Document:

Filed by Bowne Pure Compliance

 

Exhibit 10.26

LOAN AGREEMENT

by and between

Security First Bank,

as Lead Lender

and

E ENERGY ADAMS, LLC,

a Nebraska limited liability company,

as Borrower

Dated as of June 29, 2007

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page
	 	 	 	 	 
	 	 	 	 
	Section 1.	 	Definitions
	 	 	1	 
	 	 	 	 	 
	 	 	 	 
	Section 2.	 	Borrower Representations
	 	 	4	 
	 	 	 	 	 
	 	 	 	 
	Section 3.	 	Lead Lender Representations
	 	 	6	 
	 	 	 	 	 
	 	 	 	 
	Section 4.	 	The Loan
	 	 	7	 
	 	 	 	 	 
	 	 	 	 
	Section 5.	 	The Note
	 	 	7	 
	 	 	 	 	 
	 	 	 	 
	Section 6.	 	The Pledge
	 	 	7	 
	 	 	 	 	 
	 	 	 	 
	Section 7.	 	Loan Repayments and Prepayments
	 	 	8	 
	 	 	 	 	 
	 	 	 	 
	Section 8.	 	Debt Service Reserve Fund
	 	 	9	 
	 	 	 	 	 
	 	 	 	 
	Section 9.	 	Capitalized Interest Fund
	 	 	10	 
	 	 	 	 	 
	 	 	 	 
	Section 10.	 	Disbursement of Loan Proceeds
	 	 	10	 
	 	 	 	 	 
	 	 	 	 
	Section 11.	 	Transfer and Assignments
	 	 	11	 
	 	 	 	 	 
	 	 	 	 
	Section 12.	 	Participations
	 	 	11	 
	 	 	 	 	 
	 	 	 	 
	Section 13.	 	Assignment of Redevelopment Contract
	 	 	12	 
	 	 	 	 	 
	 	 	 	 
	Section 14.	 	Defaults and Remedies
	 	 	12	 
	 	 	 	 	 
	 	 	 	 
	Section 15.	 	Notices
	 	 	12	 
	 	 	 	 	 
	 	 	 	 
	Section 16.	 	Severability
	 	 	13	 
	 	 	 	 	 
	 	 	 	 
	Section 17.	 	Binding Effect
	 	 	13	 
	 	 	 	 	 
	 	 	 	 
	Section 18.	 	This Agreement Governs
	 	 	13	 
	 	 	 	 	 
	 	 	 	 
	Section 19.	 	Amendments
	 	 	13	 
	 	 	 	 	 
	 	 	 	 
	Section 20.	 	Counterparts
	 	 	13	 
	 	 	 	 	 
	 	 	 	 
	Section 21.	 	Governing Law
	 	 	13	 
	 	 	 	 	 
	 	 	 	 
	 	 	 	 	 
	 	 	 	 
	Exhibit A	 	Qualified Project Costs
	 	 	 	 
	 	 	 	 	 
	 	 	 	 
	Exhibit B	 	Closing Costs
	 	 	 	 
	 	 	 	 	 
	 	 	 	 
	Exhibit C	 	Resolution of Borrower
	 	 	 	 
	 	 	 	 	 
	 	 	 	 
	Exhibit D	 	Form of Borrower’s Note
	 	 	 	 
	 	 	 	 	 
	 	 	 	 
	Exhibit E	 	Form of Security Agreement
	 	 	 	 

(i)

 

 

 

LOAN AGREEMENT

This Loan Agreement (this “Agreement”), dated as of June 29, 2007, is by and between the E
Energy Adams, LLC, a Nebraska limited liability company as borrower (the “Borrower”) and Security
First Bank, a Nebraska bank (the “Lead Lender”) as lead agent for all participating institutions,
more fully described on Schedule 1 attached hereto (jointly and severally, the “Participants”).

RECITALS:

A. The Borrower has entered into a Redevelopment Contract, dated May 29, 2007 (the
“Redevelopment Contract”) with the Village of Adams, Nebraska (the “Issuer”).

B. Pursuant to the Redevelopment Contract, the Borrower agreed to acquire, construct and equip
a 50 million gallon per year (the “Facility”) located within the boundaries of the Issuer on land
owned by the Borrower (the “Redevelopment Project”) and designated by Issuer as a redevelopment
area pursuant to the Act (as hereinafter defined) (the “Redevelopment Area”).

C. Pursuant to the Redevelopment Contract, the Issuer agreed to provide a grant (the “Grant”)
to the Borrower to reimburse the Borrower for expenditures qualifying under the Act (as hereinafter
defined) that Borrower will make or has made to acquire, construct and equip the Redevelopment
Project (the “Qualified Project Costs”) which are payable from the proceeds of TIF Indebtedness (as
hereinafter defined) pursuant to the Act.

D. Pursuant to the Redevelopment Contract, the Issuer agreed to provide the Grant only after
the Borrower has provided to the Issuer satisfactory evidence that private funds have been
committed to the Redevelopment Project in amounts sufficient to complete the Redevelopment Project.

E. This Agreement and the proceeds of this Loan (the “Loan Proceeds”) shall constitute
satisfactory evidence to the Issuer that the Borrower has committed private funds in amounts
sufficient to complete the Redevelopment Project.

F. Pursuant to this Agreement, the Borrower will use a portion of the Loan Proceeds to fund
the Debt Service Reserve Fund and the Capitalized Interest Fund required to be established, and
will pay a portion of the costs of issuing the Loan (the “Closing Costs”).

G. The Lead Lender proposes to make the Loan, and the Borrower desires to borrow the Loan
Proceeds, upon the terms and conditions set forth in this Agreement, the Pledge and the Borrower’s
Note.

The Borrower and the Lead Lender, each in the consideration of the representations, covenants
and agreements of the other as set forth in this Agreement, mutually represent, covenant and agree
as follows:

THE AGREEMENT

Section 1. Definitions. In this Agreement, capitalized terms shall have the following
respective meanings unless the context clearly requires elsewise:

“Act” shall mean Section 2 of Article VIII of the Nebraska Constitution, Sections 18-2101
through 18-2154 of the Reissue Revised Statutes of Nebraska, 1997, as amended, and acts amendatory
or
supplemental thereto from time to time, pursuant to which authority the Issuer pledged the TIF
Indebtedness secured by the Issuer’s Series A Note and Issuer’s Series B Note.

 

 

 

“Agreement” shall mean this Loan Agreement, dated as of June 29, 2007, by and between the
Borrower and the Lead Lender, as from time to time amended as permitted herein.

“Borrower” shall mean E Energy Adams, LLC, and its successors and assigns.

“Borrower’s Note” shall have the meaning given that term in Section 5 hereof.

“Capitalized Interest Amount” shall mean the amount of $513,800 to be deposited to the
Capitalized Interest Fund from Loan Proceeds upon the closing of the Loan.

“Capitalized Interest Fund” shall mean the capitalized interest account established and
maintained pursuant to Section 9 of this Agreement.

“Closing Costs” shall mean those costs listed in Exhibit B to be paid by the Borrower from the
Loan Proceeds upon the closing of the Loan, which the Lead Lender shall disburse directly to the
parties entitled to such payments as set forth in this Agreement.

“Debt Service Reserve Fund” shall mean the debt service reserve account established and
maintained pursuant to Section 8 of this Agreement.

“Debt Service Reserve Fund Requirement” shall mean the amount equal to ten percent (10%) of
the original stated principal amount of the Loan, which amount shall be deposited to the Debt
Service Reserve Fund by the Lead Lender on behalf of the Borrower from the Loan Proceeds upon the
closing of the Loan.

“Event of Default” shall have the meaning given that term under Section 14 hereof.

“Excess Pledged Tax Increment Revenues” shall mean all Pledged Tax Increment Revenues in
excess of those required to pay in full the Issuer’s Series A Note (as defined herein below).

“Facility” shall mean the ethanol production facility acquired, constructed, equipped, owned
and operated by the Borrower within the Redevelopment Area established within the boundaries of the
Issuer.

“Grant” shall mean the grant of the TIF Indebtedness incurred as described on Exhibit C to the
Redevelopment Contract, and paid by the Issuer to the Borrower upon requisition by the Borrower for
reimbursement of Qualified Project Costs set forth on Exhibit A attached hereto and pursuant to
Section 3.04 of the Redevelopment Contract.

“Issuer” shall mean the Village of Adams, Nebraska, a body corporate and politic duly
organized under the Constitution and the laws of the State of Nebraska.

“Issuer’s Resolution” shall mean the resolution of the governing body of the Issuer adopted on
June 27, 2007 authorizing, among other things, the issuance of the Issuer’s Series A Note and
Issuer’s Series B Note.

“Issuer’s Series A Note” shall mean the Issuer’s Tax Increment Revenue Note, Taxable Series
2007A (E Energy Adams, LLC Ethanol Plant Project), dated the date of issuance and delivery thereof,
in the original principal amount of $5,035,000 with a debt service coverage ratio of 1.15 and an
interest rate not to exceed 10%, and a maturity date on or before December 1, 2021.

 

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“Issuer’s Series B Note” shall mean the Issuer’s Tax Increment Revenue Note, Taxable Series
2007B (E Energy Adams, LLC Ethanol Plant Project), dated the date of issuance and delivery thereof,
in the principal amount of $2,500,000 without assuming a debt service coverage ratio and an
interest rate not to exceed 10%, and a maturity date on or before December 31, 2021.

“Lead Lender” shall mean Security First Bank, a commercial bank established and existing under
the laws of the state of Nebraska.

“Liquidated Damages Amount” shall mean the “Liquidated Damages Amount” as defined in the
Redevelopment Contract.

“Loan” shall mean the loan made by the Lead Lender to the Borrower pursuant to this Agreement
and the Note.

“Loan Documents” shall mean this Agreement and any and all ancillary documents necessary to
consummate the transactions contemplated thereby.

“Loan Interest Rate” shall mean nine and fifteen-tenths percent (9.15%).

“Loan Maturity Date” shall mean December 1, 2021.

“Loan Payment Date” or “Loan Payment Dates” shall mean each June 1 and December 1 of each year
commencing June 1, 2009.

“Loan Proceeds” shall mean the funds received by the Borrower from the Lead Lender at the
closing of this Loan.

“Origination Fee” shall mean the amount of $2,000.00 payable by the Borrower to the Lead
Lender as an origination fee upon the closing of the Loan, which fee shall be paid from Loan
Proceeds.

“Participant” shall have the meaning given that term in the Introduction to this Agreement and
in Section 12 hereof and on Schedule 1 attached hereto.

“Payment Direction Letter” shall have the meaning given that term in Section 7 hereof.

“Permitted Encumbrances” shall mean (a) those encumbrances which secure indebtedness incurred
to acquire, construct and equip the Redevelopment Project or for any other physical improvements to
the Redevelopment Area, as specified in the Section 5.02 of the Redevelopment Contract, and (b)
that interest taken by the senior secured lead lender, Farm Credit Services of America, Nebraska,
along with its lending syndicate, on the senior credit facility provided to Borrower.

“PILOT Payments” shall mean the payment in lieu of taxes that the Issuer is required to make
under certain circumstances pursuant to Section 4.06 of the Redevelopment Contract.

“Pledge” shall have the meaning given that term in Section 6 hereof.

“Pledged Revenues” shall mean Pledged Tax Increment Revenues, PILOT Payments and Liquidated
Damages Amount.

 

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“Pledged Tax Increment Revenues” shall mean the Tax Increment Revenues pledged by the Issuer
to the payment of, and as security for, the TIF Indebtedness pursuant to Section 3.03 of the
Redevelopment Contract.

“Qualified Project Costs” shall mean those costs payable from the proceeds of TIF Indebtedness
pursuant to the Act, and as listed in Exhibit A to this Agreement, and used to reimburse the
Borrower for the Project Costs (as defined in the Redevelopment Contract).

“Redevelopment Area” shall mean certain real property acquired by the Borrower situated within
the boundaries of the Issuer as more particularly described in Exhibit A to the Redevelopment
Contract.

“Redevelopment Contract” shall mean that certain Redevelopment Contract, dated May 29, 2007,
by and between the Borrower and the Issuer.

“Redevelopment Project” shall mean the entire project, including the Facility and the land
owned by the Borrower on which the Facility shall be constructed and equipped.

“Reset Date” shall have the meaning given that term in Section 4(b) hereof.

“Security Agreement” shall have the meaning given that term in Section 6(a) hereof.

“Tax Increment Revenues” shall mean that portion of the ad valorem tax on real property in the
Redevelopment Area in excess of the amount of those ad valorem taxes on the real property located
in the Redevelopment Area which constitute the proportion of all the ad valorem taxes payable on
the real property in the Redevelopment Area which is produced by the aggregate levy rate fixed each
year by and for all public bodies with respect to the Redevelopment Area being applied to the
Facility valuation (as defined in the Act) for the period of fifteen (15) years commencing January
1, 2007 as such taxes were divided by the Issuer pursuant to Section 3.01 of the Redevelopment
Contract.

“TIF Indebtedness” shall mean any bonds, notes, loans and advances of money or other
indebtedness, including interest and premiums, if any, thereon, incurred by the Issuer pursuant to
Article III of the Redevelopment Contract and secured in whole or in part by the Pledged Tax
Increment Revenues.

Section 2. Borrower Representations. The Borrower represents, warrants and agrees as
follows:

(a) the Borrower has been duly organized, validly exists and is in good standing as a
limited liability company under the laws of the State of Nebraska, is duly qualified to do
business in Nebraska, and is duly qualified to enter into the transactions contemplated by
and necessary or incident to the execution and delivery of the Loan Documents;

(b) attached hereto as Exhibit C is a resolution of the Borrower authorizing the
transactions contemplated by the Loan Documents;

(c) since the date of the last delivery of financial information to the Lead Lender,
there has not been any material adverse change in the business of the Borrower;

 

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(d) there is no action, suit, proceeding, or to the Borrower’s knowledge, any inquiry
or investigation at law or in equity or before or by any public board or body pending or, to
our knowledge, threatened against or affecting the Borrower or its property or, to
Borrower’s knowledge, any basis therefore, wherein an unfavorable decision, ruling or
finding would adversely affect the transaction contemplated by or necessary or incident to
the execution and delivery of the Redevelopment Contract or the Loan Documents or the
validity or enforceability of the Redevelopment Contract or the Loan Documents;

(e) there are no valid material security interests in or liens against the interest of
the Borrower in the Redevelopment Project as of the date hereof, except those created by the
Permitted Encumbrances;

(f) the Borrower has duly authorized, by all necessary company action, the execution,
delivery and due performance of the Loan Documents;

(g) the Loan Documents have been duly executed and delivered by proper officers of the
Borrower. Each of the Loan Documents was executed in substantially the form in which
approved by the Borrower;

(h) the execution and delivery of the Loan Documents by the Borrower and the
performance by the Borrower of its obligations thereunder do not and will not violate or
constitute a default under the Articles of Organization or Operating Agreement of the
Borrower or any court order, and do not and will not violate or constitute a default under
any agreement, indenture, mortgage, lease or any other obligation or instrument to which the
Borrower is bound, and no approval or other action by any governmental authority or agency
is required in connection therewith, other than those which have been received;

(i) there is no action or proceedings pending or threatened looking toward the
dissolution, liquidation or sale of substantially all of the assets of the Borrower;

(j) Borrower certifies that it has incurred Qualified Project Costs, as defined in the
Redevelopment Contract, in an amount in excess of $5,035,000. Attached to this Agreement is
a true and correct listing of expenditures incurred with respect to the Project to date, all
of which Borrower represents, warrants and agrees are Qualified Project Costs;

(k) the names and addresses of the persons, firms or corporations to whom the payments
requested hereby are due, the amounts to be disbursed and the general classification and
description of the Qualified Project Costs, or to reimburse the Borrower for any Qualified
Project Costs paid by the Borrower for which each obligation requested to be paid hereby was
incurred are as set forth on Exhibit A attached hereto and incorporated herein by this
reference;

(l) such Qualified Project Costs have been made or incurred by the Borrower and have
been paid by the Borrower, if payment to the Borrower is requested, or, if payment to the
Borrower is not requested, are presently due to the persons to whom payment is requested,
are valid Qualified Project Costs under the Redevelopment Contract and proper charges
against the Loan Proceeds as set forth herein and no part thereof was included in any other
request previously filed with the Lead Lender under the provisions thereof;

(m) except for Qualified Project Costs for which payment has or will be requested and
except as set forth on Exhibit A attached hereto, there are no outstanding statements which
are now due and payable for labor, wages, materials, supplies or services in connection with
the
purchase, construction and installation of the Project which, if unpaid, might become
the basis of a vendors’, mechanics’, laborers or materialmen’s statutory or other similar
lien upon the Project or any part thereof. Set forth below is a description of (1) all
disputed statements and the reasons for such disputes, and (2) all statements in process but
not yet presented to the Lead Lender for payment;

 

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(n) all Qualified Project Costs incurred or to be incurred by the Borrower are
qualified costs and/or expenditures under the Nebraska Community Development Law, R.R.S.
Neb. §§ 18-2101, et. seq.;

(o) unless previously provided to Lead Lender, an executed copy of the construction
contract with respect to the Project is attached hereto;

(p) proceeds of the Notes in the amount of $513,800.00 shall be retained by Lead Lender
in the fund established for the Borrower with respect to the Project to pay interest on the
Loan due in 2008 and 2009. The Lead Lender shall retain the amount of $2,000.00 as payment
for its Origination Fee. Proceeds in the amount of $503,500.00 shall be retained by the
Lead Lender and deposited in the Debt Service Reserve Fund. Proceeds in the amount of
$95,700.00 shall be paid to the Placement Agent, SMITH HAYES Financial Services Corporation
as payment for placement agent services. Proceeds in the amount of $55,000.00 shall be used
to pay Closing Costs to Bond Counsel;

(q) Borrower indemnifies, protects, holds harmless and discharges Issuer and Lead
Lender from any and all damages, costs, claims or causes of action related to distribution
of amounts to Borrower pursuant hereto;

(r) Borrower hereby requests that Lead Lender distribute the Closing Costs in the
amount of $152,700 as follows:

	 	 	 	 	 	 	 
	Origination Fees:

	 	 	 	$	2,000.00	 
	Bond Counsel:

	 	 	 	$	55,000.00	 
	Placement Agent:

	 	($100,700 — 5,000 paid out of new money)
	 	$	95,700.00	 

(s) and Borrower indemnifies, protects, holds harmless and discharges Issuer and Lead
Lender from any and all damages, costs, claims or causes of action related to distribution
of amounts to Borrower pursuant hereto.

Section 3. Lead Lender Representations. The Lead Lender represents, warrants and agrees as
follows:

(a) the Lead Lender is a commercial bank duly organized and existing under the laws of
the state of Nebraska with full power and authority to enter into the transactions
contemplated by this Agreement on behalf of each of the Participants, each of which consent
to the authority of the Lead Lender;

(b) the Lead Lender is a bank or savings and loan association as defined in Sections
3(a)(2) and 3(a)(5)(A), respectively, of the Securities Act of 1933, as amended, acting in
its individual or fiduciary capacity;

 

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(c) the Lead Lender recognizes and acknowledges that this Agreement and the Issuer’s
Series A Note and Issuer’s Series B Note will never represent or constitute a general
obligation, debt, bonded indebtedness or a pecuniary obligation of the Issuer but are
limited obligations payable solely from Pledged Revenues;

(d) the Lead Lender certifies, under penalties of perjury, that the Lead Lender is not
subject to the backup withholding provisions of Section 3406(a)(i)(C) of the Internal
Revenue Code of 1986, as amended; and

(e) the Lead Lender is not making the Loan with a view to distribution of any interest
therein, except through the sale of loan participation interests as permitted in this
Agreement to other banks and lending financial institutions which constitute “accredited
investors” as defined in Rule 501 of Regulation D under the Securities Act of 1933, as
amended and who will purchase such participation interests subject to this Agreement,
including, without limitation, the making of the representations, warranties and agreements
set forth in this Section.

Section 4. The Loan.

(a) Upon the terms and conditions of this Agreement and any other documents related thereto,
the Lead Lender hereby loans to the Borrower the principal amount of Five Million Thirty Five
Thousand and no/100 Dollars (5,035,000.00). Interest on the unpaid principal amount of the Loan
shall be payable at the rates set forth in the Borrower’s Note or determined pursuant to the terms
of the Borrower’s Note.

(b) The Loan Interest Rate shall reset on June 1, 2014 (“Reset Date”). The interest rate on
the Reset Date shall be equal to the 5-year U.S. Treasury Constant Maturity Index plus 398 basis
points, but not greater than 10% for the applicable rate period and not less than 7.5% for the
applicable rate period.

(c) The Loan shall be repaid in the amounts, at the times and in the manner set forth in the
Borrower’s Note.

(d) The Loan is secured by and payable from the grant and assignment by Borrower to Lead
Lender of Issuer’s Series A Note and the Issuer’s Series B Note, the Pledge by Borrower to Lead
Lender of Pledged Revenues, as described in Section 6 below, consisting of Pledged Tax Increment
Revenues, PILOT Payments, and the Liquidated Damages Amount and amounts on deposit in the Debt
Service Reserve Fund and the Capitalized Interest Fund, and from the Borrower as obligor under the
Borrower’s Note.

Section 5. The Note. The Loan shall, in addition to this Agreement, be evidenced by a
promissory note of the Borrower substantially in the form of Exhibit D (the “Borrower’s Note”),
dated the date hereof, payable to the order of the Lead Lender in a principal amount equal to Five
Million Thirty-Five Thousand and No/100 Dollars (5,035,000.00). The Borrower’s Note shall evidence
the Borrower as the obligor of the Loan.

Section 6. The Pledge.

(a) The Pledged Revenues shall be evidenced by the Issuer’s Series A Note and Issuer’s Series
B Note, as defined in Section 1.1 herein, made by the Issuer to the Borrower. To induce the Lead
Lender to make the Loan, the Borrower hereby grants and pledges (the “Pledge”) to the Lead Lender
for the benefit of all of the Participants, and the Issuer hereby agrees to the Borrower’s pledge
and grant of, a
security interest in and to the Issuer’s Series A Note and Issuer’s Series B Note, together
with the Pledged Revenues, pursuant to the Security Agreement (the “Security Agreement”) similar in
form and substance as attached hereto as Exhibit E.

 

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Section 7. Loan Repayments and Prepayments.

(a) This Loan is evidenced by the Borrower’s Note. The principal amount and interest thereon
shall be payable by the Borrower on the dates set forth in therein. In order to comply with the
terms of the Borrower’s Note and this Agreement, the Borrower hereby agrees to direct Issuer to pay
directly to the Lead Lender all Pledged Revenues on account of the Loan. The Lead Lender and the
Borrower agree that all such amounts shall be applied by the Lead Lender as follows and in the
following order:

(i) to the payment of all fees and expenses of Lead Lender unpaid as of the date
thereof;

(ii) to the repayment of all past due interest payments under the Borrower’s Note;

(iii) to the repayment of all past due principal payments under the Borrower’s Note;

(iv) to restore the amount on deposit in the Debt Service Reserve Fund to the Debt
Service Reserve Requirement if a deficiency exists therein; and

(v) to the payment of all principal due and unpaid under the Borrower’s Note on the
applicable Loan Payment Date;

(vi) to the prepayment of the unpaid principal amount of the Borrower’s Note; and

(vii) upon full payment and satisfaction of the Borrower’s Note, to Borrower.

(b) The Lead Lender shall enter in its ledgers and records a record of all payments made. At
least ten (10) days prior to each Loan Payment Date, the Lead Lender agrees to provide to the
Borrower a statement setting forth the amount of interest and principal due on such Loan Payment
Date and the remaining outstanding principal amount of the Borrower’s Note on such Loan Payment
Date assuming the regularly scheduled principal has been paid, being the remaining outstanding
principal amount of the Borrower’s Note; provided, however, Lead Lender’s failure to provide such
statement should in no way relieve Borrower’s obligation to make such payment on each Loan Payment
Date. The Borrower agrees that all Pledged Revenues payable or paid to the Borrower pursuant to
the Issuer’s Series A Note and Issuer’s Series B Note shall be paid directly to the Lead Lender so
long as the Borrower’s Note has not been paid in full. Borrower agrees to execute and deliver an
irrevocable payment direction letter (the “Payment Direction Letter”) and any other documentation
requested by Lead Lender advising Issuer to make all payments under the Issuer’s Series A Note and
Issuer’s Series B Note directly to Lead Lender. The Payment Direction Letter shall be irrevocable
until full repayment and satisfaction of Borrower’s Note at which time Borrower may revoke the
Payment Direction Letter. In the event the Lead Lender receives any Pledged Revenues in excess of
the amount required to pay all amounts due under the Borrower’s Note in full, the Lead Lender
agrees to credit any such overpayment to account of Borrower pursuant to Section 7(a)(vi) and
Section 7(a)(vii) above.

 

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Section 8. Debt Service Reserve Fund.

(a) The Borrower hereby agrees to establish and maintain, so long as the Loan remains unpaid,
a debt service reserve account with the Lead Lender (the “Debt Service Reserve Fund”) in an amount
equal to the Debt Service Reserve Fund Requirement to be applied as hereinafter set forth.

(b) The Lead Lender shall retain from the Loan Proceeds, an amount equal to the Debt Service
Reserve Requirement upon the closing of the Loan.

(c) The “Debt Service Coverage Ratio” shall mean the quotient obtained by dividing (a) the
amount of available Pledged Tax Increment Revenues plus interest earned on the actual funds held by
the Lead Lender in the Debt Service Reserve Fund to scheduled Debt Service by (b) interest and
principal due and payable to Lead Lender during the applicable Loan Payment Date. Commencing on
June 1, 2009, the Debt Service Coverage Ratio shall equal or exceed 1.15 to 1.00.

(d) If the Lead Lender determines in its sole and reasonable discretion that the Debt Service
Coverage Ratio will not be achieved on any Loan Payment Date, the Lead Lender may utilize funds
from the Debt Service Reserve Fund to prepay principal in such amount as reasonably determined by
Lead Lender so that the Debt Service Coverage Ratio shall thereafter be satisfied.

(e) If, after utilizing the Debt Service Reserve Fund to achieve the Debt Service Coverage
Ratio, the Lead Lender determines that that Debt Service Reserve Fund Requirement is less than ten
percent (10%) of the original principal amount of the Loan, the Lead Lender shall notify the
Borrower in writing of such deficiency. Upon written notice from Lead Lender, Borrower will
replenish the Debt Service Reserve Fund to an amount equal to ten percent (10%) of the original
principal amount of the Loan.

(f) In addition, Lead Lender may use the amounts in the Debt Service Reserve Fund to make loan
repayments falling due on each Loan Payment Date to the extent that the payment made by the Issuer
under the Issuer’s Series A Note on any such Loan Repayment Date is insufficient to pay the amounts
due on such Loan Payment Date, after the application of any amounts on deposit in the Capitalized
Interest Fund available to pay interest on such Loan Payment Date.

(g) The Debt Service Reserve Fund shall be maintained as an interest bearing account or
certificate of deposit with the Lead Lender. All interest earnings shall be retained in the Debt
Service Reserve Fund. On each Loan Payment Date, if there exists an excess above the Reserve
Requirement in the Debt Service Reserve Fund and no withdrawal is required to pay principal of, and
interest on, the Loan then due, the Lead Lender shall apply such excess to the prepayment of the
principal amount on the Loan. The Debt Service Reserve Fund shall be valued at the amount actually
on deposit and currently available to withdraw (excluding accrued but unpaid interest earnings) for
the purposes of determining a deficiency.

(h) The Borrower hereby grants a security interest in the Debt Service Reserve Fund, all
amounts on deposit therein and the proceeds thereof to the Lead Lender to secure all amounts
payable on the Loan. If, on any date, the amount on deposit in the Debt Service Reserve Fund is
equal to or greater than the total principal of, and accrued and unpaid interest on, the Loan, the
Lead Lender shall apply such amounts to the prepayment of the Loan in full. Any excess amounts in
the Debt Service Reserve Fund after such payment of the Loan in full, shall be paid by the Lead
Lender to the Borrower.

 

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Section 9. Capitalized Interest Fund.

(a) The Borrower hereby agrees to establish and maintain, so long as amounts are on deposit
therein, a funded interest account with the Lead Lender (the “Capitalized Interest Fund”) to be
applied as hereinafter set forth.

(b) The Lead Lender shall retain from the Loan Proceeds an amount equal to the Capitalized
Interest Amount upon the closing of the Loan.

(c) The amounts in the Capitalized Interest Fund shall be used solely to pay interest due on
the Loan on each Payment Date to the extent of the amount of interest then due or amounts on
deposit in the Capitalized Interest Fund, as the case may be.

(d) The Capitalized Interest Fund shall be maintained as an interest bearing account or
certificate of deposit with the Lead Lender. All interest earnings shall be retained in the
Capitalized Interest Fund and applied to the payment of interest on the Loan.

(e) The Borrower hereby grants a security interest in the Capitalized Interest Fund, all
amounts on deposit therein and the proceeds thereof to the Lead Lender to secure all amounts
payable on the Loan.

Section 10. Disbursement of Loan Proceeds.

(a) The Loan Proceeds shall be disbursed entirely on the date of Loan closing as follows:

(i) the Lead Lender, on behalf of the Borrower, shall pay the amount of $152,700 to the
parties entitled thereto the Closing Costs as set forth in Exhibit B;

(ii) the Lead Lender shall retain an amount equal to the Debt Service Reserve
Requirement and deposit such amount to the Debt Service Reserve Fund;

(iii) the Lead Lender shall retain an amount equal to the Capitalized Interest Amount
and deposit such amount to the Capitalized Interest Fund; and

(iv) the Lead Lender shall disburse the balance of the Loan Proceeds to the Borrower.

(b) Receipt by the Lead Lender of the following shall be conditions precedent to its
obligation to disburse the Loan:

(i) executed copies of this Agreement and the Borrower’s Note;

(ii) possession of the Issuer’s Series A Note and Issuer’s Series B Note;

(iii) an opinion of special counsel to the Issuer in form and substance acceptable to
the Lead Lender;

(iv) an opinion of counsel to the Borrower in form and substance acceptable to the Lead
Lender;

 

-10-

 

(v) evidence acceptable to the Lead Lender, as confirmed by a certificate of the Issuer
that the Borrower has expended Qualified Project Costs in an amount at least equal to the
principal amount of the Loan and that the Grant may be made; and

(vi) such other showings, certificates and opinions as the Lead Lender may reasonably
require to evidence compliance of the Borrower with the terms of the Borrower’s Note, the
Issuer’s Series A Note, the Issuer’s Series B Note and this Agreement.

Section 11. Transfer and Assignments.

(a) The Borrower shall not have the right to assign this Agreement or any of the Borrower’s
obligations hereunder, or any interest herein, to any other party unless the Borrower shall have
obtained in writing the Lead Lender’s consent.

(b) The Lead Lender shall have the right, subject to the further provisions of this Section
11, to sell or assign all of its interest in this Agreement, the Borrower’s Note and related
documents (each such transfer, an “Assignment”) to any commercial lender or other financial
institution (and “Assignee”).

(c) In addition to assignment of the Loan in whole, the Lead Lender shall have the right to
sell participations in the Loan as set forth in Section 12 below.

Section 12. Participations.

(a) The Lead Lender shall have the right, subject to the further provisions of this Section
12, to grant or sell a participation in all or any part of its Loan or the Borrower’s Note or the
Pledge (a “Participation”) to any commercial lender or other financial institution (a
“Participant”) without the consent of the Borrower, or any other party hereto.

(b) Notwithstanding anything in the foregoing to the contrary, except in the instance of an
Assignment, (a) no Participant shall have any direct rights hereunder, (b) the Borrower and the
Lead Lender, other than the assigning or selling lender, shall deal solely with the assigning or
selling lender and shall not be obligated to extend any rights or make any payment to, or seek any
consent of, the Assignee or Participant, (c) no Assignment or Participation shall relieve the
assigning or selling lender from any of its other obligations hereunder and such lender shall
remain solely responsible for the performance hereof, and (d) no Assignee or Participant, other
than an affiliate of the assigning or selling lender, shall be entitled to require such lender to
take or omit to take any action hereunder, except that such lender may agree with such Assignee or
Participant that such lender will not, without such Assignee’s or Participant’s consent, take any
action which would, in the case of any principal, interest or fee in which the Assignee or
Participant has an ownership or beneficial interest: (w) extend the final maturity of any Loans,
(x) reduce the interest rate on the Loans, (y) forgive any principal of, or interest on, the Loans
or any fees, or (z) release all or substantially all of the collateral security for the Loans.

(c) No lender shall be permitted to enter into any Assignment or Participation with any
Assignee or Participant who is not a United States Person unless such Assignee or Participant
represents and warrants to such lender that, as at the date of such Assignment or Participation, it
is entitled to receive interest payments without withholding or deduction of any taxes and such
Assignee or Participant executes and delivers to such lender on or before the date of execution and
delivery of documentation of such Participation or Assignment, a United States Internal Revenue
Service Form W8BEN or W8ECI, or any successor to either of such forms, as appropriate, properly
completed and claiming complete exemption from withholding and deduction of all Federal Income
Taxes. A “United States Person”
means any citizen, national or resident of the United States, any corporation or other entity
created or organized in or under the laws of the United States or any political subdivision hereof
or any estate or trust, in each case that is not subject to withholding of United States Federal
income taxes or other taxes on payment of interest, principal or fees hereunder.

 

-11-

 

(d) Each lender may furnish any information concerning the Borrower in the possession of such
lender from time to time to Assignees and Participants and potential Assignees and Participants.

(e) Notwithstanding any other provision in this Agreement, any lender may at any time create a
security interest in, or pledge, all or any portion of its rights under and interest in this
Agreement.

Section 13. Assignment of Redevelopment Contract. The Borrower covenants and agrees that it
will not assign its rights under the Redevelopment Contract to any other party without consent of
the Lead Lender and the Issuer.

Section 14. Defaults and Remedies. An “Event of Default” shall mean each or any of the
following:

(a) failure of the Borrower to pay any amount due under the Borrower’s Note or this
Agreement within ten (10) days of when due; or

(b) a breach by Borrower of any covenant, condition, representation or warranty
contained herein or in any of the Loan Documents within ten (10) days after written notice;
or

(c) a default by the Borrower under the Redevelopment Contract after applicable notice
and cure periods under the Redevelopment Contract.

Upon the occurrence of an Event of Default, the Lender may pursue any remedies available at
law.

Section 15. Notices. All notices provided for herein shall be in writing and shall be deemed
to have been given when delivered personally or when deposited in the United States mail,
registered or certified mail, postage prepaid, addressed as follows:

	 	 	 
	To the Borrower:

	 	E Energy Adams, LLC
	 

	 	510 Main Street
	 

	 	PO Box 49
	 

	 	Adams, NE 68301
	 

	 	Attention: Larry Brees
	 

	 	Phone: (402) 988-4655
	 

	 	Fax: (402) 988-5205
	 
	 	 
	With a copy to:

	 	Crosby Guenzel, LLP
	 

	 	Suite 400
	 

	 	Federal Trust Building
	 

	 	134 South 13th Street
	 

	 	Lincoln, NE 68508
	 

	 	Attention: Dave Jarecke
	 

	 	Phone: (402) 434-7329
	 

	 	Fax: (402) 434-7303
	 
	 	 
	To the Lead Lender:

	 	Security First Bank
	 

	 	5710 South 53rd St.
	 

	 	Lincoln, NE 68512
	 

	 	Attention: Aaron Bell
	 

	 	Phone: (402) 323-8006
	 

	 	Fax: (402) 323-8021
	 

	 	Email: abell@security1stbank.com

or addressed to any such party at such other address as such party shall hereafter furnish by
notice to the other parties.

 

-12-

 

Section 16. Severability. If any section, paragraph or provision of this Agreement shall be
held to be invalid or unenforceable for any reason, the invalidity or unenforceability of such
section, paragraph or provision shall not affect any of the remaining provisions of this Agreement.

Section 17. Binding Effect. This Agreement shall inure to the benefit of and shall be
binding upon the Borrower and the Lead Lender and their respective successors and assigns.

Section 18. This Agreement Governs. In the event of a conflict of any provision or term of
this Agreement with any term or provision of the Borrower’s Note, the terms and provisions of this
Agreement shall govern.

Section 19. Amendments. Except as otherwise provided in this Agreement, this Agreement may
not be effectively amended, changed, modified, altered or terminated by the Borrower or the Lead
Lender except in writing executed by both such parties.

Section 20. Counterparts. This Agreement may be simultaneously executed in several
counterparts, each of which shall be an original and all of which shall constitute but one and the
same instrument.

Section 21. Governing Law. This Agreement shall be governed by the laws of the state of
Nebraska.

IN WITNESS WHEREOF, Lead Lender and the Borrower have caused this Agreement to be
executed as of the date first above written.

	 	 	 	 	 
	 	SECURITY FIRST BANK,
as Lead Lender, on behalf of all Participants

 	 
	 	By:  	     /s/ John Daubert
 	 
	 	 	John Daubert 	 
	 	 	President / CEO 	 
	 

	 	 	 	 	 
	 	E ENERGY ADAMS, LLC,
a Nebraska limited liability company as Borrower

 	 
	 	By:  	     /s/ Jack L. Alderman
 	 
	 	 	Its:  Chairman 	 
	 	 	 	 
	 

 

-13-

 

SCHEDULE 1

LIST OF PARTICIPANTS

 

 

 

	 	 	 	 	 	 	 	 	 
	Lead Bank	 	Portion of Total Loan ($)	 	 	Participation Interest (%)	 
	 
	 	 	 	 	 	 	 	 
	Security First Bank

Attn: John Daubert

57103 S 53rd St

Lincoln, NE 68516

(402) 323-8011

	 	$	2,535,000	 	 	 	50.34757	%
	 
	 	 	 	 	 	 	 	 
	Participants
	 	 	 	 	 	 	 	 
	Commercial National Bank
of Ainsworth

Attn: Doug Weiss

200 N Main St

P.O. Box 6

Ainsworth, NE 69210

(402) 387-2381

	 	$	500,000	 	 	 	9.93049	%
	 
	 	 	 	 	 	 	 	 
	First National Bank

Attn: Jack Beard

Main St & Parker St

P.O. Box 248

Lewellen, NE 69147

(308) 778-5361

	 	$	500,000	 	 	 	9.93049	%
	 
	 	 	 	 	 	 	 	 
	Exchange Bank

Attn: Brian Schardt

1204 Allen Dr

Grand Island, NE 68803

	 	$	500,000	 	 	 	9.93049	%
	 
	 	 	 	 	 	 	 	 
	Plattsmouth State Bank

Attn: Joan Lewis

446 Main St

Plattsmouth, NE 68048

(402) 296-2194

	 	$	500,000	 	 	 	9.93049	%
	 
	 	 	 	 	 	 	 	 
	The Gothenburg State Bank &
Trust Company

Attn: Luke Rickertsen

900 Lake Ave

P.O. Box 81

Gothenburg, NE 69138

(308) 537-7181

	 	$	250,000	 	 	 	4.96524	%
	 
	 	 	 	 	 	 	 	 
	Curtis State Bank

Attn: John Wilkinson

301 Center Ave

P.O. Box 69025

(308) 367-4155

	 	$	250,000	 	 	 	4.96524	%
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	TOTAL

	 	$	5,035,000	 	 	 	100	%

 

 

 

EXHIBIT A

QUALIFIED PROJECT COSTS

	 	 	 	 	 
	E Energy Adams, LLC
	 	 	 	 
	Schedule of Project Costs
	 	 	 	 
	As of June 20, 2007
	 	 	 	 
	 	 	 	 	 
	Land and land easements
	 	$	1,306,557.29	 
	Cost of Issuance, Debt Service Reserve
Fund, Capitalized Interest Fund
	 	 	1,175,000.00	 
	Site development-excavating
	 	 	2,499,157.00	 
	Development of road
	 	 	428,920.00	 
	Rail yard
	 	 	1,838,603.00	 
	Natural gas line
	 	 	1,766,373.00	 
	Wells
	 	 	75,944.00	 
	 
	 	 	 
	 	 	 	 	 
	Total expenditures
	 	$	9,090,554.29	 
	 
	 	 	 

 

 

 

EXHIBIT B

CLOSING COSTS

	 	 	 	 	 
	 	 	Amount	 
	Placement Agent fee ($100,700 — 5,000
paid from new money)
	 	$	95,700.00	 
	Counsel
	 	 	55,000.00	 
	Origination Fee
	 	 	2,000.00	 
	 
	 	 	 
	Total
	 	$	152,700.00	 
	 
	 	 	 

 

B-1 

 

EXHIBIT C

RESOLUTION OF BORROWER

 

 

 

RESOLUTION OF BOARD OF DIRECTORS

OF

E ENERGY ADAMS, LLC

The undersigned, being the directors of E Energy Adams, LLC, a Nebraska limited liability
company, hereinafter referred to as the “Company,” hereby consent by majority vote to the adoption
hereof and do hereby adopt the following resolutions and declare them to be in full force and
effect:

RESOLVED, that the Company shall enter into the Redevelopment Agreement, the
Loan Agreement, the Security Agreement, and the Note (collectively the “TIF
Documents”) in with such modification, additions, deletions, and changes as the
Manager deems fit in the form attached hereto under which the Company shall obtain
tax-increment financing in the amount of $5,035,000 or in such similar amount as the
Manager determines is appropriate through negotiations provided such terms are
generally in accordance with the documents attached hereto;

RESOLVED FURTHER, that, to secure the obligations of the Company under the Loan
Agreement, the Company shall grant to the Lender (as defined therein), a security
interest in certain assets of the Company; and, in connection therewith, the Company
shall enter into one or more security agreements and pledge agreements reflecting
the foregoing grant (collectively, the “Security Documents”);

RESOLVED FURTHER, that Jack Alderman, a Manager of the Company, be and is
hereby authorized and empowered in the name of and on behalf of the Company to
negotiate, execute and deliver the TIF Documents and all other instruments,
agreements certificates and other documents as may be required in connection
therewith, including any amendments, restatements, supplements or modifications of
the foregoing, all on such terms as may be approved by the Manager executing such
documents, the execution and delivery of the same by said Manger to be conclusive
evidence that the same was approved and authorized hereby;

RESOLVED FURTHER, that said Manager is authorized and empowered to do or cause
to be done all such acts or things and to sign and deliver, or cause to be signed
and delivered, all such documents, instruments and certificates in the name and on
behalf of the Company or otherwise, as said Manager, in his/her discretion, may deem
necessary, advisable or appropriate to effectuate or carry out the purposes and
intent of the foregoing resolutions and to perform the obligations of the Company
under all instruments and agreements executed on behalf of the Company in connection
therewith;

 

 

 

RESOLVED FURTHER, that the execution by said Manager of any document authorized
by the foregoing resolutions, or any document executed in
the accomplishment of any action or actions so authorized, is (or shall become upon
delivery) the enforceable and binding act and obligation of the Company, without the
necessity of the signature or attestation of any other officer, Manager or Director
of the Company or the affixing of the corporate seal;

RESOLVED FURTHER, that all acts and transactions undertaken or agreements
executed and delivered by said Manager in connection with the foregoing matters are
hereby ratified, confirmed and adopted by the Company; and

RESOLVED FURTHER, that the undersigned Directors of the Company hereby certify
these resolutions.

This Resolution may be executed in counterparts and the counterparts taken together shall
constitute the whole.

Dated effective: June 20, 2007.

	 	 	 
	/s/ Dennis L. Boesiger

	 	/s/ Ron Miller
	 

	 	 
	 
	 	 
	/s/ Tom Roode

	 	/s/ Vinson VanEngen
	 

	 	 
	 
	 	 
	/s/ Duane Wollenburg

	 	s/ Steve Dean
	 

	 	 
	 
	 	 
	/s/ Kenneth Brinkman

	 	/s/ Jack L. Alderman
	 

	 	 
	 
	 	 
	/s/ Mark Weber

	 	 
	 

	 	 
	 
	 	 
	/s/ Gary Bentzinger

	 	 
	 

	 	 
	 
	 	 
	/s Amy Johnston

	 	 
	 

	 	 
	 
	 	 

 

 

 

EXHIBIT D

FORM OF BORROWER’S NOTE

 

 

 

PROMISSORY NOTE

			
	 	 	 
	$5,035,000.00
	 	June 29, 2007

FOR VALUE RECEIVED, E ENERGY ADAMS, LLC (the “Borrower”), a Nebraska limited liability
company, with an address at 510 Main Street, Adams, NE 68301, promises to pay to the order of
Security First Bank, (“Lead Lender”), as lead agent for the participating lenders as described in
the Loan Agreement (the “Participants”), and having an office at 5710 S 53rd St.,
Lincoln, NE 68516, the principal sum of five million and thirty-five thousand and No/100 Dollars
($5,035,000.00), under this Note from the date of its disbursement until such principal sum shall
be fully paid. Interest and principal shall be payable in installments as set forth in Section
3 below. The total principal sum, or the amount thereof outstanding, together with any accrued
but unpaid interest, shall be due and payable in full on December 1, 2021 (the “Maturity Date”).

(A) Loan Agreement. This Note is issued pursuant to the terms, provisions and
conditions of that certain Loan Agreement (as amended, the “Loan Agreement”) dated as of even date,
between the Borrower and Lead Lender, and evidences the loan (the “Loan”) made pursuant thereto.
Capitalized terms used herein which are not otherwise specifically defined shall have the same
meaning herein as in the Loan Agreement.

(B) Interest Rate. All principal amounts outstanding under this Note shall bear
interest at the then-applicable Interest Rate.

(C) Payment of Interest and Principal.

Section 1. Payment and Calculation of Interest. Subject to the provision of
Section 5(b) of this Note dealing with payments falling due on dates that are not “Business
Days,” all interest shall be: (a) payable commencing on June 1, 2009 and on December 1 and June 1
for each year thereafter (each a “Loan Payment Date”) until the principal together with all
interest and other charges payable with respect to the Loan shall be fully paid; and (b) calculated
on the basis of a 360-day year and the actual number of days elapsed and by the provisions set
forth in Section 4 of the Loan Agreement. Interest at the then-applicable Interest Rate shall be
computed from and including the first day of the applicable Interest Period, up to and including
the last day thereof. Proceeds from the Series A Note (as defined herein) and Series B Note (as
defined herein), which have been pledged by Borrower in favor of Lead Lender pursuant to that
certain Security Agreement of even date herewith, in the amount of $513,800 shall be retained by
Lead Lender to pay for interest on the Loan due in 2008 and 2009, pursuant to the Loan Agreement.
Interest shall be paid in accordance with Schedule 1 attached hereto.

Section 2. Interest Rate. The “Interest Rate” commencing on the date of the closing
of the Loan shall be nine and fifteen-tenths percent (9.15%) simple interest. The Interest Rate
shall reset on June 1, 2014 (“Reset Date”) The interest rate on the Reset Date shall be equal to
the 5-year U.S. Treasury Constant Maturity Index average for the prior month period plus 398 basis
points, but not greater than 10% for the applicable rate period and not less than 7.5% for the
applicable rate period.

 

D-1 

 

Section 3. “Interest Period” shall mean, in the case of the first Interest Period, the period
commencing on the closing of the Loan and ending on the last day before the first day of first Loan
Payment Date; or, thereafter, the period commencing on each Loan Payment Date and ending on the
last day before the next successive Loan Payment Date until the Maturity Date.

Section 4. Principal Repayment. Principal shall be paid in accordance with the
Schedule 1 attached hereto.

Section 5. Payment upon Maturity Date. The entire remaining principal balance and any
unpaid interest or other amount due and owing shall be due and payable in full upon the Maturity
Date.

Section 6. Prepayment. The Loan or any portion thereof may be prepaid in full or in
part, at any time without penalty on or after June 1, 2012, upon not less than thirty (30) days’
prior written notice to the holder of this Note. Prepayment due to excess TIF sweep is allowed
without penalty on any Interest payment date.

Section 7. Maturity Date. Upon the Maturity Date of the Loan, all accrued interest,
principal and other charges due with respect to the Loan shall be due and payable in full and the
principal balance and such other charges, but not unpaid interest, shall continue to bear interest
at the Default Rate until so paid.

Section 8. Date of Credit. Payments shall be credited on the Business Day on which
immediately available funds are received prior to one o’clock P.M. Central Standard Time; payments
received after one o’clock P.M. Central Standard Time shall be credited to the Loan on the next
Business Day.

Section 9. Billings. Lead Lender may submit billings reflecting payments due;
however, any changes in the interest rate which occur between the date of billing and the due date
may be reflected in the billing for a subsequent payment period. Neither the failure of Lead
Lender to submit a billing nor any error in any such billing shall excuse the Borrower from the
obligation to make full payment of all payment obligations of the Borrower when due.

Section 10. Default Rate. The Borrower shall pay upon billing therefor, an interest
rate (“Default Rate”) which is four percent (4%) per annum above the Interest Rate: (a) following
Borrower’s failure to make a required payment, for that period between the due date and the date of
payment, (b) following any Event of Default, unless and until the Event of Default is expressly and
specifically waived in writing by Lead Lender or (c) after the Maturity Date.

Section 11. Late Charges. The Borrower shall pay, upon billing therefor, a “Late
Charge” equal to five percent (5%) of the amount of any payment of principal (other than principal
due on the Maturity Date of the Loan), interest, or both, which is not paid in full within ten (10)
days of the due date thereof. Late charges (a) are payable in addition to, and not in limitation
of, the Default Rate, (b) are intended to compensate the Lead Lender for administrative and
processing costs incident to late payments, (c) are not interest and (d) shall not be subject to
refund or rebate or credited against any other amount due.

(D) Debt Service Coverage Event.

Section 1. The Borrower hereby agrees to establish and maintain, so long as the Loan remains
unpaid, a debt service reserve account with the Lead Lender (the “Debt Service Reserve Fund”) in an
amount equal to the ten percent (10%) of the original stated principal amount of the Loan, which
amount shall be deposited to the Debt Service Reserve Fund by the Lead Lender on behalf of the
Borrower from the Loan Proceeds upon the closing of the Loan (the “Debt Service Reserve Fund
Requirement”).

 

D-2 

 

Section 2. The “Debt Service Coverage Ratio” shall mean the quotient obtained by dividing (a)
the amount of available Pledged Tax Increment Revenues plus interest earned on the actual funds
held by the Lead Lender in the Debt Service Reserve Fund to scheduled Debt Service by (b) interest
and principal due and payable to Lead Lender during the applicable Loan Payment Date. Commencing
on June 1, 2009, the Debt Service Coverage Ratio shall equal or exceed 1.15 to 1.00.

Section 3. If the Lead Lender determines in its sole and reasonable discretion that the Debt
Service Coverage Ratio will not be achieved on any Loan Payment Date, the Lead Lender may utilize
funds from the Debt Service Reserve Fund to prepay principal in such amount as reasonably
determined by Lead Lender so that the Debt Service Coverage Ratio shall thereafter be satisfied.

Section 4. If, after utilizing the Debt Service Reserve Fund to achieve the Debt Service
Coverage Ratio, the Lead Lender determines that that Debt Service Reserve Fund Requirement is less
than ten percent (10%) of the original principal balance, the Lead Lender shall notify the Borrower
in writing of such deficiency. Upon written notice from Lead Lender, Borrower will replenish the
Debt Service Reserve Fund to an amount equal to ten percent (10%) of the original principal
balance.

(E) Definitions.

Section 1. “Banking Day” means a day on which banks are not required or authorized by law to
close in Nebraska.

Section 2. “Business Day” means any Banking Day. If any day on which a payment is due is not
a Business Day, then the payment shall be due on the next day following which is a Business Day.

Section 3. “Debt Service Coverage Ratio” for the purposes of this Note and the Loan
Agreement, means 1.15 to 1.00.

Section 4. “Dollars” or “$” means lawful money of the United States.

Section 5. “Interest Rate” means the interest rate for applicable Interest Period, in an
amount not to exceed ten percent (10%).

Section 6. “Series A Note” means the Tax Increment Revenue Note, Taxable Series 2007A (E
Energy Adams, LLC Ethanol Plant Project), dated the date of issuance and delivery thereof, in the
original principal amount of $5,035,000.00, issued by the Village of Adams, Nebraska.

Section 7. “Series B Note” means the Tax Increment Revenue Note, Taxable Series 2007B (E
Energy Adams, LLC Ethanol Plant Project), dated the date of issuance and delivery thereof, in the
original principal amount of $2,500,000.00, issued by the Village of Adams, Nebraska.

(F) Acceleration Due to an Event of Default. At the option of the holder, this Note
and the indebtedness evidenced hereby shall become immediately due and payable without further
notice or demand, and notwithstanding any prior waiver of any breach or default, or other
indulgence, upon the occurrence at any time and during the continuance of any one or more of the
following events, each of which shall be an “Event of Default” hereunder and under the Loan
Agreement and each other Loan
Document: (i) default continuing uncured beyond the applicable notice and grace period, if
any, set forth herein or in the Loan Agreement, in making any payment of interest, principal, other
charges or payments due hereunder; (ii) an Event of Default as defined in or as set forth in the
Loan Agreement or any other Loan Document, each as the same may from time to time hereafter be
amended; or (iii) an event which pursuant to any express provision of the Loan Agreement, or of any
other Loan Document, gives Lead Lender the right to accelerate the Loan.

 

D-3 

 

(G) Certain Waivers, Consents and Agreements. Each and every party liable hereon or
for the indebtedness evidenced hereby whether as maker, (i) agrees to any substitution, exchange,
release, surrender or other delivery of any security or collateral now or hereafter held hereunder
or in connection with the Loan Agreement, or any of the other Loan Documents, and to the addition
or release of any other party or person primarily or secondarily liable; (ii) agrees that if any
security or collateral given to secure this Note or the indebtedness evidenced hereby or to secure
any of the obligations set forth or referred to in the Loan Agreement, or any of the other Loan
Documents, shall be found to be unenforceable in full or to any extent, or if Lead Lender or any
other party shall fail to duly perfect or protect such collateral, the same shall not relieve or
release any party liable hereon or thereon nor vitiate any other security or collateral given for
any obligations evidenced hereby or thereby; (iii) agrees to pay all reasonable costs and expenses
incurred by Lead Lender or any other holder of this Note in connection with the indebtedness
evidenced hereby, including, without limitation, all reasonable attorneys’ fees and costs for (a)
the administration and implementation of the Loan, (b) the syndication and/or participation of the
Loan, (c) the collection of the indebtedness evidenced hereby and (d) for the enforcement of rights
and remedies hereunder or under the other Loan Documents, whether or not suit is instituted; and
(iv) consents to all of the terms and conditions contained in this Note, the Loan Agreement, and
all other instruments now or hereafter executed evidencing or governing all or any portion of the
security or collateral for this Note and for such Loan Agreement, or any one or more of the other
Loan Documents.

(H) Delay Not A Bar. No delay or omission on the part of the holder of this Note in
exercising any right hereunder or any right under any instrument or agreement now or hereafter
executed in connection herewith, or any agreement or instrument which is given or may be given to
secure the indebtedness evidenced hereby or by the Loan Agreement, or any other agreement now or
hereafter executed in connection herewith or therewith shall operate as a waiver of any such right
or of any other right of such holder, except as expressly set forth therein, nor shall any delay,
omission or waiver on any one occasion be deemed to be a bar to or waiver of the same or of any
other right on any future occasion.

(I) Partial Invalidity. The invalidity or unenforceability of any provision hereof,
of the Loan Agreement, of the other Loan Documents, or of any other instrument, agreement or
document now or hereafter executed in connection with the Loan made pursuant hereto and thereto
shall not impair or vitiate any other provision of any of such instruments, agreements and
documents, all of which provisions shall be enforceable to the fullest extent now or hereafter
permitted by law.

(J) Use of Proceeds. All proceeds of the Loan shall be used solely for the purposes
more particularly provided for and limited by the Loan Agreement.

(K) Notices. Any notices given with respect to this Note shall be given in the manner
provided for in the Loan Agreement.

(L) Governing Law. It is understood and agreed that all of the Loan Documents were
negotiated, executed and delivered in the State of Nebraska, which State the parties agree has a
substantial relationship to the parties and to the underlying transactions embodied by the Loan
Documents. This Note and each of the other Loan Documents shall in all respects be governed,
construed, applied and enforced in accordance with the internal laws of the State of Nebraska
without regard to principles of conflicts of law.

 

D-4 

 

(M) Waiver of Jury Trial. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING
DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A)
CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO
ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION.

(N) No Oral Change. This Note and the other Loan Documents may only be amended,
terminated, extended or otherwise modified by a writing signed by the party against which
enforcement is sought. In no event shall any oral agreements, promises, actions, inactions,
knowledge, course of conduct, course of dealing, or the like be effective to amend, terminate,
extend or otherwise modify this Note or any of the other Loan Documents.

(O) Rights of the Holder. This Note and the rights and remedies provided for herein
may be enforced by Lead Lender or any subsequent holder hereof. Wherever the context permits each
reference to the term “holder” herein shall mean and refer to Lead Lender or the then subsequent
holder of this Note.

(P) Right to Pledge to Federal Reserve. Lead Lender may at any time pledge or assign
all or any portion of its rights under the Loan Documents including any portion of this Note to any
of the twelve (12) Federal Reserve Banks organized under Section 4 of the Federal Reserve Act, 12
U.S.C. Section 341. No such pledge or assignment or enforcement thereof shall release Lead Lender
from its obligations under any of the Loan Documents.

(Q) General Rights of Assignment and Participation. In accordance with and subject to
the terms and conditions of the Loan Agreement, Lead Lender shall have the unrestricted right at
any time or from time to time, and without Borrower’s or any other person’s consent, to assign all
or any portion of its rights and obligations hereunder and to grant participating interests in the
obligations of Lead Lender.

(R) Replacement Note. Upon receipt of an affidavit of an officer of Lead Lender as to
the loss, theft, destruction or mutilation of the Note or any other security document which is not
of public record, and, in the case of any such loss, theft, destruction or mutilation, upon
cancellation of the Note or other security document, the Borrower will issue, in lieu thereof, a
replacement note or other security document in the same principal amount thereof and otherwise of
like tenor.

[Signatures appear on following page]

 

D-5 

 

IN WITNESS WHEREOF, the Borrower has caused this Note to be duly executed as of the date and
year set forth above as a sealed instrument at Adams, Nebraska.

	 	 	 	 	 
	WITNESS:	 	BORROWER:
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 	 	E ENERGY ADAMS, LLC,
	 	 	a Nebraska limited liability company
	 

	 	By:
	 	 
	 

	 	 	 	 
	 

	 	Its:
	 	 
	 

	 	 	 	 
	 	 	Hereunto duly authorized

 

D-6 

 

Schedule 1

Principal and Interest Payments

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Date	 	Principal	 	 	Coupon	 	 	Interest	 	 	Total P+I	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	12/1/2007
	 	 	—	 	 	 	—	 	 	 	194,518.83	 	 	 	194,518.83	 
	6/1/2008
	 	 	—	 	 	 	—	 	 	 	230,351.25	 	 	 	230,351.25	 
	12/1/2008
	 	 	—	 	 	 	—	 	 	 	230,351.25	 	 	 	230,351.25	 
	6/1/2009
	 	 	95,000.00	 	 	 	9.15	%	 	 	230,351.25	 	 	 	325,351.25	 
	12/1/2009
	 	 	100,000.00	 	 	 	9.15	%	 	 	226,005.00	 	 	 	326,005.00	 
	6/1/2010
	 	 	105,000.00	 	 	 	9.15	%	 	 	221,430.00	 	 	 	326,430.00	 
	12/1/2010
	 	 	110,000.00	 	 	 	9.15	%	 	 	216,626.25	 	 	 	326,626.25	 
	6/1/2011
	 	 	115,000.00	 	 	 	9.15	%	 	 	211,593.75	 	 	 	326,593.75	 
	12/1/2011
	 	 	120,000.00	 	 	 	9.15	%	 	 	206,332.50	 	 	 	326,332.50	 
	6/1/2012
	 	 	125,000.00	 	 	 	9.15	%	 	 	200,842.50	 	 	 	325,842.50	 
	12/1/2012
	 	 	130,000.00	 	 	 	9.15	%	 	 	195,123.75	 	 	 	325,123.75	 
	6/1/2013
	 	 	135,000.00	 	 	 	9.15	%	 	 	189,176.25	 	 	 	324,176.25	 
	12/1/2013
	 	 	145,000.00	 	 	 	9.15	%	 	 	183,000.00	 	 	 	328,000.00	 
	6/1/2014
	 	 	150,000.00	 	 	 	9.15	%	 	 	176,366.25	 	 	 	326,366.25	 
	12/1/2014
	 	 	155,000.00	 	 	 	9.15	%	 	 	169,503.75	 	 	 	324,503.75	 
	6/1/2015
	 	 	165,000.00	 	 	 	9.15	%	 	 	162,412.50	 	 	 	327,412.50	 
	12/1/2015
	 	 	170,000.00	 	 	 	9.15	%	 	 	154,863.75	 	 	 	324,863.75	 
	6/1/2016
	 	 	180,000.00	 	 	 	9.15	%	 	 	147,086.25	 	 	 	327,086.25	 
	12/1/2016
	 	 	185,000.00	 	 	 	9.15	%	 	 	138,851.25	 	 	 	323,851.25	 
	6/1/2017
	 	 	195,000.00	 	 	 	9.15	%	 	 	130,387.50	 	 	 	325,387.50	 
	12/1/2017
	 	 	205,000.00	 	 	 	9.15	%	 	 	121,466.25	 	 	 	326,466.25	 
	6/1/2018
	 	 	215,000.00	 	 	 	9.15	%	 	 	112,087.50	 	 	 	327,087.50	 
	12/1/2018
	 	 	225,000.00	 	 	 	9.15	%	 	 	102,251.25	 	 	 	327,251.25	 
	6/1/2019
	 	 	235,000.00	 	 	 	9.15	%	 	 	91,957.50	 	 	 	326,957.50	 
	12/1/2019
	 	 	245,000.00	 	 	 	9.15	%	 	 	81,206.25	 	 	 	326,206.25	 
	6/1/2020
	 	 	255,000.00	 	 	 	9.15	%	 	 	69,997.50	 	 	 	324,997.50	 
	12/1/2020
	 	 	265,000.00	 	 	 	9.15	%	 	 	58,331.25	 	 	 	323,331.25	 
	6/1/2021
	 	 	280,000.00	 	 	 	9.15	%	 	 	46,207.50	 	 	 	326,207.50	 
	12/1/2021
	 	 	730,000.00	 	 	 	9.15	%	 	 	33,397.50	 	 	 	763,397.50	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Total
	 	$	5,035,000.00	 	 	 	—	 	 	$	4,532,076.33	 	 	$	9,567,076.33	 

 

D-7 

 

EXHIBIT E

FORM OF SECURITY AGREEMENT

 

 

 

SECURITY AGREEMENT

This Security Agreement dated as of the 29th of June, 2007 (this “Security Agreement”), by and
between E Energy Adams, LLC, a Nebraska limited liability company, having an address c/o Larry
Brees 510 Main Street, Adams, NE 68301 (“Pledgor”) and Security First Bank, a banking corporation,
organized under the laws of the State of Nebraska (“Pledgee”).

RECITALS:

WHEREAS, Pledgee made a loan to Pledgor in the original principal amount of $5,035,000.00 (the
“Loan”), pursuant to that certain Loan Agreement of even date herewith by and between Pledgee and
Pledgor (the “Loan Agreement”); and

WHEREAS, the Loan will be disbursed to Pledgor in one or more advances and is evidenced by
that certain Promissory Note dated of even date herewith from Pledgor to Pledgee (“Note”); and

WHEREAS, in order to induce Pledgee to make the Loan, Pledgor is willing to enter into this
Security Agreement and grant Pledgee a security interest in the Series A Note, the Series B Note
and the Pledged Revenues (as hereinafter defined).

AGREEMENT

NOW THEREFORE, in consideration of the foregoing, and in order to induce Pledgee to make the
Loan and for other good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, Pledgor does hereby agree with Pledgee, as follows:

Definitions.

“Chief Executive Office State” shall mean the State in which the Chief Executive Offices of
Pledgor.

“Code” shall mean the Uniform Commercial Code, as enacted in the State of Nebraska, as
amended.

“Collateral State” shall mean any State in which Collateral is issued and/or held.

“Financing Statement” shall have the meaning given that term under the Code.

“Interest” shall have the meaning set forth in the Loan Agreement.

“Issuer” shall mean The Village of Adams, Nebraska, as issuer of the Series A Note and Series
B Note.

“Loan Documents” shall mean the Loan Agreement and any and all ancillary documents necessary
to consummate the transactions contemplated thereby.

“Obligations” shall mean (a) the aggregate unpaid principal amount of, and accrued Interest
on, the Note; (b) all other fees and other amounts owing by Pledgor to Pledgee under the Note; and
(c) each and all of the representations, warranties, covenants, obligations, liabilities,
indemnities and duties of Pledgor under the Loan Documents.

 

E-1 

 

“Pledged Revenues” shall mean Pledged Tax Increment Revenues, PILOT Payments and Liquidated
Damages Amount, as such terms are defined in the Loan Agreement.

“Pledgor State” shall mean any State in which Pledgor is authorized or licensed to conduct
business.

“Series A Note” shall mean the Issuer’s Taxable ax Increment Revenue Note, Series 2007A (E
Energy Adams, LLC Ethanol Plant Project), dated the date of issuance and delivery thereof, in the
original principal amount of $5,035,000.00 with a debt service coverage ratio of 1.15 to 1 and an
interest rate not to exceed 10%, and a maturity date on or before December 1, 2021.

“Series B Note” shall mean the Issuer’s Taxable Tax Increment Revenue Note, Series 2007B (E
Energy Adams, LLC Ethanol Plant Project), dated the date of issuance and delivery thereof, in the
principal amount of $2,500,000.00, without assuming a debt service coverage ratio and an interest
rate not to exceed 10%, and a maturity date on or before December 31, 2021.

Grant of Security Interest. As security for the full payment and performance of the
Obligations when due, Pledgor hereby grants, assigns and pledges, a continuing lien on and security
interest in, and, as a part of such grant, assignment and pledge, hereby transfers and assigns to
Pledgee as security, all of the following (the “Collateral”) whether now owned or hereafter
acquired: (i) the Series A Note and all of Pledgor’s right, title and interest in and to the
Series A Note; (ii) the Series B Note and all of Pledgor’s right, title and interest in and to the
Series B Note; (iii) all of Pledgor’s interest in all distributions to which Pledgor shall at any
time be entitled in respect of the Series A Note or Series B Note; (iv) the Pledged Revenues; and
(v) to the extent not otherwise included, all proceeds of any or all of the foregoing.

Perfection of Security Interests.

Pledgor authorizes Pledgee to file a Financing Statement describing the Collateral.

Pledgor authorizes Pledgee to file a Financing Statement describing any agricultural liens or
other statutory liens held by Pledgee.

Pledgee shall receive, prior to the Closing of the Loan, an official report from the Secretary
of State of each Collateral State, Chief Executive Office State and the Pledgor State indicating
that Pledgee’s interest is prior to all other security interest or other interests reflected in the
report.

Possession. Pledgor shall have possession of the Collateral, except where expressly
otherwise provided in this Security Agreement, or where Pledgee chooses to perfect its security
interest by possession in addition to the filing of a financing statement.

Powers of Pledgor Prior to an Event of Default. Prior to an Event of Default, Pledgor
shall be entitled to receive and retain all distributions with respect to the Collateral.

Representations, Warranties and Covenants. Pledgor hereby covenants with, and
represents and warrants to, Pledgee as follows:

Pledgor will defend Pledgee’s right, title and interest in and to the Collateral pledged by
Pledgor pursuant hereto or in which it has granted a security interest pursuant hereto against the
claims and demands of all other persons.

 

E-2 

 

Pledgor is the legal beneficiary of the Series A Note and Series B Note in which it has
granted a security interest pursuant hereto, free and clear of all claims or security interests of
every nature whatsoever, except such as are created pursuant to this Security Agreement, and has
the unqualified right to pledge and grant a security interest in the same as herein provided
without the consent of any other person other than any such consent that has been obtained.

The Series A Note and Series B Note have been validly acquired by Pledgor and are duly and
validly pledged hereunder. All consents and approvals required for the execution and delivery of
this Security Agreement and the consummation of the transactions contemplated by this Security
Agreement have been obtained.

Application of Collateral. All proceeds of any Collateral now or at any time
hereafter received or retained by Pledgee pursuant to the provisions of this Security Agreement
(including, without limitation, any proceeds from the sale of all or any portion of Series A Note,
Series B Note or Pledged Revenues, and all distributions received by Pledgee in respect of Series A
Note or Series B Note) shall, after an Event of Default, be applied by Pledgee to the Obligations.

Remedies. If an Event of Default shall occur and then be continuing:

Pledgee may exercise all of the rights and remedies of a secured party under the Code.

Pledgee shall also have the right to, at any time and from time to time, (i) cause any or all
of the Series A Note and/or Series B Note to be registered in or transferred into the name of
Pledgee or into the name of a nominee or nominees, or designee or designees, of Pledgee; and/or
(ii) sell, resell, assign and deliver, in its sole discretion, any or all of the Series A Note
and/or Series B Note or any other collateral security for the Obligations and all right, title and
interest, claim and demand therein and right of redemption thereof, at public or private sale, for
cash, upon credit or for future delivery, and in connection therewith Pledgee may grant options and
may impose reasonable conditions such as requiring any purchaser to represent that any “securities”
constituting any part of the collateral are being purchased for investment only, Pledgor hereby
waiving and releasing any and all equity or right of redemption. If all or any of the Series A
Note and/or Series B Note is sold by Pledgee upon credit or for future delivery, Pledgee shall not
be liable for the failure of the purchaser to purchase or pay for the same and, in the event of any
such failure, Pledgee may resell such collateral.

Pledgee may exercise, either by itself or by its nominee or designee, in the name of Pledgor,
all of the rights, powers and remedies granted to Pledgee in Section 2 hereof in respect of
the Series A Note and/or Series B Note and may exercise and enforce all of Pledgee’s rights and
remedies hereunder and under law.

Events of Default. An “Event of Default” shall mean each or any of the following:

if Pledgor fails to pay any payment of principal due under the Note or the Loan Agreement,
together with all accrued and unpaid Interest, if any, which is due under the Note, or declared due
and payable whether at maturity or by acceleration; or

if any Event of Default under the Note has occurred or is occurring; or

if any Event of Default under the Loan Documents has occurred or is occurring ; or

if any Event of Default under this Security Agreement has occurred or is occurring.

 

E-3 

 

Waivers; Modifications. None of the terms and conditions of this Security Agreement
may be discharged, changed, waived, modified or varied in any manner unless in a writing duly
signed by the parties hereto.

Remedies Cumulative. All rights and remedies afforded to Pledgee by reason of this
Security Agreement are separate and cumulative remedies, and shall be in addition to all other
rights and remedies in favor of Pledgee existing at law or in equity or otherwise. No one of such
remedies, whether or not exercised by Pledgee, shall be deemed to exclude, limit, or prejudice the
exercises of any other legal or equitable remedy or remedies available to Pledgee.

Notices. Any demand, notice or other communication in connection with this Security
Agreement will be deemed to be made, given and received:

if mailed by prepaid registered mail addressed as set forth below, on the day following the
day on which it was mailed, during a period of uninterrupted mail service, whether or not the same
be returned undelivered;

if delivered or sent by prepaid courier service to the address set forth below, or personally
served upon any director, officer, servant, employee or partner of the Pledgor or Pledgee, at the
time of such delivery or service; or

if sent prepaid by telefax or other similar means of electronic communication, to the number
set forth below or where the Pledgor or Pledgee has such facilities to receive such communication,
provided that a copy thereof is sent on the same day by prepaid mail, at the time of such sending.

Until further notice, notices under this Security Agreement shall be addressed as follows:

If to Pledgee:

Security First Bank

5710 S 53rd St.

Lincoln, NE 68512

Attention: Aaron Bell

Facsimile: (402) 323-8021

If to Pledgor:

E Energy Adams

510 Main Street

P.O. Box 49

Adams, NE 68301

Attention: Larry Brees

Facsimile: (402) 988-5205

Binding Effect and Assignments. This Security Agreement shall be binding upon and
inure to the benefit of Pledgor and its successors and assigns. This Security Agreement shall be
binding upon and shall inure to the benefit of Pledgee and its successors and assigns.

 

E-4 

 

Consent of Issuer. The Village of Adams, Nebraska, as Issuer of the Series A Note and
Series B Note and Pledged Revenues, hereby consents and agrees to the terms and conditions of this
Security Agreement.

Severability. In case any one or more of the provisions contained in this Security
Agreement shall be found to be invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained herein shall not in any way be
affected or impaired thereby, and this Security Agreement shall continue in full force and effect
in accordance with its remaining terms.

Further Assurances. Pledgor agrees to do such further acts and things and to execute
and deliver to Pledgee such additional conveyances, assignments, agreements and instruments as
Pledgee from time to time may reasonably require or deem advisable to carry into effect this
Security Agreement or to further assure and confirm unto Pledgee its rights, powers and remedies
hereunder.

Release. Pledgee agrees to release its security interest in the Series A Note and
Series B Note upon satisfaction of all of the following conditions precedent:

that the documents to effect such release be prepared by counsel for Pledgor; and

that (i) the principal amount of the Note evidencing the Loan and the other Obligations, shall
have been fully paid and satisfied, and (ii) accrued Interest on the Note evidencing the Loan and
any costs, commitment and other fees, expenses and other sums owing to Pledgee as provided in the
Note, shall have been fully paid; and

that all costs, fees, expenses and other sums paid or incurred by or on behalf of Pledgee in
exercising any of its rights, powers, options, privileges and remedies hereunder, including,
without limitation, reasonable attorneys’ fees and disbursements, shall have been fully paid.

If the Series A Note and Series B Note are so released, Pledgee, at the request and sole cost and
expense of Pledgor made at the time of any such release, will execute and deliver to Pledgor a
proper instrument or instruments acknowledging the satisfaction and termination of this Security
Agreement, and will duly assign, transfer and deliver without recourse and without any
representation or warranty, express or implied (except that Pledgee shall represent that such
release has been and is duly authorized, that all necessary consents to the execution and delivery
thereof have been obtained and that it has not assigned or encumbered the Collateral), to Pledgor
such of the Series A Note and Series B Note as may be in the possession of Pledgee and as has not
theretofore been sold or otherwise applied or released pursuant to this Security Agreement,
together with any moneys at the time held by Pledgee hereunder and not applied to the payment of
the Obligations.

Governing Law. This Security Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Nebraska applicable to contracts entered into
and to be performed entirely within such State and without regard to the conflicts or choice of
laws or rules of such State.

Interpretation. All grammatical changes in gender, tense and number required to give
meaning to any provision herein shall be deemed to be made. References to “this Agreement,”
“hereof,” “herein,” “hereto” and like references are to this Security Agreement and not to any
particular article, section or other subdivision of this Security Agreement. The insertion of
headings in this Security Agreement is for convenience of reference only and will not affect the
construction or interpretation of this Security
Agreement. Unless otherwise specified herein, all statements of or reference to dollar
amounts in this Security Agreement will mean lawful money of the United States of America.

Counterparts. This Security Agreement may be executed in one or more counterparts each
of which shall be deemed and constitute an original and binding agreement.

[Remainder of this page intentionally left blank.]

 

E-5 

 

[signature page to Security Agreement]

IN WITNESS WHEREOF, the parties have duly executed and delivered this Security Agreement as of
the day and year first above written.

	 	 	 	 	 
	 	 	PLEDGOR
	 
	 	 	 	 
	 	 	E ENERGY ADAMS, LLC,
a Nebraska limited liability company
	 
	 	 	 	 
	 

	 	By:
	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Its:
	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 	 	PLEDGEE
	 
	 	 	 	 
	 	 	SECURITY FIRST BANK,
on behalf of all Participants
	 
	 	 	 	 
	 

	 	 	 	 
	 	 	 
	 	 	John Daubert
	 	 	President / CEO

Consent of Issuer:

The Village of Adams, Nebraska
hereby consents to and accepts the
provisions of this Security
Agreement, agrees to comply with
the terms hereof and to perform
any obligations imposed upon it
hereby and grants the security
interests granted by it herein.

	 	 	 	 	 
	THE VILLAGE OF ADAMS, NEBRASKA	 	 
	 
	 	 	 	 
	By:

	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	Its:

	 	 	 	 
	 

	 	 	 	 

 

E-6Filed by Bowne Pure Compliance

 

Exhibit 10.20

ENERGY MANAGEMENT AGREEMENT

(Single Site)

The purpose of this Agreement is to set forth the understanding and agreement between U.S. Energy
Services, Inc. (“U.S. Energy”) and Central Iowa Energy, LLC (“Client”) related to the
provision of energy management services.

SCOPE OF SERVICES: Client has retained U.S. Energy to assist with natural gas and electric
energy management as more fully described in this Agreement.

PROJECT DESCRIPTION: Client is operating a 30 million gallon per year biodiesel
plant (“Plant”) located near Newton, Iowa. The Plant will have peak electric usage of
approximately  XX  MW and will consume approximately 650 MMBtu of natural gas per
day.

U.S. ENERGY RESPONSIBILITIES: The following services will be provided to Client upon
request:

Natural Gas Supply Management Services

	 	1.	 	Invoice Review – U.S. Energy will perform a detailed review of the monthly supply and
utility invoices to ensure accuracy for each of the Client facilities. U.S. Energy will
report any major discrepancies and pursue resolution of any incorrect invoices.

	 
	 	2.	 	Tariff Review – Each facility will be evaluated to determine the most beneficial rate
structure available that best fits the Client’s needs. In addition, U.S. Energy will
continue to monitor natural gas service tariffs to determine if new tariffs or changes to
the tariffs will have an impact on Client.

	 
	 	3.	 	Procurement of Supply to
Facilities – U.S. Energy will determine the most
appropriate method of securing firm physical natural gas supplies to the facilities. A
determination as to whether U.S. Energy-transported, third party-transported, or gas
utility tariff sales supply will provide the most reliable and economic supply of natural
gas to the facilities will be made. Once determined, U.S. Energy will be responsible for
management and monitoring of all operations and agreements related to the natural gas
activities.

	 
	 	4.	 	Negotiation Services – U.S. Energy will provide negotiation services to establish
transportation rates on interstate pipelines and gas utilities, contractual terms with
suppliers and transporters, lines of credit with suppliers, and new tariffs where
applicable with utilities.

	 
	 	5.	 	Energy Tax Exemption Analysis – U.S. Energy will evaluate energy tax exemption
opportunities and if evidence proves an audit to be beneficial, with
Client’s approval and payment, U.S. Energy will arrange for a third party energy tax
exemption audit.

 

 

 

	 	6.	 	Gold + Web Site Access – Gold+ is U.S. Energy’s password-protected web site that
allows clients access to their information. Gold+ access also makes available industry
news, hedging strategies and NYMEX pricing. In addition, various energy usage reports,
and other customized reports for Client will be available on the web page.

Natural Gas Price Rick Management Servicesu

	 	1.	 	Commodity Price Management – U.S. Energy will review natural gas usage at all
facilities and make recommendations for managing natural gas commodity costs. An analysis
will be developed to help determine the amount of natural gas usage that should be
considered for this price management service. U.S. Energy will procure the fixed natural
gas price once Client agrees to a target gas price and quantity. U.S. Energy will provide
price risk management information several times a month through the following
communications:

Weekly Update: E-mailed each week

Monthly Pricing Letter: Mailed out the beginning of each month

Monthly Conference Call: Occurs the first Tuesday of each month

Hedge Recommendations: Updated regularly and published on U.S. Energy’s web site

Annual Energy Conference: Occurs in May of each year.

Gold+ Web Site Access: Gold+ is U.S. Energy’s password-protected web site that

allows clients access to their information. Gold+ access also makes available

industry news, hedging strategies and NYMEX pricing.

Electric Supply Management Services

	 	1.	 	Invoice Review – U.S. Energy will perform a detailed review of the monthly supply and
utility invoices to ensure accuracy for each of the Client facilities. U.S. Energy will
report any major discrepancies and pursue resolution of any incorrect invoices.

	 
	 	2.	 	Tariff Review – Each facility will be evaluated to determine the most beneficial rate
structure available that best fits the Client’s needs. In addition, U.S. Energy will
continue to monitor electric tariffs to determine if new tariffs or changes to the tariffs
will have an impact on Client.

	 
	 	3.	 	Electric Procurement – U.S. Energy will investigate the market conditions for third
party purchase of electricity in Client’s specified locations as it becomes available. If
advantageous to Client’s facilities, U.S. Energy will conduct procurements for those
facilities that have the ability to purchase energy from third-party suppliers. On an
annual basis or according to contract expiration dates, U.S. Energy will negotiate
directly with electric power suppliers to provide supply agreements for the Client
facilities. U.S. Energy will assist with the management and monitoring of these
agreements. U.S. Energy wil also
determine whether firm, interruptible, or a blend of services will provide the lowest cost.
As regulatory conditions change in each state, the electric procurement process will be
reevaluated to take advantage of the changes.

 

2

 

	 	4.	 	Cost and Usage Analysis/Trending: U.S. Energy will archive the monthly electric
billing information in a database that will be used to analyze and trend electric costs
and usage. The reports will be available on U.S. Energy’s website for Client access.

	 
	 	5.	 	Load Profile – U.S. Energy will trend interval load data if available, and help
identify potential areas for Client to target for demand and energy savings.

	 
	 	6.	 	Negotiation Services – U.S. Energy will provide negotiation services to establish
electric rates with electric utilities, contractual terms with third party suppliers,
lines of credit with suppliers, and new tariffs where applicable with electric utlities.

	 
	 	7.	 	Energy Tax Exemption Analysis – U.S. Energy will evaluate energy tax exemption
opportunities and if evidence proves an audit to be beneficial, with Client’s approval and
payment, U.S. Energy will arrange for a third party energy tax exemption audit. U.S.
Energy will further utilize the results for tax exemption filings.

	 
	 	8.	 	Gold+ Web Site Access – Gold+ is U.S. Energy’s password-protected web site that
allows clients access to their information. Gold+ access also makes available industry
news, hedging strategies and NYMEX pricing. In addition, various energy usage reports,
load profile reports and other customized reports for Client will be available on the web
page.

AGENCY: U.S. Energy will act as Client’s agent while managing Client’s energy matters.
The scope of this agency is set forth in the Agency Authorization between U.S. Energy and Client
attached as Exhibit A (the terms of which are made a part of this Agreement).

FEES: U.S. Energy’s fee for services during the term of this Agreement shall be a monthly
retainer fee of $.05/MMBtu consumed plus pre-approved travel expenses. The monthly retainer fee
will increase 4% per year on the annual anniversary date of the effective date of this Agreement.

If Client elects to utilize U.S
Energy to provide physical or financial natural gas hedging
services, a $.01/MMBtu administrative fee will be assessed on volumes hedged to cover the costs
associated with compliance to Federal and State commodities rules and regulations and
administrative costs of facilitating this natural gas hedging service.

TERM: The initial term of this Agreement shall commence on June 1, 2007 and continue for a
one-year term, year to year thereafter, unless Client or U.S. Energy terminates the contract upon
sixty (60) days prior written notice before the annual renewal date. Client shall remain
responsible for payment and performance associated with any and all transportation, supply, and
storage transactions entered into by U.S.
Energy and authorized by Client, prior to termination, as well as fees and charges for U.S.
Energy’s services occurring up until the termination date.

 

3

 

BILLING AND PAYMENT: On the first of the month, U.S. Energy shall invoice Client for
appropriate gas and electric costs for the previous month and for the U.S. Energy retainer fee for
the current month. Client shall pay U.S. Energy within ten (10) days of receipt of invoice.

TAXES: Client will be responsible for payment of all taxes including, but not limited to,
all sales, use, excise, BTU, heating value and other taxes associated with the purchase and/or
transport of natural gas, electricity and the provision of services hereunder.

CONFIDENTIALITY: U.S. Energy shall not divulge to any other person or party any
information developed by U.S. Energy hereunder or revealed to U.S. Energy pursuant to this
Agreement, unless such information is (a) already in U.S. Energy’s possession and such information
is not known by U.S. Energy to be subject to another Confidentiality Agreement, or (b) is or
becomes generally available to the public other than as a result of an unauthorized disclosure by
U.S. Energy, its officers, employees, directors, agents or its advisors, or (c) becomes available
to U.S. Energy on a non-confidential basis from a source which is not known to be prohibited from
disclosing such information to U.S. Energy by legal, contractual or fiduciary obligation to the
supplier, or (d) is required by U.S. Energy to be disclosed by court order, or (e) is permitted by
Client. All such information shall be and remain the property of Client unless such information is
subject to another Confidentiality Agreement, and upon the termination of this Agreement, U.S.
Energy shall return all such information upon Client’s request. Notwithstanding anything to the
contrary herein, U.S. Energy shall not disclose any information which is in any way related to this
Agreement or U.S. Energy’s services hereunder without first discussing such proposed disclosure
with Client.

NOTICES: Any formal notice, request or demand which a party hereto may desire to give to
the other respecting this Agreement shall be in writing and shall be considered as duly delivered
as of the postmark date when mailed by ordinary, registered or certified mail by said party to the
addresses listed below. Either party may, from time-to-time, identify alternate addresses at which
they may receive notice during the term of this Agreement by providing written notice to the other
party of such alternate addresses.

	 	 	 
	Client:

	 	Derek Winkel
	 

	 	General Manager
	 

	 	Central Iowa Energy, LLC
	 

	 	3426 East 28th St. N
	 

	 	Newton, IA 50208
	 
	U.S. Energy:

	 	Bank: US Bank
	     (Payment by wire)

	 	Account Name: U.S. Energy Services, Inc.
	 

	 	Account #: 173100561153
	 

	 	ABA: 091 0000 22

 

4

 

	 	 	 
	     (Notices):

	 	U.S. Energy Services, Inc.
	 

	 	1000 Superior Blvd, Suite 201
	 

	 	Wayzata, MN 55391
	 

	 	Attn: Contract Administration

ASSIGNMENT OR AMENDMENT: The Agreement may not be assigned or amended without the written
consent of U.S. Energy and Client. Such consent shall not be unreasonably withheld by either
party.

APPLICABLE LAW: The Agreement shall be construed in accordance with the laws of the State
of Minnesota.

ENTIRE AGREEMENT: This Agreement constitutes the entire Agreement among the parties
pertaining to the subject matter hereof and supersedes all prior Agreements and understanding
pertaining hereto.

Agreed to and Accepted by:

Central Iowa Energy, LLC

	 	 	 	 	 
	By:

	 	/s/ Derek Winkel
	 	 
	 

	 	 	 	 
	Name: Derek Winkel	 	 
	(Print)	 	 
	Title: General Manager	 	 

Date: 6/8/07

U.S. Energy Services, Inc.

	 	 	 	 	 
	By:

	 	/s/Gail McMinn
	 	 
	 

	 	 	 	 
	Name: Gail McMinn	 	 
	(Print)	 	 
	Title: Executive Vice President – Commercial Services	 	 

Date: 6/12/07

 

5

 

EXHIBIT A

AGENCY AUTHORIZATION

The purpose of this Agency Authorization (this “Authorization”) is to set forth the authorization
and agreement between U.S. Energy Services, Inc. (“U.S. Energy”) and Central Iowa Energy, LLC
(“Client”) related to the provision of energy supply management services.

Client and U.S. Energy agree on the following terms and conditions:

	1.	 	APPOINTMENT AND SCOPE – Client hereby appoints U.S. Energy as its agent for managing Client’s
energy supplies and to deal with third parties on behalf of Client, in connection with
energy-related matters, in U.S. Energy’s capacity as Client’s agent, including, without
limitation, the purchase of energy resources in such quantity and at such times as Client may
authorize in writing, by electronic communications (e.g., by email), verbally or otherwise
(“Energy Procurements”). U.S. Energy is authorized to contract on behalf of Client for the
acquisition of energy supply, transportation and distribution. U.S. Energy hereby accepts
such appointment and agrees to use commercially reasonable efforts to perform the services
required by this Authorization.

	 
	2.	 	AUTHORITY OF U.S. ENERGY TO ALIGN CREDIT – Client authorizes U.S. Energy, in making Energy
Procurements, to align credit from energy suppliers or third parties on behalf and as an agent
of Client, as needed.

	 
	3.	 	AUTHORITY OF U.S. ENERGY TO EXTEND CREDIT – Client hereby agrees that when making Energy
Procurements on behalf of a Client, U.S. Energy may use U.S. Energy funds to pay suppliers,
thereby extending credit directly to Client (and acting as a “Creditor,” as that term is used
in this Authorization).

	 
	4.	 	TERM – The term of this Authorization shall commence as of the date hereof and shall continue
indefinitely until such time as the parties hereto shall agree in writing to terminate the
Authorization.

	 
	5.	 	INDEPENDENT CONTRACTOR – It is not the intent of the parties hereto to form any partnership
or joint venture relationship. Each party shall, in relation to its obligations hereunder,
act as an independent contractor.

	 
	6.	 	RELEASE OF ENERGY CONSUMPTION RECORDS AND BILLS — This Agreement serves as authorization for
the release of Client’s energy consumption records and bills from pipelines and suppliers to
U.S. Energy.

	 
	7.	 	AUTHORITY – Each of Assignor and Assignee represents and warrants to the other that it is
fully empowered and authorized to execute and deliver this Assignment, and the individuals
signing this Assignment each represent and warrant that he or she is fully authorized to do
so.

Agreed to and Accepted by:

	 	 	 	 	 	 	 	 	 
	Central Iowa Energy, LLC	 	 	 	U.S. Energy Services, Inc.
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ Derek Winkel
	 	 	 	By:
	 	/s/ Gail McMinn
	 

	 	 
	 	 	 	 	 	 
	 
	Print Name: Derek Winkel	 	 	 	Print Name: Gail McMinn
	 
	Title: General Manager	 	 	 	Title: EVP – Commercial Services
	 
	 	 	 	 	 	 	 	 
	Date: 6/8/07	 	 	 	Date: 6/12/07

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