Document:

Exhibit 4(i)

FIRST AMENDMENT TO CONSTRUCTION AND TERM

  LOAN AGREEMENT AND OTHER LOAN DOCUMENTS

          THIS FIRST AMENDMENT TO CONSTRUCTION AND TERM LOAN AGREEMENT AND OTHER LOAN DOCUMENTS (this "Amendment"), dated as of August 7, 2007, is
executed by and among LEVELLAND/HOCKLEY COUNTY ETHANOL, LLC, a Texas limited liability company (the "Borrower"), each of the Lenders or other lending institutions which is a signatory hereto
or any successor or assignee thereof, and MERRILL LYNCH CAPITAL, a division of Merrill Lynch Business Financial Services Inc., a Delaware corporation (in its capacity as administrative agent for the Lenders, together with its successors in such
capacity, the "Administrative Agent"). 

R E C I T A L S:

          A.      The Borrower, the Lenders, and the Administrative Agent are parties to that certain Construction and Term Loan Agreement, dated as of September 27, 2006 (the "Loan
Agreement"). The terms defined in the Loan Agreement and not otherwise defined herein shall be used herein as defined in the Loan Agreement. 

          B.      In connection with the Loan Agreement, the Borrower and the Administrative Agent executed that certain Security Agreement dated as of September 27, 2006 (the "Security
Agreement"). 

          C.      The Borrower, the Administrative Agent and the Lenders desire to amend the Loan Agreement and the Security Agreement as described herein, subject to the terms and conditions contained herein.

          NOW, THEREFORE, in consideration of the premises herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as
follows intending to be legally bound: 

ARTICLE I

Definitions 

          Section 1.1 Definitions. Capitalized terms used in this Amendment, to the extent not otherwise defined herein,
shall have the same meanings as in the Loan Agreement, as amended hereby. 

ARTICLE II

Amendments

          Section 2.1       Amendment to Preamble of the Loan Agreement. Effective as of the date hereof, the reference to the
street address "1012 Austin Street" in the Preamble of the Loan Agreement is deleted and the street address "103 South FM 2646" is inserted in lieu thereof. 

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          Section 2.2       Amendments to Definitions in the Loan Agreement. Effective as of the date hereof, the following
definitions in Section 1.1 of the Loan Agreement are amended and restated to read in their entirety as follows: 

            "Construction
        Costs" means all costs to acquire the Land
        and all equipment and materials that comprise the Improvements and to
        design and construct the Improvements, including labor and materials,
        architectural, engineering, interior and landscape design, legal, consulting
        and other related fees; costs for Construction Contracts; the Imposition
        costs; bond and insurance costs; and any financing costs payable to any
        creditor other than Administrative Agent or any Lender during the Construction
        Phase but excluding all financing costs payable to Administrative Agent
        and Lenders and including all Allocations itemized in the Budget under "Construction
        Costs". 

             "Note
        Amount" means $43,710,000.

          Section 2.3     Amendments to Section 2.8(a) of the Loan Agreement. Effective as of the date hereof, Section
2.8(a) of the Loan Agreement is amended and restated in its entirety to read as follows: 

            (a)        Procedures.
      Advances shall be made only once each Draw Period during the Construction
      Phase. Each Advance shall be in an amount of not less than the Minimum
      Advance, and Borrower shall not request an Advance for less than the Minimum
      Advance. Advances will be made only for actual costs incurred in accordance
      with the Budget and other provisions hereof. For each Advance, Borrower
      must submit to Administrative Agent and the Independent Consultant a written
      Draw Request. Each Draw Request must include the information and documentation
      required in this Agreement, along with the lien waivers and releases, information,
      certifications, approvals, instruments, and documents required as a condition
      to the requested Advance (except the down date endorsement to the Title
      Insurance must be received by Administrative Agent and the Independent
      Consultant prior to the date that the requested Advance is actually made).
      In each Draw Request, Borrower must (i) specify the amount of such Draw
      Request that applies to each Allocation; (ii) identify all funds being
      used to pay any portion of the costs reflected in the Draw Request other
      than the funds being requested to be advanced, and identify the sources
      and respective amounts from each source of such other funds; (iii) include
      a summary of all Budgeted costs to be paid pursuant to the Draw Request
      that are not covered by a payment application; and (iv) state the date
      the Advance is requested, which shall be at least 10 Business Days after
      Administrative Agent and the Independent Consultant receive the Draw Request
      but in no event earlier than the date payment is due under the applicable
      Construction Contracts. All Draw Requests shall account for the retainage
      and other withholdings required pursuant to Section
      2.8(f). Except as otherwise provided in this
      Loan Agreement, all Advances will be deposited in the Construction Account;
      provided that if not all of the conditions to an Advance for Construction
      Costs have been met or satisfied (including if a Default or an Event of
      Default exists), but Administrative Agent and each Lender elects to make
      such Advance, then Administrative Agent and such Lender shall have the
      unconditional right, exercisable in Administrative Agent's and such Lender's
      sole discretion, to make such Advance, in whole or in part, upon such terms
      and conditions as

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  Administrative Agent may require, to
      one or more of (A) directly to Borrower by depositing same in the Construction
      Account, (B) directly to the Contractor, Design Professional, subcontractors,
      laborers, or materials suppliers owed, and/or (C) jointly to Borrower and
      any one or more of the Contractor, Design Professional, subcontractors,
      laborers, or materials suppliers owed. Borrower will hold the Advances
      deposited in the Construction Account (until payment to the proper payee)
      as a trust fund for the purpose of paying the respective costs contained
      in the Draw Request, pursuant to which such Advance was made. Borrower
      will apply all proceeds from Advances promptly to the payment of the respective
      costs specified in the subject Draw Request and for which the Advance is
      made, and will not use any part thereof for any other purpose. Borrower
      irrevocably authorizes Administrative Agent to make an Advance in an amount
      equal to the accrued and unpaid interest on the Loan notwithstanding that
      (i) such Advance may be less than the Minimum Advance, (ii) Borrower has
      previously requested an Advance during such Draw Period, (iii) Borrower
      has not satisfied the conditions contained in Sections
      3.2, 3.4 and 3.5,
      (iv) Borrower has not provided a completed Draw Request and/or (v) a Default
      has occurred and is continuing. 

          Section 2.4       Amendments to Section 2.8(f) of the Loan Agreement. Effective as of the date hereof, Section
2.8(f) of the Loan Agreement is amended and restated to read in its entirety as follows: 

            (f)         Retainage.
      An amount equal to 10% of all costs incurred pursuant to a Construction
      Contract for acquisition or construction of any Improvements, excluding
      Construction Contracts for design, and for which an Advance has been requested
      or made, plus the amount of any claims asserted by any laborers or materialmen
      against any portion of the Collateral pursuant to stop notices, lien claims
      or similar demands or notices received by Administrative Agent and the
      Independent Consultant (which have not been bonded against or otherwise
      secured in accordance with the applicable provisions of the Mortgage),
      shall be retained by Administrative Agent. Such retainage shall be paid
      over by Administrative Agent to Borrower, excluding the amount of any such
      unbonded or unsecured lien claims, plus potential costs and interest related
      thereto (which funds will be disbursed only as such claims are resolved
      or bonded around reasonably satisfactorily to Administrative Agent in addition
      to the satisfaction of the following conditions), plus the amounts to be
      retained upon substantial Completion under and as such term is defined
      in that certain Agreement between Owner and Design/Builder on the Basis
      of a Stipulated Price (the "Design /Builder
      Agreement") dated July 14, 2006 between Borrower
      and ICM, Inc., pursuant to Section 4.01. B.2 and 3 of the Design/Builder
      Agreement, when all of the following have occurred to the satisfaction
      of Administrative Agent: 

             (i)
         Administrative Agent has received a certificate of substantial completion,
    in form and substance acceptable to Administrative Agent, executed by Borrower,
    the Contractor and the appropriate Design Professional, and approved by
    the Independent Consultant, certifying, among other things, that all requirements
    for substantial Completion have been satisfied, the date of substantial
    Completion, that direct connection has been made to all proposed utility
    facilities and such utilities are available for use at the Project, and
    that the

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  construction of the Project has been
      completed (except the punch list items) in a good and workmanlike manner,
      free of defects and damages. 

             (ii)         Administrative Agent and the Independent Consultant shall have received
    such other evidence as Administrative Agent may require that no mechanics'
    or materialmen's liens or other encumbrances have been filed and remain
    in effect against the Collateral, and the time periods for the filing of
    any stop notice or lien claim with respect to the construction of the Improvements
    shall have elapsed without the filing or providing of any such stop notice
    or lien claim. The Design Professional, Contractor, and all subcontractors
    and material suppliers who performed or provided work or materials related
    to the Improvements have been paid in full, subject to the release of the
    retainage as provided in this Section 2.8(f). 

             (iii)        Each
      applicable Governmental Agency shall have duly inspected and approved the
      Improvements and the right of occupancy of same and issued the appropriate
    permits, licenses and certificates evidencing proper completion of the
    Improvements and the right of occupancy, to the extent that the Improvements
    require Governmental Agency inspection and the issuance of a permit, license
    or certificate, and Administrative Agent and the Independent Consultant
    shall have received satisfactory evidence of the foregoing or Administrative
    Agent shall have expressly waived any such requirement (which Administrative
    Agent may do in its sole discretion and subject to such conditions and
    requirements as Administrative Agent may impose).

             (iv)
        All conditions to an Advance contained in Section
      3.5 are met or satisfied. 

   Notwithstanding the previous provisions
      of this Section 2.8(f) to
      the contrary, Administrative Agent hereby agrees to release separately
      the amount of retainage withheld with respect to each subcontractor providing
      services or materials for the construction of the Improvements, but only
      after (A) all other conditions to an Advance are satisfied, (B) the Independent
      Consultant approves the separate release of such amount, and (C) such subcontractor
      and the Contractor execute an affidavit, lien waiver, and release in form
      and substance acceptable to Administrative Agent in Administrative Agent's
      sole discretion, for the benefit of Administrative Agent and Lenders (1)
      stating that the subcontractor has completed all of its services relating
      to the construction of the Improvements and has been paid in full for such
      services, and (2) providing a waiver and release by the subcontractor of
      any and all mechanic's and materialmen's or other Liens it may have against
      the Land, Improvements, and other Collateral. The amount retained for punch
      list items in accordance with Section 4.01. B.2(ii) of the Design/Builder
      Agreement and the $750,000 retained pursuant to Section 4.01. B.2(iii)
      of the Design/Builder Agreement shall be disbursed upon Administrative
      Agent's receipt of evidence satisfactory to Administrative Agent that all
      requirements under the Design/Builder Agreement for the release and disbursement
      of such retained funds have been met. 

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          Section 2.5       Amendment to Section 2.13 of the Loan Agreement. Effective as of the date hereof, Section 2.13 of
the Loan Agreement is amended and restated to read in its entirety as follows: 

            Section
      2.13 Borrower's Equity.
      All of Borrower's Equity shall be expended, and evidence thereof shall
      be provided to Administrative Agent prior to disbursement of any Advance;
      provided however, Borrower may retain a portion of Borrower's Equity for
      purposes of paying costs incurred by Borrower in accordance with the Budget
      prior to the date of Completion so long as (a) such amount of Borrower's
      Equity retained by Borrower shall not exceed in the aggregate $250,000
      (or such other amount acceptable to Administrative Agent) during such period,
      (b) no Default has occurred and is continuing, (c) all such amounts are
      deposited into a deposit account that is subject to a first priority perfected
      lien in favor of Administrative Agent, (d) for budgeting purposes, the
      unused balance of such funds shall be considered "operating cash at start-up",
      and (e) Borrower provides to Administrative Agent such invoices and other
      documentation as Administrative Agent may request with respect to the proposed
      uses of such funds or that may otherwise be required or permitted for an
      Advance. 

          Section 2.6       Amendment to Section 3.1(g) of the Loan Agreement. Effective as of the date hereof, Section 3.1(g)
of the Loan Agreement is amended and restated to read in its entirety as follows: 

  (g)         [Reserved.]

          Section 2.7       Amendment to Exhibit C to the Loan Agreement. Effective as of the date hereof, all references in
the Loan Agreement to "Exhibit C" shall be deemed to mean the "Exhibit C" attached hereto as Exhibit C. 

          Section 2.8       Amendment to Exhibit F to the Loan Agreement. Effective as of the date hereof, all references in
the Loan Agreement to "Exhibit F" shall be deemed to mean the "Exhibit F" attached hereto as Exhibit F. 

          Section 2.9       Amendment to Schedule 2 to Security Agreement. Effective as of the date hereof, all references in
the Security Agreement to "Schedule 2" shall be deemed to mean the "Schedule 2" attached hereto as Schedule 2. 

ARTICLE III 

Conditions Precedent 

          Section 3.1       Condition.  The effectiveness of this Amendment is subject to the satisfaction of the following
conditions precedent: 

            (a)         Amendment.
      The Administrative Agent shall have received this Amendment executed by
      the Borrower, the Administrative Agent and the Majority Lenders. 

            (b)         No
        Default. No Default shall have occurred
        and be continuing. 

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            (c)        Representations
        and Warranties. All of the representations
        and warranties contained in Article IV of the Loan Agreement and in the
        other Loan Documents shall be true and correct on and as of the date
        of this Amendment with the same force and effect as if such representations
        and warranties had been made on and as of such date, except to the extent
        such representations and warranties speak to a specific date. 

ARTICLE IV

No Waiver 

          Nothing contained herein shall be construed as a consent by the Administrative Agent and the Lenders to any breach of any covenant or provision of the Loan Agreement, the other Loan Documents, this
Amendment, or of any other contract or instrument among Borrower, the Administrative Agent and the Lenders, and the failure of the Administrative Agent or any Lender at any time or times hereafter to require strict compliance by Borrower of any
provision thereof shall not waive, affect or diminish any right of the Administrative Agent and the Lenders to thereafter demand strict compliance therewith.  The Administrative Agent and the Lenders hereby reserve all rights granted under the Loan
Agreement and the other Loan Documents (in each case as amended by this Amendment), and this Amendment and any other contract or instrument among Borrower, the Administrative Agent and the Lenders. 

ARTICLE V

Ratifications, Representations and Warranties

          Section 5.1       Ratifications. The terms and provisions set forth in this Amendment shall modify and supersede all
inconsistent terms and provisions set forth in the Loan Agreement and the other Loan Documents and except as expressly modified and superseded by this Amendment, the terms and provisions of the Loan Agreement and the other Loan Documents are
ratified and confirmed and shall continue in full force and effect. The Borrower, the Administrative Agent and the Majority Lenders agree that the Loan Agreement as amended hereby shall continue to be legal, valid, binding and enforceable in
accordance with its terms, except as enforceability may be limited by bankruptcy and other similar laws affecting the rights of creditors generally. 

          Section 5.2       Representations and Warranties.  The Borrower hereby represents and warrants to the Administrative
Agent and the Lenders that (i) the execution, delivery and performance of this Amendment and any and all other Loan Documents executed or delivered in connection herewith have been authorized by all requisite corporate action on the part of the
Borrower and will not violate the articles of organization, operating agreement or regulations or other organizational documents of the Borrower, (ii) the representations and warranties contained in the Loan Agreement, as such Loan Agreement is
amended hereby, and any other Loan Document are true and correct on and as of the date hereof as though made on and as of the date hereof except for those that relate solely to a specific date or have changed as a result of transactions permitted by
the Loan Agreement, (iii) after giving effect to this Amendment, no Default has occurred and is continuing, and (iv) after giving effect to this Amendment, the Borrower is in full compliance with all material covenants and agreements contained in
the Loan Agreement as amended hereby. 

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ARTICLE VI 

Miscellaneous

          Section 6.1       Survival of Representations and Warranties.  All representations and warranties made in this
Amendment or any other Loan Document (as amended by this Amendment), including any Loan Document furnished in connection with this Amendment, shall survive the execution and delivery of this Amendment and such other Loan Documents, and no
investigation by the Administrative Agent or any Lender shall affect the representations and warranties or the right of the Administrative Agent or any Lender to rely upon them. 

          Section 6.2       Severability.  Any provision of this Amendment held by a court of competent jurisdiction to be
invalid or unenforceable shall not impair or invalidate the remainder of this Amendment and the effect thereof shall be confined to the provision so held to be invalid or unenforceable. 

          Section 6.3       GOVERNING LAW.  THIS LOAN AGREEMENT, THE NOTE AND, UNLESS OTHERWISE EXPRESSLY PROVIDED
THEREIN, EACH OF THE OTHER LOAN DOCUMENTS, SHALL BE GOVERNED IN ALL RESPECTS BY THE LAWS OF THE STATE OF ILLINOIS, NOT INCLUDING ITS CONFLICT OF LAW PROVISIONS; PROVIDED THAT THE LAWS OF THE STATE WHERE REAL PROPERTY COLLATERAL IS LOCATED SHALL
GOVERN WITH RESPECT TO THE CREATION, PERFECTION AND ENFORCEMENT OF RIGHTS, SECURITY INTERESTS, REMEDIES AND LIENS AGAINST THE REAL PROPERTY COLLATERAL. 

          Section 6.4       Successors and Assigns. This Amendment is binding upon and shall inure to the benefit of the
Administrative Agent, the Lenders and the Borrower and their respective successors and assigns, except the Borrower may not assign or transfer its rights or obligations hereunder without the prior written consent of the Administrative Agent and the
Lenders. 

          Section 6.5       Counterparts.  This Amendment may be executed in one or more counterparts, each of which when so
executed shall be deemed to be an original, but all of which when taken together shall constitute one and the same instrument. Facsimiles of signatures shall be binding and effective as originals. 

          Section 6.6       Effect of Waiver.  No consent or waiver, express or implied, by the Administrative Agent or any
Lender to or for any breach of or deviation from any covenant, condition or duty by the Borrower shall be deemed a consent or waiver to or of any other breach of the same or any other covenant, condition or duty. 

          Section 6.7       Headings.  The headings, captions, and arrangements used in this Amendment are for convenience
only and shall not affect the interpretation of this Amendment. 

          Section 6.8     ENTIRE AGREEMENT.  THIS AMENDMENT, THE LOAN AGREEMENT AND THE OTHER LOAN DOCUMENTS EMBODY THE
FINAL, ENTIRE AGREEMENT BETWEEN THE PARTIES HERETO RELATING TO THIS AMENDMENT AND SUPERSEDE ANY AND ALL PRIOR AND CONTEMPORANEOUS 

7 

COMMITMENTS, AGREEMENTS, REPRESENTATIONS AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TO THIS AMENDMENT, AND MAY NOT BE CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OR
DISCUSSIONS OF THE PARTIES HERETO. THERE ARE NO ORAL AGREEMENTS BETWEEN THE PARTIES HERETO. 

[Remainder of Document Intentionally Left Blank]

 

 

 

 

 

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          IN WITNESS WHEREOF, this Amendment is executed as of the date first set forth above. 

  	
      BORROWER:  
	 	   
	
        LEVELLAND/HOCKLEY COUNTY ETHANOL,  
	
        LLC  
	 	   
	 	   
	By:      	/s/
            James P. Halbert

	 	James P. Halbert
	 	 Vice President  

  

 

 

 

 

 

Signature Page to First Amendment to Construction and Term Loan Agreement and Other Loan Documents 

  	
      ADMINISTRATIVE AGENT AND LENDER:  
	 	   
	
        MERRILL LYNCH CAPITAL, a division of  
	
        Merrill Lynch Business Financial Services Inc., as  
	
        Administrative Agent and a Lender  
	 	   
	 	   
	By:      	/s/ Steve
      Coley 

	 	 Steve Coley  
	 	Vice President, Group Credit Manager  

  

 

 

 

 

 

Signature Page to First Amendment to Construction and Term Loan Agreement and Other Loan Documents

  	
      OTHER LENDERS:  
	 	 	   
	
        STATE BANK OF TEXAS,                                            
	
        as a Lender  
	 	 	   
	 	 	   
	By:      	/s/
            Sushil Patel

	 	Name: 	Sushil
      Patel 
	 	Title: 	 CLO 

  

 

 

 

 

 

Signature Page to First Amendment
to Construction and Term Loan Agreement and Other Loan Documents

  	PALM DESERT NATIONAL
      BANK, 
	as a Lender 
	 	 	 
	 	 	 
	By:      	/s/
            C. Dawson-Voight

	 	Name: 	Cheryl Dawson-Voight
	 	Title: 	VP/Loan
          Administrator

 

 

 

 

 

Signature Page to First Amendment
to Construction and Term Loan Agreement and Other Loan Documents

  	COMMUNITY FIRST BANK, 
	as a Lender 
	 	 	 
	 	 	 
	By:      	/s/
      Thomas J. Fleming

	 	Name: 	Thomas
      J. Fleming
	 	Title: 	Vice
          President

  

 

 

 

 

 

Signature Page to First Amendment
to Construction and Term Loan Agreement and Other Loan Documents

  	MIDWEST BANK OF WESTERN
      ILLINOIS, 
	as a Lender 
	 	 	 
	 	 	 
	By:      	/s/
      Brad S. Ray

	 	Name: 	Brad
      S. Ray
	 	Title: 	Vice
          President

 

 

 

 

 

Signature Page to First Amendment to Construction and Term Loan Agreement and Other Loan Documents

  	TEXAS CITIZENS BANK
      N.A., 
	as a Lender 
	 	 	 
	 	 	 
	By:      	 /s/
          Cindy Howell

	 	Name: 	Cindy
      Howell
	 	Title: 	Vice
          President

  

 

 

 

 

 

Signature Page to First Amendment to Construction and Term Loan Agreement and Other Loan Documents

EXHIBIT C 

Form of Draw Request

 [See Attached] 

 

 

 

 

 

Exhibit C – Cover Page

EXHIBIT F 

Budget 

 [See Attached]

 

 

 

 

 

Exhibit F – Cover Page

SCHEDULE 2 

Addresses 

	 	   	   	   	                           	 Address 
	 	 Record Owner 

	 	
(a)  	      	
Chief Executive Office:  	 	
103 South FM 2646  	 	
Debtor  
	 	   	   	   	
Levelland, TX 79336  	   
	 	
(b)  	   	
Locations where books and  	 	
c/o RIO Technical Services Inc.  	 	
RIO Technical  
	 	   	   	
records are kept:  	
4200 South Hulen, Suite 630  	
Services Inc.  
	 	   	   	   	
Fort Worth, TX 76109  	   
	 	
(c)  	   	
Locations where Equipment  	 	
103 South FM 2646  	 	
Debtor  
	 	   	   	
and Inventory are kept:  	
Levelland, TX 79336  	   
	 	
(d)  	   	
All other places of business  	 	
None  	 	
None  
	 	   	   	
not listed above:  	   	   
	 	
(e)  	   	
Persons (other than Debtor)  	 	
None  	 	
None  
	 	   	   	
who have possession of  	   	   
	 	   	   	
Collateral or other property:  	   	   

 

 

 

 

 

Schedule 2 - Solo PageExhibit 4(j)

SECOND AMENDMENT TO CONSTRUCTION AND TERM

  LOAN AGREEMENT 

          THIS
SECOND AMENDMENT TO CONSTRUCTION AND TERM LOAN AGREEMENT (this "Amendment"),
dated as of February 15, 2008, is executed by and among LEVELLAND/HOCKLEY COUNTY
ETHANOL, LLC, a Texas limited liability company (the "Borrower"),
each of the Lenders or other lending institutions which is a signatory hereto
or any successor or  assignee thereof, and MERRILL LYNCH CAPITAL, a division
of Merrill Lynch Business Financial Services Inc., a Delaware corporation (in
its capacity as administrative agent for the Lenders, together with its successors
in such capacity, the
"Administrative Agent"). 

R E C I T A L S:

          A.      The Borrower, the Lenders, and the Administrative Agent are parties to that certain Construction and Term Loan Agreement, dated as of September 27, 2006, as amended by that certain First Amendment
to Construction and Term Loan Agreement and other Loan Documents dated as of August 10, 2007 (as has been and may be amended, modified, supplemented or restated from time to time, the "Loan Agreement"). 

          B.      The Borrower, the Administrative Agent and the Lenders desire to amend the Loan Agreement as described herein, subject to the terms and conditions contained herein. 

          NOW, THEREFORE, in consideration of the premises herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as
follows intending to be legally bound: 

ARTICLE I

Definitions 

          Section 1.1 Definitions. Capitalized terms used in this Amendment, to the extent not otherwise defined herein,
shall have the same meanings as in the Loan Agreement, as amended hereby. 

ARTICLE II

Amendments

          Section 2.1       Amendments to Definitions in the Loan Agreement. Effective as of the date hereof, the following
definitions in Section 1.1 of the Loan Agreement are amended and restated to read in their entirety as follows: 

            "Commitment
        Expiration Date means the earlier of (a)
        May 31, 2008, (b) the day before the Conversion Date, or (c) the date
        on which the Commitment is terminated pursuant to Section
        9.2(a). 

             "Maturity
        Date" means (a) as to the Construction
        Loan, the earliest of (i) May 31, 2008, (ii) the date Completion shall
        have occurred, plus 30 days or (iii) the date the

Second Amendment to Construction and Term Loan Agreement – Page 1

  Commitments are sooner terminated and
      the Obligations are due and payable in accordance with Section
      9.2, and (b) if the Construction Loan is
      converted to a Term Loan, then as to the Term Loan, the earlier of (i)
      the date that is the fifth anniversary of the Conversion Date, or (ii)
      the date the Note and the other Obligations are due and payable in accordance
      with Section 9.2. 

          Section 2.2       Amendment to Section 3.2(j) of the Loan Agreement. Effective as of the date hereof, Section 3.2(j)
of the Loan Agreement is amended and restated in its entirety to read as follows: 

            (j)             in
      Administrative Agent's determination, which cannot be made in bad faith,
  Completion will occur on or before May 31, 2008; 

          Section 2.3       Amendments to Section 7.6 of the Loan Agreement. Effective as of the date hereof, Section 7.6 of
the Loan Agreement is amended by deleting all references to the date "March 31, 2008" and inserting in lieu thereof the date "May 31, 2008." 

          Section 2.4       Amendment to Section 9.1(m) of the Loan Agreement. Effective as of the date hereof, Section 9.1(m)
of the Loan Agreement is amended and restated to read in its entirety as follows: 

            (m)        Construction.
      The construction of the Improvements is (i) at any time discontinued for
      an unscheduled period of 10 or more consecutive days other than by reason
      of an event of Force Majeure, (ii) not resumed within 90 days after the
      date of any event of Force Majeure, or (iii) not completed by May 31, 2008,
      or Borrower is unable to satisfy any condition precedent to Borrower's
      right to receive Advances hereunder for a period in excess of 30 days after
      Administrative Agent's refusal to make any further Advances. 

ARTICLE III 

Conditions Precedent 

          Section 3.1       Condition.  The effectiveness of this Amendment is subject to the satisfaction of the following
conditions precedent: 

            (a)         Amendment.
      The Administrative Agent shall have received this Amendment executed by
      the Borrower, the Administrative Agent and the Lenders. 

             (b)         No
        Default. No Default shall have occurred
        and be continuing. 

             (c)         Representations
        and Warranties. All of the representations
        and warranties contained in Article IV of the Loan Agreement and in the
        other Loan Documents shall be true and correct on and as of the date
        of this Amendment with the same force and effect as if such representations
        and warranties had been made on and as of such date, except to the extent
        such representations and warranties speak to a specific date. 

Second Amendment to Construction and Term Loan Agreement - Page 2 

ARTICLE IV

No Waiver 

          Nothing contained herein shall be construed as a consent by the Administrative Agent and the Lenders to any breach of any covenant or provision of the Loan Agreement, the other Loan Documents, this
Amendment, or of any other contract or instrument among Borrower, the Administrative Agent and the Lenders, and the failure of the Administrative Agent or any Lender at any time or times hereafter to require strict compliance by Borrower of any
provision thereof shall not waive, affect or diminish any right of the Administrative Agent and the Lenders to thereafter demand strict compliance therewith.  The Administrative Agent and the Lenders hereby reserve all rights granted under the Loan
Agreement and the other Loan Documents (in each case as amended by this Amendment), and this Amendment and any other contract or instrument among Borrower, the Administrative Agent and the Lenders. 

ARTICLE V

Ratifications, Representations and Warranties

          Section 5.1       Ratifications. The terms and provisions set forth in this Amendment shall modify and supersede all
inconsistent terms and provisions set forth in the Loan Agreement and the other Loan Documents and except as expressly modified and superseded by this Amendment, the terms and provisions of the Loan Agreement and the other Loan Documents are
ratified and confirmed and shall continue in full force and effect. The Borrower, the Administrative Agent and the Lenders agree that the Loan Agreement as amended hereby shall continue to be legal, valid, binding and enforceable in accordance with
its terms, except as enforceability may be limited by bankruptcy and other similar laws affecting the rights of creditors generally. 

          Section 5.2       Representations and Warranties.  The Borrower hereby represents and warrants to the Administrative
Agent and the Lenders that (i) the execution, delivery and performance of this Amendment and any and all other Loan Documents executed or delivered in connection herewith have been authorized by all requisite action on the part of the Borrower and
will not violate the articles of organization, operating agreement or regulations or other organizational documents of the Borrower, (ii) the representations and warranties contained in the Loan Agreement, as such Loan Agreement is amended hereby,
and any other Loan Document are true and correct on and as of the date hereof as though made on and as of the date hereof except for those that relate solely to a specific date or have changed as a result of transactions permitted by the Loan
Agreement, (iii) after giving effect to this Amendment, no Default has occurred and is continuing, and (iv) after giving effect to this Amendment, the Borrower is in full compliance with all material covenants and agreements contained in the Loan
Agreement as amended hereby. 

ARTICLE VI 

Miscellaneous 

          Section 6.1       Survival of Representations and Warranties.  All representations and warranties made in this
Amendment or any other Loan Document (as amended by this 

Second Amendment to Construction and Term Loan Agreement - Page 3 

Amendment), including any Loan Document furnished in connection with this Amendment, shall survive the execution and delivery of this Amendment and such other Loan Documents, and no investigation by the Administrative Agent or any
Lender shall affect the representations and warranties or the right of the Administrative Agent or any Lender to rely upon them. 

          Section 6.2       Severability.  Any provision of this Amendment held by a court of competent jurisdiction to be
invalid or unenforceable shall not impair or invalidate the remainder of this Amendment and the effect thereof shall be confined to the provision so held to be invalid or unenforceable. 

          Section 6.3       GOVERNING LAW.  THIS LOAN AGREEMENT, THE NOTE AND, UNLESS OTHERWISE EXPRESSLY PROVIDED
THEREIN, EACH OF THE OTHER LOAN DOCUMENTS, SHALL BE GOVERNED IN ALL RESPECTS BY THE LAWS OF THE STATE OF ILLINOIS, NOT INCLUDING ITS CONFLICT OF LAW PROVISIONS; PROVIDED THAT THE LAWS OF THE STATE WHERE REAL PROPERTY COLLATERAL IS LOCATED SHALL
GOVERN WITH RESPECT TO THE CREATION, PERFECTION AND ENFORCEMENT OF RIGHTS, SECURITY INTERESTS, REMEDIES AND LIENS AGAINST THE REAL PROPERTY COLLATERAL. 

          Section 6.4       Successors and Assigns. This Amendment is binding upon and shall inure to the benefit of the
Administrative Agent, the Lenders and the Borrower and their respective successors and assigns, except the Borrower may not assign or transfer its rights or obligations hereunder without the prior written consent of the Administrative Agent and the
Lenders. 

          Section 6.5       Counterparts.  This Amendment may be executed in one or more counterparts, each of which when so
executed shall be deemed to be an original, but all of which when taken together shall constitute one and the same instrument. Facsimiles of signatures shall be binding and effective as originals. 

          Section 6.6       Effect of Waiver.  No consent or waiver, express or implied, by the Administrative Agent or any
Lender to or for any breach of or deviation from any covenant, condition or duty by the Borrower shall be deemed a consent or waiver to or of any other breach of the same or any other covenant, condition or duty. 

          Section 6.7       Headings.  The headings, captions, and arrangements used in this Amendment are for convenience
only and shall not affect the interpretation of this Amendment. 

          Section 6.8     ENTIRE AGREEMENT.  THIS AMENDMENT, THE LOAN AGREEMENT AND THE OTHER LOAN DOCUMENTS EMBODY THE
FINAL, ENTIRE AGREEMENT BETWEEN THE PARTIES HERETO RELATING TO THIS AMENDMENT AND SUPERSEDE ANY AND ALL PRIOR AND CONTEMPORANEOUS COMMITMENTS, AGREEMENTS, REPRESENTATIONS AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TO THIS AMENDMENT, AND
MAY NOT BE CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OF THE PARTIES HERETO. THERE ARE NO ORAL AGREEMENTS BETWEEN THE PARTIES HERETO. 

Second Amendment to Construction and Term Loan Agreement - Page 4 

          IN WITNESS WHEREOF, this Amendment is executed as of the date first set forth above. 

  	
      BORROWER:  
	   
	
        LEVELLAND/HOCKLEY COUNTY ETHANOL,  
	
        LLC  
	 	   
	 	   
	By:      	/s/
            James P. Halbert

	 	James P. Halbert  
	 	Vice President  

  

 

 

 

 

 

Signature Page to Second Amendment to Construction and Term Loan Agreement

  	
      ADMINISTRATIVE AGENT AND LENDER:  
	 	   
	
        MERRILL LYNCH CAPITAL, a division of  
	
        Merrill Lynch Business Financial Services Inc., as  
	
        Administrative Agent and a Lender  
	 	   
	 	   
	By:      	 /s/
            Steve Coley 

	 	 Steve Coley  
	 	 Vice President, Group Credit Manager  

  

 

 

 

 

 

Signature Page to Second Amendment to Construction and Term Loan Agreement

  	
      OTHER LENDERS:  
	 	 	   
	
        STATE BANK OF TEXAS,                                            
	
        as a Lender  
	 	 	   
	 	 	   
	By:      	 /s/
            Sushil Patel

	 	Name: 	Sushil
      Patel
	 	Title: 	CLO

  

 

 

 

 

 

Signature Page to Second Amendment to Construction and Term Loan Agreement

  	PALM DESERT NATIONAL
      BANK, 
	as a Lender 
	 	 	 
	 	 	 
	By:      	/s/
      C. Dawson-Voight

	 	Name: 	Cheryl
      Dawson-Voight
	 	Title: 	Vice
          President/Credit Administrator

 

 

 

 

 

Signature Page to Second Amendment to Construction and Term Loan Agreement

  	COMMUNITY FIRST BANK, 
	as a Lender 
	 	 	 
	 	 	 
	By:      	/s/
            Thomas J. Fleming

	 	Name: 	Thomas
      J. Fleming
	 	Title: 	Vice
          President

  

 

 

 

 

 

Signature Page to Second Amendment to Construction and Term Loan Agreement

  	MIDWEST BANK OF WESTERN
      ILLINOIS, 
	as a Lender 
	 	 	 
	 	 	 
	By:      	/s/
            Brad Ray

	 	Name: 	Brad
      Ray
	 	Title: 	Vice
          President

 

 

 

 

 

Signature Page to Second Amendment to Construction and Term Loan Agreement

  	TEXAS CITIZENS BANK
      N.A., 
	as a Lender 
	 	 	 
	 	 	 
	By:      	/s/
      Cindy Howell

	 	Name: 	Cindy
      Howell
	 	Title: 	Vice
          President

  

 

 

 

 

 

Signature Page to Second Amendment to Construction and Term Loan Agreement

  	INTERSTATE BANK, SSB, 
	as a Lender 
	 	 	 
	 	 	 
	By:      	/s/
            David Bergin

	 	Name: 	David
      Bergin
	 	Title: 	President

  

 

 

 

 

 

Signature Page to Second Amendment to Construction and Term Loan Agreement

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