Document:

Exhibit 10(a)

	
  

 	
  

 
	
  

 	
 EXECUTION
COPY 

 

UNIT PURCHASE AGREEMENT

          This
Agreement (the “Agreement”) is entered into as of the close of business
on July 25, 2011 by and among REX NuGen LLC, a South Dakota limited liability company (“REX”)
and Central Farmers Cooperative, a South Dakota Cooperative (“CFC”). REX and CFC are referred to collectively herein as the “Parties.”

          A.          CFC
currently owns 51,051 Class A membership interest units (“Class
A Units”) of NuGen Energy, LLC (“NuGen”), and REX currently owns
49,049 Class A Units (herein sometimes referred to as the “Minority Units”),
which together constitute all of the outstanding Class A Units of NuGen. NuGen
owns and operates a 100 MGY anhydrous ethanol refinery and production facility
located in Turner County, South Dakota.

          B.          REX has agreed to purchase from CFC,
and CFC has agreed to sell to REX, all Class A Units owned by CFC (sometimes
referred to herein as the “Purchased Units”).

          Now,
therefore, in consideration of the premises and the mutual promises herein
made, and in consideration of the representations, warranties, and covenants
herein contained, the Parties agree as follows:

ARTICLE I

DEFINITIONS

          1.1 Defined Terms. In addition to all other
terms defined elsewhere in this Agreement, the following capitalized terms have
the meanings set forth below:

“Class A Units” has the meaning set forth in the Recital A above
of this instrument.

“Closing” shall have the meaning set forth in the first
paragraph of Article VII of this Agreement

“Dougherty” means Dougherty Funding, LLC, a Delaware limited
liability company, and the lender of record to NuGen under the Revolving Loan and the Term Loan.

“Employee Benefit Plan” shall mean an employee benefit plan as defined
in Section 3(3) of ERISA, which is subject to Title I of ERISA, or a plan as
defined in Section 4975(e)(1) of the
IRC.

“Environmental Laws” shall mean all present or future federal,
state or local laws, statutes, common law duties, rules, regulations, ordinances
and codes, together with all
administrative or judicial orders, consent agreements, directed duties,
requests, licenses, authorizations and permits of, and agreements with, any
governmental authority, in each case relating to any matter arising out of or
relating to public health and safety, or pollution or protection of the
environment or workplace, including any of the foregoing relating to the
presence, use, production, generation, handling, transport, treatment, storage,
disposal, distribution, discharge, emission, release, threatened release,
control or cleanup of any Hazardous Substance.

“ERISA” shall mean the Employee Retirement Income Security Act
of 1974, as amended from time to time.

“ERISA
Affiliate” shall mean each person (as defined in section 3(9)
of ERISA) that together with NuGen would be deemed to be a “single employer”
within the meaning of section 414(b),(c), (m) or (o) of the IRC.

“GAAP” shall mean generally accepted accounting principles set
forth from time to time in the opinions and pronouncements of the Accounting
Principles Board and the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards Board (or
agencies with similar functions of comparable stature and authority within the
U.S. accounting profession), which are applicable to the circumstances as of
the date of determination, provided, however, that interim financial statements
or reports shall be deemed in compliance with GAAP despite the absence of footnotes
and fiscal year-end adjustments as required by GAAP.

“Hazardous Substances” shall mean (a) any petroleum or petroleum
products, radioactive materials, asbestos in any form that is or could become
friable, urea formaldehyde foam insulation, dielectric fluid containing levels
of polychlorinated biphenyls, radon gas and mold; (b) any chemicals, materials,
pollutant or substances defined as or included in the definition of “hazardous
substances”, “hazardous waste”, “hazardous materials”, “extremely hazardous
substances”, “restricted
hazardous waste”, “toxic substances”, “toxic pollutants”,
“contaminants”, “pollutants” or words of similar import, under any applicable
Environmental Law; and (c) any other chemical, material or substance, the
exposure to, or release of which is prohibited, limited or regulated by any
governmental authority or for which any
duty or standard of care is
imposed pursuant to, any Environmental Law.

“Intellectual Property” shall mean the collective reference to
all rights, priorities and privileges relating to intellectual property,
whether arising under United States, multinational or foreign laws or
otherwise, including copyrights, patents, service marks and trademarks, and all
registrations and applications for registration therefore and all licensees
thereof, trade names, domain names, technology, know-how and processes, and all rights to sue at law or in equity
for any infringement or other impairment thereof, including the right to
receive all proceeds and damages therefrom.

“IRC” means the Internal Revenue Code of 1986, as amended from
time to time.

“Lien”
shall mean, with respect to any Person, any interest granted by such
Person in any real or personal property, asset or other right owned or being
purchased or acquired by such Person which secures payment or performance of any obligation and shall
include any mortgage, lien, encumbrance, title retention lien, charge, claim or
other security interest of any kind, whether arising by contract, as a matter
of law, by judicial process or otherwise.

“Material Adverse Effect” shall mean a material adverse effect
on the business, operations, property, assets, liabilities or financial
condition taken as a whole, or a material adverse effect on the ability of CFC
or NuGen to perform its obligations.

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“Multiemployer
Plan” means a multiemployer plan (as defined in Section 4001(a)(3) of ERISA) to which NuGen or any ERISA
Affiliate contributes or is obligated to contribute.

“Operating
Agreement” shall have the meaning ascribed to it in Section 2.5.

“Pension
Plan” shall mean an employee pension benefit plan that is covered by Title
IV of ERISA or subject to the minimum funding standards under Section 412 of
the IRC, and that is maintained by NuGen or an ERISA Affiliate for employees.

“Permitted
Liens” shall mean those Liens mutually agreed to by REX and CFC which are set forth on Schedule
1.1 hereto and Liens permitted pursuant to the Revolving Loan and Term
Loan.

“Person”
shall mean any natural person, partnership, limited liability company,
corporation, trust, joint venture, joint stock company, association,
unincorporated organization, government or agency or political subdivision
thereof, or other entity; whether acting in an individual, fiduciary or other
capacity.

“Reportable
Event” means a reportable event (as defined in Section 4043 of ERISA),
other than an event for
which the 30-day notice requirement under ERISA has been waived in regulations issued
by the Pension Benefit Guaranty Corporation.

“Revolving
Loan” shall mean that certain Revolving Credit and Security Agreement dated
July 23, 2009 between NuGen and Dougherty, as the same has been or may be
amended.

“Solvent”
shall mean that (i) the sum of the assets of such Person, both at a fair valuation and at present
fair salable value, will exceed its liabilities, including contingent
liabilities, (ii) such Person will have sufficient capital with which to
conduct its business as presently conducted and as proposed to be conducted and
(iii) such Person has not
incurred debts, and does not intend to incur
debts, beyond its ability to pay such debts as they mature. For purposes of
this definition, “debt” shall mean any liability on a claim, and
“claim” shall mean (x) a right to payment, whether or not such right is
reduced to judgment, liquidated, unliquidated, fixed, contingent, matured,
unmatured, disputed, undisputed, legal, equitable, secured, or unsecured, or
(y) a right to an equitable remedy for breach of performance if such breach
gives rise to a payment, whether or not such right to an equitable remedy is
reduced to judgment, fixed, contingent, matured, unmatured, disputed,
undisputed, secured, or unsecured. With respect to any such contingent liabilities, such liabilities shall be
computed at the amount which, in light
of all the facts and circumstances existing at the time, represents the
amount which can reasonably be expected to become an actual or matured
liability.

“Term Loan”
shall mean that certain Loan and Security Agreement dated July 23, 2009 between
NuGen and Dougherty, as the same has been or may be amended.

“Transaction
Documents” shall mean this Agreement and any other agreements, instruments
or documents entered into pursuant to this Agreement.

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“UCC” shall mean the Uniform Commercial Code as the same may,
from time to time, be in effect in the State of South Dakota.

          1.2 Accounting Terms. Any accounting terms
used in this Agreement which are not specifically defined herein shall have the
meanings customarily given them in accordance with GAAP. Calculations and
determinations of financial and accounting terms used and not otherwise
specifically defined hereunder and the preparation of financial statements
previously furnished to REX pursuant to this Agreement were made and prepared,
both as to classification of items and as to amounts, in accordance with sound
accounting practices and
GAAP.

          1.3 Other Terms Defined in UCC. All other
capitalized words and phrases used herein and not otherwise specifically
defined herein shall have the respective meanings assigned to such terms in the
UCC, to the extent the same are used or defined therein.

          1.4 Other Interpretive Provisions.

	
  

 	
  

 
	
  

 	
           (a) The
 meanings of defined terms are equally applicable to the singular and plural
 forms of the defined terms. Whenever the context so requires, the neuter
 gender includes the masculine and feminine, the single number includes the
 plural, and vice versa.

 
	
  

 	
  

 
	
  

 	
           (b)          The
 words “hereof”, “herein” and “hereunder” and words of similar import when used
 in this Agreement shall refer to this Agreement as a whole and not to any
 particular provision of this Agreement.

 
	
  

 	
  

 
	
  

 	
           (c)          The
 term “including” is not limiting, and means “including, without limitation”.

 
	
  

 	
  

 
	
  

 	
           (d)          Unless
 otherwise expressly provided herein, (i) references to agreements
 (including this Agreement and the other Transaction Documents) and other
 contractual agreements or instruments shall be deemed to include all
 subsequent amendments, restatements, supplements and other modifications thereto, but only to the extent such amendments,
 restatements, supplements and other modifications are not prohibited by the
 terms of any Transaction Document, and (ii)
 references to any statute or regulation shall be construed as
 including all statutory and regulatory provisions amending, replacing,
 supplementing or interpreting such statute or regulation.

 
	
  

 	
  

 
	
  

 	
           (e)          To
 the extent any of the provisions of the other Transaction Documents are inconsistent with the terms of
 this Agreement, the provisions of this Agreement shall govern.

 

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ARTICLE
II

PURCHASE AND SALE OF CLASS A UNITS, PURCHASE PRICE ADJUSTMENTS,

AND TAX DISTRIBUTIONS

          2.1 Purchase of Purchased Units. For the consideration
specified below in Section 2.2, on and subject to the terms and conditions of
this Agreement, REX agrees to purchase
from CFC, and CFC agrees to sell to REX free and clear of any Liens, the Purchased Units, such
Purchased Units constituting a 51.0% voting membership interest in NuGen and
all of the Class A Units owned by CFC. 

          2.2 Purchase Price for Purchased Units. The
purchase price (the “Purchase Price”) for the Purchased Units shall be
$12,928,000, subject to adjustment as provided in Section 2.3 below. The
Purchase Price shall be paid at Closing in cash by wire transfer of immediately
available funds or such other method as is agreed to by REX and CFC.

          2.3 Purchase Price Adjustments. The
Purchase Price shall be subject to adjustment as follows:

	
  

 	
  

 
	
  

 	
           (a)          The
 Purchase Price set forth in Section 2.2 reflects a deduction of $300,000,
 representing the May, June and July payments received or anticipated to be
 received by CFC pursuant to the Management Agreement dated June 25, 2009 between
 NuGen and CFC (the “Management Agreement”). Subject to the Purchase
 Price adjustments described in Section 7.5 below, if the Closing occurs
 subsequent to July 31, 2011, the Purchase Price shall be reduced by $100,000
 for each additional elapsed month prior to the actual Closing for which CFC
 has received its $100,000 monthly payment under the Management Agreement. 

 
	
  

 	
  

 
	
  

 	
           (b)          The
 Purchase Price set forth in Section 2.2 assumes that no additional REX
 Distributions (defined in the “Unit Purchase and Option Agreement”) pursuant
 to Section 2.2(a)(2) of the Unit Purchase and Option Agreement dated June 30,
 2010 between REX and CFC (the “Unit Purchase and Option Agreement”)
 are made prior to a July 31, 2011 Closing. At Closing, the Purchase Price
 shall be reduced by the amount of any additional REX Distributions paid to
 CFC prior to Closing. REX shall have no further obligation to assign or pay
 CFC any REX Distributions pursuant to Section 2.2(a)(2) of the Unit Purchase
 and Option Agreement from and after the Closing.

 
	
  

 	
  

 
	
  

 	
           (c)          REX
 has an option (the “Option”), granted pursuant to Section 2.3 of the Unit
 Purchase and Option Agreement, to acquire a sufficient number of additional
 Class A Units from CFC which when combined with its other Class A Units will
 constitute a 51% equity and voting interest in NuGen on a fully diluted basis
 as of the date the Option is exercised. The Purchase Price shall be further
 reduced by any consideration paid by REX to CFC if REX exercises the Option.
 If REX exercises the Option, the number of Purchased Units sold pursuant to
 Section 2.1 shall be reduced by the Option Units so purchased. The Option
 shall be cancelled to the extent it has not been exercised by REX as of the
 Closing.

 

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          2.4 Tax Distributions from NuGen. CFC
hereby agrees to waive its right to receive any further Tax Distributions (as
defined in the Revolving Loan and Term Loan) otherwise due CFC from NuGen, and
REX hereby agrees to waive, and cause NuGen to waive, their respective rights
to require CFC to reimburse any excess Tax Distribution that may otherwise be
calculated as being owed by CFC. In the event Dougherty or the participating
banks under the Term Loan or Revolving Loan, or their assigns, make a valid
claim against CFC for reimbursement of Tax Distributions received for NuGen’s
fiscal year ending July 31, 2011, REX agrees to pay the amount of such tax
distribution on behalf of CFC. In the event Closing does not occur, the waivers
herein granted shall immediately be null and void, and of no further effect,
the intent of the parties that all rights and obligations relating to Tax
Distributions shall be reinstated as if the waiver had never been granted.

          2.5 Operating Agreement. Concurrent with
the closing of the purchase of the Purchase Units, REX shall cause NuGen to
enter into the Fourth Amended and Restated Limited Liability Company Agreement
in the form attached hereto as Exhibit A (the “Fourth Amended
Operating Agreement”). The attached Fourth Amended Operating Agreement
shall supersede and replace any prior operating agreements of NuGen, including
the Third Amended and Restated Limited Liability Company Agreement dated as of
July 2, 2009 (the “Operating Agreement”).

ARTICLE
III

REPRESENTATIONS AND WARRANTIES REGARDING CFC

          To induce
REX to close the transactions contemplated in this Agreement, CFC represents
and warrants to REX that except as may be set forth in particularity and in
detail on the disclosure schedules attached to this Agreement and dated the same date as this Agreement (the “Disclosure
Schedules”), which shall be arranged in paragraphs corresponding to the
numbered paragraphs in this Article III (provided, however, that each
disclosure set forth in the Disclosure Schedule shall not be deemed to refer to
any other section other than (i) the specific section or sections referenced in
such disclosure and (ii) any
other sections where the applicability of the disclosed matter or circumstance
to the representation or warranty in question is reasonably obvious), the
following statements are true and correct as of the Closing and each shall
survive the execution and delivery of this Agreement:

          3.1 Organization and Name. CFC is a
cooperative duly organized, existing and in good standing under the laws of the
State of South Dakota, with full and adequate power to carry on and conduct its
business as presently conducted. CFC is duly licensed or qualified in all
foreign jurisdictions wherein the nature of its activities require such qualification
or licensing, except for such jurisdictions where the failure to so qualify
would not have a Material Adverse Effect. The exact legal name of CFC is as set
forth in the first paragraph of this instrument. 

          3.2 Authorization. CFC has full right,
power and authority to enter into this Agreement, and the other Transaction
Documents as provided herein and to perform all of its duties and obligations
under this Agreement and
the other Transaction Documents. The execution and delivery of this Agreement and the other Transaction
Documents will not, nor will the observance or performance of any of the matters and things herein or therein set forth, violate or

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contravene
any provision of law or of the articles of incorporation of CFC. All necessary
and appropriate action has been
taken on the part of CFC to authorize the execution and delivery of this
Agreement and the other Transaction Documents.

          3.3 Validity
and Binding Nature. This Agreement and the other Transaction Documents are the legal, valid and
binding obligations of CFC, enforceable against CFC in accordance with their terms, subject to bankruptcy, insolvency and
similar laws affecting the enforceability of creditors’ rights generally
and to general principles of equity.

          3.4 Consent; Absence of Breach. To the
actual knowledge of Steve Domm and Brent Edwards (the “CFC Representatives”)
after reasonable inquiry and investigation (the “Knowledge Qualifier”),
the execution, delivery and performance of this Agreement, and the other
Transaction Documents, and the transactions hereunder and thereunder, do not
and will not (a) except as disclosed on Schedule 3.4(a), require any
consent, approval, authorization of, or filings with, notice to or other act by
or in respect of, any governmental authority or any other Person (other than
any consent or approval which has been obtained and is in full force and
effect), (b) conflict with (i) any provision of law or any applicable
regulation, order, writ, injunction or decree of any court or governmental
authority, (ii) the articles of incorporation of CFC, or (iii) any material
agreement, indenture, permit instrument or other document, or any judgment,
order or decree, which is binding upon CFC or any of its properties or assets, or
(c) require, or result in, the creation or imposition of any Lien on any asset
of CFC. 

          3.5 Ownership of Purchased Units; Liens.
CFC is the sole owner of the Purchased Units, which are duly and validly issued, fully paid and
non-assessable and, at or prior to Closing, will be free and clear of all
Liens, charges and claims. The 51,051 Class A Units comprising the Purchased
Units constitutes all of the Class A Units owned by CFC. In the event REX
exercises the Option, immediately prior to the closing of the purchase of the
Option Units, CFC will be the sole owner of the Option Units, which will be
duly and validly issued, fully paid and non-assessable and will be free and clear of all Liens, charges and
claims.

          3.6 Brokers’ Fees. CFC does not have any
liability or obligation to pay any commissions to any broker, finder, or
agent with respect to the transactions contemplated by this Agreement, or to
the extent CFC has any such liability, CFC shall satisfy its obligations
thereto and REX will have no liability with respect thereto.

          3.7 Sale or Transfer of Purchased Units. Since June 10, 2011, CFC has not entered into an agreement or conducted
discussions with other prospective purchasers of the Purchased Units. 

          3.8 Complete Information. Subject to and
qualified by the Knowledge Qualifier, all financial statements, schedules,
certificates, confirmations, agreements, contracts, and other materials and
information heretofore or contemporaneously herewith furnished in writing by
NuGen or CFC to REX
for purposes of, or in connection with, this Agreement and the transactions contemplated
thereby are true and accurate in every material respect on the date as of which
such information is dated or certified, and
none of such information is or will be incomplete by omitting to state
any material fact necessary to make such information not misleading in light of
the circumstances under which made (it being recognized by REX that any 

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projections and forecasts provided by NuGen or CFC are based on good
faith estimates and assumptions believed to be reasonable as of the date of the
applicable projections or assumptions and that actual results during the period
or periods covered by any such projections and forecasts may differ from projected
or forecasted results).

          3.9 Compliance With Unit Purchase and Option
Agreement. CFC is in full compliance with its obligations under the
Unit Purchase and Option Agreement and acknowledges it has received all REX
Distributions required to be paid by REX over to CFC under the Unit Purchase
and Option Agreement as of the date of this Agreement and again as of Closing.

ARTICLE
IV

REPRESENTATIONS AND WARRANTIES REGARDING NUGEN

          To induce REX to close the transactions contemplated in
this Agreement, CFC, as the holder of a majority of the voting units of NuGen, subject to and qualified by
the Knowledge Qualifier, and after reasonable inquiry of NuGen’s CEO (Aaron
Riedell) and CFO (Loren Johnson) (the “NuGen Representatives”), and in
reliance thereon, represents and warrants to REX that, except as may be set forth in particularity and in detail the
Disclosure Schedules, which shall be arranged in paragraphs
corresponding to the numbered paragraphs in this Article IV (provided, however,
that each disclosure set forth in the Disclosure Schedule shall not be deemed
to refer to any other section other than (i) the specific section or sections
referenced in such disclosure and (ii) any other sections where the
applicability of the disclosed matter or circumstance to the representation or
warranty in question is reasonably obvious), the following statements are true
and correct as of the Closing and each shall survive the execution and delivery
of this Agreement:

          4.1 NuGen Organization and Name. NuGen is a
limited liability company duly organized, existing and in good standing under
the laws of the State of South Dakota, with full and adequate power to carry on
and conduct its business as presently conducted. NuGen is duly licensed or
qualified in all foreign jurisdictions wherein the nature of its activities
require such qualification or licensing, except for such jurisdictions where
the failure to so qualify would not have a Material Adverse Effect. The exact
legal name of NuGen is as set forth in the first paragraph of this
instrument, and NuGen currently does not conduct, nor has it during the last
five (5) years conducted, business under any other name or trade name.

          4.2 Consent; Absence of Breach. The
execution, delivery and performance of this Agreement and the other Transaction
Documents, and the transactions hereunder and thereunder, do not and will not,
except as disclosed on Schedule 4.2 (a) require any consent, approval,
authorization of, or filings with, notice to or other act by or in respect of,
any governmental authority or any other Person (other than any consent or
approval which has been obtained and is in full force and effect), (b) conflict with (i) any
provision of law or any applicable regulation, order, writ, injunction or
decree of any court or governmental authority, (ii) the articles of organization of NuGen, or (iii) any
agreement, indenture, instrument, permit or other document, 

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or any judgment, order or decree, which is binding upon NuGen or any of
its properties or assets, or (c) require, or result in, the
creation or imposition of any Lien on any asset of NuGen.

          4.3 Capitalization. The following
provisions of this Section 4.3 are true and correct as of the Closing and each
shall survive the execution and delivery of this Agreement: 

	
  

 	
  

 
	
  

 	
           (a)          As
 of the date set forth above, the capitalization of NuGen is set forth in Schedule
 4.3, Part I (the “Pre-Closing Capitalization Table”). The
 Pre-Closing Capitalization Table includes a true and complete accounting of
 the capitalization of NuGen, including all units of NuGen and other equity
 securities (and other rights, options or securities convertible into or
 exercisable or exchangeable for equity securities) that are authorized,
 issued, outstanding or reserved for future issuance.

 
	
  

 	
  

 
	
  

 	
           (b)          All
 of the presently outstanding equity securities have been duly and validly
 issued (including, without limitation, issued in compliance with all
 applicable securities laws) and are fully-paid and nonassessable. To the
 actual knowledge of the CFC Representatives without independent inquiry, (i)
 all of the presently outstanding equity securities are owned free and clear
 of any proxy, voting agreement, voting trust or similar agreement, and (ii) no equity security has been
 issued or disposed of in violation of the preemptive rights, rights of first
 refusal or similar rights of any of NuGen’s members or any other Person.

 
	
  

 	
  

 
	
  

 	
           (c)          There
 are no outstanding options, warrants, rights (including conversion or
 preemptive rights and rights of first refusal), proxy or member agreements,
 or agreements or understandings of any kind for the purchase or acquisition
 from NuGen of any of its securities or under which NuGen is obligated to
 repurchase or redeem any of its securities. To the actual knowledge of the
 CFC Representatives without independent inquiry, no member of NuGen has
 granted or provided any other person (through an oral or written agreement) a
 right or option to purchase or acquire from such member any interest of any
 kind in any securities of NuGen in which such member has an interest (whether
 of record or equitable). 

 
	
  

 	
  

 
	
  

 	
           (d)          No
 agreement or understanding between NuGen and any holder of any equity
 securities, options or other rights to purchase equity securities from NuGen
 provides for acceleration or other changes in the vesting provisions or other
 terms of such agreement
 or understanding as the result of any merger, consolidated sale of stock or
 assets, change in control or any other transaction(s) by NuGen.

 
	
  

 	
  

 
	
  

 	
           (e)          After the Closing and transfer to REX of
 the Purchased Units described in this Agreement, the capitalization of
 NuGen will be as set forth in Schedule 4.3, Part II (the “Post-Closing
 Capitalization Table”). The Post-Closing Capitalization Table reflects
 that after Closing, (i) REX shall own
 not less than a 100% voting interest and 97.55% economic interest in NuGen on
 a fully diluted basis; and (ii) the Class B Members (as defined in the
 Operating Agreement) will continue to own 2,658,369 Class B Units,
 representing a 2.45% equity ownership interest in NuGen. 

 

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          4.4
Ownership of Properties; Liens. Except for NuGen’s interest as a
licensee under (i) the ICM License Agreement (as defined in the
Term Loan), and (ii) certain
software license agreements, NuGen is the sole owner of all of its
properties and assets, real and personal, tangible and intangible, of any
nature whatsoever (including patents, trademarks, trade names, service marks
and copyrights), free and clear of all Liens, charges and claims (including infringement claims with respect
to patents, trademarks, service marks, copyrights and the like), other than
Permitted Liens.

          4.5 Intellectual
Property. NuGen owns and
possesses or has a license or other right to
use all Intellectual Property, as are necessary for the conduct of the
businesses of NuGen, without any infringement upon rights of others which could
reasonably be expected to have a Material Adverse Effect upon NuGen, and no
material claim has been asserted and is pending by any Person challenging or
questioning the use of any Intellectual Property or the validity or
effectiveness of any Intellectual Property nor does NuGen know of any valid
basis for any such claim. 

          4.6
Financial Statements. (a)
All financial statements of NuGen submitted to REX have been prepared at NuGen’s request by Christianson
& Associates in accordance with sound accounting practices and GAAP
on a basis, except as otherwise noted therein, and present fairly the financial
condition of NuGen and the results of the operations for NuGen as of such date and for the periods indicated, and (b) since July 31, 2010 (the date of
the most recent audited financial statement submitted by NuGen to REX), there
has been no change in the financial condition or in the assets or liabilities
of NuGen having a Material Adverse Effect on NuGen.

          4.7 Litigation and Contingent Liabilities. Except as set forth on Schedule 4.7, there is no litigation, arbitration
proceeding, demand, charge, claim, petition or governmental investigation or
proceeding pending, or threatened, against NuGen, which, if adversely
determined, might reasonably be expected to have a Material Adverse Effect upon
NuGen. NuGen has no material guarantee obligations, contingent liabilities,
liabilities for taxes, or any long-term leases or unusual forward or long-term
commitments, including any interest rate or foreign currency swap or exchange
transaction or other obligation in respect of derivatives, that are not
fully-reflected or fully reserved for in the most recent audited financial
statements delivered to REX or fully-reflected or fully reserved for in the
most recent quarterly financial statements delivered to REX.

          4.8 Event of Default. CFC has no knowledge
of the existence of any event of default, and NuGen has received no notice of any default (without regard to
grace or cure periods) under any other contract or agreement to which it is a
party, including, without limitation, the Revolving Loan and the Term Loan.

          4.9 Adverse Circumstances. Other than as
disclosed on Schedule 4.9, no condition, circumstance, event, agreement,
document, instrument, restriction, litigation or proceeding (or threatened
litigation or proceeding) exists which would have a Material Adverse
Effect upon NuGen.

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          4.10
Environmental Laws and Hazardous Substances. The representations and
statements set forth in this Section 4.10 are qualified by reference to
the items disclosed on Schedule 4.10 of this Agreement. NuGen has not
generated, used, stored, treated, transported, manufactured, handled, produced
or disposed of any Hazardous Substances, on or off any of the premises of NuGen
(whether or not owned by it) in any manner which at any time violates any Environmental Law or any license, permit,
certificate, approval or similar authorization thereunder. NuGen has complied
in all material respects with all Environmental Laws and has obtained all
licenses, permits certificates, approvals and similar authorizations thereunder. There has been no investigation,
proceeding, complaint, order, directive,
claim, citation or notice by any governmental authority or any other Person,
nor is any pending or, to the best of NuGen’s knowledge, threatened, and
NuGen shall immediately notify REX upon becoming aware of any such
investigation, proceeding, complaint, order, directive, claim, citation or
notice, and shall take prompt and appropriate actions to respond thereto, with
respect to any non-compliance with, or violation of, the requirements of any Environmental Law by NuGen or the release,
spill or discharge, threatened or actual, of any Hazardous Material or the generation, use, storage,
treatment, transportation, manufacture, handling, production or disposal of any
Hazardous Material or any other environmental, health or safety matter, which affects NuGen or its business,
operations or assets or any properties at which NuGen has transported, stored
or disposed of any Hazardous Substances. NuGen has no material liability,
contingent or otherwise, in connection with a release, spill or discharge,
threatened or actual, of any Hazardous Substances or the generation, use,
storage, treatment, transportation, manufacture, handling, production or
disposal of any Hazardous Material. 

          4.11
Solvency. Based upon the continuing accuracy of the financial
statements prepared by NuGen and reviewed by Christianson &
Associates, as of the date hereof, NuGen is Solvent, and (a) NuGen is able to
realize upon its assets and pay its debts and other liabilities (including
disputed contingent and unliquidated liabilities) as they mature in the normal
course of business, (b) NuGen does not intend to, and does not believe that it
will, incur debts or liabilities beyond its ability to pay as such debts and
liabilities mature, and (e) NuGen is not engaged in business or a transaction, and is not about to engage in business
or a transaction, for which its property would constitute unreasonably small
capital.

          4.12 ERISA.

	
  

 	
  

 
	
  

 	
           (a)          Neither
 NuGen nor any ERISA Affiliate as of the date hereof (i) maintains, contributes to or has any
 liability to contribute to any Pension Plan or has within the preceding five
 years made or accrued such contributions or had such liability, (ii)
 contributes to or has any liability to contribute to any Multiemployer Plan
 or has within the preceding five years made or accrued such
 contributions or had such liability or (iii)
 provides or has any material liability to provide post-retirement medical or
 insurance benefits with respect to employees or former employees (other than
 benefits required under Section 601 of ERISA, Section 4980B of the IRC
 or applicable state law).

 
	
  

 	
  

 
	
  

 	
           (b)          Except
 as disclosed on Schedule 4.12, neither NuGen nor any ERISA Affiliate
 (i) has knowledge that NuGen or the ERISA Affiliate is not in material
 compliance with the requirements of ERISA, the IRC, or state law with respect
 to any 

 

11

	
  

 	
  

 
	
  

 	
 Employee Benefit Plan, (ii) has knowledge that a Reportable Event
 occurred or continues to exist in connection with any Pension Plan, or (iii) sponsors an Employee Benefit Plan that
 it intends to maintain as qualified
 under the IRC that is not so qualified, and no fact or circumstance
 exists which may have a material adverse effect on such Employee Benefit
 Plan’s tax qualified status.

 
	
  

 	
  

 
	
  

 	
           (c)          Except
 as, in the aggregate, does not have a Material Adverse Effect, neither NuGen
 nor any ERISA Affiliate has liability for any (i) accumulated funding deficiency (as defined in Section 302 of ERISA
 and Section 412 of the IRC) under any Pension Plan, whether or not waived, (ii) withdrawal, partial withdrawal,
 reorganization or other event under any Multiemployer Plan under
 Section 4201 or 4243 of ERISA, or (iii)
 event or circumstance which could result in financial obligation to
 the Pension Benefit Guaranty Corporation, the Internal Revenue Service, the
 Department of Labor or any participant in connection with any Employee
 Benefit Plan (other than routine claims for benefits under the Employee
 Benefit Plan).

 

          4.13 Labor
Relations. Except as could
not reasonably be expected to have a Material Adverse Effect, (i) there are no strikes, lockouts or
other labor disputes against NuGen or threatened, (ii) hours worked by and payment made to employees of NuGen have
not been in violation of the Fair Labor Standards Act, as amended, or any other
applicable law, and (ii) no unfair labor practice complaint
is pending against NuGen or threatened before any governmental authority.

          4.14 Taxes. As of the date hereof, NuGen has
timely filed all tax returns and reports
required by law to have been filed by it and has paid all taxes, governmental
charges and assessments due and payable with respect to such returns, except
any such taxes or charges which are
being diligently contested in good faith by appropriate proceedings and for which
adequate reserves in accordance with GAAP shall have been set aside on its
books, are insured against or bonded over to the satisfaction of REX, and the contesting of such payment
does not create a Lien on the Purchased Units which is not a Permitted Lien.
There is no controversy or objection pending or threatened in respect of any tax returns of NuGen. NuGen has made
adequate reserves on its books and records in accordance with GAAP for all
taxes that have accrued but which are not yet due and payable.

          4.15 Governmental Regulation. NuGen is not,
or after giving effect to this Agreement and the other Transaction
Documents, will not be, subject to regulation under the Federal Power
Act, the ICC Termination Act of 1995
or the Investment Company Act of 1940,
each as amended from time to time, or to any federal or state statute or
regulation limiting its ability to incur indebtedness for borrowed money. 

          4.16 Place of Business. The principal place
of business and books and records of NuGen are located at 27283 447th Avenue, Marion, South Dakota. 

          4.17 Brokers’ Fees. NuGen does not have any
liability or obligation to pay any commissions to any broker, finder, or agent
with respect to the transactions contemplated by this Agreement.

12

          4.18 Permits. NuGen has in full force and effect all necessary
governmental permits and
approvals in order to operate its business in accordance with applicable law. Schedule
4.18 contains a true,
complete and correct list of all
permits that NuGen currently holds, and NuGen is in compliance with all
terms of such permits. No investigation or review by any governmental entity with respect to NuGen or the permits
is pending, or, to the knowledge of NuGen, threatened.

          4.19 Sale or Transfer of Assets; Capitalization. Since June 30,
2010, NuGen has not (i) entered into an agreement with other prospective
purchasers of the equity and/or assets
of NuGen, (ii) become a party to a merger, business combination or
consolidation, or completed the sale of all or substantially all of NuGen’s
assets or other sale of assets outside of the ordinary course of business,
(iii) liquidated, dissolved or recapitalized NuGen, (iv) made changes to
NuGen’s Operating Agreement,
Articles of Organization or other constituent documents, or (v) engaged in any
businesses other than the businesses in which it is presently engaged. Since
June 10, 2011, NuGen has not made any changes to NuGen’s capitalization
or paid any dividends or other distributions (other than “Make-Up
Consideration” under the Revolving Loan and/or Term Loan) to its members. CFC agrees to, and will cause NuGen to, not
do any of the foregoing from the date hereof through the Closing. CFC has
delivered to REX a true, correct and complete copy of the Operating Agreement.

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF REX

          To
induce CFC to close the transactions contemplated in this Agreement, REX makes
the following representations and warranties to CFC, each of which shall
survive the execution and delivery of this Agreement:

          5.1 Organization and Name. REX is a limited liability company
duly organized, existing and in good standing under the laws of the State of
South Dakota, with full and adequate power to carry on and conduct its
businesses presently conducted. The exact legal name of REX is as set forth in the first paragraph of
this Agreement.

          5.2 Authorization. REX has full right,
power and authority to enter into this Agreement and the other Transaction
Documents and to perform all of its duties and obligations under this Agreement
and the other Transaction Documents. The execution and delivery of this
Agreement and the other Transaction Documents will not, nor will the observance or performance of any of the
matters and things herein or therein set forth, violate or contravene any
provision of law or of the articles of organization of REX. All necessary and
appropriate action has been taken
on the part of REX to authorize
the execution and delivery of this Agreement and any other documents or
instruments related thereto.

          5.3 Validity and Binding Nature. This
Agreement and the other Transaction Documents are the legal, valid and binding
obligations of REX, enforceable against REX in accordance with their terms, subject to bankruptcy, insolvency and similar laws affecting the enforceability
of creditors’ rights generally and to general principles of equity.

13

          5.4 Consent; Absence of Breach. The
execution, delivery and performance of this Agreement and the other
Transaction Documents, and the transactions hereunder and thereunder, do not and will not (a) require
any consent, approval, authorization of, or filings with, notice to or other
act by or in respect of, any governmental authority or any other Person
(other than any consent or approval which has been obtained and is in full
force and effect), (b) conflict with (i) any provision of law or any
applicable regulation, order, writ, injunction
or decree of any court or governmental authority, (ii) the articles of
organization of REX, or (iii) any
agreement, indenture, instrument or other document, or any judgment, order or
decree, which is binding upon REX or any of its properties or assets, or (c)
require, or result in, the creation or imposition of any Lien on any asset of
REX. 

          5.5 Minority Units. REX is the owner of the
Minority Units and has not taken any action (or omitted to take any action)
with regard to such Minority Units that would make any representation set forth
in Section 4.3 above untrue or incorrect as of the Closing, and this representation
shall survive the Closing.

          5.6 Compliance With Unit Purchase and Option
Agreement. REX is in full compliance with its obligations under the
Unit Purchase and Option Agreement including without limitation its obligations
to pay to CFC all REX Distributions as of the date of this Agreement and again
as of Closing. 

          5.7 Brokers’ Fees. REX does not have any liability or obligation to
pay any commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement, or to the extent REX has any such
liability, REX shall satisfy its obligations thereto and CFC will have no
liability with respect thereto. 

          5.8 Volatile Nature of Ethanol Industry. (a) REX and its owners are experienced investors in, and owners of, multiple
ethanol production facilities, and as such, acknowledge and understand the
risks and volatility inherent in the ethanol industry; and (b) REX, as a
current significant Unit owner in NuGen with representatives on NuGen’s Board
of Managers, Risk Committee and Executive Committee, is aware of the
operational and commodity risks and volatility inherent in the operation of
NuGen’s ethanol production facility.

          5.9 Complete Information. To the best of
the knowledge of Zafar Rizvi after reasonable inquiry and investigation, all
NuGen financial statements, schedules, certificates, confirmations, agreements,
contracts, and other materials and information heretofore or contemporaneously
herewith furnished in writing to REX by NuGen or CFC for purposes of, or in connection with, this
Agreement and the transactions contemplated thereby are true and
accurate in every material respect on the date as of which such information is
dated or certified, and none of
such information is or will be incomplete by omitting to state any material
fact necessary to make such information not misleading in light of the
circumstances under which made 

14

ARTICLE VI

COVENANTS

          6.1 Further Assurances. Each Party shall cooperate with the other,
take such further action, and execute and deliver such further
documents, as may be reasonably requested
by any other Party to give effect to the transactions contemplated in this Agreement
and any other Transaction Documents.

          6.2 Inconsistent Agreements. Except as contemplated in Section 6.7 below,
no Party shall enter into any other agreement containing any provision
which would be violated or breached by any transaction described in this
Agreement and any other Transaction Documents.

          6.3 Access to Information. From and after
the Closing, REX will be entitled, and CFC will not object, to access of all
documents, books, records (including tax records), agreements, and financial data of any sort
relating to the operations of NuGen prior to and after the Closing. 

          6.4 Fiscal Year. REX intends that upon the closing of the purchase of the Purchased Units, as soon as practicable upon receipt
of necessary consent from Dougherty, NuGen’s fiscal year shall be amended to be
January 1 - December 31, which designation shall also be included in the
Fourth Amended Operating Agreement.

          6.5 Consents and/or Waivers. Each Party hereto
hereby agrees to take such further action, execute such additional
documents and use commercially reasonable efforts, as necessary, after Closing to assist the other Parties hereto in
obtaining any third party consents and/or waivers required (if any) in
connection with the transactions contemplated by the provisions of this
Agreement. 

          6.6 Section 754 Election. CFC agrees that it will not object
to NuGen making an Election
under Section 754 of the Internal Revenue Code for its tax year that includes
the effective date of this Agreement. 

          6.7 New Business or Investment. CFC agrees
to, and will cause NuGen to, not pursue new business or investment
opportunities other than the ongoing NuGen projects relating to a grain
conveyance system, potential amendments to the ethanol marketing agreement and
investigation as to a corn oil extraction system. Any contracts entered into on
such matters prior to Closing shall require REX’s prior written consent, which
consent shall not be unreasonably withheld, conditioned or delayed, until (i)
closing of the transactions contemplated by this Agreement or (ii) the Parties
agree to terminate that certain letter agreement between them dated June 21,
2011. 

          6.8 Corn Procurement Agreement. REX and CFC
agree that the Corn Procurement Agreement between NuGen and Fremar, LLC shall
remain in effect under its current terms until Closing. The parties acknowledge
that current discussions are being held regarding specific changes to the Corn
Procurement Agreement, which changes have been mutually agreed to by REX and
CFC and their mutual understandings of such changes are set forth in the email
communications attached hereto and incorporated herein as Schedule 6.8
(collectively the Corn 

15

Agreement
Amendments”). CFC agrees to use its best efforts to obtain Fremar, LLC’s
approval to the Corn Agreement Amendments as soon as practicable and in any
event on or prior to Closing hereunder. 

ARTICLE VII

CLOSING; CLOSING DOCUMENTS

          7.1 Closing. The consummation of the
purchase and sale of the Purchased Units (the “Closing”) will take place
within 15 days of the
satisfaction of all conditions to closing having been either satisfied or
waived by the Party entitled to waive the same, but in all events on or before
July 31, 2011 (the “Closing Date”), subject to extension as provided in
Section 7.5. Notwithstanding the foregoing, the purchase and sale of the
Purchased Units shall be deemed, and CFC’s incidents of ownership thereof
terminated, effective close of business on July 31, 2011 (the “Effective
Date”); all incidents of ownership for REX shall be effective as of August
1, 2011.

          7.2 Conditions Precedent to REX’s Obligations.
The obligation of REX to purchase the Purchased Units from CFC shall be subject
to fulfillment or waiver in writing by REX at or prior to the Closing of each
of the following conditions:

	
  

 	
  

 	
  

 
	
  

 	
           (a)          At
 the Closing, CFC shall deliver to REX all of the following, each to be satisfactory in form and content to
 REX in its sole but reasonable discretion:

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
               (1)          The
 Purchased Units by duly executed assignment.

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
               (2)          Evidence
 of the release of all Liens that encumber the Purchased Units reasonably
 satisfactory to REX and its counsel.

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
               (3)          Evidence
 of termination or assignment of the Management Agreement.

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
               (4)          NuGen
shall deliver to REX a duly executed Fourth Amended and Restated Operating
Agreement in the form attached hereto as Exhibit A. 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
               (5)          A secretary certificate which certifies and
 attaches (i) a true and complete
 copy of CFC’s articles of incorporation, (ii) a true and complete copy of the resolution adopted by CFC’s Board
 of Directors authorizing the transactions contemplated by this Agreement, and
 (iii) a certificate of good standing for CFC for the state in which CFC is organized and for each state in which
 CFC is qualified to do business;

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
               (6)          Such
 other certificates, documents and instruments that REX or its counsel may
 reasonably request in order to consummate the transactions contemplated by
 this Agreement.

 

16

	
  

 	
  

 	
  

 
	
  

 	
  

 	
           (7)          A
 written opinion of counsel for NuGen dated as of Closing as to the matters
 set forth in Sections 4.1, 4.2, 4.3 and 4.7, and any other legal memoranda
 mutually agreed to by legal counsel of the Parties.

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
           (8)          If
 the Option is exercised, evidence of the release of all Liens that
 encumber the Option Units reasonably satisfactory to REX and its counsel.

 
	
  

 	
  

 	
  

 
	
  

 	
           (b)        At
 the Closing, the following shall be delivered to REX, each to be satisfactory
 in form and content to REX in its sole discretion:

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
           (1)          Evidence
 of compliance with NuGen’s unit transfer policy in connection with the
 transfer of the Purchased Units to REX as reasonably satisfactory to REX and
 its counsel. 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
           (2)          A
 secretary certificate which certifies and attaches (i) a true and complete
 copy of NuGen’s articles of organization, (ii) a true and complete copy of the
 resolution adopted by NuGen’s Board of Managers authorizing the transactions
 contemplated by this Agreement, and (iii) a certificate of good standing for
 NuGen for the state in which NuGen is organized and for each state in which
 NuGen is qualified to do business.

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
           (3)          As
 soon as practicable but no later than September 30, 2011,
 audited financial statements of NuGen as of such dates and for such periods,
 prepared by Christianson & Associates, required for compliance with
 applicable rules and regulations of the Securities and Exchange Commission.

 
	
  

 
	
  

 	
  

 	
 (c)        At
 or prior to the Closing, the following shall have occurred:

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
             (1)          Dougherty
 shall have consented to: (i) the purchase and sale of the Purchased Units by
 REX from CFC as provided in Section 2.1, and/or otherwise fully waived any
 claim to invoke the Change of Control provisions as set forth in Section
 12.13 of the Term Loan; and (ii) all Rex required changes to the Dougherty
 Term Loan and Revolving Loan Agreements, said REX required changes to be
 consistent with and reflecting the material terms set forth in the Term Sheet
 dated June 29, 2011, between NuGen and Dougherty, and REX will use its best
 efforts to cause such condition to be satisfied as soon as practicable; and
 (iii) any other necessary consents or waivers having been obtained with
 respect thereto to the sole satisfaction of REX.

 
	
  

 
	
  

 	
           (d)        There
 having been no material adverse change in the prospects of NuGen from the
 date hereof to the Closing as determined by REX in its sole and absolute
 discretion. 

 
	
  

 	
  

 	
  

 
	
  

 	
           (e)        The
 approval by Fremar of the Corn Agreement Amendments and the incorporation
 into and execution of such Corn Agreement Amendments into the Corn
 Procurement Agreement.

 

17

	
  

 	
  

 	
  

 
	
           7.3
 Conditions Precedent to CFC’s Obligations. The obligation of CFC to sell the Purchased
 Units to REX shall be subject to fulfillment or waiver in writing by CFC at
 or prior to the Closing of
 each of the following conditions:

 
	
  

 	
  

 	
  

 
	
  

 	
           (a)          REX
 shall pay to CFC the Purchase Price set forth in Section 2.2, as adjusted
 pursuant to Section 2.3, for the Purchased Units.

 
	
  

 	
  

 
	
  

 	
           (b)          At
 the Closing, REX shall deliver to CFC all of the following, each to be
 satisfactory in form and content to CFC in its sole discretion:

 
	
  

 	
  

 
	
  

 	
  

 	
              (1)           A
 secretary certificate which certifies and attaches (i) a true and complete
 copy of REX’s articles of organization, (ii) a true and complete copy of the
 resolution adopted by REX’s Board of Managers authorizing the transactions
 contemplated by this Agreement, and (iii) a certificate of good standing for
 REX for the state in which REX is organized.

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
              (2)           Such
 other certificates, documents and instruments that CFC or its counsel may
 reasonably request in order to consummate the
 transactions contemplated by this Agreement.

 
	
  

 	
  

 	
  

 
	
           7.4
 Termination. Subject to Section 7.5, this Agreement
 may be terminated prior to the occurrence of the Closing as follows:

 
	
  

 	
  

 	
  

 
	
  

 	
           (a)          By
 REX by delivery of written notice to CFC if the conditions for Closing set
 forth in Section 7.2 have not been satisfied by July 31, 2011, provided that
 REX in good faith has used commercially reasonable efforts to cause the
 conditions set forth in Section 7.3 to be met.

 
	
  

 	
  

 
	
  

 	
           (b)          By
 CFC by delivery of written notice to REX if the conditions for Closing set
 forth in Section 7.3 have not been satisfied by July 31, 2011, provided that
 CFC in good faith has used commercially reasonable efforts to cause the
 conditions set forth in Section 7.2 to be met. 

 
	
  

 	
  

 	
  

 
	
           7.5
 Closing Date Extension. The Closing Date may be
 extended beyond July 31, 2011 as follows, but shall be deemed effective as of
 the Effective Date:

 
	
  

 	
  

 	
  

 
	
  

 	
           (a)          The
 Parties, by mutual written consent, may extend the Closing Date until
 September 30, 2011.

 
	
  

 	
  

 
	
  

 	
           (b)          If
 the only unsatisfied condition for Closing is Section 7.2(c), REX may extend
 the Closing Date for two additional 30 day periods for the purpose of
 obtaining Dougherty’s consent (each referred to herein as an “Extension
 Period,” and the actual date during the Extension Period on which the Section
 7.2(C) condition is satisfied shall be referred to as the “Condition
 Satisfaction Date”). In such event, the Closing shall be 

 

18

	
  

 	
  

 
	
  

 	
 deemed effective as of the Effective Date with all Purchase Price
 adjustments made effective as of that date.

 
	
  

 	
  

 
	
  

 	
           (c)          REX
 may further extend the Closing Date for a reasonable period of time, not to exceed
 30 days beyond the Condition Satisfaction Date, and under no circumstances
 will such date be calculated to occur later than October 30, 2011, if
 necessary to ensure compliance with rules and regulations of the Securities
 and Exchange Commission. In such event, if CFC actually receives its $100,000
 monthly fee under the Management Agreement for such extended month, then the
 Purchase Price shall be reduced by the sum of $50,000 for such extended
 month.

 

ARTICLE
VIII

INDEMNIFICATION

          8.1
Indemnification by CFC. CFC agrees to indemnify, save,
defend, and hold harmless REX and its
affiliates and their successors and assigns (the “Other Indemnitees”)
from and against, and to promptly reimburse REX and the Other Indemnitees for,
all losses, liabilities, indebtedness, damages, actions, causes of action,
debts, dues, judgments, penalties, fines, costs, obligations, taxes, expenses,
and fees, including all reasonable attorneys’ fees and court costs (all of such
losses, liabilities and other items being hereinafter collectively referred to
as “Indemnified Liabilities”), paid or incurred by or asserted against
REX or the Other Indemnitees, or NuGen resulting from, arising out of, relating
to or caused by (a) the breach of any representation, warranty or covenant of
CFC contained in this Agreement or any document or schedule referred to herein,
or (b) the cost and expense of defending any action, demand, or claim by any
third party (other than claims by any third party relating to the matters
described on Schedule 4.2) against or affecting REX or NuGen, which if
true or successful, would give rise to a breach of any of the representations,
warranties, or covenants of CFC or would obligate REX or NuGen or cause REX or
NuGen to be subject to any obligation, liability, or indebtedness referred to
in the preceding clauses even if such action, demand, or claim ultimately
proves to be untrue or unfounded. 

          8.2
Indemnification by REX. REX agrees to indemnify, save,
defend, and hold harmless CFC from and against, and promptly reimburse CFC for,
all Indemnified Liabilities paid or incurred by or asserted against CFC or
NuGen resulting from, arising out of,
relating to or caused by (a) the breach of any representation, warranty,
or covenant of REX contained in this Agreement or any agreement, document, or
schedule referred to herein, or (b) the cost and expense of defending any
action, demand, or claim by any third party against or affecting CFC or NuGen,
which if true or successful, would give rise to a breach of any of the
representations, warranties, or covenants of REX or would obligate CFC or NuGen
or cause CFC or NuGen to be subject to any obligation, liability, or
indebtedness referred to in the preceding clauses even if such action, demand,
or claim ultimately proves to be untrue and unfounded.

          8.3
Limitations on Indemnifications and Warranties with Respect to Time.
Any claim for indemnification or for breach of any representation or warranty arising under or out of this
Agreement shall be delivered with reasonable specificity in writing delivered
to the indemnitor within the following time limitations:

19

	
  

 	
  

 	
  

 
	
  

 	
           (a)          CFC’s
 representations, warranties, and indemnities with respect to Section 3.1,
 Section 3.2, Section 3.3, Section 3.4, Section 3.5, Section 4.1, Section 4.2,
 Section 4.3, Section 4.4, and Section 4.17 shall survive indefinitely. 

 
	
  

 	
  

 
	
  

 	
           (b)          CFC’s
 representations, warranties, and indemnities with respect to Sections 4.12
 and 4.14 shall survive for the applicable statute of limitations.

 
	
  

 	
  

 
	
  

 	
           (c)          CFC’s
 representations, warranties, and indemnities with respect to Section 4.10
 shall survive for five years after the Closing.

 
	
  

 	
  

 
	
  

 	
           (d)          REX’s
 representations, warranties and indemnities with respect to Article V shall
 survive indefinitely.

 
	
  

 	
  

 
	
  

 	
           (e)          The
 Parties’ representations, warranties, and indemnities with respect to all
 other matters shall expire at the close of business occurring on the 18-month
 anniversary of the Closing except with respect to claims, whether liquidated
 or unliquidated, asserted prior thereto.

 

ARTICLE IX

MISCELLANEOUS

          9.1
No Third-Party Beneficiaries. This Agreement shall not confer any rights or remedies upon any Person other than the Parties and their respective
successors and permitted assigns.

          9.2
Entire Agreement. This Agreement (including the
documents referred to herein) constitutes the entire agreement among the
Parties and supersedes any prior understandings, agreements, or representations
by or among the Parties, written or oral, to the extent they relate in any way
to the subject matter hereof.

          9.3
Governing Law. It is the intention of the parties
hereto that the laws of the State of South Dakota shall govern the validity of
this Agreement, the construction of its terms, and the interpretation of the
rights and duties of the parties.

          9.4
Succession and Assignment. This Agreement shall be
binding upon and inure to the benefit of the Parties named herein. No Party may
assign either this Agreement or any of its rights, interests, or obligations hereunder without the
prior written approval of the other Parties and any purported assignment
without such consent shall be void.

          9.5
Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.

20

          9.6
Headings. The section headings contained in this Agreement
are inserted for convenience only and shall not affect in any way the meaning
or interpretation of this Agreement. 

          9.7
Notices. All
notices, requests, demands and other communications required or permitted
to be given under this Agreement shall be in writing and shall be deemed to
have been duly given if (a) delivered personally, (b) mailed, certified or
registered mail (return receipt requested) with postage prepaid or (c) sent by
next day, or overnight mail or nationally recognized courier, addressed as
follows:

	
  

 	
  

 
	
  

 	
 If to REX:

 
	
  

 	
  

 
	
  

 	
 REX NuGen, LLC

 
	
  

 	
 Zafar Rizvi,
 President

 
	
  

 	
 2875
 Needmore Road

 
	
  

 	
 Dayton, OH
 45414 

 
	
  

 	
 Telephone
 (937) 276-3931

 
	
  

 	
 zrizvi@rexamerican.com
 

 
	
  

 	
  

 
	
  

 	
 with a copy to:

 
	
  

 	
  

 
	
  

 	
 Dinsmore
 & Shohl LLP

 
	
  

 	
 10
 Courthouse Plaza SW, Suite 1100 

 
	
  

 	
 Dayton, Ohio
 45402

 
	
  

 	
 Attn: Edward
 M. Kress, Esq.

 
	
  

 	
 Telephone
 (937) 449-2830

 
	
  

 	
 edward.kress@dinslaw.com
 

 
	
  

 	
  

 
	
  

 	
 If to CFC:

 
	
  

 	
  

 
	
  

 	
 Central
 Farmers Cooperative

 
	
  

 	
 44608 - 273rd Street

 
	
  

 	
 Marion,
 South Dakota 57043

 
	
  

 	
 Attention:
     Steve Domm

 
	
  

 	
  

 
	
  

 	
 with a copy
 to:

 
	
  

 	
  

 
	
  

 	
 Stoel Rives
 LLP

 
	
  

 	
 33 South
 Sixth Street, Suite 4200

 
	
  

 	
 Minneapolis,
 MN 55402

 
	
  

 	
 Attn: Kevin
 R. Prohaska, Esq.

 
	
  

 	
 Telephone
 (612) 373-8805

 
	
  

 	
 krprohaska@stoel.com

 

21

	
  

 	
  

 
	
  

 	
 If to NuGen:

 
	
  

 	
  

 
	
  

 	
 NuGen
 Energy, LLC

 
	
  

 	
 27283 - 447th Avenue

 
	
  

 	
 Marion,
 South Dakota 57043

 
	
  

 	
 Attention: Aaron
 Riedell

 

All such notices, requests, demands and other communications shall be
deemed to have been received (w) if delivered personally, on the day delivered,
(x) if mailed registered or certified mail (return receipt requested), on the
next business day following the day on which the written receipt of such mail
is signed and (y) if sent by next day or overnight mail or courier, on the day
delivered. Any Party may change the address to which notices, requests,
demands, claims, and other communications hereunder are to be delivered by
giving the other Parties notice in the manner herein set forth.

          9.8
Amendments and Waivers. No amendment of any provision
of this Agreement shall be valid unless the same shall be in writing and signed
by REX and CFC. No waiver by any Party of any default, misrepresentation, or
breach of warranty or covenant hereunder, whether intentional or not, shall be
deemed to extend to any prior or subsequent default, misrepresentation, or
breach of warranty or covenant hereunder or affect in any way any rights arising by virtue of any
prior or subsequent occurrence.

          9.9
Severability. Any term or provision of this Agreement
that is invalid or unenforceable in any situation in any jurisdiction shall not
affect the validity or enforceability of the remaining terms and provisions
hereof or the validity or enforceability of the offending term or provision in
any other situation or in any other jurisdiction.

          9.10
Expenses. Each of the Parties will bear his or its own
costs and expenses (including legal fees and expenses) incurred in connection with this Agreement and
the transactions contemplated hereby. REX and CFC agree to each pay fifty
percent (50%) of the costs and expenses (including Stoel Rives legal fees and
expenses of NuGen for those fees relating to NuGen’s approval of the Term Sheet
with Dougherty and its authorizing resolutions, but not including Stoel Rives
fees related to the opinion requirement set forth in Section 7.2(a)(7), which
shall be 100% paid by CFC) incurred by NuGen in connection with this Agreement
and the transactions contemplated hereby, to the extent NuGen is prohibited by
Dougherty from paying such expenses itself. REX agrees to pay 100% of the fees,
costs and expenses incurred by it, Dougherty and/or NuGen related to the
approvals and negotiations of the Dougherty loan amendments, NuGen’s operating
agreement amendments, any amendments to the Corn Procurement Agreement, and any
other amendments and/or documents requiring approval from Dougherty, and/or
between Dougherty and NuGen in connection with the transactions contemplated by
this Agreement, including without limitation, the costs and expenses relating
to reimbursement to Dougherty for Oppenheimer’s legal fees in connection
therewith.

          9.11
Construction. The Parties have participated jointly in
the negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the Parties and no presumption or burden of 

22

proof shall arise favoring or disfavoring any Party by virtue of the
authorship of any of the provisions of
this Agreement. Any reference to any federal, state, local, or foreign statute or
law shall be deemed also to refer to all rules and regulations promulgated
thereunder, unless the context requires otherwise. The word “including” shall
mean including without limitation.

          9.12
Incorporation of Exhibits, Annexes, and Schedules. The Exhibits and Schedules identified
in this Agreement are incorporated herein by reference and made a part hereof.

          9.13
Survival. Except as the context otherwise requires and
subject to the time limitations set forth herein, all covenants and agreements
of the Parties shall survive the sale of the Purchased Units and the
consummation of the transactions contemplated herein or the termination of this
Agreement.

* * * * *

23

          IN WITNESS
WHEREOF, the Parties hereto have executed this Agreement on the date first
above written.

	
  

 	
  

 	
  

 	
  

 
	
  

 	
 REX:

 	
  

 
	
  

 	
  

 	
  

 
	
  

 	
 REX NUGEN,
 LLC

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
 /s/ Zafar
 Rizvi

 	
  

 
	
  

 	
  

 	 

 	
  

 
	
  

 	
  

 	
 Zafar Rizvi,
 President

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 CFC:

 	
  

 
	
  

 	
  

 	
  

 
	
  

 	
 CENTRAL
 FARMERS COOPERATIVE

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
 /s/ Steve
 Domm

 	
  

 
	
  

 	
  

 	 

 	
  

 
	
  

 	
  

 	
 Steve Domm

 	
  

 
	
  

 	
  

 	
 Its:    General
 Manager

 	
  

 

24

 [REX
NuGen, LLC LETTERHEAD]

July 26, 2011

Central
Farmers Cooperative

44608 – 273rd Street

Marion, SD 57043

Attention:        Steve
Domm

Re: Unit
Purchase Agreement – extension beyond July 31, 2011 to close

Dear Steve,

Reference is
made to the Unit Purchase Agreement (“UPA”) dated as of July 25, 2011, between
REX NuGen, LLC (“REX”) and Central Farmers Cooperative (“CFC”). Terms not
defined herein have the meanings given them in the UPA. Section 7.1 of the UPA
provides that the Closing Date is July 31, 2011 subject to extension as
provided in Section 7.5. The parties acknowledge that Closing is subject to
conditions to be satisfied or waived in accordance with Sections 7.2 and 7.3,
among them the consent by Dougherty pursuant to Section 7.2(c)(1) (“herein the
Dougherty Consent”) and the approval by Fremar of the Corn Agreement Amendments
pursuant to Section 7.2(e) (herein the “Fremar Approval”).

Section 7.5
provides that REX may extend the Closing for up to two 30-day Extension Periods
if the Dougherty Consent is the only unsatisfied condition. REX hereby requests
an extension of the Closing Date for one 30-day Extension Period and agrees to
continue to diligently pursue satisfaction of the Dougherty Consent condition
as soon as practicable. While the Dougherty Consent is not the only unsatisfied
condition, CFC acknowledges that it is in its best interest to consent to REX’s
request and hereby grants one 30-day Extension Period which will terminate on
the earlier of the Condition Satisfaction Date and August 31, 2011; provided
that the Fremar Approval must also be satisfied prior to Closing under the
terms of the UPA. Nothing herein is intended to grant any additional Extension
Periods but the parties acknowledge and agree that each of CFC and REX shall
continue to pursue the satisfaction or waiver of any conditions precedent to
Closing which are intended for their respective benefits so that the Closing
under the UPA can occur as soon as practicable, as the same may be extended
under the UPA, and in any event not later than the latest date set forth in the
UPA.

Sincerely,

	
  

 	
  

 	
  

 
	
 REX NuGen,
 LLC

 	
  

 
	
  

 	
  

 	
  

 
	
 By:

 	
 /s/ Zafar
 Rizvi

 	
  

 
	
  

 	 

 	
  

 
	
  

 	
     Zafar
 Rizvi, President

 	
  

 
	
 *********************************************************

 
	
  

 	
  

 	
  

 
	
 ACKNOWLEDGED AND AGREED ON JULY 26, 2011:

 

	
  

 	
  

 	
  

 
	
 Central Farmers Cooperative

 	
  

 
	
  

 	
  

 	
  

 
	
 By:

 	
 /s/ Steve
 Domm

 	
  

 
	
  

 	 

 	
  

 
	
  

 	
     Steve
 Domm, General Manager

 	
  

 
	
  

 	
  

 	
  

 

REX
NuGen, LLC 

2875 Needmore Road

Dayton, Ohio 45414

August 29,
2011

Central
Farmers Cooperative

44608 – 273rd Street

Marion, SD 57043

Attention:        Steve
Domm

            Re:
Unit Purchase Agreement – Second Extension and Amendment

Dear Steve:

Reference is made to the Unit Purchase Agreement dated as of July 25,
2011 (as extended, amended and modified by letter amendment dated July 26,
2011, the “UPA”), between REX NuGen, LLC (“REX”) and Central Farmers
Cooperative (“CFC”). Terms not defined herein have the meanings given them in
the UPA. Section 7.1 of the UPA provides that the Closing Date is July 31, 2011
subject to extension as provided in Section 7.5. The parties acknowledge that
Closing is subject to conditions to be satisfied or waived in accordance with
Sections 7.2 and 7.3, including without limitation: (i) the consent by
Dougherty pursuant to Section 7.2(c)(1) (herein the “Dougherty Consent”); and
(ii) the approval by Fremar of the Corn Agreement Amendments pursuant to
Section 7.2(e) (herein the “Fremar Approval”).

Pursuant to Section 7.5, the Parties currently can extend the Closing
Date until September 30, 2011. REX hereby requests an amendment to the
provisions for Closing, by amendments to the appropriate Sections of the UPA,
so as to provide that the Closing Date shall be on the earlier of: (i) December
31, 2011; or (ii) upon closing of a financing with a third party lender in lieu
of the required Dougherty Consent as required pursuant to Section 7.2 (c). REX
hereby continues, in good faith, to pursue both the Doughtery Consent
condition, and/or new financing with First National Bank of Omaha (or another
lender), as soon as possible, but in all events on or before the Closing Date. 

The Amendments
to the UPA, shall be as follows:

	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (i)

 	
 The Closing Date set forth in Section 7.1 shall be amended to read
 “on or before December 31, 2011 (the “Closing Date”)”. 

 
	
  

 	
  

 	
  

 
	
  

 	
 (ii)

 	
 Section 7.2(c) of the UPA shall be amended as follows:

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (a)

 	
 The preamble shall now read “At or prior to Closing, either one or
 the other of the conditions at Sections 7.2(c)(1) or 7.2(c)(2) shall have
 occurred:”

 

1

	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (b)

 	
 A new subparagraph (c) (2) shall be added to read as follows:

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 REX shall have obtained an executed conditional commitment letter to
 refinance the existing debt due pursuant to the Doughtery Term Loan and
 Revolving Loan Agreements, with a closing no later than December 31, 2011;
 provided however, if REX shall abandon or terminate a refinancing as
 contemplated hereby, then in such case, REX shall have elected to either (A)
 satisfy or obtain a waiver of the conditions at Section 7.2(c)(1) as quickly
 as reasonably practicable, or (B) exercise its right to terminate this
 Agreement in accordance with the terms and obligations set forth under
 Section 7.4(a).

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (iii)

 	
 Sections 7.4(a) and 7.4(b) shall each be amended to read as follows:

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
           (a)          By
 REX by delivery of written notice to CFC if the conditions for Closing set
 forth in Section 7.2 have not been satisfied by December 31, 2011, provided
 that REX in good faith has used commercially reasonable efforts to cause the
 conditions set forth in Sections 7.2(c) and 7.3 to be met.

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
           (b)          By
 CFC by delivery of written notice to REX if the conditions for Closing set
 forth in Section 7.3 have not been satisfied by December 31, 2011, provided
 that CFC in good faith has used commercially reasonable efforts to cause the
 conditions set forth in Section 7.2 to be met. 

 
	
  

 	
  

 	
  

 
	
  

 	
 (iv)

 	
 Section 7.5 (a) shall hereby be amended to read as follows:

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 The Parties agree that the Closing Date shall be extended to the
 earlier of December 31, 2011, or upon a closing of a new financing with First
 National Bank of Omaha or another lender to provide funding to repay the
 Dougherty existing debt.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (v)

 	
 Section 7.5(c) shall be amended (A) such that the outside date of
 October 30, 2011 shall hereafter be December 31, 2011; and (B) so that the
 last sentence of said Section 7.5(c) shall read as follows: “In the event of
 such further extension by REX, if CFC actually receives its $100,000 monthly
 management fee under the Management Agreement for such extended 30 day
 period, then the Purchase Price shall be reduced by the sum of $50,000 as
 consideration for CFC’s October management fee, but there will be no further
 reduction to the Purchase Price for any management fees received by CFC for
 any months after October 2011.”

 
	
  

 	
  

 	
  

 
	
  

 	
 (vi)

 	
 Schedule 4.2 is amended by adding the
 following sentence at the end of said Schedule: “The parties acknowledge that
 in the event a refinancing occurs in connection with the Closing hereunder,
 as contemplated by Section 7.2(c)(2), then the forgoing consent by Dougherty
 Funding shall no longer be required.” 

 

          While the
Dougherty Consent and/or a new financing with First National Bank of Omaha 

2

(or another lender) is not the only unsatisfied condition, each party
acknowledges that it is in its respective best interest to consent to the
amendments set forth herein; provided, the parties acknowledge that the Fremar
Approval must also be satisfied prior to Closing under the terms of the UPA. 

          The intent
is to grant an extension of the Closing Date to a date no later than December
31, 2011, but the parties acknowledge and agree that each of CFC and REX shall
continue to pursue the satisfaction or waiver of any conditions precedent to
Closing, which are intended for their respective benefits so that the Closing
of the UPA can occur as soon as practicable, as the same may be extended under
the UPA, and in any event not later than December 31, 2011.

          Execution
of this letter shall be deemed an amendment to the UPA and the authorized act
of each party

Sincerely,

	
  

 	
  

 	
  

 
	
 REX NuGen,
 LLC

 	
  

 
	
  

 	
  

 	
  

 
	
 By:

 	
 /s/ Zafar
 Rizvi

 	
  

 
	
  

 	 

 	
  

 
	
  

 	
     Zafar
 Rizvi, President

 	
  

 
	
  

 
	
 ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪
▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪
▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪
▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪
▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪
▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪  

 
	
  

 	
  

 	
  

 
	
 ACKNOWLEDGED AND AGREED ON August 30, 2011:

 

	
  

 	
  

 	
  

 
	
 Central Farmers Cooperative

 	
  

 
	
  

 	
  

 	
  

 
	
 By:

 	
 /s/ Steve
 Domm

 	
  

 
	
  

 	 

 	
  

 
	
  

 	
     Steve
 Domm, General Manager

 	
  

 
	
  

 	
  

 	
  

 

3Exhibit 10.78(a)

Exhibit 10.78(a)

EXECUTION VERSION

AMENDMENT NO. 1 TO AMENDED AND RESTATED CREDIT AGREEMENT 

This Amendment No. 1 to Amended and Restated Credit Agreement dated as of October 28, 2011
(this “Amendment”), is by and among SMITH & WESSON HOLDING CORPORATION, a Nevada
corporation, SMITH & WESSON CORP., a Delaware corporation, THOMPSON/CENTER ARMS COMPANY, INC., a
New Hampshire corporation, THOMPSON CENTER HOLDING CORPORATION, a Delaware corporation, SMITH &
WESSON SECURITY SOLUTIONS, INC., a Delaware corporation, FOX RIDGE OUTFITTERS, INC., a New
Hampshire corporation, K.W. THOMPSON TOOL COMPANY, INC., a New Hampshire corporation, O.L.
DEVELOPMENT, INC., a New Hampshire corporation, BEAR LAKE HOLDINGS, INC., a Delaware corporation,
and SMITH & WESSON DISTRIBUTING, INC., a Delaware corporation (collectively, the
“Borrowers”, and each a “Borrower”), TD BANK N.A., a national banking association,
in its capacity as administrative agent (in said capacity, the “Administrative Agent”) for
the lenders from time to time party to the Credit Agreement referenced below (collectively, the
“Lenders”).

R E C I T A L S:

WHEREAS, the Borrowers, the Administrative Agent and the Lenders have entered into that
certain Amended and Restated Credit Agreement dated as of December 7, 2010 (as amended, restated,
supplemented or modified from time to time, the “Credit Agreement”); and

WHEREAS, the Borrowers have requested that the Administrative Agent and the Lenders enter into
this Amendment to, among other things, revise the definition of the Capital Expenditures to exclude
certain restructuring related expenses therefrom and to provide the Borrowers with the ability to
reduce the Revolving Commitment from time to time, all as more particularly set forth herein, and
the Administrative Agent and the Required Lenders have agreed to do so, subject to the terms and
conditions set forth herein;

NOW THEREFORE, for good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties hereto hereby agree as follows:

1. Recitals. The foregoing recitals are hereby incorporated by reference herein.

2. Definitions. Terms defined in the Credit Agreement and not otherwise defined
herein shall have the meanings given to such terms in the Credit Agreement.

3. Amendments to Credit Agreement. The parties hereto hereby agree that, effective on
the Amendment Effective Date, the Credit Agreement is hereby amended as follows:

3.1. Amendment to Definition of “Capital Expenditures”. The definition of “Capital
Expenditures” set forth in Section 1.01 of the Credit Agreement is hereby deleted in its entirety
and the following is substituted therefor:

““Capital Expenditures” of any Person means, without duplication, any expenditure or
commitment to expend money for any purchase or other acquisition of any asset which would be
classified as a fixed or capital asset on a balance sheet of such Person prepared in accordance
with GAAP;
provided however, solely for purposes of calculating the Consolidated Fixed Charge
Coverage Ratio for the Test Periods ending on October 31, 2011, January 31, 2012, April 30, 2012
and July 31, 2012 respectively, Capital Expenditures shall not include any expenditures resulting
from the Borrowers’ consolidation of their Rochester, New Hampshire operations into their
Springfield, Massachusetts facility in an amount not to exceed $4,254,000 in aggregate.”

 

 

 

3.2. Amendment to Section 2.10. Section 2.10 of the Credit Agreement is hereby amended
by deleting clauses (c) and (d) thereof in their entirety and substituting the following new
clauses (c) and (d) therefor:

“SECTION 2.10. Termination and Reduction of Commitments.

(c) The Borrower Representative may from time to time reduce the Revolving Commitment,
provided that (x) each reduction of the Revolving Commitment shall be in an amount of $10,000,000
or any whole multiple of $1,000,000 in excess thereof, and (y) the Borrower Representative shall
not reduce the Revolving Commitment if, after giving effect to any concurrent prepayment of the
Revolving Loans hereunder, the Revolving Exposure would exceed the Revolving Commitment.

(d) The Borrower Representative shall notify the Administrative Agent of any election to
terminate or reduce the Revolving Commitment under paragraph (b) or (c) of this Section at least
five (5) Business Days prior to the effective date of such termination or reduction, specifying
such election and the effective date thereof. Each notice delivered by the Borrower Representative
pursuant to this Section shall be irrevocable; provided that a notice of termination of the
Revolving Commitments delivered by the Borrower Representative may state that such notice is
conditioned upon the effectiveness of other credit facilities, in which case such notice may be
revoked by the Borrower Representative (by notice to the Administrative Agent on or prior to the
specified effective date) if such condition is not satisfied. Any termination or reduction of the
Revolving Commitment shall be permanent.”

4. Representations and Warranties. The Borrowers, by their execution hereof, jointly
and severally represent and warrant as follows:

4.1. Legal Existence; Organization. Each Borrower is duly organized and validly
existing and in good standing under the laws of the jurisdiction of its organization and under the
laws of each other jurisdiction in which it is qualified to do business, with all power and
authority (corporate or otherwise) necessary (a) to enter into this Amendment and the documents
executed in connection herewith and to perform all of its obligations hereunder and thereunder, and
(b) to own its properties and carry on the business now conducted or proposed to be conducted by
it.

4.2. Enforceability. Each Borrower has taken all action (corporate or otherwise)
required to make the provisions of this Amendment and the documents executed in connection herewith
valid and enforceable obligations of such Borrower, as they purport to be. Each Borrower has duly
authorized, executed and delivered this Amendment and the documents executed in connection
herewith. This Amendment and each document executed in connection herewith is the legal, valid and
binding obligations of such Borrower and each is enforceable against such Borrower in accordance
with its terms.

4.3. No Legal Obstacle to Agreements. Neither the execution, delivery or performance
by any Borrower of this Amendment or any document executed in connection herewith nor the
execution, delivery or performance by any Borrower, nor the consummation of any other transaction
referred to or contemplated by this Amendment, any document executed in connection herewith, nor
the fulfillment of the terms hereof or thereof, has constituted or resulted in or will constitute
or result in:

4.3.1 any breach or termination of any agreement, instrument, deed or lease to which
such Borrower is a party or by which such Borrower is bound, or of the charter, by-laws or
other organizational documents, as applicable, of such Borrower;

 

- 2 -

 

4.3.2 the violation of any law, judgment, decree or governmental order, rule or
regulation applicable to such Borrower;

4.3.3 the creation under any agreement, instrument, deed or lease of any Lien (other
than Liens on the Collateral which secure the Obligations) upon any of the assets of such
Borrower; or

4.3.4 any redemption, retirement or other repurchase obligation of such Borrower under
any charter, by-law, organizational document, agreement, instrument, deed or lease to which
such Borrower is a party.

Except such as have been obtained and are in full force and effect, no approval, authorization
or other action by, or declaration to or filing with, any governmental or administrative authority
or any other Person is required to be obtained or made by any Borrower in connection with the
execution, delivery and performance by such Borrower of this Amendment or any document executed in
connection herewith or the consummation of the transactions contemplated hereby or thereby or the
execution, delivery and performance by such Borrower.

4.4. Defaults. No Default exists or, immediately after giving effect to this
Amendment, will exist.

4.5. Incorporation of Representations and Warranties. The representations and
warranties set forth in Article V of the Credit Agreement and in the other Loan Documents are each
true and correct in all material respects on the date hereof as if originally made on and as of the
date hereof, except to the extent that such representations and warranties expressly relate to an
earlier date, in which case, such representations and warranties shall be true and correct as of
such earlier date, provided that all representations and warranties set forth in Article V
with respect to the Schedules shall be true and correct as of the date hereof with reference to the
updated Schedules delivered herewith.

5. Conditions. This Amendment shall become effective upon the date when each of the
following conditions precedent have been satisfied (the “Amendment Effective Date”):

5.1. Consummation of this Amendment. The Administrative Agent shall have received
this Amendment fully executed by the parties hereto.

5.2. Fees and Expenses. The Borrowers shall have paid or provided for payment of all
fees and expenses of the Administrative Agent (including the reasonable fees and expenses of its
legal counsel) in connection with this Amendment and the documents executed in connection herewith
and the transactions contemplated herein.

6. Further Assurances. Each Borrower will, promptly upon the request of the
Administrative Agent from time to time, execute, acknowledge, deliver, file and record all such
instruments and notices, and take all such other action, as the Administrative Agent deems
necessary or advisable to carry out the intent and purposes of this Amendment (and the attached
acknowledgements and consents) and the documents executed in connection therewith.

 

- 3 -

 

7. No Defenses; Release. Each Borrower warrants and represents to the Administrative
Agent and the Lenders that, as of the Amendment Effective Date, such Borrower has no claims,
counterclaims, offsets or defenses to the Loan Documents or the Obligations, or if any such Person
does have any claims, counterclaims, offsets or defenses to the Loan Documents or the Obligations
as of the Amendment Effective Date, the same are hereby waived, relinquished and released in
consideration of the execution and delivery of this Amendment by the Administrative Agent and the
Lenders party hereto.

8. General. Except as specifically amended hereby, all of the terms and provisions of
the Credit Agreement and each of the other Loan Documents (including without limitation any
Collateral Documents) and all related documents, shall remain in full force and effect and are
hereby ratified and confirmed. This Amendment may be executed in any number of counterparts, which
together shall constitute one instrument, and shall bind and inure to the benefit of the parties
thereto and their respective successors and assigns, including as such successors and assigns, all
holders of any Obligation. Delivery of an executed counterpart of a signature page of this
Amendment by telecopy or in PDF format by electronic mail shall be effective as delivery of a
manually executed counterpart of this Amendment. This Amendment shall be governed by and construed
in accordance with the laws of the State of New York, including, but not limited to, Section 5-1401
of the New York General Obligations Law.

9. Reduction of Revolving Commitment. The Borrower Representative hereby notifies the
Administrative Agent of its election to reduce the Revolving Commitment from $115,000,000 to
$55,000,000, effective on the Amendment Effective Date, and requests that the Administrative Agent
and the Lenders waive the required notice period under Section 2.10(c) of the Credit Agreement, as
amended hereby. The Borrower Representative confirms and represents that, after giving effect to
such reduction in the Revolving Commitment and any concurrent prepayment of the Revolving Loans
under the Credit Agreement, the Revolving Exposure will not exceed the Revolving Commitment.
Subject to the terms and conditions set forth herein, the Required Lenders and the Administrative
Agent hereby agree to waive the required notice period under Section 2.10(c) of the Credit
Agreement, as amended hereby, and agree that the reduction in the Revolving Commitment as requested
by the Borrower Representative herein shall become effective on the Amendment Effective Date.

[Signature pages follow]

 

- 4 -

 

Each of the undersigned has caused this Amendment to be executed and delivered by its duly
authorized officer as of the date first above written.

	 	 	 	 	 
	 	Borrowers:

SMITH & WESSON HOLDING CORPORATION

 	 
	 	By:  	/s/ Jeffrey D. Buchanan
 	 
	 	 	Name:  	Jeffrey D. Buchanan 	 
	 	 	Title:  	EVP, CFO, Secretary and Treasurer 	 
	 
	 	SMITH & WESSON CORP.

 	 
	 	By:  	/s/ Jeffrey D. Buchanan
 	 
	 	 	Name:  	Jeffrey D. Buchanan 	 
	 	 	Title:  	EVP, CFO, Secretary and Treasurer 	 
	 
	 	THOMPSON/CENTER ARMS COMPANY, INC.

 	 
	 	By:  	/s/ Jeffrey D. Buchanan
 	 
	 	 	Name:  	Jeffrey D. Buchanan 	 
	 	 	Title:  	EVP, CFO, Secretary and Treasurer 	 
	 
	 	SMITH & WESSON SECURITY SOLUTIONS, INC.

 	 
	 	By:  	/s/ Jeffrey D. Buchanan
 	 
	 	 	Name:  	Jeffrey D. Buchanan 	 
	 	 	Title:  	EVP, CFO, Secretary and Treasurer 	 
	 
	 	FOX RIDGE OUTFITTERS, INC.

 	 
	 	By:  	/s/ Jeffrey D. Buchanan
 	 
	 	 	Name:  	Jeffrey D. Buchanan 	 
	 	 	Title:  	EVP, CFO, Secretary and Treasurer 	 
	 

 

 

 

	 	 	 	 	 
	 	BEAR LAKE HOLDINGS, INC.

 	 
	 	By:  	/s/ Jeffrey D. Buchanan
 	 
	 	 	Name:  	Jeffrey D. Buchanan 	 
	 	 	Title:  	EVP, CFO, Secretary and Treasurer 	 
	 
	 	K.W. THOMPSON TOOL COMPANY, INC.

 	 
	 	By:  	/s/ Jeffrey D. Buchanan
 	 
	 	 	Name:  	Jeffrey D. Buchanan 	 
	 	 	Title:  	EVP, CFO, Secretary and Treasurer 	 
	 
	 	O.L. DEVELOPMENT, INC.

 	 
	 	By:  	/s/ Jeffrey D. Buchanan
 	 
	 	 	Name:  	Jeffrey D. Buchanan 	 
	 	 	Title:  	EVP, CFO, Secretary and Treasurer 	 
	 
	 	THOMPSON CENTER HOLDING COMPANY

 	 
	 	By:  	/s/ Jeffrey D. Buchanan
 	 
	 	 	Name:  	Jeffrey D. Buchanan 	 
	 	 	Title:  	EVP, CFO, Secretary and Treasurer 	 
	 
	 	SMITH & WESSON DISTRIBUTING, INC.

 	 
	 	By:  	/s/ Jeffrey D. Buchanan
 	 
	 	 	Name:  	Jeffrey D. Buchanan 	 
	 	 	Title:  	EVP, CFO, Secretary and Treasurer 	 
	 

 

 

 

	 	 	 	 	 
	 	Required Lenders:

TD BANK, N.A.

 	 
	 	By:  	/s/ Maria P. Goncalves
 	 
	 	 	Name:  	Maria P. Goncalves 	 
	 	 	Title:  	Regional Vice President 	 
	 
	 	SOVEREIGN BANK

 	 
	 	By:  	/s/ John Faber
 	 
	 	 	Name:  	John Faber 	 
	 	 	Title:  	Senior Vice President 	 
	 
	 	BERKSHIRE BANK

 	 
	 	By:  	/s/ Michael T. Mancuso
 	 
	 	 	Name:  	Michael T. Mancuso 	 
	 	 	Title:  	Vice President 	 
	 
	 	CHICOPEE SAVINGS BANK

 	 
	 	By:  	/s/ Kathi L. Donahue
 	 
	 	 	Name:  	Kathi L. Donahue 	 
	 	 	Title:  	Senior Vice President 	 
	 
	 	DEUTSCHE BANK TRUST COMPANY AMERICAS

 	 
	 	By:  	/s/ Dusan Lazarov
 	 
	 	 	Name:  	Dusan Lazarov 	 
	 	 	Title:  	Director 	 
	 
	 	By:  	                                                  /s/ Michael Getz
 	 
	 	 	Name:  	Michael Getz 	 
	 	 	Title:  	Vice President 	 
	 

 

 

 

	 	 	 	 	 
	 	Administrative Agent:

TD BANK, NA.,

as Administrative Agent

 	 
	 	By:  	/s/ Maria P. Goncalves
 	 
	 	 	Name:  	Maria P. Goncalves 	 
	 	 	Title:  	Regional Vice President

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00195-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00195-of-00352.parquet"}]]