Document:

MASTER
CONTRACT

BY AND BETWEEN

East Fork Biodiesel, LLC

AND
THE

IOWA DEPARTMENT OF ECONOMIC
DEVELOPMENT

CONTRACT
NUMBER: P0606M01004

TABLE OF CONTENTS

	
 

	
 

	
 

	
 

	
ARTICLE
 1. MASTER CONTRACT DURATION; FUNDING
 AGREEMENT DURATION

	
 

	
ARTICLE 2. FUNDING

	
 

	
Article
 2.1

	
 

	
Funding
 Sources

	
 

	
Article
 2.2

	
 

	
Reduction,
 Discontinuance or Alteration of Funding

	
 

	
ARTICLE 3. CONTRACT STRUCTURE AND DEFINITIONS;
 DOCUMENTS INCORPORATED BY REFERENCE; ORDER OF PRIORITY

	
 

	
Article
 3.1

	
 

	
Contract
 Structure and Definitions

	
 

	
Article
 3.2

	
 

	
Documents
 Incorporated by Reference

	
 

	
Article
 3.3

	
 

	
Business’s
 Financial Assistance Application on File

	
 

	
Article
 3.4

	
 

	
Order of
 Priority

	
 

	
ARTICLE 4. AWARD

	
 

	
Article
 4.1

	
 

	
Description
 of the Project and Award Budget

	
 

	
Article
 4.2 

	
 

	
Job
 Obligations

	
 

	
Article
 4.3

	
 

	

 Repayment Obligation

	
 

	
 

	
 

	
 

	
ARTICLE 5. CONDITIONS TO DISBURSEMENT OF FUNDS;
 DISBURSEMENT TERMS 

	
 

	
Article
 5.1

	
 

	
Documents
 Submitted

	
 

	
Article
 5.2

	
 

	
Prior
 Costs

	
 

	
Article
 5.3

	
 

	
Cost
 Variation

	
 

	
Article
 5.4

	
 

	
Suspension
 of Disbursement

	
 

	
Article
 5.5 

	
 

	
Investment
 of Award Proceeds

	
 

	
ARTICLE 6. SECURITY; CROSS-COLLATERALIZATION

	
 

	
Article
 6.1

	
 

	
Secured
 Property 

	
 

	
Article
 6.2

	
 

	
Value of
 Collateral 

	
 

	
Article
 6.3

	
 

	
Additional
 or Substitute Collateral

	
 

	
ARTICLE 7. REPRESENTATIONS AND WARRANTIES

	
 

	
Article
 7.1

	
 

	
Organization
 and Qualifications

	
 

	
Article
 7.2

	
 

	
Authority
 and Validity of Obligations

	
 

	
Article
 7.3

	
 

	
Use of
 Proceeds

	
 

	
Article
 7.4

	
 

	
Subsidiaries

	
 

	
Article
 7.5

	
 

	
Financial
 Reports

	
 

	
Article
 7.6

	
 

	
No
 Material Adverse Change

	
 

	
Article
 7.7

	
 

	
Full
 Disclosure; Business’s Financial Assistance Application

	
 

	
Article
 7.8

	
 

	
Trademarks,
 Franchises and Licenses

	
 

	
Article
 7.9

	
 

	
Governmental
 Authority and Licensing

	
 

	
Article
 7.10

	
 

	
Litigation
 and Other Controversies

	
 

	
Article
 7.11

	
 

	
Good
 Title

	
 

	
Article
 7.12

	
 

	
Taxes

	
 

	
Article
 7.13

	
 

	
Other
 Contracts

	
 

	
Article
 7.14

	
 

	
No
 Default

	
 

	
Article
 7.15

	
 

	
Compliance
 with Laws

	
 

	
Article
 7.16

	
 

	
Effective
 Date of Representations and Warranties

	
 

	
 

	
 

	
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ARTICLE 8. COVENANTS

	
 

	
Article
 8.1

	
 

	
Maintain
 Existence in Iowa

	
 

	
Article
 8.2

	
 

	
Job
 Obligations

	
 

	
Article
 8.3

	
 

	
Performance
 Obligations

	
 

	
Article
 8.4

	
 

	
Maintenance
 of Properties

	
 

	
Article
 8.5

	
 

	
Taxes
 and Assessments

	
 

	
Article
 8.6

	
 

	
Insurance

	
 

	
Article
 8.7

	
 

	
Required
 Reports

	
 

	
Article
 8.8

	
 

	
Inspection
 and Audit

	
 

	
Article
 8.9

	
 

	
Mergers,
 Consolidations and Sales

	
 

	
Article
 8.10

	
 

	
Formation and Maintenance of Subsidiaries

	
 

	
Article
 8.11

	
 

	
Compliance
 with Laws

	
 

	
Article
 8.12

	
 

	
Use of
 Award Proceeds

	
 

	
Article
 8.13

	
 

	
Changes
 in Business Ownership, Structure or Control

	
 

	
Article
 8.14

	
 

	
Notice
 of Meetings

	
 

	
Article
 8.15

	
 

	
Notice
 of Proceedings

	
 

	
Article
 8.16

	
 

	
Accounting
 Records

	
 

	
Article
 8.17

	
 

	
Restrictions

	
 

	
Article
 8.18

	
 

	
No
 Changes in Business Operations

	
 

	
Article
 8.19

	
 

	
Indemnification

	
 

	
ARTICLE
 9. EVENTS OF DEFAULT AND REMEDIES

	
 

	
Article
 9.1

	
 

	
Events
 of Default

	
 

	
Article
 9.2

	
 

	
Default
 Remedies

	
 

	
Article
 9.3

	
 

	
Default
 Interest Rate

	
 

	
Article
 9.4

	
 

	
Expenses

	
 

	
Article
 9.5

	
 

	
Notice
 of Default and Opportunity to Cure

	
 

	
ARTICLE
 10. MISCELLANEOUS

	
 

	
Article
 10.1

	
 

	
Timely
 Performance

	
 

	
Article
 10.2

	
 

	
State of
 Iowa Recognition

	
 

	
Article
 10.3

	
 

	
Choice
 of Law and Forum

	
 

	
Article
 10.4

	
 

	
Governing
 Law

	
 

	
Article
 10.5

	
 

	
Master
 Contract/Funding Agreement Amendments

	
 

	
Article
 10.6

	
 

	
Notices

	
 

	
Article
 10.7

	
 

	
Headings

	
 

	
Article
 10.8

	
 

	
Final
 Authority

	
 

	
Article
 10.9

	
 

	
Waivers

	
 

	
Article
 10.10

	
 

	
Counterparts

	
 

	
Article
 10.11

	
 

	
Survival
 of Representations

	
 

	
Article
 10.12

	
 

	
Severability
 of Provisions

	
 

	
Article
 10.13

	
 

	
Successors
 and Assigns

	
 

	
Article
 10.14

	
 

	
Termination

	
 

	
Article
 10.15

	
 

	
Integration

	
 

	
 

	
 

	
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MASTER
 CONTRACT

	
 

	
 

	
 

	 

	
 

	
 

	
 

	
BUSINESS:

	
 

	
East Fork Biodiesel, LLC

	
MASTER CONTRACT NUMBER:

	
 

	
P0606M01004

	
AWARD DATE:

	
 

	
June 20, 2006 

	
 

	
 

	
 

	 

          This
FINANCIAL ASSISTANCE CONTRACT (the “Master
Contract”) is made as of the CONTRACT EFFECTIVE DATE by and between
the Iowa Department of Economic Development
(“IDED”), 200 East Grand Avenue, Des Moines, IA 50309 and East Fork Biodiesel, LLC an Iowa Limited Liability
Corporation (“Business”), 220 East
State St., Algona, Iowa 50001.

          WHEREAS,
the Business submitted an application to IDED requesting financial assistance
in the financing of its Project as more fully described in Exhibit C,
Description of the Project and Award Budget, (the “Project”); and

          WHEREAS,
the IDED found the Project to meet the requirements established to receive
financial assistance; and

          WHEREAS,
the IDED and/or the Iowa Department of Economic Development Board (“IDED
Board”) have awarded the Business financial assistance from one or more
IDED-administered programs for the Project, all of which are subject to the
terms and conditions set forth herein and collectively referred to as the “Award”; and

          NOW
THEREFORE, in consideration of the mutual promises contained herein and
intending to be legally bound, the Business and IDED agree to the following
terms:

ARTICLE 1

MASTER CONTRACT DURATION; FUNDING AGREEMENTS DURATION

          This
Master Contract shall be in effect until all of Business’s obligations and
liabilities under this Master Contract and all of the Funding Agreements
executed in connection with this Master Contract have been satisfied. The
duration of each Funding Agreement will be as described in the Funding
Agreement.

ARTICLE 2

FUNDING

          2.1     Funding
Sources. The sources of funding for this Award are appropriations to IDED
for financial assistance programs administered by the IDED and tax credit
programs that IDED is authorized to administer.

          2.2     Reduction,
Discontinuance or Alteration of Funding. Any termination, reduction, or
delay of funds available due, in whole or in part, to (i) lack of, reduction
in, or a deappropriation of revenues previously appropriated by the legislature
for this Award, or (ii) any other reason beyond the IDED’s control may, in the
IDED’s discretion, result in the termination, reduction or delay of funds to
the Business.

	
 

	
 

	
 

	
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ARTICLE 3

CONTRACT STRUCTURE AND DEFINITIONS;

DOCUMENTS INCORPORATED BY REFERENCE; AND ORDER OF PRIORITY

          3.1     Contract
Structure and Definitions.

          (a)
This Award shall be governed by this Master Agreement and the individual
funding  agreements (the “Funding
Agreements”) for each source of program assistance for this Award.
This Award has been provided to the Business to fund the Project described in
Exhibit C, Description of the Project and Award Budget. The Articles of this
Master Contract apply to each Funding Agreement unless a Funding Agreement
specifically states otherwise.

          (b)
The following terms apply to this Master Contract and each of the Funding
Agreements, unless otherwise specified in a Funding Agreement:

          “Award
Date” means
the date first stated in this Master Contract and is the date the IDED and/or
the IDED Board approved the awarding of financial assistance to the Business
for the Project.

          “Business’
Employment Base” means
the number of jobs as stated in Exhibit D, Job Obligations that the Business
and IDED have established as the job base for this Project. The number of jobs
the Business has pledged to create/retain shall be in addition to the
Business’s Employment Base.

          “Created
Jobs” means
the number of new FTE Jobs the Business will add over and above the Buisiness’s
Employment Base and, if applicable, Statewide Employment Base.

          “Forgivable
Loan” means a
form of an award made by the IDED to the Business under a Funding Agreement(s)
for which repayment is eliminated in part or entirely if the Business satisfies
the terms of this Contract and the Funding Agreement(s).

          “Full-time
Equivalent (FTE) Job” means
the employment of one person:

	
 

	
 

	
(a)

	
For 8 hours per day for a
 5-day, 40-hour workweek for 52 weeks per year, including paid holidays,
 vacations and other paid leave, or

	
 

	
(b)

	
For the number of hours or
 days per week, including paid holidays, vacations and other paid leave,
 currently established by schedule, custom, or otherwise, as constituting a
 week of full-time work for the kind of service an individual performs for an
 employing unit.

          “Job
Maintenance Period” means the date two (2) years from the Project Completion Date as stated in
Exhibit C, Description of the Project and Award Budget. The Business shall
maintain the Project, and the created/retained jobs through the Job Maintenance
Period.

          “Job
Obligations” means
the Created Jobs, Retained Jobs, Qualifying Jobs and Non-qualifying Jobs
associated with the Project that pay the wages and benefits, all as outlined in
Exhibit D, Job Obligations. 

          “Loan” means form of an award made by the
IDED to
the Business under a Funding Agreement(s) for which full repayment is expected.

          “Non-qualifying
jobs” are
those jobs created or retained by the project that do not qualify for funding, but would not be created or
retained if the Project did not proceed. 

          “Project” means the
description of the work and activities to be completed by the Business as

	
 

	
 

	
 

	
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outlined in Exhibit C,
Description of the Project and Award Budget, and Exhibit A, Business’s
Financial Assistance Application.

          “Project
Completion Date” means the
date three (3) years from the Award Date as stated in Exhibit C, Description of
the Project and Award Budget. The Project Completion Date is the date by which
all Project activities shall be satisfactorily completed.

          “Statewide
Employment Base” means
the number of jobs as stated in Exhibit D, Job Obligations that the Business
and IDED have determined as those jobs that will be retained at other
facilities in the state. The number of jobs the Business has pledged to
create/retain shall be in addition to the Statewide Employment Base.

          “Qualifying
jobs” are
those created or retained jobs that qualify for program funding.

          3.2     Documents
Incorporated by Reference. The following documents are incorporated by
reference and considered an integral part of this Master Contract:

	
 

	
 

	
 

	
 

	
 

	
 

	
Exhibit A -

	
 

	
Business’s Financial
 Assistance Application, Application # 06-VAP-031 and 06-EZ-036,

	
 

	
Exhibit B -

	
 

	
Funding Agreements:

	
 

	
 

	
 

	
 

	
B2- VAAPFAP Funding
 Agreement

	
 

	
 

	
 

	
 

	
B4- EZ Funding Agreement

	
 

	
Exhibit C -

	
 

	
Description of the Project
 and Award Budget

	
 

	
Exhibit D -

	
 

	
Job Obligations

          “Retained Job” means an existing job that would be
eliminated or moved to another state if the project did not proceed in Iowa.

          3.3     Business’s
Financial Assistance Application on File. Due to its size, Exhibit A will
not be attached to this Master Contract, but will be kept on file at the Iowa
Department of Economic Development. It shall, nevertheless, be considered an
incorporated element of this Master Contract and the Funding Agreements.

          3.4     Order
of Priority. In the case of any inconsistency or conflict between the
specific provisions of this document and the exhibits, the following order of
priority shall control:

          (a) Master Contract,
Articles 1-10

          (b) Exhibit B - Funding Agreements

          (c) Exhibit C - Description of the Project and Award Budget

          (d) Exhibit D - Job Obligations

          (e) Exhibit A - Business’s Financial Assistance Application

ARTICLE 4

AWARD

          4.1     Description
of the Project and Award Budget. The IDED and/or the IDED Board have
approved an Award to the Business from the programs and in the amounts
identified in Exhibit C, Description of the Project and Award Budget. The Project
Budget for this Award is as detailed in Exhibit C.

          4.2     Job
Obligations. The IDED and/or the IDED Board have approved an Award to the
Business and the Business’ obligations for FTE Created Jobs, Retained Jobs,
Qualifying Jobs and Non-qualifying Jobs are outlined in Exhibit D, Job
Obligations.

	
 

	
 

	
 

	
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          4.3     
Repayment Obligation. The obligation to repay the direct financial
assistance components of this Award shall
be evidenced by Promissory Notes executed in connection with the Funding Agreements.

ARTICLE 5

CONDITIONS TO DISBURSEMENT OF FUNDS; DISBURSEMENT TERMS

          The
obligation of IDED to make, continue or disburse funds under this Master
Contract and the Funding Agreements shall
be subject to the following conditions precedent:

          5.1     
Documents Submitted. IDED shall have received each of the following
documents, properly executed and completed, and approved by IDED as to form and
substance:

	
 

	
 

	
(a)

	
Master Contract. Fully executed Master Contract.

	
 

	
 

	
(b)

	
Funding Agreements.
 Fully executed Funding Agreements.

	
 

	
 

	
(c)

	
Promissory
 Notes.The Promissory Notes required by the Funding
 Agreements.

	
 

	
 

	
(d)

	
Articles of Incorporation.
 Copies of the articles of incorporation of the Business, certified in
 each instance by its secretary or assistant secretary.

	
 

	
 

	
(e)

	
Certificate of Corporate Existence.
 A certificate of existence for the Business from the Office of the
 Secretary of State of Iowa.

	
 

	
 

	
(f)

	
Results of Lien and Tax Search.
 Financing statement, tax and judgment lien search results, in the Business’s state of incorporation/organization,
 against the Business and Secured Property.

	
 

	
 

	
(g)

	
Security
 Documents. The fully executed Security Documents required
 in Article 6.0.

	
 

	
 

	
(h) 

	
Other Required Documents. IDED shall have received such other contracts, instruments, documents,
 certificates and opinions as the IDED may reasonably request.

	
 

	
 

	
(i) 

	
Hazardous
 Waste Audit. To comply with Iowa Code section 15A.l(3)”b,”
 if the Business generates solid or hazardous waste, it must either: a)
 submit a copy of the Business’s existing in-house plan to reduce the amount of waste and safely dispose
 of the waste based on an in-house audit conducted within the past 3 years; or
 b) submit an outline of a plan to be developed in-house, or 3) submit documentation
 that the Business has authorized the Iowa Department of Natural Resources or
 Iowa Waste Reduction Center to conduct the audit.

	
 

	
 

	
(j) 

	
Release Form - Confidential Tax Information. A signed Authorization for Release of
 Confidential State Tax Information form to permit IDED to receive the
 Business’s state tax information directly from the Iowa Department of Revenue
 for purposes of annually updating the Iowa Public Return on Investment Analysis.

	
 

	
 

	
(k) 

	
Satisfactory
 Credit History. Documentation of satisfactory credit history of
 the Business and guarantors, as applicable, with no judgments or
 unsatisfied liens or similar adverse credit actions.

	
 

	
 

	
(1) 

	
Project Financial Commitments.
 The Business shall have submitted a letter from the funding sources
 identified in Exhibit C committing to the specified financial involvement in
 the Project and received the IDED’s
 approval of the letters of commitment. Each letter shall include the amount,
 terms and conditions of the financial commitment, as well as any applicable
 schedules.

	
 

	
 

	
 

	
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(m) 

	
Requests for Disbursement.
  All disbursements of Award proceeds shall be subject to receipt by the
 IDED of requests for disbursement, in form and content acceptable to IDED,
 submitted by the Business. All requests shall include documentation of costs
 that have been paid or costs to be paid immediately upon receipt of Award
 proceeds.

	
 

	
 

	
(n) 

	
Funding Agreements Disbursement
 Requirements. Satisfaction of all disbursement
 requirements outlined in the specific program Funding Agreements.

          5.2     
Prior Costs. No expenditures made prior to the Award Date may be
included as Project costs. This restriction applies to the direct financial
assistance portions of this Award, not the tax credit benefits included in this
Award.

          5.3     
Cost Variation. In the event that the total Project cost is less
than the amount specified in the Exhibit C,
the Funding Agreements shall be reduced at the same ratio to the total Project
cost reduction as the ratio of the Funding Agreement amount to the total amount
of funds provided by the Business and all funding sources requiring a
proportional reduction of their financial contribution to the Project. Any disbursed excess above the reduced
IDED participation amount shall be returned immediately to IDED.

          5.4     
Suspension of Disbursement. Upon the occurrence of an Event of Default (as
defined in this Master Contract or any of the Funding Agreements) by the
Business, the IDED may suspend payments and tax credit program benefits to the
Business until such time as the default has been cured to IDED’s satisfaction.
Notwithstanding anything to the contrary in this Master Contact or the Funding Agreements, upon a termination of this Master
Contract on account of an Event of Default by the Business, Business
will no longer have the right to receive any disbursements or any tax credit
program benefits after the effective date
of default. All Award funds may also be suspended, in IDED’s sole discretion,
in the event the Business experiences a layoff within the state of Iowa or
closes any of its Iowa facilities.

          5.5     
Investment of Award Proceeds.

          (a)
In the event that the Award proceeds
are not immediately utilized, temporarily idle Award proceeds held by the
Business may be invested provided such investments shall be in accordance with State
law, including but not limited to the provisions of Iowa Code chapter 12C
concerning the deposit of public funds. Interest accrued on temporarily idle
Award proceeds held by the Business shall be credited to and expended on the
Project prior to the expenditure of other Award proceeds.

          (b)
All proceeds remaining, including accrued interest, after all allowable
Project costs have been paid or obligated shall be returned to the IDED within
thirty (30) days after the Project Completion Date. Within ten (10) days of receipt of a written request from IDED,
Business shall inform the IDED in writing of the amount of unexpended Award
funds in the Business’s possession or under the Business’s control,
whether in the form of cash on hand, investments, or otherwise.

ARTICLE 6 

SECURITY; CROSS-COLLATERALIZATION

          The
Business shall execute in favor of the IDED all security agreements, financing
statements, mortgages, personal and/or
corporate guarantees (the “Security
Documents”) as required by the IDED.

          6.1     
Security. This Award shall be secured by: 1st position
security interest in specific project manufacturing
equipment valued at or above the $400,000 loan amount, (the “Secured Property”). IDED’s financial
assistance award will not be subordinate to any other lender.

	
 

	
 

	
 

	
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          6.2     
Value of Collateral. The value, as reasonably determined by IDED,
of the Secured Property shall meet or
exceed the amount of Award funds disbursed.

          6.3     
Additional or Substitute Collateral. In case of a decline in the
market value of the Secured Property, or
any part thereof, IDED may require that additional or substitute collateral of
quality and value satisfactory to IDED be pledged as Secured Property for this
Award. The Business shall provide such additional or substitute collateral
Secured Property within 20 days of the date of the request for additional
or substitute collateral to secure this Award in an amount equal to or greater
than the amount of outstanding Award funds.

ARTICLE 7 

REPRESENTATIONS AND WARRANTIES

The Business represents and
warrants to IDED as follows:

          7.1     
Organization and Qualifications. The Business is duly organized, validly existing
and in good standing as a corporation under the state of its incorporation. The
Business has full and adequate power to own its property and conduct its
business as now conducted, and is duly licensed or qualified and in good
standing in each jurisdiction in which the nature of the business conducted by
it or the nature of the property owned or leased by it requires such licensing
or qualifying, except where the failure to so qualify
would not have a material adverse effect on the Business’s ability to perform
its obligations hereunder.

          7.2     
Authority and Validity of Obligations. The Business has full
right and authority to enter into this
Master Contract and the Funding Agreements and to make the borrowings herein
provided for. The person signing this Master Contract and the Funding
Agreements has full authority to:

	
 

	
 

	
 

	
 

	
a)

	
sign this Master Contract and
 the Funding Agreements, and

	
 

	
 

	
 

	
 

	
b)

	
issue Promissory Notes on
 behalf of the Business, and

	
 

	
 

	
 

	
 

	
c)

	
secure Business’s obligations under this Master
 Contract and the Funding Agreements, and 

	
 

	
 

	
 

	
 

	
d)

	
perform each and all of the
 obligations under the Master Contract and its Funding Agreement.

The Master Contract and Funding Agreement documents
delivered by the Business have been duly authorized, executed and delivered by
the Business and constitute the valid and binding obligations of the Business and enforceable against it in accordance
with their terms. This Master Contract, the Funding Agreements and related
documents do not contravene any provision of law or any judgment, injunction,
order or decree binding upon the Business or any provision of the articles of
organization or operating agreement of the Business, contravene or constitute a
default under any covenant, indenture or contract of or effecting the
Business or any of its properties.

          7.3     
Use of Proceeds. The Business hereby agrees to use Award proceeds only
for the Project and for the activities
described in Exhibit C, Description of the Project and Award Budget, this
Master Contract and the Funding Agreements. Use of Award proceeds shall
conform to the Budget for the Project as detailed in Exhibit C. The Business
represents that there are legally enforceable commitments in place from the funding sources identified for
the Project in Exhibit C.

          7.4     
Subsidiaries. The Business has no Subsidiaries on the Contract
Effective Date.

          7.5     
Financial Reports. The balance sheet of the Business furnished to
IDED as of the Contract Effective Date, fairly presents its financial condition
as at said date in conformity with GAAP applied on a consistent basis. The Business has no contingent liabilities which
are material to it, other than as indicated on such financial statements or,
with respect to future periods, on the financial statements furnished to IDED.

	
 

	
 

	
 

	
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          7.6     
No Material Adverse Change. Since the Award Date, there has been
no change in the condition (financial or otherwise) or business prospects of the Business, except those occurring in
the ordinary course of business, none of which individually or in the aggregate have been materially adverse. To
the knowledge of the Business, there has been no material adverse change in the condition of the Business (financial or otherwise) or the business prospects of the Business 

          7.7     
Full Disclosure; Business’s Financial Assistance Application. The
statements and other information furnished to the IDED by Business in its
Financial Assistance Application and in connection with the negotiation of this
Master Contract and the Funding Agreements do not contain any untrue statements of a material fact or omit a material
fact necessary to make the material statements contained herein or therein not
misleading. The IDED acknowledges that as to any projections furnished to the
IDED, the Business only represents that the same were prepared on the basis of
information and estimates it believed to be reasonable.

          7.8     
Trademarks. Franchises and Licenses. The Business owns,
possesses, or has the right to use all necessary patents, licenses, franchises,
trademarks, trade names, trade styles, copyrights, trade secrets, know
how and confidential commercial and proprietary information to conduct its
businesses as now conducted, without known conflict with any patent, license,
franchise, trademark, trade name, trade style, copyright or other proprietary
right of any other Person. As used in this Master Contract, “Person” means
an individual, partnership, corporation, association, trust, unincorporated
organization or any other entity or
organization, including a government or agency or political subdivision
thereof.

          7.9     
Governmental Authority and Licensing. The Business has received all
licenses, permits, and approvals of all Federal, state, local, and
foreign governmental authorities, if any, necessary to conduct its
businesses, in each case where the failure to obtain or maintain the same could
reasonably be expected to have a material
adverse effect. No investigation or proceeding which, if adversely determined,
could reasonably be expected to result in revocation or denial of any material
license, permit, or approval is pending or, to the knowledge of the Business
threatened.

          7.10     
Litigation and Other Controversies. There is no litigation or governmental
proceeding pending, nor to the knowledge of the Business threatened,
against the Business which if adversely determined would result in any material
adverse change in the financial condition, Properties, business or operations
of the Business, nor is the Business aware of any existing basis for any such
litigation or governmental proceeding.

          7.11     
Good Title. The Business has good and defensible title (or valid
leasehold interests) to all of its Property (including, without limitation,
the Secured Property) reflected on the most recent balance sheets furnished to
the IDED (except for sales of assets in the ordinary course business).

          7.12     
Taxes. All tax returns required to be filed by the Business in any
jurisdiction have, in fact, been filed, and
all taxes, assessments, fees and other governmental charges upon the Business
or upon any of its property, income or franchises, which are shown to be due
and payable in such returns, have been paid, except such taxes,
assessments, fees and governmental charges, if any, as are being contested in
good faith and by appropriate proceedings which prevent enforcement of the
matter under contest and as to which adequate reserves established in
accordance with GAAP have been provided. The Business knows of no proposed
additional tax assessment against it for which adequate provisions in
accordance with GAAP have not been made on its accounts. Adequate provisions in
accordance with GAAP for taxes on the books of the Business have been made for
all open years, and for their current fiscal period.

          7.13     
Other Contracts. The Business is not in default under the terms
or any covenant, indenture

	
 

	
 

	
 

	
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or contract of or affecting either the Business or any
of its properties, which default, if uncured, would have a material adverse effect on its financial condition, properties,
business or operations.

          7.14     
No Default. No Default or Event of Default has occurred or
is continuing.

          7.15     
Compliance with Laws. The Business is in compliance with the
requirements of all federal, state and local laws, rules and regulations
applicable to or pertaining to the business operations of the Business and laws
and regulations establishing quality criteria and standards for air, water,
land and toxic or hazardous wastes or substances, non-compliance with which
could have a material adverse effect on the financial condition, properties,
business or operations of the Business. The Business has not received
notice to the effect that its operations are not in compliance with any of the
requirements of applicable federal, state
or local environmental or health and safety statutes and regulations or are the
subject of any governmental investigation evaluating whether any
remedial action is needed to respond to a
release of any toxic or hazardous waste or substance into the environment,
which non-compliance or remedial action could have a material adverse effect on
the financial condition, properties, business or operations of the
Business.

          7.16     
Effective Date of Representations
and Warranties. The warranties
and representations of this Article are made as of the Contract
Effective Date and shall be deemed to be renewed and restated by the Business at the time each request for
disbursement of funds is submitted to the IDED.

ARTICLE 8

COVENANTS

          The
Business agrees that, for the duration of this Master Contract and the Funding
Agreements:

          8.1     
Maintain Existence in Iowa. The Business shall at all times preserve and
maintain its existence as a corporation in good standing and maintain
the Project in Iowa. The Business will preserve and keep in force and affect
all licenses, permits, franchises, approvals, patents, trademarks, trade names,
trade styles, copyrights and other
proprietary rights necessary to the proper conduct of its respective business.

          8.2     
Job Obligations.

          (a)     
Jobs and Wages. By the Project Completion Date, the Business
shall create/retain the number of FTE Created Jobs, Retained Jobs, Qualifying
Jobs and Non-qualifying Jobs above the Business’ Employment Base and, if applicable, the Statewide Employment Base, and maintain the jobs through the
Job Maintenance Period, all as
detailed in Exhibit D. The Business shall pay the wage rates identified in
Exhibit D.  

          (b)     
Benefits. The Business shall provide and pay for the
eligible benefits described in Exhibit A, Business’s Financial Assistance
Application, with an Average Benefit Value calculated
by IDED and shown in Exhibit D.
During the Contract period the Business may adjust the benefit package provided
the Average Benefit Value is not
decreased and provided the benefit package includes eligible benefits. For purposes
of this Contract, “Eligible benefits” means,
medical and dental insurance plans, pension and profit-sharing plans, child care services, life insurance coverage,
vision insurance plan, and disability coverage.  

          8.3     
Performance Obligations. By the Project Completion Date, Business shall
complete the Project, make the total
investment pledged for the Project, and comply with all other performance requirements
described in this Master Contract and the Funding Agreements. The Business
shall 

	
 

	
 

	
 

	
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promptly provide IDED with written notice of any major
changes that would impact the success of the Project.

          8.4     
Maintenance of Properties. The
Business shall maintain, preserve and keep its properties in good repair, working order and condition
(ordinary wear and tear excepted) and will from time to time make all
needful and proper repairs, renewals, replacements, additions and betterments
thereto so that at all time the efficiency
thereof shall be fully preserved and maintained in accordance with prudent business
practices.

          8.5     
Taxes and Assessments. The Business shall duly pay and discharge all
taxes, rates, assessments, fees and governmental charges upon or against
it against its properties, in each case before the same become delinquent and
before penalties accrue thereon, unless and to the extent that the same are being contested in good faith and by
appropriate proceedings and adequate reserves are provided therefore.

          8.6     
Insurance. The Business shall insure and keep insured in
good and responsible insurance companies, all insurable property owned by it
which is of a character usually insured by Persons similarly situated and
operating like properties against loss or damage from such hazards or risks as
are insured by Persons similarly situated and operating like properties; and
the Business shall insure such other hazards and risks (including
employers’ and public liability risks) in good and responsible insurance companies as and to the extent usually insured by
Persons similarly situated and conducting similar businesses. The Business will
upon request of the IDED furnish a certificate setting forth in summary form
the nature and extent of the insurance maintained pursuant to this Article.

          8.7     
Required Reports.

          (a)     
Review of Disbursement Requests
and Reports. The Business shall
prepare, sign and submit disbursement requests and reports as specified in this
Master Contract in the form and content required by IDED. The Business
shall review all reimbursement requests and verify that claimed expenditures
are allowable costs. The Business shall
maintain documentation adequate to support the claimed costs.

          (b)     
Reports. The Business shall prepare, sign and submit the
following reports to the IDED throughout the Contract period:

	
 

	
 

	
 

	
 

	
 

	
Report 

	
 

	
Due Date

	
 

	
 

	
 

	
 

	
Mid-Year Status Report

	
July 31st for the
 period ending June 30th 

	
 

	
 

	
 

	
End-of-Year Status Report
 Includes:

	
January 31st for
 the period ending Dec. 31st 

	
-

	
Public Return on Investment
 (ROI) Update

	
-

	
Payroll Register with all created and/or

	
 

	
retained jobs highlighted and indicate

	
 

	
the Project Jobs paying the required wage

	
-

	
“Employer’s Contribution and Payroll Report”

	
-

	
For Enterprise Zone awards, annual certification of
 compliance

	
 

	
with the requirements of Iowa Code 15E.193, as
 required by

	
 

	
15E. 195(6).

	
 

	
 

	
 

	
 

	
End of Project Report

	
Within 30 days of Project
 Completion Date 

	
Report content: same items as End-of-Year Report

	
 

	
 

	
 

	
End of Job Maintenance Period Report

	
Within 30 days of the end of the Job 

	
Report Content: same items as

 End-of-Year Report

	
Maintenance Period 

	
 

	
 

	
 

	
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          (c)     Additional
Reports, Financials as Requested by IDED. The IDED reserves the right to
require more frequent submission of any of the above reports if, in the opinion
of the IDED, more frequent submissions would help improve the Business’s
Project performance, or if necessary in order to meet requests from the Iowa
General Assembly, the Department of Management or the Governor’s office. At the
request of IDED, Business shall submit its annual financial statements
completed by an independent CPA, or other financial statements including, but
not limited to, income, expense, and retained earnings statements.

          8.8     Inspection
and Audit. The Business will permit the IDED and its duly authorized
representatives to visit and inspect any of the Business’s properties,
corporate books and financial records of the Business related to the Project, to
examine and make copies of the books of accounts and other financial records of
the Business, and to discuss the affairs, finances and accounts of the Business
with, and to be advised as to the same by, its officers, and independent public
accountants (and by this provision the Business authorizes such accountants to
discuss with the IDED and the IDED’s duly authorized representatives the
finances and affairs of the Business) at such reasonable time and reasonable
intervals as the IDED may designate, but at least annually.

          8.9     Mergers,
Consolidations and Sales. Without the written consent of the IDED, which
shall not be unreasonably withheld, the Business shall not be a party to any
merger or consolidation, or sell, transfer, lease or otherwise dispose of all
or any part of the Secured Property.

          8.10    Formation
and Maintenance of Subsidiaries. The Business will not form or acquire any
Subsidiary or transfer assets pledged as security for this Master Contract to
any subsidiary or affiliate without the written consent of the IDED, which
shall not be unreasonably withheld.

          8.11     Compliance
with Laws.

          (a)
The Business will comply in all material respects with the requirements of all
federal, state and local laws, rules, regulations and orders applicable to or
pertaining to its properties or business operations including, but not limited
to, all applicable environmental, hazardous waste or substance, toxic substance
and underground storage laws and regulations, and the Business will obtain any
permits, licenses, buildings, improvements, fixtures, equipment or its property
required by reason of any applicable environmental, hazardous waste or
substance, toxic substance or underground storage laws or regulations.

          (b)
The Business shall comply in all material respects with all applicable federal,
state, and local laws, rules, ordinances, regulations and orders applicable to
the prevention of discrimination in employment, including the administrative
rules of the Iowa Department of Management and the Iowa Civil Rights Commission
which pertain to equal employment opportunity and affirmative action.

          (c)
The Business shall comply in all material respects with all applicable federal,
state and local laws, rules, ordinances, regulations and orders applicable to
worker rights and worker safety.

          (d)
The Business shall comply with IDED’s administrative rules for each program
funding source, as identified in the Funding Agreements.

          8.12    Use
of Award Proceeds. The Business will use the Award proceeds extended under
this Master Contract and the Funding Agreements solely for the purposes set
forth in Exhibit C.

	
 

	
 

	
 

	
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          8.13
     Changes in Business Ownership. Structure and
Control. The Business shall not materially change the ownership, structure,
or control of the Business if it would adversely affect the Project. This
includes, but is not limited to, entering into any merger or consolidation with
any person, firm or corporation or permitting substantial distribution,
liquidation or other disposal of Business assets directly associated with the
Project. Business shall provide IDED with advance notice of any proposed
changes in ownership, structure or control. The materiality of the change and
whether or not the change affects the Project shall be as reasonably determined
by IDED.

          8.14     Notice
of Meetings. The Business shall notify IDED at least two (2) working days
in advance of all meetings of the board of directors at which the subject
matter of this Master Contract, the Funding Agreements, or the Project is
proposed to be discussed. The Business shall provide IDED with copies if the
agenda and minutes of such meetings and expressly agrees that a representative
of IDED has a right to attend those portions of any and all such meetings where
the Project, this Master Contract or the Funding Agreements are discussed.

          8.15     Notice
of Proceedings. The Business shall promptly notify IDED of the initiation
of any claims, lawsuits, bankruptcy proceedings or other proceedings brought
against the Business which would adversely impact the Project.

          8.16     Accounting
Records. The Business is required to maintain its books, records and all
other evidence pertaining to this Master Contract and it Funding Agreements in
accordance with generally accepted accounting principles and such other
procedures specified by IDED. These records shall be available to IDED, its
internal or external auditors, the Auditor of the State of Iowa, the Attorney
General of the State of Iowa and the Iowa Division of Criminal Investigations
at all times during the Master Contract’s and the Funding Agreements’ duration
and any extensions thereof, and for three (3) full years from the Agreement
Expiration Date.

          8.17      Restrictions.
The Business shall not, without prior written disclosure to IDED and prior
written consent of IDED, which shall not be unreasonably withheld, directly or
indirectly:

          (a)
Assign, waive or transfer any of Business’s rights, powers, duties or
obligations under this Master Contract or the Funding Agreements.

          (b)
Sell, transfer, convey, assign, encumber or otherwise dispose of any of the
Secured Property or the Project.

          (c)
Place or permit any restrictions, covenants or any similar limitations on the
Secured Property or the Project,

          (d)
Remove from the Project site or the State all or substantially all of the
Secured Property.

          (e)
Create, incur or permit to exist any Lien of any kind on the Secured Property.

          8.18     No
Changes in Business Operations. The Business shall not materially change
the Project or the nature of the Business and activities being conducted, or
proposed to be conducted by Business, as described in the Business’s approved
application for funding, Exhibit A of this Master Contract, unless approved in
writing by IDED prior to the change.

          8.19
     Indemnification. The Business shall
indemnify, defend and hold harmless the IDED, the State of Iowa, its
departments, divisions, agencies, sections, commissions, officers, employees
and agents from and against all losses, liabilities, penalties, fines, damages
and claims (including taxes), and all related costs and expenses (including
reasonable attorneys’ fees and disbursements and costs of

	
 

	
 

	
 

	
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investigation, litigation,
settlement, judgments, interest and penalties), arising from or in connection
with any of the following:

	
 

	
 

	
a)

	
 Any claim, demand,
 action, citation or legal proceeding arising out of or resulting from the
 Project;

	
 

	
 

	
b)

	
 Any claim, demand,
 action, citation or legal proceeding arising out of or resulting from a
 breach by the Business of any representation or warranty made by the Business
 in this Master Contract or the Funding Agreements;

	
 

	
 

	
c)

	
Any claim, demand,
 action, citation or legal proceeding arising out of or related to occurrences
 that the Business is required to insure against as provided for in this
 Master Contract or the Funding Agreements; and

	
 

	
 

	
d)

	
Any claim, demand,
 action, citation or legal proceeding which results from an act or omission of
 the Business or any of their agents in its or their capacity as an employer
 of a person.

ARTICLE 9

EVENTS OF DEFAULT AND REMEDIES

          9.1     Events
of Default. Any one or more of the following shall constitute an “Event of Default” hereunder:

          (a)
Nonpayment. In the event
of a missed payment under a Loan or in the event a Forgivable Loan is not
forgiven and all or a portion of the Forgivable Loan must be repaid by the
Business, a default in the payment when due (whether by lapse of time,
acceleration or otherwise) of any principal on the Promissory Note(s), or
default in payment for more than ten (10) Business Days of the due date thereof
of any interest on the Promissory Note(s) or any fee or other obligation
payable by the Business shall be an Event of Default; or

          (b)
Noncompliance with Covenants. Default
in the observance or performance of any covenant set forth in Article 8, for
more than five (5) Business Days; or

          (c)
Noncompliance with Security Documents.
Default in the observance or performance of any term of any Security
Documents beyond any applicable grace period set forth therein; or

          (d)
Noncompliance with Master Contract.
Default in the observance or performance of any other provision of this
Master Contract; or

          (e)
Noncompliance with Funding Agreements;
Cross-Default. Default in the observance or performance of any
other provision of any of the Funding Agreements, including Events of Default
identified in any of the Funding Agreements; IDED may elect to declare the
Business in default of this Master Contract and any or all of the Funding
Agreements if there is a default under any one of the Funding Agreements; or

          (f)
Material Misrepresentation. Any
representation or warranty made by the Business in this Master Contract or the
Funding Agreements or in any statement or certificate furnished by it pursuant
to this Master Contract or the Funding Agreements, or made in its Financial
Assistance Application, or in connection with any of the above, proves untrue
in any material respect as of the date of the issuance or making thereof; or

          (g)
Lien Deficiencies. Any of
the Security Documents shall for any reason fail to create a valid and
perfected priority Lien in favor of the IDED in any Secured Property pledged by
Business; or

	
 

	
 

	
 

	
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          (h)
Judgment Over $100,000. Any
judgment or judgments, writ or writs or warrant or warrants of attachment, or
any similar process or processes in an aggregate amount in excess of $100,000
shall be entered or filed against the Business or against any of its property
and remains unvacated, unbonded or unstayed for a period of 30 days; or

          (i)
Adverse Change in Financial Condition.
Any change shall occur in the financial condition of the Business which
would have a material adverse effect on the ability of the Business to perform
under this Master Contract or the Funding Agreements; or

          (j)
Bankruptcy or Similar Proceedings Initiated. Either the Business shall (1) have
entered involuntarily against it an order for relief under the United States
Bankruptcy Code, as amended, (2) not pay, or admit in writing its inability to
pay, its debts generally as they become due, (3) make an assignment for the
benefit of creditors, (4) apply for, seek, consent to, or acquiesce in, the
appointment of a receiver, custodian, trustee, examiner, liquidator or similar
official for it or any substantial part of its Property, (5) institute any
proceeding seeking to have entered against it an order for relief under the
United States Bankruptcy Code as amended, to adjudicate it insolvent, or
seeking dissolution, winding up, liquidation, reorganization, arrangement,
adjustment or composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors or fail to file
an answer or other pleading denying the material allegations of any such
proceeding filed against it, or (6) fail to contest in good faith any
appointments or proceeding described in Article 9.1(k) below; or

          (k)
Appointment of Officials. A
custodian, receiver, trustee, examiner, liquidator or similar official shall be
appointed for either the Business or any substantial part of any of its
respective property, or a proceeding described in Article 9.1(j) shall be
instituted against either the Business and such appointment continues
undischarged or such proceeding continues undismissed or unstayed for a period
of sixty (60) days; or

          (l)
Insecurity. IDED shall in
good faith deem itself insecure and reasonably believes, after consideration of
all the facts and circumstances then existing, that the prospect of payment and
satisfaction of the obligations under this Master Contract and/or the Funding
Agreements, or the performance of or observance of the covenants in this Master
Contract and/or the Funding Agreements, is or will be materially impaired.

          (m)
Failure to Submit Required Reports.
The Business fails to submit complete reports by the required due dates as
outlined in Article 8.7.

          (n)
Layoffs, Relocation, or Closure.
The Business experiences a substantial layoff, relocates a substantial
portion of its business or its offices outside of Iowa, or closes its
operations during the term of this Contract.

          9.2     Default
Remedies. When an Event of Default has occurred and is continuing, the IDED
may, by written notice to the Business:

          (a)
terminate this Master Contract, the Funding Agreements and all of the
obligations of IDED under this Master Contract and the Funding Agreements on
the date stated in such notice, and

          (b)
declare the principal and any accrued interest on the outstanding Promissory
Notes to be forthwith due and payable, including both principal and interest
and all fees, charges and other amounts payable under this Master Contract and
the Funding Agreements, shall be and become immediately due and payable without
further demand, presentment, protest or notice of any kind.

          9.3     Default
Interest Rate. If an Event of Default occurs and remains uncured, a default
rate of 6% shall apply to repayment of amounts due under this Master Contract
and the Funding Agreements.

	
 

	
 

	
 

	
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The default interest rate
shall accrue from the first date Award funds are disbursed.

          9.4     Expenses.
The Business agrees to pay to the IDED all expenses reasonably incurred or paid
by IDED including reasonable attorneys’ fees and court costs, in connection
with any Default or Event of Default by the Business or in connection with the
enforcement of any of the terms of this Master Contract and the Funding
Agreements.

          9.5     Notice
of Default and Opportunity to Cure. If IDED has reasonable cause to believe
that and Event of Default has occurred under this Master Contract and/or the
Funding Agreements, IDED shall issue a written Notice of Default to the
Business, setting forth the nature of the alleged default in reasonable specificity,
and providing therein a reasonable period time, which shall not be fewer than
thirty (30) days from the date of the Notice of Default, in which the Business
shall have an opportunity to cure, provided that cure is possible and feasible.

ARTICLE 10

MISCELLANEOUS.

          10.1  
Timely Performance. The parties agree that the dates and time periods
specified in this Master Contract and the Funding Agreements, including the
timelines established for the Project and more fully described in Exhibit C, are
of the essence to the satisfactory performance of this Master Contract and the
Funding Agreements.

          10.2   State of Iowa
Recognition. The Project shall permanently recognize, in a manner
acceptable to IDED, the financial contribution to the Project made by the State
of Iowa. For example, a sign or plaque acknowledging that the Project was
funded in part by an Award from the State of Iowa, Iowa Department of Economic
Development.

          10.3  
Choice of Law and Forum.

          (a) In the event
any proceeding of a quasi-judicial or judicial nature is commenced in
connection with this Master Contract or the Funding Agreements, the proceeding
shall be brought in Des Moines, Iowa, in Polk County District Court for the
State of Iowa, if such court has jurisdiction. If however, such court lacks
jurisdiction and jurisdiction lies only in a United States District Court, the
matter shall be commenced in the United States District Court for the Southern
District of Iowa, Central Division.

          (b)
This provision shall not be construed as waiving any immunity to suit or
liability, in state or federal court, which may be available to the IDED, the
State of Iowa or its members, officers, employees or agents.

          10.4   Governing
Law. This Master Contract and the Funding Agreements and the rights and
duties of the parties hereto shall be governed by, and construed in accordance
with the internal laws of the State of Iowa without regard to principles of
conflicts of laws.

          10.5   Master
Contract/Funding Agreement Amendments. Neither this Master Contract nor any
documents incorporated by reference in connection with this Master Contract,
including the Funding Agreements, may be changed, waived, discharged or
terminated orally, but only as provided below:

          (a)
Writing required. The Master
Contract and the Funding Agreements may only be amended if done so in writing
and signed by the Business and IDED; and for those Funding Agreements in which
the Community is a signatory, by the Community, the Business and IDED. Examples
of situations requiring an amendment include, but are not limited to, time
extensions, budget revisions, and significant alterations of existing
activities or beneficiaries. No amendment will be valid until approved in
writing by IDED.

	
 

	
 

	
 

	
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          (b)
IDED review.    IDED
will consider whether an amendment request is so substantial as to necessitate
reevaluating the IDED’s or IDED Board’s original funding decision. An amendment
may be denied by IDED if it substantially alters the circumstances under which
the Project funding was originally approved. 

          10.6   Notices.
Except as otherwise specified herein, all notices hereunder shall be in writing
(including, without limitation by fax) and shall be given to the relevant party
at its address, e-mail address, or fax number set forth below, or such other
address, e-mail address, or fax number as such party may hereafter specify by
notice to the other given by United States mail, by fax or by other
telecommunication device capable of creating a written record of such notice
and its receipt. Notices hereunder shall be addressed:

	
 

	
 

	
 

	
To the Business:

	
 

	
 

	
East Fork Biodiesel, LLC

 Ken Clark, President

 220 East State St.

 Algona, Iowa 50001

	
 

	
 

	
 

	
 

	
E-mail:

	
kclark@eastforkbiodiesel.com

	
 

	
Telephone:

	
515.395.8888 

	
 

	
Facsimile:

	
515.395.8891

	
 

	
 

	
 

	
To the IDED at:

	
 

	
Iowa Department of
 Economic Development

	
 

	
Business Services

	
 

	
200 East Grand Avenue

	
 

	
Des Moines, Iowa 50309

	
 

	
Attention: Julie Malone,
 Business Services Project Manager

	
 

	
 

	
 

	
E-mail:   julie.malone@iowalifechanging.com

	
 

	
Telephone:

	
515.242.4872 

	
 

	
Facsimile:

	
515.242.4832

Each such notice, request or
other communication shall be effective (i) if given by facsimile, when such
facsimile is transmitted to the facsimile number specified in this Article and
a confirmation of such facsimile has been received by the sender, (ii) if given
by e-mail, when such e-mail is transmitted to the e-mail address specified in
this Article and a confirmation of such e-mail has been received by the sender,
(iii) if given by mail, five (5) days after such communication is deposited in
the mail, certified or registered with return receipt requested, addressed as
aforesaid or (iv) if given by any other means, when delivered at the addresses
specified in this Article.

          10.7   Headings.
Article headings used in this Master Contract and the Funding Agreements are
for convenience of reference only and are not a part of this Master Contract or
the Funding Agreements for any other purpose.

          10.8   Final
Authority. The IDED shall have the authority to reasonably assess whether
the Business has complied with the terms of this Master Contract and the
Funding Agreements. Any IDED determinations with respect to compliance with the
provisions of this Master Contract and the Funding Agreements shall be deemed
to be final determinations pursuant to Section 17 A of the Code of Iowa (2005).

	
 

	
 

	
 

	
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          10.9     Waivers.
No waiver by IDED of any default hereunder shall operate as a waiver of any
other default or of the same default on any future occasion. No delay on the
part of the IDED in exercising any right or remedy hereunder or under the
Funding Agreements shall operate as a waiver thereof. No single or partial
exercise of any right or remedy by IDED shall preclude future exercise thereof
or the exercise of any other right or remedy.

          10.10     Counterparts.
This Master Contract may be executed in any number of counterparts, each of
which shall be deemed to be an original, but all of which together shall
constitute but one and the same instrument.

          10.11     Survival
of Representations. All representations and warranties made herein or in
any other Master Contract/Funding Agreement document or in certificates given
pursuant hereto or thereto shall survive the execution and delivery of this
Master Contract and the Funding Agreements and the other Master
Contract/Funding Agreement documents and shall continue in full force and
effect with respect to the date as of which they were made until all of
Business’s obligations or liabilities under this Master Contract and the
Funding Agreements have been satisfied.

          10.12     Severability
of Provisions. Any provision of this Master Contract or the Funding
Agreements, which is unenforceable in any jurisdiction, shall, as to such
jurisdiction, be ineffective to the extent of such unenforceability without
invalidating the remaining provisions hereof or affecting the validity or
enforceability of such provision in any other jurisdiction. All rights,
remedies and powers provided in this Master Contract and or the Funding
Agreements or any other Master Contract document may be exercised only to the
extent that the exercise thereof does not violate any applicable mandatory
provisions of law, and all the provisions of this Master Contract and the
Funding Agreements and any other Master Contract document are intended to be
subject to all applicable mandatory provisions of law which may be controlling
and to be limited to the extent necessary so that they will not render this
Master Contract or the Funding Agreements or any other Master Contract document
invalid or unenforceable.

          10.13     Successors
and Assigns. This Master Contract and the Funding Agreements shall be
binding upon the Business and its respective successors and assigns, and shall
inure to the benefit of the IDED and the benefit of their respective successors
and assigns. The Business may not assign its rights hereunder or under any of
the Funding Agreements without the written consent of the IDED, which consent
will not be unreasonably withheld.

          10.14     Termination.
This Master Contract and any of the Funding Agreements can be terminated upon
mutual, written agreement of the Business and IDED and, for amendments to
Funding Agreements to which the Community is a signatory, the Community.

          10.15     Integration.
This Master Contract and the Funding Agreements contains the entire
understanding between the Business and IDED relating to the Project and any
representations that may have been made before or after the signing of this
Master Contract and the Funding Agreements, which are not contained herein, are
nonbinding, void and of no effect. None of the Parties have relied on any such
prior representation in entering into this Master Contract and its Funding
Agreement.

	
 

	
 

	
 

	
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          IN
WITNESS WHEREOF in consideration of the mutual covenants set forth above and
for other good and valuable consideration, the receipt, adequacy and legal
sufficiency of which are hereby acknowledged, the parties have entered into
this Master Contract and have caused their duly authorized representatives to
execute this Master Contract, effective as of the latest date stated below (the
“Contract Effective Date”). 

FOR THE IOWA DEPARTMENT OF
ECONOMIC DEVELOPMENT:

	
 

	
 

	
BY: 

	

	
 

	
Mike Blouin, Director

	
 

	
 

	
 

	
11.21.06

	
 

	
Date

	
 

	
 

	
FOR THE BUSINESS:

	
 

	
 

	
BY:

	

	
 

	
Signature

	
 

	
 

	
 

	
Kenneth M. Clark, President

	
 

	
Typed Name and Title

	
 

	
 

	
 

	
11/3/06

	
 

	
Date

	
 

	
 

	
 

	
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LIST OF EXHIBITS

	
 

	
 

	
Exhibit A -

	
Business’s Financial
 Assistance Application (on file with IDED),
Application # 06-VAP-031 and
 06-EZ-036

	
 

	
 

	
Exhibit B -

	
Funding Agreements

 B2-VAAPFAP Funding Agreement
 B4-EZ Funding Agreement

	
 

	
 

	
Exhibit C -

	
Description of the Project and Award Budget

	
 

	
 

	
Exhibit D -

	
Job Obligations

	
 

	
 

	
 

	
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EXHIBIT B - 4

EZ FUNDING AGREEMENT

	
 

	
 

	
 

	
 

	
 

	
 

	
BUSINESS:

	
 

	
East Fork
 Biodiesel, LLC

	
 

	
 

	
 

	 

	
 

	
 

	
COMMUNITY:

	
 

	
Kossuth
 County

	
 

	
 

	
 

	 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
MASTER CONTRACT NUMBER:

	
 

	
P0606M01004

	
 

	
 

	
 

	 

	
 

	
 

	
FUNDING AGREEMENT NUMBER:

	
 

	
06-EZ-036

	
 

	
 

	
 

	 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
ENTERPRISE ZONE NAME:

	
 

	
Kossuth
 County/Algona EZ-17

	
 

	
 

	
 

	 

	
 

	
 

	
ZONE CERTIFICATION DATE:

	
 

	
March 16,
 2006

	
 

	
 

	
 

	 

	
 

	
 

	
ZONE EXPIRATION DATE:

	
 

	
March 16,
 2016

	
 

	
 

	
 

	 

	
 

	
 

	
 

	
 

	
 

	
 

          THIS
ENTERPRISE ZONE (EZ) FUNDING AGREEMENT is made by and among the IOWA DEPARTMENT
OF ECONOMIC DEVELOPMENT, 200 East Grand Avenue, Des Moines, Iowa 50309
(“IDED”), the business identified above (“Business”), and the community
identified above (“Community”), effective as of the Contract Effective Date
stated in the Master Contract identified above.

          WHEREAS,
the purpose of the EZ Program is to promote new economic development in
economically distressed areas; and

          WHEREAS,
the Community has designated and IDED has certified the Enterprise Zone
identified above; and

          WHEREAS,
eligible businesses locating or located in an Enterprise Zone are authorized
under this program to receive certain tax incentives and assistance and the
Business has located, or will locate, within the certified Enterprise Zone; and

          WHEREAS,
the Enterprise Zone Commission responsible for the above-identified Zone has
recommended approval and IDED has found the Business’ application to be
consistent with the EZ Program’s eligibility requirements; and

          WHEREAS,
the Business has executed the Master Contract described above with the IDED
pursuant to an Award on the Award Date stated in the Master Contract to the
Business for the Project; and

          WHEREAS,
the Master Contract specifies that for each program funding source the IDED and
the Business shall enter into a Funding Agreement; and

          WHEREAS,
this EZ Funding Agreement contains additional terms and conditions for the
award of EZ benefits and

          NOW,
THEREFORE, the Business and Community accept the terms and conditions set forth
in this EZ Funding Agreement and the Master Contract for the funding of the
Project. In consideration of the mutual promises contained in the Master
Contract and this EZ Funding Agreement and other good and valuable
consideration, it is agreed as follows:

1.0     Master Contract. Unless otherwise
specified
in this EZ Funding Agreement, the definitions, terms, conditions, and
provisions contained in the Master Contract are applicable to this EZ Funding
Agreement. The following provisions in the Master Contract do not apply to this
EZ Funding Agreement: 

Article
3.1(b) – Definition of “Project Completion Date” and “Job Maintenance Period.”
[The EZ program has different time periods for these activities.]

Article 4.3
- Repayment obligation. [No promissory note required for tax credits.]

Article 5.1(c)
– Promissory Notes. [Execution of note is not a condition precedent to
receipt of tax credit benefits]

Article 5.1(g)
– Security Documents. [Execution of Security Documents is not a
condition precedent to receipt of tax credit benefits].

Article 5.1(m) – Requests for disbursement. [Not required for tax credit
program
benefits.] 

Article 5.2 – Prior costs. [Not applicable to tax credit program
benefits.] 

Article 5.3 – Cost variation. [Not applicable to tax credit program
benefits.]

 Article 5.5 –
Investment of Award Proceeds. [No proceeds in tax credit programs.] 

Article 6 – Security,
Cross-collateralization.. [Not applicable to tax credit program benefits.]

Article 9.1(a) – Nonpayment as
an Event of Default. [Not applicable
because there are
no loan payments in tax credit programs].

Article 9.1(c) – Noncompliance
with Security Documents as an Event of
Default. [Not
applicable because there are no Security Documents required in tax credit
programs].

Article 9.1(g) – Lien Deficiencies
as an Event of Default. [Not
applicable because
there are no Security Documents required in tax credit programs.]

2.0     Definitions. As
used in this EZ Funding Agreement, the following terms shall apply:

          2.1
Agreement Expiration Date. Expiration of this EZ Funding Agreement
occurs upon the happening of one of the following events, whichever occurs
first: 

	
 

	
 

	
 

	
(a) IDED’s determination
 that the Business has fully met the requirements of the EZ Funding Agreement,
 including meeting its Job Obligations, and IDED closes out this EZ Funding
 Agreement.

	
 

	
 

	
 

	
(b) An Event of Default
 occurs that is not remedied within the time period allowed under Article 5.0
 of this EZ Funding Agreement.

	
 

	
 

	
 

	
(c) This EZ Funding
 Agreement is terminated upon mutual, written agreement of the Business, the
 Community and IDED.

          2.2
EZ Program. “EZ Program” means the Enterprise Zone Program. The EZ
Program is authorized by Iowa Code (2005) sections 15E.191 through 15E.196.

	
 

	
 

	
 

	
Master Contract #
 P0606M01004

	
 

	
 

	
Funding Agreement #06-EZ-036

	
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 2 -

	
Master FA updated 09/30/05 

          2.3
EZ Award. “EZ Award” means IDED’s approval of the Business’s Financial
Assistance Application for the Project. This EZ Award authorizes the Business
to receive EZ Program benefits.

          2.4
“Annual Base Rent”. “Annual Base Rent” means the Business’ annual lease
payment minus taxes, insurance, and operating or maintenance expenses.

          2.5
“Commission” or “Enterprise Zone Commission” or “Enterprise Zone
Commission” means the Enterprise Zone commission established by the
Community responsible for the certified Enterprise Zone.

          2.6
“Enterprise Zone.” “Enterprise Zone” means the site within the Community
certified by the IDED Board for the purpose of attracting private investment.

          2.7
Project Completion Date. “Project Completion Date” means: (1) the first
date upon which the average annualized production of finished product for the
preceding ninety-day period at the manufacturing facility operated by the Business
within the Enterprise Zone is at least fifty percent of the initial design
capacity of the facility; or (2) for existing or non-manufacturing facilities,
the date of completion of all improvements included in the Project.

          2.8
“Project Jobs” means the number of
new Full-time Equivalent (FTE) Jobs created by the location or expansion of the
Business in the Enterprise Zone, as shown in Master Contract Exhibit D.

3.0     Enterprise Zone Benefits.

          3.1          Benefits
Available. The following Enterprise Zone benefits are available
to the Business under this EZ Funding Agreement:

          (a)          Supplemental
New Jobs Credit. As provided in Iowa Code section 15.331, the
Business is eligible to claim a supplemental new jobs credit from withholding
in an amount equal to 11⁄2 percent of the gross wages paid by the Business. The
supplemental new jobs credit available under this program is in addition to and
not in lieu of the program and withholding credit of 11⁄2 percent authorized under
Iowa Code chapter 260E.

          Additional
new jobs created by the project, beyond those that were agreed to in Article 4
of this Agreement, are eligible for the additional 1 1⁄2 percent withholding
credit as long as those additional jobs meet the local Enterprise Zone wage
eligibility criteria and are an integral part or a continuation of the Project.
Approval and administration of the supplemental new jobs credit shall follow
existing procedures established under lowa Code chapter 260E.

          (b)          Value-Added
Property Tax Exemption. The Community has approved an exemption
from taxation all or a portion of the value added to the property upon which
the Business locates or expands in the Enterprise Zone and which is used in the
operation of the Business. The amount of  the exemption is detailed in
Attachment B, “Community Resolution Authorizing Property Tax Exemptions for the
Enterprise Zone.”

	
 

	
 

	
 

	
Master Contract #
 P0606M01004

	
 

	
 

	
Funding Agreement
 #06-EZ-036

	
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Master FA updated 09/30/05

          (c)          Investment
Tax Credit. 

	
 

	
 

	
 

	
(i) The Business may claim
 an investment tax credit as provided in Iowa Code section 15.333. An
 investment tax credit may be claimed of up to a maximum of ten percent (10%)
 of the new investment which is directly related to the Project Jobs created
 by the location or expansion of the Business in the Enterprise Zone. The
 Business may not claim an investment tax credit for capital expenditures
 above the amount stated in Article 4.3 of this EZ Funding Agreement. The
 credit is to be taken in the year the qualifying asset is placed in service.
 Any credit in excess of the tax liability for the tax year may be credited to
 the tax liability for the following seven years or until depleted, whichever
 occurs earlier.

	
 

	
 

	
 

	
(ii) The tax credit shall
 be amortized equally over a five-year period which the department will, in
 consultation with the eligible business, define. The five-year amortization
 period is specified below:

	
 

	
 

	
 

	
      Amortization
 Schedule

	
 

	
 

	
 

	
July
 1, 2007 – June 30, 2008

	
 

	
$1,041,000

	 

	 

	 

	
July
 1, 2008 – June 30, 2009

	
 

	
$1,041,000

	 

	 

	 

	
July
 1, 2009 – June 30, 2010

	
 

	
$1,041,000

	 

	 

	 

	
July
 1, 2010 – June 30, 2011

	
 

	
$1,041,000

	 

	 

	 

	
July
 1, 2011 – June 30, 2012

	
 

	
$1,041,000

	
 

	
 

	
 

	
 

	
 

	
(iii) EZ Funding Agreement
 Exhibit C, “Investment Tax Credit Amortization Schedule Examples,”
 illustrates how the 5-year amortization requirement will be applied.

	
 

	
 

	
 

	
(iv) The capital
 expenditures eligible for the investment tax credit are: 

	
 

	
 

	
 

	
 

	
 

	
 

	
1.

	
The purchase price of real
 property and any existing buildings and structures located on the real
 property.

	
 

	
 

	
 

	
 

	
 

	
 

	
2.

	
The cost of improvements
 made to real property which is used in operation of the Business.

	
 

	
 

	
 

	
 

	
 

	
 

	
3.

	
The costs of manufacturing
 machinery and equipment and computers, as defined in Iowa Code section
 427A.1(1) “e” and “j,” which are purchased for use in the operation of the
 Business and which the purchase price have been depreciated in accordance
 with generally accepted accounting principles.

	
 

	
 

	
 

	
 

	
 

	
 

	
4.

	
Ten (10) years of Annual
 Base Rent payments provided the cumulative cost of these payments does not
 exceed the cost of the land and the third-party developer’s costs to build or
 renovate the building. Annual base rent shall only be considered when the
 project includes the construction of a new building or the major renovation
 of an existing building.

          (d)          Refund
Of Sales, Service And Use Taxes Paid To Contractors Or Subcontractors. The Business is eligible for a
refund of
sales, service and use taxes paid to contractors and subcontractors as
authorized in Iowa Code section 15.331A.

	
 

	
 

	
 

	
Master Contract #
 P0606M01004

	
 

	
 

	
Funding Agreement
 #06-EZ-036

	
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 4 -

	
Master FA updated 09/30/05

	
 

	
 

	
 

	
 

	
(i)

	
The Business may apply for
 a refund of the sales and use taxes paid under Iowa Code chapters 422 and 423
 for gas, electricity, water or sewer utility services, goods, wares, or
 merchandise, or on services rendered, furnished, or performed to or for a
 contractor or subcontractor and used in the fulfillment of a written contract
 relating to the construction or equipping of a facility within the Enterprise
 Zone.

	
 

	
 

	
 

	
 

	
(ii)

	
Taxes attributable to
 intangible property and furniture and furnishings shall not be refunded.

          To
receive a refund of the sales, service and use taxes paid to contractors or
subcontractors, the Business must, within one year after Project Completion,
make an application to the Department of Revenue.

          3.2          Duration
Of Benefits. The Enterprise Zone designation shall remain in
effect for ten years following the date of certification. Any state or local
incentives or assistance that may be conferred must be conferred before the
designation expires. However, the benefits of the incentive or assistance may
continue beyond the expiration of the Enterprise Zone designation.

          3.3          Benefits
Not Available. The following Enterprise Zone benefits are not available to the Business under this agreement:  

          (a)          Additional
Research Activities Credit.

          (b)          Refund
of Taxes Attributable to Racks, Shelving, and Conveyor Equipment.

4.0     Conditions to Receipt of
Enterprise Zone Benefits.

The Enterprise Zone Benefits
authorized under this EZ Funding Agreement are available to the Business provided
the Business, (and where applicable, the Community) satisfies each of the
following conditions:

          4.1          Job
Creation And Maintenance. The Business shall create the Project Jobs within
three (3) years of the Effective Date (defined in the Master Contract). The
Business shall maintain the Project Jobs for a period of ten (10) years from
the date the Business first meets its Job Obligations as shown in Master
Contract Exhibit D.

          4.2          Average
Wage. The Business shall pay an average starting wage for the Project Jobs,
as shown in Master Contract Exhibit D.

          4.3          Investment.
Within three (3) years of the Effective Date (as defined in the Master
Agreement), the Business shall make a capital investment of $52,050,000 within
the Enterprise Zone, as defined in 3.1(c).

          4.4          Medical
And Dental Insurance. The Business provides all full-time employees with
the option of choosing one of the following:

(a)     The
Business pays 80 percent of both of the following: 

          (i)          the
cost of a standard medical insurance plan, and

          (ii)         the
cost of a standard dental insurance plan or an equivalent plan;

(b)     The
Business provides the employee with a monetarily equivalent plan to the plan
provided in “a.”

	
 

	
 

	
 

	
Master Contract #
 P0606M01004

	
 

	
 

	
Funding Agreement #06-EZ-036

	
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Master FA updated 09/30/05

          4.6     Business
Retention. The Business shall have and maintain Project operations
contemplated by this Agreement within the Community at least through the
Agreement Expiration Date.

          4.7     Other
Conditions. Tax benefits may not be claimed until:

	
 

	
 

	
 

	
 

	
(a)

	
IDED receives written
 documentation which outlines the employees benefit package that the East Fork
 Biodiesel, LLC has implemented; and 

	
 

	
 

	
 

	
 

	
(b)

	
IDED Business Services’
 Team confirms that East Fork Biodiesel, LLC has satisfied the Enterprise Zone
 Program’s employee benefit requirement.

5.0     Events of Default;
Notice of Default; Repayment Provisions.

          5.1
Events of Default. The terms of the Master Contract regarding Events of
Default and Remedies govern this EZ Funding Agreement.

          5.2
Notice of Default. The following Notice of Default and repayment
provisions supersede the Notice of Default and repayment provisions specified
in the Master Contract:

          (a)      From
Department. If, through the
Mid-Year Status Report, End-of-Year Status Report, or other means, the IDED has
reason to believe the Business is in default of the terms of this Agreement,
the IDED will issue a written Notice of Default to the Business, setting forth
the nature of the default in reasonable specificity, and providing therein a
reasonable period of time, which shall not be less than 30 days from the date of
the Notice of Default, in which the Business shall have an opportunity to cure,
provided that cure is possible and feasible. A copy of any Notice of Default
will also be provided to the Community and Department of Revenue.

          (b)      From
Community. If, through
monitoring, auditing or other means, the Community has reason to believe the
Business is in default of the terms of this Agreement, the Community will issue
a written Notice of Default to the Business, setting forth the nature of the
default in reasonable specificity, and providing therein a reasonable period of
time, which shall not be less than 30 days from the date of the Notice of
Default, in which the Business shall have an opportunity to cure, provided that
cure is possible and feasible. A copy of any Notice of Default will also be
provided to the IDED and Department of Revenue.

          5.3
Repayment Provisions. If the Business has received incentives or
assistance under the EZ Program and fails to meet and maintain any one of the
requirements of the EZ Program, the EZ Program Administrative Rules (261 IAC
chapter 59) or any term of this EZ Funding Agreement, the Business is subject
to repayment of all or a portion of the incentives and assistance that it has
received, as detailed below:

          (a)          Job
creation. If the Business does not meet its job creation and
maintenance requirement, repayment shall be calculated as follows: 

	
 

	
 

	
 

	
 

	
(i)

	
If the Business has met 50
 percent or less of the requirement, the Business shall repay the same
 percentage in benefits as the Business failed to create in jobs.

	
 

	
 

	
 

	
 

	
(ii)

	
If the Business has met
 more than 50 percent but not more than 75 percent of the requirement, the
 Business shall repay one-half of the percentage in benefits as the Business
 failed to create in jobs. 

	
 

	
 

	
 

	
 

	
(iii)

	
If the Business has met
 more than 75 percent but not more than 90

	
 

	
 

	
 

	
Master Contract #
 P0606M01004

	
 

	
 

	
Funding Agreement
 #06-EZ-036

	
-
 6 -

	
Master FA updated 09/30/05 

	
 

	
 

	
 

	
 

	
 

	
percent of the
 requirement, the Business shall repay one-quarter of the percentage in
 benefits as the Business failed to create in jobs.

	
 

	
 

	
 

	
 

	
(iv)

	
If the Business has not
 met the minimum job creation requirement of ten (10) new full-time jobs, the
 Business shall repay all of the incentives and assistance that it has
 received.

    

          (b)          Wages
and benefits. If the Business fails to comply with the
wage or benefit requirements, the Business shall not receive Enterprise Zone
benefits for each year during which the Business is not in compliance.

          (c)          Capital
Investment. If the Business does not meet the capital investment
requirement, repayment shall be calculated as follows: 

	
 

	
 

	
 

	
 

	
(i)

	
If the Business has met 50
 percent or less of the requirement, the Business shall repay the same
 percentage in benefits as the Business failed to invest.

	
 

	
 

	
 

	
 

	
(ii)

	
If the Business has met
 more than 50 percent but not more than 75 percent of the requirement, the
 Business shall repay one-half of the percentage in benefits as the Business
 failed to invest.

	
 

	
 

	
 

	
 

	
(iii)

	
If the Business has met
 more than 75 percent but not more than 90 percent of the requirement, the
 Business shall repay one-quarter of the percentage in benefits as the
 Business failed to invest.

	
 

	
 

	
 

	
 

	
(iv)

	
If the Business has not
 met the minimum investment requirement of $500,000, the Business shall repay
 all of the incentives and assistance that it has received.

	
 

	
 

	
 

	
             (d) Department
 of Revenue; Community Recovery. Once it has been established,
 through the Business’ annual certification, monitoring, audit or
 otherwise, that the Business is required to repay all or a portion of the
 incentives received, the Department of Revenue and the Community shall
 collect the amount owed. The Community has the authority, pursuant to the EZ
 Program, to take action to recover the value of taxes not collected as a
 result of the exemption provided by the Community to the Business. Department
 of Revenue has the authority, pursuant to the EZ Program, to recover the
 value of state taxes or incentives provided under the EZ Program. The value
 of state incentives provided under the EZ Program includes applicable
 interest and penalties.

6.0     Incorporated documents. The
following documents are hereby incorporated by this reference:

	
 

	
 

	
 

	
 

	
1.

	
The Master Contract number
 and its Exhibits.

	
 

	
 

	
 

	
 

	
2.

	
EZ Funding Agreement
 Exhibit A, “Enterprise Zone Commission Resolution Approving the Business’s
 Enterprise Zone Application.”

	
 

	
 

	
 

	
 

	
3.

	
EZ Funding Agreement
 Exhibit B, “Community Resolution Authorizing Property Tax Exemptions for the
 Enterprise Zone.”

	
 

	
 

	
 

	
 

	
4.

	
EZ Funding Agreement
 Exhibit C, “Investment Tax Credit Amortization Schedule Examples.”

	
 

	
 

	
 

	
Master Contract #
 P0606M01004

	
 

	
 

	
Funding Agreement
 #06-EZ-036

	
-
 7 -

	
Master FA updated 09/30/05

               IN WITNESS WHEREOF, the
parties have executed this EZ Funding Agreement:

	
 

	
 

	
 

	
 

	
 

	
BUSINESS:

	
 

	
 

	
 

	
 

	
 

	
BY:

	

	
 

	
 

	 

	
 

	
 

	
 

	
Signature

	
 

	
 

	
 

	
 

	
 

	
Kenneth M. Clark, President

	
 

	
 

	
 

	 

	
 

	
 

	
 

	
Typed Name and Title

	
 

	
 

	
 

	
 

	
 

	
 

	
11/03/06

	
 

	
 

	 

	
 

	
 

	
 

	
Date

	
 

	
 

	
 

	
 

	
IOWA
 DEPARTMENT OF ECONOMIC DEVELOPMENT:

	
 

	
 

	
BY:

	

	
 

	
 

	 

	
 

	
 

	
 

	
Mike Blouin, Director 

	
 

	
 

	
 

	
 

	
 

	
11.21.06

	
 

	
 

	
 

	 

	
 

	
 

	
 

	
Date

	
 

	
COMMUNITY:

	
 

	
 

	
BY:

	

	
 

	
 

	 

	
 

	
 

	
 

	
Signature

	
 

	
 

	
 

	
 

	
 

	
EugeneElsbecker, Chairman
 Kossuth County Enterprise Zone Commission

	
 

	
 

	 

	
 

	
 

	
 

	
Typed Name and Title

	
 

	
 

	
 

	
 

	
 

	
11-06-06

	
 

	
 

	
 

	 

	
 

	
 

	
 

	
Date

	
 

	
 

	
 

	
Master Contract #
 P0606M01004

	
 

	
 

	
Funding
 Agreement #06-EZ-036

	
- 8 -

	
Master FA updated 09/30/05

	
 

	
 

	
 

	
(EZ) Funding Agreement

	
 

	
Exhibit C

Investment Tax Credit Amortization Schedule Examples

Background Information:

Effective July 1, 2005,
Investment Tax Credits (or Insurance Premium Tax Credits) awarded to a Business
by the Iowa Department of Economic Development must be amortized equally over a
5-year period. The Department will determine the amortization schedule and
include it in the Business’ funding agreement.

Please note Investment Tax
Credits (or Insurance Premium Tax Credits) are earned
when the corresponding asset (e.g. the building, a piece of
machinery & equipment, etc.) is placed in service. “Placed in service”
typically corresponds with the point in time when the Business can start
depreciating the asset for tax purposes.

Earned Investment Tax Credits
(or Insurance Premium Tax Credits) which cannot be used because of the
amortization schedule or because the credits exceed the Business’ tax liability
for that tax year may be carried forward for up to seven additional tax years.

Example #1

In this example, the Business
is eligible to receive an Investment Tax Credit (ITC) in the amount of
$100,000. The ITC is earned on December 15, 2005 and may be carried forward
until the tax year in which December 15, 2012 falls. The Business’ ITC
amortization schedule follows:

	
 

	
 

	
 

	
Fiscal Year 2006 - July 1, 2005 — June 30, 2006 

	
$20,000
 

	
 

	
Fiscal Year 2007 - July 1, 2006 — June 30, 2007 

	
$20,000
 

	 
	
Fiscal Year 2008 - July 1, 2007 — June 30, 2008 

	
$20,000
 

	
 

	
Fiscal Year 2009 - July 1, 2008 — June 30, 2009

	
$20,000
 

	 
	
Fiscal Year 2010 - July 1, 2009 — June 30, 2010

	
$20,000
 

	
 

As the ITC was earned in the
first year, the Business may claim up to $20,000 on its tax return for that tax
year. The Business’ tax liability for that tax year is $15,000 therefore; the
Business will carry forward $5,000 of unused credits.

	
 

	
 

	
 

	
 

	
 

	
ITC Earned - Total

	
 

	
$

	
100,000

	
 

	
 

	
 

	
 

	
 

	
 

	
ITC Available to be Taken
 based on the Amortization Schedule

	
 

	
$

	
20,000
 

	
 (FY 2006)

	
Less ITC Claimed on Current Year’s Tax Return

	
 

	
$

	
15,000

	
 

	 

	 

	 

	 

	
 

	
ITC to be Carried Forward into Future Tax Year

	
 

	
$

	
5,000

	
 

The following year the
Business may claim up to $25,000 in ITCs on its tax return; $5,000 being carried
forward from last year plus another $20,000 based on the amortization schedule.
The Business’ tax liability for the current tax year is $25,000.

	
 

	
 

	
 

	
 

	
 

	
ITC Earned -Total

	
 

	
$

	
100,000

	
 

	
Less ITC Claimed to Date

	
 

	
$

	
15,000
 

	
 

	 

	 

	 

	 

	
 

	
ITC Remaining - Total

	
 

	
$

	
85,000

	
 

	
 

	
 

	
 

	
 

	
 

	
ITC Available to be Taken
 based on the Amortization Schedule

	
 

	
$

	
20,000
 

	
 (FY 2007)

	
Plus ITC Carried Forward from Previous Year

	
 

	
$

	
5,000
 

	
 

	
Less ITC Claimed on Current Year’s Tax Return

	
 

	
$

	
25,000

	
 

	 

	 

	 

	 

	
 

	
ITC to be Carried Forward into Future Tax Year

	
 

	
$

	
0
 

	
 

September 14, 2005

The Business would be able to continue to take tax credits based on the amortization schedule and its tax
liability each year. If this example were to continue, the tax credits could
continue to be claimed until they are exhausted or until the carry forward
period expires in the tax year in which December 15, 2012 falls.

Example #2

In this example, the Business is eligible to receive an Investment Tax Credit (ITC) in the amount of
$500,000. The ITC is earned on February 15, 2008 and may be carried forward
until the tax year in which February 15, 2015 falls. The Business’ ITC amortization
schedule follows:

	
 

	
 

	
 

	
Fiscal Year 2006 - July 1, 2005 — June 30, 2006 

	
$100,000
 

	
 

	
Fiscal Year 2007 - July 1,
 2006 — June 30, 2007 

	
$100,000
 

	 
	
Fiscal Year 2008 - July 1,
 2007 — June 30, 2008

	
$100,000
 

	
 

	
Fiscal Year 2009 - July 1,
 2008 — June 30, 2009 

	
$100,000
 

	 
	
Fiscal Year 2010 - July 1,
 2009 — June 30, 2010

	
$100,000
 

	
 

As the ITC was earned in the
third year of the amortization schedule, the Business may claim up to $300,000
on its tax return for that tax year ($100,000 per year for 3 years). The
Business’ tax liability for that tax year is $50,000 therefore; the Business
will carry forward $250,000 of unused credits.

	
 

	
 

	
 

	
 

	
 

	
ITC Earned - Total

	
 

	
$

	
500,000

	
 

	
 

	
 

	
 

	
 

	
 

	
ITC Available to be Taken
 based on the Amortization Schedule

	
 

	
$

	
300,000
 

	
 (FY 2006 — FY 2008)

	
Less ITC Claimed on Current Year’s Tax Return

	
 

	
$

	
50,000
 

	
 

	 

	 

	 

	 

	
 

	
ITC to be Carried Forward into Future Tax Year

	
 

	
$

	
250,000
 

	
 

The following year the
Business may claim up to $350,000 in ITCs on its tax return; $250,000 being
carried forward from last year plus another $100,000 based on the amortization
schedule. The Business’ tax liability for the current tax year is $60,000.

	
 

	
 

	
 

	
 

	
 

	
ITC Earned - Total 

	
 

	
$

	
500,000
 

	
 

	
Less ITC Claimed to Date 

	
 

	
$

	
50,000
 

	
 

	 

	 

	 

	 

	
 

	
ITC Remaining - Total

	
 

	
$

	
450,000

	
 

	
 

	
 

	
 

	
 

	
 

	
ITC Available to be Taken
 based on the Amortization Schedule 

	
 

	
$

	
100,000
 

	
 (FY 2009)

	
Plus ITC Carried Forward from Previous Year 

	
 

	
$

	
250,000
 

	
 

	
Less ITC Claimed on Current Year’s Tax Return 

	
 

	
$

	
60,000
 

	
 

	 

	 

	 

	 

	
 

	
ITC to be Carried Forward into Future Tax Year

	
 

	
$

	
290,000
 

	
 

The following year the
Business may claim up to $390,000 in ITCs on its tax return; $290,000 being
carried forward from last year plus another $100,000 based on the amortization
schedule. The Business’ tax liability for the current tax year is $50,000.

	
 

	
 

	
 

	
 

	
 

	
ITC Earned - Total

	
 

	
$

	
500,000

	
 

	
Less ITC Claimed to Date

	
 

	
$

	
110,000
 

	
 

	 

	 

	 

	 

	
 

	
ITC Remaining - Total

	
 

	
$

	
390,000

	
 

	
 

	
 

	
 

	
 

	
 

	
ITC Available to be Taken
 based on the Amortization Schedule

	
 

	
$

	
100,000
 

	
 (FY 2010)

	
Plus ITC Carried Forward from Previous Year

	
 

	
$

	
290,000
 

	
 

	
Less ITC Claimed on Current Year’s Tax Return

	
 

	
$

	
50,000
 

	
 

	 

	 

	 

	 

	
 

	
ITC to be Carried Forward into Future Tax Year

	
 

	
$

	
340,000
 

	
 

After FY 2010, the Business
is no longer subject to the amortization schedule and therefore, it would be
able to continue to take tax credits based on its tax liability each year. If
this example were to continue, the tax credits could continue to be claimed
until they are exhausted or until the carry forward period expires in the tax
year in which February 15, 2015 falls.

September 14, 2005

	
 

	
 

	
 

	 	
 

	
 

	 	
DESCRIPTION OF THE PROJECT AND AWARD BUDGET

 (EXHIBIT C)

	 	
 

	
 

	 	
Name of
 Business: 

	
East Fork
 Blodiesel, LLC

	 	
 

	

	 	
 

	
 

	 	
Contract
 Number:

	
P0608M01004

	 	
 

	

	 	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
PROJECT DESCRIPTION

	 

	
 

	
 

	
 

	
 

	
 

	
East Fork
 Blodiesel, LLC will
 construct a 60 million gallon per year biodiesel plant, that will also
 produce glycerin at the Algona location. The project involves land
 acquisition, site preparation, building construction, acquisition of
 machinery and equipment, furniture and fixture purchases, and working capital
 including inventory. The Business will create 36 full time equivalent
 positions as a result of this project.

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
VAP

	
 

	
EZ

	
 

	
 

	

 

	
 

	

 

	
 Project Completion Date:

	
 

	
July 31, 2009 

	
 

	
July 31, 2011 

	
Job Maintenance Period:

	
 

	
July 31, 2009

	
 

	
Once the 36 new jobs pledge
 has been achieved, the jobs will need to be maintained for an additional ten
 (10) years.

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
AWARD BUDGET

	 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
SOURCE OF FUNDS

	
 

	
 

	
 

	
 

	
 

	
 

	
USE OF FUNDS

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Amount

	
 

	
 

	
 

	
 

	
 

	
 

	
Cost

	
 

	
 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	
IDED Programs

	
 

	
 

	
 

	
 

	
 

	
 

	
 *Land Acquisition

	
 

	
$

	
475,000

	
 

	
 

	
VAP

	
 

	
$

	
400,000

	
 

	
 loan/forgivable loan

	
 

	
 *Site Preparation

	
 

	
$

	
1,680,000

	
 

	
 

	
EZ Benefits

	
 

	
 

	
1  see note  

	
 

	
 

	
 

	
 *Building Construction

	
 

	
$

	
40,570,000

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 *Mfg Machinery and
 Equipment

	
 

	
$

	
9,250,000

	
 

	
 

	
Community College

	
 

	
$

	
185,000 

	
 

	
 job Training

	
 

	
 Racking, Shelving,
 etc.

	
 

	
$

	
200,000

	
 

	
 

	
Senior Lenders

	
 

	
$

	
35,260,000 

	
 

	
 Equity

	
 

	
 *Computer Hardware

	
 

	
$

	
75,000

	
 

	
 

	
Seed Funding

	
 

	
$

	
2,155,000 

	
 

	
 Equity

	
 

	
 Computer Software

	
 

	
$

	
150,000

	
 

	
 

	
Business

	
 

	
$

	
31,000,000

	
 

	
 

	
 

	
 Furniture and Fixtures

	
 

	
$

	
250,000

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 Working Capital

	
 

	
$

	
14,850,000

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 Job Training

	
 

	
$

	
250,000

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 Organizational Costs

	
 

	
$

	
1,250,000

	
 

	
 

	
1 $8,961,250
 (estimated benefit value)

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	 

	 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
SUB TOTAL

	
 

	
$

	
69,000,000

	
 

	
 

	
 

	
SUBTOTAL

	
 

	
$

	
69,000,000

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
*
 included as capital investment if awarded tax credit program 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
SUB TOTAL

	
 

	
$

	
0

	
 

	
 

	
 

	
SUB TOTAL 

	
 

	
$

	
0

	
 

	
 

	
TOTAL ALL
 FUNDS

	
 

	
$

	
69,000,000

	
 

	
 

	
 

	
 

	
 

	
$

	
69,000,000

	
 

	
 

Jul-06

JOB OBLIGATIONS

(EXHIBIT D)

	
 

	
 

	
Jobs Created or Retained through this Project

	
East Fork Blodlesel, LLC

	
 

	
Contract # P0606M01004

Below is a list of the Jobs that must be retained and/or created as a result of this Project. A “retained job” is an existing job that
would be eliminated or moved to another state if the project did not proceed in
Iowa. A “created job” means the
number of new FTE Jobs the Business will add over and above the Business’s
Employment Base and, if applicable, Statewide Employment Base. “ Qualifying jobs” are those created or
retained jobs that qualify for program funding. “Non-qualifying jobs” are those jobs created or retained by
the project that do not qualify for funding, but would not be created or
retained if the Project did not proceed.  

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
PROJECT JOBS

	
 

	
VAAPFAP-IVF

	
 

	
 

	
EZ

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
$16.09

	
 

	
 

	
$11.14

	
 

	 

	 

	 

	 

	 

	 

	 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Job Title

	
 

	
 

	
# of
 Jobs

	
 

	
 

	
Type of
 Job:

 Created (C) or

 Retained (R)

	
 

	
 

	
Starting or

 Current Hourly

 Wage

	
 

	
 

	
Avg. Benefit

 Value

	
 

	
 

	
Qualifying

	
 

	
 

	
Non-Qualifying

	
 

	
 

	
Qualifying

	
 

	
 

	
Non-Qualifying

	
 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	
General Manager

	
 

	
 

	
1

	
 

	
 

	
C

	
 

	
 

	
$48.08

	
 

	
 

	
$1.79

	
 

	
 

	
1

	
 

	
 

	
0

	
 

	
 

	
1

	
 

	
 

	
0

	
 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	
Operations Manager

	
 

	
 

	
1

	
 

	
 

	
C

	
 

	
 

	
$38.46

	
 

	
 

	
$1.79

	
 

	
 

	
1

	
 

	
 

	
0

	
 

	
 

	
1

	
 

	
 

	
0

	
 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	
Scale Clerk

	
 

	
 

	
1

	
 

	
 

	
C

	
 

	
 

	
$14.90

	
 

	
 

	
$1.79

	
 

	
 

	
1

	
 

	
 

	
0

	
 

	
 

	
1

	
 

	
 

	
0

	
 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	
Financial Assistant

	
 

	
 

	
1

	
 

	
 

	
C

	
 

	
 

	
$17.31

	
 

	
 

	
$1.79

	
 

	
 

	
1

	
 

	
 

	
0

	
 

	
 

	
1

	
 

	
 

	
0

	
 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	
Crew Leaders

	
 

	
 

	
4

	
 

	
 

	
C

	
 

	
 

	
$17.31

	
 

	
 

	
$1.79

	
 

	
 

	
4

	
 

	
 

	
0

	
 

	
 

	
4

	
 

	
 

	
0

	
 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	
Crew Operators

	
 

	
 

	
16

	
 

	
 

	
C

	
 

	
 

	
$14.90

	
 

	
 

	
$1.79

	
 

	
 

	
16

	
 

	
 

	
0

	
 

	
 

	
16

	
 

	
 

	
0

	
 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	
Work Leader

	
 

	
 

	
2

	
 

	
 

	
C

	
 

	
 

	
$17.31

	
 

	
 

	
$1.79

	
 

	
 

	
2

	
 

	
 

	
0

	
 

	
 

	
2

	
 

	
 

	
0

	
 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	
Load/Receive Specialist

	
 

	
 

	
6

	
 

	
 

	
C

	
 

	
 

	
$13.94

	
 

	
 

	
$1.79

	
 

	
 

	
0

	
 

	
 

	
6

	
 

	
 

	
6

	
 

	
 

	
0

	
 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	
Elec/Mech/Lab Techs

	
 

	
 

	
4

	
 

	
 

	
C

	
 

	
 

	
$17.31

	
 

	
 

	
$1.79

	
 

	
 

	
4

	
 

	
 

	
0

	
 

	
 

	
4

	
 

	
 

	
0

	
 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	
Total Jobs Created:

	
 

	
 

	
36

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	 

	 

	 

	 

	 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	
Total Jobs Retained:

	
 

	
 

	
0

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	 

	 

	 

	 

	 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	
Totals: 

	
 

	
 

	
36

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
30

	
 

	
 

	
6

	
 

	
 

	
36

	
 

	
 

	
0

	
 

	 

	 

	 

	 

	 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Business Employment Base:

	
 

	
 

	
0

	
 

	
 

	
Statewide Employment Base:

	
 

	
 

	
0

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

Job Performance Obligations

VAAPFAP-IVF: As a result of
this project. East Fork Biodiesel, LLC, will create 36 new full-time equivalent
(FTE) jobs at the Algona location. 30 of the created project Jobs will have
starting wages including benefits that meet or exceed $16.09 (130%) per hour.
The average wage, including benefits, of the 30 qualifying project jobs will be
at least $19.47 per hour.

Enterprise Zone Program: As a result of this project.
East Fork Biodiesel, LLC, will create 36 new full-time equivalent (FTE) jobs at
the Algona location. By the Project Completion Date, the project shall have 36
jobs, all of which have an average wage equal to or greater than $17.05 per
hour.

Date          21-Jun-06

EXHIBIT B - 2 

	
 

	
VAAPFAP FUNDING AGREEMENT 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
BUSINESS:

	
 

	
East Fork Biodiesel, LLC

	
 

	
 

	
 

	
 

	 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
MASTER
 CONTRACT NUMBER:

	
 

	
# P0606M01004

	
 

	
 

	
 

	
 

	 

	
 

	
 

	
FUNDING
 AGREEMENT NUMBER:

	
 

	
# 06-VAPIVFGF-031

	
 

	
 

	
 

	
 

	 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
AWARD
 TYPE: 

	
 

	
Loan/Forgivable Loan

	
 

	
 

	
 

	
 

	 

	
 

	
 

	
AMOUNT:

	
 

	
$400,000

	
 

	
 

	
 

	
 

	 

	
 

	
 

	
 

	
 

	
 

	
 

          THIS
VAAPFAP FUNDING AGREEMENT is made by and between the IOWA DEPARTMENT OF
ECONOMIC DEVELOPMENT, 200 East Grand Avenue, Des Moines, Iowa 50309 (“IDED”)
and the business identified above (“Business”), effective as of the effective
as of the latest date stated in the last page of the Master Contract identified
above.

          WHEREAS,
the Business has executed the Master Contract described above with the IDED
pursuant to an Award on the Award Date stated in the Master Contract to the
Business for the Project; and

          WHEREAS,
the Master Contract specifies that for each program funding source the IDED and
the Business shall enter into a Funding Agreement; and

          WHEREAS,
this Funding Agreement contains additional terms and conditions for the award
of VAAPFAP funds and

          NOW,
THEREFORE, the Business accepts the terms and conditions set forth in this
Funding Agreement and the Master Contract for the funding of the Project. In
consideration of the mutual promises contained in the Master Contract and this
VAAPFAP Funding Agreement and other good and valuable consideration, it is
agreed as follows:

1,0     Master
Contract. Unless otherwise specified in this VAAPFAP Funding Agreement, the
definitions, terms, conditions, and provisions contained in the Master Contract
are applicable to this VAAPFAP Funding Agreement.

2.0     Definitions. As used in
this
Agreement, the following terms shall apply:

          2.1     
Agreement Expiration Date. Expiration of this VAAPFAP Funding Agreement
occurs upon the happening of one of the following events, whichever occurs
first:

	
 

	
 

	
 

	
     (a)
 IDED’s determination that the Business has fully met the requirements of the
 VAAPFAP Funding Agreement, including repayment of all amounts due hereunder,
 and IDED closes out this VAAPFAP Funding Agreement.

	
 

	
 

	
 

	
     (b)
 An Event of Default occurs that is not remedied within the time period
 allowed under the Master Contract.

	
 

	
 

	
 

	
     (c)
 If no disbursement of VAAPFAP funds has occurred within twenty-four (24)
 months of the Award Date (as defined in the Master Contract).

	
 

	
 

	
 

	
     (d)
 This VAAPFAP Funding Agreement is terminated upon mutual, written agreement
 of the Business and IDED.

          2.2     
VAAPFAP. “VAAPFAP” means the Value-Added Agricultural Products and
Processes Financial Assistance Program established in Iowa Code section
15E.111. The source of funding for this VAAPFAP Funding Agreement is an
appropriation by the State legislature.

3.0     Terms
of VAAPFAP Award. VAAPFAP funds have been awarded to assist the Business with
the Project. The terms of the VAAPFAP Award are as follows: 

          3.1     Loan.
$300,000, 60 months, 0% interest rate 

          3.2     Forgivable
Loan. $100,000, 36 months 

          3.3     Terms
of Forgiveness. IDED will, in its sole discretion, determine if the Business
has satisfied the terms of this VAAPFAP Funding Agreement, including
fulfillment of the Job Obligations by the Project Completion Date as shown in
Master Contract Exhibit D and after six (6) months sustained production of at
least four (4) million gallons of biodiesel fuel per month OR 45 million
gallons of biodiesel produced over a twelve month period. If IDED determines
that the Business has satisfied said terms and has continued to satisfy said
terms through the Job Maintenance Period, then barring any other default,
repayment of principal and interest which would otherwise have accrued for the
time period beginning with the Award Date and ending with the Project Completion
Date shall be permanently waived. If IDED does not waive repayment, the
Forgivable Loan shall be repaid as described in Article 5.2(b) of this VAAPFAP
Funding Agreement. 

          3.4     Maximum
funds available for Project. It is expressly understood and agreed that the
maximum amounts to be paid to the Business by IDED for this VAAPFAP Funding
Agreement shall not exceed the amount stated on page one of this VAAPFAP
Funding Agreement. 

          3.5     Promissory
note(s). The obligation of the Business to repay the Loan and Forgivable
Loan shall be evidenced by a Promissory Note(s) executed by the Business. 

          3.6     Business’
Job Obligation. The Business’ Job Obligations are as described in Master
Contract Exhibit D. These jobs shall be maintained through the Project
Maintenance Period. 

4.0     Conditions
to Disbursement. In addition to the conditions to disbursement
described in the Master Contract, Business shall meet the following conditions
before IDED will release VAAPFAP funds:

          4.1     
No additional requirements

5.0     Default; Remedies upon
Default.

          5.1     The
terms of the Master Contract regarding Events of Default and Remedies govern
this VAAPFAP Funding Agreement. The following are additional Events of Default for this VAAPFAP Funding
Agreement: 

                              No
other specific default events

	
 

	
 

	
 

	
Master
 Contract # P0606M01004

	
 

	
 

	
Funding
 Agreement # 06-VAPIVFGF-031

	
- 2 -

	
Master FA updated 09/30/05

          5.2     The
following are Default Remedies available to IDED in addition to those specified
in the Master Contract:

          (a)     Repayment
of Loan - Failure to Meet Job Obligations. If the Business meets less that 100% of its Job Obligations, the
IDED may require full repayment of the Loan, as permitted under the Master
Contract. IDED may also elect to allow repayment on a pro rata basis as
described below:

	
 

	
 

	
 

	
If
 the Business received a Loan at a rate below 6% (the annual interest rate for
 default set by the IDED Board), the unpaid principal amount of the Loan may
 be prorated between the percentage of FTE Jobs created/retained and the
 percentage of the shortfall.

	
 

	
 

	
 

	
The
 shortfall principal portion may be amortized over the remaining term of the
 Loan, beginning at the Project Completion Date, at a default rate of 6% (the
 annual interest rate set by the IDED Board). Interest will be charged
 beginning from the date Loan proceeds were disbursed to the Community for the
 Business; interest accrued from this date will be due immediately. The pro
 rata portion of the Loan associated with the percentage of FTE Jobs created
 will be amortized at the original Loan rate and term.

          (b)     Repayment
of Forgivable Loan - Failure to Meet Job Obligations. If the Business has
fulfilled 50% or more of its Job
Obligations, a pro rata percentage will be forgiven for each new FTE job
created/retained at the time the repayment amount is calculated (e.g. at the
Project Completion Date or the date an Event of Default occurred) Any balance
(shortfall) will be amortized over a two (2) year period (beginning at the at
the time the repayment amount is calculated (e.g. at the Project Completion
Date or the date an Event of Default occurred) at six (6%) percent interest per
annum with equal monthly payments, and, interest will be charged at six (6%)
percent per annum from the date of the first VAAPFAP disbursement on the
shortfall amount with that amount accrued as of the Project Completion Date
being due and payable immediately.

          (c)     Repayment
– Time Allowed. If the IDED has allowed repayment of the Forgivable Loan on
a pro rata basis as described in paragraph “b” above, that amount is
immediately due and payable. If the Business has a current Loan balance, the
amount owed on the Forgivable Loan may be combined with the amount owed on the
Loan to reflect a single monthly payment. This combined loan shall be repaid
over the time period remaining

          (d)     Example.
VAAPFAP Funding Agreement Exhibit B is an example of how these repayment
calculations will be applied.

6.0     Reports.

          6.1     The
terms of the Master Contract regarding Required Reports are applicable to this
VAAPFAP Funding Agreement.

7.0     Incorporated documents. The following
documents are hereby incorporated by this reference:

	
 

	
 

	
 

	
 

	
1.

	
The
 Master Contract and its Exhibits.

	
 

	
 

	
2.

	
VAAPFAP
 Funding Agreement Exhibit A1 – Forgivable Loan Promissory Note, and VAAPFAP
 Funding Agreement Exhibit A2 – Loan Promissory Note

	
 

	
 

	
 

	
Master
 Contract # P0606M01004

	
 

	
 

	
Funding
 Agreement # 06-VAPIVFGF-031

	
- 3 -

	
Master FA updated 09/30/05

	
 

	
 

	
 

	
 

	
3.

	
VAAPFAP
 Funding Agreement Exhibit B – Example: Business Job Shortfall Calculation.

          IN
WITNESS WHEREOF, the parties have executed this VAAPFAP Funding Agreement:

	
 

	
 

	
 

	
 

	
BUSINESS:

	
 

	
 

	
 

	
 

	
 

	
BY:

	

	
 

	
 

	
 

	 

	
 

	
 

	
 

	
Signature

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Kenneth
 M. Clark, President

	
 

	
 

	
 

	 

	
 

	
 

	
 

	
Typed Name and Title

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
11/03/06  

	
 

	
 

	
 

	

	
 

	
 

	
 

	
Date

	
 

	
 

	
 

	
 

	
 

	
IOWA DEPARTMENT OF
ECONOMIC DEVELOPMENT: 

	
 

	
 

	
 

	
 

	
 

	
BY:

	

	
 

	
 

	
 

	 

	
 

	
 

	
 

	
Mike
 Blouin, Director

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
11.21.06

	
 

	
 

	
 

	

	
 

	
 

	
 

	
Date

	
 

	
 

	
 

	
 

	
Master
 Contract # P0606M01004

	
 

	
 

	
Funding
 Agreement # 06-VAPIVFGF-031

	
- 4 -

	
Master FA updated 09/30/05

	
 

	
VAAPFAP Funding Agreement Exhibit A1- Forgivable Loan Promissory Note 

	
 

PROMISSORY NOTE

                              FOR
VALUE RECEIVED, the undersigned promises, in the event this Forgivable Loan is
not forgiven, to pay to the order of the IOWA
DEPARTMENT OF ECONOMIC DEVELOPMENT, at its office at 200 East Grand,
Des Moines, Iowa 50309, the sum of ONE
HUNDRED THOUSAND DOLLARS ($100,000) with interest at a rate of 0%
unless an Event of Default occurs, in which case interest shall be at the
default rate set forth in Contract number P0606M01004 (“Contract”). The terms
and conditions by which forgiveness of this Loan may occur are as specified in
the Contract.

Interest shall first be
deducted from the payment and any balance shall be applied on principal. Upon
default in payment of any interest, or any installment of principal, the whole
amount then unpaid shall become immediately due and payable at the option of
the holder.

The undersigned, in case of
suit on this note, agrees to pay on demand all costs of collection, maintenance
of collateral, legal expenses, and attorneys’ fees incurred or paid by the
holder in collecting and/or enforcing this Note on default.

This note shall be secured
by the Security specified in the Contract,

Makers, endorsers and
sureties waive demand of payment, notice of non-payment, protest and notice.
Sureties, endorsers and guarantors agree to all of the provisions of this note,
and consent that the time or times of payment of all or any part hereof may be
extended after maturity, from time to time, without notice.

	
 

	
 

	
 

	
 

	
East Fork
 Biodiesel, LLC

	
 

	
 

	
 

	
 

	
By:

	

	
 

	
 

	

	
 

	
 

	
Ken Clark, President

	
 

	
 

	
 

	
 

	
Address:

	
105 N.
 Hall St

	
 

	
 

	
Algona, IA 50511

	
 

	
 

	
 

	
 

	
Date

	
11/03/06

	
 

	
 

	

	
 

	
VAAPFAP
Funding Agreement Exhibit A2- Loan Promissory Note 

	
 

PROMISSORY NOTE

                              FOR
VALUE RECEIVED, the undersigned promises to pay to the order of the IOWA DEPARTMENT OF ECONOMIC DEVELOPMENT, at
its office at 200 East Grand, Des Moines, Iowa 50309, the sum of THREE HUNDRED THOUSAND DOLLARS ($300,000)
with interest thereon at ZERO PERCENT (0%) to be paid as follows:

          60 monthly
payments of $5,000.00 beginning
on the first day of the fourth month from the date Award funds are disbursed.
Final payment may vary depending upon dates payments are received. 

Interest shall first be
deducted from the payment and any balance shall be applied on principal.

Upon default in payment of any
interest, or any installment of principal, the whole amount then unpaid shall
become immediately due and payable at the option of the holder.

The undersigned, in case of
suit on this note, agrees to pay on demand all costs of collection, maintenance
of collateral, legal expenses, and attorneys’ fees incurred or paid by the
holder in collecting and/or enforcing this Note on default.

This note shall be secured
by the Security specified in the Contract.

Makers, endorsers and
sureties waive demand of payment, notice of non-payment, protest and notice.
Sureties, endorsers and guarantors agree to all of the provisions of this note,
and consent that the time or times of payment of all or any part hereof may be
extended after maturity, from time to time, without notice.

	
 

	
 

	
 

	
 

	
East Fork
 Biodiesel, LLC

	
 

	
 

	
 

	
 

	
By:

	

	
 

	
 

	

	
 

	
 

	
Ken Clark, President

	
 

	
 

	
 

	
 

	
Address:

	
105 N.
 Hall St

	
 

	
 

	
Algona, IA 50511

	
 

	
 

	
 

	
 

	
Date

	
11/03/06

	
 

	
 

	

	
 

	
 

	
EXAMPLE: 

	
(VAP) Funding 

	
Business Job 

	
Agreement Exhibit B 

	
Shortfall Calculation 

	
 

VAP

East Fork Biodiesel, LLC

FUNDING AGREEMENT #: 06-VAPIVFGF-031

$400,000,000
L/FL/ June 20, 2006

($300,000
0% Loan, $100,000 Forgivable Loan)

	
 

	
 

	
A.

	
FORGIVABLE
 LOAN - JOB SHORTFALL CALCULATION

	
 

	
 

	
 

	
50
 jobs pledged, 42 jobs attained; 84% of pledged jobs attained, 16% shortfall 

	
 

	
 

	
 

	
$75,000
 (forgivable loan amount) x 16% = $12,000

	
 

	
 

	
 

	
Forgivable Loan Job Shortfall Balance due = $12,000

	
 

	
 

	
B.

	
FORGIVABLE
 LOAN – INTEREST PENALTY CALCULATION

	
 

	
 

	
 

	
CEBA
 funds disbursed on 11-1-00. Project Completion Date was 6-30-03.

	
 

	
 

	
 

	
Interest
 penalty = job shortfall balance x 6% x number of years from disbursement of
 funds to Project Completion Date

	
 

	
 

	
 

	
($12,000
 x 6% x 2.67 years) = $1,922.40

	
 

	
 

	
 

	
Forgivable Loan Net Interest Penalty due = $1,922.40

	
 

	
 

	
C.

	
LOAN
 BALANCE – INTEREST PENALTY CALCULATIONS

	
 

	
 

	
 

	
Loan
 balance as of 7-21-05 = $15,797.58

	
 

	
 

	
 

	
 

	
 

	
84%
 of remaining loan balance stays at 0% interest = ($15,797.58 x .84) = $13,269.97

	
 

	
 

	
16%
of remaining loan balance changes to 6% interest = ($15,797.58 x .16) = $2,527.61 

	
 

	
 

	
 

	
 

	
Interest
 penalty = 16% of remaining loan balance x 6% x 2.67 years

	
 

	
 

	
 

	
 

	
($2,527.61 x 6% x 2.67 years) = $404.92
 

	
 

	
 

	
 

	
 

	
Loan Net Interest Penalty due = $404.92

	
 

	
 

	
D.

	
REPAYMENT
 TERMS & SCHEDULE

	
 

	
 

	
 

	
1.

	
Total
 Net Interest Penalty due is $2,327.32
 ($1,922.40 + $404.92).

	
 

	
 

	
2.

	
Total
 Forgivable Loan amount due is $12,000.

	
 

	
 

	
3.

	
Remaining
 Loan Balance as of 7-21-05 will be $15,797.58
 and will be re-amortized to convert 16% of that balance to 6% interest over
 remaining term of loan.

Master FA Exhibit B updated 12-30-05

	
 

	
 

	
 

	
AMENDMENT

	
 

	
 

	
BUSINESS:

	
East Fork Biodiesel, LLC

	
 

	
CONTRACT NUMBER:

	
P0606M01004
 (the “Contract”)

	
 

	
AMENDMENT
 NUMBER:

	
One

          THIS
AMENDMENT (“Amendment”) is made as of the EFFECTIVE DATE stated above between the Iowa Department of Economic
Development, (“IDED”), 200 East
Grand Avenue, Des Moines, Iowa 50309, an
agency of the State of Iowa and East Fork
Biodiesel, LLC an Iowa
Limited Liability Corporation (“Business”),
2108 140th Avenue, P.O. Box 21,
Algona, Iowa 50001.

          WHEREAS,
IDED adopted rule amendments that streamlined the reporting requirements and revised the method
by which IDED counts and track jobs; and

          WHEREAS,
these rule amendments became effective on June 15, 2007; and

          WHEREAS,
the revised job counting and tracking method uses a base employment analysis
that is performed at the time of application, before the award is made,
annually during the reporting cycle, at the project completion date and at
the end of the maintenance date; and

          WHEREAS,
the IDED and the Business wish to amend the Contract to incorporate the
streamlined reporting and job counting requirements.

          NOW
THEREFORE, in consideration of the mutual promises contained herein and
intending to be legally bound, the Business and IDED agree to the following
amendments to the Contract:

	
 

	
 

	
 

	
1. 

	
REVISION OF ARTICLE 3.1(b), DEFINITIONS. Paragraph
“b” of
 Article 3.1 is amended as follows:

	
 

	
 

	
 

	
 

	
 

	
(b)
 The following terms apply to this Master Contract and each of the Funding Agreements, unless
 otherwise specified in a Funding Agreement:

	
 

	
 

	
 

	
 

	
 

	
     “Award
 Date” means the date first stated in this Master
 Contract and is the date the IDED and/or the IDED Board approved the awarding
 of financial assistance to the Business for the Project.

	
 

	
 

	
 

	
 

	
 

	
     “Benefits
 Requirements” means the benefits
 requirements established by the Department pursuant to statute or rule for each
 program that is providing financial assistance or tax credit benefits for
 this Project.

	
 

	
 

	
 

	
 

	
 

	
     “Business’s Employment Base” means the number of
jobs as stated in Exhibit D, Job Obligations that the Business and IDED have established
as the job base for this Project. The number of jobs the Business has pledged to
create/retain shall be in addition to the Business’s Employment Base. 

Amendment
No. One - East Fork Biodiesel, LLC

Master Contract #P0606M01004 

	
 

	
 

	
 

	
     “Created
 Jobs” means the number of new FTE Jobs the Business will add
 over and above
 the Business’s Employment Base and, if applicable, Statewide Employment
 Base.

	
 

	
 

	
 

	
     
 “Eligible Benefits” means all of the following: medical and dental
 insurance plans, pension and profit-sharing plans, child care services,
 life insurance coverage, vision insurance plan, and disability coverage.

	
 

	
 

	
 

	
     
 “Forgivable Loan” means a form of an award made by the IDED to the
 Business under a Funding Agreement(s) for which repayment is eliminated in part or
 entirely if the Business satisfies the terms of this Contract and the Funding
 Agreement(s).

	
 

	
 

	
 

	
     “Full-time
 Equivalent (FTE) Job” means the employment of one person:

	
 

	
 

	
 

	
(a)
 For 8 hours per day for a 5-day, 40-hour workweek for 52 weeks per year,
 including paid holidays, vacations and other paid leave, or

	
 

	
 

	
 

	
(b)
 For the number of hours or days per week, including paid holidays, vacations
 and other paid leave, currently established by schedule, custom, or
 otherwise, as constituting a week of full-time work for the kind of service an
 individual performs for an employing unit.

	
 

	
 

	
 

	
     “Job
 Maintenance Period” means the date two (2) years from the Project
 Completion Date
 as stated in Exhibit C, Description of the Project and Award Budget D,
 Job Obligations. The Business shall maintain the Project, and the
 created/retained jobs through the Job Maintenance Period.

	
 

	
 

	
 

	
     “Job
 Obligations” means the Created Jobs, Retained Jobs, Qualifying
 Jobs and Non­qualifying Jobs associated with the Project that pay the wages and
 benefits, all as outlined in Exhibit D, Job Obligations Business’s
 Employment Base number and the new jobs to be created that pay the required
 wages and benefits, all as outlined in Exhibit D, Job Obligations.

	
 

	
 

	
 

	
     “Loan” means form of an
award
 made by the IDED to the Business under a Funding Agreement(s) for
 which full repayment is expected.

	
 

	
 

	
 

	
     “Non-qualifying
 jobs” arc those jobs created
 or retained by the project that do not qualify for funding, but would
 not be created or retained if the Project did not proceed.

	
 

	
 

	
 

	
     “Project” means the
description
 of the work and activities to be completed by the Business as outlined in
 Exhibit C, Description of the Project and Award Budget, Exhibit D, Job Obligations, and Exhibit A,
 Business’s Financial Assistance Application.

	
 

	
 

	
 

	
     “Project
 Completion Date” means the date three (3) years from the Award Date as stated in Exhibit C,
 Description of the Project and Award Budget  D, Job Obligations.
 The Project Completion Date is the date by which all Project activities shall be
 satisfactorily completed.

	
 

	
 

	
 

	
     “Qualifying
 jobs” are those created or retained jobs that qualify for
 program funding meet or exceed the Qualifying Wage Threshold
 Requirement established for the programs providing assistance
 to this Project qualify for program funding.

Page 2 of 5

Amendment
No. One - East Fork Biodiesel, LLC

Master Contract #P0606M01004

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
“Qualifying Wage Threshold
Requirement” means the wage threshold requirement (e.g. 90%, 100%, 130%, 160% of the average county or
regional wage rate) established by the Department pursuant to statute or rule for each
program that is providing financial assistance or tax credit benefits for this
Project. The Qualifying Wage Threshold Requirement for each funding source
providing assistance to this Project is outlined in Exhibit D, Job
Obligations.  

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
“Retained Job” means an existing job
 that meets the Qualifying Wage Threshold Requirements and would be eliminated
 or moved to another state if the Project did not proceed in Iowa.

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
“Statewide Employment
 Base”‘means the number of jobs as stated in Exhibit
 D, Job Obligations that the Business and IDED have determined as those jobs
 that will bo retained at other facilities in the state. The number of jobs
 the Business has pledged to create/retain shall be in addition to the
 Statewide Employment Base.

	
 

	
 

	
 

	
 

	
2.

	
REVISION OF
ARTICLE 4.2, JOB OBLIGATIONS. Article 4.2 is amended as follows:  

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
          4.2
 Job Obligations. The IDED and/or the IDED Board have approved an Award to the Business
 and the Business’s obligations for FTE Created Jobs, Retained Jobs,
 Qualifying Jobs and Non qualifying Jobs Job Obligations are
 outlined in Exhibit D, Job Obligations.

	
 

	
 

	
 

	
 

	
3.

	
REVISION OF
 ARTICLE 8.2(a) and (b). Paragraphs (a) and (b) of
 Article 8.2 are revised as
 follows:

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
8.2 Job Obligations; Benefits Requirements.

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
          (a)
Jobs and Wages. By the Project Completion Date, the Business shall create/retain the
number of FTE Created Jobs, and Retained Jobs, Qualifying Jobs and Non qualifying Jobs above the
Business’s Employment Base,
and if applicable, the Statewide Employment Base, and maintain the jobs through the Job
Maintenance Period, all as detailed in Exhibit D. The Business
shall pay the wage rates identified in Exhibit D. 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
          (b)
 Benefits. The Business shall provide and pay for the eligible benefits
 described in Exhibit A, Business’s Financial Assistance Application, with an Average Benefit Value calculated by IDED and shown in Exhibit D.
 During the Contract period the Business may adjust the benefit package
 provided the Average Benefit Value is not decreased and provided
 the benefit package includes eligible benefits. For purposes of this Contract, “Eligible benefits”
means,
 medical and dental insurance plans, pension and profit-sharing plans, child
 caro services, life insurance coverage, vision insurance plan, and disability
 coverage. does not fall below the minimum benefit threshold requirement (e.g., 80% of medical
 and dental insurance) for the funding source that is assisting the Project
 and provided the benefit package includes eligible benefits.

	
 

	
 

	
 

	
 

	
4.

	
REVISION OF ARTICLE 8.7(b),
 REPORTS. Article 8.7(b) is amended as follows:

Page 3 of 5

Amendment No. One - East Fork Biodiesel, LLC

Master Contract #P0606M01004

	
 

	
 

	
 

	
          (b)
 Reports. The Business shall prepare, sign and submit the following
 reports to the IDED throughout the Contract period:

	
 

	
 

	
 

	
 

	
Report 

	
Due Date 

	
	
 

	
	
 

	
Mid
 Year Status Report

	
 July 31st for the period ending
 June 30th

	
 

	
 

	
End
 of Year Status Report Includes:

	
January
 31st for the period ending Deo. 31st

	
Public
 Return on Investment (ROI) Update 
Payroll Register with all created and/or

	
 

	
retained
 jobs highlighted and indicate

	
 

	
the
 Project Jobs paying the required wage

	
 

	
“Employer’s
 Contribution and Payroll Report” 

	
 

	
For
 Enterprise Zone awards, annual certification of complianco

	
 

	
with
 the requirements of Iowa Code 15E. 193, as required by 
15E. 195(6).

	
 

	
 

	
 

	
End
 of Project Report

	
Within
 30 days of Project Completion Date

	
Report
 content: same items as End of Year Report

	
 

	
 

	
 

	
End
 of Job Maintenance Period Report

	
Within
 30 days of the end of the Job

	
Report
 Content: same items as

	
Maintenance
 Period

	
End
 of Year Report

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Report

	
 

	 

	
 

	
Due Date

	
 

	
 

	
 

	
 

	
 

	 
	
 

	
 

	
 

	
 

	
 

	
Annual Project Status Report

	
 

	
 

	
July
 31st for the period ending June 30th

	
 

	
 

	
The
 Annual Project Status Report will collect information from the Business about
 the status of the project. This report will collect data such as current
 employment levels, number of jobs that meet or exceed the Qualifying Wage
 Threshold Requirements (with and without benefits), project expenditures,
 including amount spent on research and development, any changes to the
 Business’s benefits, ownership, structure, or control of the Business and any
 other information required by IDED. 

	
 

	
 

	
 

	
 

	
 

	
 

	 
	
 

	
 

	
 

	
 

	
 

	
End of Project Report

	
 

	
 

	
Within
 30 days of Project Completion Date

	
 

	
 

	
The
 End of Project Report will collect information from the Business about the
 completed project such as final employment levels, number of jobs that meet
 or exceed the Qualifying Wage Threshold Requirements (with and without
 benefits), project expenditures and changes to the Business’s benefits, ownership, structure, or control
 of the Business and any

	
 

	
 

	
 

Page 4 of 5

Amendment No. One - East Fork Biodiesel, LLC 

Master Contract #P0606M01004

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
other
 information required by IDED.

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	 
	
 

	
 

	
 

	
 

	
 

	
End of Job Maintenance Period Report

	
 

	
 

	
Within
 30 days of the end of the Job Maintenance Period 

	
 

	
 

	
The
 End of Job Maintenance Period Report will collect information from the
 Business’s continued maintenance of employment levels and Qualifying Wage
 Threshold Requirements (with and without benefits) that were verified at the Project
 Completion Date, and changes to the Business’s benefits, ownership, structure, or control of the
 Business and any other information required by IDED.

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
5.

	
REVISION OF EXHIBIT C, PROJECT DESCRIPTION AND AWARD
 BUDGET. Exhibit
 C of the Contract is revised by deleting all references to “project
 completion date” and “maintenance date.” These dates are now found in Revised
 Exhibit D, Job Obligations. The Revised Exhibit C is attached to this Amendment #1 and
 incorporated by this reference.

	
 

	
 

	
6.

	
REVISION OF EXHIBIT D, JOB OBLIGATIONS. The Contract is
 revised to replace Exhibit D with an updated Exhibit D that presents the Job Obligations in the updated
 format. The Revised Exhibit D is attached to this Amendment #1 and incorporated
 by this reference.

          Except
as otherwise revised above, the terms, provisions, and conditions of the
Contract remain unchanged and are in full force and effect. The Amendment
Effective Date is the latest date signed below:

	
 

	
 

	
 

	
FOR BUSINESS:

	
 

	
FOR IDED: 

	
 

	
 

	
 

	

	
 

	
 

	 
	
 

	 

	
Name, Title

	
 

	
Michael
 L. Tramontina, Director

	
 

	
 

	
 

	
7/3/08

	
 

	
 

	 
	
 

	 

	
Date

	
 

	
Date 

Page 5 of 5

	
 

	
 

	
 

	
 

	

Amendment Number One

	
 

	
 

	
 

	
 

	
DESCRIPTION OF THE PROJECT AND AWARD
 BUDGET

 (EXHIBIT C)

	
 

	
 

	
 

	
 

	
 

	
Name of Business:

	
East Fork Blodlesel, LLC

	
 

	
 

	
 

	 

	
 

	
 

	
 

	
 

	
 

	
 

	
Contract Number:

	
P0606M01004

	
 

	
 

	
 

	 

	
 

	
 

	
 

	
PROJECT DESCRIPTION

	 

	
 

	
East Fork Blodlesel, LLC will construct a 60
million gallon per year biodiesel plant, that will also produce glycerin at
the Algona location. The project
involves land acquisition, site preparation, building construction,
acquisition of machinery end equipment,
furniture and fixture purchases, and working capital including inventory. 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
AWARD BUDGET

	 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
SOURCE OF FUNDS

	
 

	
 

	
 

	
 

	
 

	
 

	
USE OF FUNDS

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Amount 

	
 

	
 

	
 

	
 

	
 

	
 

	
Cost 

	
 

	
 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	
IDED Programs

	
 

	
 

	
 

	
 

	
 

	
 

	
 *Land Acquisition

	
 

	
$

	
475,000

	
 

	
 

	
VAP

	
 

	
$

	
400,000

	
 

	
 loan/forgivable loan

	
 

	
 *Site Preparation

	
 

	
$

	
1,680,000

	
 

	
 

	
EZ Benefits

	
 

	
 

	
1  see
note  

	
 

	
 

	
 

	
 *Building Construction

	
 

	
$

	
40,570,000

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 *Mfg Machinery and
 Equipment

	
 

	
$

	
9,250,000

	
 

	
 

	
Community College

	
 

	
$

	
185,000 

	
 

	
 Job Training

	
 

	
 Racking, Shelving,
 etc.

	
 

	
$

	
200,000

	
 

	
 

	
Senior Lenders

	
 

	
$

	
35,260,000 

	
 

	
 Equity

	
 

	
 *Computer Hardware

	
 

	
$

	
75,000

	
 

	
 

	
Seed Funding

	
 

	
$

	
2,155,000 

	
 

	
 Equity

	
 

	
 Computer Software

	
 

	
$

	
150,000

	
 

	
 

	
Business

	
 

	
$

	
31,000,000

	
 

	
 

	
 

	
 Furniture and Fixtures

	
 

	
$

	
250,000

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 Working Capital

	
 

	
$

	
14,850,000

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 Job Training

	
 

	
$

	
250,000

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 Organizational Costs

	
 

	
$

	
1,250,000

	
 

	
 

	
1 $8,961,250
 (estimated benefit value)

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	 

	 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
SUB TOTAL

	
 

	
$

	
69,000,000

	
 

	
 

	
 

	
SUBTOTAL

	
 

	
$

	
69,000,000

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
*
 included as capital investment if awarded tax credit program 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
SUB TOTAL

	
 

	
$

	
0

	
 

	
 

	
 

	
SUB TOTAL

	
 

	
$

	
0

	
 

	
 

	
TOTAL ALL
 FUNDS

	
 

	
$

	
69,000,000

	
 

	
 

	
 

	
 

	
 

	
$

	
69,000,000

	
 

	
 

Revised 06-13-08

Revised 07-13-07

 Jul-06

EXHIBIT D – JOB OBLIGATIONS

East Fork Biodiesel, LLC

06-EZ-036 and 06-VAP-031 

This Project has been
awarded benefits from the Value-Added Agricultural Products and Processes
Financial Assistance Program (VAAPFAP) and
Enterprise Zone (EZ) Program. The charts below outline the contractual job
obligations related to this
Project. 

Data in the “Employment
Base” column has been verified by the Department and reflects the employment
characteristics of the facility receiving funding before this award was made.
Jobs to be retained as a part of this Project must be included in these
calculations. 

Data in the “Jobs To Be
Created” column outlines the new full-time jobs (including their wage
characteristics) that must
be added to the employment base
and, if applicable, statewide employment base as a result of this award. 

At the Project Completion
Date and through the Project Maintenance Date, the Business must achieve (at a
minimum) the numbers found in the “Total Job Obligations” column. 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
VAAP JOB
 OBLIGATIONS

	
 

	
Employment

 Base

	
 

	
Jobs

 To Be Created

	
 

	
Total

 Job

 Obligations

	
Project Completion Date: July 31, 2009

	
 

	
 

	
 

	
Project Maintenance Date: July 31,
 2011

	
 

	
 

	
 

	 

	 

	 

	 

	 

	 

	 

	
Total employment at project location

	
 

	
0

	
 

	
36 

	
 

	
36 

	 

	 

	 

	 

	 

	 

	 

	
Average Wage of total employment at project
location

	
 

	
n/a

	
 

	
 

	
 

	
 

	 

	 

	 

	 

	 

	 

	 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	 

	 

	 

	 

	 

	 

	 

	
Qualifying wage threshold requirement (per hr)

	
 

	
$16.09(130%)

	
 

	
 

	
 

	
 

	 

	 

	 

	 

	 

	 

	 

	
Benefit value (per hr)

	
 

	
$1.79

	
 

	
 

	
 

	
 

	 

	 

	 

	 

	 

	 

	 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	 

	 

	 

	 

	 

	 

	 

	
Number of jobs at or above qualifying wage

	
 

	
n/a

	
 

	
n/a 

	
 

	
n/a 

	 

	 

	 

	 

	 

	 

	 

	
Average Wage of jobs at or above qualifying wage

	
 

	
n/a

	
 

	
 

	
 

	
 

	 

	 

	 

	 

	 

	 

	 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	 

	 

	 

	 

	 

	 

	 

	
Number of jobs at or above qualifying wage w/benefits

	
 

	
0

	
 

	
30 

	
 

	
30 

	 

	 

	 

	 

	 

	 

	 

	
Average wage of jobs at or above qualifying
wage w/benefits  

	
 

	
n/a

	
 

	
 

	
 

	
 

	 

	 

	 

	 

	 

	 

	 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	 

	 

	 

	 

	 

	 

	 

	
EZ JOB OBLIGATIONS

	
 

	
Employment

 Base

	
 

	
Jobs

 To Be Created

	
 

	
Total

 Job

 Obligations

	
Project Completion Date: July 31, 2009 

	
 

	
 

	
 

	
Project Maintenance Date: July 31,
2019 

	
 

	
 

	
 

	 

	 

	 

	 

	 

	 

	 

	
Total employment at project location

	
 

	
0

	
 

	
36 

	
 

	
36 

	 

	 

	 

	 

	 

	 

	 

	
Average Wage of total employment at project
location

	
 

	
n/a

	
 

	
 

	
 

	
 

	 

	 

	 

	 

	 

	 

	 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	 

	 

	 

	 

	 

	 

	 

	
Qualifying wage (per hr)

	
 

	
$11.14(90%)

	
 

	
 

	
 

	
 

	 

	 

	 

	 

	 

	 

	 

	
Benefit value (per hr)

	
 

	
n/a

	
 

	
 

	
 

	
 

	 

	 

	 

	 

	 

	 

	 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	 

	 

	 

	 

	 

	 

	 

	
Number of jobs at or above qualifying wage

	
 

	
0

	
 

	
36 

	
 

	
36 

	 

	 

	 

	 

	 

	 

	 

	
Average Wage of jobs at or above qualifying wage

	
 

	
n/a

	
 

	
 

	
 

	
 

	 

	 

	 

	 

	 

	 

	 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	 

	 

	 

	 

	 

	 

	 

	
Number of jobs at or above qualifying wage
w/benefits

	
 

	
n/a

	
 

	
n/a 

	
 

	
n/a 

	 

	 

	 

	 

	 

	 

	 

	
Average wage of jobs at or above qualifying
wage w/benefits  

	
 

	
n/a

	
 

	
 

	
 

	
 

	 

	 

	 

	 

	 

	 

	 

	
 

	
 

	
 

	
 

	
Notes re: Oualifving Wages

	
 

	
 

	
 

	
 

	
1.

	
If the Benefit Value was added to the base
 wage to meet program wage threshold eligibility requirements, then any
 reduction in the Benefit Value during the life of the Contract must be
 compensated for with salary to ensure that the Qualifying Wage rates are met.
 

	
 

	
 

	
 

	
 

	
2.

	
Bonus or commission
 payments are not included when calculating the Qualifying Wage rate. 

Revised 8/07Stock Purchase Agreement

 Exhibit 10.1 
 AMENDMENT NO. 1 
 TO 
 STOCK PURCHASE AGREEMENT 
 THIS AMENDMENT NO. 1 TO STOCK PURCHASE AGREEMENT
(this “Amendment”) is entered into as of May 29, 2009, by and between Praise International North America, Inc., a Delaware corporation (“Buyer”), and Diedrich Coffee, Inc., a Delaware corporation
(“Seller”), with reference to the following: 
 WHEREAS, Buyer and Seller are parties to that certain Stock Purchase
Agreement dated as of March 27, 2009 (the “Agreement”); and 
 WHEREAS, in accordance with Section 11.11 of the
Agreement, Buyer and Seller desire to amend the Agreement as described below. 
 NOW, THEREFORE, for good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, and intending to be legally bound, the parties hereto agree as follows: 
 1.
Amendment. Section 10.1(b) of the Agreement is hereby amended such that the date “May 31, 2009” contained therein shall be stricken and replaced with the date “June 12, 2009.” 
 2. No Further Amendments. Except as expressly amended pursuant to Section 1 hereof, the remaining provisions of the Agreement shall
remain in full force and effect in accordance with their terms, notwithstanding the execution and delivery of this Amendment. 
 3.
Defined Terms. Capitalized terms used but not defined herein shall have the respective meanings assigned to them in the Agreement. 
 4. Counterparts. This Amendment may be executed in one or more counterparts (including by means of facsimile or portable document format), each of which shall be deemed an original but all of which together will constitute one and
the same instrument. 
 5. Governing Law. This Amendment and its validity, construction, interpretation, and legal effect shall be
governed by and construed in accordance with the domestic laws of the State of California without giving effect to any choice or conflict of law provision or rule (whether of the State of California or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the State of California. 
 [Signature Page Follows] 
  

 1 

 IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the date first above written.

  

			
	 BUYER:
  
 Praise International North America, Inc.

		
	By:	 	/s/ Robert McCullough
		 	 Name: Robert McCullough
 Title:   Director/Secretary

	
	 SELLER: 
  
 Diedrich Coffee, Inc.

		
	By:	 	/s/ James R. Phillips
		 	 Name: James R. Phillips
 Title:   President and Chief Executive Officer

  
 SIGNATURE PAGE 
 TO 
 AMENDMENT NO. 1 TO STOCK PURCHASE AGREEMENT

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