments or contributions to
meet the minimum funding standards of Section 412 of the Internal Revenue
Code of 1986, as amended, with respect to each Plan; (iii) promptly after
the filing 

 

60

 

thereof,
furnish to Lender a copy of any report required to be filed pursuant to Section 103
of ERISA in connection with each Plan for each Plan year, including but not
limited to the Schedule B attached thereto, if applicable; (iv) notify
Lender promptly of any “reportable event” (as defined in Section 4043 of
ERISA) or any circumstances arising in connection with any Plan which might
constitute grounds for the termination thereof by the Pension Benefit Guaranty
Corporation or for the appointment by the appropriate United States District
Court of a trustee to administer the Plan, the initiation of any audit or
inquiry by the Internal Revenue Service or the Department of Labor of any Plan
or transaction(s) involving or related to any Plan, or any “prohibited
transaction” as defined in Section 406 of ERISA or Section 4975(c) of
the Internal Revenue Code of 1986, as amended; (v) notify Lender prior to
any action that could result in the assertion of liability under Subtitle E of
Title IV of ERISA caused by the complete or partial withdrawal from any
multiemployer plan or to terminate any defined benefit plan sponsored by
Borrower; and (vi) promptly furnish such additional information concerning
any Plan as Lender may from time to time reasonably request.

 

7.18               Construction;
Change Orders.  All
construction and development shall be performed in all material respects in
accordance with the Plans and Specifications, appropriate set back
requirements, any restrictive covenants and the requirements of any
governmental authority, and the anticipated use to which the Improvements will
be put will comply with all requirements of governmental authorities and any
restrictive covenants to which the Property may be subject.  Except as specifically permitted by this
Section, no plans and specifications shall be utilized and no changes shall be
made in the Plans and Specifications referred to herein, unless first approved
by Lender in writing, and any other party where approval may be required by
Lender; provided, however, that Borrower may make
changes to the Plans and Specifications without Lender’s approval if (i) Borrower
notifies Lender in writing of such change within forty-eight (48) hours
thereafter; (ii) Borrower obtains the approval of all parties whose
approval is required, including the Project General Contractor, the Project
Addition General Contractor and any Governmental Authority to the extent
approval from such parties is required; (iii) sufficient funds are
available in the Budget line items affected by the change; (iv) the
structural integrity of the Improvements is not impaired; (v) no
substantial change in architectural appearance is effected; (vi) the
performance of the mechanical, electrical, and life safety systems of the
Improvements is not adversely affected; 
and (vii) the cost of or reduction resulting from any one such
change does not exceed $50,000 and the aggregate change in cost of all such
changes does not exceed $250,000.  For
the purposes of computing such “aggregate change in cost,” pursuant to clause
(vii), increases shall be added to, rather than netted against, decreases.  Borrower shall promptly furnish to Lender and
the Inspecting Engineer, copies of all change orders, regardless of whether
Lender’s approval is required.

 

7.19               No Modifications.  Except as expressly permitted under Section 7.18
immediately above, Borrower shall not amend, modify or terminate any
Construction Document without Lender’s prior written consent.  Borrower shall not amend, modify or terminate
any Operation Document or the Ground Lease without Lender’s prior written
consent, which consent shall not be unreasonably delayed, conditioned or
denied.

 

7.20               Books and Records.  Borrower shall maintain complete and accurate
books and financial records in accordance with GAAP.

 

61

 

7.21               Hazardous
Materials.  Borrower shall
not cause or permit a release, omission or discharge of any Hazardous Materials
in excess of amounts thereof permitted pursuant to applicable Environmental
Laws.

 

7.22               Notice.  If Borrower shall receive any of the
following:

 

(a)                                  notice that any
violation of any Law or Environmental Law may have been committed or is about
to be committed by Borrower or otherwise affecting the Improvements, or

 

(b)                                 notice that any
administrative or judicial complaint or order has been filed or is about to be
filed against Borrower, the Property or the Improvements alleging violations of
any Environmental Law or requiring Borrower to take any action in connection
with the release or threatened release of Hazardous Materials or solid waste
into the environment, or

 

(c)                                  notice from a
federal, state, or local governmental agency or private party alleging that
Borrower may be liable or responsible for costs associated with a response to
or cleanup of a release or disposal of a Hazardous Materials or solid waste
into the environment or any damages caused thereby, including without
limitation any notice that Borrower is a “potentially responsible party” as
defined by CERCLA, or

 

(d)                                 notice under any
Construction Document that Borrower is in default thereunder, or

 

(e)                                  notice under any
Operation Document that Borrower is in default thereunder, or

 

(f)                                    notice under the
Ground Lease that Borrower is in default thereunder, or

 

(g)                                 notice
of any default under the Subordinated Loan Agreement, or

 

(h)                                 notice
of any default under any of the Grants or any agreement executed in connection
therewith,

 

then Borrower shall provide Lender with a copy of such notice within
five (5) days of Borrower’s receipt thereof.  In addition, Borrower shall give prompt notice
in writing to Lender of any breach of any of the representations, warranties or
covenants in this Agreement or the other Loan Documents or any development or
the occurrence of any event, financial or otherwise, which constitutes a
Default or Event of Default or which constitutes a material default under any
other agreement to which Borrower is a party or which may or shall materially
and adversely affect the business, properties or affairs of Borrower or its
ability to pay and perform its obligations under this Agreement or the other
Loan Documents.

 

7.23               Litigation.  Borrower shall advise Lender within five (5) Business
Days, in writing, of any actions, suits or proceedings brought against
Borrower, the Property or the Improvements prior to full payment of the Loans,
where the amount in dispute is in excess of $50,000.

 

62

 

7.24               Other Indebtedness.  Borrower shall not incur any Indebtedness
other than the Permitted Indebtedness.

 

7.25               Inspection.

 

(a)                            Lender, or any
person designated by Lender, shall have the right, from time to time hereafter
(but not more than once per month unless a Default or Event of Default has
occurred and is continuing), to call at Borrower’s place or places of business
(or any other place where the collateral or any information relating thereto is
kept or located, including but not limited to REG Services and REG
Marketing) during reasonable business hours, without hindrance or delay, (i) to
inspect, audit, check and make copies of and extracts from Borrower’s books,
records, journals, orders, receipts, correspondence and other data relating to
Borrower’s business or to any transactions between the parties hereto and
whether such items or data are maintained in accordance with Borrower’s
standard operating procedures or pursuant to this Agreement, (ii) to
verify such matters concerning the collateral as Lender may consider reasonable
under the circumstances, (iii) to discuss the affairs, finances and
business of Borrower with any officers, employees or directors of Borrower, and
(iv) to inspect the real property of Borrower, and any books, records,
journals, orders, receipts, correspondence, notices, permits or licenses, with
regard to, among other things, compliance with Environmental Laws.  Borrower will deliver to Lender, within five (5) days
of request therefore, any instruments necessary to obtain records from any
person maintaining the same.

 

(b)                           Lender may itself
inspect or, at its option, retain the Inspecting Engineer to inspect (at the
expense of Borrower), from time to time, (i) the construction of the
Improvements, the Property and all materials used or held in storage on site to
be used in the construction of the Improvements, (ii) the Plans and
Specifications, (iii) the construction disbursements, and (iv) such
other matters, documents and information as Lender deems reasonably necessary
or desirable.  The Inspecting Engineer
shall make reports of its inspections to Lender.  Lender’s and Inspecting Engineer’s inspection
of the Property and the Improvements  and
such other matters, documents and information is solely for its own benefit in
administering this Agreement.  Such
inspection may not be relied upon by any other party, person or entity, and any
decision to (i) advance Construction/Term Loan proceeds or not to advance
the Construction Loan proceeds or (ii) make Disbursements of the Project
Addition Escrow Account or not make Disbursements of the Project Addition
Escrow Account, shall not indicate, on behalf of Lender, any approval or
disapproval of the status, quality or completion of the Improvements either at
the time of, before or after such Advance or Disbursement, or refusal to issue
an Advance or make a Disbursement is made.

 

(c)                            Borrower shall pay
on demand or within ten (10) days thereafter all reasonable expenses
reasonably incurred by Lender in acquiring information pursuant to this
Section.

 

7.26               Bank Accounts;
Other Commercial Banking Products.  Borrower shall set up and maintain with
Lender all escrow, operating, investment, depository, security and reserve
accounts and treasury management services for the Biodiesel Plant and its
business operations, including without limitation, the Debt Service Fund
Account, the Project Addition Escrow Account, Renewable Fuels Grant Account,
and the Working Capital Escrow Account. 
Borrower’s 

 

63

 

operating accounts shall be non-interest bearing accounts.  In the event that Borrower procures any
additional commercial banking products relative to the Biodiesel Plant,
Borrower shall inform Lender and provide Lender with an opportunity to make a
bid to provide such commercial banking product to Borrower.

 

7.27               Construction Escrow Account.  Borrower shall not withdraw any amounts from
the Construction
Escrow Account without the prior written
consent of Lender or except as otherwise expressly permitted by this Agreement
or the Project Construction Disbursing Agreement.

 

7.28               Debt Service Fund Account.  Borrower shall not withdraw any amounts from
the Debt Service Fund Account without the prior written consent of Lender or
except as otherwise expressly permitted by this Agreement or the Debt Service
Fund Account Agreement.

 

7.29               Project Addition Escrow Account.  Borrower shall not withdraw any amounts from
the Debt Service Fund Account without the prior written consent of Lender or
except as otherwise expressly permitted by this Agreement, the Project Addition
Construction Disbursing Agreement or the Project Addition Escrow Account Agreement.  All interest income earned on
such funds deposited in the Project Addition Escrow Account shall remain in
said account and shall be used for the payment of Project Addition Costs.

 

7.30               Renewable Fuels Grant Account.  Borrower shall not withdraw any amounts from
the Debt Service Fund Account without the prior written consent of Lender or
except as otherwise expressly permitted by this Agreement or the Renewable
Fuels Grant Account Agreement.  All interest income
earned on such funds deposited in the Renewable Fuels Grant Account shall remain in
said account and shall be used for the payment of Project Costs.  Borrower shall cause the DCEO to directly deposit with
Lender all Renewable Fuels Grant proceeds in the Renewable Fuels Grant Account.
To the extent Borrower receives any Renewable Fuels Grant proceeds directly
from the DCEO, Borrower shall promptly deposit such proceeds into the Renewable
Fuels Grant Account.  The Renewable Fuels
Grant proceeds shall be used for payment of the Project Costs and for no other
purpose.

 

7.31               Reserved.

 

7.32               As-Built Survey.  Upon completion of the Project Addition,
Borrower shall provide Lender with an “as-built” survey of the Property showing
the dimensions and boundaries of the Property, the area of the Property in
square feet; any then-existing improvements, including without limitation, the
Project, fences, set-back lines, encroachments, roads, paths, driveways, rights
of way, easements and other matters of interest to Lender with courses and
distances so as to permit a verbal description of the Properties and of any
other item noted on the survey, all of which shall be acceptable to Lender and
the Title Company.  The survey shall be
in compliance with the minimum standards as adopted by the American Land Title
Association and the American Congress on Surveying and Mapping (2005), with a
certificate of the surveyor in the form attached hereto as Exhibit E,
with such additional requirements as Lender may request.

 

7.33               Financial
Covenants.

 

(a)                                  Minimum Fixed Charge
Coverage Ratio.  Commencing
with the fiscal quarter ending June 30, 2009 (the “Financial Covenant
Commencement Date”), Borrower shall 

 

64

 

maintain
a Fixed Charge Coverage Ratio of at least 1.25 to 1.00 measured as of the end
of each fiscal quarter thereafter.  The
Fixed Charge Coverage Ratio shall be measured quarterly, on a rolling
four-quarter basis, provided, however, that to the extent the Fixed Charge
Coverage Ratio is measured during the first three (3) quarters following
Commencement of Production at the Biodiesel Plant, the measurement of EBITDA
for purposes of the Fixed Charge Coverage Ratio shall be made on an annualized
basis.

 

(b)                                 Maximum Funded
Debt to EBITDA Ratio.  Commencing on
the Financial Covenant Commencement Date, Borrower shall maintain a Funded Debt
to EBITDA Ratio of not more than:

 

(i)                                     4.50 to 1.00 measured as of the end of
the fiscal quarter ending on the Financial Covenant Commencement Date; then

 

(ii)                                  4.50 to 1.00 measured as of the end of
the fiscal quarter ending September 30, 2009; then

 

(iii)                               4.00 to 1.00 measured as of the end of
the fiscal quarter ending December 31, 2009; and then

 

(iv)                              3.00 to 1.00 measured as
of the end of each fiscal quarter thereafter.

 

The Funded Debt to EBITDA Ratio shall
be measured quarterly, on a rolling four-quarter basis, provided, however, that
to the extent that the Funded Debt to EBITDA Ratio is measured during the first
three (3) quarters following Commencement of Production at the Biodiesel Plant,
the measurement of EBITDA for purposes of the Funded Debt to EBITDA
Ratio shall be made on an annualized
basis.

 

7.34                           Capital Expenditures. 
Commencing upon the final completion of the Project Addition, Borrower
shall not make Capital Expenditures which exceed $300,000 during any fiscal
year of the Borrower.

 

7.35                           Ownership of
Improvements.   Borrower shall be
the owner of the fee interest in the Improvements at the Property at all times.

 

7.36                           Intentionally Omitted.

 

7.37                           Infrastructure
Grants.  Borrower shall use
commercially reasonable efforts to cause the City to use all of the proceeds
from the Infrastructure Grants to build the infrastructure improvements
supporting the Biodiesel Plant as contemplated by Infrastructure Grants and any
and all agreements executed in connection therewith.

 

7.38                           Collateral Appraisal.  Upon Lender’s request, Borrower shall, at the
Borrower’s expense, provide to Lender an appraisal of the Collateral, including
an Accounts and Inventory Audit, by a third-party appraiser acceptable to the
Lender in its sole discretion, provided, that so 

 

65

 

long
as no Default or Event of Default has occurred and is continuing, Lender shall
not request such appraisal of Collateral more than once per calendar year.

 

7.39                           Liens and
Security Interests.  Borrower
shall not create or suffer to exist any
lien, security interest or other charge or encumbrance, or any other type of
preferential arrangement, upon or with respect to any of  the Collateral, whether now owned or
hereafter acquired, except for Liens in favor of Lender and Permitted Liens.

 

7.40                           Restricted Investments.  Borrower shall not make or permit to exist
any loans or advances to or any other investment in any Person (including any shareholders
of Borrower or any Affiliates), except investments in (i) interest-bearing
United States Government obligations, (ii) prime commercial paper rated
AAA by Standard and Poor’s or Prime P-1 by Moody’s Investor Service, Inc.,
(iii) agreements involving the sale and guaranteed repurchase of United
States Government securities, or (iv) any other investments for which
Lender has given its prior written consent. 
All instruments and documents evidencing such investments shall be
pledged to Lender promptly after Borrower’s receipt thereof, shall be security
for the Obligations, and shall be Collateral hereunder.

 

7.41                           Payment of Taxes.  Borrower shall pay and discharge, before they
become delinquent, all taxes, assessments and other governmental charges imposed
upon it, its properties, or any part thereof, or upon the income or profits
therefrom and all claims for labor, materials or supplies which if unpaid might
be or become a lien or charge upon any of its property, except such items as it
is in good faith appropriately contesting and as to which adequate reserves
have been provided to Lender’s reasonable satisfaction.

 

7.42                           Maintenance of
Properties and Leases.  Borrower
shall (i) maintain, preserve and keep its properties, including, without
limitation, the Collateral, and every part thereof in good repair, working
order and condition (except for such properties as Borrower in good faith
determines are not useful in the conduct of its business), (ii) from time
to time make all necessary and customary property repairs, renewals,
replacements, additions and improvements thereto so that at all times the
efficiency thereof shall be fully preserved and maintained, and (iii) maintain
all leases of real or personal property in good standing, free of any defaults
by Borrower thereunder.

 

7.43                           Material
Contracts.  Borrower shall not enter
into any material contract related to the construction or operation of the
Biodiesel Plant without the prior written consent of Lender.

 

7.44                           Intentionally
Omitted.

 

7.45                           Compliance with
Anti-Terrorism Orders. 
Borrower warrants, represents and covenants that Borrower, nor any of
its affiliated entities is or will be an entity or person (i) that is
listed in the Annex to, or is otherwise subject to the provisions of, Executive
Order 13224, 66 Fed. Reg. 49079 (Sept. 25, 2001) (herein referred to as “EO13224”),
(ii) whose name appears on the United States Treasury Department’s Office
of Foreign Assets Control (“OFAC”) most current list of “Specifically Designed
National and Blocked Persons” (which list may be published from time to time in
various mediums including, but not limited to, the OFAC website,
http:www.treas.gov/ofac/t11sdn.pdf), or (iii) whose name appears on any
other such list issued 

 

66

 

pursuant
to EO13224.  (Any and all parties or
persons described in subparts (i) through (iii) above are herein
referred to as “Prohibited Persons”).  In
addition, Borrower further warrants, represents and covenants that Borrower
will not permit the transfer of any interest in Borrower to any Prohibited
Person.  Borrower covenants and agrees
that Borrower will (i) conduct any business, nor engage in any transaction
or dealing with any Prohibited Person, including, but not limited to, the making
or receiving of funds, goods, or services to or for the benefit of a Prohibited
Person, or (ii) engage in or conspire to engage in any transaction that
evades or avoids, or has the purpose of evading or avoiding, or attempts to
violate, any of the prohibitions set forth in EO13224.  Borrower further covenants and agrees to
immediately notify Lender if Borrower has knowledge that it has not fully
complied with the representations and covenants made in this paragraph.  Borrower covenants and agrees to deliver from
time to time to Lender any such certification or other evidence as may be
requested by Lender in its sole and absolute discretion, confirming that
Borrower has fully complied with its representations and covenants made in this
paragraph.

 

7.46                           Transactions With
Affiliates.

 

(a)                                  Borrower shall not
enter into or be a party to any transaction or arrangement, including without
limitation, the purchase, sale or exchange of property of any kind or the
rendering of any service, with any Affiliate, except in the ordinary course of
and pursuant to the reasonable requirements of the Borrower’s business and upon
fair and commercially reasonable terms substantially as favorable to the
Borrower as those which would be obtained in a comparable arms-length transaction
with a non-Affiliate.  Lender
acknowledges and agrees that the agreements listed on Schedule
7.46, in the form existing as of the date hereof, do not violate
the above provisions of this Section 7.46.

 

(b)                                 Notwithstanding the
foregoing to the contrary, following the occurrence of an Event of Default,
Borrower shall not pay a bonus, incentive payment, management fee, or similar
payment (excluding the Monthly Fee, as such term is defined in the MOSA) to
REG, any Affiliate of REG , or any Affiliate.

 

7.47                           Sale-Leasebacks;
Subsidiaries; New Business.  Borrower shall not enter into any sale and
leaseback transaction with respect to any of its properties, create any
subsidiary, or manufacture any goods, render any services or otherwise enter
into any business which is not substantially similar to that existing or
contemplated on the Closing Date or business incidental thereto.

 

7.48                           Change of Control. 
Without the prior written consent of Lender, Borrower shall not take any
action that would trigger a Change of Control as defined under the Oil
Feedstock Supply Agreement.

 

7.49                           Sales
of Raw Materials.  Any raw materials
purchased by Borrower (including, without limitation, soybean oil feedstock and
animal fat feedstock) shall be used only for its own internal business
purposes, unless Lender otherwise consents in writing.  Notwithstanding the foregoing, Borrower may
sell raw materials to its Affiliates, REG and the Affiliates of REG provided
that:

 

67

 

(i)                                     Borrower
provides evidence acceptable to Lender that proceeds received from any such
sale are equal to or greater than the amount paid by Borrower for such raw
materials;

 

(ii)                                  the
purchaser of said raw materials pays for all costs in connection with the
transportation and delivery of such raw materials;

 

(iii)                               no
Event of Default shall exist; and

 

(iv)                              said
sale of raw materials would not result in a breach under any material agreement
to which Borrower is a party.

 

SECTION 8.                                EVENTS OF DEFAULT
AND REMEDIES.

 

8.1                     Events of Default.

 

Any of the following shall constitute an Event of Default hereunder:

 

(a)                                  If Borrower shall
fail to pay any sum due and owing under either of the Loans on the date each
such amount becomes due and payable or if Borrower shall fail to pay any other
monetary obligation hereunder or under any of the other Loan Documents on the
date each such amount becomes due and payable, and such failure continues for a
period of five (5) Business Days after said amount was due.

 

(b)                                 If Borrower
breaches or fails to comply with any covenant made by it in this Agreement or
in any of the other Loan Documents, including, without limitation, any of the
financial covenants in Section 7.33 of this Agreement (other than a
failure which would be an Event of Default under another subsection of this Section 8.1),
which breach or failure to comply is not cured to Lender’s satisfaction within
thirty (30) days following written notice from Lender of such breach or failure
to comply with such covenant  (but during
such cure period, Lender may suspend making any further Advances to the
Borrower); provided
further, that if such breach or failure to comply (i) is incurable, (ii) results in a lien that has priority over Lender’s
lien in the Collateral and the priority of Lender’s lien is not fully insured
over such prior lien by Lender’s title policy, or (iii) if the Borrower
has committed any fraud or conversion as to such Collateral or
misrepresentation as to the value or condition of such Collateral, Lender need
not provide the Borrower with any notice of or right to cure such breach or
failure to comply.

 

(c)                                  If at any time any
representation or warranty made by Borrower herein or in any of the Loan
Documents, including any Affidavit submitted with any request for Advance, shall
be materially incorrect, and such materially incorrect representation or
warranty could
reasonably be expected (in Lender’s sole discretion) to have a material adverse
effect on Borrower, the Improvements and/or the ability of Borrower pay and/or
perform the Obligations.

 

(d)                                 If any default or
event of default shall exist under any of the Loan Documents other than this
Agreement and such default or event of default shall continue beyond any
applicable grace or cure periods.

 

68

 

(e)                                  If the
construction of the Improvements be not carried on with reasonable dispatch,
and materially in accordance with the Schedule of Construction, or at any time
be discontinued for a period of twenty (20) consecutive business days
provided, however, this paragraph shall not apply to Unavoidable Delays.

 

(f)                                    If Borrower, other
than as permitted under the Loan Documents, executes any security agreement,
chattel mortgage or other instrument creating a security interest in any materials,
fixtures or articles intended to be incorporated in the Improvements or the
appurtenances thereto, or in any articles of personal property placed in the
Improvements, or files or permits the filing of a financing statement
publishing notice of such security interest, or if any of such materials,
fixtures or articles be not purchased so that the ownership thereof will vest
unconditionally in Borrower on delivery at the Property, or if Borrower does
not promptly produce to Lender upon demand the contracts, bills of sale,
statements, receipted vouchers or agreements, or any of them, under which
Borrower claims title to such materials, fixtures and articles.

 

(g)                                 [Intentionally
Omitted].

 

(h)                                 If Borrower
defaults beyond any applicable grace or cure period under the terms of any
other indebtedness of Borrower, and such default could reasonably be expected
to have a material adverse effect on Borrower, the Project, and/or Borrower’s
ability to pay and/or perform the Obligations.

 

(i)                                     If Borrower
assigns this Agreement or any Advance to be made hereunder or any interest in
either, or if the Property and/or the Improvements is conveyed, assigned,
mortgaged, pledged or encumbered in any way other than as herein provided
without the prior written consent of Lender.

 

(j)                                     If any statements,
details, budgets or revisions submitted by Borrower to Lender indicates, in the
reasonable opinion of Lender that (i) the estimated cost of construction
of the Project  is in excess of the
amount of funds available to Borrower to complete and pay for such construction
and if Borrower fails to advance sufficient funds to provide for such excess
within fifteen (15) days after demand therefor or (ii) the estimated
cost of construction of the Project Addition is in excess of the amount of
funds available to Borrower under the Project Addition Escrow Account to
complete and pay for such construction and if Borrower fails to advance
sufficient funds to provide for such excess within fifteen (15) days after
demand therefor.

 

(k)                                  If a lien or claim
of lien in excess of $50,000 for the performance of work or the supply of
materials be filed against the Property or the Improvements and remains
unsatisfied for a period of fifteen (15) days after the date of filing
thereof, or if the Title Company refuses to insure or commit to insure any
Advance made hereunder, provided that Borrower may cure this default by
escrowing an amount equal to 125% of the amount of such claim with Lender.

 

(l)                                     If Borrower shall
generally not pay its material debts as such debts become due, or shall admit
in writing its inability to pay its debts generally, or shall make a 

 

69

 

general assignment for the benefit of creditors; if any proceeding shall
be instituted by Borrower seeking to adjudicate it a bankrupt or insolvent, or
seeking liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief, or composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors, or seeking the
entry of an order for relief or the appointment of a receiver, trustee, or
similar official for it or for any substantial part of its property; if any
proceeding shall be instituted against Borrower seeking to adjudicate it a
bankrupt or insolvent, or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief, or composition of its or its debts
under any law relating to bankruptcy, insolvency or reorganization or relief of
debtors, or seeking the entry of an order for relief or the appointment of a
receiver, trustee, or similar official for it or for any substantial part of
its property and any such proceeding is not dismissed within sixty (60) days;
or if Borrower shall take any action to authorize any of the actions set forth
in this subsection (l).

 

(m)                               If any Guarantor
shall generally not pay its material debts as such debts become due, or shall
admit in writing its inability to pay its debts generally, or shall make a
general assignment for the benefit of creditors; if any proceeding shall be
instituted by any Guarantor seeking to adjudicate it bankrupt or insolvent, or
seeking liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief, or composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors, or seeking the
entry of an order for relief or the appointment of a receiver, trustee, or
similar official for it or for any substantial part of its property; if any
proceeding shall be instituted against any Guarantor seeking to adjudicate it a
bankrupt or insolvent, or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief, or composition of it or its debts
under any law relating to bankruptcy, insolvency or reorganization or relief of
debtors, or seeking the entry of an order for relief or the appointment of a
receiver, trustee, or similar official for it or for any substantial part of
its property and any such proceeding is not dismissed within sixty (60) days;
or if any Guarantor shall take any action to authorize any of the actions set
forth in this subsection (m).

 

(n)                                 If any judgment or
order, singly or in the aggregate, for the payment of money in excess of
$100,000  shall be rendered against Borrower or
any of its assets and either (i) enforcement proceedings shall have been
commenced by any creditor upon such judgment or order, or (ii) there shall
be any period of fifteen (15) consecutive days during which a stay of enforcement
of such judgment or order by reason of a pending appeal or otherwise, shall not
be in effect.

 

(o)                                 If any provision
of any Loan Document after delivery thereof shall for any reason cease to be
valid and binding on Borrower, or Borrower shall so state in writing; or the
Leasehold Mortgage after delivery thereof to Lender shall for any reason,
except to the extent permitted by the terms thereof, cease to create a valid
and perfected first priority lien and security interest in any of the collateral
purported to be covered thereby, except to the extent due solely to Lender’s
gross negligence or willful misconduct.

 

(p)                                 If any Guarantor
shall fail to materially perform, observe or comply with, or a default or event
of default shall occur under any of the terms, covenants, conditions or
provisions contained in its Guaranty and in any such instance, any applicable
cure period has 

 

70

 

elapsed,
or if the Guaranty shall for any reason cease to be valid and binding on any
Guarantor, or Guarantor shall so state in writing.

 

(q)                                 If there shall
occur, in the reasonable judgment of Lender, any material adverse change in the
financial condition, business, operations or prospects of Borrower or REG.

 

(r)                                    Any challenge,
whether by litigation or otherwise, shall be asserted against the validity of
this Agreement, the development of the Biodiesel Plant or any of the
transactions carried out pursuant to any of them, including, without
limitation, a claim that Borrower has no authority to enter into them, or that
such transactions violate any federal, state or municipal constitution,
charter, law, ordinance, regulation, resolution or rule, or any court order,
and such challenge shall not be resolved or dismissed within sixty (60) days
following the date that Borrower first becomes aware of such challenge or
should have reasonably known of such challenge.

 

(s)                                  If notice is given to Lender purporting
to terminate the operation of the Leasehold Mortgage as security for future
advances and/or future obligations.

 

(t)                                    If any Event of
Default shall occur under the under any loan document evidencing the REG
Ventures Subordinated Indebtedness, including, but not limited to the
Subordinated Loan Agreement or the Convertible Subordinated Note.

 

(u)                                 If  (i) there shall occur any default or
event of default under the Ground Lease which could reasonably be expected to
lead to a termination of the Ground Lease, or (ii) there shall occur any
termination of such Ground Lease.

 

(v)                                 If (i) Borrower shall receive a
notice from Project General Contractor that Project General Contractor intends
to stop work or terminate the Project General Construction Contract due to
Borrower’s breach of or failure to perform under the Project General Construction
Contract, including, without limitation, failure to make payment, and Borrower
fails to cure such breach or failure to perform within fifteen (15) days after
receipt of such notice, (ii) there shall occur any other default or event
of default under the Project General Construction Contract which is not waived
by Project General Contractor, (iii)  Borrower shall receive a notice from
Project Addition General Contractor that Project Addition General Contractor
intends to stop work or terminate the Project Addition General Construction
Contract due to Borrower’s breach of or failure to perform under the Project
Addition General Construction Contract, including, without limitation, failure
to make payment, and Borrower fails to cure such breach or failure to perform
within fifteen (15) days after receipt of such notice or (iv) there shall
occur any other default or event of default under the Project Addition General
Construction Contract which is not waived by Project Addition General
Contractor.

 

(w)                               If there shall occur any default or event
of default by Borrower under the Equipment Purchase and Sale Agreement which is
not waived by De Smet, or any termination of such Equipment Purchase and Sale
Agreement.

 

(x)                                   If there shall occur any default or event
of default by Borrower under any of the Operation Documents which default or
event of default is not waived, or any termination of any such Operation
Documents.

 

71

 

(y)           If there shall occur any default or
event of default by Borrower under the Rate Management Agreement, including,
without limitation, any nonpayment by Borrower of any Rate Management Obligation
when due, and such default shall continue for more than five (5) days
after written notice of the same to Borrower.

 

(z)            If
there shall occur any default or event of default under the IFA Guaranty or any
agreement executed in connection with the IFA Guaranty, or if the IFA Guaranty
is revoked, terminated or otherwise cancelled by the IFA for any reason;
provided, however, it shall not be an Event of Default hereunder if the IFA
Guaranty is replaced with a substitute guaranty with terms and conditions
acceptable to Lender, in its sole discretion, in an amount equal or greater than
the IFA Guaranty by a guarantor acceptable to Lender, in its sole discretion,
within sixty (60) days after the IFA has delivered to Borrower and/or Lender
its notice of revocation of the IFA Guaranty.

 

(aa)         If
there shall occur any default or event of default under any agreement executed
by Borrower and the DCEO in connection with the Renewable Fuels Grant, or if
the Renewable Fuels Grant is revoked, terminated or otherwise cancelled by the
DCEO for any reason.

 

(bb)         If
there shall occur any default or event of default under any agreement executed
in connection with the Economic Development Programming Assistance Grant,
including without limitation (i) the Company/Local Agency Agreement or (ii) the
State/Local Joint Agreement, or if the Economic Development Programming
Assistance Grant is revoked, terminated or cancelled for any reason, including,
without limitation, the failure of Borrower to submit any reports required in
connection with the Economic Development Programming Assistance Grant.

 

(cc)         If
there shall occur any default or event of default under any agreement executed
in connection with the CDBG Grant, or if the CDBG Grant is revoked, terminated
or otherwise cancelled by the City for any reason, and such default has a
material adverse effect on Borrower, the Project, and or the ability of
Borrower to pay and/or perform the Obligations.

 

(dd)         If
there shall occur any default or event of default under any agreement executed
in connection with either of the TARP Grants, or if either of the TARP Grants
are revoked, terminated or otherwise cancelled by either the IDOT or the City
for any reason, and such default has a material adverse effect on Borrower, the
Project, and or the ability of Borrower to pay and/or perform the Obligations.

 

(ee)         (i) The Biodiesel Plant fails to produce at least
ten (10) million gallons of Biodiesel Fuel during any one year period
after Commencement of Production, or (ii) after Commencement of
Production, Borrower fails to operate the Biodiesel Plant for one full year.

 

(ff)           If
the Project Addition is not completed by the Project Addition Completion Date.

 

72

 

8.2       Remedies.  Upon the occurrence of any Event of Default
and in addition to all remedies conferred upon Lender by law or in equity, by
the terms of the Loan Documents, or by the terms of any other documents serving
as security for Borrower’s indebtedness, Lender may pursue any one or more of
the following remedies:

 

(a)           To cancel this
Agreement by written notice to Borrower, in which event Lender shall be fully
released and relieved of all obligations and liabilities to Borrower.

 

(b)         To institute
appropriate proceedings to specifically enforce performance hereof.

 

(c)           To withhold further
Advances hereunder.

 

(d)           To take immediate
possession of the Project and Borrower’s leasehold interest in the Property, as
well as all other property to which fee or leasehold title is held by Borrower (and
which Lender has a security interest) as is necessary to fully complete all on-site
and off-site improvements contemplated to be developed and/or constructed under
this Agreement.

 

(e)           To appoint a receiver
as a matter of strict right without regard to the solvency of Borrower for the
purpose of preserving the property above described, preventing waste, and to
protect all rights accruing to Lender by virtue of this Agreement, or under the
Loan Documents and expressly to make any and all further improvements, whether
on-site or off-site, as may be determined by Lender for the purpose of
completing the Project in accordance with this Agreement.  All expense incurred in connection with the
appointment of said receiver, or in protecting, preserving, or improving the
Property or the Project, shall be chargeable against Borrower and shall be
enforced as a lien against the Property and the Project.

 

(f)            To accelerate
maturity of the Leasehold Mortgage, and/or the Notes, and demand payment of the
principal sums due thereunder with interest, advances, and costs, and in
default of said payment or any part thereof, to exercise the power of sale if
given and available, and pursue its other rights and remedies under the Leasehold
Mortgage or the other Loan Documents.

 

(g)           To foreclose and to
enforce collection of such payment by foreclosure under the Leasehold Mortgage,
and/or other appropriate action in any court of competent jurisdiction.

 

(h)           Upon or after the occurrence and
during the continuation of any Event of Default, Lender is hereby authorized at
any time and from time to time, without notice to the Borrower (any such notice
being hereby waived by the Borrower), to set-off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held and
other indebtedness at any time owing by Lender to or for the credit or the
account of the Borrower against any and all of the obligations of Borrower to
Lender irrespective of whether or not Lender shall have made any demand under
this Agreement or the other Loan Documents and although such obligations may be
unmatured.  The rights of Lender
hereunder are in addition to other rights and remedies (including, without
limitation, other rights of set-off) which Lender may have.

 

73

 

The remedies and rights of Lender shall be cumulative and not exclusive
of any other remedies of Lender under any other provision of this Agreement or
under any other instrument or at law or in equity.  Lender shall be privileged and have the
absolute right to resort to any one or more, or all of said remedies, none to
the exclusion of the others, concurrently or successively, in such order, as
Lender may select.  Except if Lender
chooses the option of specific performance, Lender shall have the absolute
right to refuse to disburse and to apply any balance of Loan funds as a payment
toward the Leasehold Mortgage and the Notes, and to the extent allowed by
law.  No other party, whether contractor,
materialman, laborer, subcontractor or supplier, shall have any interest in the
Loan funds so applied and shall not have any right to garnish, require or
compel payment thereof toward discharge or satisfaction of any claim or lien
which they or any of them have or may have for work performed or materials
supplied to the construction project.  Any additional funds shall be secured by the
lien of the Leasehold Mortgage and the Security Agreement, and shall be
considered a part of the Loans as though initially included therein.

 

SECTION 9.    LENDER’S
RIGHT TO COMPLETE.

 

9.1       Lender’s Right.
Upon the occurrence of any Event of Default described in Section 8 which
would give Lender the right under this Agreement to refrain from making any
further Advance hereunder, Lender, at its sole option (whether or not it
exercised any rights under Section 8) but without any obligation upon
Lender to do so, may at any time thereafter (1) advance the proceeds of
the Loan or any part thereof, or if necessary, sums in excess of the Loan
proceeds, to the Project General Contractor, any subcontractor or any person furnishing
labor or material in the construction of the Project for the account of
Borrower, and the sums so paid or advanced shall for the purposes of this
Agreement, be deemed to have been advanced to Borrower pursuant to the
provisions hereof; (2) disburse the proceeds of the Project Addition
Escrow Account or any part thereof to the Project Addition General Contractor,
any subcontractor or any person furnishing labor or material in the
construction of the Project Addition, and (3) take possession of the Property
and the Improvements together with all materials, equipment and improvements
thereon whether affixed to the realty or not, and all Plans and Specifications,
which Borrower hereby assigns to Lender, and Lender shall have the right but
shall be under no obligation to perform any and all work and labor necessary to
complete the Improvements substantially according to the Plans and
Specifications and may employ watchmen or take any action it may deem necessary
to protect them from depredation or injury.

 

9.2       Lender’s
Implementation.  To implement the
rights of Lender under this Section 9, Lender shall have the authority and
right to complete the Improvements as follows:

 

(a)                            to use the balance of the Loan including any
funds of Borrower which may not have been advanced for the purpose of
completing the Improvements;

 

(b)                                 to
use the balance of the Project Addition Escrow Account which may not have been
disbursed for the purpose of completing the Improvements;

 

(c)                                  to make such additions and changes and corrections
in the Plans and Specifications as may be necessary or desirable to complete
the Improvements in substantially the manner contemplated in the Plans and
Specifications;

 

74

 

(d)           to succeed to the rights of Borrower
under the Project General Construction Contract, the Project Addition General
Construction Contract and all or any one or more Subcontracts, or to make new
contractual arrangements to employ the present or new contractors,
subcontractors, agents, architects and inspectors as shall be required;

 

(e)           to cure any breach or failure to
perform by Borrower under the Project General Construction Contract for which Project
General Contractor has given Borrower and/or Lender notice that Project General
Contractor will or intends to either (i) stop work pursuant to the Project
General Construction Contract or (ii) terminate such Project General
Construction Contract;

 

(f)  to cure any
breach or failure to perform by Borrower under the Project Addition General
Construction Contract for which Project Addition General Contractor has given
Borrower and/or Lender notice that Project Addition General Contractor will or
intends to either (i) stop work pursuant to the Project Addition General
Construction Contract or (ii) terminate such Project Addition General
Construction Contract;

 

(g)  to pay, settle or compromise all existing bills and claims
which may be or become liens against the Property or Improvements or as may be
necessary or desirable for completion of the Improvements or for the clearance
of title;

 

(h) to execute all applications, certificates or instruments in the
name of Borrower which may be required by any governmental authority or
contract; and

 

(i)   to do any and every act
which Borrower might or could do in its own behalf.

 

Lender, in its name, or on behalf of Borrower, shall also have power to
prosecute and defend all actions and proceedings in connection with the
construction of the Improvements on the Property and to take such action and require
such performance as it deems necessary. 
Borrower hereby assigns and quitclaims to Lender all sums unadvanced
hereunder conditioned upon the use of said sums in trust for the completion of
the Improvements, such assignment to become effective only at the option of
Lender upon the occurrence and continuance of an Event of Default described in Section 8.  In addition it is agreed that Lender may, at
its option, expend money in completing said construction and protecting and
preserving the Property, which shall be over and above the total amount of the
funds in the Loan fund to the maximum extent permitted by the law of the
applicable jurisdiction, and said money when so expended, shall be added to the
principal of the Loans and the same, together with interest thereon at the Default
Rate, shall be secured by the lien of the Loan Documents and shall be payable
by Borrower on demand.

 

9.3           Lender May Perform
Obligations; Further Assurances.  Upon the
occurrence and during the continuance of and Event of Default, Borrower shall
permit Lender, if Lender so elects in its sole discretion, to pay or perform
Borrower’s Obligations hereunder or under the other Loan Documents and to
reimburse Lender, on demand, or, if Lender so elects, by Lender making either (i) an
Advance against the Loan on Borrower’s behalf or (ii) debiting any
account maintained by Borrower with Lender for any and all fees and charges due
hereunder, including, without limitation, the accounts established by Borrower
with Lender pursuant to this 

 

75

 

Agreement, for all amounts
expended by or on behalf of Lender in connection therewith and all reasonable
costs and expenses incurred by or on behalf of Lender in connection therewith.

 

SECTION 10.    GENERAL
CONDITIONS.

 

The following conditions shall be applicable
throughout the terms of this Agreement:

 

10.1                           No Waiver.  No Advance under any of the
Loans shall constitute a waiver of any of the obligations set forth herein,
nor, in the event Borrower is unable to satisfy any such condition, shall any
such waiver have the effect of precluding Lender from thereafter declaring such
inability to be an Event of Default as hereinafter provided.

 

10.2                           Form Satisfactory.  Not in
any way in limitation of any other provision of this Agreement, all proceedings
taken in connection with the transactions provided herein, all documents
required or contemplated by this Agreement, the designation of the persons
responsible for the preparation and execution thereof, and the form of policies
of insurance and the issuers thereof shall be reasonably satisfactory to
Lender.

 

10.3                           Notices.  Any notice, request,
demand, consent, confirmation or other communication hereunder shall be in
writing and delivered (i)  in person, by messenger or overnight courier, (ii) by
registered or certified mail, return receipt requested and postage prepaid, or (iii) by
facsimile, to the applicable party at its address or facsimile number set forth
below, or at such other address or facsimile number as such party hereafter may
designate as its address for communications hereunder by notice so given.

 

	
  If
  to Borrower:

  	
   

  	
  Blackhawk
  Biofuels, LLC

  
	
   

  	
   

  	
  22
  South Chicago Avenue

  
	
   

  	
   

  	
  Freeport,
  IL  61032-4230

  
	
   

  	
   

  	
  Attention: 
  Ronald L. Mapes, Chair

  
	
   

  	
   

  	
  Facsimile: 
  (815) 235-4727

  
	
   

  	
   

  	
   

  
	
  and
  also:

  	
   

  	
  Lindquist &
  Vennum PLLP

  
	
   

  	
   

  	
  4200
  IDS Center

  
	
   

  	
   

  	
  80
  South Eighth Street

  
	
   

  	
   

  	
  Minneapolis,
  MN  55402-2274

  
	
   

  	
   

  	
  Attention: 
  Dean R. Edstrom, Esq.

  
	
   

  	
   

  	
  Facsimile: 
  (612) 371-3207

  
	
   

  	
   

  	
   

  
	
  and also:

  	
   

  	
  Renewable Energy Group, Inc.

  
	
   

  	
   

  	
  416 S. Bell Avenue

  
	
   

  	
   

  	
  PO Box 888

  
	
   

  	
   

  	
  Ames, Iowa 50010

  
	
   

  	
   

  	
  Attention: Jeffrey Stroburg

  
	
   

  	
   

  	
  Facsimile:
  (515) 239-8009

  
	
   

  	
   

  	
   

  
	
  and
  also:

  	
   

  	
  Nyemaster,
  Goode, West, Hansell & O’Brien, PC

  
	
   

  	
   

  	
  700 Walnut Street, Suite 1600

  

 

76

 

	
   

  	
   

  	
  Des Moines, Iowa 50309-3899

  
	
   

  	
   

  	
  Attention: Rick Neumann

  
	
   

  	
   

  	
  Facsimile No.: (515) 283-3108

  
	
   

  	
   

  	
   

  
	
  If to Lender:

  	
   

  	
  Fifth Third Bank

  
	
   

  	
   

  	
  8000 Maryland Avenue, Suite 1400

  
	
   

  	
   

  	
  St. Louis, Missouri 63105

  
	
   

  	
   

  	
  Attention: Shawn Hagan
  and Mary Ann Lemonds

  
	
   

  	
   

  	
  Facsimile No.: (314) 889-3377

  
	
   

  	
   

  	
   

  
	
  and also:

  	
   

  	
  Husch Blackwell
  Sanders LLP

  
	
   

  	
   

  	
  190 Carondelet Plaza, Suite 600

  
	
   

  	
   

  	
  St. Louis, Missouri 63105

  
	
   

  	
   

  	
  Attention:
  Edward J. Lieberman, Esq.

  
	
   

  	
   

  	
  Facsimile No.: (314)
  480-1505

  

 

Such notices and
communications shall be deemed delivered upon receipt (or refusal to accept
delivery) provided that all notices and communications sent by facsimile
shall also be evidenced by the facsimile machine’s confirmation identifying the
recipient’s facsimile number and transmission and provided further that all
notices or other communications sent by facsimile shall also delivered by
another means permitted by under this Section.

 

10.4         No Oral Amendments.  Neither this Agreement nor any provision
hereof may be changed, waived, discharged or terminated orally, but only by an
instrument in writing signed by the party against whom enforcement of the
change, waiver, discharge or termination is sought.

 

10.5         Additional Remedies.  The remedies herein provided shall be in
addition to and not in substitution for the rights and remedies which would
otherwise be vested in Lender in any Loan Document or in law or equity, all of
which rights and remedies are specifically reserved by Lender.  The remedies herein provided or otherwise available
to Lender shall be cumulative and may be exercised concurrently.  The failure to exercise any of the remedies
herein provided shall not constitute a waiver thereof nor shall use of any of
the remedies hereby provided prevent the subsequent or concurrent resort to any
other remedy or remedies.  It is intended
that all remedies herein provided for or otherwise available to Lender shall
continue and be each and all available to Lender until all sums due it by
reason of this Agreement have been paid to it in full and all obligations
incurred by it in connection with the construction or operation of the
Improvements have been fully discharged without loss or damage to Lender.

 

10.6         No Partner.  Lender is not a partner with Borrower or any
other party in the building of the Improvements.  Lender shall not in any way be liable or
responsible by reason of the provisions hereof, or otherwise, for the payment
of any claims growing out of the operation of any Improvements.

 

10.7         The Collateral
Documents as Security.  The Collateral
Documents shall constitute security for all monies advanced by Lender and all
obligations incurred by Lender in excess of the Loans advanced or incurred by
Lender pursuant to the authority of this Agreement; and all such monies
advanced and obligations incurred shall constitute a lien upon Borrower’s 

 

77

 

interest
in the Property and Improvements secured by the Collateral Documents and
recovery therefore may be had by Lender upon the Collateral Documents in
addition to all other remedies herein granted to Lender.

 

10.8         Usury Savings.  Notwithstanding any provision herein or in
any other Loan Document, the total liability of Borrower for any payments of
interest or in the nature of interest shall not exceed the limits imposed by the
usury laws of the State of Missouri.  In
the event that such payment is paid by Borrower or received by Lender, then
such excess sum shall be credited as a payment of the principal amount of the
Obligations, unless Borrower shall notify Lender, in writing, that they elect
to have such excess sum returned forthwith. 
Such return or credit shall not cure or waive any Event of Default under
this Agreement, the Leasehold Mortgage or any other Loan Document.

 

10.9         Assignment by
Lender.  Lender may pledge or otherwise
hypothecate or may assign in whole or in part, or issue participating interests
in amounts of up to $10,000,000 in the aggregate, in and to this Agreement and
any of its rights and security hereunder, and the Notes, the Leasehold Mortgage
and all other Loan Documents, to any other person, firm or corporation provided
that all of the provisions of this Agreement shall continue to apply to the
Loans, the Notes, the Leasehold Mortgage and the other Loan Documents.  In the event of such assignment, it shall be
deemed in compliance by Lender with this Agreement and to have been made in
pursuance of this Agreement and not to be in modification hereof and the
Advances made by any such assignee shall be evidenced and secured by the Notes,
and the Leasehold Mortgage.  In the case
of any such transfer, whether by assignment, issuance of participations,
pledge, or hypothecation, by Lender, Borrower will accord full recognition
thereto and agrees that all rights and remedies of Lender in connection with
the interest so transferred shall be enforceable against Borrower by such
institution with the same force and effect and to the same extent as the same
would have been enforceable by Lender but for such transfer.

 

10.10       Signs.  Borrower agrees, upon Lender’s request, to
erect and maintain a sign in form acceptable to Lender on the Property during
construction of the Improvements which indicates that Lender is providing
construction financing for the Biodiesel Plant.

 

10.11       Additional Documents.  Borrower agrees upon demand to do any act or
execute any additional documents (including, but not limited to, security
agreements on any personalty included or to be included in the Property or the
Improvements) as may be reasonably required by Lender to secure the Notes, to confirm
the lien of the Leasehold Mortgage, or any other applicable Loan Document, or to otherwise create,
evidence, assure or enhance Lender’s rights and remedies under, or as
contemplated by, the Loan Documents or at law or in equity.  All of
said documents shall be in form and substance prepared by or acceptable to
Lender.

 

10.12       Binding Effect;
Continuing Agreement.  The terms,
conditions, covenants, agreement, powers, privileges, notices and
authorizations herein contained shall extend to, be binding upon and available
to the heirs, executors, administrators, successors and, to the extent
permitted hereunder, the assigns of each of the respective parties hereto.  Notwithstanding the foregoing, Borrower shall
not, without the prior written consent of Lender, assign or transfer
voluntarily or by operation of law this Agreement.  An assignment or transfer in violation of
this provision shall be invalid and of no force or effect.  Borrower’s obligations, covenants, 

 

78

 

representations
and warranties hereunder shall continue beyond the final disbursement of the
Loan made hereunder for so long as Borrower has any obligations outstanding
Lender, or Lender has any lien on any property of Borrower.

 

10.13       Governing Law.  This Agreement and each transaction
consummated hereunder shall be deemed to be made under the laws of the State of
Missouri and shall be construed in accordance with and governed by the laws of
such State.

 

10.14       Headings.  The titles and headings of the paragraphs of
this Agreement have been inserted for convenience of reference only and are not
intended to summarize or otherwise describe, or limit, modify or expound upon
the subject matter of such paragraphs.

 

10.15       Lender’s Discretion.  Any
condition of this Agreement which requires the submission of evidence of the
existence or non-existence of a specified fact or facts implies as a condition
the existence or non-existence, as the case may be, of such fact or facts and
Lender shall, at all time, be free independently to establish to its
satisfaction and in its reasonable discretion such existence or non-existence.  Except as otherwise expressly provided in
this Agreement, whenever Lender’s judgment, consent or approval is required
hereunder for any matter, or Lender shall have an option or election hereunder,
such judgment, the decision as to whether or not to consent to or approve the
same or the exercise of such option or election shall be in the sole discretion
of Lender.

 

10.16       Consent to Forum.  As part of the consideration for new value this
day received, Borrower hereby consents to the jurisdiction of any state court
located within St. Louis County, Missouri or the United States District Court, Eastern
District of Missouri, Eastern Division, and waives personal service of any and
all process upon Borrower and consents that all such service of process be made
by certified or registered mail directed to Borrower at the address set forth
in the preliminary statements hereof, and service so made shall be deemed to be
completed upon actual receipt thereof. 
Nothing contained herein should be deemed to affect the parties’ right
to remove to Federal Court within the Eastern District of Missouri.  Borrower waives any objection to jurisdiction
and venue of any action instituted against Borrower as provided herein and
agrees not to assert any defense based on lack of jurisdiction or venue.  Borrower further agrees not to assert against
Lender (except by way of a defense or counterclaim in a proceeding initiated by
Lender) any claim or other assertion of liability with respect to this
Agreement, the Notes, any of the Loan Documents, Lender’s conduct in respect of
any of the foregoing or otherwise in any jurisdiction other than the foregoing
jurisdictions.  Nothing in this section
shall affect the right of Lender to serve legal process in any other manner
permitted by law or affect the right of Lender to bring any action or
proceeding against Borrower in the courts of any other jurisdictions.

 

10.17       Waiver of Jury Trial.  TO THE
FULLEST EXTENT PERMITTED BY LAW, AND AS SEPARATELY BARGAINED FOR CONSIDERATION TO
LENDER, BORROWER HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY (WHICH LENDER ALSO
WAIVES) IN ANY ACTION, SUIT, PROCEEDING OR COUNTERCLAIM OF ANY KIND
ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE NOTES, ANY OF THE LOAN
DOCUMENTS OR LENDER’S CONDUCT IN RESPECT OF ANY OF THE FOREGOING.

 

79

 

10.18       Incorporation by
Reference; Statement Required By Mo. Rev. Stat. Section 432.047. All
of the terms of the other Loan Documents are incorporated in and made part of
this Loan Agreement by reference. 
Pursuant to Mo. Rev. Stat. Section 432.047, Lender hereby gives the
following notice to Borrower:

 

“Oral agreements or commitments to loan money, extend credit or to
forbear from enforcing repayment of a debt including promises to extend or
renew such debt are not enforceable, regardless
of the legal theory upon which it is based that is in any way related to the
credit agreement.  To protect you (borrower(s)) and us
(creditor) from misunderstanding or disappointment, any agreements we
reach covering such matters are contained in this writing, which is the
complete and exclusive statement of the agreement between us, except as we may
later agree in writing to modify it.”

 

10.19       Counterparts.  This Agreement may be executed in
counterparts including facsimile counterparts), any one of which shall be deemed an original, and all of which taken
together shall be treated as one document.

 

[SIGNATURES ON FOLLOWING PAGE]

 

80

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement the
day and year first above written.

 

	
   

  	
   

  	
  BLACKHAWK
  BIOFUELS, LLC,

  
	
   

  	
   

  	
  a
  Delaware limited liability company

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /S/ Ronald L. Mapes

  
	
   

  	
   

  	
   

  	
  Ronald
  L. Mapes, Chair

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  FIFTH THIRD BANK

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /S/
  Mary Ann Lemonds

  
	
   

  	
   

  	
   

  	
  Mary
  Ann Lemonds, Vice President

  
	
   

  	
   

  	
   

  	
   

  

 

 

Signature
Page

 

 

EXHIBIT A

 

LEGAL DESCRIPTION OF PROPERTY

 

A.            Legal
Description of Leased Premises

 

A tract of land being
part of the Northwest Quarter of Section 9, Township 19 North, Range 11
West of the Second Principal Meridian, Vermilion County, Illinois and also part
of Chs’ Leverenz First Addition to the City of Danville, Vermilion County,
Illinois, Edward C. Lamm’s Addition to Danville, Illinois and Fred Stebe’s
Addition to the City of Danville, Vermilion County, Illinois as all 3
subdivisions are recorded in the Vermilion County Recorder’s Office, and also
the vacated public Right-of-Ways for Section Street, Short Street,
Anderson Street, Harrison Street and the public alleys per City of Danville,
Illinois Ordinance Number 8499, recorded as Document Number 06-12386 in said
Vermilion County Recorder’s Office, described as follows, with bearings on a
local datum:

 

Beginning at the
Northeast corner of Lot 1 in said Chs’ Leverenz First Addition, proceed North
88° 26' 08" East along an Easterly extension of the North line of said
Lot, 24.06 feet to the Westerly Right-of-Way line of the former C. &
E. I. Railroad; thence South 23° 16' 43" East along said Westerly
Right-of-Way line of the former C. & E. I. Railroad, 96.74 feet to the
East Right-of-Way line of Anderson Street; thence South 2° 27' 08" West
along said East Right-of-Way line of Anderson Street, 75.37 feet to an Easterly
extension of the South line of said Lot 1; thence South 88° 25' 51" West
along said extension of the South line, 66.16 feet to the Southeast corner of
said Lot 1; thence South 2° 27' 08" West along a Southerly extension of
the East line of said Lot, 50.12 feet to the Northeast corner of Lot 1 in
Christ Evert’s 1st Addition to the City of Danville, Illinois, as recorded in
said Vermilion County Recorder’s Office, said corner also being on the South
Right-of-Way line of Harrison Street; thence South 88° 25' 51" West along
said South Right-of-Way line of Harrison Street, 280.15 feet; thence South 88°
31' 59" West along said South Right-of-Way line of Harrison Street, 443.13
feet; thence North 2° 35' 14" East along said South Right-of-Way line of
Harrison Street, 25.15 feet; thence South 88° 31' 59" West along said
South Right-of-Way line of Harrison Street, 220.89 feet to the West
Right-of-Way line of Section Street; thence North 2° 48' 17" East
along said West Right-of-Way line of Section Street, 305.28 feet to a line
being a Westerly extension of the North line of Lot 12 in said Edward C. Lamm’s
Addition; thence North 88° 33' 27" East along said Westerly extension of
the North line and along said North line, 66.54 feet to the Northeast corner of
said Lot 12; thence South 2° 45' 04" West along the East line of said Lot,
124.94 feet to the Southeast corner of said Lot 12; thence North 88° 32' 47"
East along the South lines of Lots 11, 10, 9, 8 and 7 in said Edward C. Lamm’s
Addition, 250.60 feet to the Southeast corner of said Lot 7; thence North 2° 28'
42" East along the East line of said Lot, 124.85 feet to the Northeast
corner of said Lot 7; thence North 88° 33' 27" East along an Easterly
extension of the North line of said Lot 7 and along the North lines of Lots 6,
5, 4, 3, 2 and 1 in said Edward C. Lamm’s Addition and along an Easterly
extension of said North lines, 344.04 feet to the West line of Lot 9 in said
Fred Stebe’s Addition; thence North 2° 09' 08" East along said West line,
30.56 feet to the Northwest corner of said Lot 9; thence North 88° 29' 47"
East along the North line of said Lot, 56.31 feet to the Northeast corner of
said Lot 9; thence South 2° 11' 37" West along the East line of said Lot,
128.36 feet to

 

A-1

 

the Southeast corner of
said Lot 9; thence South 88° 26' 08" West along the South line of said
Lot, 56.22 feet to the Southwest corner of said Lot 9; thence South 2° 09' 06"
West along a Northerly extension of the West line of Lot 4 in said Chs’
Leverenz First Addition, 16.50 feet to the Northwest corner of said Lot 4;
thence North 88° 26' 08" East along the North line of said Lot 4 and along
the North lines of Lots 3 and 2 and said North line of Lot 1, all in said Chs’
Leverenz First Addition, 281.02 feet to the Point of Beginning, encompassing
5.924 acres more or less.

 

B.            Legal Description of Soybean Oil Pipeline Easement

 

A
tract of land being 20.00 feet in width and being centered upon the following
described center line and being part of the North one-half of Section 9,
Township 19 North, Range 11 West of the Second Principal Meridian, Vermilion
Country, Illinois, described as follows, with bearing on a local datum:

 

Commencing
at the Northeast corner of Lot 1 in Christ Evert’s 1st Addition to
the City of Danville, Illinois, as recorded in the Vermilion County recorder’s
office, said corner also being on the South Right-of-Way line of vacated
Harrison Street (platted as Madison Street), proceed South 88° 25' 51"
West along said South Right-of-Way line, 280.15 feet; thence South 88° 31' 59"
West along said South Right-of-Way line, 161.63 feet to the True Point of
Beginning of said center line; thence South 00° 05' 56" West, 116.68 feet;
thence South 45° 14' 48" East, 46.13 feet; thence South 81° 16' 37"
East, 58.62 feet; thence North 50° 05' 48" East, 34.72 feet to the point
of ending of said center line.

 

C.            Legal
Description of Access Right of Way Easement

 

A
tract of land being a part of the North one-half of Section 9, Township 19
North, Range 11 West of the Second Principal Meridian, Vermilion County,
Illinois, described as follows, with bearings on a local datum:

 

Commencing
at the Northeast corner of Lot 1 in Christ Evert’s 1st Addition to
the City of Danville, Illinois, as recorded in the Vermilion County recorder’s
office, said corner also being on the South Right-of-Way line of vacated
Harrison Street (platted as Madison Street), proceed South 88° 25' 51"
West along said South Right-of-Way line, 280.15 feet; thence South 88° 31' 59"
West along said South Right-of-Way line, 184.85 feet to the True Point of
Beginning; thence continue South 88° 31' 59" West along South Right-of-Way
line, 50.30 feet; thence South 33° 31' 40" East, 42.68 feet; thence South
00° 57'  00" West, 405.00 feet;
thence South 20° 47' 53" East, 210.22 feet; thence North 74° 55' 37"
East, 42.68 feet, thence South 15° 19' 21" East, 136.89 feet; thence South
02° 33' 00" West, 16.14 feet to the North Right-of-Way line of North
Street; thence South 87° 27' 00" East along said North Right-of-Way line,
180.54 feet; thence North 02° 23' 00" East, 351.45 feet; thence South 88°
09' 07" West, 130.15 feet; thence North 02° 27' 08" East, 138.58
feet; thence South 88° 16' 50" West, 195.96 feet; thence North 00° 57' 00"
East, 300.00 feet; thence North 16° 15' 59" East, 4.15 feet to the True
Point of Beginning, encompassing 2.922 acres more or less.

 

A-2

 

D.            Legal Description of Underground Gas Pipeline Easement

 

A
tract of land being 12.00 feet in width and being centered upon the following
described center line and being part of the North one-half of Section 9,
Township 19 North, Range 11 West of the Second Principal Meridian, Vermilion
Country, Illinois, described as follows, with bearing on a local datum:

 

Commencing
at the Northeast corner of Lot 1 in Christ Evert’s 1st Addition to
the City of Danville, Illinois, as recorded in the Vermilion County recorder’s
office, said corner also being on the South Right-of-Way line of vacated
Harrison Street (platted as Madison Street), proceed South 88° 25' 51"
West along said South Right-of-Way line, 6.00 feet to the True Point of Beginning
of said center line; thence South 02° 27' 08" West along a line being
parallel with the West Right-of-Way line Anderson Street, 309.50 feet; thence
South 88° 33' 32" West, 477.00 feet; thence South 02° 03' 14" East,
133.94 feet; thence South 08° 49' 38" East, 50.50 feet; thence South 68°
39' 13" West, 109.57 feet; thence South 21° 14' 31" East, 70.33 feet;
thence South 12° 47' 11" East, 46.53 feet; thence South 19° 46' 04"
West, 140.44 feet; thence South 01° 35' 19" West, 204.49 feet; thence
North 87° 48' 14" West, 801.27 feet; thence North 67° 37' 59"  West, 48.04 feet; thence North 46° 31' 27"
West, 33.50 feet to the point of ending of said center line.

 

E.             Legal Description of Biodiesel Pipeline Easement

 

A
tract of land being 20.00 feet in width and being centered upon the following
described center line and being part of the North one-half of Section 9,
Township 19 North, Range 11 West of the Second Principal Meridian, Vermilion
Country, Illinois, described as follows, with bearing on a local datum:

 

Commencing
at the Northeast corner of Lot 1 in Christ Evert’s 1st Addition to
the City of Danville, Illinois, as recorded in the Vermilion County recorder’s
office, said corner also being on the South Right-of-Way line of vacated
Harrison Street (platted as Madison Street), proceed South 88° 25' 51"
West along said South Right-of-Way line, 280.15 feet; thence South 88° 31' 59"
West along said South Right-of-Way line, 443.13 feet; thence North 02° 34' 14"
East along said South Right-of-Way line, 25.15 feet; thence South 88° 31' 59"
West along said Right-of-Way line, 41.61 feet to the True Point of Beginning of
said center line; thence South 44° 44' 27" West, 318.70 feet; thence North
78° 26' 57" West, 107.90 feet; thence South 66° 39' 16" West, 59.97
feet; thence South 19° 59' 46" West, 10.00 feet to the point of the ending
of said center line.

 

A-3

 

EXHIBIT B-1

 

PROJECT PLANS AND
SPECIFICATIONS

 

[ON FILE WITH LENDER]

 

B-1

 

EXHIBIT B-2

 

PROJECT ADDITION PLANS AND
SPECIFICATIONS

 

[ON FILE WITH LENDER]

 

B-2

 

EXHIBIT C-1

 

PROJECT BUDGET

 

[ON FILE WITH LENDER]

 

C-1

 

EXHIBIT C-2

 

PROJECT ADDITION BUDGET

 

[ON FILE WITH LENDER]

 

C-2

 

EXHIBIT
D-1

 

SCHEDULE
OF CONSTRUCTION

 

FOR
PROJECT

 

[ON FILE WITH LENDER]

 

D-1

 

EXHIBIT
D-2

 

SCHEDULE
OF CONSTRUCTION

 

FOR
PROJECT ADDITION

 

[ON FILE WITH LENDER]

 

D-2

 

EXHIBIT
E

 

SURVEYOR’S
CERTIFICATE

 

[Name], a
registered land surveyor, License No. [Number],
in and for the State of Illinois  and legally doing business in [County], does hereby certify to FIFTH THIRD BANK, [Title Company], BLACKHAWK
BIOFUELS, LLC, BUNGE MILLING, INC.
and their respective successors and assigns that I have made a careful boundary
survey of a tract of land described [hereon]  [as follows:

 

(Insert Property Description)]

 

I.                The
accompanying survey (“Survey”) was made on the ground and correctly shows the
boundary of the subject property and all visible encroachments on the subject
property and was made in accordance with laws and/or Minimum Standards of the
State of Illinois;

 

II.            The property described
hereon is the same as the property described in                           
Commitment No.                           
with an effective date of                                         
and that all easements, covenants and restrictions (to the extent plottable)
referenced in said title commitment or apparent from a physical inspection of
the site or otherwise known to me have been plotted hereon or otherwise noted
as to their effect on the subject property;

 

III.        Said described property is
located within an area having a Zone Designation           
by the Federal Emergency Management Agency (FEMA), on Flood Insurance Rate Map No.                             ,
with a date of identification of                                 ,
for Community No.                       ,
in                         
County, State of Illinois, which is the current Flood Insurance Rate Map for
the community in which said premises is situated;

 

IV.       The
subject property has direct access to and from E. Madison Avenue, a duly
dedicated and accepted public street or highway;

 

 [If
the certificate is attached to rather than typed or otherwise reproduced on the
face of the Survey, add a paragraph specifically identifying the Survey (such
as by date, property description, and survey number) to which the certificate
relates.]

 

The parties listed above are entitled to rely on the
Survey and this certificate as being accurate.

 

This is to certify that this map or plat and the
survey on which it is based were made in accordance with laws regulating
surveying in the State of Illinois, and with the “Minimum Standard Detail
Requirements for ALTA/ACSM Land Title Surveys”, jointly established and adopted
by ALTA and NSPS in 2005 and includes Items 1 through 4, 11(a), and 18 in Table
A contained therein.  Pursuant to the
Accuracy Standards as adopted by ALTA and NSPS and in effect on the date of
this certification, undersigned further certifies that in my professional
opinion, as a land surveyor registered in the State of Illinois, the Relative
Positional Accuracy of this survey does not exceed that which is specified
herein.

 

E-1

 

	
   

  	
   

  	
  [Signature]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  [Type name of surveyor below
  signature line]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Registration No.                        

  
	
   

  	
   

  	
   

  
	
  Date:     [Date]

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  [Seal]

  	
   

  	
   

  

 

E-2

 

EXHIBIT F

 

Borrower’s Affidavit and

Requisition for Funds No.                 

 

	
  Date:

  	
   

  	
   

  

 

                                 TO:                                                                                                        PROJECT:

 

                                  ,

Fifth Third Bank, as construction lender,

 

The undersigned does hereby request and authorize payment totaling $                        
as described and itemized on Schedule A, attached, and does hereby certify and
guarantee that all amounts requested for labor and/or material are physically
incorporated into the [Project]/[Project Addition] (except for “stored” items
shown on Schedule A), in compliance with the plans and specifications, with
modifications approved by addressee above, or for services truly performed
relating to the subject property.  All
such payment requests, individually and in total are in accordance with the
terms of the executed loan documents and represent the lesser of the amounts
actually due and billed or value of work in place and services performed.

 

The undersigned further certifies that no part of the payments
requested include or contemplate rebates, or commissions to the undersigned,
its beneficiaries, agents or assigns, and that all amounts requested are solely
for the named payees and for the purpose indicated and that this requisition
includes all amounts outstanding and payable on subject property through                                 ,
20      , except for retainage (if any) provided
for in the construction contract and the construction loan agreement and
Construction and Disbursing Escrow Agreement.

 

The undersigned further says that no claims have been made to the
affiant by, nor is any suit now pending on behalf of, any contractor,
subcontractor, laborer or materialman and further that no chattel mortgages,
conditional bills of sale, retention of title agreements, security agreements,
financing statements or personal property leases have been given or are
outstanding as to any fixtures, appliances or equipment which are now installed
in or upon said real property, or the improvements thereon, except as indicated
on Schedule B (if any), attached.

 

The undersigned hereby acknowledges the dependence others may place
upon the statements contained herein.  No
obligation on the part of the lender or its advisors, expressed or implied, is
created by this requisition as to protection of the owner and/or contractor or
assigns from mechanics’ or materialmen’s lien claims, and the owner and
contractor, as agreed between them, shall be responsible for the procurement of
required lien waivers, paid bills, and releases from both principal payees and
all subordinate claimants thereunder, and the undersigned hereby covenants and
agrees to hold [Project]/[Project Addition] Participants and their agents and
assigns harmless against any lien, claim or suit by the contractors,
subcontractors, mechanics or materialmen in connection with the furnishing of
said services, labor and material included in the

 

F-1

 

requisition hereinabove described and all prior requisitions, except
for acknowledged retainage (if any) provided for in the construction contract
and construction loan agreement.

 

The undersigned does further certify that:  (a) the subcontractors and material
suppliers shown on the breakdown submitted to the lender are in its opinion
capable of performing their contractual obligations; (b) cost projections
previously provided you are adequate to complete the work to be done; (c) all
underground utilities and on-site and off-site improvements are now or shall be
available to the [Project]/[Project Addition], and all costs therefore are
included in the cost breakdown and contract submitted to the lender; and (d) all
work in place and material furnished to date is in compliance with those plans
and specifications identified at loan closing by lender, including requirements
of Sale Contract(s), if any.

 

That the disbursement requested above shall be funded by                                 .

 

The undersigned does agree to furnish to [Project]/[Project Addition]
Participants (if requested by them), lien waivers from all payees named herein
within two weeks from date payment is received by owner or prior to the next
fund request, whichever shall occur first.

 

 

BLACKHAWK BIOFUELS, LLC,

a Delaware limited liability company

 

	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

 

Subscribed and worn to before me this            

day of                                     ,
20        .

 

	
   

  	
   

  
	
  Notary
  Public

  

 

F-2

 

General Contractor Affidavit and Requisition for Funds

 

TO:

 

RE:

 

The undersigned does hereby request and authorize payments totaling                                                 
                                                    
Dollars as described and itemized on Schedule A, attached, and does hereby
certify that all amounts requested for labor and/or materials are physically
incorporated into the [Project]/[Project Addition] (except for “stored” items
identified as such) in compliance with the plans and specifications approved by
the addressees above, or for services truly performed relating to the subject
property.  All such payment requests,
individually and in total, are in accordance with the terms of the executed
loan documents, and represent the lesser of amounts actually due and billed or
value of work in place and services performed.

 

The undersigned further certifies that no part of the payments
requested include or contemplate rebates, commission or loans to the
undersigned, their (its) beneficiaries, agents or assigns, and that all amounts
requested are solely for the named payees and for the purposes indicated and
that this requisition includes all amounts outstanding and payable on subject
property through                                   ,
except for retentions.

 

The undersigned further says that no claims have been made to the
affiant by, nor is any suit now pending on behalf of, any contractor,
subcontractor, laborer or materialman and further that no chattel mortgages,
conditional bills of sale, retention of title agreements, security agreements,
financing statements, or personal property leases have been given or are
outstanding as to any fixtures, appliances, or equipment which are now
installed in or upon said real property, or the improvements thereon, arising
from labor and materials included in the construction contract.

 

The undersigned does further certify to their (its) best knowledge and
opinion that:  (a) the
subcontractors and material supplies shown on the breakdown submitted to the
lender are, in their opinion, capable of performing their contractual obligations;
(b) cost projections made by the contractor are submitted to the lender
are adequate to complete the work to be done; (c) all underground
utilities and on-site and off-site improvements are now or shall be available
to the [Project]/[Project Addition], and all costs therefore are included in
the cost breakdown and contract submitted to the lender; (d) all work in
place and material furnished to date is in compliance with those plans and
specifications identified at loan closing.

 

The undersigned hereby acknowledge(s) the dependence others may
place upon the statements contained herein. 
No obligation on the part of the lender or its advisor, expressed or
implied, is created by this requisition as to protection of the owner and/or
contractors, or assigns from mechanics’ or materialmen’s lien claims, and the
owner and contractor, as agreed between them, shall be responsible for the
procurement of required lien waivers, paid bills and releases from both
principal payees and all subordinate claimants thereunder and hereby covenants
and agreed to hold                                                             ,
and their agents harmless against any lien, claim or suit by any contractors,
subcontractors, mechanics or materialmen in connection with 

 

F-3

 

the
furnishing of said services, labor and material included in the requisition
hereinabove described and all prior requisitions.

 

The undersigned do(es) agree to furnish to                                            lien
waivers from all payees named herein within two weeks from date or prior to the
next fund request whichever shall occur first.

 

 

	
   

  	
   

  
	
   

  	
  (Contractor)

  

 

Subscribed and sworn to before me this                     
day of                             ,
200    .

 

 

	
   

  	
   

  
	
   

  	
  Notary
  Public

  

 

My commission expires:

 

 

(Attach standard 1987 issue of A.I.A. G702 and G703 or equal, together
with invoices from subcontractors and major material suppliers, complete with
Schedules of Value, in support of Draw.)

 

F-4

 

EXHIBIT G

 

QUARTERLY COMPLIANCE
CERTIFICATE

 

, 200  

 

	
  To:

  	
   

  	
  FIFTH THIRD BANK (“Bank”)

  
	
   

  	
   

  	
  8000 Maryland Ave., Ste. 1400

  
	
   

  	
   

  	
  St. Louis, Missouri 63105

  

 

 

Re: Blackhawk Biofuels, LLC (“Borrower”)

 

Gentlemen:

 

1.                                       Representations and Warranties.  Each of the representations and warranties
set forth in Section 4 of the Loan Agreement by and between Borrower and
Bank, dated as of May        , 2008 (the “Loan
Agreement”), are true and complete, except as set forth on Attachment 1 hereto.

 

2.                                       No Defaults.  Except as set forth on Attachment 2, no
Default or Event of Default (as defined in the Loan Agreement) exists as of the
date hereof.

 

3.                                       Financial Covenants.  Set forth below are calculations of the
financial covenants required pursuant to Section 7.33 and Section 7.34
of the Credit Agreement.  Calculation of
the financial covenants set forth as (a) and (b) below shall not be
required unless the period covered by this Quarterly Compliance Certificate is
on or after the Financial Covenant Commencement Date.  The financial covenant calculations set forth
below have been prepared and calculated in accordance with the terms and
provisions of the Loan Agreement.  Capitalized terms used and not defined in this
Assignment shall have the meanings given to them in the Loan Agreement.

 

PERIOD COVERED:  Quarter Ended

 

(a)           Minimum Fixed Charge Coverage Ratio

 

Net
Income

 

Plus: 
Interest Expense

 

Plus: 
Taxes

 

Plus: 
Depreciation Expense

 

Plus: 
Amortization Expense

 

Equals:  EBITDA

 

Less: 
Taxes

 

Less: 
Dividends and Distributions

 

Less: 
Maintenance Capital Expenditures

 

G-1

 

Equals:   Cash
Available for Debt Service Requirements

 

Current
Portion Long Term Debt - Prior Period

 

Plus:  Interest
Expense

 

Equals:  Total Debt
Service Requirements

 

Fixed Charge Coverage Ratio

 

Required Minimum Ratio*

 

In Compliance?  (Yes/No):

 

* Minimum Required: 1.25 to 1.00

 

(b)           Maximum Funded Debt to EBITDA Ratio

 

Total
Funded Debt

 

EBITDA

 

Funded Debt Ratio

 

Required Maximum Ratio*

 

In Compliance?  (Yes/No):

 

* Maximum Required :

 

(i)                                     4.50 to 1.00 measured as of the end of the fiscal quarter ending on the
Financial Covenant Commencement Date; then

 

(ii)                                  4.50 to 1.00 measured as of the end of the fiscal quarter ending September 30,
2009; then

 

(iii)                               4.00 to 1.00 measured as of the end of the fiscal quarter ending December 31,
2009; and then

 

(iv)                              3.00 to 1.00 measured as of the end of each fiscal quarter thereafter.

 

The Funded Debt to EBITDA Ratio shall be measured
quarterly, on a rolling four-quarter basis, provided, however, that to the
extent that the Funded Debt to EBITDA Ratio is measured during the first three (3) quarters
following Commencement of Production at the Biodiesel Plant, the measurement of
EBITDA for purposes of the Funded Debt to EBITDA Ratio shall be made on an
annualized basis.

 

(c)           Maximum Capital Expenditures

 

Fiscal Year to date (Maximum: $300,000 per Fiscal
Year)

 

In Compliance?  (Yes/No):

 

G-2

 

The foregoing Compliance Certificate is true, correct
and complete.

 

 

BLACKHAWK
BIOFUELS, LLC,

a
Delaware limited liability company

 

	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Its:

  	
   

  
				

 

G-3

 

ATTACHMENT 1 TO MONTHLY
COMPLIANCE CERTIFICATE

 

Exceptions
to Representations and Warranties

 

 

ATTACHMENT
2 TO MONTHLY COMPLIANCE CERTIFICATE

 

Defaults
and Events of Default

 

 

EXHIBIT H

 

BORROWING BASE CERTIFICATE

 

[BANK TO PROVIDE FORM OF
CERTIFICATE PRIOR TO THE

FIRST ADVANCE UNDER THE
REVOLVING CREDIT LOAN]

 

H-1

 

EXHIBIT I

 

CONTRIBUTION MARGIN PRO-FORMA CERTIFICATE

 

	
  Blackhawk Biofuels, LLC

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Current Price

  
	
  FOB
  Plant Sales Price

  	
   

  	
   

  	
  $

  
	
  Glycerin

  	
   

  	
   

  	
  $

  
	
  Soy
  Oil

  	
   

  	
   

  	
  $

  
	
  Basis

  	
   

  	
   

  	
  $

  
	
  Alternative
  Feedstock

  	
   

  	
   

  	
  $

  
	
  Chemicals

  	
   

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  
	
  %
  Soy Oil

  	
   

  	
     %

  	
   

  
	
  %
  Alternative Feedstock

  	
   

  	
     %

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Variable
  Costs

  	
   

  	
  $

  	
   

  
	
  Soy
  Oil Conversion

  	
   

  	
   

  	
   

  
	
  Animal
  Fat Conversion

  	
   

  	
   

  	
   

  
	
  Glycerin
  Conversion

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  
	
  FOB
  Plant Sales Price

  	
   

  	
  $

  	
   

  
	
  Glycerin

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
  $

  
	
  Feedstock

  	
   

  	
  $

  	
   

  
	
  Chemicals

  	
   

  	
  $

  	
   

  
	
  Variable

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  
	
  Contribution
  Margin

  	
   

  	
   

  	
  $

  

 

I-1

 

The foregoing Contribution Margin Pro-Forma Certificate
is true, correct and complete.

 

 

BLACKHAWK BIOFUELS, LLC,

a Delaware limited liability
company

 

	
   

  	
  By:

  	
   

  
	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  
	
   

  	
  Its:

  	
   

  
					

 

G-1

 

 

SCHEDULE 1.1

 

PERMITTED LIENS

 

1.             Rights
of public and quasi public utilities, if any, that may fall within the
boundaries of vacated alleys and streets. 
As per An Ordinance Vacating Streets and Alleys approved by the City
Council of the City of Danville September 19, 2006, as Ordinance No. 8499
and recorded September 20, 2006, as Document No. 06-12386.

 

2.             Rights
of way for drainage ditches, drain tiles, feeders, laterals and underground
pipes, if any.

 

3.             Ordinance
No. 5624 of the City of Danville, recorded in Book 789 page 784 as
Document 817299, and Ordinance No. 6823 recorded in Book 890 page 294
as Document 890321, and Ordinance No. 150 of Danville Sanitary District
recorded as Document 81-7072, providing for a lien for delinquent sewage
services, subject to rights arising prior to the filing of a notice of lien in
the Office of the Recorder of Deeds of Vermilion County, Illinois, and all
amendments thereto.

 

 

SCHEDULE 4.10

 

REAL PROPERTY AND PERSONAL PROPERTY LEASES

 

1.             A lease for
existing office space, currently on a month-to-month basis, for rent in
the amount of $600 per month.

 

 

SCHEDULE 4.11

 

ENVIRONMENTAL REPORTS

 

1.  Phase I Environmental Site Assessment dated November 2007
by Burns & McDonnell Engineering Company, Inc.

 

 

SCHEDULE 4.20

 

INTELLECTUAL PROPERTY

 

1.             Intellectual
property rights granted to or acquired by the Borrower under the Project
General Construction Contract.

 

2.             Intellectual
property rights and licenses granted to or acquired by the Borrower under
contracts and leases assumed and/or assigned to the Borrower in connection with
the Asset Purchase Agreement.

 

3.             Generally
available commercial software licensed by or to the Borrower.

 

4.             Tradenames,
unregistered trademarks and trade secrets that may be owned by the Borrower associated
with the business or proposed business of the Borrower.

 

5.             Rights
and licenses acquired by the Borrower under contracts and leases assumed by the
Borrower in connection with the Asset Purchase Agreement.

 

 

SCHEDULE 7.46

 

AGREEMENTS WITH AFFILIATES

 

1.             The
Management and Operational Services Agreement;

 

2.             the
Subordinated Loan Agreement by and among REG Ventures, LLC, Renewable Energy
Group, Inc., and Borrower, dated as of even date hereof;

 

3.             the
Convertible Secured Subordinated Note in
the original principal amount of $21,700,000;

 

4.             that
certain Subordinated Security Agreement given by Borrower to REG Ventures, LLC,
dated as of even date hereof;

 

5.             that
certain Subordinated Mortgage of Leasehold, Security Agreement, Assignment of
Rents and Leases and Fixture Filing between Borrower and REG Ventures, LLC,
dated as of even date hereof;

 

6.             that
certain Unit Purchase Warrant given by Borrower in favor of REG Ventures, LLC,
dated as of even date hereof; and

 

7.             the
Project Addition Construction Contract by and between Borrower and REG
Construction & Technology Services, LLC, dated May 9, 2008.EXHIBIT 10.4

 

CONSTRUCTION/TERM LOAN NOTE

 

	
  $24,650,000.00

  	
  May 9, 2008

  

 

For value received, the undersigned,  BLACKHAWK BIOFUELS, LLC, a Delaware limited liability company (the “Borrower”), promises to pay to the order of
FIFTH THIRD BANK, a Michigan banking corporation,  (the “Lender”)
in lawful money of the United States of America, the principal sum of
Twenty-Four Million Six Hundred Fifty Thousand and 00/100 Dollars
($24,650,000.00) or such lesser amount as may be disbursed hereunder, together
with interest on each disbursement of the aforesaid principal sum, from the
date of such disbursement, at the rate provided for herein.

 

This Construction/Term Loan Note (the “Note”) is the Construction/Term
Loan Note referred to in, and is issued pursuant to, that certain Loan
Agreement between Borrower and Lender dated of even date herewith (as amended
or otherwise modified from time to time, the “Loan Agreement”), and is entitled
to all of the benefits and security of the Loan Agreement.  All of the terms, covenants and conditions of
the Loan Agreement and all other instruments evidencing or securing the
indebtedness hereunder are hereby made a part of this Note and are deemed
incorporated herein in full.  All
capitalized terms used herein, unless otherwise specifically defined in this
Note, shall have the meanings ascribed to them in the Loan Agreement.

 

Interest hereunder shall (i) accrue
on the principal amount outstanding at the end of each day at a variable rate per annum as set forth in Section 3.1
of the Loan Agreement and (ii) be
computed on the basis of actual days elapsed over the period of a 360-day year.

 

Upon or after the occurrence and
during the continuation of any Event of Default hereunder, under the terms of
the Leasehold Mortgage (as hereinafter defined), or under the Loan Agreement,
the outstanding principal balance of this Note shall bear interest at a
variable rate per annum equal to the Default Rate.

 

The principal amount and accrued interest of this Note shall be due and
payable on the dates and in the manner set forth in the Loan Agreement.

 

Lender is authorized to rely on the oral or written loan requests,
including facsimile, telecopy or telegraphic loan requests, which Lender
believes in its good faith judgment to emanate from a properly authorized
representative of Borrower, whether or not that is in fact the case.

 

In no contingency or event whatsoever, whether by reason of advancement
of the proceeds hereof or otherwise, shall the amount paid or agreed to be paid
to Lender for the use, forbearance or detention of money advanced hereunder
exceed the highest lawful rate permissible under any law which a court of
competent jurisdiction may deem applicable hereto.

 

 

This Note is secured by, among other things, a Mortgage of Leasehold, Security Agreement,
Assignment of Rents and Leases and Fixture Filing executed and delivered as of the date hereof,
encumbering certain real estate in the County of Vermilion, Illinois
(hereinafter, as amended, restated or replaced from time to time, the “Leasehold
Mortgage”), which Leasehold Mortgage secures future advances and future
obligations.

 

Payments of principal and interest shall be made to Lender by wire
transfer, in immediately available funds, before 12:00 noon, St. Louis,
Missouri time, on the appropriate due date, at its offices located at 8000
Maryland Avenue, Suite 1400, St. Louis, MO 63105; or in such other manner as Lender may elect from
time to time.  If any payment is due on a
day other than a business day, such payment shall be due on the next succeeding
business day.  Failure to make payments
on this Note as required under the terms hereof (subject to any cure rights
contained in the Loan Agreement) and under the terms of the Loan Agreement
shall constitute an Event of Default hereunder. 
All payments due under this Note and not received within fifteen (15)
days following the date due hereunder shall be subject to a late payment fee of
five percent (5%) of the amount of said late payment.

 

Borrower
may prepay this Note in accordance with and subject to the terms of the Loan
Agreement.  No amounts repaid under this
Note may be reborrowed.

 

Upon the occurrence of an Event of Default hereunder or under any of the
other Loan Documents, including, without limitation, the Loan Agreement or the
Leasehold Mortgage, Lender shall be entitled, at its option, to declare the
then outstanding principal balance and accrued interest hereof to be, and the
same shall thereupon become, immediately due and payable without notice to or
demand upon Borrower, all of which Borrower hereby expressly waives.

 

Time is of the essence of this Note. 
To the fullest extent permitted by applicable law, Borrower, for itself
and its successors and assigns, expressly waives presentment, demand, protest,
notice of dishonor, and any and all other notices, demands and consents in
connection with the delivery, acceptance, performance, default or enforcement
of this Note, and hereby consents to any extensions of time, renewals, releases
of any party to or guarantor of this Note, waivers and any other modifications
that may be granted or consented to by Lender from time to time in respect of
the time of payment or any other provision of this Note.

 

Wherever possible each provision of this Note shall be interpreted in
such a manner as to be effective and valid under applicable law, but if any
provision of this Note shall be prohibited or invalid under applicable law,
such provision shall be ineffective to the extent of such prohibition or
invalidity without invalidating the remainder of such provision or remaining
provisions of this Note.  No delay or
failure on the part of Lender in the exercise of any right or remedy hereunder
shall operate as a waiver thereof, nor as an acquiescence in any default, nor
shall any single or partial exercise by Lender of any right or remedy preclude
any other right or remedy.  Lender, at
its option, may enforce its rights against any collateral securing this Note
without enforcing its rights against Borrower, any guarantor of the
indebtedness evidenced hereby or any other property or indebtedness due or to
become due to Borrower.  Borrower agrees
that, without releasing or impairing Borrower’s liability hereunder, Lender may
at any time release, surrender, substitute or exchange any collateral securing
this Note and may at any 

 

2

 

time release any party primarily or secondarily
liable for the indebtedness evidenced by this Note.

 

This Note shall be governed by, and construed and enforced in accordance
with, the internal laws of the State of Missouri.

 

Mo.Rev.Stat. §  432.047 Required Statement.  “Oral agreements or commitments to loan money,
extend credit or to forbear from enforcing repayment of a debt including
promises to extend or renew such debt are not enforceable, regardless of the legal theory upon which it is
based that is in any way related to the credit agreement.  To
protect you (borrower(s)) and us (creditor) from misunderstanding or
disappointment, any agreements we reach covering such matters are contained in
this writing, which is the complete and exclusive statement of the agreement
between us, except as we may later agree in writing to modify it.”

 

[SIGNATURE
PAGE TO FOLLOW]

 

3

 

IN
WITNESS WHEREOF, Borrower has caused this Note to be executed and delivered by
its duly authorized representative as of the date first above written.

 

	
   

  	
  BLACKHAWK
  BIOFUELS, LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
        /S/  Ronald
  L. Mapes

  
	
   

  	
   

  	
  Ronald
  L. Mapes, Chair

  

 

Signature Page

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