SC 13D/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D

Under the Securities Exchange Act of 1934
(Amendment No. 4)*

HERON LAKE BIOENERGY, LLC

(Name of Issuer)

Class A and Class B units

(Title of Class of Securities)

None

(CUSIP Number)

Davis, Brown, Koehn, Shors & Roberts, P.C.

Attn: Mark D. Wickham

215 Tenth Street, Suite 1300

Des Moines, IA 50309

515-288-2500

(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)

July 31, 2013

(Date of Event Which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box: o.

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7 for other parties to whom copies are to be sent.

*The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

(Continued on following pages)

CUSIP No.:   None
	1	Name of Reporting Persons Granite Falls Energy, LLC I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) 41-1997390
	2	Check the Appropriate Box if a Member of a Group
		(a)			o
		(b)			o
	3	SEC Use Only
	4	Source of Funds WC, BK, OO
	5	Check Box if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)  o
	6	Citizenship or Place of Organization Minnesota
Number of Shares Beneficially Owned by Each Reporting Person With			7	Sole Voting Power 39,080,949
			8	Shared Voting Power 0
			9	Sole Dispositive Power 39,080,949
			10	Shared Dispositive Power 0
	11	Aggregate Amount Beneficially Owned by Each Reporting Person 39,080,949
	12	Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares o
	13	Percent of Class Represented by Amount in Row (11) 63.3%
	14	Type of Reporting Person 00 (LLC)

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CUSIP No.:   None
	1	Name of Reporting Persons Project Viking, L.L.C. I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) 25-1922419
	2	Check the Appropriate Box if a Member of a Group
		(a)			o
		(b)			o
	3	SEC Use Only
	4	Source of Funds WC, BK
	5	Check Box if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)  o
	6	Citizenship or Place of Organization Minnesota
Number of Shares Beneficially Owned by Each Reporting Person With			7	Sole Voting Power 39,080,949
			8	Shared Voting Power 0
			9	Sole Dispositive Power 39,080,949
			10	Shared Dispositive Power 0
	11	Aggregate Amount Beneficially Owned by Each Reporting Person 39,080,949
	12	Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares o
	13	Percent of Class Represented by Amount in Row (11) 63.3%
	14	Type of Reporting Person OO (LLC)

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Reference is made to the report on Schedule 13D originally filed with the Securities and Exchange Commission on October 21, 2008, Amendment No. 1 filed with the Securities and Exchange Commission on July 9, 2010, Amendment No. 2 filed with the Securities and Exchange Commission on December 3, 2010 and Amendment No. 3 filed with the Securities Exchange Commission on May 25, 2011 (“Schedule 13D”).  Pursuant to this Amendment No. 4 to Schedule 13D (this “Amendment”), Item 1, Item 2, Item 3, Item 4, Item 5, Item 6 and Item 7 of the Schedule 13D are hereby amended as provided below.  Except as set forth in this Amendment, the Schedule 13D is not being amended.

Item 1.Security and Issuer.

This Amendment amends the Schedule 13D relating to the Class A and Class B units (the “Units”) of Heron Lake BioEnergy, LLC, a Minnesota limited liability company (the “Issuer” or “HLBE”). The principal executive offices of the Issuer are located at 91246 390th Avenue, Heron Lake, Minnesota 56137-3175.

Item 2.Identity and Background.

This Amendment is being filed by Granite Falls Energy, LLC (“GFE”), a Minnesota limited liability company, and its wholly-owned subsidiary, Project Viking, L.L.C. (“Project Viking”), a Minnesota limited liability company (each a “Reporting Person” and collectively, the “Reporting Persons”).  The Reporting Persons have entered into a Joint Filing Agreement, dated as of August 8, 2013, a copy of which is attached hereto as Exhibit G.  The Schedule 13D to which this Amendment relates was originally filed by Roland J. (Ron) Fagen (“Mr. Fagen”) and his wife, Diane K. Fagen (“Mrs. Fagen”), as the owners of Project Viking.  However, as reflected by this Amendment, Mr. Fagen and Mrs. Fagen no longer have any beneficial ownership interest in Project Viking or the Units.

The principal business of GFE is the production of fuel-grade ethanol, distillers grains and crude corn oil for sale.  The address of the principal business office of GFE is 15045 Highway 23 S.E., Granite Falls, Minnesota 56241.  Attached as Schedule A hereto, and incorporated by reference herein, is a chart setting forth the name, business address, present principal occupation or employment (along with the name, principal business and address of any corporation or other organization in which such employment is conducted) and citizenship of each governor and executive officer of GFE (collectively, the “Schedule A Persons”), in each case as of the date hereof.

The principal business of Project Viking is to hold the Units for the purposes set forth in this Amendment.  The address of the principal office of Project Viking is 15045 Highway 23 S.E., Granite Falls, Minnesota 56241.  Attached as Schedule B hereto, and incorporated by reference herein, is a chart setting forth the name, business address, present principal occupation or employment (along with the name, principal business and address of any corporation or other organization in which such employment is conducted) and citizenship of each governor and executive officer of Project Viking (collectively, the “Schedule B Persons”), in each case as of the date hereof.

During the last five years, neither the Reporting Persons nor, to the knowledge of the Reporting Persons, any of the Schedule A Persons or Schedule B Persons, has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors). During the last five years, neither the Reporting Persons nor, to the knowledge of the Reporting Persons, any of the Schedule A Persons or Schedule B Persons, has been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.

Item 3.Source and Amount of Funds or Other Consideration.

The Reporting Persons hereby restate the disclosures contained in Item 3 of the Schedule 13D, which are hereby incorporated by reference.  On July 31, 2013, the Issuer issued 15,000,000 Class B Units and 8,075,000 Class A Units (collectively, the “Issuance”) to Project Viking, at a price of $0.30 per Unit, or $6,922,500 in the aggregate, pursuant to that certain Subscription Agreement Including Investment Representations dated July 31, 2013, between the Issuer and Project Viking attached as Exhibit H hereto and incorporated herein by reference (the “Subscription Agreement”).

The purchase of Units in the Issuance was funded in part with a bank loan from Granite Falls Bank to Project Viking and Mr. Fagen, as the borrowers, in the amount of $5,000,000, which bears interest at a rate of 3.99% and is due in a single lump sum payment upon the earlier of the demand of Granite Falls Bank or September 23, 2013.  A copy of the promissory note (the “GF Bank Note”) for this loan is attached as Exhibit I hereto and incorporated herein by reference.  In connection with its purchase of 100% of the membership interests of Project Viking, discussed in the following paragraph, GFE assumed the obligations under the GF Bank Note, with Project Viking and Mr. Fagen remaining secondarily liable for payment thereon, pursuant to that certain Assumption Agreement by and among GFE, Project Viking, Mr. Fagen and Granite Falls Bank attached as Exhibit J hereto and incorporated herein by reference and that certain Creditor and Debtors Agreement dated July 31, 2013 by and among GFE, Project Viking, Mr. Fagen and Granite Falls Bank attached as Exhibit K hereto and incorporated herein by reference.  The remainder of the purchase price for the Issuance was paid using working capital of Project Viking.

On July 31, 2013, GFE purchased from Mr. Fagen and Mrs. Fagen 100% of the membership interests of Project Viking (the “Viking Acquisition”) pursuant that certain Membership Interest Purchase Agreement dated July 31, 2013, attached as Exhibit L hereto and incorporated herein by reference.  The aggregate purchase price paid by GFE to Mr. Fagen and Mrs. Fagen for the Viking

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Acquisition was $17,024,500, paid as follows: (i) an $8,000,000 cash payment from GFE to Mr. Fagen and Mrs. Fagen, paid using the working capital of GFE, (ii) the issuance of a secured promissory note (the “Fagen Note”) from GFE to Mr. Fagen and Mrs. Fagen in the principal amount of $4,024,500, which bears interest at a rate of 4% and is due in a single lump sum payment on August 30, 2013, a copy of which is attached as Exhibit M hereto and incorporated herein by reference and (iii) GFE’s assumption of Mr. Fagen’s and Project Viking’s obligations under the $5,000,000 GF Bank Note discussed in the preceding paragraph.  GFE anticipates borrowing funds from a commercial lender prior to August 30, 2013 in order to pay in full all obligations under the Fagen Note and the GF Bank Note.

The descriptions of the transactions and agreements set forth in this Item 3 are qualified in their entirety by reference to the complete agreements or instruments governing such matters, each of which is incorporated by reference and attached to this Statement as an exhibit pursuant to Item 7.

Item 4.Purpose of Transaction.

GFE entered into the transactions described in this report in order to expand its market share and increase its efficiencies through ownership control of the Issuer.  GFE is in the business of producing fuel-grade ethanol, distillers grains and crude corn oil for sale.  The Issuer operates an ethanol plant in Heron Lake, Minnesota that also produces fuel-grade ethanol, distillers grains and crude corn oil for sale.

As a result of the Viking Acquisition, and Project Viking’s acquisition of the Units in the Issuance as described in Item 3, GFE will have ownership control over the operations and affairs of the Issuer.  The Reporting Persons may in the future exercise any and all of the rights associated with ownership of the Units as set forth in the Member Control Agreement attached hereto as Exhibit B (the “Member Control Agreement”), which is incorporated herein by reference.  Pursuant to the Member Control Agreement, a member of the Issuer that holds a majority of the Issuer’s outstanding membership units is entitled to appoint a majority of the Issuer’s governors.  Accordingly, as the owner of a majority of the Issuer’s outstanding units, Project Viking has appointed five of the Issuer’s nine governors, each of whom is also a governor of GFE.  Project Viking has also appointed two alternate governors of the Issuer, who may act in place of an absentee governor appointed by Project Viking.  Both such alternate governors are also governors of GFE.

In connection with the transactions described in Item 3, on July 31, 2013 the Issuer, GLE and Project Viking entered into that certain Subscription Supplement Agreement attached as Exhibit N hereto and incorporated herein by reference (the “Subscription Supplement Agreement”).  Pursuant to the Subscription Supplement Agreement, Project Viking agreed to vote the Units it holds in favor of and to cause the governors it appointed to the Issuer’s board of governors to vote in favor of three specified amendments (each a “Specified Amendment” and collectively, the “Specified Amendments”) to the Member Control Agreement. The first Specified Amendment would require that any Issuer board of governors action to (i) sell, lease, exchange or otherwise dispose of all or substantially all of the assets of the Issuer; (ii) merge or consolidate the Issuer with another person; (iii) materially change the business purpose of the Issuer; or (iv) voluntarily dissolve the Issuer, in each case would require the affirmative vote of at least two-thirds of the voting power of the Issuer’s governors in office. Under the Subscription Supplement Agreement, until the approval of these Specified Amendments by the Issuer’s members, Project Viking agreed that it will cause each governor it has a right to appoint to vote in favor of any of such actions only if at least one elected governor then serving on the Issuer’s board of governors also votes in favor of such action. The second Specified Amendment to the Member Control Agreement would add provisions consistent with the Subscription Supplement Agreement relating to alternate governors acting in the place and stead of absentee governors. The third Specified Amendment to the Member Control Agreement would remove the authority of the Issuer’s board of governors to increase the minimum ownership requirements and to place other membership restrictions on the holders of the Issuer’s Class B Units.  The Issuer agreed under the Subscription Supplement Agreement to call a special member meeting to consider and vote upon the Specified Amendments as soon as practicable following the closing.  The Reporting Persons expect that the Specified Amendments to the Member Control Agreement will be adopted in the near future.  GFE agreed to cause Project Viking to act in compliance with its covenants and obligations under the Subscription Supplement Agreement and the Subscription Agreement.

On July 31, 2013, the Issuer and GFE entered into that certain Management Services Agreement attached as Exhibit O hereto and incorporated herein by reference (the “Management Services Agreement”).  Pursuant to the Management Services Agreement, GFE agreed to supply its own personnel to act as part-time officers and managers of the Issuer for three positions, including Chief Executive Officer and Chief Financial Officer.  As a result, GFE and the Issuer now each have the same Chief Executive Officer and Chief Financial Officer.

Prior to the closing of the transactions described in Item 3, the Issuer had been conducting an offering of a maximum of $12 million in aggregate principal amount of promissory notes (the “Notes Offering”) titled “7.25% Secured Subordinated Notes due 2018” (the “2018 Notes”). Under the Subscription Supplement Agreement, with respect to Notes Offering subscriptions held in escrow or subscriptions for 2018 Notes subsequently received by the Issuer, the Issuer agreed to accept no more than $3,670,500 of such subscriptions. With this limit, the Reporting Persons expect that on a fully diluted basis, assuming all subscribers either (i) elect to receive Units, or (ii) elect to receive 2018 Notes and later convert such 2018 Notes to Units pursuant to their terms, the percentage interest of the Reporting Persons in the Units of the Issuer would not be reduced below 50.13%.

Pursuant to the Subscription Supplement Agreement, within 10 days following July 31, 2013, the Issuer will initiate a confirmation/re-subscription process to supplement and amend the terms of the Notes Offering and to require confirmation of subscriptions by subscribers to the 2018 Notes and holders of the 7.25% Subordinated Secured Notes due 2018 (the “Interim

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Subordinated Notes”) that the Issuer sold on May 17, 2013. This process will allow such persons to (1) confirm/re-subscribe their subscription or Interim Subordinated Notes for 2018 Notes pursuant to the terms of the Notes Offering, or (2) elect to convert the principal amount of their subscription or Interim Subordinated Notes into a subscription for Units, at the rate of $0.30 per Unit.

The Reporting Persons beneficially own $102,000 in principal amount of the aggregate of $1,407,000 in principal amount of Interim Subordinated Notes. The Reporting Persons intend to convert this amount into 340,000 Class A Units as soon as practicable in connection with the confirmation/re-subscription process discussed in the preceding paragraph.  Other holders of Interim Subordinated Notes and other subscribers in the Notes Offering may subscribe for Units or later convert their 2018 Notes or Interim Subordinated Notes to Units, thus diluting the ownership percentage of the Issuer beneficially held by the Reporting Persons.

The descriptions of the transactions and agreements set forth in this Item 4 are qualified in their entirety by reference to the complete agreements or instruments governing such matters, each of which is incorporated by reference and attached to this Statement as an exhibit pursuant to Item 7.

Except as otherwise set forth herein, as of the date of this Amendment, none of the Reporting Persons has any plans or proposals which relate to or would result in any of the actions specified in clauses (a) through (j) of the instructions to Item 4 of Schedule 13D.

A Reporting Person may, subject to the provisions and restrictions of the Member Control Agreement, market and general economic conditions and other factors, acquire additional Units or other securities of the Issuer or sell or otherwise dispose of all or a portion of the Units or other securities of the Issuer now owned or hereafter acquired by such Reporting Person.

The Reporting Persons may also take any other action with respect to the Issuer, its Units, or its other securities in any manner permitted by law.

Item 5.Interest in Securities of the Issuer.

(a)As of the date hereof, the Reporting Persons beneficially own the following Units.  The aggregate number does not include 340,000 Class A Units that may be issued to Project Viking upon conversion of the $102,000 in principal amount of the Issuer’s Interim Subordinated Notes purchased by Project Viking on May 17, 2013.

Beneficial ownership of GFE and Project Viking as of July 31, 2013:

Class of Units	Aggregate Number Owned	Percentage
Class A Units	24,080,949	51.6	%
Class B Units	15,000,000	100.0	%
Total Units	39,080,949	63.3	%

All information as to percentage ownership of the Issuer’s Units set forth in this Amendment is based upon information provided by the Issuer with respect to its Units outstanding in its Form 8-K filed with the Securities and Exchange Commission on August 2, 2013.

(b)Project Viking has the sole power to vote, direct the vote, dispose or direct the disposition of the 39,080,949 Units beneficially owned by Project Viking.  As the holder of 100% of the membership interests of Project Viking, GFE has the sole power to vote, direct the vote, dispose or direct the disposition of the 39,080,949 Units beneficially owned by GFE.

(c)None, other than as described in Item 3 above, which is incorporated herein by reference.

(d)Not applicable.

(e)As described in Item 2 above, on July 31, 2013, Mr. Fagen and Mrs. Fagen ceased to be the beneficial owners of more than five percent of the Units.

Item 6:Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer

The Reporting Persons hereby restate the disclosures contained in Item 6 of the Schedule 13D, which are hereby incorporated by reference.  GFE holds 100% of the membership interests of Project Viking and therefore controls Project Viking.

Item 3 above is hereby incorporated by reference.  The GF Bank Note is secured in part by all of Project Viking’s assets, including the Units owned by Project Viking.  The Fagen Note is secured by the membership interests of Project Viking held by GFE.  GFE anticipates borrowing funds from a commercial lender prior to August 30, 2013 in order to pay in full all obligations under the Fagen Note and the GF Bank Note.  Such a lender may likewise require a security interest in the Units owned by Project Viking and/or the membership interests of Project Viking held by GFE.

Pursuant to the Member Control Agreement, as majority owner of the Issuer, Project Viking is entitled to appoint a majority of

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the Issuer’s governors.  Project Viking has accordingly appointed five of the Issuer’s nine governors, each of whom is also a governor of GFE.  Project Viking has also appointed two alternate governors of the Issuer, who may act in place of an absentee governor appointed by Project Viking.  Both such alternate governors are also governors of GFE.

Pursuant to the Subscription Supplement Agreement, Project Viking agreed to vote the Units it holds in favor of and to cause the governors it appointed to the Issuer’s board of governors to vote in favor of the Specified Amendments to the Member Control Agreement. The first Specified Amendment would require that any Issuer board of governors action to (i) sell, lease, exchange or otherwise dispose of all or substantially all of the assets of the Issuer; (ii) merge or consolidate the Issuer with another person; (iii) materially change the business purpose of the Issuer; or (iv) voluntarily dissolve the Issuer, in each case would require the affirmative vote of at least two-thirds of the voting power of the Issuer’s governors in office. Under the Subscription Supplement Agreement, until the approval of these Specified Amendments by the Issuer’s members, Project Viking agreed that it will cause each governor it has a right to appoint to vote in favor of any of such actions only if at least one elected governor then serving on the Issuer’s board of governors also votes in favor of such action. The second Specified Amendment to the Member Control Agreement would add provisions consistent with the Subscription Supplement Agreement relating to alternate governors acting in the place and stead of absentee governors. The third Specified Amendment to the Member Control Agreement would remove the authority of the Issuer’s board of governors to increase the minimum ownership requirements and to place other membership restrictions on the holders of the Issuer’s Class B Units.  The Issuer agreed under the Subscription Supplement Agreement to call a special member meeting to consider and vote upon the Specified Amendments as soon as practicable following the closing.  GFE agreed to cause Project Viking to act in compliance with its covenants and obligations under the Subscription Supplement Agreement and the Subscription Agreement.

The Subscription Supplement Agreement also provides that at any member meeting of the Issuer, with respect to outstanding Units owned beneficially or of record by Project Viking, Project Viking will: (i) appear at such meeting or otherwise cause such Units to be counted as present thereat for purposes of establishing a quorum; (ii) vote or cause to be voted such Units in favor of the Specified Amendments and any action required in furtherance thereof; and (iii) vote or cause to be voted, or execute consents in respect of, such Units against any proposal, action or transaction presented to the members of the Issuer (A) that could reasonably be expected to prevent or materially impede or delay the effectiveness of the Specified Amendments (including any proposal to amend Section 5.1(c) of the Member Control Agreement in a manner other than the Specified Amendments), (B) to change in any manner the voting rights of the Units or the appointment rights of the Issuer’s members or their affiliates, or (C) to alter or amend in any manner Section 5.6 or Section 5.8 of the Member Control Agreement with respect to contracts or transactions between the Issuer and governors or their affiliates.

Under the Subscription Supplement Agreement, Project Viking agreed that, except for actions taken in furtherance of the Subscription Supplement Agreement, Project Viking (i) has not entered, and will not enter at any time while the Subscription Supplement Agreement remains in effect, into any voting agreement or voting trust with respect to the Units owned beneficially or of record by Project Viking or its affiliates; and (ii) has not granted, and will not grant at any time while the Subscription Supplement Agreement remains in effect, a proxy, consent or power of attorney with respect to the Units owned beneficially or of record by Project Viking or its affiliates that is inconsistent with Project Viking’s or its appointed governors’ obligations under the Subscription Supplement Agreement.

The descriptions of the transactions and agreements set forth in this Item 6 are qualified in their entirety by reference to the complete agreements or instruments governing such matters, each of which is incorporated by reference and attached to this Statement as an exhibit pursuant to Item 7.

Item 7.Material to be Filed as Exhibits.

Exhibit A:  [Reserved].

Exhibit B:  Member Control Agreement of the Issuer, as amended through the date of this Amendment.

Exhibit C:  Unit Transfer Policy of the Issuer, dated November 5, 2008 (incorporated herein by reference to Exhibit C to Amendment 1 to Schedule 13D filed on July 9, 2010).

Exhibit D:  Subscription Agreement Including Investment Representations, dated July 2, 2010, between the Issuer and Project Viking, L.L.C. (incorporated herein by reference to Exhibit D to Amendment 1 to Schedule 13D filed on July 9, 2010).

Exhibit E:  [Reserved].

Exhibit F:  Subscription Agreement Including Investment Representations, dated May 19, 2011, between the Issuer and Project Viking, L.L.C. (incorporated herein by reference to Exhibit F to Amendment No. 3 to Schedule 13D filed on May 25, 2011).

Exhibit G:  Joint Filing Agreement, dated as of August 8, 2013, by and among the Reporting Persons.

Exhibit H:  Subscription Agreement Including Investment Representations, dated July 31, 2013, by and between the Issuer and Project Viking, L.L.C. regarding 8,075,000 Class A Units and 15,000,000 Class B Units, including the Subscription Supplement Agreement.

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Exhibit I:  Promissory Note, dated July 23, 2013, between Granite Falls Bank, as Lender, and Project Viking, L.L.C. and Roland J. (Ron) Fagen, as Borrower.

Exhibit J:  Assumption Agreement among Granite Falls Energy, LLC, Project Viking, L.L.C., Roland J. Fagen and Granite Falls Bank.

Exhibit K:  Creditor and Debtors Agreement dated July 31, 2013 by and among Granite Falls Energy, LLC, Project Viking, L.L.C., Roland “Ron” J. Fagen and Granite Falls Bank.

Exhibit L:  Membership Interest Purchase Agreement effective July 31, 2013 by and between Granite Falls Energy, LLC and Roland J. Fagen and Diane K. Fagen.

Exhibit M:  Secured Promissory Note dated July 31, 2013, between Roland (Ron) J. Fagen and Diane K. Fagen, jointly as “Holder”, and Granite Falls Energy, LLC, as “Borrower.”

Exhibit N:  Subscription Supplement Agreement dated July 31, 2013, by and among Heron Lake BioEnergy, LLC, Granite Falls Energy, LLC and Project Viking, L.L.C.

Exhibit O:  Management Services Agreement effective as of July 31, 2013 between Granite Falls Energy, LLC and Heron Lake BioEnergy, LLC.

SIGNATURE

After reasonable inquiry and to the best of the undersigneds’ knowledge and belief, the undersigned certify that the information set forth in this Amendment is true, complete and correct.

Dated: August 12, 2013
	Granite Falls Energy, LLC
	By:	/s/ Paul Enstad
	Its:	Chairman
	Project Viking, L.L.C.
	By:	/s/ Paul Enstad
	Its:	President

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Schedule A

The following tables set forth the name, present principal occupation or employment (along with the name, principal business and address of any corporation or other organization in which such employment is conducted) and citizenship of each governor and executive officer of Granite Falls Energy, LLC. The country of citizenship of each governor and executive officer is the United States of America, with the exception of Marten Goulet, who is a citizen of Canada.  The business address of each director and executive officer is: c/o Granite Falls Energy, LLC, 15045 Highway 23 S.E., Granite Falls, Minnesota 56241.

Governors:

Name	Principal Occupation or Employment
Paul Enstad	Chairman and Governor of GFE and HLBE; farmer
Rodney Wilkison	Vice Chairman and Governor of GFE and HLBE; financial consultant
Dean Buesing	Secretary and Governor of GFE; Governor of HLBE; farmer
Leslie Bergquist	Governor of GFE; Alternate Governor of HLBE; farm manager for Fagen Farms; consultant for Bergquist Consulting Corp.
Marten Goulet	Governor of GFE and HLBE; Chief Financial Officer of Wagner Construction, Inc.
Kenton Johnson	Governor of GFE; farmer
Shannon Johnson	Governor of GFE and HLBE; farmer
Myron Peterson	Governor of GFE; farmer
Martin Seifert	Alternate Governor of GFE; Executive Director of Avera Marshall Foundation
David Thompson	Governor of GFE; Alternate Governor of HLBE; railroad consultant for Flolo-Thompson, Inc.

Executive Officers:

Name	Principal Occupation or Employment
Steve Christensen	Chief Executive Officer and General Manager of GFE and and HLBE
Stacie Schuler	Chief Financial Officer of GFE and HLBE

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Schedule B

The following table sets forth the name, present principal occupation or employment (along with the name, principal business and address of any corporation or other organization in which such employment is conducted) and citizenship of each governor and executive officer of Project Viking, L.L.C. The country of citizenship of each governor and executive officer is the United States of America and the business address of each director and executive officer is: c/o Granite Falls Energy, LLC, 15045 Highway 23 S.E., Granite Falls, Minnesota 56241.

Governor and President:

Name	Principal Occupation or Employment
Paul Enstad	Chairman and Governor of GFE and HLBE; farmer

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EX-99.B

EXHIBIT 99.B

HERON LAKE BIOENERGY, LLC

A Minnesota Limited Liability Company

MEMBER CONTROL AGREEMENT

(As Amended August 30, 2011)

(Contains Restrictions On

Transfer Of Interests)

MEMBER CONTROL AGREEMENT

OF

HERON LAKE BIOENERGY, LLC

TABLE OF CONTENTS

SECTION 1:	THE LIMITED LIABILITY COMPANY	B-1
1.1	Formation and Agreement	B-1
1.2	Name	B-1
1.3	Purpose; Powers	B-1
1.4	Principal Place of Business	B-1
1.5	Term	B-2
1.6	Filings; Agent for Service of Process	B-2
1.7	Title to Property	B-2
1.8	Payments of Individual Obligations	B-2
1.9	Independent Activities	B-3
1.10	Member Authority	B-3
1.11	Access to and Confidentiality of Information	B-3
1.12	Limited Liability	B-4
1.13	Definitions	B-4
SECTION 2:	CAPITAL AND INTERESTS	B-11
2.1	Members	B-11
2.2	Authorized Capital Units; Designation of Class A and B Units	B-11
2.3	Capital Contributions; Issuance of Units	B-12
2.4	Capital Accounts	B-12
SECTION 3:	ALLOCATIONS	B-13
3.1	Profits	B-13
3.2	Losses	B-13
3.3	Special Allocations	B-13
3.4	Curative Allocations	B-16
3.5	Loss Limitation	B-16
3.6	Other Allocation Rules	B-16
3.7	Tax Allocations: Code Section 704(c)	B-17
SECTION 4:	DISTRIBUTIONS	B-17
4.1	Net Cash Flow	B-17
4.2	Amounts Withheld	B-18
4.3	Limitations on Distributions	B-18

SECTION 5:	MANAGEMENT AND OPERATIONS	B-18
5.1	Management by Board of Governors	B-18
5.2	Actions by Governors; Committees; Reliance on Authority	B-21
5.3	The Board of Governors	B-22
5.4	Duties and Obligations of Governors	B-25
5.5	Officers	B-26
5.6	Limitation of Liability; Indemnification of Governors and Officers	B-28
5.7	Member Compensation; Expenses; Loans	B-29
5.8	Contracts with Members or their Affiliates	B-29
SECTION 6:	MEMBERS	B-30
6.1	Members; Rights and Powers Generally	B-30
6.2	Membership Requirements and Member Voting	B-30
6.3	Member Meetings	B-31
6.4	Termination of Membership	B-33
6.5	Continuation of the Company	B-33
6.6	No Obligation to Purchase Member’s Interest	B-33
6.7	Waiver of Dissenters’ Rights	B-34
SECTION 7:	UNIT CERTIFICATES	B-34
7.1	Certificates for Units	B-34
7.2	Transfer of Certificates	B-34
7.3	Loss or Destruction of Certificates	B-34
7.4	Certificate Regulations	B-34
7.5	Legends	B-35
SECTION 8:	ACCOUNTING, BOOKS AND RECORDS	B-35
8.1	Accounting, Books and Records	B-35
8.2	Reports	B-36
8.3	Tax Matters	B-36
8.4	Delivery to Members and Inspection	B-37
SECTION 9:	AMENDMENTS	B-38
9.1	Amendments	B-38
SECTION 10:	TRANSFERS	B-38
10.1	Restrictions on Transfers	B-38
10.2	Permitted Transfers	B-39
10.3	Conditions to Permitted Transfers	B-39
10.4	Prohibited Transfers	B-40

ii

10.5	Rights of Unadmitted Assignees	B-41
10.6	Admission of Transferees as Members	B-41
10.7	Representations Regarding Transfers; Legend	B-41
10.8	Distributions and Allocations in Respect of Transferred Units	B-42
SECTION 11:	[INTENTIONALLY OMITTED]	B-43
SECTION 12:	DISSOLUTION AND WINDING UP	B-43
12.1	Dissolution Events	B-43
12.2	Winding Up	B-43
12.3	Compliance With Certain Requirements of Regulations; Deficit Capital Accounts	B-44
12.4	Deemed Distribution and Recontribution	B-44
12.5	Rights of Unit Holders	B-44
12.6	Notice of Dissolution/Termination	B-45
12.7	Allocations During Period of Liquidation	B-45
12.8	Character of Liquidating Distributions	B-45
12.9	The Liquidator	B-45
12.10	Form of Liquidating Distributions	B-46
SECTION 13:	DISPUTE RESOLUTION	B-46
SECTION 14:	MISCELLANEOUS	B-46
14.1	Notices	B-46
14.2	Binding Effect	B-47
14.3	Construction	B-47
14.4	Time	B-47
14.5	Headings	B-47
14.6	Severability	B-47
14.7	Incorporation by Reference	B-48
14.8	Variation of Terms	B-48
14.9	Governing Law	B-48
14.10	Waiver of Jury Trial	B-48
14.11	Counterpart Execution	B-48
14.12	Specific Performance	B-48

iii

MEMBER CONTROL AGREEMENT

OF

HERON LAKE BIOENERGY, LLC

THIS MEMBER CONTROL AGREEMENT is hereby adopted and entered into effective as of the Effective Date (as defined below), by the Members (as defined below), pursuant to the provisions of the Act (as defined below), on the terms and conditions set forth herein.

SECTION 1

THE LIMITED LIABILITY COMPANY

1.1Formation and Agreement.

The Members have caused the Company to be formed as a Minnesota limited liability company pursuant to the provisions of the Act. The Members hereby agree that this Agreement constitutes the “member control agreement” within the meaning of Section 322B.37 of the Act. To the extent that the rights or obligations of any Member are different by reason of any provision of this Agreement than they would be in the absence of such provisions, this Agreement, to the extent permitted by the Act, shall control.

1.2Name.

The name of the Company shall be Heron Lake BioEnergy, LLC, and all business of the Company shall be conducted in such name. The name of the Company may be changed from time to time in accordance with the Act.

1.3Purpose; Powers.

(a)The business and purpose of the Company is (i) to engage in the development, financing, investment into, construction, ownership and operation of bio-energy facilities including ethanol production facilities, (ii) to pool, handle, deal, market, manufacture, process, or otherwise change the form or marketability of products of its Members and others, including crops, livestock, and other agricultural products, (iii) to conduct any business and investment activity in which a limited liability company organized under the Act may lawfully be engaged, and (iv) to perform and conduct any and all activities necessary, related or incidental to the foregoing.

(b)The Company shall possess and may exercise all the powers and privileges granted to the Company by the Act or by any other law, subject to any limitations provided in the Articles or in this Agreement.

1.4Principal Place of Business.

The principal place of business of the Company shall be as set forth in the Articles, or at such other place(s) within or without the State of Minnesota as the Board may determine.

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1.5 Term.

The term of the Company began on the date the Articles were originally filed with the Secretary of State of the State of Minnesota, and shall continue until the winding up and liquidation of the Company and its business is completed following a Dissolution Event as provided in Section 12 hereof.

1.6Filings; Agent for Service of Process.

(a)The Company’s organizer has caused the Articles to be filed with the Secretary of State of the State of Minnesota, in accordance with the provisions of the Act. The Company shall take any and all other actions reasonably necessary to perfect and maintain the status of the Company as a limited liability company under the laws of the State of Minnesota. The Board shall cause amendments to the Articles to be filed whenever required by the Act.

(b)The Board shall cause the Company to make such filings and take any and all other actions as may be reasonably necessary to perfect and maintain the status of the Company as a limited liability company or similar type of entity under the laws of any other jurisdictions in which the Company engages in business.

(c)The name and address of the agent for service of process on the Company resident in the State of Minnesota shall be as set forth in the Articles or any successor as appointed by the Board, and the Board is hereby authorized to change the Company’s registered office or resident agent, or both, from time to time without Member vote or approval.

(d)In connection with the dissolution and completion of the winding up of the Company, the Board shall cause to be executed and filed a notice of dissolution and articles of termination whenever required by the Act, and make similar filings under the laws of any other jurisdictions in which the Board deems such filings necessary or advisable.

1.7Title to Property.

All Property owned by the Company shall be owned by the Company as an entity and no Unit Holder or Governor shall have any ownership interest in such Property in its individual name. Each Unit Holder’s interest in the Company shall be personal property for all purposes. The Company shall hold title to all of its Property in the name of the Company and not in the name of any Unit Holder or Governor.

1.8Payments of Individual Obligations.

The Company’s credit and assets shall be used solely for the benefit of the Company, and no asset of the Company shall be Transferred or encumbered for, or in payment of, any individual obligation of any Unit Holder or Governor.

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1.9Independent Activities.

(a)Each Governor shall be required to devote only such time to the affairs of the Company as may be necessary to manage the business and affairs of the Company in accordance with Section 5 hereof, and shall be free to serve any other Person or enterprise in any capacity that the Governor may deem appropriate in his or her discretion.

(b)Neither this Agreement nor any activity undertaken pursuant hereto shall (i) prevent any Unit Holder, Governor or its Affiliates, acting on their own behalf, from engaging in whatever activities they choose, whether the same are competitive with the Company or otherwise, and any such activities may be undertaken without having or incurring any obligation to offer any interest in such activities to the Company or any other Unit Holder or Governor, or (ii) require any Unit Holder or Governor to permit the Company or any other Unit Holder or Governor or its Affiliates to participate in any such activities, and as a material part of the consideration for the execution of this Agreement by each Member, each Member hereby waives, relinquishes, and renounces any such right or claim of participation.

1.10Member Authority.

Each Member represents and warrants to the Company and to the other Members that:

(a)the Member, if not an individual, is duly organized, validly existing and in good standing under the laws of its state of organization and is duly qualified and in good standing as a foreign organization in the jurisdiction of its principal place of business if not organized therein;

(b)the Member, if not an individual, has full corporate, limited liability company, partnership, trust or other applicable power and authority to execute and agree to this Agreement and to perform its obligations hereunder and all necessary actions by the board of directors, shareholders, managers, members, partners, trustees, beneficiaries, or other Persons necessary or appropriate for the due authorization, execution, delivery and performance of this Agreement by that Member have been taken;

(c)the Member has duly executed and delivered this Agreement; and

(d)the Member’s authorization, execution, delivery and performance of this Agreement does not conflict with any other agreement or arrangement to which that Member is a party or by which it is bound.

1.11Access to and Confidentiality of Information.

(a)In addition to the other rights specifically set forth in this Agreement, each Member is entitled to all information to which the Member is entitled to have access pursuant to the Act under the circumstances and subject to the conditions therein stated, which conditions include but are not limited to such reasonable standards governing what information and documents are to be furnished at what time and location and at whose expense as may be set forth herein or otherwise established by the Board. However, without limiting the foregoing, the Members agree that the Board may from time to time determine, due to contractual obligations,

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business concerns or other considerations, that certain Confidential Information should be kept confidential and not provided to some or all of the Members or that it is not just or reasonable for some or all of the Members or their assignees or representatives to examine or copy any such information.

(b)Each Member acknowledges that from time to time the Member may receive Confidential Information from or regarding the Company, the release of which may be damaging to the Company or Persons with whom it does business. Each Member agrees to hold in strict confidence any Confidential Information it receives regarding the Company that is identified as being confidential (and if such information is provided in writing, is so marked) and may not disclose such information to any Person, except for disclosures (i) to another Member having the right to such information, (ii) compelled by law, provided the Member must promptly notify an officer of the Board of any request or demand for such information, to the extent reasonably possible, (iii) to advisors or representatives of the Member, or to Persons (and their advisors or representatives) seeking to acquire all or any portion of the Member’s Interest through a Transfer in accordance with this Agreement, but only if in each case such Person has agreed to be bound by the provisions of this Section 1.11(b), or (iv) of information that the Member has also received from a source independent of the Company that the Member reasonably believes has the legal right to disclose such information to the Member. Each Member acknowledges that a breach of the provisions of this Section 1.11(b) may cause the Company irreparable harm and injury for which monetary damages are inadequate or difficult to calculate or both. Accordingly, each Member specifically agrees that the Company shall be entitled to injunctive relief to enforce the provisions of this Section 1.11(b), that such relief may be granted without the necessity of proving actual damages, and that such injunctive or equitable relief shall be in addition to, not in lieu of, the right to recover monetary damages for any breach of this Section 1.11(b) by the Member. The obligations referred to in this Section 1.11(b) shall survive the termination of a Member’s membership in the Company.

1.12Limited Liability.

Except as otherwise expressly agreed to under a separate written agreement, the debts, liabilities and obligations of the Company, whether arising in contract, tort or otherwise, shall be solely the debts, obligations and liabilities of the Company, and no Member, Unit Holder or Governor of the Company shall be personally liable for the acts, debts, obligations or liabilities of the Company merely on account of that status. The failure of the Company to observe any formalities or requirements relating to the exercise of its powers or management of its business or affairs under this Agreement or the Act shall not be grounds for imposing liability on the Members, Unit Holders or Governors for any debt, obligation or liability of the Company.

1.13Definitions.

Capitalized words and phrases used in this Agreement have the following meanings:

“2004 Offering” means the Company’s offering of Class A Units pursuant to the Registration Statement dated September 17, 2004.

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“Act” means the Minnesota Limited Liability Company Act as set forth in Chapter 322B of the Minnesota Statutes Annotated (commencing with Section 322B.01), as amended from time to time (or any corresponding provision or provisions of any succeeding law).

“Adjusted Capital Account Deficit” means, with respect to any Unit Holder, the deficit balance, if any, in such Unit Holder’s Capital Account as of the end of the relevant Fiscal Year, after giving effect to the following adjustments:

(i)Credit to such Capital Account any amounts which such Unit Holder is deemed to be obligated to restore pursuant to the next to the last sentences in Sections 1.704-2(g)(1) and 1.7042(i)(5) of the Regulations; and

(ii)Debit to such Capital Account the items described in Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5) and 1.704-1(b)(2)(ii)(d)(6) of the Regulations.

The foregoing definition is intended to comply with the provisions of Section 1.704-1(b)(2)(ii)(d) of the Regulations and shall be interpreted consistently therewith.

“Affiliate” means, with respect to another Person, any of the following: (i) any Person directly or indirectly owning, controlling, or holding with power to vote ten percent or more of the outstanding voting securities of such other Person, (ii) any Person ten percent or more of whose outstanding securities are directly or indirectly owned, controlled, or held, with power to vote, by such other Person, (iii) any Person directly or indirectly controlling, controlled by or under common control with such other Person, (iv) any executive officer, director, manager, governor, trustee or partner of such other Person, or (v) any legal entity on which such person acts as an executive officer, director, manager, governor, trustee or partner. For purposes of this definition, the terms “controlling,” “controlled by” or “under common control with” mean the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person or entity, whether through the ownership of voting securities, by contract or otherwise, or the power to elect at least 50% of the board of directors or managers or governors, or persons exercising similar authority with respect to such Person or entities.

“Agreement” means this Member Control Agreement, as amended, modified, supplemented or restated from time to time. Words such as “herein,” “hereinafter,” “hereof,” “hereto” and “hereunder” refer to this Agreement as a whole, unless the context otherwise requires.

“Articles” means the Articles of Organization filed with the Secretary of State of the State of Minnesota pursuant to the Act for the purpose of forming the Company, as amended, modified, supplemented or restated from time to time.

“Assignee” means a transferee of Units who is not admitted as a Member pursuant to Section 10.6 hereof.

“Board” means collectively the persons who are named as Governors of the Company in or designated or elected as Governors pursuant to this Agreement. “Governor” or “Governors” means any such person or persons.

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“Capital Account” means the capital account maintained for each Unit Holder in accordance with Section 2.4 hereof.

“Capital Contributions” means, with respect to any Unit Holder, the amount of cash, property, services rendered or a promissory note or other obligation to contribute cash or property or to perform services contributed to the Company with respect to the Units in the Company held or purchased by such Unit Holder.

“CEO” means the Chief Executive Officer/General Manager of the Company, including any interim CEO, as appointed by the Board.

“Class A Units” means all Units that are designated as such pursuant to Section 2.2 hereof.

“Class B Units” means all Units that are designated as such pursuant to Section 2.2 hereof.

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

“Company” means the limited liability company formed pursuant to the filing of the with the Secretary of State of the State of Minnesota and the limited liability company continuing the business of this Company in the event of dissolution of the Company as herein provided.

“Company Minimum Gain” has the meaning given the term “partnership minimum gain” in Sections 1.704-2(b)(2) and 1.704-2(d) of the Regulations.

“Confidential Information” means any information or compilation of information possessed by the Company that derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means, including but not limited to: (a) any information not generally known or readily ascertainable in the industry of the Company, regarding the Company’s products, pricing of products, research, marketing, business systems, and processing techniques etc.; (b) financial information concerning the Company and customers of the Company, including but not limited to, customer lists, information concerning accounts receivable of the customers of the Company; (c) quantity and types of products purchased by the Company and customers of the Company; and (d) any information that the Company may from time to time designate as “Confidential” which is not generally known in the Company’s industry.

“Debt” means (i) any indebtedness for borrowed money or the deferred purchase price of property as evidenced by a note, bonds, or other instruments, (ii) obligations as lessee under capital leases, (iii) obligations secured by any mortgage, pledge, security interest, encumbrance, lien or charge of any kind existing on any asset owned or held by the Company whether or not the Company has assumed or become liable for the obligations secured thereby, (iv) any obligation under any interest rate swap agreement, (v) accounts payable, and (vi) obligations

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under direct or indirect guarantees of (including obligations (contingent or otherwise) to assure a creditor against loss in respect of) indebtedness or obligations of the kinds referred to in clauses (i), (ii), (iii), (iv) and (v) above; provided that Debt shall not include obligations in respect of any accounts payable that are incurred in the ordinary course of the Company’s business and are not delinquent or are being contested in good faith by appropriate proceedings.

“Depreciation” means, for each Fiscal Year, an amount equal to the depreciation, amortization, or other cost recovery deduction allowable with respect to an asset for such Fiscal Year, except that if the Gross Asset Value of an asset differs from its adjusted basis for federal income tax purposes at the beginning of such Fiscal Year, Depreciation shall be an amount which bears the same ratio to such beginning Gross Asset Value as the federal income tax depreciation, amortization, or other cost recovery deduction for such Fiscal Year bears to such beginning adjusted tax basis; provided, however, that if the adjusted basis for federal income tax purposes of an asset at the beginning of such Fiscal Year is zero, Depreciation shall be determined with reference to such beginning Gross Asset Value using any reasonable method selected by the Board.

“Dissolution Event” has the meaning set forth in Section 12.1 hereof.

“Effective Date” means the date that the Company first issues Units in connection with its closing on all or a portion of subscription agreements received and accepted in accordance with the terms of the 2004 Offering or September 23, 2004, whichever occurs first.

“Financial Closing” means when the Board determines, in its sole discretion, that the Company has closed on the debt and equity financing necessary to construct the Company’s proposed ethanol plant and provide working capital at plant start-up.

“Fiscal Quarter” means, subject to a change in Fiscal Year pursuant to Section 8.1(b), (i) the period commencing with the formation of the Company and ending on July 31, 2003, (ii) any subsequent three-month period commencing on each August 1, November 1, February 1 and May 1 and ending on the last date before the next such date, and (iii) the period commencing on the immediately preceding August 1, November 1, February 1 and May 1 as the case may be, and ending on the date on which all Property is distributed to the Unit Holders pursuant to Section 12 hereof.

“Fiscal Year” means, subject to a change in Fiscal Year pursuant to Section 8.1(b), (i) the period commencing with the formation of the Company and ending on October 31, 2003, (ii) any subsequent twelve-month period commencing on November 1 and ending on October 31, and (iii) the period commencing on the immediately preceding November 1 and ending on the date on which all Property is distributed to the Unit Holders pursuant to Section 12 hereof or, if the context requires, any portion of a Fiscal Year for which an allocation of Profits or Losses or a distribution is to be made.

“GAAP” means generally accepted accounting principles in effect in the United States of America from time to time.

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“Gross Asset Value” means with respect to any asset, the asset’s adjusted basis for federal income tax purposes, except as follows:

(i)The initial Gross Asset Value of any asset contributed by a Unit Holder to the Company shall be the gross fair market value of such asset, as determined by the Board;

(ii)The Gross Asset Values of all Company assets shall be adjusted to equal their respective gross fair market values (taking Code Section 7701(g) into account) as determined by the Board as of the following times: (A) the acquisition of an additional interest in the Company by any new or existing Unit Holder in exchange for more than a de minimis Capital Contribution; (B) the distribution by the Company to a Unit Holder of more than a de minimis amount of Company property as consideration for an interest in the Company; (C) the liquidation of the Company within the meaning of Regulations Section 1.704-1(b)(2)(ii)(g); and (D) such other times as the Regulations may permit; provided that an adjustment described in clauses (A), (B) or (D) of this subparagraph shall be made only if the Board determines that such adjustment is necessary to reflect the relative economic interests of the Unit Holders in the Company.

(iii)The Gross Asset Value of any item of Company assets distributed to any Unit Holder shall be adjusted to equal the gross fair market value (taking Code Section 7701(g) into account) of such asset on the date of distribution as determined by the Board; and

(iv)The Gross Asset Values of Company assets shall be increased (or decreased) to reflect any adjustments to the adjusted basis of such assets pursuant to Code Section 734(b) or Code Section 743(b), but only to the extent that such adjustments are taken into account in determining Capital Accounts pursuant to Regulations Section 1.704-1(b)(2)(iv)(m) and subparagraph (vi) of the definition of “Profits” and “Losses” or Section 3.3(g) hereof; provided, however, that Gross Asset Values shall not be adjusted pursuant to this subparagraph (iv) to the extent that an adjustment pursuant to subparagraph (ii) is required in connection with a transaction that would otherwise result in an adjustment pursuant to this subparagraph (iv).

If the Gross Asset Value of an asset has been determined or adjusted pursuant to subparagraph (ii) or (iv), such Gross Asset Value shall thereafter be adjusted by the Depreciation taken into account with respect to such asset for purposes of computing Profits and Losses.

“Interest” means, collectively, a Unit Holder’s share of the “Profits” and “Losses” of the Company, a Unit Holder’s right to receive distributions of the Company’s assets, and, with respect to a Member, any right of the Member to vote on or participate in the management of the Company and to information concerning the business and affairs of the Company as provided for in this Agreement. An Interest is quantified by the unit of measurement referred to herein as a “Unit” (as defined below).

“Issuance Items” has the meaning set forth in Section 3.3(h) hereof.

“Liquidation Period” has the meaning set forth in Section 12.7 hereof. “Liquidator” has the meaning set forth in Section 12.9(a) hereof.

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“Losses” has the meaning set forth in the definition of “Profits” and “Losses.”

“Majority in Interest” of the Members or any class(es) or series thereof means Members holding more than fifty percent (50%) of the Units then held by all Members, or of the Units of the specified class(es) or series of Units then held by all Members.

“Member” means any Person who is described in and meets the membership requirements established in Sections 6.1 and 6.2(a) hereof and who has not ceased to be a Member pursuant to the terms of this Agreement. “Members” means all such Persons.

“Net Cash Flow” means the gross cash proceeds of the Company less the portion thereof used to pay or establish reserves for all Company expenses, debt payments, obligations and liabilities, capital improvements, replacements, and contingencies, all as reasonably determined by the Board. “Net Cash Flow” shall not be reduced by depreciation, amortization, cost recovery deductions, or similar allowances, but shall be increased by any reductions of reserves previously established.

“Nonrecourse Deductions” has the meaning set forth in Section 1.704-2(b)(1) of the Regulations.

“Nonrecourse Liability” has the meaning set forth in Section 1.704-2(b)(3) of the Regulations.

“Permitted Transfer” has the meaning set forth in Section 10.2 hereof.

“Person” means any individual, partnership (whether general or limited), limited liability company, corporation, trust, estate, association, nominee or other entity.

“Profits” and “Losses” mean, for each Fiscal Year, an amount equal to the Company’s taxable income or loss for such Fiscal Year, determined in accordance with Code Section 703(a) (for this purpose, all items of income, gain, loss, or deduction required to be stated separately pursuant to Code Section 703(a)(1) shall be included in taxable income or loss), with the following adjustments (without duplication):

(i)Any income of the Company that is exempt from federal income tax and not otherwise taken into account in computing Profits or Losses pursuant to this definition of “Profits” and “Losses” shall be added to such taxable income or loss;

(ii)Any expenditures of the Company described in Code Section 705(a)(2)(B) or treated as Code Section 705(a)(2)(B) expenditures pursuant to Regulations Section 1.704-1(b)(2)(iv)(i), and not otherwise taken into account in computing Profits or Losses pursuant to this definition of “Profits” and “Losses” shall be subtracted from such taxable income or loss;

(iii)In the event the Gross Asset Value of any Company asset is adjusted pursuant to subparagraphs (ii) or (iii) of the definition of Gross Asset Value, the amount of such adjustment

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shall be treated as an item of gain (if the adjustment increases the Gross Asset Value of the asset) or an item of loss (if the adjustment decreases the Gross Asset Value of the asset) from the disposition of such asset and shall be taken into account for purposes of computing Profits or Losses;

(iv)Gain or loss resulting from any disposition of Property with respect to which gain or loss is recognized for federal income tax purposes shall be computed by reference to the Gross Asset Value of the Property disposed of, notwithstanding that the adjusted tax basis of such Property differs from its Gross Asset Value;

(v)In lieu of the depreciation, amortization, and other cost recovery deductions taken into account in computing such taxable income or loss, there shall be taken into account Depreciation for such Fiscal Year, computed in accordance with the definition of Depreciation;

(vi)To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Code Section 734(b) is required, pursuant to Regulations Section 1.704-(b)(2)(iv)(m)(4), to be taken into account in determining Capital Accounts as a result of a distribution other than in liquidation of a Unit Holder’s interest in the Company, the amount of such adjustment shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis) from the disposition of such asset and shall be taken into account for purposes of computing Profits or Losses; and

(vii)Notwithstanding any other provision of this definition, any items which are specially allocated pursuant to Section 3.3 and Section 3.4 hereof shall not be taken into account in computing Profits or Losses.

The amounts of the items of Company income, gain, loss or deduction available to be specially allocated pursuant to Sections 3.3 and Section 3.4 hereof shall be determined by applying rules analogous to those set forth in subparagraphs (i) through (vi) above.

“Property” means all real and personal property acquired by the Company, including cash, and any improvements thereto, and shall include both tangible and intangible property.

“Regulations” means the Income Tax Regulations, including Temporary Regulations, promulgated under the Code, as such regulations are amended from time to time.

“Regulatory Allocations” has the meaning set forth in Section 3.4 hereof. “Securities Act” means the Securities Act of 1933, as amended.

“Syndication Expenses” means all expenditures classified as syndication expenses pursuant to Section 1.709-2(b) of the Regulations.

“Subsidiary” means, with respect to any Person, any corporation, partnership, joint venture, limited liability company, association or other entity in which such Person owns, directly or indirectly, fifty percent (50%) or more of the outstanding equity securities or interests,

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the holders of which are generally entitled to vote for the election of the governing body of such entity.

“Transfer” means, as a noun, any voluntary or involuntary transfer, sale, pledge or hypothecation or other disposition, whether by operation of law (e.g., pursuant to a merger) or otherwise, and, as a verb, voluntarily or involuntarily to transfer, sell, pledge or hypothecate or otherwise dispose of.

“Unit” means the unit of measurement into which an Interest is divided for purposes of those provisions of this Agreement that require quantification of the rights, preferences and obligations represented by an Interest, as authorized and designated in Section 2.2 and issued pursuant to Section 2.3 hereof.

“Unit Holder” means a Person who owns Units, regardless of whether such Person is a Member. “Unit Holders” means all Unit Holders. Unit Holders may be designated with respect to specific types or classes of Units held.

“Unit Holder Nonrecourse Debt” has the same meaning as the term “partner nonrecourse debt” in Section 1.704-2(b)(4) of the Regulations.

“Unit Holder Nonrecourse Debt Minimum Gain” means an amount, with respect to each Unit Holder Nonrecourse Debt, equal to the Company Minimum Gain that would result if such Unit Holder Nonrecourse Debt were treated as a Nonrecourse Liability, determined in accordance with Section 1.704-2(i)(3) of the Regulations.

“Unit Holder Nonrecourse Deductions” has the same meaning as the term “partner nonrecourse deductions” in Sections 1.704-2(i)(1) and 1.704-2(i)(2) of the Regulations.

SECTION 2

CAPITAL AND INTERESTS

2.1Members.

The Members of the Company are those Persons described in Sections 6.1 and 6.2(a) hereof, who have not ceased to be Members.

2.2Authorized Capital Units; Designation of Class A and Class B Units.

(a)The Company is authorized to issue 80,000,000 Units.

(b)Of the total number of authorized Units, 65,000,000 Units are hereby designated as Class A Units and 15,000,000 Units are hereby designated Class B Units. Each Class B Unit issued and outstanding as of the date the amendments to this Agreement are adopted by members at the 2011 annual meeting of the members of the Company shall be and is hereby automatically converted into, and shall hereafter be deemed to be, a Class A Unit, and the books and records of the Company shall be adjusted appropriately.

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(c)The rights of Class A and Class B Units are established herein.

2.3Capital Contributions; Issuance of Units.

(a)No Member shall be obligated to make any additional Capital Contributions to the Company or to pay any assessment to the Company, other than the unpaid portion of such Member’s written agreement to make Capital Contributions, and no Units shall be subject to any mandatory assessment, requests or demands for capital.

(b)Additional Units may only be issued in consideration of Capital Contributions. The Board may accept Capital Contributions from Members or persons seeking to become Members, may authorize the Company to enter into a written subscription agreement with such Member or persons seeking to become Members to make Capital Contributions for the purchase of Units, and may cause the Company to issue additional Units to such persons in consideration of Capital Contributions to the Company. Capital Contributions and the issuance of additional Units shall be made at such times and upon such terms and conditions as the Board and the person acquiring the Units may agree.

(c)Upon acceptance of Capital Contributions and the issuance of additional Units, the Board shall cause the books and records of the Company to be adjusted appropriately.

(d)The Members shall have no preemptive rights to make contributions pursuant to Minnesota Statutes, Section 322B.33 or any similar provisions of future law.

2.4Capital Accounts.

A Capital Account shall be maintained for each Unit Holder in accordance with the following provisions:

(a)To each Unit Holder’s Capital Account there shall be credited (A) such Unit Holder’s Capital Contributions, (B) such Unit Holder’s distributive share of Profits and any items in the nature of income or gain which are specially allocated pursuant to Sections 3.3 and 3.4 hereof, and (C) the amount of any Company liabilities assumed by such Unit Holder or which are secured by any Property distributed to such Unit Holder. The principal amount of a promissory note which is not readily traded on an established securities market and which is contributed to the Company by the maker of the note (or a Unit Holder related to the maker of the note within the meaning of Regulations Section 1.704-1(b)(2)(ii)(c)) shall not be included in the Capital Account of any Unit Holder until the Company makes a taxable disposition of the note or until (and to the extent) principal payments are made on the note, all in accordance with Regulations Section 1.704-1(b)(2)(iv)(d)(2);

(b)To each Unit Holder’s Capital Account there shall be debited (A) the amount of money and the Gross Asset Value of any Property distributed to such Unit Holder pursuant to any provision of this Agreement, (B) such Unit Holder’s distributive share of Losses and any items in the nature of expenses or losses which are specially allocated pursuant to Sections 3.3 and 3.4 hereof, and (C) the amount of any liabilities of such Unit Holder assumed

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by the Company or which are secured by any Property contributed by such Unit Holder to the Company;

(c)In the event Units are Transferred in accordance with the terms of this Agreement, the transferee shall succeed to the Capital Account of the transferor to the extent it relates to the Transferred Units; and

(d)In determining the amount of any liability for purposes of subparagraphs (a) and (b) above there shall be taken into account Code Section 752(c) and any other applicable provisions of the Code and Regulations.

The foregoing provisions and the other provisions of this Agreement relating to allocation of Profits and Loss, nonliquidating distributions, liquidating distributions, and the maintenance of Capital Accounts, including and subject to Section 12.3 hereof, are intended to comply with Regulations Section 1.704-1(b), and shall be interpreted and applied in a manner consistent with such Regulations. In the event the Board shall determine that it is prudent to modify the manner in which the Capital Accounts, or any debits or credits thereto (including, without limitation, debits or credits relating to liabilities which are secured by contributed or distributed property or which are assumed by the Company or any Unit Holders), are computed in order to comply with such Regulations, the Board may make such modification, provided that it is not likely to have a material effect on the amounts distributed to any Person pursuant to Section 12 hereof upon the dissolution of the Company. The Board also shall (i) make any adjustments that are necessary or appropriate to maintain equality between the Capital Accounts of the Unit Holders and the amount of capital reflected on the Company’s balance sheet, as computed for book purposes, in accordance with Regulations Section 1.704-1(b)(2)(iv)(q), and (ii) make any appropriate modifications in the event unanticipated events might otherwise cause this Agreement not to comply with Regulations Section 1.704-1(b).

SECTION 3

ALLOCATIONS

3.1Profits.

After giving effect to the special allocations in Section 3.3 and Section 3.4 hereof, and except as otherwise provided in Section 3.5 hereof, Profits for any Fiscal Year shall be allocated among the Unit Holders ratably in proportion to Units held.

3.2Losses.

After giving effect to the special allocations in Section 3.3 and 3.4 hereof, and except as otherwise provided in Section 3.5 hereof, Losses for any Fiscal Year shall be allocated among the Unit Holders ratably in proportion to Units held.

3.3Special Allocations.

The following special allocations shall be made in the following order:

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(a)Minimum Gain Chargeback. Except as otherwise provided in Section 1.7042(f) of the Regulations, notwithstanding any other provision of this Section 3, if there is a net decrease in Company Minimum Gain during any Fiscal Year, each Unit Holder shall be specially allocated items of Company income and gain for such Fiscal Year (and, if necessary, subsequent Fiscal Years) in an amount equal to such Unit Holder’s share of the net decrease in Company Minimum Gain, determined in accordance with Regulations Section 1.704-2(g). Allocations pursuant to the previous sentence shall be made in proportion to the respective amounts required to be allocated to each Unit Holder pursuant thereto. The items to be so allocated shall be determined in accordance with sections 1.704-2(f) (6) and 1.704-2(j) (2) of the Regulations. This Section 3.3(a) is intended to comply with the minimum gain chargeback requirement in Section 1.704-2(f) of the Regulations and shall be interpreted consistently therewith.

(b)Unit Holder Minimum Gain Chargeback. Except as otherwise provided in Section 1.704-2(i) (4) of the Regulations, notwithstanding any other provision of this Section 3, if there is a net decrease in Unit Holder Nonrecourse Debt Minimum Gain attributable to a Unit Holder Nonrecourse Debt during any Fiscal Year, each Unit Holder who has a share of the Unit Holder Nonrecourse Debt Minimum Gain attributable to such Unit Holder Nonrecourse Debt, determined in accordance with Section 1.704-2(i) (5) of the Regulations, shall be specially allocated items of Company income and gain for such Fiscal Year (and, if necessary, subsequent Fiscal Years) in an amount equal to such Unit Holder’s share of the net decrease in Unit Holder Nonrecourse Debt, determined in accordance with Regulations Section 1.704-2(i) (4). Allocations pursuant to the previous sentence shall be made in proportion to the respective amounts required to be allocated to each Unit Holder pursuant thereto. The items to be so allocated shall be determined in accordance with Sections 1.704-2(i) (4) and 1.704-2(j) (2) of the Regulations. This Section 3.3(b) is intended to comply with the minimum gain chargeback requirement in Section 1.704-2(i) (4) of the Regulations and shall be interpreted consistently therewith.

(c)Qualified Income Offset. In the event any Unit Holder unexpectedly receives any adjustments, allocations, or distributions described in Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), or 1.704-1(b)(2)(ii)(d)(6) of the Regulations, items of Company income and gain shall be specially allocated to such Unit Holder in an amount and manner sufficient to eliminate, to the extent required by the Regulations, the Adjusted Capital Account Deficit of the Unit Holder as quickly as possible, provided that an allocation pursuant to this Section 3.3(c) shall be made only if and to the extent that the Unit Holder would have an Adjusted Capital Account Deficit after all other allocations provided for in this Section 3 have been tentatively made as if this Section 3.3(c) were not in this Agreement.

(d)Gross Income Allocation. In the event any Unit Holder has a deficit Capital Account at the end of any Fiscal Year which is in excess of the sum of (i) the amount such Unit Holder is obligated to restore pursuant to the penultimate sentences of Regulations Sections 1.7042(g)(1) and 1.704-2(i)(5), each such Unit Holder shall be specially allocated items of Company income and gain in the amount of such excess as quickly as possible, provided that an allocation pursuant to this Section 3.3(d) shall be made only if and to the extent that such Unit Holder would have a deficit Capital Account in excess of such sum after all other allocations

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provided for in this Section 3 have been made as if Section 3.3(c) and this Section 3.3(d) were not in this Agreement.

(e)Nonrecourse Deductions. Nonrecourse Deductions for any Fiscal Year shall be specially allocated to the Unit Holders in proportion to Units owned.

(f)Unit Holder Nonrecourse Deductions. Any Unit Holder Nonrecourse Deductions for any Fiscal Year shall be specially allocated to the Unit Holder who bears the economic risk of loss with respect to the Unit Holder Nonrecourse Debt to which such Unit Holder Nonrecourse Deductions are attributable in accordance with Regulations Section 1.704-2(i)(1).

(g)Section 754 Adjustments. To the extent an adjustment to the adjusted tax basis of any Company asset, pursuant to Code Section 734(b) or Code Section 743(b) is required, pursuant to Regulations Section 1.704-1(b)(2)(iv)(m)(2) or 1.704-1(b)(2)(iv)(m)(4), to be taken into account in determining Capital Accounts as the result of a distribution to a Unit Holder in complete liquidation of such Unit Holder’s interest in the Company, the amount of such adjustment to Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis) and such gain or loss shall be specially allocated to the Unit Holders in accordance with their interests in the Company in the event Regulations Section 1.704-1(b)(2)(iv)(m)(2) applies, or to the Unit Holder to whom such distribution was made in the event Regulations Section 1.704-1(b)(2)(iv)(m)(4) applies.

(h)Allocations Relating to Taxable Issuance of Units. Any income, gain, loss or deduction realized as a direct or indirect result of the issuance of Units by the Company to a Unit Holder (the “Issuance Items”) shall be allocated among the Unit Holders so that, to the extent possible, the net amount of such Issuance Items, together with all other allocations under this Agreement to each Unit Holder shall be equal to the net amount that would have been allocated to each such Unit Holder if the Issuance Items had not been realized.

(i)Syndication Expenses. Syndication Expenses for any Fiscal Year shall be specially allocated to the Unit Holders in proportion to their Units, provided that, if Units are issued pursuant to Section 2.3 hereof during the Fiscal Year, all Syndication Expenses shall be divided among the Unit Holders from time to time so that, to the extent possible, the cumulative Syndication Expenses allocated with respect to each Unit at any time is the same amount. In the event the Board shall determine that such result is not likely to be achieved through future allocations of Syndication Expenses, the Board may allocate other items of income, gain, deduction, or loss so as to achieve the same effect on the Capital Accounts of the Unit Holders.

(j)Equalization of Certain Profits or Loss Allocations. Immediately following Financial Closing, and subject to Section 3.3(i) hereof, items of income, loss and deduction shall be specially allocated to the extent possible among the Units until the cumulative Profits or Losses allocated to each Unit since the Company’s formation is equal.

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3.4Curative Allocations.

The allocations set forth in Sections 3.3(a) through (g) and 3.5 hereof (the “Regulatory Allocations”) are intended to comply with certain requirements of the Regulations. It is the intent of the Members that, to the extent possible, all Regulatory Allocations shall be offset either with other Regulatory Allocations or with special allocations of other items of Company income, gain, loss or deduction pursuant to this Section 3.4. Therefore, notwithstanding any other provision of this Section 3 (other than the Regulatory Allocations), the Board shall make such offsetting special allocations of Company income, gain, loss or deduction in whatever manner it determines appropriate so that, after such offsetting allocations are made, each Unit Holder’s Capital Account balance is, to the extent possible, equal to the Capital Account balance such Unit Holder would have had if the Regulatory Allocations were not part of this Agreement.

3.5Loss Limitation.

Losses allocated pursuant to Section 3.2 hereof shall not exceed the maximum amount of Losses that can be allocated without causing any Unit Holder to have an Adjusted Capital Account Deficit at the end of any Fiscal Year. In the event some but not all of the Unit Holders would have Adjusted Capital Account Deficits as a consequence of an allocation of Losses pursuant to Section 3.2 hereof, the limitation set forth in this Section 3.5 shall be applied on a Unit Holder by Unit Holder basis among the Units and Losses not allowable to any given Unit Holder as a result of such limitation shall be allocated to the other Unit Holders in accordance with the positive balances in such Unit Holders’ Capital Accounts, so as to allocate the maximum permissible Losses to each Unit Holder under Section 1.704-1(b)(2)(ii)(d) of the Regulations. If this Section 3.5 causes Losses to be allocated in disproportion to Units, the effect of such allocation shall be reversed at the earliest opportunity by specially allocating Net Profits to the Unit Holders to whom such Losses were allocated, the most recently allocated Losses to be reversed first.

3.6Other Allocation Rules.

(a)For purposes of determining the Profits, Losses, or any other items allocable to any period, Profits, Losses, and any such other items shall be determined on a daily, monthly, or other basis, as determined by the Board using any permissible method under Code Section 706 and the Regulations thereunder.

(b)Generally, all Profits and Losses allocated to the Unit Holders or the Holders of specified Units or a specified class thereof shall be allocated among them in proportion to the Units or specified Units or class thereof, respectively, held by each. In the event Units are issued pursuant to Section 2.3 hereof during a Fiscal Year, the Profits (or Losses) allocated to the Unit Holders for each such Fiscal Year shall be allocated among the Unit Holders in proportion to the number of Units each holds from time to time during such Fiscal Year in accordance with Code Section 706, using any convention permitted by law and selected by the Board.

(c)The Unit Holders are aware of the income tax consequences of the allocations made by this Section 3 and hereby agree to be bound by the provisions of this Section 3 in reporting their shares of Company income and loss for income tax purposes.

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(d)Solely for purposes of determining a Unit Holder’s proportionate share of the “excess nonrecourse liabilities” of the Company within the meaning of Regulations Section 1.7523(a)(3), the Unit Holders’ aggregate interests in Company profits shall be deemed to be as provided in the Capital Accounts.

To the extent permitted by Regulations Section 1.704-2(h)(3), the Unit Holders shall endeavor to treat distributions of Net Cash Flow as having been made from the proceeds of a Nonrecourse Liability or a Unit Holder Nonrecourse Debt only to the extent that such distributions would cause or increase an Adjusted Capital Account Deficit for any Unit Holder.

3.7Tax Allocations: Code Section 704(c).

(a)In accordance with Code Section 704(c) and the Regulations thereunder, income, gain, loss, and deduction with respect to any Property contributed to the capital of the Company shall, solely for tax purposes, be allocated among the Unit Holders so as to take account of any variation between the adjusted basis of such Property to the Company for federal income tax purposes and its initial Gross Asset Value (computed in accordance with the definition of Gross Asset Value).

(b)In the event the Gross Asset Value of any Company asset is adjusted pursuant to subparagraph (ii) of the definition of Gross Asset Value, subsequent allocations of income, gain, loss, and deduction with respect to such asset shall take account of any variation between the adjusted basis of such asset for federal income tax purposes and its Gross Asset Value in the same manner as under Code Section 704(c) and the Regulations thereunder.

(c)Allocations pursuant to Section 3.7(a) shall be made using the “remedial allocation method” described in Regulations Section 1.704-3(d) (or any successor Regulation). Allocations pursuant to Section 3.7(b) shall be made as required or permitted by Regulations Section 1.704-3 pursuant to such method provided therein as may reasonably be designated by the Board. Any elections or other decisions relating to allocations under this Section 3.7 shall be made in any manner that the Board reasonably determines to reflect the purpose and intention of this Agreement. Allocations under this Section 3.7 are solely for purposes of federal, state and local taxes and shall not affect, or in any way be taken into account in computing, any Unit Holder’s Capital Account or share of Profits or Losses or distributions under any provision of this Agreement.

SECTION 4

DISTRIBUTIONS

4.1Net Cash Flow.

Except as otherwise provided in Section 12 hereof, Net Cash Flow, if any, shall be distributed to the Unit Holders ratably in proportion to the Units held.

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4.2Amounts Withheld.

All amounts withheld pursuant to the Code or any provision of any state, local or foreign tax law with respect to any payment, distribution or allocation to the Company or the Unit Holders shall be treated as amounts paid or distributed, as the case may be, to the Unit Holders with respect to which such amount was withheld pursuant to this Section 4.2 for all purposes under this Agreement. The Company is authorized to withhold from payments and distributions, or with respect to allocations to the Unit Holders, and to pay over to any federal, state and local government or any foreign government, any amounts required to be so withheld pursuant to the Code or any provisions of any other federal, state or local law or any foreign law, and shall allocate any such amounts to the Unit Holders with respect to which such amount was withheld.

4.3Limitations on Distributions.

(a)The Company shall make no distributions to the Unit Holders except as provided in this Section 4 and Section 12 hereof.

(b)A Unit Holder may not receive a distribution from the Company to the extent that, after giving effect to the distribution, all liabilities of the Company, other than liability to Unit Holders on account of their Capital Contributions, would exceed the Gross Asset Value of the Company’s assets or the distribution would otherwise be prohibited by Section 322B.54 of the Act.

SECTION 5

MANAGEMENT AND OPERATIONS

5.1Management by Board of Governors.

(a)Except those matters for which consent or approval of the Members is required by this Agreement or any nonwaivable provisions of the Act, and subject to the provisions of Section 5.1(d) hereof, the powers and privileges of the Company shall be exercised by or under the authority of, and the business and affairs of the Company shall be managed under the direction of, the Board and not by the Members. No Member, other than a Member acting in his or her capacity as an officer of the Board or as an officer of the Company, has the power or authority to act for or on behalf of the Company, to bind the Company by any act, or to incur any expenditures on behalf of the Company, except with the prior consent of the Board. Without limiting the foregoing authority of the Board to manage the business and affairs of the Company or the actions the Board may take in exercising the powers and privileges of the Company, the Board shall have the right to make the following decisions and take the following actions:

(i)Acquire by purchase, lease, or otherwise any real or personal property;

(ii)Operate, maintain, finance, improve, construct, own, grant operations with respect to, sell, convey, assign, mortgage, or lease any real estate and any personal property;

(iii)Execute any and all agreements, contracts, documents, certifications, and instruments necessary or convenient in connection with the management, maintenance, and

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operation of the business or affairs of the Company, including executing amendments to this Agreement and the Articles in accordance with the terms of this Agreement;

(iv)Borrow money and issue evidences of indebtedness, and secure the same by mortgage, pledge, or other lien on any or all of the Company’s assets;

(v)Execute any deed, lease, mortgage, deed of trust, mortgage note, promissory note, bill of sale, contract, or other instrument purporting to convey or encumber any or all of the Company’s assets;

(vi)Prepay in whole or in part, refinance, recast, increase, modify, or extend any liabilities affecting the assets of the Company and in connection therewith execute any extensions or renewals of encumbrances on any or all of such assets;

(vii)Care for and distribute funds to the Members by way of cash income, return of capital, or otherwise, all in accordance with the provisions of this Agreement, and perform all matters in furtherance of the objectives of the Company or this Agreement;

(viii)Hire or contract on behalf of the Company for the employment and services of employees and/or independent contractors, such as consultants, lawyers and accountants, and delegate to such Persons the duty to manage or supervise any of the assets or operations of the Company;

(ix)Engage in any kind of activity and perform and carry out contracts of any kind (including contracts of insurance covering risks to Company assets and Governor liability), as may be lawfully carried on or performed by a limited liability company under the laws of each jurisdiction in which the Company is then formed or qualified;

(x)Take, or refrain from taking, all actions, not expressly proscribed or limited by this Agreement, as may be necessary or appropriate to accomplish the purposes of the Company;

(xi)Institute, prosecute, defend, settle, compromise, and dismiss lawsuits or other judicial or administrative proceedings brought on or in behalf of, or against, the Company, the Members or any Governor in connection with activities arising out of, connected with, or incidental to this Agreement, and engage counsel or others in connection therewith;

(xii)Purchase, take, receive, subscribe for or otherwise acquire, own, hold, vote, use, employ, sell, mortgage, lend, pledge, or otherwise dispose of, and otherwise use and deal in and with, shares or other interests in or obligations of domestic or foreign business entities, including corporations, associations, general or limited partnerships or other limited liability companies, or individuals or direct or indirect obligations of the United States or of any government, state, territory, government district or municipality or of any instrumentality of any of them;

(xiii)Subject to Section 2 hereof, designate classes or series of Units, agree with any Person as to the form and other terms and conditions of such Person’s Capital Contribution to the Company and cause the Company to issue Units in consideration of such Capital Contribution; and

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(xiv)Indemnify a Member or Governor or officer or former Member or Governor or officer, and make any other indemnification that is authorized by this Agreement in accordance with the Act.

The Board may adopt such policies, rules, and regulations and may take such actions as it shall deem advisable in furtherance of the purposes of the Company, provided that the Board shall not act in a manner contrary to this Agreement.

(b)No later than sixty (60) days prior to the beginning of each Fiscal Year, the Board shall adopt an Annual Operating Budget and Annual Capital Budget covering the Fiscal Year commencing in sixty (60) days. The Annual Operating Budget shall include projected operating revenues, expenses and working capital reserves for the Fiscal Year, and the Annual Capital Budget shall include projected capital expenditures and investments for the Fiscal Year. The Budgets may but shall not be required to be incorporated into a business plan for the Fiscal Year containing such other information, plans and strategies as the Board deems advisable. The Board may amend the Company’s Annual Operating Budget or Annual Capital Budget at any time.

(c)Notwithstanding any other provision of this Agreement (including without limitation Section 5.1(a)), the Board may not take or approve the following actions, agreements, instruments or items without the affirmative vote of at least two-thirds of the voting power of the Governors in office:

(i)The plans and specifications of the Company’s proposed ethanol plant and the contract to design and construct the proposed ethanol plant;

(ii)The amount and terms of the debt financing and all documents and agreements entered into in connection therewith to construct and finance the start-up costs of the proposed ethanol plant;

(iii)The Annual Operating and Capital Budgets for each Fiscal Year;

(iv)Any contract, obligation, liability, disbursement or lawsuit settlement outside of the ordinary course of business in excess of $100,000 which is not part of the then current Fiscal Year’s approved Annual Operating or Capital Budget (provided that necessary expenditures to meet operational emergencies at the proposed ethanol plant may be incurred prior to such approval if immediate action is required for the safety or operation of the proposed ethanol plant);

(v)Any investment in excess of $100,000 which is not part of the then current Fiscal Year’s approved Annual Capital Budget;

(vi)The acceptance of additional Capital Contributions, the issuance of additional Units, or the issuance of options or warrants to purchase Units;

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(vii)The determination of the Gross Asset Values of the Company Property;

(viii)The admission of new Members and the terms of such admission;

(ix)The sufficiency of any legal opinion required under Section 10 of this Agreement or the waiver of any such legal opinion;

(x)Any tax elections under Section 8.3(a) of this Agreement; or

(xi)Any amendment to the Articles or this Agreement.

(d) Notwithstanding any other provision of this Agreement (including without limitation Section 5.1(a)), without the approval or consent of a Majority in Interest of the Members, the Board shall not have authority to approve, authorize or take any of the following actions with respect to the Company: (i) sell, lease, exchange or otherwise dispose of all or substantially all of the assets of the Company; (ii) merge or consolidate the Company with another Person; (iii) materially change the business purpose of the Company; or (iv) voluntarily dissolve the Company.

5.2Actions by Governors; Committees; Reliance on Authority.

(a)In managing the business and affairs of the Company and in exercising the powers and privileges of the Company, Governors shall act on behalf of the Company only (i) collectively through meetings of the Board held and conducted pursuant to the provisions of this Agreement or by written action taken pursuant to the provisions of this Agreement, (ii) through committees established pursuant to Section 5.2(b), and (iii) through officers of the Board and officers of the Company to whom authority and duties have been delegated pursuant to the provisions of this Agreement.

(b)The Board, by resolution approved by the affirmative vote of a majority of the Governors then holding office, may from time to time establish one or more committees, each of which shall be comprised of one or more natural persons who may but need not be Governors or Members, provided that a majority of committee members on each committee must be a Governor or Member. Any such committee shall have and may exercise only such authority and duties to the extent provided by the Board in such resolution, subject at all times to the limitations set forth in the Act, this Agreement and to the direction and control of the Board. Unless otherwise provided by the Board, the presence of a majority of the members of any such committee shall constitute a quorum for the transaction of business at a meeting of the committee, and the committee shall act by the affirmative vote of a majority of committee members present at a duly held meeting. In other matters of procedure the provisions of this Agreement shall apply to committees and the members thereof to the same extent they apply to the Board and Governors, including, without limitation, the provisions with respect to meetings and notice thereof, absent members, written actions, and valid acts. Each committee shall keep regular minutes of its proceedings and report the same to the Board. The Board may dissolve any committee at any time.

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(c)Any Person dealing with the Company, other than a Member or a Governor or an Affiliate of a Member or Governor, may rely on the authority of any officer of the Board or any officer of the Company in taking any action in the name of the Company without inquiry into the provisions of this Agreement or compliance herewith, regardless of whether the action is actually taken in accordance with the provisions of this Agreement, unless the Person dealing with the Company has actual knowledge that the officer lacks authority to act or the Act establishes that the officer lacks authority to act.

5.3The Board of Governors.

(a)Number, Qualification and Term of Office.

(i)Initial Board of Governors. Governors shall be elected or appointed by the Members at the times, in the manner and for the terms as prescribed by this Agreement. The initial Governors of the Company comprising the initial Board, who shall serve for such terms and in such manner as prescribed by this Agreement, are the following persons:

Robert J. Ferguson	Timothy O. Helgemoe
Michael S. Kunerth	Milton J. McKeown
David J. Woestehoff	Doug Schmitz
David J. Bach	Robert Wolf
Merrill Grisham

and such other eligible natural persons designated as an initial Governor by the initial Board. The number of initial Governors serving the Company shall be established by the initial Board, provided that the number of initial Governors shall not be less than seven (7) nor more than thirteen (13).

(ii)Board of Governors following Financial Closing. Commencing on the next business day following Financial Closing, the Board shall be composed of the Governors subject to appointment by certain Members pursuant to Section 5.3(a)(iv) below, if any, and the Governors subject to election by the Members pursuant to section 5.3(a)(iii) below, if any. The number of Governors serving the Company immediately following the annual meeting of the members held in 2011 shall be nine (9) Governors.

(iii)Election of Governors; Terms. Beginning at the annual meeting of the Members to be held in 2007 (“2007 Annual Meeting”), Governors shall be elected by the Members in such manner and for such terms as prescribed by this Agreement, subject to the right of certain Members to appoint Governors to the extent provided by Section 5.3(a)(iv) below. A Member who is entitled to appoint one or more Governors pursuant to Section 5.3(a)(iv) below and such Member’s Affiliates shall not be entitled to vote for the election (or removal) of Governors by the Members, as their right to representation exists in their right of appointment. Except as otherwise provided herein, all Governors elected by the Members shall serve three-year terms and until their successors are duly elected and qualified, or until their earlier death, resignation or removal. In order to preserve continuity of governance and the harmonious transition of the reduction of the number of Governors serving the Company from eleven (11)

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Governors to nine (9) Governors, the terms of the Governors elected at the annual meeting of the members to be held in 2012 shall be staggered such that one-third of the elected Governors (or as nearly as possible) shall be elected annually by the Members at the annual meeting of members to be held in 2013 and continuing each year thereafter. The Board shall adopt nomination, reporting and other election procedures in advance of the annual meeting to be held in 2012 to achieve the desired staggered effect and election matters prescribed by this Agreement.

(iv)Appointed Governors. Any Member who, together with such Member’s Affiliates, holds nine percent (9%) or more of the Units outstanding shall be entitled to appoint one Governor (each, an “Appointed Governor”) to the Board for every 9% of Units held, up to the right to appoint a maximum of four Governors by any Member who, together with such Member’s Affiliates, holds thirty-six percent (36%) or more of the Units outstanding but less than a majority of the Units outstanding. No Member who, together with such Member’s Affiliates, holds forty-five percent (45%) or more of the Units outstanding but less than a majority of the Units outstanding shall be entitled to appoint a majority of the Governors to the Board, notwithstanding the fact that such Member together with such Member’s Affiliates owns forty-five percent (45%) or more but less than a majority of the Units outstanding. Any Member who, together with such Member’s Affiliates, holds a majority of the Units outstanding shall be entitled to appoint a majority of the Governors (five (5) Governors) to the Board of Governors. In determining the appointment rights of Members and their Affiliates under this Section 5.3(a)(iv), Members and their Affiliates shall be counted only once, and the right of appointment accrues only on whole blocks of 9%, subject to the foregoing limitations. For example, a Member who, together with such Member’s Affiliates, holds 17% of the Units outstanding would be entitled to appoint only one Governor. A Member and such Member’s Affiliates shall agree among themselves on how the appointment rights provided in this Section 5.3(a)(iv) shall be exercised, and shall notify the Board of such agreement. If any Member has the right to appoint more than one Governor under this Section 5.3(a)(iv), the voting power of all Governors such Member has the right to appoint may be exercised by any one or more such Appointed Governors, as further described in Section 5.3(i) below. An Appointed Governor shall serve indefinitely at the pleasure of the Member appointing him or her (so long as such Member and its Affiliates continue to hold a sufficient number of Units to maintain the applicable appointment right) until a successor is appointed, or until the earlier death, resignation or removal of the Appointed Governor. An Appointed Governor may be removed for any reason by the Member appointing him or her, upon written notice to an officer of the Board, which notice may designate and appoint a successor Governor to fill the vacancy, and which notice may be given at a meeting of the Board attended by the person appointed to fill the vacancy.

(v)Qualification. The initial Governors of the Company may but need not be Members, provided that a majority of the initial Governors must be Members or elected or appointed representatives of Members that are not natural persons. The participation of nonmember Governors in the management and decisions of the Board prior to the Effective Date of this Agreement is hereby confirmed and ratified in all respects. Following the 2007 Annual Meeting, all Governors subject to election by the Members must be Members or elected or appointed representatives of Members that are not natural persons. The provisions of this Section 5.3(a)(v) shall not apply to Appointed Governors.

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(b)Resignation. Any Governor may resign at any time. Such resignation shall be made in writing and shall take effect at the time specified therein or, if no time be specified then at the time of its receipt by the President or the Secretary of the Company. The acceptance of a resignation shall not be necessary to make it effective, unless expressly so provided in the resignation.

(c)Removal. An initial Governor or a Governor designated to serve following Financial Closing pursuant to Section 5.3(a)(iii) above may be replaced or removed for cause by the affirmative vote of two-thirds of the remaining initial or designated Governors, as the case may be (excluding Appointed Governors). Following the election of a Governor, the Governor may be removed for any reason by the Members in such manner as prescribed by this Agreement. The notice of the meeting shall state that such removal will be discussed and acted upon at the meeting, and must also be provided to the Governor in question at least ten (10) days in advance of such meeting. The Governor in question has a right to be heard at such meeting. The provisions of this Section 5.3(c) shall not apply to Appointed Governors.

(d)Vacancies. Any vacancy occurring on the Board (whether by reason of an increase in the number of Governors or by reason of a vacancy in an existing Governor seat) may be filled by appointment through an affirmative vote of a majority of the remaining Governors subject to election by the Members, though less than a quorum. A Governor appointed by the Board to fill a vacancy at any time after the 2007 Annual Meeting shall serve until the next annual meeting of the Members (or special meeting held for the purpose of electing Governors), at which time the Members shall elect a new Governor to serve for the remainder of the original term of the vacated position. The provisions of this Section 5.3(d) shall not apply to vacancies in Appointed Governor seats.

(e)Meetings. Regular meetings of the Board shall be held from time to time as determined by the Board. Special meetings of the Board shall be held upon the call of the President or three (3) or more Governors. Board meetings shall be held at the principal office of the Company or at such other place, either within or without the State of Minnesota, as shall be designated by the person calling the meeting and stated in the notice of the meeting or a duly executed waiver of notice thereof. Governors may participate in a Board meeting by means of video or audio conferencing or similar communications equipment whereby all Governors participating in the meeting can hear each other.

(f)Notice. Oral or written notice of each meeting of the Board, stating the place, day and hour of the meeting, shall be given to each Governor at least 3 days before the day on which the meeting is to be held. The notice or waiver of notice of any special or regular meeting of the Board does not need to specify the business to be transacted or the purpose of the meeting.

(g)Waiver. Whenever any notice is required to be given to a Governor under the provisions of this Agreement, a waiver thereof in writing signed by the Governor, whether before or after the time stated therein, shall be deemed equivalent to the giving of such notice. Attendance of a Governor at any meeting of the Board shall constitute waiver of notice of such meeting by the Governor, except where the Governor attends a meeting for the express purpose

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of stating his objection to the transaction of any business because the meeting is not lawfully called or convened.

(h)Quorum. Two-thirds of the voting power of the Governors in office shall constitute a quorum necessary for the transaction of business at any regular or special meeting of the Board. If less than a quorum is present, those Governors present may adjourn the meeting from time to time until a quorum shall be present.

(i)Voting and Act of the Board. Each Governor shall have one vote; provided, however, that to the extent a Member holds the right to appoint more than one Governor pursuant to Section 5.3(a)(iv), the Board voting rights represented thereby may be exercised by any one or more such Appointed Governors present at such a meeting. For example, if a Member is entitled to appoint two Governors pursuant to Section 5.3(a)(iv), each of the two such Appointed Governors may cast one vote on any matter considered by the Board at the meeting, or one such Appointed Governor may cast two votes (regardless of whether the there are one or two such Appointed Governors then serving). If more than one Governor appointed by a Member is present at a meeting then, unless such Appointed Governors shall announce the voting power to be exercised by each at such meeting at the beginning of the meeting, the voting power represented by such Appointed Governors shall be deemed to be evenly apportioned among them. The Board shall take action by the affirmative vote of a majority of the voting power of the Governors present at a duly held meeting at which a quorum is present.

(j)Action Without a Meeting. Any action required or permitted to be taken at a meeting of the Board may be taken by written action signed by all of the Governors comprising the Board.

(k)Absentee Governors. A Governor of the Company may give advance written consent or opposition to a proposal to be acted on at a Board meeting. If the Governor is not present at the meeting, consent or opposition to a proposal does not constitute presence for purposes of determining the existence of a quorum, but consent or opposition shall be counted as a vote in favor of or against the proposal and shall be entered in the minutes or other record of action at the meeting, if the proposal acted on at the meeting is substantially the same or has substantially the same effect as the proposal to which the Governor has consented or objected.

(l)Compensation. The Board may fix the compensation, if any, of Governors. Governors shall also be entitled to reimbursement for actual expenses incurred in attending meetings of the Board or other business of the Company.

5.4Duties and Obligations of Governors.

(a)Duties. The Board shall cause the Company to conduct its business and operations separate and apart from that of any Member, Governor or any of its Affiliates. The Board shall take all actions which may be necessary or appropriate (i) for the continuation of the Company’s valid existence as a limited liability company under the laws of the State of Minnesota and each other jurisdiction in which such existence is necessary to protect the limited

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liability of Members or to enable the Company to conduct the business in which it is engaged, and (ii) for the accomplishment of the Company’s purposes, including the acquisition, development, maintenance, preservation, and operation of Company property in accordance with the provisions of this Agreement and applicable laws and regulations. Each Governor shall have the duty to discharge the foregoing duties in good faith, in a manner the Governor reasonably believes to be in the best interests of the Company, and with the care an ordinarily prudent person in a like position would exercise under similar circumstances. No Governor shall be under any other duty to the Company or the Members to conduct the affairs of the Company in a particular manner.

(b)Employment of CEO. At a reasonable time prior to the estimated start-up date of the Company’s operations, the Board shall select, employ, and fix the compensation of the CEO of the Company, who may be a member of the Board. The CEO position shall be the principal executive officer position of the Company, and the CEO shall be the chief executive officer and chief manager of the Company. The CEO shall have responsibility for all administrative and operational aspects of the Company, shall have responsibility for hiring and supervising all employees, and shall perform such other duties that may be assigned by the Board.

(c)Bonds and Insurance. The Board may require all officers, agents and employees charged by this Company with responsibility for the custody of any of its funds or property to give bonds. Bonds shall be furnished by a responsible bonding company and approved by the Board, and the cost shall be paid by the Company. The Board shall cause the Company to provide for insurance of the property of the Company, or property which may be in the possession of the Company and not otherwise adequately insured by the owner of the property. In addition, the Board shall cause the Company to provide for insurance covering liability of the Company to all employees and the public, in such commercially reasonable amounts as is customary for businesses similar to the Company.

5.5Officers.

(a)Number; Qualification; Election. Officers must be natural persons, and shall be elected or appointed by the Board on an annual or more often basis as determined by the Board. The officers of the Company shall consist of a President, one or more Vice Presidents, a Secretary, a Treasurer, a CEO, and such other officers and assistant officers of the Company appointed by the Board as it deems necessary or advisable. The President and Vice President may also be referred to as Chairman and Vice Chairman, respectively, and such officers must be Governors. If the Company has more than one Vice President, then the Vice President who is also a Governor shall be considered the Vice Chairman officer and shall carry with it the requirement that such Vice President / Vice Chairman position must be held by a Governor. All other officers of the Company, including any other Vice Presidents, may but need not be Governors. Any number of officer positions or functions of those officer positions may be held or exercised by the same person. Except as otherwise provided in this Agreement, the Board shall fix the powers, duties, and compensation of all officers of the Company.

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(b)Term of Office. Any officer of the Company shall hold office at the pleasure of the Board and may be removed at any time with or without cause, subject to any contract rights which then may be in existence.

(c)Removal and Vacancies. Any officer elected or appointed by the Board may be removed, with or without cause, at any time by a resolution of the Board. Any vacancy in an office of the Company shall be filled by a resolution of the Board. An officer may resign at any time by giving written notice to the Company. The resignation is effective without acceptance when the notice is given to the Company, unless a later effective date is specified in the notice.

(d)President. Unless provided otherwise by a resolution adopted by the Board, the President shall preside at meetings of the Members and Board; shall see that all orders and resolutions of the Board are carried into effect; may execute all documents, agreements, and instruments on behalf of the Company; may maintain records of and certify proceedings of the Board and Members; and shall perform such other duties as may from time to time be prescribed by the Board.

(e)Vice President. The Vice President shall, in the absence or disability of the President, perform the duties and exercise the powers of the President and shall perform such other duties as the Board or the President may from time to time prescribe. The Board may designate more than one Vice President, in which case the Vice President shall be designated as to denote which is most senior in office.

(f)Treasurer. Unless provided otherwise by a resolution adopted by the Board, the Treasurer shall be the Chief Financial Officer of the Company and: shall keep accurate financial records for the Company; shall deposit all monies, drafts, and checks in the name of and to the credit of the Company in such banks and depositories as the Board shall designate from time to time; shall endorse for deposit all notes, checks, and drafts received by the Company as ordered by the Board, making proper vouchers therefor; shall disburse Company funds and issue checks and drafts in the name of the Company as ordered by the Board, shall render to the CEO and the Board, whenever requested, an account of all such Officer’s transactions as Treasurer and of the financial condition of the Company, and shall perform such other duties as may be prescribed by the Board or the President from time to time.

(g)Secretary. The Secretary shall attend all meetings of the Board and of the Members and shall maintain records of, and whenever necessary, certify all proceedings of the Board and of the Members. The Secretary shall keep the required records of the Company, when so directed by the Board or other person or persons authorized to call such meetings, shall give or cause to be given notice of meetings of the Members and of meetings of the Board, and shall also perform such other duties and have such other powers as the President or the Board may prescribe from time to time.

(h)Delegation. Unless prohibited by a resolution of the Board, an officer elected or appointed by the Board may delegate in writing some or all of the duties and powers of such person’s management position to other persons. An officer who delegates the duties or

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powers of an office remains subject to the standard of conduct for an officer with respect to the discharge of all duties and powers so delegated.

(i)Compensation. Officers shall receive such compensation as may be determined from time to time by resolution of the Board.

5.6Limitation of Liability; Indemnification of Governors and Officers.

(a)No Governor or officer of the Company shall be personally liable to this Company or its Members for monetary damages for a breach of fiduciary duty by such Governor or officer; provided that this provision shall not eliminate or limit the liability of a Governor or officer to the extent provided by applicable law (i) for a breach of the Governor’s duty of loyalty to the Company or its Members; (ii) for acts or omissions that are not in good faith or involve intentional misconduct or a knowing violation of law or, with respect to an officer, for acts of negligence; (iii) for knowing violations of securities laws section 80A.23 of Minnesota Statutes or for illegal distributions; (iv) for a transaction from which the Governor derived an improper personal benefit; or (v) for an act or omission occurring prior to the effective date of the corresponding provision of the Articles. It is the intention of the Members to limit or eliminate the personal liability of Governors to the greatest extent permitted under Minnesota law. If amendments to Minnesota Statutes are passed after this provision becomes effective which authorize limited liability companies to act to further limit or eliminate the personal liability of governors of a limited liability company, then the liability of Governors shall be limited or eliminated to the greatest extent permitted by Minnesota Statutes, as so amended. No amendment to or repeal of this provision shall apply to or have any effect on the liability or alleged liability of any Governor for or with respect to any acts or omissions of such Governor occurring prior to such amendment or repeal.

(b)The Company, its receiver, or its trustee (in the case of its receiver or trustee, to the extent of Company Property) shall indemnify, defend, save harmless, and pay all judgments and claims against, and reasonable expenses of, each present and former Governor or officer relating to any liability or damage or reasonable expenses incurred with respect to a proceeding if the Governor or officer (or former Governor or officer) was a party to the proceeding in the capacity of a Governor or officer of the Company (which reasonable expenses including reasonable attorneys’ fees may be paid as incurred). Notwithstanding the foregoing provisions, the Company shall not indemnify, defend, save harmless, or pay all judgments and claims against, and reasonable expenses of, a Governor or officer (or former Governor or officer) under this provision where such judgments and claims or proceedings arise out of or are related to matters for which a Governor or officer (or former Governor or officer) is personally liable under Section 5.6(a) hereof.

(c)The Company may purchase and maintain insurance on behalf of any person in such person’s official capacity against any liability or expense asserted against or incurred by such person in or arising from that capacity, whether or not the Company would be required or permitted to indemnify the person against the liability.

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5.7Member Compensation; Expenses; Loans

(a)Except as otherwise provided in a written agreement approved by the Board, no Member shall receive any salary, fee, or draw for services rendered to or on behalf of the Company. Except as otherwise approved by or pursuant to a policy approved by the Board, no Member shall be reimbursed for any expenses incurred by such Member on behalf of the Company.

(b)Any Member or Affiliate may, with the consent of the Board, lend or advance money to the Company. If any Member or Affiliate shall make any loan or loans to the Company or advance money on its behalf, the amount of any such loan or advance shall not be treated as a contribution to the capital of the Company but shall be a debt due from the Company. The amount of any such loan or advance by a lending Member or Affiliate shall be repayable out of the Company’s cash and shall bear interest at a rate not in excess of the prime rate established, from time to time, by any major bank selected by the Board for loans to its most creditworthy commercial borrowers, plus up to four percent (4%) per annum as agreed upon by the Board and the Member, and on such other terms and conditions no less favorable to the Company than if the lender had been an independent third party. None of the Members or their Affiliates shall be obligated to make any loan or advance to the Company.

5.8Contracts with Governors or their Affiliates.

(a)No contract or transaction between the Company and a Governor or its Affiliate or between the Company and any other entity in which a Governor or its Affiliate has a material financial interest shall be void or voidable or require the Governor to account to the Company and hold as trustee for it any profit or benefit derived therefrom solely for this reason, or solely because the Governor is present at or participates in the Board meeting at which the contract or transaction is authorized, if (i) the material facts as to the contract or transaction and as to the Governor’s or Governors’ material financial interest are fully disclosed or known to the Board, and (ii) the Board determines that the terms of the contract or transaction are commercially reasonable and no less favorable to the Company than could be obtained from an unaffiliated third party and authorizes, approves or ratifies the contract or transaction in good faith by a majority vote, but the interested Governor or Governors are not counted in determining the presence of a quorum and must not vote.

(b)No contract or transaction involving the sale or delivery of corn between the Company and a Governor or its Affiliate or between the Company and any other entity in which a Governor or its Affiliate has a material financial interest shall be void or voidable or require the Governor to account to the Company and hold as trustee for it any profit or benefit derived therefrom solely for this reason, or solely because the Governor is present at or participates in the Board meeting at which or pursuant to which the contract or transaction is authorized or approved, notwithstanding the fact that the standard of Section 5.8(a) was not met, provided that the terms of the contract or transaction are or were commercially reasonable and no less favorable to the Company than could be or could have been obtained from an unaffiliated third party.

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SECTION 6
MEMBERS

6.1Members; Rights and Powers Generally.

(a)As of the Effective Date, the Members of the Company are the Persons who were members of the Company immediately prior to the Effective Date as shown on the books and records of the Company.

(b)Additional persons may, upon the approval of the Board, become Members of the Company: (i) by submitting a completed subscription agreement to subscribe for Units in the Company upon the terms and conditions as may be set forth in the subscription agreement, which shall include a representation and warranty that the representations and warranties required of all Members in this Agreement are true and correct with respect to such Person, and the acceptance thereof by the Company, (ii) by meeting any and all requirements of membership established in or pursuant to this Agreement, (iii) by submitting an executed counterpart signature agreeing to be bound by this Agreement, (iv) by submitting payment of the purchase price for the number of Units subscribed for in the subscription agreement, in accordance with the terms of the subscription agreement, and (v) upon being admitted as a Member by the Board; or in any other manner authorized in or pursuant to this Agreement. The Board may refuse to admit any Person as a Member in its sole discretion.

(c)Transferees of Units may become Members as provided in Section 10.6 hereof.

(d)Other than the right to elect or appoint Governors to the Board, no Member, other than a Member acting in his, her or its capacity as an officer of the Board or as an offericer of the Company, has any right or power to take part in the management or control of the Company or its business and affairs. No Member other than a Member acting in his, her or its capacity as an officer of the Board or as an officer of the Company, has the authority or power to act for or on behalf of the Company, to do any act that would be binding on the Company, or to incur any expenditures on behalf of the Company, except with the prior written consent of the Board.

(e)No Member shall have any voting right except with respect to those matters requiring a Member vote or approval as specifically provided for in this Agreement or as otherwise required by the Act.

6.2Membership Requirements and Member Voting.

(a)Membership. Each Member of the Company must own, or must have entered into a binding written agreement with and accepted by the Company to subscribe for, a minimum of twenty five hundred (2,500) Units, on and after the date that the Company first issues Units in connection with its closing on all or a portion of subscription agreements received and accepted in accordance with the terms of its 2004 Offering or September 23, 2004, whichever occurs first. Failure of any Member to own or to subscribe for such minimum number

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of Units on or after such date shall result in the automatic termination of membership of such Person, without further notice or action by the Company, and such Person shall become and be a non-member Unit Holder, with no rights other than those financial rights with respect to the Units owned by such Person as provided for in and subject to this Agreement, as further described in Section 6.4 hereof. The Board shall have authority to increase the minimum ownership requirements and to place other membership restrictions on the holders of Class B Units.

(b)Voting. Beginning with the 2007 Annual Meeting, Members shall elect Governors to the Board as provided in Section 5.3(a)(iii) of this Agreement. In addition, Members shall be entitled to vote on any other matters coming to a vote of the Members as specifically provided by this Agreement or as required by the Act. Each Member may cast one vote for each Unit held. The Members shall not be entitled to cumulate their voting power for the election of Governors. On those matters specifically identified in Sections 2.2, 5.1(c) and 9.1 of this Agreement as requiring the approval or consent of a Majority in Interest of the Members, the Members shall take action by the affirmative vote of a Majority in Interest of the Members. On all other matters to be voted upon by the Members, including the election (or removal) of Governors by the Members, Members shall take action by the affirmative vote of the Members holding a majority of the voting power of the Members present, either in person, by proxy or by written ballot, at a duly held meeting of the Members at which a quorum is present for the transaction of business; provided, however, that in determining the voting power present for the purpose of the election (or removal) of Governors, Units held by Members who are entitled to appoint one or more Governors pursuant to Section 5.3(a)(iv) and such Members’ Affiliates shall not be considered, and Members who are entitled to appoint one or more Governors pursuant to Section 5.3(a)(iv) and such Member’s Affiliates shall not be entitled to vote for the election (or removal) of Governors by the Members, as their right to representation exists in their right of appointment.

6.3Member Meetings.

(a)Place and Manner of Meeting. All meetings of Members shall be held at such time and place, within or without the State of Minnesota, as shall be stated in the notice of the meeting or in a duly executed waiver of notice thereof. Presence in person, or by proxy or written ballot, shall constitute participation in a meeting, except where a person participates in the meeting for the express purpose of objecting to the transaction of any business on the ground that the meeting is not lawfully convened.

(b)Conduct of Meetings. All meetings of the Members shall be presided over by the President. All meetings of the Members shall be conducted in general accordance with the most recent edition of Roberts’ Rules of Order, or such other rules and procedures as may be determined by the Board in its discretion.

(c)Annual Meeting. The annual meeting of the Members for the transaction of all business which may properly come before the meeting, including the election of Governors to the Board as provided in Section 5.3(a)(iii) of this Agreement, shall be held on a date

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determined by the Board. Failure to hold the annual meeting at the designated time shall not be grounds for dissolution of the Company.

(d)Special Meetings. Special meetings of the Members may be called at any time by the President, the Board or by the Secretary upon the request of Members holding ten percent (10%) or more of the Units then held by all Members. Such request shall state the purpose or purposes of such meeting and the matters proposed to be acted on at the special meeting.

(e)Notice. Written or printed notice stating the place, day and hour of the meeting and, in case of a special meeting, the purpose or purposes for which the meeting is called, shall be delivered not less than 15 nor more than 60 days before the date of the meeting either personally or by mail, by or at the direction of the President, the Secretary or the Board calling the meeting, to each Member entitled to vote at the meeting. If mailed, such notice shall be deemed to be delivered when deposited in the United States mail addressed to the Member at the Member’s address as it appears on the records of the Company, with postage thereon prepaid. If the purpose of the meeting is to consider removal of a Governor or any item requiring Member consent or approval pursuant to Section 2.2, 5.1(c) or 9.1 hereof, then the notice shall state such purpose, identify such Governor (if applicable), and a summary of the transaction to be considered or a verbatim statement of the amendment to be considered must accompany the notice.

(f)Quorum. At any annual or special meeting of the Members, a Majority in Interest of Members, represented in person or by proxy, shall constitute a quorum necessary for the transaction of business. The Members present at a duly organized meeting at which a quorum is present may transact business until adjournment, notwithstanding the departure or withdrawal of Members leaving less than a quorum. The registration shall be verified by the Secretary and shall be reported in the minutes of the meeting.

(g)Record Date. For the purpose of determining Members entitled to notice of or to vote at any meeting of Members or any adjournment thereof or in order to make a determination of Members for any other proper purpose, the Board may provide that the record books shall be closed for a stated period not exceeding 15 days. If the record books shall be closed for the purpose of determining Members entitled to notice of or to vote at a meeting of Members, such books shall be closed for a period not exceeding 15 days immediately preceding such meeting. In lieu of closing the record books, the Board may fix in advance a date as the record date for any such determination of Members, such date in any case to be not more than 60 days and in the case of a meeting of Members, not less than 15 days prior to the date of which the particular action requiring such determination of Members is to be taken. If the record books are not closed and no record date is fixed for the determination of Members entitled to notice of or to vote at a meeting of Members, the date on which notice of the meeting is mailed, as the case may be, shall be the record date for such determination of Members. When a determination of Members entitled to vote at any meeting of Members has been made as provided in this Section 6.3(g), such determination shall apply to any adjournment thereof, except where the determination has been made through the closing of record books and the stated period of closing has expired.

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(h)Proxies. At all meetings of Members, a Member may vote by proxy executed in writing by the Member or by his duly authorized attorney-in-fact. Such proxy shall be filed with the Secretary of the Company before or at the time of the meeting. A proxy shall be considered filed with the Company when received by the Company at its executive offices, unless later revoked. No proxy shall be valid after eleven months from the date of its execution, unless otherwise provided in the proxy. Every proxy shall be revocable at the pleasure of the Member executing it.

6.4Termination of Membership.

A Member may not be expelled, provided that the failure of a Member to comply with the membership requirements established in, or pursuant to authority granted by, this Agreement shall result in the termination of membership of such Person. The membership of a Member in the Company shall terminate upon the occurrence of events described in this Agreement or as otherwise provided for in the Act, including resignation and withdrawal. In the event a Person ceases to be a Member without having transferred all of the Units owned by such Person, such Person shall lose all voting rights and shall be considered merely an assignee of the financial rights associated with the Units held by such Person, having only the rights of an unadmitted assignee. Such Person shall remain subject to the applicable provisions of this Agreement with respect to such financial rights. Such Person shall have no right to any information or accounting of the affairs of the Company, shall not be entitled to inspect the books or records of the Company, shall not be entitled to vote on any matters reserved to the Members, and shall not have any of the other rights of a Member under this Agreement or of a member under the Act. Further, such Person shall not have the right to Transfer such Person’s Units except by means of a Permitted Transfer in accordance with the provisions of Section 10 herein.

6.5Continuation of the Company.

The Company shall not be dissolved upon the occurrence of any event which is deemed to terminate the continued membership of a Member. The Company’s affairs shall not be required to be wound up. The Company shall continue without dissolution.

6.6No Obligation to Purchase Member’s Interest.

No Member whose membership in the Company terminates, nor any transferee of such Member, shall have any right to demand or receive a return of such terminated Member’s Capital Contributions or to require the purchase or redemption of the Units owned by such terminated Member. The other Members and the Company shall not have any obligation to purchase or redeem the Units or Capital Contributions of any such terminated Member or transferee of any such terminated Member. No Member whose membership has terminated shall be entitled to receive a distribution in complete redemption of the fair value of the Units or Capital Contributions of such Person (except as provided in Section 12 hereof following a Dissolution Event), notwithstanding any provisions of the Act or any other provision of law. As a material part of the consideration for continuing or becoming a Member of the Company, each Member hereby waives any right, and expressly agrees that it intends for this provision to negate any entitlement to receive a distribution in complete redemption of the fair value of Units or Capital

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Contributions of such Member upon an event that terminates the membership of such Member which, in the absence of the provisions in this Agreement, it may otherwise be afforded by the Act.

6.7Waiver of Dissenters’ Rights. Except for those transactions or events for which waiver of dissenters rights is expressly prohibited by the Act, each Member hereby waives and agrees not to assert any dissenters’ rights under the Act.

SECTION 7

UNIT CERTIFICATES

7.1Certificates For Units.

Certificates representing Units of the Company shall be in such form as determined by the Board. The President or the Vice President and by the Secretary or assistant Secretary of the Company shall sign the certificates. All certificates shall be consecutively numbered or otherwise identified. The name and address of the person to whom the certificate has been issued shall be entered on the books of the Company. All certificates surrendered to the Company for transfer shall be canceled and no new certificates shall be issued until the former certificate is surrendered and canceled by the Company.

7.2Transfer of Certificates.

Transfer of certificates of the Company shall be made pursuant to this Agreement and only by the holder of record thereof or by the holder’s legal representative, who shall furnish proper evidence of authority to transfer, or by the holder’s attorney thereunto authorized by a power of attorney duly executed and filed with the Secretary of the Company, and upon surrender of the certificate to the Company for cancellation. The Person in whose name the certificate appears on the books of the Company is deemed to be the owner thereof for all purposes.

7.3Loss or Destruction of Certificates.

In case of loss or destruction of any certificate, another certificate may be issued in its place upon proof of such loss or destruction, and upon the holder of the certificate giving a satisfactory bond of indemnity to the Company and to the transfer agent and registrar, if any, of such certificate, in such amount as the Board may provide.

7.4Certificate Regulations.

The Board have the power and authority to make such further rules and regulations, not inconsistent with this Agreement and the statutes of the State of Minnesota, as they may deem expedient concerning the issue, transfer, conversion and registration of certificates of the Company, including the appointment or designation of one or more transfer agents and one or more registrars. The Company may act as its own transfer agent and registrar.

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7.5Legends.

The Board may place one or more legends on the certificates representing the Units to indicate restrictions on transfer, registration requirements, or other restrictions or obligations contained herein.

SECTION 8

ACCOUNTING, BOOKS AND RECORDS

8.1Accounting, Books and Records.

(a)The books and records of the Company shall be kept, and the financial position and the results of its operations recorded, in accordance with GAAP, consistently applied; provided, that the financial provisions in this Agreement relating to Capital Contributions, Profits and Losses, distributions and Capital Accounts shall be construed and determined in accordance with this Agreement without regard to whether such provisions are inconsistent with GAAP. The books and records shall reflect all the Company’s transactions and shall be appropriate and adequate for the Company’s business. The Company shall maintain at its principal office all of the following:

(i)A current list of the full name and last known business or residence address of each Unit Holder set forth in alphabetical order, together with the Capital Contributions, Capital Account and Units of each Unit Holder;

(ii)The full name and business address of each Governor;

(iii)A copy of the Articles and any and all amendments thereto together with executed copies of any powers of attorney pursuant to which the Articles or any amendments thereto have been executed;

(iv)Copies of the Company’s federal, state, and local income tax or information returns and reports, if any, for the six most recent taxable years;

(v)A copy of this Agreement and any and all amendments thereto together with executed copies of any powers of attorney pursuant to which this Agreement or any amendments thereto have been executed;

(vi)Copies of the financial statements of the Company, if any, for the six most recent Fiscal Years; and

(vii)The Company’s books and records as they relate to the internal affairs of the Company for at least the current and past four Fiscal Years.

(b)The Company shall use the accrual method of accounting in preparing its financial reports and for tax purposes and shall keep its books and records accordingly. The Board may, without any further consent of the Unit Holders (except as specifically required by the Code), apply for IRS consent to, and otherwise effect a change in, the Company’s Fiscal Year.

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8.2Reports.

(a)In General. The Treasurer of the Company shall be responsible for causing the preparation of financial reports of the Company and the coordination of financial matters of the Company with the Company’s accountants.

(b)Periodic and Other Reports. The Company shall maintain and provide to each Member upon request, the financial statements listed in clauses (i) and (ii) below, prepared, in each case (other than with respect to Unit Holder’s Capital Accounts, which shall be prepared in accordance with this Agreement) in accordance with GAAP consistently applied, and such other reports as any Member may reasonably request from time to time; provided that, if the Board so determines within thirty (30) days thereof, such other reports shall be provided at such requesting Member’s sole cost and expense.

(i)As soon as practicable following the end of each Fiscal Year (and in any event not later than ninety (90) days after the end of such Fiscal Year and at such time as distributions are made to the Unit Holders pursuant to Section 12 hereof following the occurrence of a Dissolution Event, a balance sheet of the Company as of the end of such Fiscal Year and the related statements of operations, Unit Holders’ Capital Accounts and changes therein, and cash flows for such Fiscal Year, together with appropriate notes to such financial statements and supporting schedules, all of which shall be audited and certified by the Company’s accountants, and in each case, to the extent the Company was in existence, setting forth in comparative form the corresponding figures for the immediately preceding Fiscal Year end (in the case of the balance sheet) and the two (2) immediately preceding Fiscal Years (in the case of the statements).

(ii) As soon as practicable following the end of the first three Fiscal Quarters of each Fiscal Year (and in any event not later than forty-five (45) days after the end of such Fiscal Quarter), an unaudited balance sheet of the Company as of the end of such Fiscal Quarter and the related unaudited statements of operations and cash flows for such Fiscal Quarter and for the Fiscal Year to date, in each case, to the extent the Company was in existence, setting forth in comparative form the corresponding figures for the prior Fiscal Year’s Fiscal Quarter and the Fiscal Quarter just completed.

8.3Tax Matters.

(a)Tax Elections. The Board shall, without any further consent of the Members being required (except as specifically required herein), make any and all elections for federal, state, local, and foreign tax purposes including, without limitation, any election, if permitted by applicable law: (i) to make the election provided for in Code Section 6231(a)(1)(B)(ii) or take any other action necessary to cause the provisions of Code Sections 6221 through 6231 to apply to the Company [refers to election by certain “small partnerships” that are not covered by the TEFRA audit rules to  have such rules apply to them] (ii) to adjust the basis of Property pursuant to Code Sections 754, 734(b) and 743(b), or comparable provisions of state, local or foreign law, in connection with Transfers of Units and Company distributions; (iii) with the consent of all of the Members, to extend the statute of limitations for assessment of tax deficiencies against the Unit Holders with respect to adjustments to the Company’s federal, state, local or foreign tax returns; and (iv) to the extent provided in Code Sections 6221 through 6231

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and similar provisions of federal, state, local, or foreign law, to represent the Company and the Unit Holders before taxing authorities or courts of competent jurisdiction in tax matters affecting the Company or the Unit Holders in their capacities as Unit Holders, and to file any tax returns and execute any agreements or other documents relating to or affecting such tax matters, including agreements or other documents that bind the Unit Holders with respect to such tax matters or otherwise affect the rights of the Company and the Unit Holders. The Board shall designate a qualifying Member to act as the tax matters partner within the meaning of and pursuant to Regulations Sections 301.6231(a)(7)-1 and —2 or any similar provision under state or local law.

(b)Tax Information. Necessary tax information shall be delivered to each Unit Holder as soon as practicable after the end of each Fiscal Year of the Company but not later than five (5) months after the end of each Fiscal Year.

8.4Delivery to Members and Inspection.

(a)Upon the written request of any Member for purposes reasonably related to the interest of that Person as a Member, the Board shall cause the Company to deliver to the requesting Member, at the expense of the Company, a copy of the Company’s most recent annual financial statement and its most recent federal, state, and local income tax returns and reports.

(b)Each Member (or, in the case of Section 8.4(b)(i) below, his, her or its designated representative) has the right, upon reasonable written request for purposes reasonably related to the interest of the Person as a Member and for proper purposes, to:

(i)Inspect and copy during ordinary business hours, at the Member’s expense, any of the Company records described in Sections 8.1(a)(i) through (vi) and, with respect to the Company records described in Section 8.1(a)(i), if such records are not available the Member shall be entitled to bring an action against the Company to obtain such records and recover its reasonable attorneys fees incurred in bringing such an action;

(ii)Obtain from the Company true and full information regarding the current state of the Company’s financial condition, subject to normal changes or adjustments arising after, or following the end of, the period covered by such information; and

(iii)Obtain other information regarding the Company’s affairs or inspect during ordinary business hours other books and records of the Company as is just and reasonable.

(c)The rights granted to a Member pursuant to this Section 8.4 are expressly subject to compliance by such Member with the safety, security and confidentiality procedures and guidelines of the Company, as such procedures and guidelines may be established from time to time by the Board, and to the provisions of Section 1.11 hereof. Unadmitted assignees of Units shall not have the right to information regarding the Company afforded Members hereunder or by the Act.

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SECTION 9

AMENDMENTS

9.1Amendments.

(a)Amendments to this Agreement may be proposed by the Board or by the request of Members holding ten percent (10%) or more of the Units then held by all Members. The Board shall submit to the Members a verbatim statement of any proposed amendment, providing that counsel for the Company shall have approved of the same in writing as to form, and the Board shall include in any such submission a recommendation as to the proposed amendment. The Board shall seek the written vote of the Members on the proposed amendment or shall call a meeting to vote thereon and to transact any other business that it may deem appropriate. A proposed amendment shall be adopted and be effective as an amendment hereto only if approved by a Majority in Interest of the Members.

(b)Notwithstanding Section 9.1(a) hereof:

(i)Except as provided in Section 2.2 for authorizations and designations of additional classes or series of Units and changes in numbers of authorized Units of any class or series (including Class A Units), this Agreement shall not be amended without the approval or consent of each Unit Holder adversely affected if such amendment would modify the limited liability of a Unit Holder, or the voting rights or interest of a Unit Holder in Profits, Losses, other items, or any distributions;

(ii)A provision of this Agreement that requires the approval or consent of a specified percentage in interest of the Members or any class(es) or series thereof may not be amended without the affirmative vote of Members holding at least the specified percentage of the Units then held by all Members, or of the Units of the specified class(es) or series of Units then held by all Members; and

(iii)This Section 9 shall not be amended without the approval or consent of all Members.

SECTION 10
TRANSFERS

10.1Restrictions on Transfers.

No Transfer of Units shall be valid except as specifically permitted by this Section 10 of this Agreement. It is the intent of this Agreement that (i) the tax status of the Company be the same as for a partnership, (ii) this Company preserve its partnership tax status by complying with Regulations Section 1.7704-1, et seq., and any amendments thereto, and (iii) to the extent possible, this Agreement shall be read and interpreted to prohibit the free transferability of Units.

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10.2Permitted Transfers.

(a)No Transfer of Units shall be binding on this Company without the approval of the Board nor until such Transfer shall have been entered in the books and records of this Company. The Board may adopt a Unit Transfer Policy to further implement the provisions of this Section 10. The Board shall not approve, and the Company shall not recognize for any purpose, any purported Transfer of Units unless and until the provisions, conditions and restrictions set forth in this Section 10 (including Section 10.3 hereof) and of any Unit Transfer Policy adopted by the Board have been satisfied. Any Transfer approved by the Board and satisfying the provisions, conditions and restrictions set forth in this Section 10 (including Sections 10.2 and 10.3 hereof) shall be referred to in this Agreement as a “Permitted Transfer”. Notwithstanding the foregoing, a Member may pledge or otherwise encumber all or any portion of its Units as security for the payment of debt, provided that any subsequent foreclosure or transfer to the secured party in lieu of foreclosure shall be considered a Transfer for all purposes of this Agreement.

(b)Following a Permitted Transfer, the Units held by the transferee shall remain subject to the Transfer restrictions set forth in this Section 10.

10.3Conditions to Permitted Transfers.

A Transfer shall not be treated as a Permitted Transfer under Section 10.2 hereof unless and until the following conditions are satisfied:

(a)Except in the case of a Transfer involuntarily by operation of law, the transferor and transferee shall execute and deliver to the Company (i) such documents and instruments of conveyance as may be necessary or appropriate in the opinion of counsel to the Company to effect such Transfer. In the case of a Transfer of Units involuntarily by operation of law, the Transfer shall be confirmed by presentation to the Company of legal evidence of such Transfer, in form and substance satisfactory to counsel to the Company. In all cases, the Company shall be reimbursed by the transferor and/or transferee for all costs and expenses that it reasonably incurs in connection with such Transfer.

(b)The transferor and transferee shall furnish the Company with the transferee’s taxpayer identification number, sufficient information to determine the transferee’s initial tax basis in the Units transferred, and any other information reasonably necessary to permit the Company to file all required federal and state tax returns and other legally required information statements or returns. Without limiting the generality of the foregoing, the Company shall not be required to make any distribution otherwise provided for in this Agreement with respect to any transferred Units until it has received such information.

(c)Except in the case of a Transfer of Units involuntarily by operation of law, either (a) such Units shall be registered under the Securities Act, and any applicable state securities laws, or (b) such Transfer shall be exempt from all applicable registration requirements and will not violate any applicable laws regulating the Transfer of securities, in the opinion of counsel to the Company.

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(d)Except in the case of a Transfer of Units involuntarily by operation of law, such Transfer will not cause the Company to be deemed to be an “investment company” under the Investment Company Act of 1940, in the opinion of counsel to the Company.

(e)Except in the case of a Transfer of Units involuntarily by operation of law, such Transfer will not cause the Company to be deemed to be a “publicly-traded limited partnership” under applicable provisions of the Code, in the opinion of counsel to the Company.

(f)Unless otherwise approved by the Board, no Transfer of Units shall be made except upon terms which would not, in the opinion of counsel chosen by and mutually acceptable to the Board and the transferor Member, result in the termination of the Company within the meaning of Section 708 of the Code or cause the application of the rules of Sections 168(g)(1)(B) and 168(h) of the Code or similar rules to apply to the Company. In determining whether a particular proposed Transfer will result in a termination of the Company, counsel to the Company shall take into account the existence of prior written commitments to Transfer made pursuant to this Agreement and such commitments shall always be given precedence over subsequent proposed Transfers.

(g)No notice or request initiating the procedures contemplated by Section 10.3 may be given by any Member after a Dissolution Event has occurred. No Member may Transfer all or any portion of its Units after a Dissolution Event has occurred.

The Board shall have the authority to waive any legal opinion or other condition required in this Section10.3.

10.4Prohibited Transfers.

(a)Any purported Transfer of Units that is not a Permitted Transfer shall be null and void and of no force or effect whatever; provided that, if the Company is required to recognize a Transfer that is not a Permitted Transfer (or if the Board, in its sole discretion, elects to recognize a Transfer that is not a Permitted Transfer), the Units Transferred shall be strictly limited to the transferor’s rights to allocations and distributions as provided by this Agreement with respect to the transferred Units, which allocations and distributions may be applied (without limiting any other legal or equitable rights of the Company) to satisfy any debts, obligations, or liabilities for damages that the transferor or transferee of such Units may have to the Company.

(b)In the case of a Transfer or attempted Transfer of Units that is not a Permitted Transfer, the parties engaging or attempting to engage in such Transfer shall be liable to indemnify and hold harmless the Company and the other Members from all cost, liability, and damage that any of such indemnified Members may incur (including, without limitation, incremental tax liabilities, lawyers’ fees and expenses) as a result of such Transfer or attempted Transfer and efforts to enforce the indemnity granted hereby.

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10.5Rights of Unadmitted Assignees.

Unless admitted as a Member pursuant to Section 10.6 hereof, a Person who acquires Units and is not already a Member shall only be entitled to allocations and distributions with respect to such Units in accordance with this Agreement, and shall not have any right to any information or accounting of the affairs of the Company, and shall not be entitled to inspect the books or records of the Company, and shall not have any of the rights of a Member under the Act or this Agreement. In addition, the Units held by such Person shall continue to be subject to the restrictions on Transfer provided for in this Section 10.

10.6Admission of Transferees as Members.

A transferee of Units (whether as a result of a Permitted Transfer or otherwise) may be admitted as a Member only upon satisfaction of each of the following conditions:

(a)The transferee acquired its Units by means of a Permitted Transfer;

(b)The transferee meets all requirements of membership established in or pursuant to this Agreement (including Section 6.2(a) hereof), and such admission is approved by the Board which approval may be given or withheld in the sole and absolute discretion of the Board;

(c)The transferee of Units (other than, with respect to clauses (i) below, a transferee that was a Member prior to the Transfer) shall, by submitting an executed counterpart signature page agreeing to be bound by this Agreement and such other written instruments in form and substance reasonably satisfactory to the Board (and, in the case of clause (ii) below, the transferor Member), (i) accept and adopt the terms and provisions of this Agreement, including this Section 10, and (ii) assume the obligations of the transferor Member under this Agreement with respect to the transferred Units;

(d)The transferee pays or reimburses the Company for all reasonable legal, filing, and publication costs that the Company incurs in connection with the admission of the transferee as a Member; and

(e)Except in the case of a Transfer involuntarily by operation of law, the transferee (other than a transferee that was a Member prior to the Transfer) shall deliver to the Company evidence of the authority of such Person to become a Member and to be bound by all of the terms and conditions of this Agreement, and the transferee and transferor shall each execute and deliver such other instruments as the Members reasonably deems necessary or appropriate to effect, and as a condition to, such Transfer, including amendments to the Articles or any other instrument filed with the State of Minnesota or any other state or governmental authority.

10.7Representations Regarding Transfers; Legend.

(a)Each Member hereby covenants and agrees with the Company for the benefit of the Company and all Members, that (i) it is not currently making a market in Units and will not in the future make a market in Units, (ii) it will not Transfer its Units on an established

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securities market, a secondary market (or the substantial equivalent thereof) within the meaning of Code Section 7704(b) (and any Regulations, proposed Regulations, revenue rulings, or other official pronouncements of the Internal Revenue Service or Treasury Department that may be promulgated or published thereunder), and (iii) in the event such Regulations, revenue rulings, or other pronouncements treat any or all arrangements which facilitate the selling of Company interests and which are commonly referred to as “matching services” as being a secondary market or substantial equivalent thereof, it will not Transfer any Units through a matching service that is not approved in advance by the Company. Each Member further agrees that it will not Transfer any Units to any Person unless such Person agrees to be bound by this Section 10.7(a) and to Transfer such Units only to Persons who agree to be similarly bound.

(b)Each Member hereby represents and warrants to the Company and the Members that such Member’s acquisition of Units hereunder is made as principal for such Member’s own account and not for resale or distribution of such Units. Each Member further hereby agrees that the following legend may be placed upon any counterpart of this Agreement, the certificate, or any other document or instrument evidencing ownership of Units:

A Public Company Legend approved by the Board; and

The Units represented by this document are subject to further restriction as to their sale, transfer, hypothecation, or assignment as set forth in the Member Control Agreement and agreed to by each Member. Said restriction provides, among other things, that no vendee, transferee, assignee, or endorsee of a Member shall have the right to become a Member without the consent of the Company’s Board of Governors which consent may be given or withheld in the sole and absolute discretion of the Board of Governors.

10.8Distributions and Allocations in Respect of Transferred Units.

If any Units are Transferred during any Fiscal Year in compliance with the provisions of this Section 10, Profits, Losses, each item thereof, and all other items attributable to the Transferred Units for such Fiscal Year shall be divided and allocated between the transferor and the transferee by taking into account their varying interests during the Fiscal Year in accordance with Code Section 706(d), using any conventions permitted by law and adopted from time to time by the Board. All distributions on or before the date of such Transfer shall be made to the transferor, and all distributions thereafter shall be made to the transferee. Solely for purposes of making such distributions, the Company shall recognize such Transfer not later than the end of the calendar month during which it is given notice of such Transfer, provided that, if the Company is given notice of a Transfer at least ten (10) Business Days prior to the Transfer, the Company shall recognize such Transfer as of the date of such Transfer, and provided further that if the Company does not receive a notice stating the date such Units were transferred and such other information as the Board may reasonably require within thirty (30) days after the end of the Fiscal Year during which the Transfer occurs, then all distributions may be made to the Person who, according to the books and records of the Company, was the Member of the Units on the

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last day of such Fiscal Year. Neither the Company nor any Unit Holder shall incur any liability for making allocations and distributions in accordance with the provisions of this Section 10.8, whether or not the Unitholders or the Company has knowledge of any Transfer of any Units. The Members acknowledge that the method and convention designated by the Board constitutes an agreement among the partners within the meaning of Regulations Section 1.706-1.

SECTION 11

[INTENTIONALLY OMITTED]

SECTION 12

DISSOLUTION AND WINDING UP

12.1Dissolution Events.

(a)Dissolution. The Company shall dissolve and shall commence winding up and liquidating upon the first to occur of any of the following (each a “Dissolution Event”):

(i)The affirmative vote of a Majority in Interest of the Members to dissolve, wind up, and liquidate the Company; or

(ii)The entry of a decree of judicial dissolution pursuant to the Act.

(b)The Members hereby agree that, notwithstanding any provision of the Act, the Company shall not dissolve prior to the occurrence of a Dissolution Event.

12.2Winding Up.

Upon the occurrence of a Dissolution Event, the Company shall continue solely for the purposes of winding up its affairs in an orderly manner, liquidating its assets, and satisfying the claims of its creditors and Members, and no Unit Holder shall take any action that is inconsistent with, or not necessary to or appropriate for, the winding up of the Company’s business and affairs, provided that all covenants contained in this Agreement and obligations provided for in this Agreement shall continue to be fully binding upon the Unit Holders until such time as the Property has been distributed pursuant to this Section 12.2 and the Company has been terminated pursuant to the Act. The Liquidator shall be responsible for overseeing the prompt and orderly winding up and dissolution of the Company. The Liquidator shall take full account of the Company’s liabilities and Property and shall cause the Property or the proceeds from the sale thereof (as determined pursuant to Section 12.10 hereof), to the extent sufficient therefor, to be applied and distributed, to the maximum extent permitted by law, in the following order:

(a)First, to creditors (including Governors and Members who are creditors, to the extent otherwise permitted by law) in satisfaction of all of the Company’s Debts and other liabilities (whether by payment or the making of reasonable provision for payment thereof), other than liabilities for which reasonable provision for payment has been made; and

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(b)Second, the balance, if any, to the Unit Holders in accordance with the positive balance in their Capital Accounts, after giving effect to all contributions, distributions and allocations for all periods.

12.3Compliance With Certain Requirements of Regulations; Deficit Capital Accounts.

In the event the Company is “liquidated” within the meaning of Regulations Section 1.704-1(b)(2)(ii)(g), (a) distributions shall be made pursuant to this Section 12 to the Unit Holders who have positive Capital Accounts in compliance with Regulations Section 1.704-1(b)(2)(ii)(b)(2). If any Unit Holder has a deficit balance in his Capital Account (after giving effect to all contributions, distributions and allocations for all Fiscal Years, including the Fiscal Year during which such liquidation occurs), such Unit Holder shall have no obligation to make any contribution to the capital of the Company with respect to such deficit, and such deficit shall not be considered a debt owed to the Company or to any other Person for any purpose whatsoever. In the discretion of the Liquidator, a pro rata portion of the distributions that would otherwise be made to the Unit Holders pursuant to this Section 12 may be:

(a)Distributed to a trust established for the benefit of the Unit Holders for the purposes of liquidating Company assets, collecting amounts owed to the Company, and paying any contingent or unforeseen liabilities or obligations of the Company. The assets of any such trust shall be distributed to the Unit Holders from time to time, in the reasonable discretion of the Liquidator, in the same proportions as the amount distributed to such trust by the Company would otherwise have been distributed to the Unit Holders pursuant to Section 12.2 hereof; or

(b)Withheld to provide a reasonable reserve for Company liabilities (contingent or otherwise) and to reflect the unrealized portion of any installment obligations owed to the Company, provided that such withheld amounts shall be distributed to the Unit Holders as soon as practicable.

12.4Deemed Distribution and Recontribution.

Notwithstanding any other provision of this Section 12, in the event the Company is liquidated within the meaning of Regulations Section 1.704-1(b)(2)(ii)(g) but no Dissolution Event has occurred, the Property shall not be liquidated, the Company’s Debts and other liabilities shall not be paid or discharged, and the Company’s affairs shall not be wound up. Instead, solely for federal income tax purposes, the Company shall be deemed to have contributed all of its Property and liabilities to a new limited liability company in exchange for an interest in such new company, and immediately thereafter, the Company will be deemed to liquidate by distributing such interest in the new company to the Unit Holders.

12.5Rights of Unit Holders.

Except as otherwise provided in this Agreement, each Unit Holder shall look solely to the Property of the Company for the return of its Capital Contribution and has no right or power to demand or receive Property other than cash from the Company. If the assets of the Company

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remaining after payment or discharge of the debts or liabilities of the Company are insufficient to return such Capital Contribution, the Unit Holders shall have no recourse against the Company or any other Unit Holder or Unit Holders.

12.6Notice of Dissolution/Termination.

(a)Upon the occurrence of a Dissolution Event, the Board shall, within thirty (30) days thereafter, provide written notice thereof to each of the Unit Holders, and the Board may notify its known claimants and/or publish notice as further provided in the Act.

(b)Upon completion of the distribution of the Company’s Property as provided in this Section 12, the Company shall be terminated, and the Liquidator shall cause the filing of a Articles of Termination in accordance with the Act and shall take all such other actions as may be necessary to terminate the Company.

12.7Allocations During Period of Liquidation.

During the period commencing on the first day of the Fiscal Year during which a Dissolution Event occurs and ending on the date on which all of the assets of the Company have been distributed to the Unit Holders pursuant to Section 12.2 hereof (the “Liquidation Period”), the Unit Holders shall continue to share Profits, Losses, gain, loss and other items of Company income, gain, loss or deduction in the manner provided in Section 3 hereof.

12.8Character of Liquidating Distributions.

All payments made in liquidation of the interest of a Unit Holder in the Company shall be made in exchange for the interest of such Unit Holder in Property pursuant to Section 736(b)(1) of the Code, including the interest of such Unit Holder in Company goodwill.

12.9The Liquidator.

(a)Definition. The “Liquidator” shall mean a Person appointed by the Board to oversee the liquidation of the Company. The Liquidator may be the Board or a committee of three or more Governors appointed by the Board.

(b)Fees. The Company is authorized to pay a reasonable fee to the Liquidator for its services performed pursuant to this Section 12 and to reimburse the Liquidator for its reasonable costs and expenses incurred in performing those services.

(c)Indemnification. The Company shall indemnify, save harmless, and pay all judgments and claims against such Liquidator or any officers, directors, agents or employees of the Liquidator relating to any liability or damage incurred by reason of any act performed or omitted to be performed by the Liquidator, or any officers, directors, agents or employees of the Liquidator in connection with the liquidation of the Company, including reasonable attorneys’ fees incurred by the Liquidator, officer, director, agent or employee in connection with the defense of any action based on any such act or omission, which attorneys’ fees may be paid as

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incurred, except to the extent such liability or damage is caused by acts or omissions that are not in good faith or involve negligence, fraud, intentional misconduct or a knowing violation of law, or for a transaction from which the Liquidator, officer, director, agent or employee derived an improper personal benefit.

12.10Form of Liquidating Distributions.

For purposes of making distributions required by Section 12.2 hereof, the Liquidator may determine whether to distribute all or any portion of the Property in-kind or to sell all or any portion of the Property and distribute the proceeds therefrom.

SECTION 13

DISPUTE RESOLUTION

If a dispute arises out of or relates to this Agreement, or the performance or breach thereof, the parties agree first to try in good faith to settle the dispute by mediation under the Commercial Mediation Rules of the American Arbitration Association, before resorting to arbitration. Thereafter, any remaining unresolved controversy or claim arising out of or relating to this Agreement, or the performance or breach thereof, shall be settled by binding arbitration pursuant to the Commercial Arbitration Rules of the American Arbitration Association as modified by this Section 13; PROVIDED, that this Section 13 shall not require use of the American Arbitration Association (only that such Rules as modified by this Section 13 shall be followed); and PROVIDED FURTHER, that arbitration shall not be required for allegations involving breach of contract, violations of state or federal securities laws, breach of fiduciary duty or other misconduct by the Company. The arbitration shall be conducted in the State of Minnesota. Any award rendered shall be final and conclusive upon the parties and a judgment thereon may be entered in any court having competent jurisdiction. The parties shall (i) agree upon and appoint as the arbitrator a retired former trial Judge in Minnesota; (ii) direct the arbitrator to follow substantive rules of law and the Federal Rules of Evidence; (iii) allow for the parties to conduct discovery pursuant to the rules then in effect under the Federal Rules of Civil Procedure for a period not to exceed 60 days; (iv) require the testimony to be transcribed; and (v) require the award to be accompanied by findings of fact and a statement of reasons for the decision. The cost and expense of the arbitrator and location costs shall be borne equally by the parties to the dispute. All other costs and expenses, including reasonable attorney’s fees and expert’s fees, of all parties incurred in any dispute which is determined and/or settled by arbitration pursuant to this Section 13 shall be borne by the party incurring such cost and expense. Except where clearly prevented by the area in dispute, both parties agree to continue performing their respective obligations under this Agreement while the dispute is being resolved.

SECTION 14

MISCELLANEOUS

14.1Notices.

Any notice, payment, demand, or communication required or permitted to be given by any provision of this Agreement shall be in writing and shall be deemed to have been delivered,

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given, and received for all purposes (i) if delivered personally to the Person or to an officer of the Person to whom the same is directed, or (ii) when the same is actually received, if sent either by registered or certified mail, postage and charges prepaid, or by facsimile, if such facsimile is followed by a hard copy of the facsimile communication sent promptly thereafter by registered or certified mail, postage and charges prepaid, addressed as follows, or to such other address as such Person may from time to time specify by notice to the Company and the Unit Holders:

(a)If to the Company, to the address determined pursuant to Section 1.4 hereof;

(b)If to the Unit Holders, to the address set forth on record with the company;

14.2Binding Effect.

Except as otherwise provided in this Agreement, every covenant, term, and provision of this Agreement shall be binding upon and inure to the benefit of the Members and their respective successors, transferees, and assigns.

14.3Construction.

Every covenant, term, and provision of this Agreement shall be construed simply according to its fair meaning and not strictly for or against any Member.

14.4Time.

In computing any period of time pursuant to this Agreement, the day of the act, event or default from which the designated period of time begins to run shall not be included, but the time shall begin to run on the next succeeding day. The last day of the period so computed shall be included, unless it is a Saturday, Sunday or legal holiday, in which event the period shall run until the end of the next day which is not a Saturday, Sunday or legal holiday.

14.5Headings.

Section and other headings contained in this Agreement are for reference purposes only and are not intended to describe, interpret, define, or limit the scope, extent, or intent of this Agreement or any provision hereof.

14.6Severability.

Except as otherwise provided in the succeeding sentence, every provision of this Agreement is intended to be severable, and, if any term or provision of this Agreement is illegal or invalid for any reason whatsoever, such illegality or invalidity shall not affect the validity or legality of the remainder of this Agreement. Notwithstanding the foregoing, if such illegality or invalidity would be to cause any Member to lose the material benefit of its economic bargain, then the Members agree to negotiate in good faith to amend this Agreement in order to restore such lost material benefit.

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14.7Incorporation by Reference.

Every exhibit, schedule, and other appendix attached to this Agreement and referred to herein is not incorporated in this Agreement by reference unless this Agreement expressly otherwise provides.

14.8Variation of Terms.

All terms and any variations thereof shall be deemed to refer to masculine, feminine, or neuter, singular or plural, as the identity of the Person or Persons may require.

14.9Governing Law.

The laws of the State of Minnesota shall govern the validity of this Agreement, the construction of its terms, and the interpretation of the rights and duties arising hereunder.

14.10Waiver of Jury Trial.

Each of the Members irrevocably waives to the extent permitted by law, all rights to trial by jury and all rights to immunity by sovereignty or otherwise in any action, proceeding or counterclaim arising out of or relating to this Agreement.

14.11Counterpart Execution.

This Agreement may be executed in any number of counterparts with the same effect as if all of the Members had signed the same document. All counterparts shall be construed together and shall constitute one agreement.

14.12Specific Performance.

Each Member agrees with the other Members that the other Members would be irreparably damaged if any of the provisions of this Agreement are not performed in accordance with their specific terms and that monetary damages would not provide an adequate remedy in such event. Accordingly, it is agreed that, in addition to any other remedy to which the nonbreaching Members may be entitled, at law or in equity, the nonbreaching Members shall be entitled to injunctive relief to prevent breaches of the provisions of this Agreement and specifically to enforce the terms and provisions hereof in any action instituted in any court of the United States or any state thereof having subject matter jurisdiction thereof.

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

IN WITNESS WHEREOF, the parties have adopted and entered into this Member Control Agreement as of the Effective Date.

B-48

ADDITIONAL MEMBER SIGNATURE PAGE

IN WITNESS WHEREOF, pursuant to Sections 6.1 and/or 10.6 of the Member Control Agreement of Heron Lake BioEnergy, LLC, of which this signature page is a part, in consideration of and as a condition to the undersigned’s being admitted as a Member and acquiring units in Heron Lake BioEnergy, LLC, the undersigned hereby executes and enters into this Member Control Agreement as an additional Member as of the Effective Date (as defined in this Member Control Agreement) or, if later, the effective date of the undersigned’s acquisition of Units and admission as a Member pursuant to this Member Control Agreement. By execution of this signature page and on such date, the undersigned becomes a party to this Member Control Agreement, and agrees to be bound in all respects by the terms and conditions of this Member Control Agreement on and after such date.

Date Signed:
Individuals:
(signature)	(signature of joint investor)
(print name)	(print name of joint investor)
Entities:
(print name of entity)
(signature)
(print name of authorized signatory)
(print title of authorized signatory)

B-49

EX-99.G

EXHIBIT 99.G

JOINT FILING AGREEMENT

Each of the persons named below agrees to the joint filing of a statement on Schedule 13D (including amendments thereto) with respect to the Class A Units and the Class B Units of Heron Lake BioEnergy, LLC, and further agrees that this Joint Filing Agreement be included as an exhibit to such filing; provided, however, that no person shall be responsible for the completeness or accuracy of the information concerning the other persons making the filing, unless such person knows or has reason to believe that such information is inaccurate.

IN WITNESS WHEREOF, the undersigned has duly executed this Joint Filing Agreement as of this 8th day of August, 2013.

Granite Falls Energy, LLC
By:	/s/ Paul Enstad
Its:	Chairman
Project Viking, L.L.C.
By:	/s/ Paul Enstad
Its:	President

EX-99.H

EXHIBIT 99.H

HERON LAKE BIOENERGY, LLC

SUBSCRIPTION AGREEMENT

INCLUDING INVESTMENT REPRESENTATIONS

THIS SUBSCRIPTION AGREEMENT (this “Subscription Agreement”) is entered into and made effective on July 31, 2013, by and between Heron Lake BioEnergy, LLC, a Minnesota limited liability company with its principal executive office located at 91246 390th Avenue, P.O. Box 198, Heron Lake, Minnesota 56137 (the “Company”), and Project Viking, L.L.C., a Minnesota limited liability company (“Subscriber”).

W I T N E S S E T H

In consideration of the mutual promises contained herein, and other good and valuable consideration, Subscriber hereby agrees, represents and warrants as follows:

1.Agreement of Subscription.

a.Subscriber hereby subscribes to purchase ** 8,075,000 ** Class A capital units of the Company and ** 15,000,000 ** Class B capital units of the Company (collectively, the “Units”), which Units quantify membership interests in the Company, at a purchase price of $0.30 per Unit, upon the terms and conditions as set forth in this Subscription Agreement, for a Total Purchase Price for the Units of ** $6,922,500.00 **.  All capitalized terms used in this Subscription Agreement and not otherwise defined herein shall have the meaning ascribed to such terms in the Company’s Confidential Disclosure Statement dated June 11, 2013, including appendices (the “Disclosure Statement”).

b.This subscription is irrevocable.  The Company will accept this subscription by having one of its officers countersign this Subscription Agreement and return a copy of the signature page to you to confirm acceptance.  Upon acceptance, this Subscription Agreement is binding on Subscriber, and the obligations of Subscriber hereunder are unconditional.

c.Upon the acceptance of this Subscription Agreement, Subscriber agrees to deliver by wire transfer on the same business day of the acceptance the amount of the Total Purchase Price for the Units (100% payment is due upon Subscription).  Subscriber agrees that the Units shall be governed by and that Subscriber is bound by the Company’s Member Control Agreement dated effective September 23, 2004, as amended August 30, 2011, a copy of which is included in the Disclosure Statement as Appendix B (the “Member Control Agreement”).  Subscriber acknowledges that Subscriber is a current member of the Company and therefore has received a copy of the Disclosure Statement including the Member Control Agreement.

d.Subscriber acknowledges and agrees that 100% of Subscriber’s purchase price of the Units constitutes “AT-RISK” capital and will not be placed into any type of escrow.  Immediately following acceptance of this Subscription by the Company and tender of the payment for the Units, the Company will use such funds to pay down the Company’s term revolver note with AgStar Financial Services, PCA (“AgStar”).  Subscriber acknowledges that the payment of the proceeds of this subscription to AgStar is the specified use of the funds from this subscription.

e.Upon acceptance of this Subscription Agreement and tender of full payment of the entire subscription amount, the Company will issue the Units to Subscriber for the Units purchased hereunder

HERON LAKE BIOENERGY, LLC	JULY 31, 2013
	PRIVATE PLACEMENT
	SUBSCRIPTION AGREEMENT

and issue a certificate to Subscriber for the Units purchased hereunder, dated as of the date of such acceptance and full payment.  Subscriber acknowledges and agrees that Subscriber is bound by the Company’s Articles of Organization, a copy of which is included in the Disclosure Statement as Appendix A (the “Articles”) and the Member Control Agreement.

2.Representations and Warranties of Subscriber.

In consideration of the Company’s offer to sell the Units, and in order to induce the Company to sell and issue the Units to Subscriber, Subscriber hereby represents and warrants to the Company and its agents as follows:

a.SEC Reporting Company and Reporting Obligations; Information About the Company, the Units and the Notes Offering.  Subscriber acknowledges that the Company is a public reporting company under the Securities Exchange Act of 1934, and that Subscriber has immediate reporting obligations under such Act as a result of its purchase of the Units hereunder and Subscriber’s ownership of membership interests in the Company and the number of Units purchased.  Subscriber, or its representative(s), has received, read and understands the business, financial and operating information, and the risk factors affecting the Company and its business and the value of the Units being purchased hereunder, as described in or set forth in the periodic reports and schedules filed by the Company with the SEC (including all exhibits and financial statement schedules attached thereto or included therewith), including but not limited to: (1) FORM 10-K Annual Report filed pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “34’ Act”) for the fiscal year ended October 31, 2012; (2) FORM 10-Q Quarterly reports under Section 13 or 15(d) of the Act for the fiscal quarters ended January 31, 2013 and April 30, 2013; (3) the SCHEDULE 14A Definitive Proxy Statement relating to merger or acquisition and Additional Definitive Proxy soliciting materials and Rule 14a-12 materials; and (4) all FORM 8-K reports filed in the past twelve months, including but not limited to the Form 8-K reports filed in connection with the termination of the Asset Purchase Agreement entered into with Guardian Energy, the amendments to the forbearance agreements and related loan agreements between the Company and AgStar Financial Services, PCA, and the amended and restated loan agreement and interim subordinated loan agreements entered into on May 17, 2013.  In addition, Subscriber acknowledges it has received the Company’s unaudited, non-public, financial statements for May 31, 2013 and June 30, 2013 and the 7-month and 8-month periods then ended, by reason of its appointees to the Company’s Board of Governors.  Without limiting the foregoing, Subscriber acknowledges that the Company has affirmative covenants and payment obligations to AgStar in its loan agreements with AgStar, and that there are no assurances that the covenants and payment obligations will be met, that the Company will not violate loan covenants or payment obligations in the future, or that AgStar will not declare an event of default and exercise all of their rights and remedies under the loan agreement if the Company cannot cure any such defaults or violations.

Subscriber acknowledges and represents and warrants to the Company that Subscriber has received and carefully read: (i) the Company’s Confidential Disclosure Statement dated June 11, 2013, including appendices; (ii) the form of Indenture dated as of                               , 2013 among the Company and U.S. Bank National Association attached as Appendix E to the Disclosure Statement (the “Indenture”); (iii) the form of Note to be delivered under and governed by the Indenture attached as Exhibit A to the Indenture; (iv) the form of Indenture Subordination Agreement dated effective as of                               , 2013 by and between AgStar Financial Services, PCA and U.S. Bank National Association; and (v) all other information incorporated by reference into the Disclosure Statement relating to the Company, its business, or the Company’s offering of its 7.25% Secured Subordinated Notes due 2018 (the “Notes”) pursuant to the terms and conditions of the Disclosure Statement (the “Notes

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Offering”), as supplemented in accordance with the Subscription Supplement Agreement referenced herein.  Subscriber acknowledges and understands that the Company will amend the Notes Offering and require subscribers to the Notes to confirm their subscription in accordance with the Subscription Supplement Agreement of even date herewith by and among Subscriber, the Company, and Granite Falls Energy, LLC (“Subscription Supplement Agreement”).

b.Access to Information.  Subscriber represents that it or its representatives has been given access to full and complete information regarding the Company and has had an opportunity to obtain, and has received, any and all additional information deemed necessary by Subscriber in order to form a decision regarding an investment in the Company, and Subscriber has utilized such access to Subscriber’s satisfaction.  As a result, Subscriber believes it has sufficient knowledge about the business, management and financial affairs of the Company, the Company’s ethanol plant and subsidiaries and the operations thereof, the planned used of proceeds of this subscription, the terms and conditions of this Subscription Agreement, the Notes Offering described in the Disclosure Statement, the planned amendment and confirmation procedures with respect to the Notes Offering, the Articles and Member Control Agreement, the terms and conditions of the purchase of Units contemplated hereby, and any other relevant matters, to make an informed investment decision regarding an investment in the Company and the purchase of Units contemplated hereby.

c.High Degree of Risk.  Subscriber realizes that an investment in the Units involves a high degree of risk, including, but not limited to, the risks of receiving no return on the investment and of losing Subscriber’s entire investment in the Company.

d.Ability to Bear the Risk.  Subscriber is able to bear the economic risk of investment in the Units, including the total loss of such investment.

e.No Market for Units; Restrictions on Transfer.  Subscriber realizes that (i) there are substantial restrictions on the transfer of the Units, both under the Securities Act and State Laws, as well as under the Articles and the Member Control Agreement; (ii) there is not currently, and it is unlikely that in the future there will exist, a public market for the Units; and (iii) accordingly, for the above and other reasons, Subscriber may not be able to liquidate an investment in the Units for an indefinite period.  Subscriber realizes that the Units have not been registered for sale under the Securities Act of 1933, as amended (the “Securities Act”) or applicable state securities laws (the “State Laws”).  Subscriber acknowledges and agrees that the Units may be sold only pursuant to registration under the Securities Act and State Laws, or an opinion of counsel acceptable to the Company that such registration is not required, and in accordance with the Articles and the Member Control Agreement.

f.Suitability.  Subscriber believes that the investment in the Units is suitable for the undersigned based upon Subscriber’s investment objectives and financial needs, and Subscriber has adequate means for providing for his, her or its current financial needs and personal contingencies and has no need for liquidity of investment with respect to the Units.  Subscriber has such knowledge and experience in financial and business matters that he, she or it is capable of evaluating the merits and risks of an investment in the Units or Subscriber has obtained, to the extent Subscriber deems necessary, his, her or its own professional advice with respect to the risks inherent in the investment in the Units, and the suitability of the investment in the Units in light of Subscriber’s financial condition and investment needs.

g.Investment Intent.  Subscriber has been advised that the Units are not being registered under the Securities Act or the relevant State Laws but are being offered and sold pursuant to exemptions from such laws and that the Company’s reliance upon such exemptions is predicated in part on

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Subscriber’s representations to it as contained herein.  Subscriber represents and warrants that the Units are being purchased for Subscriber’s own account and for Subscriber’s investment and without the intention of reselling or redistributing the same, that Subscriber has made no agreement with others regarding any of the Units and that Subscriber’s financial condition is such that it is not likely that it will be necessary to dispose of any of the Units in the foreseeable future.  Subscriber is aware that, in the view of the Securities and Exchange Commission, a purchase of the Units with an intent to resell by reason of any foreseeable specific contingency or anticipated change in market values, or any change in the condition of the Company, or in connection with a contemplated liquidation or settlement of any loan obtained for the acquisition of the Units and for which the Units were pledged as security, would represent an intent inconsistent with the representations set forth above.  Subscriber further represents and agrees that if, contrary to the foregoing stated intentions, Subscriber should later desire to dispose of or transfer any of the Units in any manner, he, she or it shall not do so without first obtaining the consent of the Company as required by the Company’s Articles and the Member Control Agreement and (i) the opinion of counsel satisfactory to the Company that such proposed disposition or transfer lawfully may be made without the registration of the Units pursuant to the Securities Act and applicable State Laws, or (ii) such registration (it being expressly understood that the Company shall not have any obligation to register such Units for such purpose).

h.Brokers or Finders.  Subscriber has not taken any action that will cause the Company to incur, directly or indirectly, any liability for brokerage or finders’ fees or agents’ commissions or any similar charges in connection with this Subscription Agreement.

i.Tax Liability.  Subscriber has reviewed with Subscriber’s own tax advisors the tax consequences of this investment and the transactions contemplated by this Subscription Agreement, and has and will rely solely on such advisors and not on any statements or representations of the Company or any of its agents.  Subscriber understands that Subscriber (and not the Company) shall be responsible for Subscriber’s own tax liability that may arise as a result of this investment or the transactions contemplated by this Subscription Agreement.

j.Residency.  Subscriber specifically represents and warrants to the Company that Subscriber is a resident of the State of Minnesota (please complete) and is not a resident of any other State.

Please check one indicating the basis for Subscriber’s residency:

o Subscriber is an individual that has, at the time of the offer and sale to him or her, his or her principal residence in Minnesota.

x Subscriber is a corporation, partnership, trust or other form of business organization that has, at the time of the offer and sale to it, its principal office within Minnesota.

o Subscriber is a corporation, partnership, trust or other form of business organization that is organized for the specific purpose of acquiring Units and all of the beneficial owners of that organization are residents of the State of Minnesota.

STOP:  Subscriber must be a resident of the State of Minnesota in order to be eligible to subscribe for Units.  If Subscriber is not a resident of Minnesota or is a resident of another State, Subscriber may not subscribe for Units.

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3.Accredited Status.

SECTION 3 IS REQUIRED IN CONNECTION WITH THE EXEMPTIONS FROM THE SECURITIES ACT AND STATE LAWS BEING RELIED ON BY THE COMPANY WITH RESPECT TO THE OFFER AND SALE OF THE UNITS.  SUBJECT TO SECURITIES LAWS REQUIREMENTS, ALL FINANCIAL INFORMATION IN SECTION 3 WILL BE KEPT CONFIDENTIAL, AND WILL BE REVIEWED ONLY BY THE COMPANY AND ITS COUNSEL, EXCEPT AS DISCLOSURE MAY BE REQUIRED OR COMPELLED UNDER APPLICABLE SECURITIES LAWS.  The undersigned agrees to furnish any additional information that the Company or its counsel deems reasonably necessary in order to verify the responses set forth below.

Subscriber represents and warrants as follows (EACH SUBSCRIBER MUST COMPLETE. PLEASE CHECK ALL THAT APPLY — YOU MUST BE AN ACCREDITED INVESTOR TO PURCHASE THE NOTE):

INDIVIDUALS

o(a)Subscriber (hereinafter in this Section 3, “the undersigned”) is an individual with a net worth, or a joint net worth together with his or her spouse, in excess of $1,000,000.  (In calculating net worth, the persons primary residence shall not be included as an asset, and indebtedness that is secured by the person’s primary residence, up to the estimated fair market value of the primary residence at the time of the sale of the securities, shall not be included as a liability, except that if the amount of such indebtedness outstanding at the time of sale of securities exceeds the amount outstanding 60 days before such time, other than as a result of acquisition of the primary residence, the amount of such excess shall be included as a liability.  Indebtedness that is secured by the person’s primary residence in excess of the estimated fair market value of the primary residence at the time of the sale of securities shall be included as a liability.  You may include equity in personal property and real estate, excluding your primary residence, cash, short-term investments, stock and securities.  Equity in personal property and real estate, excluding your primary residence, should be based on the fair market value of such property minus debt secured by such property.)

o(b)The undersigned is an individual that had an individual income in excess of $200,000 in each of the prior two years and reasonably expects an income in excess of $200,000 in the current year.

o(c)The undersigned is an individual that had with his/her spouse joint income in excess of $300,000 in each of the prior two years and reasonably expects joint income in excess of $300,000 in the current year.

o(d)The undersigned is a director or executive officer or general partner (or its equivalent) of the Company.

ENTITIES

o(e)The undersigned, if other than an individual, is an entity all of whose equity owners meet one of the tests set forth in (a) through (d) above.  (If relying on this category alone, each equity owner must complete a separate copy of this Subscription Agreement.)

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x(f)The undersigned is an entity, and is an “Accredited Investor” as defined in Rule 501(a) of Regulation D under the Securities Act.  This representation is based on the following (check one or more, as applicable):

o(i)The undersigned (or, in the case of a trust, the undersigned trustee) is a bank or savings and loan association as defined in Sections 3(a)(2) and 3(a)(5)(A), respectively, of the Securities Act acting either in its individual or fiduciary capacity.

o(ii)The undersigned is an insurance company as defined in Section 2(13) of the Securities Act.

o(iii)The undersigned is an investment company registered under the Investment Company Act of 1940 or a business development Company as defined in Section 2(a)(48) of that Act.

o(iv)The undersigned is a Small Business Investment Company licensed by the U.S. Small Business Administration under Section 301(c) or (d) of the Small Business Investment Act of 1958.

o(v)The undersigned is an employee benefit plan within the meaning of Title I of the Employee Retirement Income Security Act of 1974 and either (check one or more, as applicable):

o(aa)the investment decision is made by a plan fiduciary, as defined in Section 3(21) of such Act, which is either a bank, savings and loan association, insurance Company, or registered investment adviser; or

o(bb)the employee benefit plan has total assets in excess of $5,000,000; or

o(cc)the plan is a self-directed plan with investment decisions made solely by persons who are “Accredited Investors” as defined under the Securities Act.

o(vi)The undersigned is a private business development company as defined in Section 202(a)(22) of the Investment Advisers Act of 1940.

x(vii)The undersigned has total assets in excess of $5,000,000, was not formed for the specific purpose of acquiring securities of the Company and is one or more of the following (check one or more, as appropriate):

o(aa)an organization described in Section 501(c)(3) of the Internal Revenue Code; or

x(bb)a corporation or limited liability company; or

o(cc)a Massachusetts or similar business trust; or

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o(dd)a partnership.

o(viii)The undersigned is a trust with total assets exceeding $5,000,000, which was not formed for the specific purpose of acquiring securities of the Company and whose purchase is directed by a person who has such knowledge and experience in financial and business matters that he is capable of evaluating the merits and risks of the investment in the Units.

4.Entities.

If Subscriber is an entity, the individual signing on behalf of such entity and the entity jointly and severally agree and certify that:

a.if entity is accredited solely by reason of the category described in Section 3(f)(vii) or (viii) above, then the undersigned entity was not organized for the specific purpose of acquiring the Units; and

b.this Subscription Agreement has been duly authorized by all necessary action on the part of the undersigned entity, has been duly executed by an authorized officer or representative of the undersigned entity, and each is a legal, valid, and binding obligation of the undersigned entity enforceable in accordance with its terms.

5.Relationship to Brokerage Firms.

(Please answer the following questions by checking the appropriate response.)

a.o YES  x NO:  Are you a director, officer, partner, branch manager, registered representative, employee, shareholder of, or similarly related to or employed by a brokerage firm?

b.oYES  x NO:  Is your spouse, father, mother, father-in-law, mother-in-law, or any of your brothers, sisters, brothers-in-law, sisters-in-law or children, or any relative which you support, a director, officer, partner, branch manager, registered representative, employee, shareholder of, or similarly related to or engaged by, a brokerage firm?

c.oYES  x NO:  Does Subscriber own voting securities of any brokerage firm?

d.oYES  x NO:  If the undersigned is an entity, is any director, officer, partner or 5% owner of the undersigned also a director, officer, partner, branch manager, registered representative, employee, shareholder of, or similarly related to or employed by, a brokerage firm?

e.If the answer to any of the above items is “YES”, please supply details below:

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6.Securities Law Exemptions.

Subscriber acknowledges that the offer and sale of the Units has not been registered under the Securities Act, or any state securities laws and that the Company will offer and sell the Units and the Units will be issued to Subscriber in reliance on exemptions from the registration requirements of the Securities Act and exemptions under applicable state securities laws and in reliance on the representations, warranties and agreements made by Subscriber herein.  Without limiting the foregoing, the Units were offered and sold in reliance on exemptions from federal and state securities laws including without limitation section 4(2) of the Securities Act covering nonpublic offers and sales and section 3(a)(11) and Rule 147 of the Securities Act covering intrastate offers and sales of securities.  Accordingly, Subscriber agrees not to sell, pledge, distribute, offer for sale, transfer or otherwise dispose of the Units in the absence of: (i) an effective registration statement under the Securities Act as to the Units and registration or qualification of the Units under any applicable federal or state securities laws then in effect; or (ii) an opinion of counsel, satisfactory to the Company, that such registration and qualification are not required.  Additionally, the Units may be sold or transferred only to persons resident of the State of Minnesota during the period in which the Notes are being offered and sold by the Company and for a period of nine months from the date of last sale by the Company of such securities.

7.Restrictive Legend.

In addition to the restrictions to transfer of the Units contained in the Articles and Member Control Agreement, and any corresponding restrictive legends required thereunder, Subscriber also agrees that the Company shall place a restrictive legend on any statement of interest prepared by the Company with respect to the Units containing substantially the following language:

The securities represented by this Statement of Interest have not been registered under the Securities Act of 1933, as amended (the “Act”) or under applicable state securities laws and are also subject to a Subscription Agreement.  The securities may not be sold, transferred or pledged in the absence of such registration, unless pursuant to an exemption from the registration requirements of the Act and applicable state securities laws.  The Company reserves the right to require an opinion of counsel satisfactory to it before effecting any transfer of the securities.  Without limiting the foregoing, the Units were offered and sold in reliance on section 4(2) of the Act and section 3(a)(11) and Rule 147 of the Act covering intrastate offers and sales of securities.  Accordingly, the Units may be sold or transferred only to persons resident of the State of Minnesota during the period in which the Notes are being offered and sold by the Company and for a period of nine months from the date of last sale by the Company of such securities.

8.Miscellaneous.

a.Survival of Representations and Warranties; Indemnification.  Subscriber understands the meaning and legal consequences of the agreements, representations and warranties contained herein, agrees that such agreements, representations and warranties shall survive and remain in full force and effect after the execution hereof and payment for the Units, and further agrees to indemnify and hold harmless the Company and each current and future employee, agent and member of the Company from and against any and all loss, damage or liability due to, or arising out of, a breach of any agreement, representation or warranty of the undersigned contained herein.

b.No Assignment or Revocation; Binding Effect.  Neither this Subscription Agreement, nor any interest herein, shall be assignable by Subscriber without prior written consent of the Company. 

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Subscriber hereby acknowledges and agrees that Subscriber is not entitled to cancel, terminate or revoke this Subscription Agreement and that it shall survive the death, incapacity, dissolution or bankruptcy of Subscriber.  The provisions of this Subscription Agreement shall be binding upon and inure to the benefit of the parties hereto, and their respective heirs, legal representatives, successors and assigns.

c.Choice of Law.  This Subscription Agreement shall be construed and interpreted in accordance with Minnesota law, without regard to its choice of law or conflicts of law provisions.

9.Representations and Warranties of the Company.

In consideration of Subscriber’s agreement to purchase the Units, the Company represents and warrants to Subscriber as follows:

a.Existence.  The Company is a duly organized and validly existing limited liability company under the laws of the State of Minnesota.

b.Good Standing.  The Company is in good standing under the laws of the State of Minnesota and there are no proceedings or actions pending to limit or impair any of its powers, rights, privileges, or to dissolve it.

c.Due Authorization and Approval.  The execution, delivery and performance of this Subscription Agreement and the consummation of the transactions contemplated hereby have been duly authorized by proper corporate action of the Company and do not contravene the Articles or Member Control Agreement or contractual restriction binding on or affecting the Company.

d.Class B Units. Neither the Company nor its Board of Governors has increased the minimum ownership requirements of or placed other membership restrictions on the holders of Class B Units.  The Class B Units issued pursuant to this Subscription Agreement are identical to the Company’s Class A Units with respect to all rights and privileges.

e.Units.  Upon receipt of full payment for the Units, the Units shall be duly authorized, fully-paid, validly issued and non-assessable Units of the Company.

10.Additional Agreements.

a.Subscription Supplement Agreement; Voting Agreement to Waive Purchase Option.  As a material part of the consideration for each party to enter into and accept this Subscription Agreement, the parties acknowledge that they have entered into the Subscription Supplement Agreement and the Voting Agreement to Waive Purchase Option contemporaneously with this Subscription Agreement, and all respective representations, warranties, agreements and covenants of the parties thereunder shall be in addition to, and not limited by, superseded, or replaced by, the representations, warranties, agreements and covenants of the parties hereunder.

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

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SIGNATURE

/s/ Ron Fagen
Subscriber (Signature)	Subscriber (Signature, if more than one investor)
Project Viking, LLC
Print Name of Subscriber	Print Name of Subscriber (If more than one investor)
/s/ Ron Fagen, President & Managing Member
Name and Title of Signatory (for entities)
Address:
501 W. Highway 212
P.O. Box 159
Granite Falls, MN 56241

NOTE:   Please be certain to complete the Subscriber Information Page attached hereto and, if Subscriber is an entity, the attached Certificate of Signatory.

ACCEPTANCE OF SUBSCRIPTION AND AGREEMENT TO TERMS

The Company hereby accepts the subscription evidenced by this Subscription Agreement including Investment Representations, effective as of July 31, 2013.

HERON LAKE BIOENERGY, LLC
By:	/s/ Robert Ferguson
		Its:	CEO

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SUBSCRIBER INFORMATION

Project Viking LLC
(Please print name(s) in which the Note is to be issued)
25-1922419
Taxpayer I.D. No.				Taxpayer I.D. No.
				(If more than one investor)
501 W. Hwy 212 — P.O. Box 159
Address
City:  Granite Falls		State:	MN	Zip Code:56241
Telephone Number: (320) 564-3324
Name of Authorized Representative (if other than individual): Ron or Diane Fagen
Form of Ownership:   (check one)
o	Individual Ownership			o	Tenants in Common
o	Joint Tenants (JTWROS)			o	Corporation
x	Limited Liability Company			o	Trust (Signature and title pages of Trust Agreement and all amendments must be enclosed)
				Trustee Name:
				Trust Date:
				o	Other: Provide information below.

CERTIFICATE OF SIGNATORY

(To be completed if Units are being subscribed for by an Entity)

I, Ron Fagen, am the President & Managing Member of Project Viking, LLC (the “Entity”).

I certify that I am empowered and duly authorized by the Entity to execute and carry out the terms of this Subscription Agreement and to purchase and hold the Units pursuant to the terms of this Subscription Agreement and the Company’s Articles and the Member Control Agreement, and to act on behalf of the Entity with respect to any actions or consents of the Entity required thereunder or this Subscription Agreement.  I further certify that this Subscription Agreement and such actions or consents been duly and validly executed on behalf of the Entity and each constitutes a legal and binding obligation of the Entity.

IN WITNESS WHEREOF, I have set my hand hereto effective July 31, 2013.

/s/ Roland J. Fagen

(Signature)

President & Managing Member

(Title)

Roland J. Fagen

(Please Print Name)

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EX-99.I

EXHIBIT 99.I

PROMISSORY NOTE

Principal		Loan Date	Maturity	Loan No	Call/Coll	Account	Officer	Initials
$	5,000,000.00	07-23-2013	09-23-2013	28407	55		JOHN

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

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

Borrower:	PROJECT VIKING, LLC	Lender:	GRANITE FALLS BANK
	ROLAND J. FAGEN		702 PRENTICE ST.
	108 MILLER CIRCLE		PO BOX 8
	GRANITE FALLS, MN 56241		GRANITE FALLS, MN 56241
			(320) 564-2111
Principal Amount: $5,000,000.00				Date of Note: July 23, 2013

PROMISE TO PAY. PROJECT VIKING, LLC; and ROLAND J. FAGEN (“Borrower”) jointly and severally promise to pay to GRANITE FALLS BANK (“Lender”), or order, in lawful money  of the United States of America, the principal amount of Five Million & 00/100 Dollars ($5,000,000. 00) or so much as may be outstanding, together with interest on the unpaid outstanding principal balance of each advance, calculated as described in the “INTEREST CALCULATION METHOD” paragraph using an interest rate of 3.990% per annum based on a year of 360 days.  Interest shall be calculated from the date of each advance until repayment of each advance.  The interest rate may change under the terms and conditions of the “INTEREST AFTER DEFAULT” section.

PAYMENT.  Borrower will pay this loan in full immediately upon Lender’s demand.  If no demand is made, Borrower will pay this loan in one payment of all outstanding principal plus all accrued unpaid interest on September 23, 2013.  Unless otherwise agreed or required by applicable law, payments will be applied ·first to any accrued unpaid interest; then to principal; and then to any unpaid collection costs.  Borrower will pay Lender at Lender’s address shown above or at such other place as Lender may designate in writing.

INTEREST CALCULATION METHOD.  Interest on this Note is computed on a 365/360 basis; that is, by applying the ration of the interest rate of a year of 360 days, multiplied by the outstanding principal balance, multiplied by the actual number of days the principal balance is outstanding.  All interest payable under this Note is computed using this method.

PREPAYMENT.  Borrower may pay without penalty all or a portion of the amount owed earlier than it is due.  Early payments will not, unless agreed to by Lender in writing, relieve Borrower of Borrower’s obligation to continue to make payments.  Rather, early payments will reduce the principal balance due.  Borrower agrees not to send Lender payments marked “paid in full”, “without recourse”, or similar language.  If Borrower sends such a payment, Lender may accept it without losing any of Lender’s rights under this Note, and Borrower will remain obligated to pay any further amount owed to Lender.  All written communications concerning disputed amounts, including any check or other payment instrument that indicates that the payment constitutes “payment in full” of the amount owed or that is tendered with other conditions or limitations or as full satisfaction of a disputed amount must be mailed or delivered to:  GRANITE FALLS BANK, 702 PRENTICE ST. PO Box 8, GRANITE FALLS, MN  56241.

INTEREST AFTER DEFAULT.  Upon default, including failure to pay upon final maturity, the interest rate on this Note shall be increased by 3.000 percentage points.  However, in no event will the interest rate exceed the maximum interest rate limitations under applicable law.

DEFAULT.  Each of the following shall constitute an event of default (“Event of Default”) under this Note:

Payment Default.  Borrower fails to make any payment when due under this Note.

Other Defaults.  Borrower fails to comply with or to perform any other term, obligation, covenant or condition contained in this Note or in any· of the related documents or to comply with or to perform any term, obligation, covenant or condition contained in any other agreement between Lender and Borrower.

Default in Favor of Third Parties.  Borrower or any Grantor defaults under any loan, extension of

credit, security agreement, purchase or sales agreement, or any other agreement, in favor of any other creditor or person that may materially affect any of Borrower’s property or Borrower’s ability to repay this Note or perform Borrower’s obligations under this Note or any of the related documents.

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

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

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

Events Affecting Guarantor. Any of the preceding events occurs with respect to any guarantor, endorser, surety, or accommodation party of any of the indebtedness or any guarantor, endorser, surety, or accommodation party dies or becomes incompetent, or revokes or disputes the validity of, or liability under, any guaranty of the indebtedness evidenced by this Note.

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

Insecurity.  Lender in good faith believes itself insecure.

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

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

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

CHOICE OF VENUE.  If there is a lawsuit, Borrower agrees upon Lender’s request to submit to the jurisdiction of the courts of YELLOW MEDICINE County, State of Minnesota.

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

COLLATERAL.  Borrower acknowledges this Note is secured by PROPERTY DESCRIBED IN OTHER DOCUMENT(S).

LINE OF CREDIT.  This Note evidences a straight line of credit.  Once the total amount of principal has been advanced, Borrower is not entitled to further loan advances.  Advances under this Note, as well as directions for payment from Borrower’s accounts, may be requested orally or in writing by Borrower or as provided in this paragraph.  Lender may, but need not, require that all oral requests be confirmed in writing. The following person or persons are authorized to request advances and authorize payments under the line of credit until Lender receives from Borrower, at Lender’s address shown above, written notice of revocation of such authority:  ROLAND J. FAGEN, Member of PROJECT VIKING, LLC; and ROLAND J. FAGEN, Individually.  Borrower agrees to be liable for all sums either: (A) advanced in accordance with the instructions of an authorized person or (B) credited to any of Borrower’s accounts with Lender.  The unpaid principal balance owing on this Note at any time may be evidenced by endorsements on this Note or by Lender’s internal records, including daily computer print-outs.  Lender will have no obligation to advance funds under this Note if:  (A) Borrower or any guarantor is in default under the terms of this Note or any agreement that Borrower or any guarantor has with Lender, including any agreement made in connection with the signing of this Note; (B) Borrower or any guarantor ceases doing business or is insolvent; (C) any guarantor seeks, claims or otherwise attempts to limit, modify or revoke such guarantor’s guarantee of this Note or any other loan with Lender; (D) Borrower has applied funds provided pursuant to this Note for purposes other than those authorized by Lender; or (E) Lender in good faith believes itself insecure.

LOAN PURPOSE. COMMERCIAL - EQUITY INJECTION FOR STOCK PURCHASE.

SUCCESSOR INTERESTS.  The terms of this Note shall be binding upon Borrower, and upon Borrower’s heirs, personal representatives, successors and assigns, and shall inure to the benefit of Lender and its successors and assigns.

NOTIFY US OF INACCURATE INFORMATION WE REPORT TO CONSUMER REPORTING AGENCIES.  Borrower may notify Lender if Lender reports any inaccurate information about Borrower’s account(s) to a consumer reporting agency.  Borrower’s written notice describing the specific inaccuracy(ies) should be sent to Lender at the following address:  GRANITE FALLS BANK, 702 PRENTICE ST. PO BOX 8, GRANITE FALLS, MN 56241.

GENERAL PROVISIONS.  This Note is payable on demand.  The inclusion of specific default provisions or rights of Lender shall not preclude Lender’s right to declare payment of this Note on its demand.  If any part of this Note cannot be enforced, this fact will not affect the rest of the Note.  Lender may delay or forgo enforcing any of its rights or remedies under this Note without losing them.  In addition, Lender shall have all the rights and remedies provided in the related documents or available at law, in equity, or otherwise.  Except as may be prohibited by applicable law, all of lender’s rights and remedies shall be cumulative and may be exercised singularly or concurrently.  Election by Lender to pursue any remedy shall not exclude pursuit of any other remedy, and an election to make expenditures or to take action to perform an obligation of Borrower shall not affect Lender’s right to declare a default and to exercise its rights and remedies.  Each Borrower understands and agrees that, with or without notice to Borrower, Lender may with respect to any other Borrower (a) make one or more additional secured or unsecured loans or otherwise extend additional credit; (b) alter, compromise, renew, extend, accelerate, or otherwise change one or more times the time for payment or other terms of any indebtedness, including increases and decreases of  the rate of  interest on the indebtedness; (c) exchange, enforce, waive, subordinate, fail or decide not to perfect, and release any security, with or without the substitution of new collateral; (d) apply such security and direct the order or manner of sale thereof, including without limitation, any non-judicial sale permitted by the terms of the controlling security agreements, as Lender in its discretion may determine; (e) release, substitute, agree not to sue, or deal with any one or more of Borrower’s sureties, endorsers, or other guarantors on any terms or in any manner Lender may choose; and (f) determine how, when and what application) of payments and credits shall be made on any other indebtedness owing by such other Borrower.  Borrower and any other person who signs, guarantees or endorses this Note, to the extent allowed by law, waive presentment, demand for payment, and notice of dishonor:  Upon any change in the terms of this Note, and unless otherwise expressly stated in writing, no party who signs this Note, whether as maker, guarantor, accommodation maker or endorser, shall be released from liability.  All such parties agree that Lender may renew or extend (repeatedly and for any length of time) this loan or release any party or guarantor or collateral; or impair, fail to realize upon or perfect Lender’s security interest in the collateral; and take any other action deemed necessary by Lender without the consent of or notice to anyone.  All such parties also agree that Lender may modify this loan without the consent of or notice to anyone other than the party with whom the medication is made.  The obligations under this Note are joint and several.

SECTION DISCLOSURE.  To the extent not preempted by federal law, this loan is made under Minnesota Statutes, Section 334.01.

PRIOR TO SIGNING THIS NOTE, EACH BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS NOTE.  EACH BORROWER AGREES TO THE TERMS OF THE NOTE.

BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS PROMISSORY NOTE.

BORROWER:
PROJECT VIKING, LLC
By:		/s/ Roland J. Fagen
		ROLAND J. FAGEN, Member of PROJECT VIKING, LLC
x	/s/ Roland J. Fagen
	ROLAND J. FAGEN, Individually
	LENDER:
	GRANITE FALLS BANK
x	/s/ John Virnig
	John Virnig, President

EX-99.J

EXHIBIT 99.J

Assumption Agreement

This Assumption Agreement (the “Agreement”) is entered into among Granite Falls Energy, LLC, a Minnesota limited liability company (hereinafter “GFE”), Project Viking, LLC, a Minnesota limited liability company (hereinafter “Viking”), Roland J. Fagen (hereinafter “Mr. Fagen”) and Granite Falls Bank (hereinafter “Lender”).

WHEREAS, as a condition to its purchase of Viking, GFE has agreed to assume all obligations as Borrower under that certain Promissory Note in the principal amount of $5,000,000 having Loan Number 28407 (the “Note”) between Viking and Mr. Fagen, who are jointly and severally the current Borrower on the Note, and Lender, and

WHEREAS,  Lender is willing to consent to the assumption by GFE of the Note pursuant to the terms and conditions set forth herein.

NOW THEREFORE, in consideration of Lender’s agreement to allow GFE to assume primary responsibility for payment of the Note, the parties agree as follows:

1.Assumption of Borrower Status by GFE.  Upon the date hereof, GFE shall become the Borrower on the Note.  GFE hereby agrees to the assumption of all obligations of Borrower under the Note.

2.Ongoing Obligations.  The assumption by GFE of the obligations of Borrower under the Note shall not serve to release Viking and Mr. Fagen from their payment obligations in the event GFE fails to make payments due on the Note.  On the date hereof, the parties have entered into that certain Creditor and Debtors Agreement, which addresses, among other things, the manner in which Lender shall pursue collection on the Note as between GFE, Viking and Mr. Fagen.

3.Supplement to Note.  Except as expressly amended or supplement hereby, the Note is and shall remain in full force and effect.

4.Law Governing. This Agreement shall be interpreted in accordance with and governed by the laws of the State of Minnesota.

5.Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the heirs, executors, administrators and successors of the parties hereto, but no right or liability or obligation arising hereunder may be assigned by any party hereto without the prior written consent of all other parties.

6.Counterparts, Separate Signature Pages. This Agreement may be executed in any number of counterparts, or using separate signature pages.  Each such executed counterpart and each counterpart to which such signature pages are attached shall be deemed to be an original instrument, but all such counterparts together shall constitute one and the same instrument.  A signed copy of this Agreement delivered by facsimile, e-mail or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Agreement.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the Effective Date.

GRANITE FALLS ENERGY, LLC
By	/s/ Paul Enstad
Its	Chairman
PROJECT VIKING, L.L.C.
By	/s/ Roland J. Fagen
Its	President & Managing Member
/s/ Roland J. Fagen
Roland “Ron” J. Fagen
GRANITE FALLS BANK
By	/s/ John C. Virnig
Its	President

EX-99.K

EXHIBIT 99.K

CREDITOR AND DEBTORS AGREEMENT

This Creditor and Debtors Agreement (the “Agreement”) is made as of July 31, 2013 (the “Effective Date”) by and among Granite Falls Energy, LLC, a Minnesota limited liability company(“GFE”); Project Viking, L.L.C., a Minnesota limited liability company (“Viking”), Roland “Ron” J. Fagen (“Mr. Fagen”) and Granite Falls Bank (“Lender”).

RECITALS

WHEREAS, GFE has assumed all of Viking’s and Mr. Fagen’s obligations under that certain promissory note numbered 28407 in the original principal amount of $5,000,000 dated July 23, 2013 in favor of Lender (the “Note”) as of the Effective Date and Lender has consented thereto as of the Effective Date;

WHEREAS, notwithstanding the foregoing, Lender has required that each of Viking and Mr. Fagen remain secondarily liable to Lender for GFE’s obligations under the Note if there is an Event of Default (as such term is defined in the Note) by GFE under the Note,

NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

1.Lender’s Agreement Regarding Collection.  Lender shall only be entitled to seek payment of any amounts from Viking or Mr. Fagen due to Lender from GFE under the Note until and unless there is an Event of Default.  Lender shall immediately notify GFE and Mr. Fagen in writing of any Event of Default.  If such Event of Default shall remain uncured for more than five business days, then Lender shall be entitled to seek payment of any amounts due to Lender from GFE under the Note from Viking.  If Lender is unable to collect such amounts from Viking within 30 days, then Lender shall be entitled to seek payment of any amounts due to Lender from Mr. Fagen.  Each of Viking and Mr. Fagen agree to liable to Lender in such amounts in such event.

2.GFE Grant of Security Interest.  GFE hereby grants to Lender a security interest in all of GFE’s assets that would be collateral under Article 9 of the Uniform Commercial Code (“Collateral”); provided, however, that GFE’s membership interest in Viking (a wholly-owned subsidiary of GFE) shall not be Collateral.  GFE also agrees to execute documents in the future as requested by Lender to perfect its security interest in the Collateral.

3.Entire Agreement.  This Agreement supplements the Note and that certain Commercial Security Agreement dated July 23, 2013 among Viking, Mr. Fagen and Lender (the “Security Agreement”); provided, however, that if any provision of the Note or the Security Agreement conflicts with this Agreement, the terms of this Agreement shall prevail and govern in all respects.

4.Law Governing.  This Agreement shall be interpreted in accordance with and governed by the laws of the State of Minnesota.

5.Successors and Assigns.  This Agreement shall inure to the benefit of and be binding upon the heirs, executors, administrators and successors of the parties hereto, but no right or liability or obligation arising hereunder may be assigned by any party hereto without the prior written consent of all other parties.

6.Counterparts, Separate Signature Pages.  This Agreement may be executed in any number of counterparts, or using separate signature pages, Each such executed counterpart and each counterpart to which such signature pages are attached shall be deemed to be an original instrument, but all-such counterparts together shall constitute one and the same instrument A signed copy of this Agreement delivered by facsimile, e-mail or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Agreement.

7.Severability.  In the event any of the provisions of this Agreement shall be declared by a court or arbitrator to be void or unenforceable, then such provision shall be severed from this Agreement without affecting the validity and enforceability of any of the other provisions hereof, and the parties shall negotiate in good faith to replace such unenforceable or void provisions with a similar clause to achieve, to the extent permitted under law, the purpose and intent of the provisions declared void and unenforceable.

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the Effective Date.

GRANITE FALLS ENERGY, LLC
By	/s/ Paul Enstad
Its	Chairman
PROJECT VIKING, L.L.C.
By	/s/ Roland J. Fagen
Its	President & Managing Member
/s/ Roland J. Fagen
Roland “Ron” J. Fagen
GRANITE FALLS BANK
By	/s/ John C. Virnig
Its	President

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EX-99.L

EXHIBIT 99.L

MEMBERSHIP INTEREST PURCHASE AGREEMENT

This MEMBERSHIP INTEREST PURCHASE AGREEMENT (the “Agreement”) is made effective this 31st day of July, 2013, by and between GRANITE FALLS ENERGY, LLC, a Minnesota limited liability company (the “Buyer”) and ROLAND J. FAGEN and DIANE K. FAGEN (the “Sellers”).

The Sellers collectively own 100% of the membership interests of Project Viking, L.L.C., a Minnesota limited liability company (the “Company”).

The Buyer and the Sellers desire that the Buyer purchase 100% of the membership interests of the Company under the terms and conditions of this Agreement.

Therefore, in consideration of the mutual agreements contained herein, the parties hereby agree as follows:

SECTION 1

THE MEMBERSHIP INTEREST PURCHASE

1.1           Purchase and Sale of Membership Interest.  Pursuant to the terms and conditions of this Agreement, the Sellers agree to sell to the Buyer and the Buyer agrees to purchase from the Sellers, 100% of the membership interests of the Company (the “Membership Interests”) for an aggregate purchase price of Seventeen Million Twenty-Four Thousand Five Hundred Dollars ($17,024,500) (the “Purchase Price”).  At the Closing, Buyer shall pay the Purchase Price as follows:

(a)           Buyer shall pay $8,000,000 of the Purchase Price by wire transfer of immediately available funds to an account specified in writing by the Sellers;

(b)           Buyer shall issue to the Sellers a secured promissory note in the form attached hereto as Exhibit A (the “Note”) in the original principal amount of $4,024,500; and

(c)           Buyer shall assume all of the Sellers’ and the Company’s obligations under that certain Promissory Note in the principal amount of $5,000,000 having Loan Number 28407, dated July 23, 2013, in favor of Granite Falls Bank  (the “GF Note”) as of the Effective Date.  Buyer shall execute and deliver an Assumption Agreement, in the form attached hereto as Exhibit B (the “Assumption”), evidencing such assumption and the consent of Granite Falls Bank to such assumption.

1.2          Closing.  The closing of the sale and purchase of the Membership Interests (the “Closing”) will take place simultaneously with the execution of this Agreement at the offices of Leonard Street and Deinard Professional Association, located at 150 South Fifth Street, Suite 2300, Minneapolis, Minnesota at 10:00 a.m. local time, or by such other method or at such other place or different time as may be mutually acceptable to the Buyer and the Sellers.

1.3          Closing Deliveries.  At the Closing, in addition to delivering a duly executed copy of this Agreement:

(a)           the Buyer will pay the Purchase Price and deliver a duly executed Note, a duly executed Assumption, and a duly executed Assignment in Blank (defined below) to the Sellers in accordance with Section 1.1 above; and

(b)           the Sellers will deliver duly executed assignments for the uncertificated Membership Interests to the Buyer.

SECTION 2

REPRESENTATIONS AND WARRANTIES OF THE SELLERS

In order to induce Buyer to purchase the Membership Interests from Sellers, the Sellers hereby represent and warrant to the Buyer, as of the date hereof, as follows:

2.1           Organization; Good Standing; Assets.  The Company is a limited liability company duly organized, validly existing and in good standing under the laws of Minnesota and has all requisite corporate power and authority to conduct its business as currently conducted.

2.2           Capitalization of the Company.  The Membership Interests constitute 100% of the issued and outstanding equity interests of the Company.  There are no outstanding options, warrants, convertible or exchangeable securities or other rights, agreements, arrangements or commitments obligating the Sellers or the Company, directly or indirectly, to issue, sell (other than the transactions contemplated by this Agreement), purchase, acquire or otherwise transfer or deliver any equity interest in the Company, or any agreement, document, instrument or obligation convertible or exchangeable therefor.

2.3          Title to Membership Interests.  The Sellers own of record and beneficially the Membership Interests, which are, subject to any provisions contained in the GF Note, free and clear of any obligation, lien, claim, pledge, security interest, liability, charge, contingency or other encumbrance or claim of any nature whatsoever (a “Lien”).  Upon sale of the Membership Interests to the Buyer hereunder, the Buyer will acquire the entire legal and beneficial interest in the Membership Interests, free and clear of any Lien except such Liens that may be imposed by the Note and/or the GF Note.

SECTION 3

REPRESENTATIONS AND WARRANTIES OF THE BUYER

In order to induce the Sellers to sell the Membership Interests to the Buyer, the Buyer hereby represents and warrants to the Sellers as of the date hereof, as follows:

3.1          Organization, Standing of Buyer. The Buyer is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Minnesota. The Buyer has full power and authority under applicable law to own, lease and operate its properties and to carry on the business in which it is engaged.

3.2          Due Authorization.  The Buyer has all requisite power and authority to enter into this Agreement, to carry out its obligations hereunder and to consummate the transaction contemplated hereby.  The execution and delivery by the Buyer of this Agreement, the

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performance by the Buyer of its obligations hereunder, and the consummation by the Buyer of the transaction contemplated hereby have been duly authorized by all requisite limited liability company action on the part of the Buyer.  This Agreement has been duly executed and delivered by the Buyer and (assuming due execution and delivery by the Sellers) this Agreement constitutes a legal, valid and binding obligation of the Buyer enforceable against the Buyer in accordance with its terms.

3.3          No Violation.  The execution and delivery of this Agreement and the consummation of the transaction contemplated hereby does not and will not violate or conflict with the constituting documents of Buyer or any subsidiary, or violate any legal requirement or order applicable to the Buyer or any subsidiary.  The execution and delivery of this Agreement and the consummation of the transaction contemplated hereby by the Buyer does not and will not require any third-party action, or conflict with or constitute a default under, or result in the acceleration or right of acceleration, of any obligations, or any termination or right of termination under any contract.  No consent of any third party is required as a result of, or in connection with, the execution, delivery and performance of this Agreement or the consummation of the transaction contemplated hereby.

3.4          Financing.  The Buyer has or shall have sufficient cash on hand or other sources of immediately available funds to enable it to make payment in full of all obligations under the Note and the GF Note on or prior to August 30, 2013.

SECTION 4

OTHER COVENANTS

4.1          Publicity.  No party hereto will issue or make, or allow to have issued or made, any press release or public announcement concerning the transactions contemplated by this Agreement without the prior written consent of all other parties.

4.2          Resignations.  Effective as of the Closing, the Sellers hereby resign from all officer, manager, director, and other roles and positions he or she holds with the Company.

4.3          SEC Filings.  The Buyer shall promptly cause to be made on behalf of the Company all filings with the Securities and Exchange Commission required as a result of the transactions contemplated by this Agreement or the subscription by the Company to purchase additional equity of Heron Lake BioEnergy, LLC.

4.4          Grant of Security Interest.  The Buyer hereby pledges and grants to the Sellers, and hereby creates a continuing first priority lien and security interest in favor of the Sellers in and to all of its right, title and interest in and to the Membership Interest (the “Collateral”).  The Collateral secures the due and prompt payment and performance of: (a) the obligations of the Buyer from time to time arising under the Note and this Agreement with respect to the due and prompt payment of (i) the principal of and interest on the Note (including interest accruing during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding), when and as due, whether at maturity, by acceleration, or otherwise and (ii) all other monetary obligations, including fees, costs, attorneys’ fees and disbursements, reimbursement obligations, contract causes of action, expenses and indemnities, whether primary, secondary, direct or indirect, absolute or contingent, due or to become due, now existing or hereafter arising, fixed or otherwise (including monetary obligations incurred during the pendency of any bankruptcy, insolvency, receivership or other similar

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proceeding, regardless of whether allowed or allowable in such proceeding), of the Buyer under or in respect of the Note and this Agreement.  The Buyer shall, from time to time, as may be required by the Sellers with respect to all Collateral, immediately take all actions as may be requested by the Sellers to perfect the security interest of the Sellers in the Collateral.  In connection with the granting of the security interest in the Collateral, the Buyer shall execute and deliver to the Sellers an assignment in blank in the form attached hereto as Exhibit C (the “Assignment in Blank”).  The Buyer hereby irrevocably authorizes the Sellers at any time and from time to time to file in any relevant jurisdiction any financing statements and amendments thereto that contain the information required by Article 9 of the UCC of each applicable jurisdiction for the filing of any financing statement or amendment relating to the Collateral, including any financing or continuation statements or other documents for the purpose of perfecting, confirming, continuing, enforcing or protecting the security interest granted by the Buyer hereunder, without the signature of the Buyer where permitted by law, including the filing of a financing statement describing the Collateral as all Membership Interest in Project Viking, L.L.C. now owned or hereafter acquired by the Buyer, or words of similar effect. The Buyer agrees to provide all information required by the Sellers pursuant to this Section 4.4 promptly to the Sellers upon request.  The Buyer shall not issue any additional equity in the Company to any third party, grant any Lien on the Collateral that has a priority over the Sellers’ security interest in the Collateral, or take any other action which may harm the Sellers’ interest and rights in the Collateral, at any time prior to payment in full of all amounts owed to the Sellers and Granite Falls Bank pursuant to the terms of this Agreement.  If the Buyer shall fail to pay the Note when due or otherwise be in default under the Note, and such default is continuing, the Sellers, without any other notice to or demand upon the Buyer, may assert all rights and remedies of a secured party under the UCC or other applicable law, including, without limitation, the right to take possession of, hold, collect, sell, lease, deliver, grant options to purchase or otherwise retain, liquidate or dispose of all or any portion of the Collateral.

SECTION 5

MISCELLANEOUS

5.1          Survival; Indemnification. The parties agree that the representations and warranties of each party shall survive and remain in full force and effect after the execution of this Agreement and after payment for the delivery of the Membership Interests.  Each party agrees to indemnify and hold harmless the other party from and against any and all loss, damage or liability due to or arising out of, a breach of any agreement or representation or warranty in this Agreement by such party.  Notwithstanding anything in this Agreement to the contrary, the maximum amount that the Sellers shall be entitled to recover from the Buyer pursuant to the indemnity obligation of this Agreement shall in no event exceed the Purchase Price and the maximum amount that the Buyer shall be entitled to recover from the Sellers pursuant to this Agreement shall in no event exceed the Purchase Price.

5.2          Expenses. Whether or not the transaction contemplated by this Agreement is consummated, the Seller and the Buyer shall each pay their own fees and expenses incident to the negotiation, preparation, execution, delivery and performance hereof, including, without limitation, the fees and expenses of their respective counsel, accountants and other experts.

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5.3          Complete Agreement; Waiver and Modification; No Third Party Beneficiaries. This Agreement, together with the Note, constitutes the entire agreement between the parties pertaining to the subject- matter hereof and supersedes all prior agreements and understandings of the parties with the respect to the subject-matter hereof.  There are no representations or warranties by any party except those expressly stated for herein, any implied warranties being hereby expressly disclaimed by both parties. There are no covenants or conditions except those expressly stated herein. No amendment, supplement or termination of or to this Agreement, and no waiver of any of the provisions hereof, shall be binding on a party unless made in a writing signed by such party. This Agreement may be modified by mutual agreement of the parties. Nothing in this Agreement shall be construed to give any person other than the express parties hereto any rights or remedies.

5.4          Notices. All notices, requests, demands, claims and other communications hereunder shall be in writing and shall be given by delivery (by mail or otherwise) or transmitted to the address or facsimile number listed below, and will be effective (in all cases) upon receipt. Without limiting the generality of the foregoing, a mail, express, messenger or other receipt signed by any person at such address shall conclusively evidence delivery to and receipt at such address, and any printout showing successful facsimile transmission of the correct total pages to the correct facsimile number shall conclusively evidence transmission to and receipt at such facsimile number.

(a)           If to the Buyer:

Granite Falls Energy, LLC

15045 Hw. 23 SE, P.O. Box 216

Granite Falls, MN  56241-0216

Attention:  Paul Enstad

Facsimile:  (320) 564-3190

with copy to:

STONEBERG, GILES & STROUP, P.A.

300 South O’Connell Street, Marshall, MN  56258-2638

Attention:  Kevin K. Stroup

Facsimile:  (507) 532-3498

(b)           If to the Sellers:

Roland and Diane Fagen

P.O. Box 159

501 West Highway 212

Granite Falls, MN 56242

Facsimile:              (320) 564-3278

with copy to:

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Leonard, Street and Deinard Professional Association

The Army and Navy Club Building

1627 Eye Street NW, Suite 610

Washington, DC 20006

Attn:                   Jonathan W. Gottlieb, Esq.

Facsimile:          (202) 974-6101

5.5          Law Governing. This Agreement shall be interpreted in accordance with and governed by the laws of the State of Minnesota.

5.6          Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the heirs, executors, administrators and successors of the parties hereto, but no right or liability or obligation arising hereunder may be assigned by any party hereto.

5.7          Counterparts, Separate Signature Pages. This Agreement may be executed in any number of counterparts, or using separate signature pages.  Each such executed counterpart and each counterpart to which such signature pages are attached shall be deemed to be an original instrument, but all such counterparts together shall constitute one and the same instrument.  A signed copy of this Agreement delivered by facsimile, e-mail or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Agreement.

5.8          Severability. In the event any of the provisions of this Agreement shall be declared by a court or arbitrator to be void or unenforceable, then such provision shall be severed from this Agreement without affecting the validity and enforceability of any of the other provisions hereof, and the parties shall negotiate in good faith to replace such unenforceable or void provisions with a similar clause to achieve, to the extent permitted under law, the purpose and intent of the provisions declared void and unenforceable.

5.9          Brokers.  The parties represent they have not used a broker in connection with this Agreement, and therefore neither party will incur, directly or indirectly, any liability for brokerage or agent commissions or any other similar charges.

[Signatures follow on next page.]

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IN WITNESS WHEREOF, the parties have executed this Membership Interest Purchase Agreement.

BUYER		SELLERS
GRANITE FALLS ENERGY, LLC
By:	/s/ Paul Enstad	/s/ Roland J. Fagen
		Roland J. Fagen
Its:	Chairman
		/s/ Diane K. Fagen
		Diane K. Fagen

EX-99.M

EXHIBIT 99.M

SECURED PROMISSORY NOTE

$4,024,500 July 31, 2013 

Granite Falls, Minnesota

FOR VALUABLE CONSIDERATION RECEIVED, the undersigned, GRANITE FALLS ENERGY, LLC, a Minnesota limited liability company (“Borrower”), promises to pay to the order of Roland (Ron) J. Fagen and Diane K. Fagen (collectively, “Holder”), the principal sum of Four Million Twenty-Four Thousand Five Hundred Dollars ($4,024,500) with interest on the unpaid principal balance hereof, from the date hereof until this Secured Promissory Note (“Note”) is paid in full in the following manner and upon the following terms and conditions.

1.Payment.  On August 30, 2013 (the “Maturity Date”), Borrower shall pay to the Holder the entire principal balance plus all interest that shall have accrued on the outstanding principal balance at a rate of [4%] per annum.  Such payment shall be made to the Holder of this Note in immediately available United States funds by wire to an account designed by Holder or, if Holder does not upon request of Borrower designate an account, such payment shall be delivered to Holder at P.O. Box 159, 501 West Highway 212, Granite Falls, MN 56242 or at such other place as Holder shall have designated to Borrower in writing.

2.Prepayment.  Borrower may prepay all or any portion of this Note at any time or times prior to the Maturity Date and in any amount without premium or penalty.

3.Events of Default.  This Note shall become due and payable immediately, without notice, upon the occurrence of one or more of the following events (each an “Event of Default”):

(a)Borrower fails to pay when due any amount due under this Note; or

(b)Borrower shall breach any provision of that certain Membership Interest Purchase Agreement, including, without limitations, the restrictions and obligations contained Section 4.4 thereof.

4.Remedies; Security.  Upon an Event of Default, Holder may declare that all unpaid principal and interest due under this Note are due and payable immediately (without presentment, notice or demand), and Holder shall have the right to exercise and enforce any or all rights or remedies available to Holder in law or equity.  Borrower shall also pay all reasonable costs of collection, including reasonable attorneys’ fees, if any payment due hereunder is not made when due, or any other Event of Default occurs, whether or not litigation is commenced.  This Note was entered into in connection with that certain Membership Interest Purchase Agreement, dated as of even date herewith between Holder and Borrower, pursuant to which, among other things, in Section 4.4 thereof Borrower has granted to Holder a first priority security interest in the membership interests of Project Viking, L.L.C. (the “Security Agreement”).  This Note shall be secured by the Security Agreement, as the same may be amended from time to time.

5.Waiver; Delay; Partial Exercise.  Borrower waives demand, presentment, notice of non-payment, dishonor, protest, and notice of protest, and will continue to remain liable to pay the unpaid

principal balance of the indebtedness evidenced by this Note, if the Note is extended, renewed, or modified.  No delay or omission on the part of Holder in exercising any power or right hereunder will impair such right or power or be construed to be a waiver thereof or acquiescence in default, nor shall any single or partial exercise of such power or right hereunder preclude any full exercise of such power or right or of any other power or right.  To be effective, any waiver must be in writing and signed by Holder.

6.Successors and Assigns.  This Note shall inure to the benefit of the heirs, successors and assigns of Holder and be binding upon Borrower and its successors and assigns, provided that Borrower may not assign or transfer this Note without the prior written consent of Holder.

7.Governing Law.  This Note shall be governed by the laws of the State of Minnesota without regard to the conflict of laws principles thereof.

8.Unenforceability.  If any provision of this Note shall be declared void or unenforceable by any judicial or administrative authority, the validity of any other provisions and of the entire Note shall not be affected thereby.

9.Entire Agreement.  This Note, and the Security Agreement contained within the Membership Interest Purchase Agreement, represent the complete agreement of the parties with respect to the transactions contemplated hereby and supersedes all prior oral or written agreements and understandings regarding the subject matter hereof.  No amendment to this Note shall be valid unless made in a written amendment executed on behalf of Borrower and Holder.

IN WITNESS WHEREOF, this Note has been executed as of the date first above written.

BORROWER:
GRANITE FALLS ENERGY, LLC
By:	/s/ Paul Enstad
Its:	Chairman

EX-99.N

EXHIBIT 99.N

SUBSCRIPTION SUPPLEMENT AGREEMENT

This Subscription Supplement Agreement (this “Agreement”) is made and entered into as of July 31, 2013 (the “Effective Date”), by and among Heron Lake BioEnergy, LLC (the “Company”), Granite Falls Energy, LLC, a Minnesota limited liability company (“GFE”) and Project Viking, L.L.C., a Minnesota limited liability company (“Project Viking”) (each of the Company, GFE and Project Viking, a “Party” to this Agreement, and collectively, the “Parties”).

RECITALS

WHEREAS, on the Effective Date, Project Viking subscribed for 8,075,000 Class A capital units and 15,000,000 Class B capital units of the Company (collectively, the “Purchased Units”), at a purchase price of $0.30 per capital unit, upon the terms and conditions set forth in a Subscription Agreement of even date herewith (the “Viking Subscription Agreement”), for a total purchase price for the Purchased Units of $6,922,500.00;

WHEREAS, immediately following execution and delivery of the Viking Subscription Agreement to the Company, acceptance by the Company, and delivery by wire transfer of the total purchase price for the Units by Project Viking, GFE acquired and fully-paid for 100% of the membership interests of Project Viking (including all governance rights and financial rights) from Roland J. Fagen and Diane K. Fagen pursuant to a Membership Interest Purchase Agreement of even date herewith, said acquisition effective on the Effective Date;

WHEREAS, to supplement the Viking Subscription Agreement, the Parties desire to make certain representations and warranties to one another as provided in this Agreement;

WHEREAS, the Company, GFE and Project Viking have reached agreement with respect to the appointment of governors to the Company’s Board of Governors (the “Board”), the voting of any Class A Units or Class B Units including the Purchase Units (collectively, the “Units”) held by Project Viking on certain matters, and certain other governance matters, as provided in this Agreement;

WHEREAS, the Company is also offering a maximum of $12 million in aggregate principal amount of promissory notes (the “Offering”) titled “7.25% Secured Subordinated Notes due 2018” (the “Notes”) pursuant to the terms of that certain Confidential Disclosure Statement dated June 11, 2013, as supplemented on June 21, 2013 (the “Disclosure Statement”);

NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto, intending to be legally bound hereby, agree as follows:

1.Governance Agreements.  The Company, Project Viking, GFE each agree as follows:

a.The Company acknowledges and agrees that following the issuance of the Purchased Units to Project Viking on the Effective Date, Project Viking owns

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***24,080,949*** Class A Units of the Company and ***15,000,000*** Class B Units of the Company, for a total of ***39,080,949*** Units of the Company, which number of Units held by Project Viking constitutes a majority of the Units outstanding as of the Effective Date.

b.As of the close of business on the Effective Date, under Section 5.3(a)(iv) of the Member Control Agreement of the Company as amended through August 30, 2011 (the “Member Control Agreement”), a copy of which was attached to the Disclosure Statement as Appendix B, Project Viking is entitled to appoint five (5) governors to the Board.

c.One of the five (5) elected governors currently serving on the Board of Governors of the Company shall resign from the Board, effective as of the close of business on the Effective Date.  The written resignation shall be made in writing and shall be delivered to the acting President of the Board on August 1, 2013, and said resignation shall not require acceptance of resignation to make it effective.  The elected governor who resigns shall serve as an alternate to the remaining four (4) elected governors.

d.Project Viking hereby provides written notice to the Board and the Company that Kenton Johnson and Steve Core are removed from the Board, effective as of close of business on the Effective Date.  Project Viking hereby appoints the following five (5) governors to the Board pursuant to Section 5.3(a)(iv) of the Member Control Agreement, effective as of the close of business on the Effective Date:  Paul Enstad, Rodney Wilkison, Dean Buesing, Marten Goulet, and Shannon Johnson.  Project Viking hereby appoints Leslie Bergquist and David Thompson to serve as alternates to the five (5) Project Viking appointed governors.

e.Alternates will receive notice of all Board meetings and all information provided the Board.  Alternates shall be entitled to attend all meeting of the Board.  Alternates shall not be entitled to vote at Board meetings, provided that alternates may participate in Board meetings, and provided further that alternates shall serve as replacement governors and shall be entitled to vote at any Board meeting at which the appointed governor or elected governor for which the alternate is serving as alternate is absent.

f.Project Viking shall cause each governor it has a right to appoint under Section 5.3(a)(iv) to vote in favor of the Specified Amendments and in favor of such matters as are necessary to call a meeting of the members as soon as practicable following the Effective Date to consider the Specified Amendments and provide a Board recommendation to vote in favor of the Specified Amendments.  The term “Specified Amendments” shall mean (i) an amendment to Section 5.1(c) of the Member Control Agreement to add those actions identified in Section 5.1(d)(i)-(iv) of the Member Control Agreement to the actions, agreements, instruments or items specified in Section 5.1(c) that require the affirmative vote of at least two-thirds of the voting power of the governors in office, (ii) an amendment to Section 5.1(k) of the Member Control Agreement to add provisions consistent with this Agreement relating to alternates acting

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in the place and stead of absentee governors, and (iii) and amendment to Section 6.2(a) to delete the last sentence thereof.

g.At any meeting, and at every adjournment or postponement thereof, with respect to outstanding Units owned beneficially or of record by Project Viking, Project Viking shall: (i) appear at such meeting or otherwise cause such Units to be counted as present thereat for purposes of establishing a quorum; (ii) vote or cause to be voted such Units in favor of the Specified Amendments and any action required in furtherance thereof; and (iii) vote or cause to be voted, or execute consents in respect of, such Units against any proposal, action or transaction presented to the members of the Company (regardless of any recommendation of the Board) or in respect of which vote or consent of Project Viking is requested or sought (A) that could reasonably be expected to prevent or materially impede or delay the effectiveness of the Specified Amendments (including any proposal to amend Section 5.1(c) of the Member Control Agreement in a manner other than the Specified Amendments), (B) to change in any manner the voting rights of the Units or the appointment rights of Members or their Affiliates, or (C) to alter or amend in any manner Section 5.6 or Section 5.8 with respect to contracts or transactions between the Company and Governors or their Affiliates.

h.Until the approval of the Specified Amendments by members, Project Viking shall cause each governor it has a right to appoint under Section 5.3(a)(iv) to vote in favor of any action identified in Section 5.1(d)(i)-(iv) of the Member Control Agreement only if at least one elected governor then serving on the Board also votes in favor of such action.

i.Project Viking hereby covenants and agrees that, except for actions taken in furtherance of this Agreement, Project Viking (i) has not entered, and shall not enter at any time while this Agreement remains in effect, into any voting agreement or voting trust with respect to the Units owned beneficially or of record by Project Viking or its Affiliates; and (ii) has not granted, and shall not grant at any time while this Agreement remains in effect, a proxy, consent or power of attorney with respect to the Units owned beneficially or of record by Project Viking or its Affiliates that is inconsistent with Project Viking or its appoint governors obligations under this Agreement.  During the term of this Agreement, Project Viking shall not take any action that would in any way restrict, limit or interfere with the performance of Project Viking’s obligations hereunder or the effectiveness of the Specified Amendments as contemplated hereby on a timely basis.

j.GFE shall cause Project Viking to act in compliance with its covenants and obligations under this Agreement and the Viking Subscription Agreement.

2.Company Representations and Warranties. The Company represents and warrants to Project Viking that:

a.The Company is authorized to issue 80,000,000 capital units, of which 65,000,000 capital units are designated as Class A Units and 15,000,000 capital units are designated Class B Units.  Immediately prior to the Effective Date, 38,622,107 Class A

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Units are issued and outstanding and no Class B Units are issued and outstanding.  Following completion of the Offering and the issuance of the Purchased Units to Project Viking pursuant to the Viking Subscription Agreement, and assuming Project Viking elects to convert its Interim Subordinated Note in the amount of $102,000.00 to capital units, Project Viking shall own, on a fully diluted basis, a majority of the issued and outstanding capital units of the Company.

b.The Company has placed no increased minimum ownership requirements or other membership restrictions on the holders of Class B Units.

c.Other than the Viking Subscription Agreement, there are no outstanding subscriptions, options, warrants, calls, contracts, demands, commitments, convertible securities or other agreements or arrangements of any character or nature whatever under which the Company is obligated to issue any securities of any kind representing an ownership interest in the Company, except for subscriptions for approximately $6,650,000 in principal amount of Notes (“Member and Non-Member Subscriptions”) currently held in escrow, $1,407,000 in principal amount of Interim Subordinated Notes (as defined in the Disclosure Statement) to be exchanged for an equal principal amount of Notes, and the Units issuable upon conversion of the Notes.  With respect to Member and Non-Member Subscriptions currently held in escrow or subscriptions for Notes subsequently received by the Company, the Company shall accept no more than $3,670,500 of  such subscriptions.  For the sake of clarity, such maximum amount does not include the principal amount of the Interim Subordinated Notes or any exchange for Notes therefor.

d.Within ten (10) days following the Effective Date, the Company will initiate a confirmation/re-subscription process with all Member and Non-Member Subscriptions and holders of the Interim Subordinated Notes by: (i) providing such persons and the other members of the Company a supplement to the Disclosure Statement that describes (1) the change of ownership of Project Viking and its material terms, (2) the Viking Subscription Agreement, (3) the material terms of this Agreement including exhibits, (4) updated AgStar information, and (5) such other material information determined by the Company; and (ii) allowing such persons to (1) confirm / re-subscribe their subscription or Interim Subordinated Notes for Notes pursuant to the terms of the Offering under the Disclosure Statement, as supplemented or amended, or (2) elect to convert the principal amount of their subscription or Interim Subordinated Notes into a subscription for capital units, at the rate of $0.30 per unit.  The subscription payments of such persons (other than the holders of the Interim Subordinated Notes, who shall not have the right to rescind their obligation to exchange the Interim Subordinated Notes for Notes under the Offering or capital units) who do not affirmatively confirm / re-subscribe their subscription by the end of the confirmation / re-subscription period (which shall be no later than August 31) shall be returned promptly to the subscriber from escrow without interest or deduction.

e.At the end of the confirmation / re-subscription period, the Company will accept all confirmed / re-subscribed subscriptions in the Offering for Notes or capital units in the original order in which the subscription was received, on a first-come, first-

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served basis, to purchase $3,670,500 in principal amount of Notes or capital units, such that the Company shall issue a maximum of $5,077,500 in principal amount of Notes or capital units (at $0.30 per unit) in the Offering, including the Notes exchanged for the $1,407,00 in Interim Subordinated Notes, but excluding the Purchased Units issued to Project Viking pursuant to the Viking Subscription Agreement.  If the principal amount of confirmed / re-subscribed subscriptions of Member and Non-Member Subscriptions is less than $3,670,500, the Company shall continue to offer Notes pursuant to the terms of the Offering in the Disclosure Statement (as supplemented or amended).  The Company shall not issue more than $5,077,500 in principal amount of Notes or capital units (at $0.30 per unit) in the Offering, including the Notes exchanged for the $1,407,000 in Interim Subordinated Notes.

f.Neither the offer nor the issuance or sale of the Purchased Units or the Notes constitutes an event, under any anti-dilution provisions of any securities issued or issuable by the Company or any agreements with respect to the issuance of securities by the Company, which will either increase the number of Units issuable pursuant to such provisions or decrease the consideration per Units to be received by the Company pursuant to such provisions.  No holder of any security of the Company is entitled to any preemptive or similar rights to purchase any securities of the Company, except as provided in the Notes.

g.The Company has no outstanding or contingent obligations to repurchase or redeem any of its securities from holders thereof except for the exchange of Interim Subordinated Notes for Notes.  The Company is not a party or subject to any agreement or understanding, and to the knowledge of the Company, there is no agreement or understanding, that effects or relates to transfers, voting or the giving of written consents with respect to any security of the Company, or by any member of the Board, except for the Member Control Agreement and this Agreement.

h.All corporate action necessary to the issuance and delivery of the Purchased Units to Project Viking has been taken by the Company or will be taken by the Company on or prior to the Effective Date. When (i) the terms of the Notes have been established in accordance with the Indenture in the form attached as Appendix E to the Disclosure Statement, (ii) the Indenture has been validly executed and delivered by the Company and the trustee thereunder and (iii) the Notes have been executed, issued, delivered and authenticated in accordance with the terms of the Indenture and the applicable subscription agreement against the receipt of requisite consideration therefor provided for therein, the Notes will constitute legal, valid and binding obligations of the Company, except as enforcement thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or similar laws generally affecting the rights of creditors and subject to general equity principles.  With respect to the Units issuable upon conversion of the Notes, when the Units have been issued and delivered in accordance with the terms of the Note, such Units will be validly issued, fully paid and non-assessable.

i.The execution, delivery and performance of this Agreement has been duly authorized and approved by proper corporate action of the Company, and does not

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contravene the Articles of Organization or Member Control Agreement of the Company or any law or contractual restriction binding on or affecting the Company.

j.As of the date hereof, the Company does not have any liabilities, obligations or commitments, except for liabilities, obligations or commitments which (i) are described in, set forth or referenced in the periodic reports and schedules filed by the Company with the SEC (including all exhibits and financial statements and financial statement schedules attached thereto or included therewith) or the unaudited financial statements that are referred to or referenced in Section 2.a. of the Viking Subscription Agreement, (ii) fully-covered by insurance, except for reasonable deductibles or self-insured retention levels, (iii) incurred in the ordinary course of business consistent with past practices, (iv) are described in, set forth or referenced in the Disclosure Statement, as supplemented or amended, including all appendices, (v) arise under this Agreement or the Viking Subscription Agreement, (vi) individually or in the aggregate would not have a material adverse effect on the business, property, operations or financial condition of the Company, or (vii) which have otherwise been disclosed to GFE or its representatives.

k.As of the date hereof, the Company is in compliance in all material respects with all applicable laws the violation of which would have a material adverse effect on the Company and its business as currently conducted.  As of the date hereof, the Company has all material licenses and permits required by law or otherwise necessary for the proper operation of its business as currently conducted, and all of such licenses and permits are in full force and effect.

l.Since the date of the Disclosure Statement, the Company’s ethanol plant has operated in the ordinary course of business consistent with past practice and its nameplate capacity, ordinary wear and tear excepted.

m.Notwithstanding anything herein or in the Viking Subscription Agreement to the contrary, except for the due authorization and approval representation and warranty made by the Company under Section 2.h. hereof, no warranty or representation is made regarding any shareholder or member claim asserting breach of fiduciary duty by the Board or its governors or violation of the Member Control Agreement or applicable law in connection with the Offering or the Viking Subscription Agreement or this Agreement or the absence thereof.

3.Representations of GFE and Project Viking.

a.GFE and Project Viking each represent and warrant to the Company that as of the Effective Date, GFE has acquired and fully-paid for 100% of the membership interests of Project Viking, GFE has sole voting and dispositive power over all of the Units and Interim Subordinated Notes held by Project Viking, with no limitations, qualification or restrictions on such rights imposed by Roland J. Fagen, Diane K. Fagen or any other person as a result of the sale and transfer to GFE from Roland J. Fagen and Diane K. Fagen of 100% of the membership interests in Project Viking.

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b.In consideration of the Company’s offer to sell and sale and issuance of the Purchased Units to Project Viking, GFE hereby represents and warrants and covenants to the Company each of the representations, warranties and covenants set forth in Sections 2, 3, 5, 6, 7, 8 and 10 of the Viking Subscription Agreement, including without limitation that GFE has received and carefully read the Disclosure Statement and appendices thereto.

c.GFE represents and warrants to the Company that the execution, delivery and performance of this Agreement has been duly authorized and approved by proper corporate action of GFE, and does not contravene GFE’s organizational documents or any law or contractual restriction binding on or affecting GFE.

d.Project Viking represents and warrants to the Company that the execution, delivery and performance of the Viking Subscription Agreement and this Agreement has been duly authorized and approved by proper corporate action of Project Viking, and does not contravene Project Viking’s organizational documents or any law or contractual obligation or restriction binding on or affecting Project Viking.

4.Management Agreement. GFE and the Company agree to execute and enter into the Management Services Agreement attached hereto as Exhibit A, effective as of the Effective Date.

5.Agrinatural Gas, LLC .  GFE, the Company, and Project Viking each agree to execute and deliver the Voting Agreement to Waive Purchase Option in the form attached hereto as Exhibit B.

6.Specific Performance. Each Party acknowledges and agrees that irreparable injury to the other Parties hereto would occur in the event any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached and that such injury may not be adequately compensable by the remedies available at law (including the payment of money damages).  It is accordingly agreed that each Party (the “Moving Party”) shall each be entitled to specific enforcement of, and injunctive relief to prevent any violation of, the terms hereof, without the requirement to post bond or other security, and no other Party hereto will take action, directly or indirectly, in opposition to the Moving Party seeking such relief on the grounds that any other remedy or relief is available at law or in equity.  Each of the Parties hereto irrevocably agrees that any legal action or proceeding with respect to this Agreement for specific performance or for recognition and enforcement of any judgment in respect of this Agreement shall be brought and determined exclusively in the state or federal court of Minnesota and any state or federal appellate court therefrom within the State of Minnesota or the Eighth Judicial Circuit.  Each of the Parties hereto hereby irrevocably submits, with regard to any such action or proceeding for itself and in respect of its property, generally and unconditionally, to the personal jurisdiction of the aforesaid courts and agrees that it will not bring any such action in any court other than the aforesaid courts.  Each of the Parties hereto hereby irrevocably waives, and agrees not to assert in any such action or proceeding, (a) any claim that it is not personally subject to the jurisdiction of the above-named courts for any reason, (b) any claim that it or its property is exempt or immune from jurisdiction of any such court or from any such legal process commenced in such courts (whether through service of notice, attachment prior to judgment,

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attachment in aid of execution of judgment, execution of judgment or otherwise) and (c) to the fullest extent permitted by applicable legal requirements, any claim that (i) the suit, action or proceeding in such court is brought in an inconvenient forum, (ii) the venue of such suit, action or proceeding is improper or (iii) such action may not be enforced in or by such courts.  This Section 6 is not the exclusive remedy for any violation of this Agreement.

7.Severability.  If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated.  It is hereby stipulated and declared to be the intention of the Parties that the Parties would have executed the remaining terms, provisions, covenants and restrictions without including any of such which may be hereafter declared invalid, void or unenforceable.  In addition, the Parties agree to use their best efforts to agree upon and substitute a valid and enforceable term, provision, covenant or restriction for any of such that is held invalid, void or enforceable by a court of competent jurisdiction.

8.Governing Law.  This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Minnesota without reference to the conflict of laws principles thereof.  Notwithstanding any provision of the Member Control Agreement to the contrary, and except for actions brought under Section 6 of this Agreement, the Parties agree to resolve disputes arising out of or relating to this Agreement or the Viking Subscription Agreement pursuant to this Section 8.  If any dispute arises out of or relates to this Agreement or the Viking Subscription Agreement, the parties agree first to try in good faith to settle the dispute by mediation under the Commercial Mediation Rules of the American Arbitration Association, before resorting to arbitration. Thereafter, any remaining unresolved controversy or claim arising out of or relating to this Agreement or the Viking Subscription Agreement, or the performance or breach thereof, shall be settled by binding arbitration pursuant to the Commercial Arbitration Rules of the American Arbitration Association; PROVIDED, that this Section 8 shall not require use of the American Arbitration Association (only that such Rules as modified by this Section 8 shall be followed).  The arbitration shall be conducted in the State of Minnesota.  Any award rendered shall be final and conclusive upon the parties and a judgment thereon may be entered in any court having competent jurisdiction.  The cost and expense of the arbitrator and location costs shall be borne equally by the parties to the dispute. All other costs and expenses, including reasonable attorney’s fees and expert’s fees, of all parties incurred in any dispute which is determined and/or settled by arbitration pursuant to this Section 8 shall be borne by the party incurring such cost and expense.

9.Counterparts.  This Agreement may be executed in two or more counterparts, each of which shall be considered one and the same agreement and shall become effective when counterparts have been signed by each of the Parties and delivered to the other Parties (including by means of electronic delivery or facsimile).

10.Entire Agreement; Amendment and Waiver; Successors and Assigns; Third Party Beneficiaries.  This Agreement contains the entire understanding of the Parties hereto with respect to its subject matter.  There are no restrictions, agreements, promises, representations, warranties, covenants or undertakings between the Parties other than those expressly set forth

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herein.  No modifications of this Agreement can be made except in writing signed by an authorized representative of each the Company, GFE and Project Viking.  No failure on the part of any Party to exercise, and no delay in exercising, any right, power or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of such right, power or remedy by such Party preclude any other or further exercise thereof or the exercise of any other right, power or remedy.  All remedies hereunder are cumulative and are not exclusive of any other remedies provided by law.  The terms and conditions of this Agreement shall be binding upon, inure to the benefit of, and be enforceable by the Parties hereto and their respective successors, heirs, executors, legal representatives, and permitted assigns.  No Party shall assign this Agreement or any rights or obligations hereunder without, with respect to Project Viking or GFE, the prior written consent of the Company, and with respect to the Company, the prior written consent of Project Viking and GFE.  This Agreement is solely for the benefit of the Parties hereto and is not enforceable by any other persons.

IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the duly authorized signatories of the Parties as of the date hereof.

HERON LAKE BIOENERGY, LLC
By:	/s/ Robert Ferguson
Its:	CEO
Name:	Robert J. Ferguson
GRANITE FALLS ENERGY, LLC
By:	/s/ Paul Enstad
Its:	Chairman
Name:	Paul Enstad
PROJECT VIKING, L.L.C.
By:	/s/ Paul Enstad
Its:	President
Name:	Paul Enstad

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EX-99.O

EXHIBIT 99.O

MANAGEMENT SERVICES AGREEMENT

(INDEPENDENT CONTRACTOR AGREEMENT)

This MANAGEMENT SERVICES AGREEMENT (“Agreement”) is made and entered into to be effective as of the 31st day of July, 2013, by and between Granite Falls Energy, LLC, a Minnesota Limited Liability Company (“GFE”) and Heron Lake BioEnergy, LLC, a Minnesota Limited Liability Company (“Heron”) and is as follows:

RECITALS

1.WHEREAS, GFE currently owns and operates an ethanol facility; and Heron currently owns and operates an ethanol facility; and

2.WHEREAS, Heron desires to obtain management services; and

3.WHEREAS, each requires terms and conditions as necessary to protect each company’s confidential/proprietary/trade secret information; and such terms and conditions as will cause all management employees to respect the separate interests and objectives of each company; and

4.WHEREAS, the parties have had discussions regarding such management services, have reached agreement as to the same, and wish to put their understandings and agreements in writing.

NOW, THEREFORE, for good and valuable consideration, the parties agree as follows:

1.MANAGEMENT SERVICES.  GFE shall provide management services to Heron with respect to the following job descriptions and titles:

a.Positions Provided by GFE to Heron.  GFE shall provide to Heron the following management services, to-wit:

i.Chief Executive Officer (CEO);

ii.Chief Financial Officer (CFO); and

iii.Commodity Risk Manager.

b.Time Commitment.

i.Each person providing services shall devote such time as is reasonably necessary to perform the services for Heron.

ii.Each person shall use their best efforts when performing work for Heron.

iii.Approximate hours worked per week by each position shall be disclosed at semi-annual meetings and reported to Heron no less than semi-annually.

c.Reporting and Organization.  Each person filling one of the above described positions shall report as follows:

i.The CEO shall report directly to the Heron Board of Directors.

ii.The Heron Board of Directors reserves the right to require, from time to time, any of the above named persons to do such work or make such reports directly to or for the Heron Board.

iii.The CEO shall be solely responsible for hiring and firing of persons providing the management services as described herein.

iv.Nothing herein is intended to create an employment contract, or guaranty of employment, or a guaranty of employment for any length of time to any person.  Each person providing management services hereunder shall, at all times, remain the employee of GFE designated to provide services as stated herein.

2.TERM AND TERMINATION.  The initial term of this Agreement, subject to the remaining terms and conditions hereof, shall be for three years from the effective date as stated in the preamble hereof.  With respect to the term and termination hereof:

a.Evergreen.  At the expiration of the initial term, this Agreement shall continue from year to year under its then existing conditions unless and until a party hereto gives the other no less than ninety (90) days written notice of termination prior to expiration of the initial term or of the one year extension then in effect.

b.Termination for Cause.  Notwithstanding the foregoing, this Agreement may be terminated for cause, as follows:

i.If a party seeks to terminate this Agreement for cause, it shall deliver to the other party written notice of termination; which notice shall describe the basis for determining cause exists; and which notice shall provide 30 days notice and opportunity to cure.

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In the event that basis for determining cause has not been cured to the reasonable satisfaction of the party giving notice within 30 days, then the party may deliver notice that this Agreement has been terminated.

ii.Cause means:

A.A material breach of this Agreement.  Material breach shall be:  a failure of a party (to include failure of the person being provided by a party) to comply with applicable laws or regulations; a willful breach by a party (to include a person being provided by a party) of a term of this Agreement; or acts or conduct by a party (to include a person being provided by a party) which demonstrates intentional misconduct, reckless misconduct or grossly negligent misconduct.

B.A deadlock in the management of Heron.  Deadlock shall be the occurrence of disagreements between the Board of Heron which, in the opinion of the GFE Board, has impaired the ability of the management team to carry out the policies and/or procedures as directed by one or both Boards of Directors.

c.Return of Confidential Information.  Upon termination each party shall return to the other all of the other’s Confidential Information that may be in possession of the returning party.

d.Surviving Obligations.  Payment of any reimbursement obligations which have accrued and are unpaid as of the date of termination, together with the obligations of the parties as set forth at Sections 4 — 7 hereof, shall survive termination hereof.  In all other respects the obligations of the parties to each other shall cease upon termination hereof.

3.REIMBURSEMENT.  The parties intend and agree that compensation by Heron to GFE shall occur as follows:

a.Compensation.  GFE shall be responsible for and shall directly pay salary, wages, and/or benefits to the persons providing the management services hereunder.

b.Payment for Management Services.  Heron shall pay GFE Thirty-five Thousand and no/100 Dollars ($35,000.00) per month for the first year for the management services provided hereunder.  For years two and three, Heron shall pay GFE one-half (1/2) of the total salary, bonuses, and other +expenses and costs (including all benefits and tax contributions) incurred by GFE for the three management positions described at paragraph 1(a).

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Such will be paid on an estimated monthly basis with a “true up” occurring as soon as possible at the end of each fiscal year of GFE.

c.Reimbursement of Costs.  Any costs incurred in providing the management services, outside the scope of normal duties and activities, shall be reimbursed by Heron to GFE at reasonable and customary rates of reimbursement.  (Such to include, but not be limited to, mileage, hotel rooms, etc.)

d.Payment.  Payment by Heron to GFE for all amounts due GFE, shall occur on the 10th day of each month.  Payments for any partial month(s) of services shall be prorated.

4.SEPARATE RIGHTS AND RESPONSIBILITIES OF GFE AND HERON.  The parties agree that to the following reservation of their separate rights and statement of their separate responsibilities, to-wit:

a.Separate Authority.  Nothing herein shall be construed as a grant of authority by GFE as to Heron, or by Heron as to GFE, to make any management or other business decision for the other; or to exercise or seek to exercise a controlling influence over any management policies of the other.

b.Preserve Competition.  GFE and Heron acknowledge that they are competing business entities with different ownership.  The CEO and CFO shall be advised by GFE to observe all laws related to price and/or competition in carrying out this Agreement; and to implement such processes to ensure ongoing compliance with such laws by all employees providing management services hereunder.

c.Insurance.  During the term hereof each party shall maintain Workers’ Compensation Insurance at statutory limits; as well as comprehensive liability insurance for all injuries or property damage which may occur on account of services performed hereunder — with such insurance having mutually acceptable terms and limits; with each party being named as an additional insured of the other (except regarding the Worker’s Compensation policy whereby each party shall add the Alternate Employer endorsement to the respective Worker’s Compensation policy naming the other party as the Alternate Employer); with such policies having an endorsement of no cancellation without notice to both parties hereto; and said policies having a Waiver of Subrogation on all policies, including the property, where allowed by law.

5CONFIDENTIALITY AND COMPETITION COVENANTS.  With respect to confidentiality and competition covenants, the parties agree:

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a.Confidentiality.  With respect to confidentiality:

i.Each person providing management services hereunder shall protect from unauthorized disclosure — either to third parties (with respect to management services), or to GFE or Heron as the case may be (with respect to information that is beyond the scope of management service) — information which GFE and/or Heron consider non-public, confidential, or proprietary in nature.  Such non-public, confidential, and/or proprietary information (collectively “Confidential Information”) may include, without limitation, customer lists, contracts, planning and financial information, business plans and strategies, marketing plans, development plans, technical and business information, customer information, pricing information, sales information, any formulas/devices/methods/techniques, or other information which has independent economic value because of not being generally known, and which GFE or Heron, as the case may be, has protected through reasonable efforts regarding maintenance of secrecy.

ii.The parties agree that Confidential Information shall not include: information that, at the time of disclosure hereunder, is in the public domain; information that, after disclosure hereunder, enters the public domain other than by breach of this Agreement or the obligation of confidentiality stated herein; information that, prior to disclosure hereunder, was already in a party’s possession, either without limitation on disclosure to others or subsequently becoming free of such limitation; information obtained by either party from a third party having an independent right to disclose the information; information that is available through discovery by independent research without use of or access to the confidential information acquired from the other party; information disclosed upon the order of a court or other authorized governmental entity, or pursuant to other legal requirements — provided that prior to such disclosure, the disclosing party shall first timely inform the other party of such disclosure request so that the other party may seek a protective or equivalent order for non-disclosure — and provided that the disclosing party shall limit any such disclosure to the greatest extent permitted by law.

iii.The persons performing services pursuant to this Agreement shall sign Confidentiality Agreements binding each such person to the confidentiality obligations set forth above.

b.No Solicitation.  GFE hereby warrants to Heron and Heron hereby warrants to GFE that each shall not, directly or indirectly, either for itself

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or for any other person, firm or corporation solicit for employment, retain or employ any present employee of the other party, or request, induce or advise any employee to leave the employ of or cease affiliation with the other party.

c.The provisions as set forth in this Section 5 shall survive termination of this Agreement for a period of three (3) years.

6.INDEMNIFICATION.  From and after the date hereof, and except as otherwise provided for herein:

a.GFE Indemnification of Heron.  GFE shall indemnify, defend and hold harmless Heron against:  (i) all losses, claims, damages, costs, expenses, liabilities or judgments or amounts that are paid in settlement of or in connection with any claim, action, suit, proceeding or investigation to the extent the same is caused in whole or in part by GFE, (ii) or, on account of a breach of GFE’s obligations hereunder.

b.Heron Indemnification of GFE.  Heron shall indemnify, defend and hold harmless GFE against:  (i) all losses, claims, damages, costs, expenses, liabilities or judgments or amounts that are paid in settlement of or in connection with any claim, action, suit, proceeding or investigation to the extent the same is caused in whole or in part by Heron, (ii) or, on account of a breach of Heron’s obligations hereunder.

c.Limitations on Indemnification Obligation.  Neither Heron nor GFE shall be required to indemnify the other for any direct claim by the other that it has suffered consequential damages or lost profits; nor shall the requirement to indemnify extend to consequential damages or lost profits claimed by a third party and which — but for this Section 6(c) — would be included in the indemnification obligations listed at Sections 6(a) and 6(b) above.

d.Survival of Obligations.  The provisions of this Section 6 shall survive the termination of this Agreement.

7.DISPUTE RESOLUTION.  Any controversy, claim or dispute arising out of or relating to this Agreement or the breach hereof, including a dispute arising out of the negotiation, formation and execution of this Agreement, and the interpretation of this Agreement, shall be resolved as follows:

a.Meet and Confer.  The Dispute Resolution Team (“DRT”) of GFE shall meet and confer — in person — with the DRT of Heron to discuss the controversy, claim or dispute in an attempt to resolve differences and reach

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agreement.  Each party may elect to be represented by counsel or other professional advisors at such meeting.  The meeting shall occur as soon as reasonably possible, but no later than ten (10) days from a written notice by a party to the other the dispute, and the request for a meeting of the Boards.

b.Mediation.  If the controversy, claim or dispute is not resolved by a face-to-face meeting of the respective DRTs, then the DRTs shall meet with a neutral mediator in an attempt to reach a mediated settlement.  The mediator shall be jointly agreed to by the parties and if they cannot agree, the court for Lyon County, Minnesota, shall be petitioned and shall appoint the mediator.  Such mediation shall occur within twenty-one (21) business days of when the mediator is selected.

c.Arbitration.  If the controversy is not resolved by mediation, then the controversy shall be resolved by resort to binding arbitration conducted pursuant to Minnesota Statutes and subject to the following additional requirements:

i.Arbitration and proceeds related thereto shall be venued in Lyon County, Minnesota.  The District Court in and for Lyon County, Minnesota shall have jurisdiction to direct the arbitration process; and to preserve the status quo of the parties during the pondery of arbitration.

ii.The arbitration shall proceed as a private arbitration, without involvement of the American Arbitration Association, but otherwise pursuant to the then existing Rules of the American Arbitration Association applicable to commercial disputes.

iii.Each DRT shall pick an arbitrator and the two arbitrators shall pick a neutral third arbitrator.

iv.The arbitration shall occur within sixty (60) days of the appointment of the final arbitrator.

v.The determination of the arbitrators shall be final and binding and each party waives the right to appeal any such decision. Judgment upon the award rendered by the arbitrators may be entered in any court having jurisdiction thereof.  The arbitrators shall decide who shall pay the costs and expenses associated with arbitration.  Each party shall pay their own attorneys’ fees related to the arbitration.

d.Role of DRT.  The Dispute Resolution Team of each party shall consist of that party’s then existing Committee of Disinterested Persons together with that party’s Executive Committee.  Each party’s DRT shall represent it

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during the dispute resolution proceedings; and the DRT shall make recommendations for final decisions regarding dispute resolution to its Board.  The final decision on such recommendation shall, however, be reserved to and made by the respective Boards of the parties.

8.FORCE MAJEURE.  The performance of a party may be excused upon the occurrence of a Force Majeure event.  A Force Majeure event shall be fire, flood, storm, act of God, governmental action or intervention, or other circumstance which is beyond the reasonable control of the party claiming the event and which renders the performance of this Agreement by a party hereto impossible.  A party affected by a Force Majeure event shall not be relieved of performance unless such party has used reasonable efforts to remedy the conditions giving rise to such event; and unless and until such party has given written notice of the occurrence of such event.  Either party may terminate this Agreement upon not less than thirty (30) days prior written notice if the Force Majeure event has been continuously in existence for a period of ninety (90) days.

9.MISCELLANEOUS.

a.Independent Contractors.  At all times during this Agreement, GFE and its employees shall be deemed independent contractors.  Nothing herein shall be construed to create a partnership, joint venture, agency, or any other form of business relationship between GFE and Heron.  GFE and Heron acknowledge that their Agreement is strictly contractual in nature.

b.Further Assurance.  Each party agrees to execute and deliver all further instruments, legal opinions and documents, and take all further action not inconsistent with the provisions of this Agreement that may be reasonably necessary to complete performance of a party’s obligations hereunder and to effectuate the purposes and intent of this Agreement.

c.Notice.  Any and all notices provided for herein shall be given in writing by registered or certified mail, postage prepaid, which shall be addressed by either party and delivered to the other at its then existing registered office — with the initial address for notice being as follows:

i. If To GFE:	Granite Falls Energy, LLC Attn: Chairman of the Board of Directors
	Address:	15045 Hwy. 23 SE
		P. O. Box 216
		Granite Falls, MN 56241-0216
ii. If To Heron:
	Heron Lake BioEnergy, LLC

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Attn: Chairman of the Board of Directors
Address:	91246 390th Avenue
	Heron Lake, MN 56137

d.Binding Effect.  This Agreement shall be binding upon the successors, legal representatives and assigns of the parties hereto, all of whom, regardless of the number of intervening transfers, shall be bound in the same manner as the parties hereto.

e.No Assignment.  This Agreement shall not be assigned by either party except upon the written consent of the other party.  Nothing in this Agreement, express or implied, is intended to confer upon any other person any rights or remedies under or by reason of this Agreement.

f.Integration and Amendment.  This Agreement supersedes and takes precedence over any previous agreement entered into between the parties hereto, whether written or oral, regarding the matters covered herein.  This Agreement sets forth the entire understanding of the parties and may not be amended, altered or modified except by written agreement between the parties.

g.Severability.  Any term or provision of this Agreement which is invalid or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity or unenforceability without rendering invalid or unenforceable the remaining terms and provisions of this Agreement, or affecting the validity or unenforceability of any of the other terms of this Agreement in any other jurisdiction.  In the event a term or provision is invalid or unenforceable, a Court or Arbitrators (as the case may be) are granted the authority to construe, interpret, or modify this Agreement in a manner which is intended to remedy such invalidity or unenforceability while giving effect, to the greatest extent possible, to all remaining terms and provisions hereof.

h.No Waiver. Any waiver of any of terms and/or conditions of this Agreement by a party shall not be construed to be a general waiver of such terms and/or conditions; and no waiver shall be effective absent the written agreement of the parties.

i.Counter Parts.  This Agreement may be executed in one or more counterparts, all of which, taken together, shall be deemed one and the same Agreement.  Facsimile or electronic signatures shall be deemed original signatures for all purposes.

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j.Captions.  The captions herein are inserted for the convenience of reference onlyand shall be ignored in the construction or interpretation hereof.

k.Governing Law.  This Agreement shall be construed, interpreted and enforced in accordance with the laws of the State of Minnesota.

IN WITNESS WHEREOF, each party hereto has executed this Agreement effective as of the date first above written.

GRANITE FALLS ENERGY, LLC
By:	/s/ Paul Enstad
	Its:	Chairman
HERON LAKE BIOENERGY, LLC
By:	/s/ Robert Ferguson
	Its:		CEO

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