Document:

EXHIBIT
10.1

 

[Stearns Bank Letterhead]

 

 

September 26, 2003

 

The Board of Directors

Husker Ag, LLC

510 W. Locust Street

PO Box 10

Plainview, NE  68769

 

RE:                    USDA Permanent
loan financing for a 20 Million Gallon Ethanol Plant Plainview, Nebraska

 

Gentlemen:

 

Stearns Bank is pleased
to extend the following financing proposal with regards to the above-referenced
project:

 

	
  Borrower:

  	
   

  	
  Husker Ag, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Extension:  90 day extension of the $20,000,000 construction loan.  Begin P&I payments based on a 7 year
  amortization.  Change the interest
  rate to 1.25% over the WSJP Index, adjusting daily.

  
	
   

  	
   

  	
   

  
	
  Covenants:

  	
   

  	
  Add the following
  covenants:

  
	
   

  	
   

  	
  a)  No distributions without prior lender
  approval and issuance of the USDA Loan Note Guaranty.

  
	
   

  	
   

  	
  b)  Minimum 40% balance sheet tangible net
  worth must be maintained.

  
	
   

  	
   

  	
  c)  Debt Service Coverage Ratio of at least
  1.20x after distributions.

  
	
   

  	
   

  	
   

  
	
  Prepayment Penalty:

  	
   

  	
  3% prepayment penalty

  

 

 

The USDA declined the original $20,000,000 loan request with
a 60% guaranty, the borrower and lender agree to proceed on the following
terms:

 

	
  Loan Amount:

  	
   

  	
  Loan A - $8,837,300 - 70% USDA Guaranty
  loan-amortized over 15 years.

  
	
   

  	
   

  	
  Loan B - $8,837,300 conventional loan -
  amortized over 7 years

  
	
   

  	
   

  	
  Loan C - $1,505,900 conventional loan -
  amortized over 3 years (requires a principal reduction of $819,500)

  
	
   

  	
   

  	
   

  
	
  Interest Rate:

  	
   

  	
  Prime plus 1.25%,
  adjusted quarterly

  	 

	
   

  	
   

  	
   

  	 

	
  Closing Costs:

  	
   

  	
  Conversion Fee
  ($116,277.80), 2% USDA Fee ($123,722.20)

  	 

	
   

  	
   

  	
   

  	 

	
  Collateral:

  	
   

  	
  Collateral on Loan A
  & B will be as follows on a pari passu basis with USDA:

  	 

	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
  •          A first real estate
  mortgage on the proposed real estate project located in Plainview, Nebraska
  (legal to govern).

  	 

	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
  •          A first Security
  Agreement/Financing Statement covering accounts receivable, inventory,
  equipment and fixtures, along with personal property and general intangibles.

  	 

	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
  Loan C will have a
  second position on the above collateral.

  	 

	
   

  	
   

  	
   

  	 

	
  Guarantee:

  	
   

  	
  Permanent loan A is
  subject to a 70% USDA Guaranteed Loan

  	 

	
   

  	
   

  	
   

  	 

	
  Prepayment Premium:

  	
   

  	
  5% of balance in year
  one, 4% of balance in year two, 3% of balance in year three, 2% of balance in
  year four, and 1% of balance in year five.

  	 

	
   

  	
   

  	
   

  	 

	
  Escrows:

  	
   

  	
  An escrow account must
  be maintained with Lender from which real estate taxes will be paid.

  	 

	
   

  	
   

  	
   

  	 

	
  Equity:

  	
   

  	
  A minimum of 40%
  tangible balance sheet equity must be maintained.

  	 

	
   

  	
   

  	
   

  	 

	
  Covenants:

  	
   

  	
  To be determined with
  USDA Rural Development

  	 

	
   

  	
   

  	
   

  	 

	
  Financial Information:

  	
   

  	
  The following financial
  information will be required:

  	 

						

 

2

 

	
   

  	
   

  	
  a)      Fiscal
  year-end audited statement prepared by an independent CPA firm;

  
	
   

  	
   

  	
  b)     Annual
  tax returns, including all supporting schedules;

  
	
   

  	
   

  	
  c)      Quarterly
  interim financial statements prepared internally or by a CPA firm

  

 

The Lender’s conditional
commitment is subject to the negotiation and execution of definitive credit,
security and related loan documents (the “Credit Documents”) satisfactory to
the Lender.  The Credit Documents will
embody the structure, pricing and other terms described in the summary of terms
and conditions.  They will also include
provisions viewed by the Lender and its counsel as appropriate for this
transaction and for transactions of this type. 
Accordingly, it should be recognized that this letter is indicative, but
not exhaustive, as to the terms and conditions, which shall govern this
facility.

 

This conditional
commitment letter supercedes and replaces any and all conditional commitment
letter issued by the Lender to the Borrower.

 

 

	
  Sincerely,

  
	
   

  
	
  /s/ Norm Skalicky

  	
   

  
	
   

  
	
  Norm Skalicky

  
	
  CEO

  

 

 

I hereby accept the terms
and conditions of the above-described proposal to provide financing.

 

Husker Ag Processing, LLC

 

	
  By:

  	
  /s/ Gary Kuester

  	
   

  	
   

  
	
   

  	
  Chairman of the Board
  and President

  	
  Date:
  September 29, 2003

  
	
   

  	
   

  	
   

  

 

3Exhibit 10.2

 

CHANGE IN TERMS AGREEMENT

 

	
  Principal

  	
   

  	
  Loan Date 

  	
   

  	
  Maturity

  	
   

  	
  Loan No

  	
   

  	
  Call/Coll

  	
   

  	
  Account

  	
   

  	
  Officer

  	
   

  	
  Initials

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  $

  	
  20,000,000.00

  	
   

  	
  12-19-2001

  	
   

  	
  12-31-2003

  	
   

  	
  53455

  	
   

  	
  47/400

  	
   

  	
  119284

  	
   

  	
  JB

  	
   

  	
   

  	
   

  
																	

 

References in the shaded
area are for Lender’s use only and do not limit the applicability of this
document to any particular loan or item.

Any item above containing “* * *” has been omitted due to text length
limitations.

 

	
  Borrower:

  	
   

  	
  HUSKER AG, LLC (TIN: 
  47-0836953)

  	
  LENDER:

  	
   

  	
  STEARNS BANK NATIONAL ASSOCIATION

  
	
   

  	
   

  	
  PO BOX 10

  	
   

  	
   

  	
  4191 SO 2ND ST

  
	
   

  	
   

  	
  PLAINVIEW, NE 68769

  	
   

  	
   

  	
  PO BOX 7338

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  ST CLOUD, MN 56302

  

 

	
  Principal Amount: 
  $20,000,000.00

  	
  Initial Rate: 
  5.250%

  	
  Date of Agreement: SEPTEMBER 30, 2003

  

 

DESCRIPTION OF EXISTING INDEBTEDNESS.  PROMISSORY NOTE DATED 12-19-2001 IN THE
ORIGINAL PRINCIPAL AMOUNT OF $20,000,000.00.

 

DESCRIPTION OF CHANGE IN TERMS.  EXTEND MATURITY DATE, ADJUST INTEREST RATE, INCLUDE PREPAYMENT
PENALTY AND ADD PROVISIONS & COVENANTS AS STATED WITHIN THIS DOCUMENT.

 

PROMISE TO PAY.  HUSKER AG, LLC (“Borrower”) promises to pay to STEARNS BANK
NATIONAL ASSOCIATION (“Lender”), or order, in lawful money of the United States
of America, the principal amount of Twenty Million & 00/100 Dollars
($20,000,000.00), together with interest on the unpaid principal balance from
September 30, 2003, until paid in full.

 

PAYMENT. 
Subject to any payment changes resulting from changes in the Index,
Borrower will pay this loan on demand. 
Payment in full is due immediately upon Lender’s demand.  If no demand is made, Borrower will pay this
loan in 2 regular payments of $285,774.29 each and one irregular last payment
estimated at $19,694,148.88.  Borrower’s
first payment is due October 31, 2003, and all subsequent payments are due
on the same day of each month after that. 
Borrower’s final payment will be due on December 31, 2003, and will
be for all principal and all accrued interest not yet paid.  Payments include principal and
interest.  Unless otherwise agreed or
required by applicable law, payments will be applied first to any accrued
unpaid Interest; then to principal; and then to any unpaid collection
costs.  Interest on this Agreement is
computed on a 365/360 simple interest basis; that is, by applying the ratio of
the annual interest rate over a year of 360 days, multiplied by the outstanding
principal balance, multiplied by the actual number of days the principal
balance is outstanding.  Borrower will
pay Lender at Lender’s address shown above or at such other place as Lender may
designate in writing.

 

VARIABLE INTEREST RATE.  The interest rate on this Agreement is
subject to change from time to time based on changes in an independent index
which is the WALL STREET JOURNAL PRIME RATE (the “Index”).  The Index is not necessarily the lowest rate
charged by Lender on its loans.  If the
Index becomes unavailable during the term of this loan, Lender may designate a
substitute index after notice to Borrower. 
Lender will tell Borrower the current Index rate upon Borrower’s
request.  The interest rate change will
not occur more often than each DAY. 
Borrower understands that Lender may make loans based on other rates as
well.  The index currently is 4.000% per
annum.  The interest rate to be applied
to the unpaid principal balance of the Note will be at a rate of 1.250
percentage points over the Index, resulting in an initial rate of 5.250% per
annum.  NOTICE:  Under no circumstances will the interest on
the Note be more than the maximum rate allowed by applicable law.  Whenever increases occur in the interest rate,
Lender, at its option, may do one or more of the following: (A) increase
Borrower’s payments to ensure Borrower’s loan will pay off by its original
final maturity date, (B) increase Borrower’s payments to cover accruing
interest, (C) increase the number of Borrower’s payments, and (D) continue
Borrower’s payments at the same amount and increase Borrower’s final payment.

 

PREPAYMENT PENALTY.  Upon prepayment of this Agreement, Lender is
entitled to the following prepayment penalty: 
THIS NOTE MAY NOT BE PREPAID, EITHER IN WHOLE OR IN PART, EXCEPT AS
PROVIDED HEREIN.  EFFECTIVE
SEPTEMBER 30, 2003 THIS NOTE MAY BE PREPAID AT ANY TIME IN WHOLE OR
IN PART UPON 10 DAYS WRITTEN NOTICE TO THE HOLDER HEREOF AND UPON PAYMENT OF A
PREPAYMENT PREMIUM IN AN AMOUNT EQUAL TO 3.0% OF THE AMOUNT OF SUCH PREPAYMENT
DURING THE CONSTRUCTION PERIOD, 5.0% OF THE AMOUNT OF SUCH PREPAYMENT DURING
YEAR ONE FOLLOWING THE CONSTRUCTION PERIOD, 4.0% OF THE AMOUNT OF SUCH
PREPAYMENT DURING THE YEAR TWO FOLLOWING THE CONSTRUCTION PERIOD, 3.0% OF THE
AMOUNT OF SUCH PREPAYMENT DURING THE YEAR THREE FOLLOWING THE CONSTRUCTION
PERIOD, 2.0% OF THE AMOUNT OF SUCH PREPAYMENT DURING YEAR FOUR FOLLOWING THE
CONSTRUCTION PERIOD, AND 1.0% OF THE AMOUNT OF SUCH PREPAYMENT DURING YEAR FIVE
FOLLOWING THE CONSTRUCTION PERIOD.  ALL
PREPAYMENTS SHALL, AT THE OPTION OF THE HOLDER HEREOF, FIRST BE APPLIED TO
ACCRUED INTEREST AND THE REMAINDER THEREOF TO PRINCIPAL.  NOT WITHSTANDING ANY SUCH PREPAYMENT(S),
UNTIL THE PRINCIPAL AMOUNT OF THIS NOTE AND ALL INTEREST THEREON IS PAID IN
FULL, THE MAKER HEREOF SHALL CONTINUE TO MAKE INSTALLMENT PAYMENTS OF PRINCIPAL
AND INTEREST IN THE AMOUNTS AND AT THE TIMES PROVIDED HEREIN.  Except for the foregoing, Borrower may pay
all or a portion of the amount owed earlier than it is due.  Early payments will not, unless agreed to by
Lender in writing, relieve Borrower of Borrower’s obligation to continue to
make payments under the payment schedule. 
Rather, early payments will reduce the principal balance due and may
result in Borrower’s making fewer payments. 
Borrower agrees not to send Lender payments marked “paid in full,”
“without

 

 

Loan No. 53455

 

recourse”, or similar
language.  If Borrower sends such a
payment, Lender may accept it without losing any of Lender’s rights under this
Agreement, and Borrower will remain obligated to pay any further amount owed to
Lender.  All written communications
concerning disputed amounts, including any check or other payment instrument
that indicates that the payment constitutes “payment in full” of the amount
owed or that is tendered with other conditions or limitations or as full
satisfaction of a disputed amount must be mailed or delivered to:  STEARNS BANK NATIONAL ASSOCIATION, 4191 SO 2ND
ST, ST. CLOUD, MN  56302-7338.

 

INTEREST AFTER DEFAULT.  Upon default, including failure to pay upon
final maturity, the total sum due under this Agreement will bear interest from
the date of acceleration or maturity at the variable interest rate on this
Agreement.  The interest rate will not exceed
the maximum rate permitted by applicable law.

 

DEFAULT. 
Each of the following shall constitute an Event of Default under this
Agreement:

 

Payment Default.  Borrower fails to make any payment when due
under the indebtedness.

 

Other Defaults.  Borrower fails to comply with or to perform
any other term, obligation, covenant or condition contained in this Agreement
or in any of the Related Documents or to comply with or to perform any term,
obligation, covenant or condition contained in any other agreement between
Lender and Borrower.

 

Default in Favor of Third Parties.  Borrower defaults under any loan, extension
of credit, security agreement, purchase or sales agreement, or any other
agreement, in favor of any other creditor or person that may materially affect
any of Borrower’s property or Borrower’s ability to perform Borrower’s
obligations under this Agreement or any of the related Documents.

 

False Statements.  Any warranty, representation or statement
made or furnished to Lender by Borrower or on Borrower’s behalf under this
Agreement or the Related Documents is false or misleading in any material
respect, either now or at the time made or furnished or becomes false or
misleading at any time thereafter.

 

Death or Insolvency.  The dissolution of Borrower (regardless of
whether election to continue is made), any member withdraws from Borrower, or
any other termination of Borrower’s existence as a going business or the death
of any member, the insolvency of Borrower, the appointment of a receiver for any
part of Borrower’s property, any assignment for the benefit of creditors, any
type of creditor workout, or the commencement of any proceeding under any
bankruptcy or insolvency laws by or against Borrower.

 

Creditor or Forfeiture Proceedings.  Commencement of foreclosure or forfeiture
proceedings, whether by judicial proceeding, self-help, repossession or any
other method, by any creditor of Borrower or by any governmental agency against
any collateral securing the indebtedness. 
This includes a garnishment of any of Borrower’s accounts, including
deposit accounts, with Lender.  However,
this Event of Default shall not apply if there is a good faith dispute by
Borrower as to the validity or reasonableness of the claim which is the basis
of the creditor or forfeiture proceeding and if Borrower gives Lender written
notice of the creditor or forfeiture proceeding and deposits with Lender monies
or a surety bond for the creditor or forfeiture proceeding, in an amount
determined by Lender.  In its sole
discretion, as being an adequate reserve or bond for the dispute.

 

Events Affecting Guarantor.  Any of the preceding events occurs with
respect to any guarantor, endorser, surety, or accommodation party of any of
the indebtedness or any guarantor, endorser, surety, or accommodation party
dies or becomes incompetent, or revokes or disputes the validity of, or
liability under, any Guaranty of the indebtedness evidenced by this Note.  In the event of a death, Lender, at its option,
may, but shall not be required to, permit the guarantor’s estate to assume
unconditionally the obligations arising under the guaranty in a manner
satisfactory to Lender, and, in doing so, cure any Event of Default.

 

Adverse Change.  A material adverse change occurs in
Borrower’s financial condition, or Lender believes the prospect of payment of
performance of the indebtedness is impaired.

 

Insecurity.  Lender in good faith believes itself
insecure.

 

Cure Provisions.  If any default, other than
a default in payment is curable and if Borrower has not been given a notice of
a breach of the same provision of this Agreement within the preceding twelve
(12) months, it may be cured (and no event of default will have occurred) if
Borrower, after receiving written notice from Lender demanding cure of such
default:  (1) cures the default within
fifteen (15) days; or (2) if the cure requires more than fifteen (15) days,
immediately initiates steps which Lender deems in Lender’s sole discretion to
be sufficient to cure the default and thereafter continues and completes all
reasonable and necessary steps sufficient to produce compliance as soon as
reasonably practical.

 

LENDER’S RIGHTS.  Upon default, Lender may declare the entire unpaid principal
balance on this Agreement and all accrued unpaid interest immediately due, and
then Borrower will pay that amount.

 

2

 

ATTORNEYS’ FEES; EXPENSES. 
Lender may hire or pay someone else to help collect
this Agreement if Borrower does not pay. 
Borrower will pay Lender that amount. 
This includes, subject to any limits under applicable law, Lender’s
reasonable attorneys’ fees and Lender’s legal expenses, whether or not there is
a lawsuit, including reasonable attorneys’ fees, expenses for bankruptcy
proceedings (including efforts to modify or vacate any automatic stay or
injunction), and appeals.  If not
prohibited by applicable law, Borrower also will pay any court costs, in
addition to all other sums provided by law.

 

JURY WAIVER.  Lender
and Borrower hereby waive the right to any jury trial in any action,
proceeding, or counterclaim brought by either Lender or Borrower against the
other.

 

GOVERNING LAW.  This
Agreement will be governed by, construed and enforced in accordance with
federal law and the laws of the State of Minnesota.  This Agreement has been accepted by Lender in the State of
Minnesota.

 

RIGHT OF SETOFF.  To the extent permitted by applicable law, Lender reserves a
right of setoff in all Borrower’s accounts with Lender (whether checking,
savings, or some other account).  This
includes all accounts Borrower holds jointly with someone else and all accounts
Borrower may open in the future. 
However, this does not include any IRA or Keogh accounts, or any trust
accounts for which setoff would be prohibited by law.  Borrower authorizes Lender, to the extent permitted by applicable
law, to charge or setoff all sums owing on the indebtedness against any and all
such accounts, and, at Lender’s option, to administratively freeze all such
accounts to allow Lender to protect Lender’s charge and setoff rights provided
in this paragraph.

 

COLLATERAL.  Borrower
acknowledges this Agreement is secured by COLLATERAL AS DESCRIBED IN THE
FOLLOWING DOCUMENTS:  DEED OF TRUST,
ASSIGNMENT OF RENTS AND SECURITY AGREEMENT FROM BORROWER TO LENDER DATED
12-19-01.

 

CONTINUING VALIDITY.  Except
as expressly changed by this Agreement, the terms of the original obligation or
obligations, including all agreements evidenced or securing the obligation(s),
remain unchanged and in full force and effect. 
Consent by Lender to this Agreement does not waive Lender’s right to
strict performance of the obligation(s) as changed, nor obligate Lender to make
any future change in terms.  Nothing in
this Agreement will constitute a satisfaction of the obligations(s).  It is the intention of Lender to retain as
liable parties all makers and endorsers of the original obligation(s) including
accommodation parties, unless a party is expressly released by Lender in writing.  Any maker or endorser, including accommodation
makers will not be released by virtue of this Agreement.  If any person who signed the original
obligation does not sign this Agreement below, then all persons signing below
acknowledge that this Agreement is given conditionally, based on the representation
to Lender that the non-signing party consents to the changes and provisions of
this Agreement or otherwise will not be released by it.  This waiver applies not only to any initial
extension modification or release, but also to all such subsequent actions.

 

LATE CHARGE.  SHOULD
BORROWER FAIL TO PAY ANY PAYMENT REQUIRED DURING THE TERM OF THIS LOAN, OR TO
PAY THE INDEBTEDNESS UPON THE MATURITY OF THIS LOAN, AND SHOULD ANY SUCH AMOUNT
REMAIN UNPAID FOR A PERIOD OF TEN (10) DAYS FOLLOWING ITS DUE DATE, THEN
BORROWER AGREES AND COVENANTS TO PAY TO LENDER A LATE CHARGE IN THE AMOUNT OF
FIVE PERCENT (5%) OF ANY SUCH AMOUNT, INCLUDING THE AMOUNT DUE AND PAYABLE AT
MATURITY.

 

ADDITIONAL COVENANTS.

A)  NO
DISTRIBUTIONS WITHOUT PRIOR LENDER APPROVAL AND ISSUANCE OF THE USDA LOAN NOTE
GUARANTEE.

B)  MINIMUM 40% BALANCE SHEET
TANGIBLE NET WORTH MUST BE MAINTAINED.

C)  DEBT SERVICE COVERAGE RATIO
OF AT LEAST 1.20x AFTER DISTRIBUTIONS.

 

ADDITIONAL PROVISION.  IN THE EVENT USDA DECLINES THE ORIGINAL LOAN
REQUEST FOR $20,000,000.00, WITH A 60% GUARANTY, THE BORROWER AND LENDER AGREE
TO PROCEED ON THE FOLLOWING TERMS:

 

LOAN A:  $8,837,300 - 70% USDA GUARANTEE - AMORTIZED
OVER 15 YEARS

LOAN B:  $8,837,300 - CONVENTIONAL LOAN - AMORTIZED
OVER 7 YEARS

LOAN C:  $1,505,900 - CONVENTIONAL LOAN - AMORTIZED
OVER 3 YEARS (REQUIRES A PRINCIPAL REDUCTION OF $819,500)

 

THE INTEREST RATE WILL BE
WSJP INDEX + 1.25%, ADJUSTING ON THE FIRST DAY OF EACH CALENDAR QUARTER.

 

THESE TERMS ARE SUBJECT
TO ISSUANCE OF A 70% USDA LOAN NOTE GUARANTEE, CONVERSION FEE OF $116,277.80
AND USDA FEE OF $123,722.20

 

SUCCESSORS AND ASSIGNS. 
Subject to any limitations stated in this Agreement on
transfer of Borrower’s interest, this Agreement shall be binding upon and inure
to the benefit of the parties, their successors and assigns.  If ownership of the Collateral becomes
vested in a person other than Borrower, Lender, without notice to Borrower, may
deal with Borrower’s successors with reference to this Agreement and the
indebtedness by way of forbearance or extension without releasing Borrower from
the obligations of this Agreement or liability under the indebtedness.

 

3

 

MISCELLANEOUS PROVISIONS. 
This Agreement is payable on demand.  The inclusion of specific default provisions
or rights of Lender shall not preclude Lender’s right to declare payment of
this Agreement on its demand.  Lender
may delay or forgo enforcing any of its rights or remedies under this Agreement
without losing them.  Borrower and any
other person who signs, guarantees or endorses this Agreement, to the extent
allowed by law, waive presentment, demand for payment, and notice of
dishonor.  Upon any change in the terms
of this Agreement, and unless otherwise expressly stated in writing, no party
who signs this Agreement, whether as maker, guarantor, accommodation maker or
endorser, shall be released from liability. 
All such parties agree that Lender may renew or extend (repeatedly and
for any length of time) this loan or release any party or guarantor or
collateral; or impair, fall to realize upon or perfect Lender’s security
interest in the collateral; and take any other action deemed necessary by
Lender without the consent of or notice to anyone.  All such parties also agree that Lender may modify this loan
without the consent of or notice to anyone other than the party with whom the
modification is made.  The obligations
under this Agreement are joint and several.

 

SECTION DISCLOSURE.  This
loan is made under Minnesota Statutes, Section 47.59.

 

PRIOR TO SIGNING THIS AGREEMENT, BORROWER READ AND UNDERSTOOD
ALL THE PROVISIONS OF THIS AGREEMENT, INCLUDING THE VARIABLE INTEREST RATE
PROVISIONS.  BORROWER AGREES TO THE
TERMS OF THE AGREEMENT.

 

BORROWER:

 

HUSKER AG, LLC

 

 

	
  By:

  	
   

  	
  (Seal)

  	
   

  	
  By:

  	
   

  	
  (Seal)

  
	
   

  	
  GARY KUESTER,
  Chairman of HUSKER AG, LLC

  	
   

  	
   

  	
  JACK FRAHM,
  Secretary of HUSKER AG, LLC

  
	
   

  
	
   

  
	
  By:

  	
   

  	
  (Seal)

  	
   

  	
  By:

  	
   

  	
  (Seal)

  
	
   

  	
  SCOTT
  CARPENTER, Vice Chairman of HUSKER AG, LLC

  	
   

  	
   

  	
  CORY
  FURSTENAU, Treasurer of HUSKER AG, LLC

  

 

4

 

 

DISBURSEMENT REQUEST AND AUTHORIZATION

 

	
  Principal

  	
   

  	
  Loan Date

  	
   

  	
  Maturity

  	
   

  	
  Loan No

  	
   

  	
  Call/Coll

  	
   

  	
  Account

  	
   

  	
  Officer

  	
   

  	
  Initials

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  $

  	
  20,000,000.00

  	
   

  	
  12-19-2001

  	
   

  	
  12-31-2003

  	
   

  	
  53455

  	
   

  	
  47/400

  	
   

  	
  119284

  	
   

  	
  JB

  	
   

  	
   

  	
   

  
																	

 

References in the shaded
area are for Lender’s use only and do not limit the applicability of this
document to any particular loan or item.

Any item above containing “* * *” has been omitted due to text length
limitations.

 

	
  Borrower:

  	
   

  	
  HUSKER AG, LLC (TIN: 
  47-0836953)

  	
  LENDER:

  	
   

  	
  STEARNS BANK NATIONAL ASSOCIATION

  
	
   

  	
   

  	
  PO BOX 10

  	
   

  	
   

  	
  4191 SO 2ND ST

  
	
   

  	
   

  	
  PLAINVIEW, NE 68769

  	
   

  	
   

  	
  PO BOX 7338

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  ST CLOUD, MN 56302

  

 

LOAN TYPE.  This
is a Variable Rate Nondisclosable Loan to a Limited Liability Company for
$20,000,000.00 due on December 31, 2003. 
The reference rate (WALL STREET JOURNAL PRIME RATE, currently 4.000%) is
added to the margin of 1.250%, resulting in an initial rate of 5.250.  This is a secured renewal loan.

 

PRIMARY PURPOSE OF LOAN. 
The primary purpose of this loan is for:

 

o Maintenance of
Borrower’s Primary Residence.

 

o Personal,
Family or Household Purposes or Personal Investment.

 

o Agricultural
Purposes.

 

ý Business
Purposes.

 

SPECIFIC PURPOSE.  The
specific purpose of this loan is: 
CONSTRUCT A 20 MGY CAPACITY ETHANOL PLANT IN PLAINVIEW NE.

 

FLOOD INSURANCE.  As
reflected on Flood Map No. 310466 0025B dated 06-04-1987, for the community of
PIERCE COUNTY, some of the property that will secure the loan is not located in
an area that has been identified by the Director of the Federal Emergency
Management Agency as an area having special flood hazards.  Therefore, although flood insurance may be
available for the property, no special flood hazard insurance is required by
law for this loan.

 

DISBURSEMENT INSTRUCTIONS. 
Borrower understands that no loan proceeds will be
disbursed until all of Lender’s conditions for making the loan have been
satisfied.  Please disburse the loan
proceeds of $20,000,000.00 as follows:

 

	
  Other Disbursements:

  	
   

  	
  $

  	
  20,000,000.00

  	
   

  
	
  $19,827,859.74 Outstanding Balance

  	
   

  	
   

  	
   

  
	
  $172,140.26 AVAILABLE BALANCE

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Note
  Principal:

  	
   

  	
  $

  	
  20,000,000.00

  	
   

  

 

CHARGES PAID IN CASH. 
Borrower has paid or will pay in cash as agreed the
following charges:

 

	
  Prepaid Finance Charges Paid in Cash:

  	
   

  	
  $

  	
  0.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Other
  Charges Paid in Cash:

  	
   

  	
  $

  	
  98,833.64

  	
   

  
	
  $20.50 FILING / RECORDING FEES

  	
   

  	
   

  	
   

  
	
  $500.00 RENEWAL FEE

  	
   

  	
   

  	
   

  
	
  $98,313.14 ACCRUED INTEREST

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total
  Charges Paid in Cash:

  	
   

  	
  $

  	
  98,833.64.

  	
   

  

 

FINANCIAL CONDITION. 
BY SIGNING THIS AUTHORIZATION, BORROWER REPRESENTS AND WARRANTS TO
LENDER THAT THE INFORMATION PROVIDED ABOVE IS TRUE AND CORRECT AND THAT THERE
HAS BEEN NO MATERIAL ADVERSE CHANGE IN BORROWER’S FINANCIAL CONDITION AS
DISCLOSED IN BORROWER’S MOST RECENT FINANCIAL STATEMENT TO LENDER.  THIS AUTHORIZATION IS DATED SEPTEMBER 30,
2003.

 

BORROWER:

 

HUSKER AG, LLC

 

	
  By:

  	
   

  	
  (Seal)

  	
   

  	
  By:

  	
   

  	
  (Seal)

  
	
   

  	
  GARY KUESTER,
  Chairman of HUSKER AG, LLC

  	
   

  	
   

  	
  JACK FRAHM,
  Secretary of HUSKER AG, LLC

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
  (Seal)

  	
   

  	
  By:

  	
   

  	
  (Seal)

  
	
   

  	
  SCOTT
  CARPENTER, Vice Chairmen of HUSKER AG, LLC

  	
   

  	
   

  	
  CORY
  FURSTENAU, Treasurer of HUSKER AG, LLC

  

 

5

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