MASTER LOAN AGREEMENT

Exhibit 10.30

MASTER LOAN AGREEMENT

by and among

HOMELAND ENERGY SOLUTIONS, LLC

and

HOME FEDERAL SAVINGS BANK

dated
as of
November 30, 2007

TABLE OF CONTENTS

		Page
ARTICLE I. DEFINITIONS AND ACCOUNTING MATTERS			3
Section 1.01 Certain Defined Terms			3
Section 1.02 Accounting Matters			15
Section 1.03 Construction			15
ARTICLE II. AMOUNTS AND TERMS OF THE TERM LOANS			15
Section 2.01 Supplements			15
Section 2.02 Construction Loan			16
Section 2.03 Term Revolving Loan			16
Section 2.04 Revolving Line of Credit Loan			16
Section 2.05 Conversion of Construction Loan Into Term Loan			16
Section 2.06 Letters of Credit Procedures/Fees/Reimbursement			17
Section 2.07 Adjustments to Interest Rate			19
Section 2.08 Default Interest			19
Section 2.09 Late Charge			20
Section 2.10 Prepayment of Loans			20
Section 2.11 Changes in Law Rendering Certain LIBOR Rate Loans Unlawful			20
Section 2.12 Payments and Computations			21
Section 2.13 Maximum Amount Limitation			22
Section 2.14 Lender Records			22
Section 2.15 Loan Payments			22
Section 2.16 Compensation			22
Section 2.17 Excess Cash Flow			23
ARTICLE III CONDITIONS PRECEDENT			23
Section 3.01 Conditions Precedent to Funding			23
ARTICLE IV. REPRESENTATIONS AND WARRANTIES			28
Section 4.01 Representations and Warranties of Borrower			28
ARTICLE V. COVENANTS OF THE BORROWER			32
Section 5.01 Affirmative Covenants			32
Section 5.02 Negative Covenants			40
ARTICLE VI. EVENTS OF DEFAULT AND REMEDIES			44
Section 6.01 Events of Default			44
Section 6.02 Remedies			47
Section 6.03 Remedies Cumulative			48
ARTICLE VII. MISCELLANEOUS			49
Section 7.01 Amendments, etc.			49

		Page
Section 7.02 Notices, etc.			49
Section 7.03 No Waiver; Remedies			50
Section 7.04 Costs, Expenses and Taxes			50
Section 7.05 Right of Set-off			51
Section 7.06 Severability of Provisions			51
Section 7.07 Binding Effect; Successors and Assigns; Participations			51
Section 7.08 Consent to Jurisdiction			52
Section 7.09 Governing Law			52
Section 7.10 Execution in Counterparts			52
Section 7.11 Survival			52
Section 7.12 US Patriot Act			53
Section 7.13 Waiver of Jury Trial			53
Section 7.14 Entire Agreement			53
LIST OF SCHEDULES AND EXHIBITS
Schedule 3.01(d) Real Property
Schedule 4.01(a) Description of Certain Transactions Related to Borrower’s Stock
Schedule 4.01(f) Description of Certain Threatened Actions, etc.
Schedule 4.01(k) Location of Inventory and Farm Products; Third Parties in Possession; Crops
Schedule 4.01(l) Office Locations; Fictitious Names; Etc.
Schedule 4.01(p) Intellectual Property
Schedule 4.01(t) Environmental Compliance
Schedule 5.01(o) Management
Schedule 5.02(a) Description of Certain Liens, Lease Obligations, etc.
Schedule 5.02(k) Transactions with Affiliates
Schedule 5.02(l) Management Fees and Compensation
Exhibit A Compliance Certificate
Exhibit B Project Sources and Uses Statement
Exhibit C Form of Opinion Letter
Exhibit D Form of Letter of Credit

MASTER LOAN AGREEMENT

THIS MASTER LOAN AGREEMENT (this “Agreement" ), dated as of November 30, 2007, between HOME FEDERAL SAVINGS BANK, a federally chartered stock savings bank organized under the laws of the United States ( “Lender" ) and HOMELAND ENERGY SOLUTIONS, LLC , an Iowa limited liability company ( “Borrower" ).

RECITALS

A. Borrower has requested Lender extend to Borrower various credit facilities for the purposes of acquiring, constructing, equipping and furnishing of an ethanol production facility to be located near the city of New Hampton, Chickasaw County, Iowa.

B. Lender has agreed to make such loans to Borrower, and in order to reduce the amount of paperwork associated therewith, Lender and Borrower would like to enter into this Agreement.

AGREEMENT

NOW, THEREFORE, in consideration of the foregoing, intending to be legally bound hereby, and in consideration of Lender making one or more loans to Borrower, Lender and Borrower agree as follows:

ARTICLE I.
DEFINITIONS AND ACCOUNTING MATTERS

Section 1.01. Certain Defined Terms . All capitalized terms used in this Agreement and in the Supplements shall have the following meanings. Terms not otherwise defined in this Agreement shall have the meanings attributed to such terms in the Uniform Commercial Code, as amended from time to time (the “ UCC ”). All references to dollar amounts shall mean amounts in lawful money of the United States of America.

“ Advances ” means the Loans or Letters of Credit provided to Borrower pursuant to this Agreement and the Supplements.

“ Affiliate ” means, as to any Person, any other Person: (a) that directly or indirectly, through one or more intermediaries, controls or is controlled by, or is under common control with, such Person; (b) that directly or indirectly beneficially owns or holds ten percent (10%) or more of any class of voting stock or membership interests (units) of such Person; or (c) ten percent (10%) or more of the voting stock or membership interests (units) of which is directly or indirectly beneficially owned or held by the Person in question. The term “control” means the possession, directly or indirectly, of the power to direct or cause direction of the management and policies of a Person, whether through the ownership of voting securities, by contract, or otherwise; provided, however , in no event shall Lender or any Bank be deemed an Affiliate of Borrower or any of their subsidiaries.

“ Agreement ” means this Agreement, as this Agreement may be amended, modified or supplemented from time to time, together with all exhibits and schedules attached to or made a part of this Agreement from time to time.

“ Allowed Distributions ” has the meaning specified in Section 5.02(b).

“ Borrower ” means Homeland Energy Solutions, LLC, an Iowa limited liability company.

“ Borrower’s Equity ” means cash equity of Borrower of not less than $91,000,000.00 (including earned interest on Borrower’s equity escrow account), plus any grants received from any source related to the construction or operation of the Project.

“ Borrowing Base ” means, commencing 120 days after start-up of operations, the sum of: (A) seventy-five percent (75%) of the Borrower’s Eligible Accounts Receivable, plus (B) seventy-five percent (75%) of the Borrower’s Eligible Inventory.

“ Borrowing Base Certificate ” means certificates in the form attached to the Third Supplement, properly completed and duly executed by an authorized officer of the Borrower

“ Business Day ” means any day other than a Saturday, Sunday, or other day on which commercial banks are authorized to close under the Laws of the State of Minnesota, or are in fact closed in, the state where Lender’s office is located and, if such day relates to any LIBOR Rate, means any such day on which dealings in dollar deposits are conducted by and between banks in the applicable offshore dollar interbank market.

“ Capital Expenditures ” means, for any period, the sum of all amounts that would, in accordance with GAAP, be included as additions to property, plant and equipment on a statement of cash flows for Borrower during such period, with respect to: (a) the acquisition, construction, improvement, replacement or betterment of land, buildings, machinery, equipment or of any other fixed assets or leaseholds; or (b) other capital expenditures and other uses recorded as capital expenditures having substantially the same effect.

“ CERCLA ” means the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended.

“ Closing Date ” means November 30, 2007.

“ Collateral ” means and includes, without limitation, all property and assets granted as collateral security for the Loans or other indebtedness, in favor of Lender, whether real or personal property, whether granted directly or indirectly, whether granted now or in the future, and whether granted in the form of a security interest, mortgage, assignment of rents, deed of trust, assignment, pledge, chattel mortgage, chattel trust, factor’s lien, equipment trust, conditional sale, trust receipt, lien, charge, lien or title retention contract, lease or consignment intended as a security device, or any other security or lien interest whatsoever; whether created by law, contract or otherwise.

“ Commitment ” means the respective amounts committed to by Lender under this Agreement, the Supplements and the Notes.

“ Completion Date ” means the earlier of (i) May 1, 2009, or (ii) the date a Completion Certificate is issued for the Project executed by Borrower, General Contractor and Inspecting Engineer.

“ Completion Certificate ” means a certificate in form and substance reasonably acceptable to Lender, executed by Borrower, General Contractor and Inspecting Engineer stating that the Project is completed and that the processing equipment and fixtures are fully operational.

“ Compliance Certificate ” means a certificate of the treasurer, or any other officer reasonably acceptable to Lender, of Borrower, substantially in the form attached hereto as Exhibit A, setting forth the calculations of current financial covenants and: (a) stating that the Financial Statements are true and correct and, other than the unaudited interim financial statements, have been prepared in accordance with GAAP; (b) stating whether they have knowledge of the occurrence of any Event of Default under this Agreement, and if so, stating in reasonable detail the facts with respect thereto; and (c) reaffirming and ratifying the representations and warranties, as of the date of the certificate, contained in this Agreement.

“ Construction Advance ” means any Advance for the payment of Project Costs.

“ Construction Contracts ” means any and all material contracts, written or oral, between Borrower and any Contractor and any subcontractor and between any of the foregoing and any other person or entity relating in any way to the construction of the Project, including the performing of labor or the furnishing of standard or specially fabricated materials in connection therewith.

“ Construction Letter of Credit ” has the meaning set forth in the First Supplement.

“ Construction Loan ” means the loan from Lender to Borrower in the amount of $94,000,000.00 and pursuant to the terms and conditions provided for in this Agreement and in the First Supplement.

“ Construction Note ” means that certain promissory note of even date herewith executed and delivered to Lender by Borrower in the original principal amount of $94,000,000.00 and pursuant to the terms and conditions provided for in this Agreement and the First Supplement.

“ Contractor ” means and includes any person or entity, including, without limitation, the General Contractor, engaged to work on or to furnish labor, materials or supplies for the Project.

“ Conversion Date ” means 60 days after the Completion Date.

“ Current Portion of Long Term Debt ” means that portion of Funded Debt payable within one year from the date of such determination, determined in accordance with GAAP.

“ Debt ” means: (A) indebtedness for borrowed money or for the deferred purchase price of property or services; (B) obligations as lessee under leases which shall have been or should be, in accordance with GAAP, recorded as capital leases; (C) obligations under direct or indirect guaranties in respect of, and obligations (contingent or otherwise) to purchase or otherwise acquire, or otherwise to assure a creditor against loss in respect of, indebtedness or obligations of others of the kinds referred to in clause (A) or (B) above or (E) through (G) below; (D) liabilities in respect of unfunded vested benefits under plans covered by Title IV of ERISA; (E) indebtedness in respect of mandatory redemption or mandatory dividend rights on equity interests but excluding dividends payable solely in additional equity interests; (F) all obligations of a Person, contingent or otherwise, for the payment of money under any noncompete, consulting or similar agreement entered into with the seller of a company or its assets or any other similar arrangements providing for the deferred payment of the purchase price for an acquisition permitted hereby or an acquisition consummated prior to the date hereof; and (G) all obligations of a Person under any Hedging Agreement.

“ Debt Service Reserve Account ” means the Deposit Account established and maintained by Lender for Borrower as set forth in Sections 3.01(hh) and 5.01(t).

“ Default Rate ” means the lesser of: (a) the Maximum Rate; or (b) the rate per annum which shall from day-to-day be equal to two percent (2%) in excess of the then applicable rate of interest under any Supplement or Note.

“ Deposit Account ” means and includes without limitation the Disbursing Account, the Debt Service Reserve Account, and all other accounts established and maintained by Lender for Borrower at Home Federal Savings Bank during the term of this Agreement.

“ Disbursing Account ” means the Deposit Account established by Lender for purposes of making all Advances under the Disbursing Agreement.

“ Disbursing Agent ” means Tri-County Abstract and Title Guaranty, Inc., its successors and assigns.

“ Disbursing Agreement ” means the Disbursing Agreement, of even date herewith, executed by the Disbursing Agent, Borrower, and Lender, as the same may be amended, modified, or supplemented from time to time.

“ Distribution ” means any dividend, distribution, payment, or transfer of property by Borrower to any member of Borrower, including tax distributions made to member of Borrower.

“ EBITDA ” means for any period, the total of the following each calculated without duplication for Borrower for such period: (i) net income from operations; plus (ii) any provision for (or less any benefit from) income taxes included in determining such net income; plus (iii) Interest Expense deducted in determining such net income; plus (iv) amortization and depreciation expense deducted in determining such net income.

“ Eligible Accounts Receivable ” means all unpaid Accounts, net of any credits, except that the following shall not in any event be deemed Eligible Accounts Receivable:

	(a)		that portion of Accounts unpaid thirty (30) days or more after the invoice date;
	(b)		that portion of Accounts that is disputed or subject to a claim of offset or a contra account;
	(c)		that portion of Accounts not yet earned by the final delivery of goods or rendition of services, as applicable, by Borrower to the customer;
	(d)		Accounts owed by any unit of government, whether foreign or domestic, except Incentive Payments will be considered a part of Eligible Accounts Receivable as defined in this Agreement;
	(e)		Accounts owed by an account debtor located outside the United States;
	(f)		Accounts owed by an account debtor that is insolvent, the subject of bankruptcy proceedings or has gone out of business;
	(g)		Accounts owed by a guarantor, Affiliate, director, officer, employee, or member of the Borrower;
	(h)		Accounts not subject to a duly perfected security interest in favor of the Lender or which are subject to any lien, security interest or claim in favor of any Person other than Lender, including any payment or performance bond;
	(i)		that portion of Accounts that has been restructured, extended, amended or modified; and
	(j)		that portion of Accounts that constitutes advertising, finance charges, service charges or sales or excise taxes.

“ Eligible Inventory ” means all Inventory held for ultimate sale or lease, or which has been or will be supplied under contracts of service, or which are raw materials, or materials used or consumed in Borrower’s business and that has been specifically identified and accepted by Lender, excluding all of the following inventory:

	(a)		covered by documents of title, instruments, or chattel paper when these documents, instruments and paper are not owned and held by Borrower or are subject to competing claims, liens or encumbrances;
	(b)		intended to be sold outside of the ordinary course of business;
	(c)		consigned, sold or leased to others or held on consignment or lease from others or subject to a bailment;
	(d)		subject to a competing claim, lien or encumbrance unless other than any Permitted Liens;
	(e)		paid for in advance with progress payments or any other sums to Borrower in anticipation of the sale and delivery of inventory;
	(f)		obsolete or unusable in the ordinary course of business;
	(g)		inventory of work in progress; and
	(h)		Inventory that Lender, in its sole discretion, disqualifies as Eligible Inventory.

“ Environmental Laws ” means all laws and regulations relating to environmental, health, safety and land use matters applicable to any property.

“ ERISA ” means the Employee Retirement Income Security Act of 1974.

“ Events of Default ” has the meaning specified in Section 6.01.

“ Excess Cash Flow ” means EBITDA, less the sum of: (i) required payments in respect of Funded Debt; (ii) Maintenance Capital Expenditures; and (iii) Allowed Distributions.

“ Excess Cash Flow Payment ” has the meaning specified in Section 2.17.

“ Excess Distributions ” shall have the meaning specified in Section 5.02(b).

“ Extraordinary Items ” means items which are material and significantly different from Borrower’s typical business activities, determined in accordance with GAAP.

“ Financial Statements ” has the meaning specified in Section 5.01(c).

“ Fixed Charge Coverage Ratio ” means the ratio of (EBITDA +/- Extraordinary Items) divided by the sum of Current Portion of Long Term Debt + Interest Expense + Distributions + Maintenance Capital Expenditures).

“ Fixed Rate Loan ” means that portion of the unpaid principal balance of the Construction Loan that is converted to a Term Loan and which will accrue interest at a fixed rate of interest pursuant to Section 2.05.

“ Food Security Act ” means the Food Security Act of 1985, 7 U.S.C. §1631, as amended, and the regulations promulgated thereunder.

“ Funded Debt ” means the principal amount of all Debt of Borrower having a final maturity of more than one year from the date of origin thereof (or which is renewable or extendible at the option of the obligor for a period or periods more than one year from the date of origin) excluding, however, the principal amount due under any Term Revolving Note or any other line of credit used by Borrower for working capital purposes, all determined in accordance with GAAP for the period in question.

“ GAAP ” means generally accepted accounting principles, consistently applied.

“ General Contractor ” means Fagen, Inc., a Minnesota corporation, and its successors and permitted assigns.

“ Governmental Authority ” means and includes any and all courts, boards, agencies, commissions, offices, or authorities of any nature whatsoever for any governmental unit (federal, state, county, district, municipality, city, or otherwise) whether now or hereafter in existence.

“ Incentive Payments ” means any and all federal or state governmental subsidies, payments, transfers or other benefits, whether now or hereafter established, received by the Borrower.

“ Income Taxes ” means the applicable state, local or federal tax on the net income of Borrower.

“ Inspecting Engineer ” means BBI International, Inc., a Colorado corporation, and its successors and permitted assigns.

“ Intellectual Property ” has the meaning specified in Section 4.01(p).

“ Interest Expense ” means for any period, the total interest expense of Borrower calculated on a consolidated basis.

“ Interest Period ” means (for each Loan) (a) initially, the period beginning on (and including) the date on which the Loan is made and ending on (but excluding) the first day of the next calendar month thereafter; and (b) thereafter, each period commencing on the first day of each succeeding calendar month thereafter and ending on the last day of such month. Notwithstanding the foregoing: (a) any Interest Period which would otherwise extend beyond the Maturity Date shall end on the Maturity Date, and (b) other than the initial Interest Period and the final Interest Period, no Interest Period shall have a duration of less than one (1) month.

“ Inventory ” means all of Borrower’s inventory, as such term is defined in the UCC, whether now owned or hereafter acquired, whether consisting of whole goods, spare parts or components, supplies or materials, whether acquired, held or furnished for sale, for lease or under service contracts or for manufacture or processing, and wherever located.

“ Lender ” means Home Federal Savings Bank, and its successors and assigns.

“ Letter of Credit ” means the Construction Letters of Credit and the Revolving Letters of Credit issued by Lender pursuant to the terms and conditions of this Agreement and Supplements.

“ Letter of Credit Liabilities ” means, at any time, the aggregate maximum amount available to be drawn under all outstanding Letters of Credit (in each case, determined without regard to whether any conditions to drawing could then be met) and all unreimbursed drawings under Letters of Credit.

“ LIBOR Rate ” (London Interbank Offered Rate) means the rate (rounded upward to the nearest sixteenth and adjusted for reserves required on Eurocurrency Liabilities (as hereinafter defined) for banks subject to FRB Regulation D (as hereinafter defined) or required by any other federal law or regulation), quoted by the British Bankers Association (the “BBA”) at 11:00 a.m. London time two Banking Days (as hereinafter defined) before the commencement of the Interest Period for the offering of U.S. Dollar deposits in the London interbank market for an Interest Period of one month, as published by Bloomberg or another major information vendor listed on BBA’s official website. “Banking Day” shall mean a day on which Lender is open for business, dealings in U.S. dollar deposits are being carried out in the London interbank market, and banks are open for business in New York City and London, England. “Eurocurrency Liabilities” has the meaning as set forth in FRB Regulation D. “FRB Regulation D” means Regulation D as promulgated by the Board of Governors of the Federal Reserve System, 12 CFR Part 204, as amended from time to time.

“ Loan/Loans ” means and includes the Construction Loan, the Term Loan, the Term Revolving Loan, the Revolving Line of Credit Loan and any other financial accommodations extended to Borrower by Lender pursuant to the terms of this Agreement and any Supplements.

“ Loan and Carrying Charges ” means all commitment fees to Lender, brokerage fees, standby fees, interest charges, service fees, attorneys’ fees, contractors’ fees, developers’ fees, funding fees, title insurance fees and charges, recording fees, registration taxes, real estate taxes, special assessments, insurance premiums, and utility charges incurred by Borrower in the construction of the Project and issuance of the Notes, all costs incurred in acquisition of the Real Property and any other costs incurred in the development of the Project.

“ Loan Documents ” means this Agreement, any and all Supplements, the Notes, Letters of Credit, the Security Agreement, the Mortgage and all other agreements, documents, instruments, and certificates of Borrower delivered to, or in favor of, Lender under this Agreement or in connection herewith or therewith, including, without limitation, all agreements, documents, instruments, and certificates delivered in connection with the extension of Advances by Lender.

“ Loan Obligations ” means all obligations, indebtedness, and liabilities of Borrower to Lender, including the Reimbursement Obligations, arising pursuant to any of the Loan Documents, whether now existing or hereafter arising, whether direct, indirect, related, unrelated, fixed, contingent, liquidated, unliquidated, joint, several, or joint and several, including, without limitation, the obligation of Borrower to repay the Advances, interest on the Advances, and all fees, costs, and expenses (including, without limitation, reasonable attorneys’ fees and expenses) provided for in the Loan Documents.

“ Long Term Debt ” means indebtedness that matures more than one year after the date of determination thereof.

“ Long Term Marketing Agreement ” means any contract, agreement or understanding of Borrower having a term of one year or more after the date of determination thereof relating to the sale of any raw materials, inventory, products or by-products of Borrower.

“ Maintenance Capital Expenditures ” means all Capital Expenditures made in the ordinary course of business to maintain existing business operations of Borrower in any fiscal year, determined in accordance with GAAP.

“ Material Adverse Effect ” means any set of circumstances or events which: (i) has or could reasonably be expected to have any material adverse effect upon the validity or enforceability of any Loan Documents or any material term or condition contained therein; (ii) is or could reasonably be expected to be material and adverse to the condition (financial or otherwise), business assets, operations, or property of Borrower; or (iii) materially impairs or could reasonably be expected to materially impair the ability of Borrower to perform the obligations under the Loan Documents.

“ Material Contract ” means (i) any contract or other agreement, written or oral, of Borrower or its subsidiaries involving monetary liability of or to any such person in an amount in excess of $500,000.00 per annum; and (ii) any other contract or agreement, written or oral, of Borrower or any of its subsidiaries the failure to comply with which could reasonably be expected to have a Material Adverse Effect on Borrower or its subsidiaries; provided, however, that any contract or agreement which is terminable by a party other than Borrower or its subsidiaries without cause upon notice of 90 days or less shall not be considered a Material Contract.

“ Maturity Date ” means the fifth anniversary of the Conversion Date.

“ Maximum Excess Cash Flow Payment ” has the meaning specified in Section 2.17.

“ Maximum Rate ” means the maximum nonusurious interest rate, if any, at any time, or from time to time, that may be contracted for, taken, reserved, charged or received under applicable state or federal laws.

“ Mortgage ” means that certain Mortgage of even date herewith, pursuant to which a mortgage interest shall be given by Borrower to Lender in the Real Property to secure payment to Lender of the Loan Obligations.

“ Net Income ” means net income as determined in accordance with GAAP.

“ Note/Notes ” means and includes the Construction Note, Term Revolving Note, Revolving Line of Credit Note and all other promissory notes executed and delivered to Lender by Borrower pursuant to the terms of this Agreement and any Supplements as the same may be amended, modified, supplemented, extended or restated from time to time.

“ Ordinary Trade Payable Dispute ” means trade accounts payable, in an aggregate amount not in excess of $100,000.00 with respect to Borrower, and with respect to which: (a) there exists a bona fide dispute between Borrower and the vendor; (b) Borrower is contesting the same in good faith by appropriate proceedings; and (c) Borrower has established appropriate reserves on its financial statements.

“ Permitted Liens ” shall have the meaning ascribed to the term in Section 5.02.

“ Person ” means any individual, corporation, business trust, association, company, partnership, joint venture, governmental authority, or other entity.

“ Personal Property ” means all buildings, structures, equipment, fixtures, improvements, building supplies and materials and other personal property now or hereafter attached to, located in, placed in or necessary to the use of the improvements on the Real Property including, but without being limited to, all machinery, fixtures, equipment, furnishings, and appliances, as well as all renewals, replacements, additions, and substitutes thereof, and all products and proceeds thereof, and including without limitation all accounts, instruments, chattel paper, other rights to payment, money, deposit accounts, insurance proceeds and general intangibles of Borrower, whether now owned or hereafter acquired.

“ Plans and Specifications ” means the final plans and specifications for the construction of the Project, to be prepared by the General Contractor, and approved by Lender, and all amendments and modifications and supplements thereof approved by Lender.

“ Project ” means any and all buildings, structures, fixtures, and other improvements made to the Real Property and other uses identified in the Project Sources and Uses Statement as part of the acquisition and construction of ethanol production facility in Chickasaw County, Iowa, for which the Loans to Borrower are being made hereunder.

“ Project Costs ” means the total of all costs of acquiring the Real Property and constructing the Project as identified in the Project Sources and Uses Statement, together with all Loan and Carrying Charges.

“ Project Sources and Uses Statement ” means the statement attached hereto as Exhibit B which identifies the sources and uses of monies in a total amount of $175,000,000.00 related to the Project.

“ Real Property ” means that real property located in the County of Chickasaw, State of Iowa, owned by Borrower, upon which the Project is to be constructed and which is described in Schedule 3.01(d).

“ Reimbursement Obligation ” means the obligation of Borrower to reimburse Lender for any demand for payment or drawing under a Letter of Credit.

“ Reinvestment Distributions ” has the meaning specified in Section 5.02(b).

“ Related Documents ” means and includes without limitation all promissory notes, credit agreements, loan agreements, supplements, guaranties, security agreements, mortgages, deeds of trust, assignments and all other instruments, agreements and documents, whether now or hereafter existing, executed in connection with the indebtedness.

“ Revolving Letters of Credit ” has the meaning specified in the Second Supplement.

“ Revolving Loans ” means the Revolving Line of Credit Loan and the Term Revolving Loan and any other revolving loan provided by Lender to Borrower pursuant to the terms and conditions provided for in this Agreement and in any revolving loan supplement.

“ Revolving Line of Credit Loan ” means that line of credit from Lender to Borrower in the amount of $6,000,000.00 and pursuant to the terms and conditions provided for in this Agreement and the Third Supplement to the Agreement.

“ Revolving Line of Credit Note ” means that certain promissory note to be executed and delivered to Lender by Borrower on the Conversion Date pursuant to the terms and conditions provided for in this Agreement and the Third Supplement.

“ Revolving Line of Credit Loan Maturity Date ” means the maturity date set forth in the Third Supplement.

“ SARA ” means the Superfund Amendment and Reauthorizations Act of 1986, as amended.

“ Security Agreement ” means and includes, without limitation, that certain Security Agreement of even date herewith between Borrower and Lender, and any agreements, promises, covenants, arrangements, understandings, or other agreements, whether created by law, contract, or otherwise, which evidence, govern, represent, or create a Security Interest, as the same has been and may hereafter be amended or otherwise modified.

“ Security Interest ” means and includes without limitation any type of collateral security, whether in the form of a lien, charge, mortgage, assignment of rents, deed of trust, assignment, pledge, chattel mortgage, chattel trust, factor’s lien, equipment trust, conditional sale, trust receipt, lien or title retention contract, lease or consignment intended as a security device, or any other security or lien interest whatsoever, whether created by law, contract, or otherwise.

“ Subordinated Debt ” means all Debt held by Iowa Department of Economic Development or its agencies.

“ Supplement/Supplements ” has the meaning set forth in Section 2.01 of this Agreement.

“ Tangible Net Worth ” means the excess of total assets over total liabilities except Subordinated Debt, total assets and total liabilities each to be determined in accordance with GAAP, excluding, however, from the determination of total assets: (i) goodwill, organizational expenses, research and development expenses, trademarks, trade names, copyrights, patents, patent applications, licenses and rights in any thereof, and other similar intangibles; (ii) treasury stock; (iii) securities which are not readily marketable; (iv) cash held in a sinking or other analogous fund established for the purpose of redemption, retirement or prepayment of capital stock or Debt (provided, however, this exclusion shall not apply to the amounts held in the Debt Service Reserve Account which amounts will be included in the determination of total assets); (v) any write-up in the book value of any asset resulting from a revaluation thereof subsequent to the Closing Date; (vi) amortized start-up costs; and (vii) any items not included in clauses (i) through (vi) above which are treated as intangibles in conformity with GAAP.

“ Tangible Owner’s Equity ” means the Tangible Net Worth divided by total assets, measured annually at the end of each fiscal year, and expressed as a percentage.

“ Term Loan ” means any amortizing loan with a maturity of greater than one year provided by Lender to Borrower pursuant to the terms and conditions of this Agreement and the First Supplement.

“ Term Revolving Loan ” means that certain loan from Lender to Borrower in the amount of $20,000,000.00 and pursuant to the terms and conditions provided for in this Agreement and the Second Supplement.

“ Term Revolving Note ” means that certain promissory note to be executed and delivered to Lender by Borrower on the Conversion Date pursuant to the terms and conditions provided for in this Agreement and the Second Supplement.

“ Working Capital ” means current assets of Borrower less current liabilities of the Borrower as determined in accordance with GAAP.

Section 1.02. Accounting Matters . All accounting terms not specifically defined herein shall be construed in accordance with GAAP, except as otherwise stated herein. To enable the ready and consistent determination of compliance by Borrower with its obligations under this Agreement, Borrower will not change the manner in which either the last day of its fiscal year or the last days of the first three fiscal quarters of its fiscal years is calculated.

Section 1.03. Construction . Wherever herein the singular number is used, the same shall include the plural where appropriate, and words of any gender shall include each other gender where appropriate. The headings, captions or arrangements used in any of the Loan Documents are, unless specified otherwise, for convenience only and shall not be deemed to limit, amplify or modify the terms of the Loan Documents, nor affect the meaning thereof.

ARTICLE II
AMOUNTS AND TERMS OF THE LOANS

Section 2.01. Supplements . In the event Borrower desires to borrow from Lender and Lender is willing to lend to Borrower, or in the event Lender and Borrower desire to consolidate any existing loans hereunder, Lender and Borrower, will enter into a supplement to this Agreement (each supplement, as it may be amended, modified, supplemented, extended or restated from time to time, a “ Supplement ” and, collectively, the “ Supplements ”). Each Supplement will set forth Lender’s commitment to make a Loan to Borrower, the amount of the Loan(s), the purpose of the Loan(s), the interest rate or rate options applicable to the Loan(s), the repayment terms of the Loan(s), and any other terms and conditions applicable to the Loan(s). Each Supplement will also be accompanied by a Note of Borrower setting forth Borrower’s obligation to make payments of interest on the unpaid principal balance of the Loan(s), and fees and premiums, if any, and to repay the principal balance of the Loan(s). Each Loan will be governed by the terms and conditions contained in this Agreement and in the Note and the Supplement relating to that Loan.

Section 2.02. Construction Loan . Subject to the terms and conditions of this Agreement and in reliance upon the representations and warranties set forth in this Agreement, Lender has agreed to lend to Borrower and Borrower has agreed to borrow from Lender an amount not to exceed $94,000,000.00 for Project Costs. Such amount shall be loaned by Lender pursuant to the terms and conditions set forth in this Agreement and the First Supplement.

Section 2.03. Term Revolving Loan . Subject to the terms and conditions of this Agreement and in reliance upon the representations and warranties set forth in this Agreement, Lender has agreed to lend to Borrower and Borrower has agreed to borrow from Lender, as of the Conversion Date and from time to time thereafter, on a revolving basis an amount not to exceed $20,000,000.00 for cash and inventory management purposes. Such amount shall be loaned by Lender pursuant to the terms and conditions set forth in this Agreement and the Second Supplement. Pursuant to the terms and conditions in this Agreement, Lender may extend additional term Revolving Loans to Borrower. Any such future term Revolving Loans shall be provided by Lender pursuant to the terms and conditions of a future term revolving loan Supplement.

Section 2.04. Revolving Line of Credit Loan . Subject to the terms and conditions of this Agreement and in reliance upon the representations and warranties set forth in this Agreement, Lender has agreed to lend to Borrower and Borrower has agreed to borrow from Lender, as of the Conversion Date and from time to time thereafter, on a revolving basis an amount not to exceed $6,000,000.00. Such amount shall be loaned by Lender pursuant to the terms and conditions set forth in this Agreement and the Third Supplement. Pursuant to the terms and conditions in this Agreement, Lender may extend additional Revolving Loans to Borrower. Any such future Revolving Loans shall be provided by Lender pursuant to the terms and conditions of a future term revolving loan Supplement.

Section 2.05. Conversion of Construction Loan Into Term Loan and Term Revolving Loan . The Lender agrees to convert the Construction Loan into a Term Loan and Term Revolving Loan on the Conversion Date, provided all of the terms, conditions, warranties, representations, and covenants of Borrower set forth in this Agreement, the First Supplement and the Second Supplement are satisfied. Any such amount shall be provided by Lender pursuant to the terms and conditions set forth in this Agreement, the First Supplement and the Second Supplement setting forth the terms and conditions of such Term Loan and Term Revolving Loan, provided, however , that (i) all unpaid principal and all accrued interest on the Term Loan and the Term Revolving Loan shall be due and payable on the Maturity Date and (ii) Borrower shall have the right to convert up to fifty percent (50%) of the Term Loan into a Fixed Rate Loan, with the consent of Lender, which shall bear interest at the five year LIBOR swap rate, which is in effect on the Conversion Date plus 325 basis points, or another rate as agreed upon by Lender and Borrower. Should Borrower elect such fixed rate option, such rate of interest shall not be subject to any adjustments under Section 2.07 of this Agreement.

Section 2.06. Letter of Credit Procedures / Fees / Reimbursement . All Letters of Credit that are issued under this Agreement and any Supplements are subject to the following:

(a)  Letter of Credit Request Procedure . Borrower shall give Lender irrevocable prior notice (effective upon receipt) on or before 3:00 P.M. (Minneapolis, Minnesota time) on the Business Day three Business Days prior to the date of the requested issuance of a Letter of Credit specifying the requested amount, expiry date and issuance date of each Letter of Credit to be issued and the nature of the transactions to be supported thereby. Any such notice received after 3:00 P.M. (Minneapolis, Minnesota time) on a Business Day shall be deemed to have been received and be effective on the next Business Day. Each Letter of Credit shall be substantially in the form of Exhibit D, have an expiration date that occurs on or before the “Termination Date” (as such date is defined in the Supplements), shall be payable in U.S. dollars, must be satisfactory in form and substance to Lender, and shall be issued pursuant to such documentation as Lender may require, including, without limitation, Lender’s standard form letter of credit request and reimbursement agreement; provided that , in the event of any conflict between the terms of such agreement and the other Loan Documents, the terms of the other Loan Documents shall control.

(b)  Letter of Credit Fees . Borrower shall pay to Lender for (i) all fees, costs, and expenses of Lender arising in connection with any Letter of Credit, including Lender’s customary fees for amendments, transfers, and drawings on Letters of Credit; and (ii) on the date of the issuance of the Letter of Credit, and at the anniversary date of issuance of such Letter of Credit if still outstanding, an issuance fee equal to 150 basis points, on an annualized basis, of the maximum amount available to be drawn under the Letter of Credit.

(c)  Funding of Drawings . Upon receipt from the beneficiary of any Letter of Credit of any demand for payment or other drawing under such Letter of Credit, the Lender shall promptly notify Borrower as to the amount to be paid as a result of such demand or drawing and the respective payment date. Any notice pursuant to the forgoing sentence shall specify the amount to be paid as a result of such demand or drawing and the respective payment date.

(e)  Reimbursements . After receipt of the notice delivered pursuant to clause (c) of this Section 2.06 with respect to a Letter of Credit, Borrower shall be irrevocably and unconditionally obligated to reimburse Lender for any amounts paid by Lender upon any demand for payment or drawing under the applicable Letter of Credit, without presentment, demand, protest, or other formalities of any kind other than the notice required by clause (c) of this Section 2.06. Such reimbursement shall occur no later than 3:00 P.M. (Minneapolis, Minnesota time) on the date of payment under the applicable Letter of Credit if the notice under clause (c) of this Section 2.06 is received by 2:00 P.M. (Minneapolis, Minnesota time) on such date or by 11:00 A.M. (Minneapolis, Minnesota time) on the next Business Day, if such notice is received after 2:00 P.M. (Minneapolis, Minnesota time). All payments on the Reimbursement Obligations (including any interest earned thereon) shall be made to Lender for the account of Lender in U.S. dollars and in immediately available funds, without set-off, deduction, or counterclaim.

(f)  Reimbursement Obligations Absolute . The Reimbursement Obligations of Borrower under this Agreement shall be absolute, unconditional, and irrevocable, and shall be performed strictly in accordance with the terms of the Loan Documents under all circumstances whatsoever and Borrower hereby waives any defense to the payment of the Reimbursement Obligations based on any circumstance whatsoever, including, without limitation, in any case, the following circumstances: (i) any lack of validity or enforceability of any Letter of Credit or any other Loan Document; (ii) any amendment or waiver of or any consent to departure from any Loan Document; (iii) the existence of any claim, set-off, counterclaim, defense, or other rights which any Borrower or any other Person may have at any time against any beneficiary of any Letter of Credit, Lender or any other Person, whether in connection with any Loan Document or any unrelated transaction; (iv) any statement, draft, or other documentation presented under any Letter of Credit proving to be forged, fraudulent, invalid, or insufficient in any respect or any statement therein being untrue or inaccurate in any respect whatsoever; (v) payment by Lender under any Letter of Credit against presentation of a draft or other document that does not comply with the terms of such Letter of Credit; or (vi) any other circumstance whatsoever, whether or not similar to any of the foregoing; provided that Reimbursement Obligations with respect to a Letter of Credit may be subject to avoidance by a Borrower if Borrower proves in a final non-appealable judgment that it was damaged and that such damage arose directly from Lender’s willful misconduct or gross negligence in determining whether the documentation presented under the Letter of Credit in question complied with the terms thereof.

(g)  Issuer Responsibility . Borrower assumes all risks of the acts or omissions of any beneficiary of any Letter of Credit with respect to its use of such Letter of Credit. Neither Lender, nor any of its respective officers or directors shall have any responsibility or liability to Borrower or any other Person for: (a) the failure of any draft to bear any reference or adequate reference to any Letter of Credit, or the failure of any documents to accompany any draft at negotiation, or the failure of any Person to surrender or to take up any Letter of Credit or to send documents apart from drafts as required by the terms of any Letter of Credit, or the failure of any Person to note the amount of any instrument on any Letter of Credit, each of which requirements, if contained in any Letter of Credit itself, it is agreed may be waived by Lender; (b) errors, omissions, interruptions, or delays in transmission or delivery of any messages; (c) the validity, sufficiency, or genuineness of any draft or other document, or any endorsement(s) thereon, even if any such draft, document or endorsement should in fact prove to be in any and all respects invalid, insufficient, fraudulent, or forged or any statement therein is untrue or inaccurate in any respect; (d) the payment by Lender to the beneficiary of any Letter of Credit against presentation of any draft or other document that does not comply with the terms of the Letter of Credit; or (e) any other circumstance whatsoever in making or failing to make any payment under a Letter of Credit. The Lender may accept documents that appear on their face to be in order, without responsibility for further investigation, regardless of any notice or information to the contrary.

Section 2.07. Adjustments to Interest Rate . Notwithstanding any other provision of this Agreement, the Supplements, the Notes, or the Related Documents, after the Conversion Date, the rate of interest under any Loan which bears interest on a variable rate, shall be adjusted according to the following schedule should the Tangible Owner’s Equity of Borrower, achieve the levels set forth below:

Tangible Owner’s Equity		Interest Rate
Less than or equal to 54.99%		Applicable LIBOR Rate plus 325 basis points
Greater than or equal to 55.00% but less than or equal to 64.99%		Applicable LIBOR Rate plus 300 basis points
Greater than or equal to 65.00%		Applicable LIBOR Rate plus 275 basis points

Upon delivery of the fiscal year end audited financial statements and the Compliance Certificate pursuant to Section 5.01(c) beginning with the first fiscal year end after the Conversion Date, the rate of interest shall automatically be adjusted in accordance with the Tangible Owner’s Equity set forth therein and the rates set forth above. Such automatic adjustment to the rate of interest shall take effect as of the first Business Day of the month following the month in which Lender received the fiscal year end audited financial statements and related Compliance Certificate. The term “ Adjustment Date ” shall mean each such Business Day when such rates, margins or fees change pursuant to the immediately prior sentence or the next following sentence. If Borrower fails to deliver such Compliance Certificate which so sets forth the Tangible Owner’s Equity within the period of time required by Section 5.01(c)(iii) hereof or if any Event of Default occurs, the rate of interest shall automatically be adjusted to a rate equal to the applicable LIBOR Rate plus 325 basis points, such automatic adjustments: (a) to take effect as of the first Business Day after the last day on which Borrower was required to deliver the applicable Compliance Certificate in accordance with Section 5.01(c)(iii) or in the case of an Event of Default, on the date the written notice is given to Borrower; and (b) to remain in effect until subsequently adjusted in accordance herewith upon the delivery of such Compliance Certificate or, in the case of an Event of Default, when such Event of Default has been cured to the satisfaction of Lender.

Section 2.08. Default Interest . In addition to the rights and remedies set forth in this Agreement and notwithstanding any Note: (i) if Borrower fails to make any payment to Lender when due, then at Lender’s option in each instance, such obligation or payment shall bear interest from the date due to the date paid at 2% per annum in excess of the rate of interest that would otherwise be applicable to such obligation or payment; (ii) upon the occurrence and during the continuance of an Event of Default beyond any applicable cure period, if any, at Lender’s option in each instance, the unpaid balances of the Loans shall bear interest from the date of the Event of Default or such later date as Lender shall elect at 2% per annum in excess of the rate(s) of interest that would otherwise be in effect on the Loans under the terms of the applicable Note; (iii) after the maturity of any Loan, whether by reason of acceleration or otherwise, the unpaid principal balance of the Loan (including without limitation, principal, interest, fees and expenses) shall automatically bear interest at 2% per annum in excess of the rate of interest that would otherwise be in effect on the Loan under the terms of the applicable Note until paid in full. Interest payable at the Default Rate shall be payable from time to time on demand or, if not sooner demanded, on the last day of each calendar month.

Section 2.09. Late Charge . If any payment of principal or interest due under the Supplements or the Notes is not paid within ten (10) days of the due date thereof, Borrower shall, in addition to such amount, pay a late charge equal to five percent (5%) of the amount of such payment.

Section 2.10. Prepayment of Loans . Borrower may, at anytime and from time to time, upon thirty (30) days advance written notice to Lender, prepay the outstanding amount of the Loans in whole or in part with accrued interest to the date of such prepayment on the amount prepaid, without penalty or premium, except as and to the extent specifically provided in this Section 2.10. In the event that any of the Construction Loan, Term Loan or Term Revolving Loan are refinanced with a lender other than Lender (from the Closing Date through the first thirty-six (36) months after the Conversion Date), Borrower shall pay a prepayment fee for the amount(s) refinanced equal to the original Commitment for the Loan(s), which is/are being refinanced, multiplied by the following specified percentage:

Closing Date to Conversion Date			2.00	%
Months 1 - 12 after Conversion Date			3.00	%
Months 13 - 24 after Conversion Date			2.00	%
Months 25 - 36 after Conversion Date			1.00	%

Notwithstanding the foregoing, no prepayment fee shall be required if such prepayment is made pursuant to Section 2.17 of this Agreement. Any prepayment does not otherwise affect Borrower’s obligation to pay any fees due under this Agreement. In addition, in the event any portion of the Term Loan is converted to a Fixed Rate Loan, Borrower shall pay the prepayment fee applicable to that fixed interest rate, if any.

Section 2.11. Changes in Law Rendering Certain LIBOR Rate Loans Unlawful . In the event that any change in any applicable law (including the adoption of any new applicable law) or any change in the interpretation of any applicable law by any judicial, governmental or other regulatory body charged with the interpretation, implementation or administration thereof, should make it (or in the good-faith judgment of Lender should raise a substantial question as to whether it is) unlawful for Lender to make, maintain or fund LIBOR Rate loans, then: (a) Lender shall promptly notify each of the other parties hereto; and (b) the obligation of Lender to make LIBOR Rate loans of such type shall, upon the effectiveness of such event, be suspended for the duration of such unlawfulness. During the period of any suspension, Lender shall make loans to Borrower that are deemed lawful and that as closely as possible reflect the terms of this Agreement.

Section 2.12. Payments and Computations .

(a)  Method of Payment . Except as otherwise expressly provided herein, all payments of principal, interest, and other amounts to be made by Borrower under the Loan Documents shall be made to Lender in U.S. dollars and in immediately available funds, without set-off, deduction, or counterclaim, not later than 2:00 P.M. (Minneapolis, Minnesota time) on the date on which such payment shall become due (each such payment made after such time on such due date to be deemed to have been made on the next succeeding Business Day). Borrower shall, at the time of making each such payment, specify to Lender the sums payable under the Loan Documents to which such payment is to be applied and in the event that Borrower fails to so specify or if an Event of Default exists, Lender may apply such payment and any proceeds of any Collateral to the Loan Obligations in such order and manner as it may elect in its sole discretion.

(b)  Application of Funds . Lender may apply all payments received by it to the Loan Obligations in such order and manner as Lender may elect in its sole discretion; provided that any payments received from any guarantor or from any disposition of any collateral provided by such guarantor shall only be applied against obligations guaranteed by such guarantor.

(c)  Payments on a Non-Business Day . Whenever any payment under any Loan Document shall be stated to be due on a day that is not a Business Day, such payment may be made on the next succeeding Business Day, and such extension of time shall in such case be included in the computation of the payment of interest and fees, as the case may be.

(d)  Proceeds of Collateral . All proceeds received by Lender from the sale or other liquidation of the Collateral when an Event of Default exists shall first be applied as payment of the accrued and unpaid fees and expenses of Lender hereunder, including, without limitation, under Section 7.04 and then to all other unpaid or unreimbursed Loan Obligations (including reasonable attorneys’ fees and expenses) owing to Lender and then any remaining amount of such proceeds shall be applied to the unpaid amounts of Loan Obligations, until all the Loan Obligations have been paid and satisfied in full or cash collateralized. After all the Loan Obligations (including without limitation, all contingent Loan Obligations) have been paid and satisfied in full, all Commitments terminated and all other obligations of Lender to Borrower otherwise satisfied, any remaining proceeds of Collateral shall be delivered to the Person entitled thereto as directed by Borrower or as otherwise determined by applicable law or applicable court order.

(e)  Computations . Except as expressly provided otherwise herein, all computations of interest and fees shall be made on the basis of actual number of days lapsed over a year of 360 days, as appropriate. Interest shall accrue from and include the date of borrowing, but exclude the date of payment.

Section 2.13. Maximum Amount Limitation . Anything in this Agreement, any Supplement, any Note, or the other Loan Documents to the contrary notwithstanding, Borrower shall not be required to pay unearned interest on any Note or any of the Loan Obligations, or ever be required to pay interest on any Note or any of the Loan Obligations at a rate in excess of the Maximum Rate, if any. If the effective rate of interest which would otherwise be payable under this Agreement, any Note or any of the other Loan Documents would exceed the Maximum Rate, if any, then the rate of interest which would otherwise be contracted for, charged, or received under this Agreement, any Note or any of the other Loan Documents shall be reduced to the Maximum Rate, if any. If any unearned interest or discount or property that is deemed to constitute interest (including, without limitation, to the extent that any of the fees payable by Borrower for the Loan Obligations to Lender under this Agreement, any Supplement, any Note, or any of the other Loan Documents are deemed to constitute interest) is contracted for, charged, or received in excess of the Maximum Rate, if any, then such interest in excess of the Maximum Rate shall be deemed a mistake and canceled, shall not be collected or collectible, and if paid nonetheless, shall, at the option of the holder of such Note, be either refunded to Borrower, or credited on the principal of such Note. It is further agreed that, without limitation of the foregoing and to the extent permitted by applicable law, all calculations of the rate of interest or discount contracted for, charged or received by Lender under its Note, or under any of the Loan Documents, that are made for the purpose of determining whether such rate exceeds the Maximum Rate applicable to Lender, if any, shall be made, to the extent permitted by applicable laws (now or hereafter enacted), by amortizing, prorating and spreading during the period of the full terms of the Advances evidenced by the Notes, and any renewals thereof all interest at any time contracted for, charged or received by Lender in connection therewith. This Section 2.13 shall control every other provision of all agreements among the parties to this Agreement pertaining to the transactions contemplated by or contained in the Loan Documents, and the terms of this Section 2.13 shall be deemed to be incorporated in every Loan Document and communication related thereto.

Section 2.14. Lender Records . All advances and all payments or prepayments made thereunder on account of principal or interest may be evidenced by Lender in accordance with its usual practice in an account or accounts evidencing such advances and all payments or prepayments thereunder from time to time and the amounts of principal and interest payable and paid from time to time thereunder; in any legal action or proceeding in respect of the Notes, the entries made in such account or accounts shall be prima facie evidence of the existence and amounts of all advances and all payments or prepayments made thereunder on account of principal or interest. Lender shall provide monthly statements of such entries to Borrower for the purpose of confirming the accuracy of such entries.

Section 2.15. Loan Payments . During the continuance of an Event of Default, Lender may deduct any obligations due or any other amounts due and payable by Borrower under the Loan Documents from any Deposit Accounts maintained with Lender.

Section 2.16. Compensation . Upon the request of Lender, Borrower shall pay to Lender such amount or amounts as shall be sufficient (in the reasonable opinion of Lender) to compensate it for any loss, cost, or expense (excluding loss of anticipated profits incurred by it) as a result of: (i) any payment, prepayment, or conversion of a LIBOR Rate loan for any reason on a date other than the last day of the Interest Period for such Loan; or (ii) any failure by Borrower for any reason (including, without limitation, the failure of any condition precedent specified in Section 3.01 to be satisfied) to borrow, extend, or prepay a LIBOR Rate loan on the date for such borrowing, extension, or prepayment specified in the relevant notice of borrowing, extension or prepayment under this Agreement.

Such indemnification may include any amount equal to the excess, if any, of: (a) the amount of interest which would have accrued on the amount so prepaid, or not so borrowed, converted or extended, for the period from the date of such prepayment or of such failure to borrow, convert or extend to the last day of the applicable Interest Period (or in the case of a failure to borrow, convert or extend, the Interest Period that would have commenced on the date of such failure) in each case at the applicable rate of interest for such loan as provided for herein; over (b) the amount of interest (as reasonably determined by Lender) which would have accrued to Lender on such amount by placing such amount on deposit for a comparable period with leading banks in the interbank LIBOR market. The covenants of Borrower set forth in this Section 2.16 shall survive the repayment of the Loans and other obligations under the Loan Documents hereunder.

Section 2.17 Excess Cash Flow . In addition to all other payments of principal and interest required under this Agreement, the Supplements and the Notes, at the end of the first fiscal quarter following the Conversion Date, and continuing each fiscal quarter thereafter until the Maturity Date, Borrower shall remit to Lender, an amount equal to 100% of Borrower’s Excess Cash Flow, calculated based upon that fiscal quarter’s interim financial statements, on or before 45 days after the end of each fiscal quarter of Borrower (the “ Excess Cash Flow Payment" ) , provided however, that the total Excess Cash Flow Payments required hereunder shall not exceed $5,000,000.00 in any fiscal year (the “ Maximum Excess Cash Flow Payment" ). One hundred percent (100%) of the Excess Cash Flow Payment shall be applied to the reduction of the outstanding principal of the Term Loan. The Excess Cash Flow Payment shall be re-calculated annually based upon audited fiscal year-end financial statements required by Section 5.01(c)(i) of this Agreement. Borrower shall within 30 days of Lender’s request remit to Lender any additional amounts due Lender under this Section 2.17 in an amount not to exceed the Maximum Excess Cash Flow Payment. In the event the re-calculation determines that the Borrower has paid in excess of the required Excess Cash Flow Payment for the applicable period, Borrower shall be given a credit in the amount of the excess to be applied to the next quarterly Excess Cash Flow Payment due Lender under this Section 2.17. Any Excess Cash Flow Payment or any other payment from Excess Cash Flow shall not constitute a prepayment with respect to which a prepayment fee under Section 2.10 of this Agreement is required to be paid. Notwithstanding the foregoing, the Excess Cash Flow Payment shall not apply if Tangible Owner’s Equity is greater than or equal to sixty-five percent (65%) but will be reinstated if Tangible Owner’s Equity falls below 65%, measured for any fiscal quarter. Notwithstanding the foregoing, the Excess Cash Flow Payment shall not exceed an aggregate amount of $25,000,000.00 during the term of this Agreement.

ARTICLE III.
CONDITIONS PRECEDENT

Section 3.01. Conditions Precedent to Funding . The obligations of Lender to make any Advance, are subject to the conditions precedent that Lender shall have received the following, in form and substance satisfactory to Lender:

(a) This Agreement, duly executed by Borrower and Lender;

(b) The Supplements, duly executed by Borrower and Lender;

(c) The Construction Note, the Term Revolving Note and the Revolving Line of Credit Note duly executed by Borrower;

(d) The Mortgage, fully executed and notarized, to secure the Loans encumbering on a first lien basis the fee interest and/or leasehold interest of Borrower in the Real Property and the fixtures thereon described in Schedule 3.01(d);

(e) A Security Agreement duly executed by Borrower and in a form as provided by Lender by which security agreement Lender is granted a security interest by Borrower in the Collateral;

(f) The Disbursing Agreement, duly executed by Borrower;

(g) The Environmental Indemnity Agreement, duly executed by Borrower;

(h) A copy of the Construction Contract(s) and a complete set of the Plans and Specifications, together with copies of all permits and government approvals relating to the construction and use of the Project;

(i) An assignment of contract for each of the Construction Contracts and the Plans and Specifications, duly executed by Borrower and pursuant to which Borrower shall have assigned to Lender all of Borrower’s right, title and interest in and to each such Construction Contract, and which assignment shall have been consented to and certified in writing by the other party(ies) to each such Construction Contract;

(j) Copies of all Material Contracts between Borrower and third parties used in the normal operations of Borrower, including but not limited to management agreements, marketing agreements, and corn delivery agreements;

(k) Assignments of the Material Contracts between Borrower, duly executed by Borrower and pursuant to which Borrower shall have assigned to Lender all of Borrower’s right, title and interest in and to each such contract, and which assignment shall have been consented to and certified in writing by the other party(ies) to each such contract;

(l) Financing Statements in form and content satisfactory to Lender and in proper form under the Uniform Commercial Code of all jurisdictions as may be necessary or, in the opinion of Lender, desirable to perfect the security interests created by the Security Agreement;

(m) Copies of UCC, tax and judgment lien search reports listing all financing statements and other encumbrances which name Borrower (under its present name and any previous name) and which are filed in the jurisdictions in which Borrower is located, organized or maintains collateral, together with copies of such financing statements (none of which shall cover the collateral purported to be covered by the Security Agreement);

(n) Evidence that all other actions necessary or, in the opinion of Lender, desirable to enable Lender to perfect and protect the security interests created by the Security Agreement have been taken;

(o) An ALTA mortgagee title insurance policy issued by a title insurance company acceptable to Lender, with respect to the Real Property, assuring Lender that the Mortgage creates a valid and enforceable encumbrance on the Real Property, free and clear of all defects and encumbrances except Permitted Liens and containing: (i) a comprehensive endorsement (ALTA form 9); (ii) a zoning endorsement (ALTA form 3.1) specifying an ethanol production facility as a permitted use for all of the parcels included in the Real Property; and (iii) a restrictions, encroachments, minerals-owners endorsement (ALTA Form 9.2) and (iv) such endorsements as Lender shall reasonably require. All such title insurance policies shall be in form and substance reasonably satisfactory to Lender and shall provide for affirmative insurance and such reinsurance as Lender may reasonably request, all of the foregoing in form and substance reasonably satisfactory to Lender;

(p) Maps or plats of the Real Property certified to Lender and the title insurance company issuing the policy referred to in Subsection 3.01(o) (the “ Title Insurance Company ”) in a manner reasonably satisfactory to each of Lender and the Title Insurance Company, dated a date reasonably satisfactory to each of Lender and the Title Insurance Company by an independent professional licensed land surveyor, which maps or plats and the surveys on which they are based shall be sufficient to delete any standard printed survey exception contained in the applicable title policy and be made in accordance with the Minimum Standard Detail Requirements for Land Title Surveys jointly established and adopted by the American Land Title Association and the American Congress on Surveying and Mapping in 1992, and, without limiting the generality of the foregoing, there shall be surveyed and shown on such maps, plats or surveys the following: (i) the locations on such sites of all the buildings, structures and other improvements and the established building setback lines; (ii) the lines of streets abutting the sites and width thereof; (iii) all access and other easements appurtenant to the sites necessary to use the sites; (iv) all roadways, paths, driveways, easements, encroachments and overhanging projections and similar encumbrances affecting the site, whether recorded, apparent from a physical inspection of the sites or otherwise known to the surveyor; (v) any encroachments on any adjoining property by the building structures and improvements on the sites; and (vi) if the site is described as being on a filed map, a legend relating the survey to said map;

(q) Evidence as to: (i) whether any portion of the Real Property is in an area designated by the Federal Emergency Management Agency as having special flood or mud slide hazards (a “ Flood Hazard Property ”); and (ii) if any portion of the Real Property is a Flood Hazard Property: (A) whether the community in which such Real Property is located is participating in the National Flood Insurance Program; (B) Borrower’s written acknowledgment of receipt of written notification from Lender (1) as to the fact that such Real Property is a Flood Hazard Property and (2) as to whether the community in which each such Flood Hazard Property is located is participating in the National Flood Insurance Program; and (C) copies of insurance policies or certificates of insurance of Borrower evidencing flood insurance satisfactory to Lender and naming Lender as sole loss payee on behalf of Lender;

(r) Evidence reasonably satisfactory to Lender that the Real Property and the contemplated use of the Real Property, are in compliance in all material respects with all applicable Laws including without limitation health and Environmental Laws, including, but not limited to all concentrated animal feedlot operations rules and regulations, erosion control ordinances, storm drainage control laws, doing business and/or licensing laws, zoning laws (the evidence submitted as to zoning should include the zoning designation made for the Real Property, the permitted uses of the Real Property under such zoning designation and zoning requirements as to parking, lot size, ingress, egress and building setbacks) and laws regarding access and facilities for disabled persons including, but not limited to, the Federal Architectural Barriers Act, the Fair Housing Amendments Act of 1988, the Rehabilitation Act of 1973 and the Americans with Disabilities Act of 1990;

(s) A certificate of the secretary of Borrower together with true and correct copies of the following: (i) the Articles of Organization of Borrower, including all amendments thereto, certified by the Office of the Secretary of State of the state of its organization and dated within 30 days prior to the date hereof; (ii) the Operating Agreement of Borrower, including all amendments thereto; (iii) the resolutions of the Board of Directors of Borrower authorizing the execution, delivery and performance of this Agreement, the other Loan Documents, and all documentation executed and delivered in connection therewith to which Borrower is a party; (iv) certificates of the appropriate government officials of the state of organization of Borrower as to its existence and good standing, and certificates of the appropriate government officials in each state where each corporate Borrower does business and where failure to qualify as a foreign corporation would have a Material Adverse Effect on the business and financial condition of Borrower, as to its good standing and due qualification to do business in such state, each dated within 30 days prior to the date hereof; and (v) the names of the officers of Borrower authorized to sign this Agreement and the other Loan Documents to be executed by Borrower, together with a sample of the true signature of each such officer;

(t) Legal opinion of Brown, Winick, Graves, Gross, Baskerville & Schoenebaum, P.L.C. legal counsel for Borrower, substantially in the form attached hereto as “Exhibit C”;

(u) An intercreditor and subordination agreement between Lender and any holder of Subordinated Debt as to the priority of Lender’s Security Interests in the Collateral, rights to payment following an Event of Default, and as to such other matters as reasonably requested by Lender.

(v) Evidence that the costs and expenses (including, without limitation, attorney’s fees) referred to in Section 7.04, to the extent incurred and invoiced, shall have been paid in full;

(w) The results of Lender’s inspection of the Collateral, and Lender’s receipt of an appraisal of the Collateral acceptable to Lender in its sole discretion;

(x) Satisfactory review by Lender of any pending litigation relating to Borrower;

(y) A Phase I Environmental Assessment in form and substance reasonably acceptable to Lender;

(z) Borrower shall have ordered the General Contractor to begin construction of the Project, and construction shall have commenced;

(aa) A schedule, certified by Borrower as accurate and complete, setting forth: (i) the necessary licenses, permits and consents required by applicable federal, state, and local governmental entities required for the lawful construction and operation of the Project; and (ii) the deadlines to obtain such licenses, permits and consents so that the Completion Date occurs as scheduled;

(bb) Lender shall have received in form and substance reasonably acceptable to Lender, an agreement with an Inspecting Engineer of recognized standing and acceptable to Lender, by which agreement such Inspecting Engineer agrees to assist Lender in its inspection of the Project during construction, review and approve requests for Advances on the Construction Loan on behalf of Lender, and provide such additional services as Lender may reasonably require at the sole expense of Borrower;

(cc) Borrower shall have provided commitment to Lender of its Borrower’s Equity;

(dd) A Commodity Account Control Agreement for all commodity accounts kept and maintained by Borrower;

(ee) Evidence that the insurance required by Sections 5.01(j) and 5.01(s)(xii) has been obtained by Borrower;

(ff) An assignment of Borrower’s business interruption insurance policy, duly executed by Borrower and pursuant to which Borrower shall have assigned to Lender all of Borrower’s right, title and interest in and to it’s business interruption insurance policy, and which assignment shall have been consented to and certified in writing by the other party(ies) to the insurance policy;

(gg) Borrower shall have established and shall maintain all its Deposit Accounts including the Disbursing Account with Lender; and

(hh) Borrower shall have deposited $10,000,000.00 into its Debt Service Reserve Account with Lender.

ARTICLE IV.
REPRESENTATIONS AND WARRANTIES

Section 4.01 Representations and Warranties of Borrower . Borrower represents and warrants as follows:

(a)  Borrower . Borrower is a limited liability company duly organized and validly existing and in good standing under the laws of the State of Iowa and is qualified to do business in all jurisdictions in which the nature of its business makes such qualification necessary and where failure to so qualify would have a Material Adverse Effect on its respective financial condition or operations. Borrower has the power and authority to own and operate its assets and to carry on its business and to execute, deliver, and perform its obligations under the Loan Documents to which it is or may become a party. There are no outstanding subscriptions, options, warrants