10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

Quarterly Report Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

For the Quarterly Period Ended September 30, 2011

Commission File Number 001-32924

GREEN PLAINS RENEWABLE ENERGY, INC.

(Exact name of registrant as specified in its charter)

Iowa	84-1652107
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

450 Regency Parkway, Suite 400,

Omaha, NE 68114

(Address of principal executive offices, including zip code)

(402) 884-8700

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

x  Yes    ¨  No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

x  Yes     ¨  No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	¨	Accelerated filer	x
Non-accelerated filer	¨	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

¨  Yes     x  No

The number of shares of common stock, par value $0.001 per share, outstanding as of October 31, 2011 was 32,904,882 shares.

TABLE OF CONTENTS

		Page
PART I – FINANCIAL INFORMATION
Item 1.	Financial Statements
	Consolidated Balance Sheets		2
	Consolidated Statements of Operations		3
	Consolidated Statements of Cash Flows		4
	Notes to Consolidated Financial Statements		6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		25
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		40
Item 4.	Controls and Procedures		42
PART II – OTHER INFORMATION
Item 1.	Legal Proceedings		43
Item 1A.	Risk Factors		43
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		44
Item 3.	Defaults Upon Senior Securities		44
Item 4.	(Removed and Reserved)		44
Item 5.	Other Information		44
Item 6.	Exhibits		45
Signatures			46

1

GREEN PLAINS RENEWABLE ENERGY, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in thousands, except share amounts)

	September 30,			December 31,
	2011			2010
	(unaudited)
ASSETS
Current assets
Cash and cash equivalents	$	117,928		$	233,205
Restricted cash		36,507			27,783
Accounts receivable, net of allowances of $243 and $121, respectively		121,108			89,170
Inventories		182,668			184,888
Prepaid expenses and other		11,393			7,222
Deferred income taxes		20,643			8,463
Deposits		9,982			11,091
Derivative financial instruments		56,642			44,864
Total current assets		556,871			606,686
Property and equipment, net of accumulated depreciation of $112,955 and $76,063, respectively		783,639			747,421
Investment in unconsolidated subsidiaries		3,661			2,768
Goodwill		40,877			23,125
Other assets		16,763			17,779
Total assets	$	1,401,811		$	1,397,779
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	138,961		$	151,112
Accrued and other liabilities		34,433			27,742
Unearned revenue		10,274			22,581
Short-term notes payable and other borrowings		93,394			89,183
Current maturities of long-term debt		74,993			51,885
Total current liabilities		352,055			342,503
Long-term debt		509,806			527,900
Deferred income taxes		47,726			25,079
Other liabilities		4,887			4,655
Total liabilities		914,474			900,137
Stockholders’ equity
Common stock, $0.001 par value; 75,000,000 and 50,000,000 shares authorized; 36,414,508 and 35,793,501 shares issued, and 32.914,508 and 35,793,501 shares outstanding, respectively		36			36
Additional paid-in capital		439,708			431,289
Retained earnings		82,495			57,343
Accumulated other comprehensive loss		(6,951	)		(420	)
Treasury stock, 3,500,000 and 0 shares, respectively		(28,201	)		—
Total Green Plains stockholders’ equity		487,087			488,248
Noncontrolling interests		250			9,394
Total stockholders’ equity		487,337			497,642
Total liabilities and stockholders’ equity	$	1,401,811		$	1,397,779

See accompanying notes to the consolidated financial statements.

2

GREEN PLAINS RENEWABLE ENERGY, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited and in thousands, except per share amounts)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2011			2010			2011			2010
Revenues	$	957,018		$	496,149		$	2,630,921		$	1,376,499
Cost of goods sold		909,725			464,191			2,510,742			1,275,590
Gross profit		47,293			31,958			120,179			100,909
Selling, general and administrative expenses		18,248			15,016			53,350			41,580
Operating income		29,045			16,942			66,829			59,329
Other income (expense)
Interest income		59			97			222			223
Interest expense		(9,440	)		(6,544	)		(27,438	)		(17,452	)
Other, net		(284	)		2			(470	)		(321	)
Total other expense		(9,665	)		(6,445	)		(27,686	)		(17,550	)
Income before income taxes		19,380			10,497			39,143			41,779
Income tax expense		6,979			3,082			14,191			9,989
Net income		12,401			7,415			24,952			31,790
Net (income) loss attributable to noncontrolling interests		28			(49	)		200			(163	)
Net income attributable to Green Plains	$	12,429		$	7,366		$	25,152		$	31,627
Earnings per share:
Income attributable to Green Plains stockholders - basic	$	0.35		$	0.23		$	0.70		$	1.06
Income attributable to Green Plains stockholders - diluted	$	0.32		$	0.23		$	0.66		$	1.05
Weighted average shares outstanding:
Basic		35,624			31,369			36,075			29,769
Diluted		42,151			31,584			42,611			30,080

See accompanying notes to the consolidated financial statements.

3

GREEN PLAINS RENEWABLE ENERGY, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited and in thousands)

	Nine Months Ended September 30,
	2011			2010
Cash flows from operating activities:
Net income	$	24,952		$	31,790
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		36,848			26,383
Amortization of debt issuance costs		1,703			983
Loss on sale or property and equipment		106			—
Deferred income taxes		10,467			9,959
Stock-based compensation expense		2,743			2,300
Undistributed equity in loss of affiliates		470			321
Allowance for doubtful accounts		122			5
Changes in operating assets and liabilities before effects of business combinations:
Accounts receivable		(31,949	)		(16,566	)
Inventories		7,210			(38,649	)
Deposits		1,109			5,796
Derivative financial instruments		(16,543	)		(27,723	)
Prepaid expenses and other assets		(3,433	)		2,699
Accounts payable and accrued liabilities		(5,994	)		22,736
Unearned revenues		(12,307	)		1,806
Other		444			(1,237	)
Net cash provided by operating activities		15,948			20,603
Cash flows from investing activities:
Purchases of property and equipment		(35,526	)		(11,862	)
Investment in unconsolidated subsidiaries		(1,363	)		(333	)
Acquisition of businesses, net of cash acquired		(8,115	)		(22,388	)
Other		239			—
Net cash used by investing activities		(44,765	)		(34,583	)
Cash flows from financing activities:
Proceeds from the issuance of long-term debt		110,088			39,622
Payments of principal on long-term debt		(160,732	)		(61,714	)
Proceeds from short-term borrowings		2,640,404			1,401,152
Payments on short-term borrowings		(2,648,963	)		(1,369,298	)
Proceeds from issuance of common stock		—			79,732
Payments for repurchase of common stock		(14,201	)		—
Acquisition of noncontrolling interest in Blendstar		(3,125	)		—
Change in restricted cash		(8,724	)		740
Payments of loan fees		(1,702	)		(847	)
Other		495			—
Net cash provided by (used in) financing activities		(86,460	)		89,387
Net change in cash and cash equivalents		(115,277	)		75,407
Cash and cash equivalents, beginning of period		233,205			89,779
Cash and cash equivalents, end of period	$	117,928		$	165,186

Continued on the following page

4

GREEN PLAINS RENEWABLE ENERGY, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited and in thousands)

	Nine Months Ended September 30,
	2011			2010
Supplemental disclosures of cash flow:
Cash paid for income taxes	$	955		$	69
Cash paid for interest	$	26,078		$	19,629
Supplemental noncash investing and financing activities:
Assets acquired in acquisitions and mergers	$	62,686		$	28,213
Less: liabilities assumed		(54,571	)		(5,825	)
Net assets acquired	$	8,115		$	22,388
Short-term note payable issued to acquire treasury stock	$	14,000		$	—

See accompanying notes to the consolidated financial statements.

5

GREEN PLAINS RENEWABLE ENERGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

1. BASIS OF PRESENTATION, DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

References to the Company

References to “we,” “us,” “our,” “Green Plains” or the “Company” in the consolidated financial statements and in these notes to the consolidated financial statements refer to Green Plains Renewable Energy, Inc., an Iowa corporation, and its subsidiaries.

Consolidated Financial Statements

The consolidated financial statements include the accounts of the Company, its wholly-owned subsidiaries and entities which it controls. Intercompany balances and transactions are eliminated on a consolidated basis for reporting purposes. Unconsolidated entities are included in the financial statements on an equity basis. Results for the interim periods presented are not necessarily indicative of results to be expected for the entire year.

The accompanying unaudited consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles, or GAAP, for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. The financial statements should be read in conjunction with the Company’s annual report filed on Form 10-K for the year ended December 31, 2010, as amended.

The unaudited financial information reflects all adjustments which are, in the opinion of management, necessary for a fair presentation of the results of operations, financial position and cash flows for the periods presented. The adjustments are of a normal recurring nature, except as otherwise noted.

Use of Estimates in the Preparation of Consolidated Financial Statements

The preparation of consolidated financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Reclassifications

Certain amounts previously reported within the consolidated financial statements have been reclassified to conform to the current year presentation. The Company previously reported margin deposits required for exchange-traded activity as deposits in the consolidated balance sheet. The liabilities associated with this exchange-traded activity were previously reported as a derivative financial instrument liability. Since this activity has a right of offset, the Company reclassified cash deposits of approximately $43.4 million at December 31, 2010, and derivative liabilities of approximately $32.1 million at December 31, 2010, to derivative financial instruments in current assets.

Description of Business

Green Plains is North America’s fourth largest ethanol producer. The Company markets and distributes approximately one billion gallons of ethanol on an annual basis, including 740 million gallons per year, or mmgy, of expected production from its nine ethanol plants. The Company also markets corn oil and distillers grains produced at its ethanol plants. Additionally, the Company owns and operates grain handling and storage assets and provides complementary agronomy services to local grain producers through its agribusiness segment. The Company owns and operates nine blending and terminaling facilities with approximately 495 mmgy of total throughput capacity. The Company is a partner in a joint venture that was formed to commercialize advanced photo-bioreactor technologies for the growing and harvesting of algal biomass.

6

Revenue Recognition

The Company recognizes revenue when all of the following criteria are satisfied: persuasive evidence of an arrangement exists; risk of loss and title transfer to the customer; the price is fixed and determinable; and collectability is reasonably assured.

For sales of ethanol, distillers grains and corn oil, revenue is recognized when title to the product and risk of loss transfer to an external customer. Revenues related to the Company’s marketing operations for third parties are recorded on a gross basis in the consolidated financial statements, as the Company takes title to the product and assumes risk of loss. Unearned revenue is reflected on the consolidated balance sheet for goods in transit for which the Company has received payment and title has not been transferred to the customer. Revenues from the Company’s ethanol transload and splash blending services are recognized as these services are rendered.

The Company routinely enters into fixed-price, physical-delivery ethanol sales agreements. In certain instances, the Company expects that the agreements will be settled in cash rather than by product delivery. These transactions are reported net as a component of revenues. Revenues also include related realized gains and losses on derivative financial instruments, ineffectiveness on cash flow hedges, and reclassifications of realized gains and losses on effective cash flow hedges from accumulated other comprehensive income (loss).

Sales of agricultural commodities, fertilizers and other similar products are recognized when title to the product and risk of loss transfer to the customer, which is dependent on the agreed upon sales terms with the customer. These sales terms provide for passage of title either at the time shipment is made or at the time the commodity has been delivered to its destination and final weights, grades and settlement prices have been agreed upon with the customer. Shipping and handling costs are presented gross in the statements of operations with amounts billed included in revenues and also as a component of cost of goods sold. Revenues from grain storage are recognized as services are rendered. Revenues related to grain merchandising are presented gross.

Cost of Goods Sold

Cost of goods sold includes costs for direct labor, materials and certain plant overhead costs. Direct labor includes all compensation and related benefits of non-management personnel involved in the operation of the Company’s ethanol plants. Grain purchasing and receiving costs, other than labor costs for grain buyers and scale operators, are also included in cost of goods sold. Direct materials consist of the costs of corn feedstock, denaturant and process chemicals. Corn feedstock costs include unrealized gains and losses on related derivative financial instruments not designated as cash flow hedges, inbound freight charges, inspection costs and internal transfer costs. Corn feedstock costs also include related realized gains and losses on derivative financial instruments, ineffectiveness on cash flow hedges, and reclassifications of realized gains and losses on effective cash flow hedges from accumulated other comprehensive income (loss). Plant overhead costs primarily consist of plant utilities, plant depreciation and outbound freight charges. Shipping costs incurred directly by the Company, including railcar lease costs, are also reflected in cost of goods sold.

The Company uses exchange-traded futures and options contracts to minimize the effects of changes in the prices of agricultural commodities on the agribusiness segment’s grain inventories and forward purchase and sales contracts. Exchange-traded futures and options contracts are valued at quoted market prices. Commodity inventories, forward purchase contracts and forward sale contracts in the agribusiness segment are valued at market prices, where available, or other market quotes adjusted for differences, primarily transportation, between the exchange-traded market and the local markets on which the terms of the contracts are based. Changes in the market value of grain inventories, forward purchase and sale contracts, and exchange-traded futures and options contracts in the agribusiness segment, are recognized in earnings as a component of cost of goods sold. These contracts are predominantly settled in cash. The Company is exposed to loss in the event of non-performance by the counter-party to forward purchase and forward sales contracts.

Derivative Financial Instruments

To minimize the risk and the effects of the volatility of commodity price changes primarily related to corn, natural gas and ethanol, the Company uses various derivative financial instruments, including exchange-traded futures, and exchange-traded and over-the-counter options contracts. The Company monitors and manages this exposure as part of its overall risk management policy. As such, the Company seeks to reduce the potentially adverse effects that the volatility of these markets may have on its operating results. The Company may take hedging positions in these commodities as one way to mitigate risk. While the Company attempts to link its hedging activities to purchase and sales activities, there are situations where these hedging activities can themselves result in losses.

7

By using derivatives to hedge exposures to changes in commodity prices, the Company has exposures on these derivatives to credit and market risk. The Company is exposed to credit risk that the counterparty might fail to fulfill its performance obligations under the terms of the derivative contract. The Company minimizes its credit risk by entering into transactions with high quality counterparties, limiting the amount of financial exposure it has with each counterparty and monitoring the financial condition of its counterparties. Market risk is the risk that the value of the financial instrument might be adversely affected by a change in commodity prices or interest rates. The Company manages market risk by incorporating monitoring parameters within its risk management strategy that limit the types of derivative instruments and derivative strategies the Company uses, and the degree of market risk that may be undertaken by the use of derivative instruments.

The Company evaluates its contracts that involve physical delivery to determine whether they may be deemed “normal purchases or normal sales” that are expected to be used or sold over a reasonable period in the normal course of business. Any contracts that do not meet the normal purchase or normal sales criteria are recorded at fair value with the change in fair value recorded in operating income unless the contracts qualify for, and the Company elects, hedge accounting treatment.

Certain qualifying derivatives within the ethanol production segment are designed as cash flow hedges. Prior to entering into cash flow hedges the Company evaluates the derivative instrument to ascertain its effectiveness. For cash flow hedges, any ineffectiveness is recognized in current period results, while other unrealized gains and losses are reflected in accumulated other comprehensive income/loss until gains and losses from the underlying hedged transaction are realized. In the event that it becomes probable that a forecasted transaction will not occur, the Company would discontinue cash flow hedge treatment, which would affect earnings. These derivative financial instruments are recognized in other current assets or liabilities at fair value.

Recent Accounting Pronouncements

Effective January 1, 2011, the Company adopted the second phase of the amended guidance in Accounting Standards Codification (ASC) Topic 820, Fair Value Measurements and Disclosures, which requires the Company to disclose information in the reconciliation of recurring Level 3 measurements regarding purchases, sales, issuances and settlements on a gross basis, with a separate reconciliation for assets and liabilities. The Company did not experience an impact from the additional disclosure requirements.

Effective January 1, 2012, the Company will be required to adopt the third phase of amended guidance in ASC Topic 820, Fair Value Measurements and Disclosures. The purpose of the amendment is to achieve common fair value measurement and disclosure requirements by improving comparability of fair value measurements presented and disclosed in financial statements prepared in accordance with GAAP and those prepared in conformity with International Financial Reporting Standards, or IFRS. The amended guidance clarifies the application of existing fair value measurement requirements and requires additional disclosure for Level 3 measurements regarding the sensitivity of fair value to changes in unobservable inputs and any interrelationships between those inputs. The Company currently would not be impacted by the additional disclosure requirements as the Company does not have any recurring Level 3 measurements.

Effective January 1, 2012, the Company will be required to adopt the amended guidance in ASC Topic 220, Comprehensive Income. This accounting standards update, which helps to facilitate the convergence of GAAP and IFRS, is aimed at increasing the prominence of other comprehensive income in the financial statements by eliminating the option to present other comprehensive income in the statement of stockholders’ equity, and rather requiring that net income and other comprehensive income be presented in either a single continuous statement or in two separate but consecutive statements. The Company has determined that the changes to the accounting standards will affect the presentation of consolidated financial information but will not have a material effect on the Company’s financial position or results of operations.

Amended guidance in ASC Topic 350, Intangibles – Goodwill and Other is effective for the Company beginning January 1, 2012, although early adoption is permitted. The amended guidance permits an entity to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test. The more-likely-than-not threshold is defined as having a likelihood of more than 50 percent. The Company has determined that the changes to the accounting standards will not impact its disclosure or reporting requirements.

8

2. ACQUISITIONS

Acquisition of Global Ethanol, LLC

In October 2010, the Company acquired Global Ethanol, LLC, or Global, which owned two operating ethanol plants with an expected combined annual production capacity of approximately 160 million gallons. The Company valued the transaction at approximately $174.2 million, including approximately $147.6 million for the ethanol production facilities and the balance in working capital. The value of the transaction includes the assumption of outstanding debt, which totaled approximately $97.7 million at that time. Upon closing, Global was renamed Green Plains Holdings II LLC, or Holdings II. At closing of the transaction, all outstanding units of Global were exchanged for aggregate consideration consisting of 4,386,027 shares of restricted Company common stock valued at $53.9 million, warrants to purchase 700,000 shares of restricted Company common stock, valued at $3.1 million and $19.5 million in cash. The warrants, recorded as a component of additional paid-in capital, are not transferable, except in certain limited circumstances, and are exercisable for a period of three years from the closing date at a price of $14.00. In conjunction with the transaction, Holdings II entered into an amendment to its existing credit agreement and the Company contributed $10.0 million of cash equity to Holdings II, $6.0 million of which was utilized to reduce outstanding debt. The operating results of Holdings II have been included in the Company’s consolidated financial statements since October 22, 2010.

Amounts of identifiable assets acquired and liabilities assumed (in thousands)
Inventory	$	12,749
Other current assets		15,005
Property and equipment, net		133,970
Current liabilities		(11,143	)
Other, net		(110	)
Total identifiable net assets		150,471
Goodwill		23,734
Purchase price	$	174,205

During the second quarter of 2011, the purchase price allocation for the acquisition was finalized. The revisions to the allocation resulted in a reduction of net property and equipment and an increase in goodwill of $15.2 million. Depreciation expense for the three months ended June 30, 2011 has been reduced by approximately $462 thousand for the cumulative effect of previously-recorded depreciation expense based on the preliminary purchase price allocation relating to the period from date of acquisition through March 31, 2011. The effect of prospectively recognizing the finalized purchase price allocation in the consolidated financial statements is not material to the current or any prior periods. Goodwill related to the acquisition is tax deductible and results largely from economies of scale expected to be realized in the Company’s operations.

Acquisition of Otter Tail

In March 2011, the Company acquired an ethanol plant with an expected annual production capacity of 60 mmgy and certain other assets near Fergus Falls, Minnesota from Otter Tail Ag Enterprises, LLC, or Otter Tail, for $59.7 million. Consideration included $19.2 million of indebtedness to MMCDC New Markets Fund II, LLC, valued at $18.8 million, and $35.0 million in financing from a group of nine lenders, led by AgStar Financial Services, with the remaining $5.9 million paid in cash. The operating results of Otter Tail have been included in the Company’s consolidated financial statements since March 24, 2011.

9

Amounts of identifiable assets acquired and liabilities assumed (in thousands)
Inventory	$	4,986
Other current assets		738
Property and equipment, net		51,925
Current liabilities		(409	)
Other		(138	)
Total identifiable net assets		57,102
Goodwill		2,600
Purchase price	$	59,702

During the third quarter of 2011, the purchase price allocation, including the values of net property and equipment, current liabilities, goodwill and assumed long-term debt, for the acquisition were finalized. There were not any significant changes made to the preliminary purchase price allocation. Goodwill related to the acquisition is tax deductible and results largely from economies of scale expected to be realized in the Company’s operations.

Consolidated pro forma revenue and operating income, had the acquisitions of the Global and Otter Tail ethanol plants occurred on January 1, 2010, would have been $2.7 billion and $67.0 million, respectively, for the nine months ended September 30, 2011; $1.0 billion and $29.0 million, respectively, for the three months ended September 30, 2011; $1.7 billion and $80.8 million, respectively, for the nine months ended September 30, 2010; and $0.6 billion and $23.1 million, respectively, for the three months ended September 30, 2010. This unaudited information is based on historical results of operations and is not necessarily indicative of the results that would have been achieved had the acquisitions occurred on such date.

Acquisition of Remaining Interest in Blendstar

In January 2009, the Company acquired a 51% ownership interest in Blendstar, LLC, which operates nine blending and terminaling facilities with approximately 495 mmgy of total throughput capacity in seven states in the south central U.S. On July 19, 2011, the Company acquired the remaining 49% of Blendstar from the noncontrolling holders. Blendstar’s operations are included in the marketing and distribution segment.

3. FAIR VALUE DISCLOSURES

The following methods, assumptions and valuation techniques were used in estimating the fair value of the Company’s financial instruments:

Level 1 – unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. Level 1 unrealized gains and losses on commodity derivatives relate to exchange-traded open trade equity and option values in the Company’s brokerage accounts.

Level 2 – directly or indirectly observable inputs such as quoted prices for similar assets or liabilities in active markets other than quoted prices included within Level 1; quoted prices for identical or similar assets in markets that are not active; and other inputs that are observable or can be substantially corroborated by observable market data by correlation or other means. Grain inventories held for sale in the agribusiness segment are valued at nearby futures values, plus or minus nearby basis levels.

Level 3 – unobservable inputs that are supported by little or no market activity and that are a significant component of the fair value of the assets or liabilities. The Company currently does not have any recurring Level 3 financial instruments.

There have been no changes in valuation techniques and inputs used in measuring fair value. On September 30, 2011, exchange-traded futures for corn were classified as a Level 2 measurement to reflect the price limit set by the exchange for that day.

10

The following tables set forth the Company’s assets and liabilities by level that were accounted for the periods indicated (in thousands):

	Fair Value Measurements at September 30, 2011
	Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Reclassification for Balance Sheet
	(Level 1)		(Level 2)		Presentation			Total
Assets
Cash and cash equivalents	$	117,928	$	—	$	—		$	117,928
Restricted cash		38,707		—		—			38,707
Margin deposits		34,044		—		—			34,044
Inventories carried at market		—		47,553		—			47,553
Unrealized gains on derivatives		44,518		19,123		(41,043	)		22,598
Total assets measured at fair value	$	235,197	$	66,676	$	(41,043	)	$	260,830
Liabilities
Unrealized losses on derivatives	$	885	$	53,691	$	(41,043	)	$	13,533
Inventory financing arrangements	$	—		8,805		—			8,805
Total liabilities measured at fair value	$	885	$	62,496	$	(41,043	)	$	22,338

	Fair Value Measurements at December 31, 2010
	Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Reclassification for Balance Sheet
	(Level 1)		(Level 2)		Presentation			Total
Assets
Cash and cash equivalents	$	233,205	$	—	$	—		$	233,205
Restricted cash		32,183		—		—			32,183
Margin deposits		43,394		—		—			43,394
Inventories carried at market		—		96,916		—			96,916
Unrealized gains on derivatives		3,303		30,663		(32,087	)		1,879
Total assets measured at fair value	$	312,085	$	127,579	$	(32,087	)	$	407,577
Liabilities
Unrealized losses on derivatives	$	32,317	$	2,569	$	(32,087	)	$	2,799
Total liabilities measured at fair value	$	32,317	$	2,569	$	(32,087	)	$	2,799

The Company believes the fair value of its debt approximates book value, which was $678.2 million and $669.0 million at September 30, 2011 and December 31, 2010, respectively. The Company also believes the fair value of its accounts receivable and accounts payable approximate book value, which were $121.1 million and $139.0 million, respectively, at September 30, 2011 and $89.2 million and $151.1 million, respectively, at December 31, 2010.

Although the Company currently does not have any recurring Level 3 financial measurements, the fair values of the tangible assets and goodwill acquired in the Global and Otter Tail acquisitions represent Level 3 measurements and were derived using a combination of the income approach, the market approach and the cost approach as considered appropriate for the specific assets being valued.

11

4. SEGMENT INFORMATION

Company management reviews financial and operating performance in the following four separate operating segments: (1) production of ethanol and distillers grains, collectively referred to as ethanol production, (2) corn oil production, (3) grain warehousing and marketing, as well as sales and related services of agronomy and petroleum products, collectively referred to as agribusiness, and (4) marketing and distribution of Company-produced and third-party ethanol, distillers grains and corn oil, collectively referred to as marketing and distribution. Selling, general and administrative expenses, primarily consisting of compensation of corporate employees, professional fees and overhead costs not directly related to a specific operating segment, are reflected in the table below as corporate activities.

In the second quarter of 2011, the Company redefined its operating segments to include corn oil production as a reportable segment. Corn oil production, which the Company initiated in October 2010, was previously reported as a component of the marketing and distribution segment. The Company added the corn oil production segment to reflect the manner in which the Company’s executive management currently manages, allocates resources, and measures performance of its businesses. Prior period segment results have been reclassified to reflect this change.

During the normal course of business, the Company enters into transactions between segments. Examples of these intersegment transactions include, but are not limited to, the ethanol production segment selling ethanol to the marketing and distribution segment, the corn oil production segment selling corn oil to the marketing and distribution segment and the agribusiness segment selling grain to the ethanol production segment. These intersegment activities are recorded by each segment at prices approximating market and treated as if they are third-party transactions. Consequently, these transactions impact segment performance. However, revenues and corresponding costs are eliminated in consolidation and do not impact the Company’s consolidated results.

The following are certain financial data for the Company’s operating segments for the periods indicated (in thousands):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2011			2010			2011			2010
Revenues:
Ethanol production
Revenue from external customers	$	35,077		$	11,168		$	97,377		$	43,298
Intersegment revenue		551,987			239,253			1,501,031			698,040
Total segment revenue		587,064			250,421			1,598,408			741,338
Corn oil production
Revenue from external customers		393			—			1,464			—
Intersegment revenue		15,115			—			28,886			—
Total segment revenue		15,508			—			30,350			—
Agribusiness
Revenue from external customers		95,065			65,309			233,959			128,610
Intersegment revenue		48,863			33,039			149,676			75,062
Total segment revenue		143,928			98,348			383,635			203,672
Marketing and distribution
Revenue from external customers		826,483			419,672			2,298,121			1,204,591
Intersegment revenue		98			99			375			227
Total segment revenue		826,581			419,771			2,298,496			1,204,818
Revenue including intersegment activity		1,573,081			768,540			4,310,889			2,149,828
Intersegment eliminations		(616,063	)		(272,391	)		(1,679,968	)		(773,329	)
Revenue as reported	$	957,018		$	496,149		$	2,630,921		$	1,376,499

12

		0,00,000			0,00,000			0,00,000			0,00,000
	Three Months Ended September 30,						Nine Months Ended September 30,
	2011			2010			2011			2010
Gross profit:
Ethanol production	$	24,846		$	19,856		$	63,880		$	70,372
Corn oil production		9,642			—			18,098			—
Agribusiness		8,223			5,998			20,425			14,916
Marketing and distribution		5,069			6,227			17,332			15,646
Intersegment eliminations		(487	)		(123	)		444			(25	)
	$	47,293		$	31,958		$	120,179		$	100,909
Operating income:
Ethanol production	$	20,941		$	17,215		$	52,184		$	62,480
Corn oil production		9,632			—			18,040			—
Agribusiness		2,151			421			3,934			1,313
Marketing and distribution		1,923			3,271			7,078			7,056
Intersegment eliminations		(481	)		(123	)		474			(26	)
Corporate activities		(5,121	)		(3,842	)		(14,881	)		(11,494	)
	$	29,045		$	16,942		$	66,829		$	59,329

The following table sets forth revenues by product line for the periods indicated (in thousands):

		0,00,000		0,00,000		0,00,000		0,00,000
	Three Months Ended September 30,				Nine Months Ended September 30,
	2011		2010		2011		2010
Revenues
Ethanol	$	732,061	$	389,660	$	2,050,683	$	1,123,971
Corn oil		15,508		—		30,350		—
Distillers grains		109,168		39,434		302,393		115,535
Grain		84,416		57,559		189,403		93,086
Agronomy products		9,027		6,669		40,174		31,834
Other		6,838		2,827		17,918		12,073
Total revenues	$	957,018	$	496,149	$	2,630,921	$	1,376,499

The following are total assets for our operating segments for the periods indicated (in thousands):

	September 30, 2011			December 31, 2010
Total assets:
Ethanol production	$	900,661		$	850,049
Corn oil production		23,721			7,204
Agribusiness		165,716			239,595
Marketing and distribution		223,277			169,148
Corporate assets		111,537			142,666
Intersegement eliminations		(23,101	)		(10,883	)
	$	1,401,811		$	1,397,779

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5. INVENTORIES

Inventories are carried at the lower of cost or market, except grain held for sale, which is valued at market value. The components of inventories are as follows (in thousands):

	September 30,		December 31,
	2011		2010
Finished goods	$	59,704	$	38,231
Grain held for sale		47,553		96,916
Raw materials		35,112		23,306
Petroleum & agronomy items held for sale		17,960		9,011
Work-in-process		13,180		9,408
Supplies and parts		9,159		8,016
	$	182,668	$	184,888

6. GOODWILL

Changes in the carrying amount of goodwill attributable to each business segment during the nine-month period ended September 30, 2011were as follows (in thousands):

	Ethanol Production		Marketing and Distribution		Total
Balance, December 31, 2010	$	12,527	$	10,598	$	23,125
Adjustment to Global purchase price allocation		15,152		—		15,152
Acquisition of Otter Tail		2,600		—		2,600
Balance, September 30, 2011	$	30,279	$	10,598	$	40,877

7. DERIVATIVE FINANCIAL INSTRUMENTS

At September 30, 2011, the Company’s consolidated balance sheet reflects unrealized losses, net of tax, of $7.0 million in accumulated other comprehensive loss. The Company expects all of the deferred losses at September 30, 2011 will be reclassified into income over the next 12 months as a result of hedged transactions that are forecasted to occur. The amount ultimately realized in income, however, will differ as commodity prices change.

Fair Values of Derivative Instruments

The following table provides information about the fair values of our derivative financial instruments and the line items in the consolidated balance sheets in which the fair values are reflected.

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	Asset Derivatives						Liability Derivatives
Derivative Instruments	Fair Value at						Fair Value at
Consolidated Balance Sheet Location	September  30, 2011			December  31, 2010			September  30, 2011		December  31, 2010
Derivative financial instruments (1)	$	22,598	(2)	$	1,470	(3)	$	—	$	—
Financing costs and other		—			409			—		—
Accrued and other liabilities		—			—			13,157		2,570
Other liabilities		—			—			376		229
Total	$	22,598		$	1,879		$	13,533	$	2,799

(1) Derivative financial instruments per the balance sheet include margin deposits of $34.0 million and $43.4 million at September 30, 2011 and December 31, 2010, respectively.

(2) Balance at September 30, 2011, includes $15.4 million of net unrealized losses on derivative financial instruments designated as cash flow hedging instruments.

(3) Balance at December 31, 2010, includes $477 thousand of net unrealized gains on derivative financial instruments designated as cash flow hedging instruments.

Refer to Note 3—Fair Value Disclosures, which also contains fair value information related to derivative financial instruments.

Effect of Derivative Instruments on Consolidated Statements of Operations and Consolidated Statements of Stockholders’ Equity and Comprehensive Income

The following tables provide information about the gain or loss recognized in income and other comprehensive income on our derivative financial instruments and the line items in the financial statements in which such gains and losses are reflected.

Gains (Losses) on Derivative Instruments Not Designated in a Hedging Relationship	Three Months Ended September 30,						Nine Months Ended September 30,
Consolidated Statements of Operations Location	2011			2010			2011			2010
Revenue	$	1,535		$	(114	)	$	617		$	375
Cost of goods sold		(9,718	)		(13,817	)		(29,831	)		(4,161	)
Net decrease recognized in earnings	$	(8,183	)	$	(13,931	)	$	(29,214	)	$	(3,786	)
Locations of Gain (Loss) Due to Ineffectiveness of Cash Flow Hedges	Three Months Ended September 30,						Nine Months Ended September 30,
Consolidated Statements of Operations Location	2011			2010			2011			2010
Revenue		340		$	(35	)	$	320		$	(35	)
Cost of goods sold		(576	)		114			(1,231	)		123
Net decrease recognized in earnings	$	(236	)	$	79		$	(911	)	$	88
Location of Gains (Losses) Reclassified from Accumulated Other Comprehensive Income (Loss) into Net Income	Three Months Ended September 30,						Nine Months Ended September 30,
Consolidated Statements of Operations Location	2011			2010			2011			2010
Revenue		(9,608	)	$	(377	)		(31,097	)		(377	)
Cost of goods sold		(5,342	)		(39	)		8,649			(39	)
Net increase (decrease) recognized in earnings		(14,950	)	$	(416	)		(22,448	)		(416	)

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Effective Portion of Cash Flow Hedges Recognized in Other Comprehensive Income (Loss)	Three Months Ended September 30,					Nine Months Ended September 30,
	2011			2010		2011			2010
Commodity Contracts	$	(16,806	)	$	107	$	(33,031	)	$	284

There were no gains or losses due to the discontinuance of cash flow hedge treatment during the nine months ended September 30, 2011.

The table below summarizes the volumes of open commodity derivative positions as of September 30, 2011 (in thousands):

	September 30, 2011
Derivative Instruments	Exchange Traded			Non-Exchange Traded
	Net Long & (Short) (1)			Long (2)		(Short) (2)			Unit of Measure	Commodity
Futures		(16,498	)						Bushels	Corn, Soybeans and Wheat
Futures		42,715	(3)						Bushels	Corn
Futures		(22,050	)						Gallons	Ethanol
Futures		(143,304	)(3)						Gallons	Ethanol
Options		691							Bushels	Corn
Options		(2,796	)						Gallons	Ethanol
Options		448							mmBTU	Natural Gas
Options		(840	)(4)						Pounds	Soybean Oil
Forwards					21,753		(8,174	)	Bushels	Corn, Soybeans and Wheat
Forwards					11,768		(93,827	)	Gallons	Ethanol
Forwards					40		(118	)	Tons	Distillers Grains

(1) Exchange traded futures and options are presented on a net long and (short) position basis.

Options are presented on a delta-adjusted basis.

(2) Non-exchange traded forwards are presented on a gross long and (short) position basis.

(3) Futures used for cash flow hedges.

(4) Soybean oil options are used to hedge corn oil.

Energy trading contracts that do not involve physical delivery are presented net in revenues on the consolidated statements of operations. Revenues and cost of goods sold under such contracts are summarized in the table below for the periods indicated (in thousands).

	Three Months Ended September 30,				Nine Months Ended September 30,
	2011		2010		2011		2010
Revenue	$	83,909	$	8,792	$	107,721	$	22,912
Cost of goods sold	$	82,703	$	9,095	$	105,502	$	22,817

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8. DEBT

The principal balances of the components of debt are as follows (in thousands):

	September 30,			December 31,
	2011			2010
Green Plains Bluffton:
$70.0 million term loan	$	49,768		$	56,000
$20.0 million revolving term loan		20,000			20,000
$22.0 million revenue bond		19,120			20,615
Green Plains Central City:
$55.0 million term loan		47,787			52,200
$30.5 million revolving term loan		28,645			30,500
$11.0 million revolver		10,094			6,239
Equipment financing loan		186			230
Green Plains Holdings II:
$34.1 million term loan		29,414			34,136
$42.6 million revolving term loan		38,359			42,214
$15.0 million revolver		15,000			15,000
Other		387			387
Green Plains Obion:
$60.0 million term loan		28,070			40,930
$37.4 million revolving term loan		36,200			36,200
Note payable		95			124
Equipment financing loan		482			591
Economic development grant		1,447			1,514
Green Plains Ord:
$25.0 million term loan		21,862			23,800
$13.0 million revolving term loan		12,151			13,000
$5.0 million revolver		3,349			2,500
Green Plains Otter Tail:
$30.3 million term loan		28,500			—
$4.7 million revolver		4,675			—
$19.2 million note payable		18,854			—
Capital lease payable		193			—
Green Plains Shenandoah:
$30.0 million term loan		7,268			13,368
$17.0 million revolving term loan		17,000			17,000
Economic development loan		—			45
Green Plains Superior:
$40.0 million term loan		22,125			26,250
$10.0 million revolving term loan		10,000			10,000
Equipment financing loan		172			219
Green Plains Grain:
$20.0 million term loan		17,500			19,000
$100.0 million revolving loans		9,421			68,004
Inventory financing arrangements		8,805			—
Equipment financing loans		429			915
Notes payable		2,000			3,288
Green Plains Trade:
$70.0 million revolving loan		61,169			21,179
Corporate:
$90.0 million convertible notes		90,000			90,000
Note payable to related party		14,000			—
Other		3,666			3,520
Total debt		678,193			668,968
Less: current portion of long-term debt		(74,993	)		(51,885	)
Less: short-term notes payble and other		(93,394	)		(89,183	)
Long-term debt	$	509,806		$	527,900

17

Ethanol Production Segment

• Term Loans

o Scheduled principal payments (plus interest) are as follows:

¡        Green Plains Bluffton	$0.6 million per month
¡        Green Plains Central City	$0.6 million per month
¡        Green Plains Holdings II	$1.5 million per quarter
¡        Green Plains Obion	$2.4 million per quarter
¡        Green Plains Ord	$0.3 million per month
¡        Green Plains Otter Tail	$0.5 million per month
¡        Green Plains Shenandoah	$1.2 million per quarter
¡        Green Plains Superior	$1.4 million per quarter

o Final maturity dates (at the latest) are as follows:

¡        Green Plains Bluffton	November 19, 2013
¡        Green Plains Central City	July 1, 2016
¡        Green Plains Holdings II	January 1, 2015
¡        Green Plains Obion	August 20, 2014
¡        Green Plains Ord	July 1, 2016
¡        Green Plains Otter Tail	September 1, 2018
¡        Green Plains Shenandoah	May 20, 2014
¡        Green Plains Superior	July 20, 2015

• Revolving Term Loans – The revolving term loans are generally available for advances throughout the life of the commitment, subject to borrowing base restrictions. Allowable advances under the Green Plains Shenandoah loan agreement are reduced by $2.4 million each six-month period commencing on the first day of the month beginning approximately six months after repayment of the term loan, but in no event later than November 1, 2014. Allowable advances under the Green Plains Superior loan agreement are reduced by $2.5 million each six-month period commencing on the first day of the month beginning approximately six months after repayment of the term loan, but in no event later than January 1, 2016. Interest-only payments are due each month on all revolving term loans until the final maturity date for the Green Plains Bluffton, Green Plains Central City, Green Plains Ord, Green Plains Otter Tail, Green Plains Shenandoah, and Green Plains Superior loan agreements. The Green Plains Obion loan agreement requires additional semi-annual payments of $4.675 million beginning March 1, 2015. The Green Plains Holdings II loan agreement requires semi-annual payments of $2.7 million.

o Final maturity dates (at the latest) are as follows:

¡        Green Plains Bluffton	November 19, 2013
¡        Green Plains Central City	July 1, 2016
¡        Green Plains Holdings II	April 1, 2016
¡        Green Plains Obion	September 1, 2018
¡        Green Plains Ord	July 1, 2016
¡        Green Plains Otter Tail	March 23, 2012
¡        Green Plains Shenandoah	November 1, 2017
¡        Green Plains Superior	July 1, 2017

Green Plains Bluffton also received $22.0 million in Subordinate Solid Waste Disposal Facility Revenue Bond funds from the City of Bluffton, Indiana. The revenue bond requires: (1) semi-annual principal and interest payments of approximately $1.5 million during the period commencing on March 1, 2010 through March 1, 2019, and (2) a final principal and interest payment of $3.745 million on September 1, 2019. At September 30, 2011, Green Plains Bluffton had $2.5 million of cash that was restricted as to use for payment towards the current maturity and interest of the revenue bond. Such cash is presented as restricted cash on the consolidated balance sheet.

Green Plains Holdings II, under its Amended and Restated Loan and Security Agreement, is required to maintain monthly working capital in an amount not less than ($2.5) million. As of July 31, 2011, the actual working capital was ($3.4) million. The identified covenant violation was waived by the lenders and the default did not affect other debt agreements of the Company. The Company believes that it will be able to comply with the covenant for the next twelve months and was in

18

compliance at August 31, 2011 and September 30, 2011. The Company is in the process of amending the Amended and Restated Loan and Security Agreement and once finalized, anticipated in 2011, the Company expects to consistently maintain compliance with this covenant in the future.

During the nine months ended September 30, 2011, amendments were made to the Green Plains Bluffton, Green Plains Central City, Green Plains Holdings II, Green Plains Obion, Green Plains Ord, Green Plains Shenandoah and Green Plains Superior agreements. None of the amendments resulted in material changes to the agreements. All of the Company’s ethanol production subsidiaries were in compliance with their debt covenants as of September 30, 2011.

Agribusiness Segment

The Green Plains Grain loan, amended in May 2011, is comprised of a $20.0 million amortizing term loan, a $45.0 million revolving term loan, a $20.0 million seasonal revolver and a $42.0 million bulge seasonal revolver. Scheduled payments under the term loan of $0.5 million are due on the first business day of each calendar quarter, with any remaining amount payable at expiration on August 1, 2013. The bulge seasonal revolver was reduced from a $42.0 million facility to a $35.0 million facility on April 1, 2011 and matures on November 1, 2011. The revolving term loan and the seasonal revolver were to mature on November 1, 2011. However, in October 2011, Green Plains Grain entered into a new $30.0 million amortizing term loan and a new $195.0 million revolving credit facility that provide the Company’s agribusiness operations with additional working capital funding. Outstanding amounts under the prior $20.0 million term loan and the $100.0 million revolving facilities were repaid. As of September 30, 2011, Green Plains Grain was in compliance with all debt covenants.

On August 15, 2011, the Company entered into two short-term inventory financing arrangements with a financial institution. Under the terms of the financing agreements, the Company sold quantities of grain totaling $10.0 million, issued warehouse receipts to the financial institution and simultaneously entered into agreements to repurchase the grain in future periods. The agreements mature on January 11, 2012 and February 10, 2012. The Company has accounted for the agreements as short-term notes, rather than sales, and has elected the fair value option to offset fluctuations in market prices of the inventory At September 30, 2011, grain inventory and the short-term note payable were valued at $8.8 million and were measured using Level 2 inputs.

Marketing and Distribution Segment

The Green Plains Trade loan is comprised of a senior secured revolving credit facility. Under the loan agreement, as amended in January 2011, the lender will loan up to $70.0 million, subject to a borrowing base equal to 85% of eligible receivables. At September 30, 2011, Green Plains Trade had $36.1 million cash that was restricted as to use for payment towards the loan agreement. Such cash is presented as restricted cash on the consolidated balance sheet. The amended revolving credit facility expires on March 31, 2014. As of September 30, 2011, Green Plains Trade was in compliance with all debt covenants.

Corporate Activities

In November 2010, the Company issued $90.0 million of 5.75% Convertible Senior Notes due 2015, or Notes. The Notes represent senior, unsecured obligations of the Company, with interest payable on May 1 and November 1 of each year. The Notes may be converted into shares of the Company’s common stock and cash in lieu of fractional shares of the common stock based on a conversion rate initially equal to 69.7788 shares of the common stock per $1,000 principal amount of Notes, which is equal to an initial conversion price of $14.33 per share. The conversion rate is subject to adjustment upon the occurrence of specified events. The Company may redeem for cash all, but not less than all, of the Notes at any time on and after November 1, 2013, if the last reported sale price of the Company’s common stock equals or exceeds 140% of the applicable conversion price for a specified time period, at a redemption price equal to 100% of the principal amount of the Notes, plus accrued and unpaid interest.

In conjunction with the purchase of treasury stock on September 16, 2011, the Company signed a promissory note in the amount of $14.0 million to a subsidiary of NTR plc. The balance and interest charges, if any, are due on December 15, 2011.

19

Capitalized Interest

The Company had no capitalized interest during the quarterly and nine-month periods ended September 30, 2011 and 2010.

Restricted Net Assets

At September 30, 2011, there were approximately $527.2 million of net assets at the Company’s subsidiaries that were not available to be transferred to the parent company in the form of dividends, loans, or advances due to restrictions contained in the credit facilities of these subsidiaries.

Other Information

For further information on the debt obligations of the Company, refer to Note 11, Long-Term Debt, in the consolidated financial statements included in the Company’s annual report on Form 10-K for the year ended December 31, 2010, as amended.

9. STOCK-BASED COMPENSATION

The Company has 2007 and 2009 Equity Incentive Plans which reserve a combined total of 3.5 million shares of common stock for issuance pursuant to the terms of the plans. The plans provide for the granting of shares of stock, including options to purchase shares of common stock, stock appreciation rights tied to the value of common stock, non-vested stock and non-vested stock unit awards to eligible employees, non-employee directors and consultants. The Company measures share-based compensation grants at fair value on the grant date, adjusted for estimated forfeitures. The Company records noncash compensation expense related to equity awards in its financial statements over the requisite service period on a straight-line basis. All of the Company’s existing share-based compensation awards have been determined to be equity awards.

A summary of stock option activity for the nine months ended September 30, 2011 is as follows:

	Shares			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual		Aggregate Intrinsic Value (in thousands)
Outstanding at December 31, 2010		1,170,500		$	15.42
Granted		—			—
Exercised		(14,999	)		6.94			$	73
Forfeited		(11,333	)		10.74
Expired		(7,251	)		17.41
Outstanding at September 30, 2011		1,136,917		$	15.57		4.3	$	1,310
Exercisable at September 30, 2011		939,084		$	16.87		3.7	$	960

The Company’s option awards allow employees to exercise options through cash payment to the Company for the shares of common stock or through a simultaneous broker-assisted cashless exercise of a share option, through which the employee authorizes the exercise of an option and the immediate sale of the option shares in the open market. The Company uses newly-issued shares of common stock to satisfy its share-based payment obligations.

The following table summarizes non-vested stock award and DSU activity for the nine months ended September 30, 2011:

20

	Weighted- Average Number of  Non- vested Shares and DSU’s			Weighted- Average Grant- Date Fair Value		Weighted- Average Remaining Vesting Term (in years)
Nonvested at December 31, 2010		371,486		$	10.15
Granted		392,056			12.01
Forfeited		(2,500	)		16.95
Vested		(236,507	)		10.41
Nonvested at September 30, 2011		524,535		$	11.39		1.9

Compensation costs expensed for share-based payment plans described above were approximately $0.9 million and $3.5 million during the three and nine months ended September 30, 2011. Compensation costs expensed for share-based payment plans described above were approximately $0.6 million and $2.3 million during the three and nine months ended September 30, 2010. At September 30, 2011, there were $4.9 million of unrecognized compensation costs from share-based compensation arrangements, which is related to non-vested awards. This compensation is expected to be recognized over a weighted-average period of approximately 1.9 years. The potential tax benefit realizable for the anticipated tax deductions of the exercise of share-based payment arrangements generally would approximate 36% of these expense amounts.

10. EARNINGS PER SHARE

Basic earnings per common shares (“EPS”) is calculated by dividing net income available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted EPS is computed by dividing net income on an as-if-converted basis available to common stockholders by the weighted average number of common shares outstanding during the period, adjusted for the dilutive effect of any outstanding dilutive securities. The calculation of diluted earnings per share gives effect to common stock equivalents, if dilutive. The reconciliations of net income to net income on an as-if-converted basis and basic and diluted earnings per share are as follows (in thousands):

	Three Months Ended					Nine Months Ended
	September 30,					September 30,
	2011			2010		2011			2010
Net income attributable to Green Plains	$	12,429		$	7,366	$	25,152		$	31,627
Weighted average shares outstanding - basic		35,624			31,369		36,075			29,769
Income attributable to Green Plains stockholders - basic	$	0.35		$	0.23	$	0.70		$	1.06
Net income attributable to Green Plains	$	12,429		$	7,366	$	25,152		$	31,627
Interest on convertible debt		1,294			—		3,881			—
Amortization of debt issuance costs related to convertible debt		151			—		447			—
Tax effect of interest on convertible debt		(520	)		—		(1,558	)		—
Net income attributable to Green Plains on an as-if-converted basis	$	13,354		$	7,366	$	27,922		$	31,627
Weighted average shares outstanding - basic		35,624			31,369		36,075			29,769
Effect of dilutive convertible debt		6,280			—		6,280			—
Effect of dilutive stock options		247			215		256			311
Total potential shares outstanding		42,151			31,584		42,611			30,080
Income attributable to Green Plains stockholders - diluted	$	0.32		$	0.23	$	0.66		$	1.05

Excluded from the computations of diluted EPS were stock-based compensation awards totaling 0.7 million and 0.9 million shares for the three and nine months ended September 30, 2011, respectively, and awards totaling 1.0 million and 0.7 million shares for the three and nine months ended September 30, 2010, respectively, because the exercise prices or the grant-date fair value, as applicable, of the corresponding awards were greater than the average market price of the Company’s

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common stock during the respective periods. As consideration for the Global acquisition, the Company issued warrants for 700,000 shares of its restricted stock at a price of $14.00 per share. The warrants are excluded from the computations of diluted EPS as the exercise price is greater than the average market price of the Company’s common stock for the three and nine months ended September 30, 2011.

11. COMPREHENSIVE INCOME

Comprehensive income is as follows (in thousands):

	Three Months Ended					Nine Months Ended
	September 30,					September 30,
	2011			2010		2011			2010
Net income attributable to Green Plains	$	12,429		$	7,366	$	25,152		$	31,627
Unrealized gain (loss) on derivatives		(1,856	)		523		(10,583	)		700
Tax effect		683			—		4,052			—
Comprehensive income attributable to Green Plains	$	11,256		$	7,889	$	18,621		$	32,327

12. TREASURY STOCK

On September 9, 2011, the Company repurchased 3.5 million shares of common stock at a price of $8.00 per share from a subsidiary of NTR plc, which is a principal shareholder of the Company. The Company paid 50% of the amount at the time of repurchase. The remaining balance and interest charges, if any, are due on December 15, 2011. The payment obligation is recorded on the balance sheet as a short-term note payable and the repurchased shares are recorded at cost as treasury stock at September 30, 2011.

Shares of common stock repurchased by the Company are recorded at cost as treasury stock and result in a reduction of stockholders’ equity in the accompanying consolidated balance sheets. When shares are reissued, the Company will use the weighted average cost method for determining the cost basis. The difference between the cost of the shares and the issuance price will be added or deducted from additional paid-in capital. The Company does not have a share repurchase program and does not intend to retire the repurchased shares.

13. STOCKHOLDERS’ EQUITY

Components of stockholders’ equity are as follows (in thousands):

	Common Stock				Additional Paid-in Capital		Retained Earnings		Accum. Other Comp. Loss			Treasury Stock					Total Green Plains Stockholders’ Equity			Non- controlling Interest			Total Stockholders’ Equity
	Shares		Amount									Shares		Amount
Balance, December 31, 2010		35,793	$	36	$	431,289	$	57,343	$	(420	)		—	$	—		$	488,248		$	9,394		$	497,642
Net income (loss)		—		—		—		25,152		—			—		—			25,152			(200	)		24,952
Unrealized loss on derivatives, net of tax		—		—		—		—		(6,531	)		—		—			(6,531	)		—			(6,531	)
Total comprehensive income		—		—		—		—		—			—		—			18,621			(200	)		18,421
Repurchase of common stock		—		—		—		—		—			3,500		(28,201	)		(28,201	)		—			(28,201	)
Purchase of noncontrolling interest in Blendstar, net of tax		—		—		5,572		—		—			—		—			5,572			(8,944	)		(3,372	)
Stock-based compensation		607		—		2,743		—		—			—		—   —			2,743			—			2,743
Stock options exercised		15		—		104		—		—			—		—			104			—			104
Balance, September 30, 2011		36,415	$	36	$	439,708	$	82,495	$	(6,951	)		3,500	$	(28,201	)	$	487,087		$	250		$	487,337

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14. INCOME TAXES

The Company records income tax expense during interim periods based on its best estimate of the annual effective tax rate. Certain items are given discrete period treatment and, as a result, the tax effects of such items are reported in full in the relevant interim period.

Income tax expense for the three and nine months ended September 30, 2011 was $7.0 million and $14.2 million, respectively. Income tax expense for the three and nine months ended September 30, 2010 was $3.1 million and $10.0 million, respectively. The effective tax rate (calculated as the ratio of income tax expense to income before income taxes) was approximately 36% and 24% for the first nine months of 2011 and 2010, respectively. The effective tax rates for each of these periods reflect the release of a portion of valuation allowances provided against certain of the Company’s deferred tax assets, primarily federal and state net operating losses and tax credits due to anticipated income in future periods.

The Company’s unrecognized tax benefits at September 30, 2011 were $0.1 million, compared to $1.1 million at December 31, 2010. The decrease was recorded as a result of a settlement reached with tax authorities regarding the timing of certain deductions in prior tax returns. There was no change in the Company’s liabilities related to unrecognized tax benefits during the first nine months of 2010.

The 2011 annual effective tax rate can be affected as a result of variances among the estimates and amounts of full-year sources of taxable income (among the various states), the realization of tax credits, adjustments that may arise from the resolution of tax matters under review, variances in the release of valuation allowances and the Company’s assessment of its liability for uncertain tax positions.

15. COMMITMENTS AND CONTINGENCIES

Operating Leases

The Company leases certain facilities and parcels of land under agreements that expire at various dates. For accounting purposes, rent expense is based on a straight-line amortization of the total payments required over the lease term. The Company incurred lease expenses of $4.2 million and $11.8 million during the three and nine months ended September 30, 2011, respectively, and $6.8 million and $7.9 million during the three and nine months ended September 30, 2010, respectively. Aggregate minimum lease payments under these agreements for the remainder of 2011 and in future fiscal years are as follows (in thousands):

Year Ending December 31,	Amount
2011	$	4,568
2012		16,227
2013		14,284
2014		6,843
2015		5,575
Thereafter		7,740
Total	$	55,237

Commodities

As of September 30, 2011, the Company had contracted for future grain deliveries valued at approximately $293.2 million, natural gas deliveries valued at approximately $20.8 million, ethanol product deliveries valued at approximately $31.7 million and distillers grains product deliveries valued at approximately $7.4 million.

Legal

In April 2011, Aventine Renewable Energy, Inc. filed a complaint in the United States Bankruptcy Court for the District of Delaware in connection with its Chapter 11 bankruptcy naming as defendants Green Plains Renewable Energy, Inc., Green Plains Obion LLC, Green Plains Bluffton LLC, Green Plains VBV LLC and Green Plains Trade Group LLC. This action alleges $24.4 million of damages from preferential transfers or, in the alternative, $28.4 million of damages from fraudulent transfers under an ethanol marketing agreement and an unspecified amount of damages for a continuing breach of a termination agreement related to rail cars. The Company is unable to predict the outcome of these matters at this time, and any views formed as to the viability of these claims or the financial exposure which could result may change as the matters proceed through their course. The Company intends to defend these claims vigorously.

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16. RELATED PARTY TRANSACTIONS

Short-Term Note Payable

In September 2011, the Company repurchased 3.5 million shares from a subsidiary of NTR plc, which is a principal shareholder of the Company. The Company paid 50% of the repurchase amount at the time of repurchase, with the remaining balance to be repaid by December 15, 2011. At September 30, 2011, $14.0 million was outstanding on the related party note payable.

Sales and Financing Contracts

Three subsidiaries of the Company have executed separate financing agreements for equipment with AXIS Capital Inc. Gordon F. Glade, President and Chief Executive Officer of AXIS Capital is a member of our Board of Directors. A total of $0.6 million and $1.1 million were included in debt at September 30, 2011 and December 31, 2010, respectively, under these financing arrangements. Payments, including principal and interest, totaled $0.2 million and $0.5 million during the three and nine months ended September 30, 2011, respectively. Payments, including principal and interest, totaled $0.2 million and $0.5 million during the three and nine months ended September 30, 2010, respectively. The highest amount outstanding during the three months ended September 30, 2011 was $0.7 million, and the weighted average interest rate for all financing agreements with AXIS Capital was 7.3%.

The Company has entered into fixed-price ethanol purchase and sale agreements with Center Oil Company. Gary R. Parker, President and Chief Executive Officer of Center Oil, is a member of our Board of Directors. During the three and nine months ended September 30, 2011, cash receipts from Center Oil totaled $24.1 million and $89.4 million, respectively. Additional payments to Center Oil totaled $3.1 million and $5.2 million for the same periods, respectively, on these contracts. During the three and nine months ended September 30, 2010, cash receipts totaled $11.5 million and $55.4 million and payments totaled $0.7 million and $4.5 million, respectively, on these contracts. The Company had $1.8 million and $6.0 million included in accounts receivable from Center Oil at September 30, 2011 and December 31, 2010, respectively, $0.8 million in outstanding payables at September 30, 2011and no outstanding payables at December 31, 2010 under these purchase and sale agreements.

Aircraft Lease

The Company has entered into an agreement with Hoovestol Inc. for the lease of an aircraft. Wayne B. Hoovestol, President of Hoovestol Inc., is Chairman of our Board of Directors. The Company has agreed to pay $6,667 per month for use of up to 100 hours per year of the aircraft. Any flight time in excess of 100 hours per year will incur additional hourly-based charges. During the three and nine months ended September 30, 2011, payments related to this agreement totaled $33 thousand and $105 thousand, respectively. During the three and nine months ended September 30, 2010, payments related to this agreement totaled $25 thousand and $94 thousand, respectively. The Company did not have any outstanding receivables from Hoovestol Inc. and had an outstanding payable to Hoovestol Inc. of $3 thousand at September 30, 2011. The Company did not have any receivables from or payables to Hoovestol Inc. at December 31, 2010.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

General

The following discussion and analysis provides information which management believes is relevant to an assessment and understanding of our consolidated financial condition and results of operations. This discussion should be read in conjunction with the consolidated financial statements included herewith and notes to the consolidated financial statements thereto and our annual report filed on Form 10-K for the year ended December 31, 2010, as amended, including the consolidated financial statements, accompanying notes and the risk factors contained therein.

Cautionary Information Regarding Forward-Looking Statements

This report contains forward-looking statements based on current expectations that involve a number of risks and uncertainties. Forward-looking statements generally do not relate strictly to historical or current facts, but rather to plans and objectives for future operations based upon management’s reasonable estimates of future results or trends, and include statements preceded by, followed by, or that include words such as “anticipates,” “believes,” “continue,” “estimates,” “expects,” “intends,” “outlook,” “plans,” “predicts,” “may,” “could,” “should,” “will,” and words and phrases of similar impact, and include, but are not limited to, statements regarding future operating or financial performance, business strategy, business environment, key trends, and benefits of actual or planned acquisitions. In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The forward-looking statements are made pursuant to safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Although we believe that our expectations regarding future events are based on reasonable assumptions, any or all forward-looking statements in this report may turn out to be incorrect. They may be based on inaccurate assumptions or may not account for known or unknown risks and uncertainties. Consequently, no forward-looking statement is guaranteed, and actual future results may vary materially from the results expressed or implied in our forward-looking statements. The cautionary statements in this report expressly qualify all of our forward-looking statements. In addition, we are not obligated, and do not intend, to update any of our forward-looking statements at any time unless an update is required by applicable securities laws. Factors that could cause actual results to differ from those expressed or implied in the forward-looking statements include, but are not limited to, those discussed in Part I, Item 1A – Risk Factors of our annual report on Form 10-K for the year ended December 31, 2010, as amended, and in Item 1A of Part II of this Quarterly Report for the quarter ended September 30, 2011. Specifically, we may experience significant fluctuations in future operating results due to a number of economic conditions, including, but not limited to, competition in the ethanol and other industries in which we compete, commodity market risks, financial market risks, counter-party risks, risks associated with changes to federal policy or regulation, expected corn oil recovery rates and operating expenses, risks related to closing and achieving anticipated results from acquisitions, and other risk factors detailed in our reports filed with the SEC. Actual results may differ from projected results due, but not limited, to unforeseen developments.

In light of these assumptions, risks and uncertainties, the results and events discussed in the forward-looking statements contained in this report or in any document incorporated by reference might not occur. Investors are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date of this report or the date of the document incorporated by reference in this report. We are not under any obligation, and we expressly disclaim any obligation, to update or alter any forward-looking statements, whether as a result of new information, future events or otherwise.

Overview

We were formed in June 2004, incurring development costs until our first two plants were completed. Our plant in Shenandoah, Iowa commenced operations in August 2007 and our plant in Superior, Iowa commenced operations in July 2008. To complement and enhance our ethanol production facilities, in April 2008, we acquired Great Lakes Cooperative, a full-service farm cooperative in northwestern Iowa and southwestern Minnesota. As a result of our October 2008 merger with VBV LLC, we acquired two additional ethanol plants, located in Bluffton, Indiana and Obion, Tennessee. Operations commenced at the Bluffton and Obion plants in September 2008 and November 2008, respectively. In January 2009, we acquired a majority interest in Blendstar, LLC, which operates blending and terminaling facilities in the south central U.S. In July 2009, we acquired two limited liability companies that owned ethanol plants in Central City and Ord, Nebraska. In April 2010, we acquired five grain elevators in western Tennessee. In October 2010, we acquired Global Ethanol, LLC, which had two operating ethanol plants. In March 2011, we acquired an ethanol plant near Fergus Falls, Minnesota, bringing our total expected ethanol production capacity to approximately 740 mmgy. In June 2011, Green Plains Grain Company acquired 2.0 million bushels of grain storage capacity located in Hopkins, Missouri, which is approximately 45 miles from our Shenandoah, Iowa ethanol plant. In July 2011, we acquired all noncontrolling interests in Blendstar.

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We are a leading, vertically-integrated producer, marketer and distributer of ethanol. We focus on generating stable operating margins through our diversified business segments and our risk management strategy. We believe that owning and operating assets throughout the ethanol value chain enables us to mitigate changes in commodity prices and differentiates us from companies focused only on ethanol production. Today, we have operations throughout the ethanol value chain, beginning upstream with our agronomy and grain handling operations, continuing through our approximately 740 mmgy of ethanol production capacity and our corn oil production, and ending downstream with our ethanol marketing, distribution and blending facilities.

Management reviews our operations in the following four separate operating segments:

• Ethanol Production. At September 30, 2011, we operated a total of nine ethanol plants in Indiana, Iowa, Michigan, Minnesota, Nebraska and Tennessee, with approximately 740 mmgy of total ethanol production capacity. At capacity, these plants collectively will consume approximately 265 million bushels of corn and produce approximately 2.1 million tons of distillers grains annually.

• Corn Oil Production. At September 30, 2011, we were operating corn oil extraction systems at all nine of our ethanol plants. We completed the installation of corn oil extraction technology at our recently-acquired Otter Tail ethanol plant during the third quarter of 2011. The corn oil systems are designed to extract non-edible corn oil from the whole stillage process immediately prior to production of distillers grains. Industrial uses for corn oil include feedstock for biodiesel, livestock feed additives, rubber substitutes, rust preventatives, inks, textiles, soaps and insecticides.

• Agribusiness. We operate three lines of business within our agribusiness segment: bulk grain, agronomy and petroleum. In June 2011, we expanded our agribusiness operations by acquiring a grain elevator in Hopkins, Missouri with 2.0 million bushels of grain storage capacity. During the third quarter of 2011, we completed the construction of approximately 2.1 million and 1.0 million bushels of additional grain storage capacity at our Tennessee and Iowa grain elevators, respectively. In our bulk grain business, we own 14 grain elevators with approximately 37.2 million bushels of total storage capacity. We sell fertilizer and other agricultural inputs and provide application services to area producers, through our agronomy business. Additionally, we sell petroleum products including diesel, soydiesel, blended gasoline and propane, primarily to agricultural producers and consumers. We believe our bulk grain business provides synergies with our ethanol production segment as it supplies a portion of the feedstock for our ethanol plants.

• Marketing and Distribution. Our in-house marketing business is responsible for the sale, marketing and distribution of all ethanol, distillers grains and corn oil produced at our nine ethanol plants. We also market and distribute ethanol for third-party ethanol producers. At September 30, 2011, expected production capacity of these third-party producers was approximately 260 mmgy. Additionally, we own Blendstar, LLC, which operates nine blending or terminaling facilities with approximately 495 mmgy of total throughput capacity in seven states in the south central United States.

In the second quarter of 2011, we redefined our operating segments to include corn oil production as a reportable segment. Corn oil production, which we initiated in October 2010, was previously reported as a component of our marketing and distribution segment. We added the corn oil production segment to reflect the way our executive management manages, allocates resources, and measures the performance of our businesses. All prior period segment results have been restated to reflect this change.

We intend to continue to take a disciplined approach in evaluating new opportunities related to potential acquisition of additional ethanol plants by considering whether the plants fit within the design, engineering and geographic criteria we have developed. In our marketing and distribution segment, our strategy is to renew existing marketing contracts, as well as enter new contracts with other ethanol producers. We also intend to pursue opportunities to develop or acquire additional grain elevators and agronomy businesses, specifically those located near our ethanol plants. We believe that owning additional agribusiness operations in close proximity to our ethanol plants enables us to strengthen relationships with local corn producers, allowing us to source corn more effectively and at a lower average cost. We also plan to continue to grow our downstream access to customers and are actively looking at new marketing opportunities with other ethanol producers.

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We continue our support of the BioProcess Algae joint venture, which is focused on developing technology to grow and harvest algae, which consume carbon dioxide, in commercially viable quantities. Construction of Phase II was completed and the Grower Harvesters™ bioreactors were successfully started up in January 2011. Phase II allows for verification of growth rates, energy balances and operating expenses, which are considered to be some of the key steps to commercialization. The cost of the Phase II project was shared by the joint venture partners. As part of the Phase II funding, we increased our ownership in BioProcess Algae to 35%. During the third quarter of 2011, BioProcess Algae constructed an outdoor Grower Harvester system next to our Shenandoah ethanol plant, which as of September 30, 2011 was successfully producing algae. BioProcess Algae successfully completed its first round of algae-based poultry feed trials, in conjunction with the University of Illinois. The algae strains produced by the Grower Harvester system for the feed trials demonstrated high energy and protein content that was readily available, similar to other high value feed products used in the feeding of poultry today. BioProcess Algae is planning to break ground on a five acre algae farm this fall at the same location. If we and BioProcess Algae determine that the venture can achieve the desired economic performance from the five acre farm, a build-out of 400 acres of Grower Harvester reactors near our Shenandoah ethanol plant will be considered. The cost of such a build-out is estimated at $40 million to $60 million and could take up to a year to complete. Funding for BioProcess Algae for such a project would come from a variety of sources including current partners, new equity investors, debt financing or a combination thereof. If a decision was made to replicate such a 400 acre algae farm at all of our ethanol plants, we estimate that the required investment could range from $300 million to $500 million. BioProcess Algae currently is exploring potential algae markets including animal feeds, nutraceuticals and biofuels.

In the third quarter of 2011, we repurchased 3.5 million shares of common stock at a price of $8.00 per share from a subsidiary of NTR plc. Prior to this transaction, this NTR subsidiary held approximately 11.2 million shares, or 30.8%, of our outstanding shares. We paid 50% of the repurchase amount on September 16, 2011. The remaining balance and interest charges, if any, are due on December 15, 2011. The repurchased shares are recorded at cost as treasury stock and resulted in a reduction of stockholders’ equity in the accompanying consolidated balance sheets. We do not have a share repurchase program and do not intend to retire the repurchased shares.

Industry Factors Affecting our Results of Operations

Variability of Commodity Prices. Our operations and our industry are highly dependent on commodity prices, especially prices for corn, ethanol, distillers grains and natural gas. Because the market prices of these commodities are not always correlated, at times ethanol production may be unprofitable. As commodity price volatility poses a significant threat to our margin structure, we have developed a risk management strategy focused on locking in favorable operating margins when available. We continually monitor market prices of corn, natural gas and other input costs relative to the prices for ethanol and distillers grains at each of our production facilities. We create offsetting positions by using a combination of derivative instruments, fixed-price purchases and sales contracts, or a combination of strategies within strict limits. Our primary focus is not to manage general price movements of individual commodities, for example to minimize the cost of corn consumed, but rather to lock in favorable profit margins whenever possible. By using a variety of risk management tools and hedging strategies, including our internally-developed real-time margin management system, we believe we are able to maintain a disciplined approach to price risks.

Reduced Availability of Capital. Some ethanol producers have faced financial distress over the past few years, culminating with bankruptcy filings by several companies. This, in combination with continued volatility in the capital markets has resulted in reduced availability of capital for the ethanol industry in general. In this market environment, we may experience limited access to incremental financing.

Legislation. Federal and state governments have enacted numerous policies, incentives and subsidies to encourage the usage of domestically-produced alternative fuels. Passed in 2007 as part of the Energy Independence and Security Act, a federal Renewable Fuels Standard, or RFS, has been and we expect will continue to be a driving factor in the growth of ethanol usage. The RFS Flexibility Act was introduced on October 5, 2011 to reduce or eliminate the volumes of renewable fuel use required by RFS based upon corn stocks-to-use ratios. We believe the RFS is a significant component of national energy policy that reduces dependence on foreign oil by the United States. As a result, we believe that the RFS Flexibility Act will not garner sufficient support to be enacted.

To further drive growth in the increased adoption of ethanol, Growth Energy, an ethanol industry trade association, and a number of ethanol producers requested a waiver from the EPA to increase the allowable amount of ethanol blended into gasoline from the current 10% level, or E10, to a 15% level, or E15. In October 2010, the EPA approved E15 for use in model year 2007 and newer model passenger vehicles, including cars, SUVs, and light pickup truck. In January 2011, the EPA ruled that E15 was also approved for use in model year 2001 to 2006 passenger vehicles.

On July 21, 2010, President Obama signed the Dodd-Frank Wall Street Reform and Consumer Protection Act, or the Reform Act, which, among other things, aims to improve transparency and accountability in derivative markets. While the Reform Act increases the regulatory authority of the Commodity Futures Trading Commission, or CFTC, regarding over-the-counter derivatives, there is uncertainty on several issues related to market clearing, definitions of market participants, reporting, and capital requirements. While many details remain to be addressed in CFTC rulemaking proceedings, at this time we do not anticipate any material impact to our risk management strategy.

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On June 16, 2011, a legislative proposal to end the volumetric ethanol tax credit, or VEETC (often referred to as the “blender’s credit”), was passed by the U.S. Senate. The blender’s credit, which is currently set to expire on December 31, 2011, allows gasoline distributors who blend ethanol with gasoline to receive a federal excise tax credit of $0.45 per gallon of ethanol used, or $0.045 per gallon for E10 and $0.3825 per gallon for E85. We expect the VEETC will be allowed to expire at December 31, 2011.

Merger and Acquisition Activity

In March 2011, we acquired an ethanol plant with an expected annual production capacity of 60 mmgy and certain other assets near Fergus Falls, Minnesota from Otter Tail Ag Enterprises, LLC, or Otter Tail, for consideration totaling $59.7 million, consisting of $5.9 million in cash and $54.2 million in debt, valued at $53.8 million. We are constructing additional grain storage capacity totaling 1.6 million bushels at the Otter Tail plant with completion expected in early 2012. The operating results of Otter Tail have been included in the Company’s consolidated financial statements since March 24, 2011.

In June 2011, we acquired 2.0 million bushels of grain storage capacity located in Hopkins, Missouri. The grain elevator is located approximately 45 miles from our Shenandoah, Iowa ethanol plant. The operating results of this grain elevator have been included in the Company’s consolidated financial statements since June 3, 2011.

In January 2009, we acquired a 51% ownership interest in Blendstar, LLC, which operates nine blending and terminaling facilities with approximately 495 mmgy of total throughput capacity in seven states in the south central U.S. On July 19, 2011, we acquired the remaining 49% of Blendstar from the noncontrolling holders.

Critical Accounting Policies and Estimates

This disclosure is based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires that we make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. We base our estimates on historical experience and other assumptions that we believe are proper and reasonable under the circumstances. We continually evaluate the appropriateness of estimates and assumptions used in the preparation of our consolidated financial statements. Actual results could differ materially from those estimates. Key accounting policies, including but not limited to those relating to revenue recognition, property and equipment, impairment of long-lived assets and goodwill, derivative financial instruments, and accounting for income taxes, are impacted significantly by judgments, assumptions and estimates used in the preparation of the consolidated financial statements. See further discussion of our critical accounting policies and estimates, as well as significant accounting policies, in our annual report on Form 10-K for the year ended December 31, 2010, as amended.

Recent Accounting Pronouncements

Effective January 1, 2011, we adopted the second phase of the amended guidance in ASC Topic 820, Fair Value Measurements and Disclosures, which requires us to disclose information in the reconciliation of recurring Level 3 measurements regarding purchases, sales, issuances and settlements on a gross basis, with a separate reconciliation for assets and liabilities. We did not experience an impact from the additional disclosure requirements.

Effective January 1, 2012, we will be required to adopt the third phase of amended guidance in ASC Topic 820, Fair Value Measurements and Disclosures. The purpose of the amendment is to achieve common fair value measurement and disclosure requirements by improving comparability of fair value measurements presented and disclosed in financial statements prepared in accordance with GAAP and those prepared in conformity with International Financial Reporting Standards, or IFRS. The amended guidance clarifies the application of existing fair value measurement requirements and requires additional disclosure for Level 3 measurements regarding the sensitivity of fair value to changes in unobservable inputs and any interrelationships between those inputs. We currently would not be impacted by the additional disclosure requirements as we do not have any recurring Level 3 measurements.

Effective January 1, 2012, we will be required to adopt the amended guidance in ASC Topic 220, Comprehensive Income. This accounting standards update, which helps to facilitate the convergence of GAAP and IFRS, is aimed at increasing the prominence of other comprehensive income in the financial statements by eliminating the option to present other comprehensive income in the statement of stockholders’ equity, and rather requiring that net income and other comprehensive income be presented in either a single continuous statement or in two separate but consecutive statements. We have determined that the changes to the accounting standards will affect the presentation of consolidated financial information but will not have a material effect on the Company’s financial position or results of operations.

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Amended guidance in ASC Topic 350, Intangibles – Goodwill and Other, is effective for us beginning January 1, 2012, although early adoption is permitted. The amended guidance permits an entity to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test. The more-likely-than-not threshold is defined as having a likelihood of more than 50 percent. We have determined that the changes to the accounting standards will not impact our disclosure or reporting requirements.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future material effect on our consolidated financial condition, results of operations or liquidity.

Components of Revenues and Expenses

Revenues. In our ethanol production segment, our revenues are derived primarily from the sale of ethanol and distillers grains, which are co-products of the ethanol production process. In our corn oil production segment, revenues result from the sale of corn oil produced at our ethanol plants. In our agribusiness segment, the sale of grain, fertilizer and petroleum products are our primary sources of revenue. In our marketing and distribution segment, the sale of ethanol, distillers grains and corn oil that we market for our nine ethanol plants and the sale of ethanol we market for the ethanol plants owned by third parties represent our primary sources of revenue. Revenues also include net gains or losses from derivatives related to ethanol, distillers grains and corn oil.

Cost of Goods Sold. Cost of goods sold in our ethanol production segment includes costs for direct labor, materials and certain plant overhead costs. Direct labor includes all compensation and related benefits of non-management personnel involved in the operation of our ethanol plants. Plant overhead costs primarily consist of plant utilities, plant depreciation and outbound freight charges. Our cost of goods sold in the ethanol production segment is mainly affected by the cost of corn, natural gas and transportation. In this segment, corn is our most significant raw material cost. We purchase natural gas to power steam generation in our ethanol production process and to dry our distillers grains. Natural gas represents our second largest cost in this business segment. Cost of goods sold also includes net gains or losses from derivatives related to corn and natural gas.

Cost of goods sold in our corn oil production segment includes costs for direct materials, certain plant overhead costs and amounts reimbursed to the ethanol production segment for the reduction in distillers grains produced. Costs of corn oil production have become more significant as we have implemented corn oil extraction technology at all of our ethanol plants.

Grain, fertilizer and petroleum acquisition costs represent the primary components of cost of goods sold in our agribusiness segment. Grain inventories, forward purchase contracts and forward sale contracts are valued at market prices, where available, or other market quotes adjusted for differences, primarily transportation, between the exchange-traded market and the local markets on which the terms of the contracts are based. Changes in the market value of grain inventories, forward purchase and sale contracts, and exchange-traded futures and options contracts are recognized in earnings as a component of cost of goods sold.

In our marketing and distribution segment, purchases of ethanol, distillers grains and corn oil represent the largest components of cost of goods sold. Transportation expenses are also a major component of our cost of goods sold in this segment. Transportation expense includes rail car leases, freight and shipping of our ethanol and co-products, as well as costs incurred in storing ethanol at destination terminals.

Selling, General and Administrative Expenses. Selling, general and administrative expenses are recognized at the operating segment level, as well as at the corporate level. These expenses consist of employee salaries, incentives and benefits; office expenses; board fees; and professional fees for accounting, legal, consulting, and investor relations activities. Personnel costs, which include employee salaries, incentives and benefits, are the largest single category of expenditures in selling, general and administrative expenses. We refer to selling, general and administrative expenses that are not allocable to a segment as corporate activities.

Other Income (Expense). Other income (expense) includes interest earned, interest expense and other non-operating items.

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Results of Operations

Segment Results

Our operations fall within the following four segments: (1) production of ethanol and related distillers grains, collectively referred to as ethanol production, (2) corn oil production, (3) grain warehousing and marketing, as well as sales and related services of agronomy and petroleum products, collectively referred to as agribusiness, and (4) marketing and distribution of Company-produced and third-party ethanol, distillers grains and corn oil, collectively referred to as marketing and distribution. Selling, general and administrative expenses, primarily consisting of compensation of corporate employees, professional fees and overhead costs not directly related to a specific operating segment, are reflected in the table below as corporate activities. When our management evaluates segment performance, they review the information provided below, as well as segment earnings before interest, income taxes, noncontrolling interest, depreciation and amortization.

In the second quarter of 2011, we redefined our operating segments to include corn oil production as a reportable segment. Corn oil production, which we initiated in October 2010, was previously reported as a component of our marketing and distribution segment. We added the corn oil production segment to reflect the manner by which our executive management currently manages, allocates resources to, and measures the performance of our businesses. Prior period segment results have been reclassified to reflect this change.

During the normal course of business, our operating segments enter into transactions with one another. For example, our ethanol production segment sells ethanol to our marketing and distribution segment and our agribusiness segment sells grain to our ethanol production segment. These intersegment activities are recorded by each segment at prices approximating market and treated as if they are third-party transactions. Consequently, these transactions impact segment performance. However, intersegment revenues and corresponding costs are eliminated in consolidation and do not impact our consolidated results.

The table below reflects selected operating segment financial information for the periods indicated (in thousands):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2011			2010			2011			2010
Revenues:
Ethanol production
Revenue from external customers	$	35,077		$	11,168		$	97,377		$	43,298
Intersegment revenue		551,987			239,253			1,501,031			698,040
Total segment revenue		587,064			250,421			1,598,408			741,338
Corn oil production
Revenue from external customers		393			—			1,464			—
Intersegment revenue		15,115			—			28,886			—
Total segment revenue		15,508			—			30,350			—
Agribusiness
Revenue from external customers		95,065			65,309			233,959			128,610
Intersegment revenue		48,863			33,039			149,676			75,062
Total segment revenue		143,928			98,348			383,635			203,672
Marketing and distribution
Revenue from external customers		826,483			419,672			2,298,121			1,204,591
Intersegment revenue		98			99			375			227
Total segment revenue		826,581			419,771			2,298,496			1,204,818
Revenue including intersegment activity		1,573,081			768,540			4,310,889			2,149,828
Intersegment eliminations		(616,063	)		(272,391	)		(1,679,968	)		(773,329	)
Revenue as reported	$	957,018		$	496,149		$	2,630,921		$	1,376,499

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	Three Months Ended September 30,						Nine Months Ended September 30,
	2011			2010			2011			2010
Gross profit:
Ethanol production	$	24,846		$	19,856		$	63,880		$	70,372
Corn oil production		9,642			—			18,098			—
Agribusiness		8,223			5,998			20,425			14,916
Marketing and distribution		5,069			6,227			17,332			15,646
Intersegment eliminations		(487	)		(123	)		444			(25	)
	$	47,293		$	31,958		$	120,179		$	100,909
Operating income:
Ethanol production	$	20,941		$	17,215		$	52,184		$	62,480
Corn oil production		9,632			—			18,040			—
Agribusiness		2,151			421			3,934			1,313
Marketing and distribution		1,923			3,271			7,078			7,056
Intersegment eliminations		(481	)		(123	)		474			(26	)
Corporate activities		(5,121	)		(3,842	)		(14,881	)		(11,494	)
	$	29,045		$	16,942		$	66,829		$	59,329

Three Months Ended September 30, 2011 Compared to the Three Months Ended September 30, 2010

Consolidated Results

Revenues increased $460.9 million for the three months ended September 30, 2011 compared to the same period in 2010 primarily as a result of acquired operations and increases in commodity prices. We acquired our Lakota and Riga ethanol plants in October 2010 and our Otter Tail ethanol plant in March 2011. Gross profit increased $15.3 million for the three months ended September 30, 2011 compared to the same period in 2010 primarily as a result of corn oil production and ethanol production. Ethanol production increased during the three months ended September 30, 2011 compared to the same period in 2010 while operating margins per gallon produced decreased. Operating income increased $12.1 million in the 2011 period compared to 2010 as a result of the acquired operations and corn oil production. Selling, general and administrative expenses were $3.2 million higher for the three months ended September 30, 2011 compared to the same period in 2010 due to the expanded scope of our operations.

Income before taxes was affected by the factors above offset partially by an increase in interest expense of $2.9 million due to debt issued to finance the acquisitions and the $90.0 million convertible notes issued in November 2010. Income tax expense of $7.0 million and $3.1 million for the three-month periods ended September 30, 2011 and 2010, respectively, was favorably impacted by the release of a portion of valuation allowances against certain deferred tax assets, established in prior years due to the uncertainty of realization.

The following discussion of segment results provides greater detail on period-to-period results.

Ethanol Production Segment

The table below presents key operating data within our ethanol production segment for the periods indicated:

	Three Months Ended September 30,
	2011		2010
Ethanol sold (thousands of gallons)		184,619		128,924
Distillers grains sold (thousands of equivalent dried tons)		534		370
Corn consumed (thousands of bushels)		65,857		46,299

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Revenues in the ethanol production segment increased by $336.6 million for the three months ended September 30, 2011 compared to the same period in 2010. Revenues for the three months ended September 30, 2011, included production from our Lakota and Riga ethanol plants, which were acquired in October 2010, as well as production from our Otter Tail ethanol plant, which was acquired in March 2011. The Lakota, Riga and Otter Tail plants contributed $169.2 million in combined revenues for the three months ended September 30, 2011. The remaining increase in revenues was due to increased volume from production efficiencies at our other ethanol plants and increases in ethanol and distillers grains prices.

Cost of goods sold in the ethanol production segment increased by $331.7 million for the three months ended September 30, 2011 compared to the same period in 2010. The increase was due primarily to the consumption of 19.6 million additional bushels of corn and an 80.0% increase in the average cost per bushel during the three months ended September 30, 2011 compared to the same period in 2010. The volume increase was due to the additional production from our Lakota, Riga and Otter Tail plants. Gross profit for the ethanol production segment increased by $5.0 million for the three months ended September 30, 2011 compared to the same period in 2010 due to the factors listed above.

Operating income in the ethanol production segment increased by $3.7 million for the three months ended September 30, 2011 compared to the same period in 2010 due in large part to the factors discussed above, partially offset by increased depreciation expense and lower operating margins per gallon in the current quarterly period. Depreciation and amortization expense for the ethanol production segment was $11.0 million during the three months ended September 30, 2011 compared to $7.8 million during the same period in 2010.

Corn Oil Production Segment

We initiated corn oil production in the fourth quarter of 2010. By September 30, 2011, we had deployed corn oil extraction technology at all nine of our ethanol plants with the last implementation at our recently-acquired Otter Tail plant completed during the third quarter. During the three months ended September 30, 2011, we sold 32.7 million pounds of corn oil.

Agribusiness Segment

The table below presents key operating data within our agribusiness segment for the periods indicated:

	Three Months Ended September 30,
	2011		2010
Grain sold (thousands of bushels)		24,320		18,966
Fertilizer sold (tons)		790		385

Our agribusiness segment had an increase of $45.6 million in revenues, an increase of $2.2 million in gross profit, and an increase in operating income of $1.7 million for the three months ended September 30, 2011 compared to the same period in 2010. Revenue and gross profit increased primarily due to additional volumes of grain and fertilizer sold and increases in average grain commodity prices. Total grain sold increased by 5.4 million bushels and total fertilizer sold increased by 405 tons between the two periods. The increase in operating income was primarily due to increased sales volumes partially offset by an increase in selling, general and administrative expenses due to the expanded scope of our operations. The agribusiness segment’s quarterly performance fluctuates on a seasonal basis with generally stronger results expected in the second and fourth quarters each year.

Marketing and Distribution Segment

Revenues in our marketing and distribution segment increased by $406.8 million for the three months ended September 30, 2011 compared to the same period in 2010. The increase in revenues was primarily due to an increase in commodity prices as well as quantities of ethanol and distillers grains marketed. Ethanol revenues and distillers grains revenues within the marketing and distribution segment increased by $350.8 million and $38.8 million, respectively. The remainder of the increase in revenue is attributable to sales of corn oil produced by our corn oil production segment. During the quarter ended September 30, 2011, we sold 32.7 million pounds of corn oil. We sold 252.5 million gallons of ethanol within the marketing and distribution segment during the quarter ended September 30, 2011 compared to 222.0 million gallons sold during the

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same period in 2010 and experienced an increase in revenue per gallon due to higher prices. The increase in ethanol volumes is due to the expanded production of our own plants as a result of efficiency improvements and production from the recently acquired plants partially offset by a decrease in marketing and distribution for third-party ethanol producers of 25.2 million gallons.

Gross profit and operating income for the marketing and distribution segment decreased $1.2 million and $1.3 million, respectively, for the three months ended September 30, 2011 compared to the same period in 2010. The decreases in gross profit and operating income were due primarily to lower profits realized from ethanol and distillers grains trading positions.

Intersegment Eliminations

Intersegment eliminations of revenues increased $343.7 million for the three months ended September 30, 2011 compared to the same period in 2010 due to increases of $277.0 million, $35.7 million and $15.1 million in ethanol, distillers grains and corn oil, respectively, sold from our ethanol production and corn oil segments to our marketing and distribution segment. In addition, corn sales from our agribusiness segment increased $15.7 million between the periods. These increases are a result of the expanded scope of our operations and higher commodity prices.

Corporate Activities

Operating income was impacted by an increase in operating expenses for corporate activities of $1.3 million for the three months ended September 30, 2011 compared to the same period in 2010, primarily due to an increase in general and administrative expenses and personnel costs related to expanded operations.

Income Taxes

We record income tax expense during interim periods based on our best estimate of the annual effective tax rate. Income tax expense for the three months ended September 30, 2011 and 2010 was $7.0 million and $3.1 million, respectively. The effective tax rate (calculated as the ratio of income tax expense to income before income taxes) was approximately 36% and 29% for the third quarter of 2011 and 2010, respectively. The effective tax rates for each period reflect the release of a portion of valuation allowances provided against certain of our deferred tax assets, primarily federal and state net operating losses and tax credits.

Nine Months Ended September 30, 2011 Compared to the Nine Months Ended September 30, 2010

Consolidated Results

Revenues increased $1.3 billion for the nine months ended September 30, 2011 compared to the same period in 2010 as a result of acquired operations and changes in commodity prices. We acquired agribusiness operations in western Tennessee in April 2010 and our Lakota and Riga ethanol plants in October 2010. Also, in the first quarter of 2011, we acquired the Otter Tail ethanol plant. Gross profit increased $19.3 million when comparing the nine months ended September 30, 2011 with the nine months ended September 30, 2010. Gross profit increases in the corn oil production, agribusiness and market and distribution segments were partially offset by a decrease in gross profit in the ethanol production segment. Operating income increased $7.5 million in the nine months ended September 30, 2011 compared to the same period in 2010. In addition to the factors identified above, selling, general and administrative expenses increased by $11.8 million for the nine months ended September 30, 2011 compared to the same period in 2010 due to the expanded scope of our operations.

Income before taxes was also affected by an increase in interest expense of $10.0 million due to debt issued to finance the acquisitions and the $90.0 million convertible notes issued in November 2010. Income tax expense of $14.2 million and $10.0 million for the nine months ended September 30, 2011 and 2010, respectively, was favorably impacted by the release of a portion of valuation allowances against certain deferred tax assets, established in prior years due to the uncertainty of realization.

The following discussion of segment results provides greater detail on period to period results.

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Ethanol Production Segment

The table below presents key operating data within our ethanol production segment for the periods indicated:

	Nine Months Ended September 30,
	2011		2010
Ethanol sold (thousands of gallons)		540,638		382,783
Distillers grains sold (thousands of equivalent dried tons)		1,536		1,099
Corn consumed (thousands of bushels)		191,032		137,358

Revenues for the ethanol production segment increased $857.1 million for the nine months ended September 30, 2011 compared to the same period in 2010. Revenues for the nine months ended September 30, 2011, included production from our Lakota and Riga ethanol plants which were acquired in October 2010 as well as production from our Otter Tail ethanol plant, which was acquired in late March 2011. The Lakota, Riga and Otter Tail plants contributed $433.9 million in combined revenues for the nine months ended September 30, 2011. The remaining increase in revenues was due to increased volume from production efficiencies at our other ethanol plants and increases in ethanol and distillers grains prices.

Cost of goods sold in the ethanol production segment increased $863.6 million for the nine months ended September 30, 2011 compared to the same period in 2010. The increase was due primarily to the consumption of 53.7 million additional bushels of corn and a 70.8% increase in the average cost per bushel during the first nine months of 2011 compared to the same period in 2010. The volume increase was due to three full quarters of production at our Lakota and Riga plants and two quarters of production at our Otter Tail plant. Gross profit for the ethanol production segment decreased by $6.5 million for the nine months ended September 30, 2011 compared to the same period in 2010 due to the factors listed above.

Operating income for the segment, decreased $10.3 million for the nine months ended September 30, 2011 compared to the same period in 2010 due in large part to the factors discussed above. In addition, depreciation and amortization expense for the ethanol production segment was $32.0 million during the nine months ended September 30, 2011 compared to $23.0 million during the same period in 2010.

Corn Oil Production Segment

We initiated corn oil production in the fourth quarter of 2010. By September 30, 2011, we had deployed corn oil extraction technology at all nine of our ethanol plants with the last implementation at our recently-acquired Otter Tail plant completed during the third quarter of 2011. During the nine months ended September 30, 2011, we sold 64.3 million pounds of corn oil.

Agribusiness Segment

The table below presents key operating data within our agribusiness segment for the periods indicated:

	Nine Months Ended September 30,
	2011		2010
Grain sold (thousands of bushels)		51,639		36,715
Fertilizer sold (tons)		33,801		33,607

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Our agribusiness segment had an increase of $180.0 million in revenues, an increase of $5.5 million in gross profit, and an increased operating income of $2.6 million for the nine months ended September 30, 2011 compared to the same period in 2010. Revenue, gross profit and operating income increased primarily due to additional volumes from agribusiness locations in Iowa and the agribusiness operations acquired in western Tennessee in April 2010 and increases in average grain prices. Total grain sold increased by 14.9 million bushels and total fertilizer sold increased by 194 tons between the two periods. The Tennessee agribusiness operations contributed $194.4 million in revenue for the nine months ended September 30, 2011 compared with $64.6 million included in our operations for the nine months ended September 30, 2010. The agribusiness segment’s quarterly performance fluctuates on a seasonal basis with generally stronger results expected in the second and fourth quarters each year.

Marketing and Distribution Segment

Marketing and distribution revenues increased $1,093.7 million for the nine months ended September 30, 2011 compared to the same period in 2010. The increase in revenues was primarily due to an increase in ethanol revenues of $960.3 million and an increase in distillers grains revenues of $103.2 million. The remainder of the increase in revenue is attributable to sales of corn oil, which we began producing in October 2010. During the first nine months of 2011, we sold 64.3 million pounds of corn oil. We sold 786.1 million gallons of ethanol within the marketing and distribution segment during the nine months ended September 30, 2011 compared to 650.9 million gallons sold during the same period in 2010 and experienced an increase in revenue per gallon of ethanol due to higher prices. The increase in ethanol volumes is due to the expanded production of our own plants as a result of efficiency improvements and additional capacity from recently acquired operations. Marketing and distribution volumes from third-party ethanol producers decreased when comparing the nine months ended September 30, 2011 to the same period in 2010.

Gross profit and operating income for the marketing and distribution segment increased $1.7 million and $22 thousand, respectively, for the nine months ended September 30, 2011 compared to the same period in 2010. The increases in gross profit and operating income were due primarily to increased ethanol and distillers grains prices and volumes sold and the production of corn oil.

Intersegment Eliminations

Intersegment eliminations of revenues increased $906.6 million for the nine months ended September 30, 2011 compared to the same period in 2010 due to an increase of $715.4 million, $87.7 million and $28.9 million in ethanol, distillers grains and corn oil, respectively, sold from our ethanol production and corn oil segments to our marketing and distribution segment. In addition, corn sales from our agribusiness segment to our ethanol production segment increased $74.5 million between the periods.

Corporate Activities

Operating income was impacted by an increase in operating expenses for corporate activities of $3.4 million for the nine months ended September 30, 2011 compared to the same period in 2010, primarily due to an increase in general and administrative expenses and personnel costs related to expanded operations.

Income Taxes

We record income tax expense during interim periods based on our best estimate of the annual effective tax rate. Income tax expense for the nine-month periods ended September 30, 2011 and 2010 was $14.2 million and $10.0 million, respectively. The effective tax rate (calculated as the ratio of income tax expense to income before income taxes) was approximately 36% and 24% for the first nine months of 2011 and 2010, respectively. The effective tax rates for each period reflect the release of a portion of valuation allowances provided against certain of our deferred tax assets, primarily federal and state net operating losses and tax credits.

EBITDA

Management uses earnings before interest, income taxes, noncontrolling interests, depreciation and amortization, or EBITDA, to measure our financial performance and to internally manage our businesses. Management believes that EBITDA provides useful information to investors as a measure of comparison with peer and other companies. EBITDA should not be considered an alternative to, or more meaningful than, net income or cash flow as determined in accordance with generally accepted accounting principles. EBITDA calculations may vary from company to company. Accordingly, our computation of EBITDA may not be comparable with a similarly titled measure of another company. The following sets forth the reconciliation of net income to EBITDA for the periods indicated (in thousands):

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	Three Months Ended September 30,					Nine Months Ended September 30,
	2011			2010		2011			2010
Net income attributable to Green Plains	$	12,429		$	7,366	$	25,152		$	31,627
Net income (loss) attributable to noncontrolling interests		(28	)		49		(200	)		163
Interest expense		9,440			6,544		27,438			17,452
Income taxes		6,979			3,082		14,191			9,989
Depreciation and amortization		12,811			9,103		36,848			26,383
EBITDA	$	41,631		$	26,144	$	103,429		$	85,614

Liquidity and Capital Resources

On September 30, 2011, we had $154.4 million in cash and equivalents, comprised of $56.6 million held at our parent company and the remainder at our subsidiaries. We also had up to an additional $102.7 million available at our subsidiaries under revolving credit agreements, subject to borrowing base restrictions or other specified lending conditions at September 30, 2011. Funds held at our subsidiaries are generally required for their ongoing operational needs. Further, distributions from our subsidiaries are restricted pursuant to these loan agreements. At September 30, 2011, there were approximately $527.2 million of net assets at our subsidiaries that were not available to be transferred to the parent company in the form of dividends, loans or advances due to restrictions contained in the credit facilities of these subsidiaries.

We incurred capital expenditures of $35.5 million in the first nine months of 2011 primarily for the installation of corn oil extraction facilities and expansions of grain storage capacity. Capital spending for the remainder of 2011 is expected to be approximately $6.5 million, including construction of grain storage expansion at our Otter Tail ethanol plant, expected to be completed in early 2012. The remainder of our capital spending primarily relates to other recurring capital expenditures in the ordinary course of business. We believe available borrowings under our credit facilities and cash provided by operating activities will be sufficient to support our working capital, capital expenditures and debt service requirements for the foreseeable future.

On August 15, 2011, we entered into two short-term inventory financing arrangements with a financial institution. Under the terms of the financing agreements, we sold quantities of grain totaling $10.0 million, issued warehouse receipts to the financial institution and simultaneously entered into agreements to repurchase the grain in future periods. The agreements mature in January and February of 2012. We have accounted for the agreements as short-term notes rather than sales, and have recorded our repurchase obligation at fair value at the end of each period. At September 30, 2011, the grain inventory and short-term notes payable were valued at $8.8 million.

Net cash provided by operating activities was $15.9 million for the nine months ended September 30, 2011 compared to $20.6 million for the same period in 2010. Cash provided by operating activities for the nine months ended September 30, 2011 was affected by increases in accounts receivable and derivative financial instruments and decreases in accounts payable, accrued liabilities and amounts prepaid by customers, offset by a decrease in grain inventory held for sale. Net cash used by investing activities was $44.8 million for the nine months ended September 30, 2011, primarily due to the acquisitions of our Otter Tail ethanol plant and the additional grain storage under construction and purchases of property and equipment. Net cash used by financing activities was $86.5 million for the nine months ended September 30, 2011 due to the repayment of debt and $14.2 million in cash outflows for the repurchase of treasury stock in the third quarter of 2011. Green Plains Trade and Green Plains Grain utilize revolving credit facilities to finance working capital requirements. These facilities are frequently drawn upon and repaid resulting in significant cash movements that are reflected on a gross basis within financing activities as proceeds from and payments on short-term notes payable and other borrowings. In addition, we made scheduled principal payments and $13.1 million in free cash flow payments for a total of $160.7 million in debt reduction on our term debt facilities and long-term revolving credit facilities, offset by advances of $110.1 million from long-term revolving credit facilities, during the nine months ended September 30, 2011.

Our business is highly impacted by commodity prices, including prices for corn, ethanol, distillers grains and natural gas. We attempt to reduce the market risk associated with fluctuations in commodity prices through the use of derivative financial instruments. Sudden changes in commodity prices may require cash deposits with brokers, or margin calls. Depending on our open derivative positions, we may require significant liquidity with little advanced notice to meet margin calls. We continuously monitor our exposure to margin calls and believe that we will continue to maintain adequate liquidity to cover

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such margin calls from operating results and borrowings. Recent increases in grain and ethanol prices and our expanded grain handling capacity have led to more frequent and larger margin calls. Accordingly, in October 2011, Green Plains Grain entered into a new $195 million revolving credit facility and a new $30 million amortizing term loan that provide our agribusiness operations with additional working capital funding. The revolving credit facility includes an accordion feature whereby amounts available under the facility may be increased by up to $55.0 million of new lender commitments upon agent approval. Outstanding amounts under the prior $100 million revolving facilities and the $20 million term loan were repaid

We were in compliance with our debt covenants at September 30, 2011. Based upon our current forecasts, we believe we will maintain compliance at each of our subsidiaries for the upcoming twelve months, or if necessary have sufficient liquidity available on a consolidated basis to resolve a subsidiary’s noncompliance; however, no obligation exists to provide such liquidity for a subsidiary’s compliance. No assurance can be provided that actual operating results will approximate our forecasts or that we will inject the necessary capital into a subsidiary to maintain compliance with its respective covenants. In the event actual results differ significantly from our forecasts and a subsidiary is unable to comply with its respective debt covenants, the subsidiary’s lenders may determine that an event of default has occurred. Upon the occurrence of an event of default, and following notice, the lenders may terminate any commitment and declare the entire unpaid balance due and payable.

We believe that we have sufficient working capital for our existing operations. However, we can provide no assurance that we will be able to secure additional funding for our future operations. A sustained period of unprofitable operations may strain our liquidity and make it difficult to maintain compliance with our financing arrangements. While we may seek additional sources of working capital in response, we can provide no assurance that we will be able to secure this funding if necessary. We may sell additional equity or borrow additional amounts to improve or preserve our liquidity; expand our ethanol plants; build additional or acquire existing ethanol plants; or build additional or acquire existing agribusiness and ethanol distribution facilities. We can provide no assurance that we will be able to secure the funding necessary for these additional projects or for additional working capital needs at reasonable terms, if at all.

Debt

For additional information related to our debt, see Note 8 – Debt included herein as part of the Notes to Consolidated Financial Statements.

Ethanol Production Segment

Each of our ethanol production segment subsidiaries have credit facilities with lender groups that provide for term and revolving term loans to finance construction and operation of the production facilities.

The Green Plains Bluffton loan is comprised of a $70.0 million amortizing term loan and a $20.0 million revolving term loan. At September 30, 2011, $49.8 million related to the term loan was outstanding, along with the entire revolving term loan. The term loan requires monthly principal payments of approximately $0.6 million. The loans mature on November 19, 2013.

The Green Plains Central City loan is comprised of a $55.0 million amortizing term loan and a $30.5 million revolving term loan as well as a statused revolving credit supplement of up to $11.0 million. At September 30, 2011, $47.8 million related to the term loan was outstanding, along with $28.6 million on the revolving term loan and $10.1 million on the revolver. The term loan requires monthly payments of $0.6 million. The term loan and the revolving term loan mature on July 1, 2016 and the revolver matures on June 29, 2012 with an option to renew.

The Green Plains Holdings II loan is comprised of a $34.1 million amortizing term loan, a $42.6 million revolving term loan and a $15.0 million revolving line of credit loan. At September 30, 2011, $29.4 million was outstanding on the term loan, along with $38.4 million on the revolving term loan and $15.0 million on the revolving line of credit loan. The term loan requires quarterly principal payments of $1.5 million. The revolving term loan requires semi-annual principal payments of approximately $2.7 million. The amortizing term loan will mature on January 1, 2015. The revolving term loan will mature on April 1, 2016. The revolving line of credit will mature on April 30, 2013.

The Green Plains Obion loan is comprised of a $60.0 million amortizing term loan and a revolving term loan of $37.4 million. At September 30, 2011, $28.1 million related to the term loan and $36.2 million on the revolving term loan was outstanding. The term loan requires quarterly principal payments of $2.4 million. The term loan matures on August 20, 2014 and the revolving term loan matures on September 1, 2018.

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The Green Plains Ord loan is comprised of a $25.0 million amortizing term loan and a $13.0 million revolving term loan as well as a statused revolving credit supplement of up to $5.0 million. At September 30, 2011, $21.9 million related to the term loan was outstanding, $12.2 million on the revolving term loan, along with $3.3 million on the revolver. The term loan requires monthly payments of $0.3 million. The term loan and the revolving term loan mature on July 1, 2016 and the revolver matures on June 29, 2012 with an option to renew.

The Green Plains Otter Tail loan is comprised of a $30.3 million amortizing term loan, a $4.7 million revolver and a $19.2 million note payable. At September 30, 2011, $28.5 million related to the term loan, $4.7 million on the revolver and $18.9 million on the note payable were outstanding. The term loan requires monthly principal and interest payments of $0.5 million and the note payable requires monthly principal payments of $0.3 million beginning October 1, 2014. The term loan matures on September 1, 2018 and the revolver matures on March 23, 2012.

The Green Plains Shenandoah loan is comprised of a $30.0 million amortizing term loan and a $17.0 million revolving term loan. At September 30, 2011, $7.3 million related to the term loan was outstanding along with the entire $17.0 million on the revolving term loan. The term loan requires quarterly principal payments of $1.2 million. The term loan matures on May 20, 2014 and the revolving term loan matures on November 1, 2017.

The Green Plains Superior loan is comprised of a $40.0 million amortizing term loan and a $10.0 million revolving term loan. At September 30, 2011, $22.1 million related to the term loan was outstanding, along with the entire $10.0 million on the revolving term loan. The term loan requires quarterly principal payments of $1.375 million. The term loan matures on July 20, 2015 and the revolving term loan matures on July 1, 2017.

Each term loan, except for the Green Plains Holdings II and Green Plains Otter Tail agreements, has a provision that requires us to make annual special payments equal to a percentage ranging from 50% to 75% of the available free cash flow from the related entity’s operations (as defined in the respective loan agreements), subject to certain limitations. During the nine months ended September 30, 2011, $13.1 million was paid under these requirements.

With certain exceptions, the revolving term loans within this segment are generally available for advances throughout the life of the commitment. Interest-only payments are due each month on all revolving term facilities until the final maturity date, with the exception of the Green Plains Obion loan, which requires additional semi-annual payments of $4.675 million beginning March 1, 2015.

The term loans and revolving term loans bear interest at LIBOR plus 1.5% to 4.50% or lender-established prime rates. Some have established a floor on the underlying LIBOR index. In some cases, the lender may allow us to elect to pay interest at a fixed interest rate to be determined. As security for the loans, the lenders received a first-position lien on all personal property and real estate owned by the respective entity borrowing the funds, including an assignment of all contracts and rights pertinent to construction and on-going operations of the plant. Additionally, debt facilities within Green Plains Central City and Green Plains Ord are cross-collateralized. These borrowing entities are also required to maintain certain financial and non-financial covenants during the terms of the loans.

Green Plains Bluffton also received $22.0 million in Subordinate Solid Waste Disposal Facility Revenue Bond funds from the city of Bluffton, Indiana, of which $19.1 million remained outstanding at September 30, 2011. The revenue bond requires: semi-annual principal and interest payments of approximately $1.5 million during the period commencing on March 1, 2010 through March 1, 2019; and a final principal and interest payment of $3.745 million on September 1, 2019. The revenue bond bears interest at 7.50% per annum.

Agribusiness Segment

The Green Plains Grain loan, as amended on May 31, 2011, is comprised of a $20.0 million amortizing term loan, a $45.0 million revolving term loan, a $20.0 million seasonal revolver and a $35.0 million bulge seasonal revolver. The term loan expires on August 1, 2013 and the remainder of the bulge seasonal revolver, the revolving term loan and the seasonal revolver expire on November 1, 2011. Payments of $0.5 million under the term loan are due on the first business day of each calendar quarter, with any remaining amount payable at the expiration of the loan term. The loans bear interest at three-month LIBOR plus 4.25% on the term loan, LIBOR plus 3.5% on the revolving term loan, and one-month LIBOR plus 3.75% on the seasonal revolver, all subject to an interest rate floor of 4.5%. Loan proceeds are used primarily for working capital purposes. At September 30, 2011, $17.5 million on the term loan and $9.4 million on the various revolving loans were outstanding. As security for the loans, the lender received a first-position lien on real estate, equipment, inventory, and accounts receivable owned by Green Plains Grain. In October 2011, Green Plains Grain entered into a new $30.0 million amortizing term loan

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and a new $195.0 million revolving credit facility that provide our agribusiness operations with additional working capital funding. Outstanding amounts under the prior $20.0 million term loan and the $100.0 million revolving facilities were repaid.

On August 15, 2011, we entered into two short-term inventory financing arrangements with a financial institution. Under the terms of the financing agreements, we sold quantities of grain totaling $10.0 million, issued warehouse receipts to the financial institution and simultaneously entered into agreements to repurchase the grain in future periods. The agreements mature in January and February of 2012. We have accounted for the agreements as short-term notes, rather than sales, and have recorded our repurchase obligation at fair value at the end of each period. At September 30, 2011, grain inventory and the short-term note payable were valued at $8.8 million.

Marketing and Distribution Segment

The Green Plains Trade loan is comprised of a senior secured revolving credit facility of up to $70.0 million, subject to a borrowing base of 85% of eligible receivables. At September 30, 2011, $61.2 million on the revolving credit facility was outstanding. The revolving credit facility expires on March 31, 2014 and bears interest at the lender’s commercial floating rate plus 2.5% or LIBOR plus 3.5%. As security for the loan, the lender received a first-position lien on accounts receivable, inventory and other collateral owned by Green Plains Trade.

Corporate Activities

We also have $90.0 million of 5.75% Convertible Senior Notes due 2015. The Notes represent senior, unsecured obligations, with interest payable on May 1 and November 1 of each year. The Notes may be converted into shares of common stock and cash in lieu of fractional shares of the common stock based on a conversion rate initially equal to 69.7788 shares of the common stock per $1,000 principal amount of Notes, which is equal to an initial conversion price of $14.33 per share. The conversion rate is subject to adjustment upon the occurrence of specified events. We may redeem for cash all, but not less than all, of the Notes at any time on and after November 1, 2013, if the last reported sale price of our common stock equals or exceeds 140% of the applicable conversion price for a specified time period, at a redemption price equal to 100% of the principal amount of the Notes, plus accrued and unpaid interest.

On September 16, 2011, we signed a promissory note in the amount of $14.0 million to a subsidiary of NTR plc. The amount represents the remaining balance due on the Company’s repurchase of common stock. The balance and interest charges, if any, are due to December 15, 2011.

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Contractual Obligations

Our contractual obligations as of September 30, 2011 were as follows (in thousands):

	Payments Due By Period
Contractual Obligations	Total		Less than 1 year		1-3 years		3-5 years		More than 5 years
Long-term debt obligations (1)	$	655,722	$	145,591	$	166,630	$	213,029	$	130,472
Interest and fees on debt obligations (2)		101,741		29,153		43,060		24,732		4,796
Operating lease obligations (3)		55,238		17,017		24,123		10,963		3,135
Deferred tax liabilities		47,726		—		—		—		47,726
Purchase obligations
Forward grain purchase contracts (4)		293,202		284,152		9,050		—		—
Other commodity purchase contracts (5)		39,100		39,100		—		—		—
Other		8,892		8,774		118		—		—
Total contractual obligations	$	1,201,621	$	523,787	$	242,981	$	248,724	$	186,129

(1) Includes the current portion of long-term debt and excludes the discount on long-term debt of $322 thousand.

(2) Interest amounts are calculated over the terms of the loans using current interest rates, assuming scheduled principle and interest amounts are paid pursuant to the debt agreements. Includes administrative and/or commitment fees on debt obligations.

(3) Operating lease costs are primarily for railcars and office space.

(4) Purchase contracts represent index-priced and fixed-price contracts. Index purchase contracts are valued at current quarter-end prices.

(5) Includes fixed-price ethanol, dried distillers grains and natural gas purchase contracts.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

We are exposed to various market risks, including changes in commodity prices and interest rates. Market risk is the potential loss arising from adverse changes in market rates and prices. In the ordinary course of business, we enter into various types of transactions involving financial instruments to manage and reduce the impact of changes in commodity prices and interest rates. At this time, we do not expect to have exposure to foreign currency risk as we expect to conduct all of our business in U.S. dollars.

Interest Rate Risk

We are exposed to market risk from changes in interest rates. Exposure to interest rate risk results primarily from holding term and revolving loans that bear variable interest rates. Specifically, we had $678.2 million outstanding in debt as of September 30, 2011, $452.7 million of which was variable-rate in nature. Interest rates on our variable-rate debt are determined based upon the market interest rate of either the lender’s prime rate or LIBOR, as applicable. A 10% change in interest rates would affect our net income by approximately $1.9 million per year in the aggregate. Other details of our outstanding debt are discussed in the notes to the consolidated financial statements included as a part of this report.

Commodity Price Risk

We produce ethanol, distillers grains and corn oil from corn and our business is sensitive to changes in the prices of each of these commodities. The price of corn is subject to fluctuations due to unpredictable factors such as weather; corn planted and harvested acreage; changes in national and global supply and demand; and government programs and policies. We use natural gas in the ethanol production process and, as a result, our business is also sensitive to changes in the price of natural gas. The price of natural gas is influenced by such weather factors as extreme heat or cold in the summer and winter, or other natural events like hurricanes in the spring, summer and fall. Other natural gas price factors include North American exploration and production, and the amount of natural gas in underground storage during both the injection and withdrawal seasons. Ethanol prices are sensitive to world crude-oil supply and demand; crude-oil refining capacity and utilization; government regulation; and consumer demand for alternative fuels. Distillers grains prices are sensitive to various demand factors such as numbers of livestock on feed, prices for feed alternatives, and supply factors, primarily production by ethanol plants and other sources.

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We attempt to reduce the market risk associated with fluctuations in the price of corn, natural gas, distillers grains, corn oil and ethanol by employing a variety of risk management and economic hedging strategies. Strategies include the use of forward fixed-price physical contracts and derivative financial instruments, such as futures and options executed on the Chicago Board of Trade and/or the New York Mercantile Exchange.

We focus on locking in operating margins based on a model that continually monitors market prices of corn, natural gas and other input costs against prices for ethanol, distillers grains and corn oil at each of our production facilities. We create offsetting positions by using a combination of forward fixed-price physical purchases and sales contracts and derivative financial instruments. As a result of this approach, we frequently have gains on derivative financial instruments that are conversely offset by losses on forward fixed-price physical contracts or inventories and vice versa. In our ethanol production segment, gains and losses on derivative financial instruments are recognized each period in operating results while corresponding gains and losses on physical contracts are generally designated as normal purchases or normal sales contracts and are not recognized until quantities are delivered or utilized in production. For cash flow hedges, any ineffectiveness is recognized in current period results, while other unrealized gains and losses are reflected in accumulated other comprehensive income until gains and losses from the underlying hedged transaction are realized. In the event that it becomes probable that a forecasted transaction will not occur, we would discontinue cash flow hedge treatment, which would affect earnings. During the nine months ended September 30, 2011, revenues and cost of goods sold included a net loss and net gain from derivative financial instruments of $30.2 million and $22.4 million, respectively. To the extent the net gains or losses from settled derivative instruments are related to hedging current period production, they are generally offset by physical commodity purchases or sales resulting in the realization of the intended operating margins. However, our results of operations are impacted when there is a mismatch of gains or losses associated with the change in fair value of derivative instruments at the reporting period when the physical commodity purchase or sales has not yet occurred since they are designated as a normal purchase or normal sale.

In our agribusiness segment, inventory positions, physical purchase and sale contracts, and financial derivatives are marked to market with gains and losses included in results of operations. The market value of derivative financial instruments such as exchange-traded futures and options has a high, but not perfect, correlation to the underlying market value of grain inventories and related purchase and sale contracts.

Ethanol Production Segment

A sensitivity analysis has been prepared to estimate our ethanol production segment exposure to ethanol, corn, distillers grains and natural gas price risk. Market risk related to these factors is estimated as the potential change in net income resulting from hypothetical 10% changes in prices of our expected corn and natural gas requirements, and ethanol and distillers grains output for a one-year period from September 30, 2011. This analysis includes the impact of risk management activities that result from our use of fixed-price purchase and sale contracts and derivatives. The results of this analysis, which may differ from actual results, are as follows (in thousands):

Commodity	Estimated Total Volume Requirements for the Next 12 Months	Unit of Measure	Net Income Effect of Approximate 10% Change in Price
Ethanol	740,000	Gallons	$	82,449
Corn	265,000	Bushels	$	77,960
Distillers grains	2,100	Tons (1)	$	20,022
Natural gas	20,513	MMBTU (2)	$	4,024

(1) Distillers grains quantities are stated on an equivalent dried ton basis.

(2) Millions of British Thermal Units

Corn Oil Production Segment

A sensitivity analysis has been prepared to estimate our corn oil production segment exposure to corn oil price risk. Market risk related to these factors is estimated as the potential change in net income resulting from hypothetical 10% changes in prices of our expected corn oil output for a one-year period from September 30, 2011. This analysis includes the impact of risk management activities that result from our use of fixed-price sale contracts. Market risk at September 30, 2011, based on the estimated net income effect resulting from a hypothetical 10% change in such prices, was approximately $2.1 million.

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Agribusiness Segment

The availability and price of agricultural commodities are subject to wide fluctuations due to unpredictable factors such as weather, plantings, foreign and domestic government farm programs and policies, changes in global demand created by population changes and changes in standards of living, and global production of similar and competitive crops. To reduce price risk caused by market fluctuations in purchase and sale commitments for grain and grain held in inventory, we enter into exchange-traded futures and options contracts that function as economic hedges. The market value of exchange-traded futures and options used for economic hedging has a high, but not perfect correlation, to the underlying market value of grain inventories and related purchase and sale contracts. The less correlated portion of inventory and purchase and sale contract market value, known as basis, is much less volatile than the overall market value of exchange-traded futures and tends to follow historical patterns. We manage this less volatile risk by constantly monitoring our position relative to the price changes in the market. In addition, inventory values are affected by the month-to-month spread relationships in the regulated futures markets, as we carry inventories over time. These spread relationships are also less volatile than the overall market value and tend to follow historical patterns, but also represent a risk that cannot be directly offset. Our accounting policy for our futures and options, as well as the underlying inventory positions and purchase and sale contracts, is to mark them to the market and include gains and losses in the consolidated statement of operations in sales and merchandising revenues.

A sensitivity analysis has been prepared to estimate agribusiness segment exposure to market risk of our commodity position (exclusive of basis risk). Our daily net commodity position consists of inventories related to purchase and sale contracts and exchange-traded contracts. The fair value of our position, which is a summation of the fair values calculated for each commodity by valuing each net position at quoted futures market prices, is approximately $83.0 thousand at September 30, 2011. Market risk at that date, based on the estimated net income effect resulting from a hypothetical 10% change in such prices, was approximately $11.3 thousand.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in the reports that we file or submit under the Securities Exchange Act of 1934, or Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required financial disclosure.

As of the end of the period covered by this report, our management carried out an evaluation, under the supervision of and with the participation of our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Our disclosure controls and procedures are designed to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms. These disclosure controls and procedures are designed to ensure that information required to be disclosed by us in the reports that it files or submits under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required financial disclosure. Based upon that evaluation, our management, including our Chief Executive Officer and the Chief Financial Officer, concluded that our disclosure controls and procedures were effective.

Changes in Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining effective internal control over financial reporting to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of our consolidated financial statements for external purposes in accordance with generally accepted accounting principles. In the third quarter of 2011, we finalized the implementation of process and information system enhancements in our Iowa grain operations that are reported as part of the agribusiness segment. These process and information systems enhancements resulted in modifications to internal controls over the sales, customer service, inventory management and accounts payable processes related to grain handling. There were no other material changes in our internal control over financial reporting that occurred during the period covered by this quarterly report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II – OTHER INFORMATION

Item 1. Legal Proceedings.

In April 2011, Aventine Renewable Energy, Inc. filed a complaint in the United States Bankruptcy Court for the District of Delaware in connection with its Chapter 11 bankruptcy naming as defendants Green Plains Renewable Energy, Inc., Green Plains Obion LLC, Green Plains Bluffton LLC, Green Plains VBV LLC and Green Plains Trade Group LLC. This action alleges $24.4 million of damages from preferential transfers or, in the alternative, $28.4 million of damages from fraudulent transfers under an ethanol marketing agreement and an unspecified amount of damages for a continuing breach of a termination agreement related to rail cars. We are unable to predict the outcome of these matters at this time, and any views formed as to the viability of these claims or the financial exposure which could result may change as the matters proceed through their course. We intend to defend these claims vigorously.

Item 1A. Risk Factors.

Our investors should consider the risks that could affect us and our business as set forth in Part I, Item 1A, “Risk Factors” of our annual report on Form 10-K for the year ended December 31, 2010, as amended. Although we have attempted to discuss key factors, our investors need to be aware that other risks may prove to be important in the future. New risks may emerge at any time and we cannot predict such risks or estimate the extent to which they may affect our financial performance. Investors should also consider the discussion of risks and the other information included in this quarterly report on Form 10-Q, including Cautionary Information Regarding Forward-Looking Information, which is included in Part I, Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

The following risk factor should be considered in conjunction with the other information included in, or incorporated by reference in, this quarterly report on Form 10-Q.

We may fail to realize the anticipated benefits of our joint venture to commercialize algae production.

We have 35% ownership in a joint venture that is focused on developing technology to grow and harvest algae, which consume carbon dioxide, in commercially viable quantities. The algae produced have the potential to be used for advanced bio-fuel production, high quality animal feed, or as biomass for energy production, but our current primary focus is on efficiently growing, and developing primary markets for, algae on a large scale. We believe this technology has specific applications with facilities, including ethanol plants that emit carbon dioxide. We may fail to realize the expected benefits of capturing carbon dioxide to grow and harvest algae as acceptable production rates, operating costs, capital requirements and product market prices may not be achieved.

The following risk factor, which modifies a previously-filed risk factor, should be considered in conjunction with the other information included in, or incorporated by reference in, this quarterly report on Form 10-Q.

The ethanol industry is highly dependent on government usage mandates affecting ethanol production and favorable tax benefits for ethanol blending and any changes to such regulation could adversely affect the market for ethanol and our results of operations.

The domestic market for ethanol is largely dictated by federal mandates for blending ethanol with gasoline. The RFS mandate level for 2011 of 12.6 billion gallons approximates current domestic production levels. Future demand will be largely dependent upon the economic incentives to blend based upon the relative value of gasoline versus ethanol, taking into consideration the blender’s credit and the RFS. Any significant increase in production capacity beyond the RFS level might have an adverse impact on ethanol prices. Additionally, the RFS mandate with respect to ethanol derived from corn could be reduced or waived entirely. A reduction or waiver of the RFS mandate could adversely affect the prices of ethanol and our future performance. The RFS Flexibility Act was introduced on October 5, 2011 to reduce or eliminate the volumes of renewable fuel use required by RFS based upon corn stocks-to-use ratios. We believe the RFS is a significant component of national energy policy that reduces dependence on foreign oil by the United States. As a result, we believe that the RFS Flexibility Act will not garner sufficient support to be enacted.

The volumetric ethanol excise tax credit, or VEETC, is currently set to expire on December 31, 2011. Referred to as the blender’s credit, VEETC provides companies with a tax credit to blend ethanol with gasoline. The Food, Conservation and Energy Act of 2008, or the 2008 Farm Bill, amended the amount of tax credit provided under VEETC to 45 cents per gallon of pure ethanol and 38 cents per gallon for E85, a blended motor fuel containing 85% ethanol and 15% gasoline. On June 16,

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2011, a legislative proposal to end the VEETC was passed by the U.S. Senate. We expect the VEETC will be allowed to expire at December 31, 2011.

Federal law mandates the use of oxygenated gasoline. If these mandates are repealed, the market for domestic ethanol would be diminished significantly. Additionally, flexible-fuel vehicles receive preferential treatment in meeting corporate average fuel economy, or CAFE, standards. However, high blend ethanol fuels such as E85 result in lower fuel efficiencies. Absent the CAFE preferences, it may be unlikely that auto manufacturers would build flexible-fuel vehicles. Any change in these CAFE preferences could reduce the growth of E85 markets and result in lower ethanol prices.

To the extent that such federal or state laws are modified, the demand for ethanol may be reduced, which could negatively and materially affect our ability to operate profitably.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

Employees surrender shares upon the vesting of restricted stock grants to satisfy payroll tax withholding obligations. No restricted stock vested during the third quarter of 2011 and therefore no shares were surrendered. On September 9, 2011, we repurchased 3.5 million shares of common stock at a price of $8.00 per share from a subsidiary of NTR plc, which is a principal shareholder. We do not have a share repurchase program and do not intend to retire the repurchased shares.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. (Removed and Reserved).

Item 5. Other Information.

None.

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Item 6. Exhibits.

EXHIBIT INDEX

Exhibit No.	Description
10.1	Fifth Amendment dated July 28, 2011 to Second Amended and Restated Credit Agreement dated April 19, 2010 by and among Green Plains Grain Company LLC, Green Plains Grain Company TN LLC, and First National Bank of Omaha (Incorporated by reference to Exhibit 10.4 of the Company’s Quarterly Report on Form 10-Q, filed August 3, 2011)
10.2	Stock Repurchase Agreement between Greenstar North America Holdings Inc. and Green Plains Renewable Energy, Inc. (Incorporated by reference to Exhibit 10.1 if the Company’s Current Report on Form 8-K, filed September 14, 2011)
10.3	Master Loan Agreement, dated September 28, 2011, by and among Green Plains Shenandoah LLC and Farm Credit Services of America, FLCA
10.4	Revolving Term Loan Supplement, dated September 28, 2011, by and among Green Plains Shenandoah LLC and Farm Credit Services of America, FLCA
10.5	Multiple Advance Term Loan Supplement, dated September 28, 2011, by and among Green Plains Shenandoah LLC and Farm Credit Services of America, FLCA
10.6	Amended and Restated Master Loan Agreement, dated September 30, 2011, by and among Green Plains Bluffton LLC and AgStar Financial Services, PCA
31.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101	The following information from Green Plains Renewable Energy, Inc.’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2011, formatted in Extensible Business Reporting Language (XBRL): (i) the Consolidated Balance Sheet, (ii) the Consolidated Statement of Operations, (iii) the Consolidated Statement of Cash Flows, and (iv) the Notes to Consolidated Financial Statements (tagged as blocks of text).

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	GREEN PLAINS RENEWABLE ENERGY, INC. (Registrant)
Date: November 1, 2011	By:	/s/ Todd A. Becker
		Todd A. Becker
		President and Chief Executive Officer
		(Principal Executive Officer)
Date: November 1, 2011	By:	/s/ Jerry L. Peters
		Jerry L. Peters
		Chief Financial Officer
		(Principal Financial Officer)

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EX-10.3

Exhibit 10.3

MASTER LOAN AGREEMENT

THIS MASTER LOAN AGREEMENT is entered into as of September 28, 2011, between FARM CREDIT SERVICES OF AMERICA, FLCA (“Farm Credit”) and GREEN PLAINS SHENANDOAH LLC, Shenandoah, Iowa (the “Company”).

BACKGROUND

Farm Credit and the Company are parties to a Master Loan Agreement dated August 26, 2010 (the “Existing Agreement”). Pursuant to the terms of the Existing Agreement, the parties entered into one or more Supplements thereto. Farm Credit and the Company now desire to amend and restate the Existing Agreement and to apply such new agreement to the existing Supplements, as well as any new Supplements that may be issued thereunder. For that reason and for valuable consideration (the receipt and sufficiency of which are hereby acknowledged), Farm Credit and the Company hereby agree that the Existing Agreement shall be amended and restated to read as follows:

SECTION 1. Supplements. In the event the Company desires to borrow from Farm Credit and Farm Credit is willing to lend to the Company, or in the event Farm Credit and the Company desire to consolidate any existing loans hereunder, the parties will enter into a Supplement to this agreement (a “Supplement”). Each Supplement will set forth the amount of the loan, the purpose of the loan, the interest rate or rate options applicable to that loan, the repayment terms of the loan, and any other terms and conditions applicable to that particular loan. Each loan will be governed by the terms and conditions contained in this agreement and in the Supplement relating to the loan. As of the date hereof, the following Supplements are outstanding hereunder and shall be governed by the terms and conditions hereof: (A) the Multiple Advance Term Loan Supplement dated September 28, 2011 and numbered RI0355T01D; and (B) the Revolving Term Loan Supplement dated September 28, 2011 and numbered RI0355T02C.

SECTION 2. Sale of Participation Interests and Appointment of Administrative Agent. The Company acknowledges that concurrent with the execution of this Master Loan Agreement and related Supplements, Farm Credit is selling a participation interest in this Master Loan Agreement and Supplements executed concurrently herewith to CoBank, ACB (“CoBank”) (up to a 100% interest). Pursuant to an Administrative Agency Agreement dated January 30, 2006, (the “Agency Agreement”), Farm Credit and CoBank appointed CoBank to act as Administrative Agent (“Agent”) to act in place of Farm Credit hereunder and under the Supplements and any security documents to be executed thereunder. All funds to be advanced hereunder shall be made by Agent, all repayments by the Company hereunder shall be made to Agent, and all notices to be made to Farm Credit hereunder shall be made to Agent. Agent shall be solely responsible for the administration of this agreement, the Supplements and the security documents to be executed by the Company thereunder and the enforcement of all rights and remedies of Farm Credit hereunder and thereunder. Company acknowledges the appointment of the Agent and consents to such appointment.

SECTION 3. Availability. Loans will be made available on any day on which Agent and the Federal Reserve Banks are open for business upon the telephonic or written request of the Company. Requests for loans must be received no later than 12:00 Noon Company’s local time on the date the loan is desired. Loans will be made available by wire transfer of immediately available funds to such account or accounts as may be authorized by the Company. The Company shall furnish to Agent a duly completed and executed copy of a CoBank Delegation and Wire and Electronic Transfer Authorization Form, and Agent shall be entitled to rely on (and shall incur no liability to the Company in acting on) any request or direction furnished in accordance with the terms thereof.

SECTION 4. Repayment. The Company’s obligation to repay each loan shall be evidenced by the promissory note set forth in the Supplement relating to that loan or by such replacement note as Agent shall require. Agent shall maintain a record of all loans, the interest accrued thereon, and all payments made with respect thereto, and such record shall, absent proof of manifest error, be conclusive evidence of the outstanding principal and interest on the loans. All payments shall be made by wire transfer of immediately available funds, by check, or by automated clearing house or other similar cash handling processes as specified by separate agreement between the Company and Agent. Wire transfers shall be made to ABA No. 307088754 for advice to and credit of Agent (or to such other account as Agent may direct by notice). The Company shall give Agent telephonic notice no later than 12:00 Noon Company’s local time of its intent to pay by wire and funds received after 3:00 p.m. Company’s local time shall be credited on the next business day. Checks shall be mailed to CoBank, Department 167, Denver, Colorado 80291-0167 (or to such other place as Agent may direct by notice). Credit for payment by check will not be given until the later of: (A) the day on which Agent receives immediately available funds; or (B) the next business day after receipt of the check.

SECTION 5. Capitalization. The Company agrees to purchase voting (Class D) or non-voting (Class E) stock in Farm Credit Services of America, ACA (currently a minimum of $1,000.00 worth of stock consisting of at least 200 shares of $5.00 par value stock) as required under the policy of Farm Credit at the time of acquisition. Farm Credit policy may change from time to time. Farm Credit shall have a first lien on the stock for payment of any liability of the Company to Farm Credit. Said stock shall be owned as follows:

Owner Name: Green Plains Shenandoah LLC                    SSN/TIN: 26-1905438

The Company authorizes and appoints the following to act on behalf of all owners, to vote the Class D stock, and to accept, receive and receipt for any dividends declared on the stock:

Jerry Peters, voter

SECTION 6. Security. The Company’s obligations under this agreement, all Supplements (whenever executed), and all instruments and documents contemplated hereby or thereby, shall be secured by a statutory first lien on all equity which the Company may now own or hereafter acquire in Farm Credit. In addition, the Company’s obligations under each Supplement (whenever executed) and this agreement shall be secured by a first lien (subject only to exceptions approved in writing by Agent) pursuant to all security agreements, mortgages, and deeds of trust executed by the Company in favor of Farm Credit, whether now existing or hereafter entered into. As additional security for those obligations: (A) the Company agrees to grant to Farm Credit, by means of such instruments and documents as Agent shall reasonably require a first priority lien on such of its other assets, whether now existing or hereafter acquired, as Agent may from time to time require; and (B) the Company agrees to grant to Farm Credit, by means of such instruments and documents as Agent shall reasonably require, a first priority lien on all realty which the Company may from time to time acquire after the date hereof. Farm Credit may at its discretion assign collateral to the Agent under the Agency Agreement.

SECTION 7. Conditions Precedent.

(A) Conditions to Initial Supplement. Farm Credit’s obligation to extend credit under the initial Supplement hereto is subject to the conditions precedent that Agent receive, in form and content satisfactory to Agent, each of the following:

This Agreement, Etc. A duly executed copy of this agreement and all instruments and documents contemplated hereby.

(B) Conditions to Each Supplement. Farm Credit’s obligation to extend credit under each Supplement, including the initial Supplement, is subject to the conditions precedent that Agent receive, in form and content satisfactory to Agent, each of the following:

(1) Supplement. A duly executed copy of the Supplement and all instruments and documents contemplated thereby.

(2) Evidence of Authority. Such certified board resolutions, certificates of incumbency, and other evidence that Agent may require that the Supplement, all instruments and documents executed in connection therewith, and, in the case of initial Supplement hereto, this agreement and all instruments and documents executed in connection herewith, have been duly authorized and executed.

(3) Fees and Other Charges. All fees and other charges provided for herein or in the Supplement.

(4) Evidence of Perfection, Etc. Such evidence as Agent may require that Farm Credit has a duly perfected first priority lien on all security for the Company’s obligations, and that the Company is in compliance with Section 9(D) hereof.

(C) Conditions to Each Loan. Farm Credit’s obligation under each Supplement to make any loan to the Company thereunder is subject to the condition that no “Event of Default” (as defined in Section 12 hereof) or event which with the giving of notice and/or the passage of time would become an Event of Default hereunder (a “Potential Default”), shall have occurred and be continuing.

SECTION 8. Representations and Warranties.

(A) This Agreement. The Company represents and warrants to Farm Credit and Agent that as of the date of this agreement:

(1) Compliance. The Company and, to the extent contemplated hereunder, each “Subsidiary” (as defined below), is in compliance with all of the terms of this agreement, and no Event of Default or Potential Default exists hereunder.

(2) Subsidiaries. The Company has no “Subsidiary(ies)” (as defined below). For purposes hereof, a “Subsidiary” shall mean a corporation of which shares of stock having ordinary voting power to elect a majority of the board of directors or other managers of such corporation are owned, directly or indirectly, by the Company.

(B) Each Supplement. The execution by the Company of each Supplement hereto shall constitute a representation and warranty to Agent that:

(1) Applications. Each representation and warranty and all information set forth in any application or other documents submitted in connection with, or to induce Farm Credit to enter into, such Supplement, is correct in all material respects as of the date of the Supplement.

(2) Conflicting Agreements, Etc. This agreement, the Supplements, and all security and other instruments and documents relating hereto and thereto (collectively, at any time, the “Loan Documents”), do not conflict with, or require the consent of any party to, any other agreement to which the Company is a party or by which it or its property may be bound or affected, and do not conflict with any provision of the Company’s bylaws, articles of incorporation, or other organizational documents.

(3) Compliance. The Company and, to the extent contemplated hereunder, each Subsidiary, is in compliance with all of the terms of the Loan Documents (including, without limitation, Section 9(A) of this agreement on eligibility to borrow from Farm Credit).

(4) Binding Agreement. The Loan Documents create legal, valid, and binding obligations of the Company which are enforceable in accordance with their terms, except to the extent that enforcement may be limited by applicable bankruptcy, insolvency, or similar laws affecting creditors’ rights generally.

SECTION 9. Affirmative Covenants. Unless otherwise agreed to in writing by Agent while this agreement is in effect, the Company agrees to and with respect to Subsections 9(B) through 9(G) hereof, agrees to cause each Subsidiary to:

(A) Eligibility. Maintain its status as an entity eligible to borrow from Farm Credit pursuant to the terms of the Farm Credit Act of 1971, as amended, 12 USC 2001, et seq.

(B) Corporate Existence, Licenses, Etc. (1) Preserve and keep in full force and effect its existence and good standing in the jurisdiction of its incorporation or formation; (2) qualify and remain qualified to transact business in all jurisdictions where such qualification is required; and (3) obtain and maintain all licenses, certificates, permits, authorizations, approvals, and the like which are material to the conduct of its business or required by law, rule, regulation, ordinance, code, order, and the like (collectively, “Laws”).

(C) Compliance with Laws. Comply in all material respects with all applicable Laws, including, without limitation, all Laws relating to environmental protection and any patron or member investment program that it may have. In addition, the Company agrees to cause all persons occupying or present on any of its properties, and to cause each Subsidiary to cause all persons occupying or present on any of its properties, to comply in all material respects with all environmental protection Laws.

(D) Insurance. Maintain insurance with insurance companies or associations acceptable to Agent in such amounts and covering such risks as are usually carried by companies engaged in the same or similar business and similarly situated, and make such increases in the type or amount of coverage as Agent may request. All such policies insuring any collateral for the Company’s obligations to Farm Credit shall have mortgagee or lender loss payable clauses or endorsements in form and content acceptable to Agent. At Agent’s request, all policies (or such other proof of compliance with this Subsection as may be satisfactory to Agent) shall be delivered to Agent.

(E) Property Maintenance. Maintain all of its property that is necessary to or useful in the proper conduct of its business in good working condition, ordinary wear and tear excepted.

(F) Books and Records. Keep adequate records and books of account in which complete entries will be made in accordance with generally accepted accounting principles (“GAAP”) consistently applied.

(G) Inspection. Permit Agent or its agents, upon reasonable notice and during normal business hours or at such other times as the parties may agree, to examine its properties, books, and records, and to discuss its affairs, finances, and accounts, with its respective officers, directors, employees, and independent certified public accountants.

(H) Reports and Notices. Furnish to Agent:

(1) Annual Financial Statements. As soon as available, but in no event more than 90 days after the end of each fiscal year of Green Plains Renewable Energy, Inc. (“Green Plains”) occurring during the term hereof, annual consolidated and consolidating financial statements of Green Plains and its consolidated Subsidiaries, including Green Plains Shenandoah LLC, prepared in accordance with GAAP consistently applied. Such financial statements shall: (a) be audited by independent certified public accountants selected by the Company and acceptable to Agent; (b) be accompanied by a report of such accountants containing an opinion thereon acceptable to Agent; (c) be prepared in reasonable detail and in comparative form; and (d) include a balance sheet, a statement of income, a statement of retained earnings, a statement of cash flows, and all notes and schedules relating thereto, and be accompanied by written communication from the auditor identifying passed audit adjustments and material deficiencies pertaining to the Company, as may reasonably be requested by Agent.

(2) Interim Financial Statements. As soon as available, but in no event more than 30 days after the end of each month, a consolidated balance sheet of the Company and its consolidated Subsidiaries, if any, as of the end of such month, a consolidated statement of income for the Company and its consolidated Subsidiaries, if any, for such period and for the period year to date, and such other interim statements as Agent may reasonably request, all prepared in reasonable detail and in comparative form in accordance with GAAP consistently applied and, if required by written notice from Agent, certified by an authorized officer or employee of the Company acceptable to Agent.

(3) Notice of Default. Promptly after becoming aware thereof, notice of the occurrence of an Event of Default or a Potential Default.

(4) Notice of Non-Environmental Litigation. Promptly after the commencement thereof, notice of the commencement of all actions, suits, or proceedings before any court, arbitrator, or governmental department, commission, board, bureau, agency, or instrumentality affecting the Company or any Subsidiary which, if determined adversely to the Company or any such Subsidiary, could have a material adverse effect on the financial condition, properties, profits, or operations of the Company or any such Subsidiary.

(5) Notice of Environmental Litigation, Etc. Promptly after receipt thereof, notice of the receipt of all pleadings, orders, complaints, indictments, or any other communication alleging a condition that may require the Company or any Subsidiary to undertake or to contribute to a cleanup or other response under environmental Laws, or which seek penalties, damages, injunctive relief, or criminal sanctions related to alleged violations of such Laws, or which claim personal injury or property damage to any person as a result of environmental factors or conditions.

(6) Formation Documents. Intentionally Omitted.

(7) Budgets. As soon as available, but in no event more than 90 days after the end of any fiscal year of the Company occurring during the term hereof, copies of the Company’s board-approved annual budgets and forecasts of operations and capital expenditures.

(8) Compliance Certificates. As soon as available, but in no event more than 30 days after the end of each fiscal quarter of the Company, a certificate of an officer or employee of the Company acceptable to Agent setting forth calculations showing compliance with each of the financial covenants that require compliance at the end of the period for which the statements are being furnished.

(9) Other Information. Such other information regarding the condition or operations, financial or otherwise, of the Company or any Subsidiary as Agent may from time to time reasonably request, including but not limited to copies of all pleadings, notices, and communications referred to in Subsections 9(H)(4) and (5) above.

SECTION 10. Negative Covenants. Unless otherwise agreed to in writing by Agent, while this agreement is in effect the Company will not:

(A) Borrowings. Create, incur, assume, or allow to exist, directly or indirectly, any indebtedness or liability for borrowed money (including trade or bankers’ acceptances), letters of credit, or the deferred purchase price of property or services (including capitalized leases), except for: (1) debt to Farm Credit; (2) accounts payable to trade creditors incurred in the ordinary course of business; (3) current operating liabilities (other than for borrowed money) incurred in the ordinary course of business; (4) debt of the Company to miscellaneous creditors in an amount not to exceed $1,600,000.00, on terms and conditions satisfactory to Agent; and (5) unsecured indebtedness of the Company to Green Plains in an amount not to exceed $10,000,000.00, and all extensions, renewals, and refinancings thereof, provided that such indebtedness is documented with terms and conditions satisfactory to Agent.

(B) Liens. Create, incur, assume, or allow to exist any mortgage, deed of trust, pledge, lien (including the lien of an attachment, judgment, or execution), security interest, or other encumbrance of any kind upon any of its property, real or personal (collectively, “Liens”). The forgoing restrictions shall not apply to: (1) Liens in favor of Farm Credit; (2) Liens for taxes, assessments, or governmental charges that are not past due; (3) Liens and deposits under workers’ compensation, unemployment insurance, and social security Laws; (4) Liens and deposits to secure the performance of bids, tenders, contracts (other than contracts for the payment of money), and like obligations arising in the ordinary course of business as conducted on the date hereof; (5) Liens imposed by Law in favor of mechanics, materialmen, warehousemen, and like persons that secure obligations that are not past due; (6) easements, rights-of-way, restrictions, and other similar encumbrances which, in the aggregate, do not materially interfere with the occupation, use, and enjoyment of the property or assets encumbered thereby in the normal course of its business or materially impair the value of the property subject thereto; (7) Liens in favor of miscellaneous creditors to secure indebtedness permitted hereunder, with priority of such Liens acceptable to Agent; and (8) purchase money security interests in favor of Danisco US Inc.

(C) Mergers, Acquisitions, Etc. Merge or consolidate with any other entity or acquire all or a material part of the assets of any person or entity, or form or create any new Subsidiary or affiliate, or commence operations under any other name, organization, or entity, including any joint venture.

(D) Transfer of Assets. Sell, transfer, lease, or otherwise dispose of any of its assets, except in the ordinary course of business.

(E) Loans and Investments. Make any loan or advance to any person or entity, or purchase any capital stock, obligations or other securities of, make any capital contribution to, or otherwise invest in any person or entity, or form or create any partnerships or joint ventures except trade credit extended in the ordinary course of business.

(F) Contingent Liabilities. Assume, guarantee, become liable as a surety, endorse, contingently agree to purchase, or otherwise be or become liable, directly or indirectly (including, but not limited to, by means of a maintenance agreement, an asset or stock purchase agreement, or any other agreement designed to ensure any creditor against loss), for or on account of the obligation of any person or entity, except by the endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of the Company’s business.

(G) Change in Business. Engage in any business activities or operations substantially different from or unrelated to the Company’s present business activities or operations.

(H) Dividends, Etc. Declare or pay any dividends, or make any distribution of assets to the member/owners, or purchase, redeem, retire or otherwise acquire for value any of its equity, or allocate or otherwise set apart any sum for any of the foregoing, except that a distribution may be accrued to the Company’s members/owners of up to 40% of the year-to-date net profit before taxes (according to GAAP) and payment of this accrued amount may be made after the end of each fiscal quarter, provided that the Company has been and will remain in compliance with all loan covenants, terms and conditions. Furthermore, after receipt of the audited financial statements for the pertinent fiscal year, and provided that the required “Free Cash Flow” payment has been made to the Agent for such fiscal year as provided in the Multiple Advance Term Loan Supplement dated September 28, 2011 and numbered RI0355T01D and any renewals, restatements and amendments thereof, additional distributions may be made in excess of the quarterly distribution(s) so long as aggregate distributions do not exceed 100% of the net profit before taxes for such fiscal year, and the Company will remain in compliance with all other loan covenant, terms and conditions.

(I) Capital Expenditures. During any fiscal year of the Company, expend, in the aggregate, more than $1,250,000.00 for the acquisition of fixed or capital assets (including all obligations under capitalized leases authorized under the terms of this agreement, but excluding obligations under operating leases). Notwithstanding the foregoing, additional expenditures over $1,250,000.00 are allowed so long as they are 100% financed by certified cash injections of equity capital.

(J) Leases. Create, incur, assume, or permit to exist any obligation as lessee under operating leases or leases which should be capitalized in accordance with GAAP for the rental or hire of any real or personal property except railcar leases with a lease term of not more than five years for up to and including 100 railroad cars, under terms and conditions acceptable to Agent, and except leases which do not in the aggregate require the Company to make scheduled payments to the lessors in any fiscal year of the Company in excess of $100,000.00.

(K) Changes to Operating Agreements, Etc. Amend or otherwise make any material changes to the Company’s Articles of Organization, Operating Agreement, management contracts and ethanol and/or distillers grain marketing contracts.

SECTION 11. Financial Covenants. Unless otherwise agreed to in writing, while this agreement is in effect:

(A) Working Capital. The Company will have at the end of each period for which financial statements are required to be furnished pursuant to Section 9(H) hereof an excess of current assets over current liabilities (both as determined in accordance with GAAP consistently applied) of not less than $6,000,000.00, except that in determining current assets, any amount available under the Revolving Term Loan Supplement (less the amount that would be considered a current liability under GAAP if fully advanced) hereto may be included.

(B) Net Worth. The Company will have at the end of each period for which financial statements are required to be furnished pursuant to Section 9(H) hereof an excess of total assets over total liabilities (both as determined in accordance with GAAP consistently applied) of not less than $54,000,000.00.

(C) Debt Service Coverage Ratio. The Company will have at the end of each fiscal year of the Company a “Debt Service Coverage Ratio” (as defined below) for such year of not less than 1.25 to 1.00. For purposes hereof, the term “Debt Service Coverage Ratio” shall mean the following (all as calculated for the most current year end in accordance with GAAP consistently applied): (1) net income (before taxes), plus depreciation and amortization; plus new equity injection(s) (except equity used to fund capital expenditures); divided by $4,800,000.00.

SECTION 12. Events of Default. Each of the following shall constitute an “Event of Default” under this agreement:

(A) Payment Default. The Company should fail to make any payment to Agent, or to purchase any equity in, Farm Credit within ten (10) days of when due.

(B) Representations and Warranties. Any representation or warranty made or deemed made by the Company herein or in any Supplement, application, agreement, certificate, or other document related to or furnished in connection with this agreement or any Supplement, shall prove to have been false or misleading in any material respect on or as of the date made or deemed made.

(C) Certain Affirmative Covenants. The Company or, to the extent required hereunder, any Subsidiary should fail to perform or comply with Sections 9(A) through 9(H)(2), 9(H)(7) through 9(H)(8) or any reporting covenant set forth in any Supplement hereto, and such failure continues for 15 days after written notice thereof shall have been delivered by Agent to the Company.

(D) Other Covenants and Agreements. The Company or, to the extent required hereunder, any Subsidiary should fail to perform or comply with any other covenant or agreement contained herein or in any other Loan Document or shall use the proceeds of any loan for an unauthorized purpose, provided, however, that the Company shall have thirty (30) days after the date of any required financial statement issued under Section 9(H)(1) or 9(H)(2) above that is timely received by the Agent to cure any shortfall under a Financial Covenant set forth in Section 11 above.

(E) Cross-Default. The Company should, after any applicable grace period, breach or be in default under the terms of any other agreement between the Company and Farm Credit, or between the Company and any affiliate of Farm Credit, including without limitation Farm Credit Leasing Services Corporation.

(F) Other Indebtedness. The Company or any Subsidiary should fail to pay when due any indebtedness to any other person or entity for borrowed money or any long-term obligation for the deferred purchase price of property (including any capitalized lease), or any other event occurs which, under any agreement or instrument relating to such indebtedness or obligation, has the effect of accelerating or permitting the acceleration of such indebtedness or obligation, whether or not such indebtedness or obligation is actually accelerated or the right to accelerate is conditioned on the giving of notice, the passage of time, or otherwise.

(G) Judgments. A judgment, decree, or order for the payment of money shall be rendered against the Company or any Subsidiary and either: (1) enforcement proceedings shall have been commenced; (2) a Lien prohibited under Section 10(B) hereof shall have been obtained; or (3) such judgment, decree, or order shall continue unsatisfied and in effect for a period of 20 consecutive days without being vacated, discharged, satisfied, or stayed pending appeal.

(H) Insolvency, Etc. The Company or any Subsidiary shall: (1) become insolvent or shall generally not, or shall be unable to, or shall admit in writing its inability to, pay its debts as they come due; or (2) suspend its business operations or a material part thereof or make an assignment for the benefit of creditors; or (3) apply for, consent to, or acquiesce in the appointment of a trustee, receiver, or other custodian for it or any of its property or, in the absence of such application, consent, or acquiescence, a trustee, receiver, or other custodian is so appointed; or (4) commence or have commenced against it any proceeding under any bankruptcy, reorganization, arrangement, readjustment of debt, dissolution, or liquidation Law of any jurisdiction.

(I) Material Adverse Change. Any material adverse change occurs, as reasonably determined by Agent, in the Company’s financial condition, results of operation, or ability to perform its obligations hereunder or under any instrument or document contemplated hereby.

(J) Revocation of Guaranty. Any guaranty, suretyship, subordination agreement, maintenance agreement, or other agreement furnished in connection with the Company’s obligations hereunder and under any Supplement shall, at any time, cease to be in full force and effect, or shall be revoked or declared null and void, or the validity or enforceability thereof shall be contested by the guarantor, surety or other maker thereof (the “Guarantor”), or the Guarantor shall deny any further liability or obligation thereunder, or shall fail to perform its obligations thereunder, or any representation or warranty set forth therein shall be breached, or the Guarantor shall breach or be in default under the terms of any other agreement with Agent (including any loan agreement or security agreement), or a default set forth in Subsections (F) through (H) hereof shall occur with respect to the Guarantor.

SECTION 13. Remedies. Upon the occurrence and during the continuance of an Event of Default or any Potential Default, Farm Credit shall have no obligation to continue to extend credit to the Company and may discontinue doing so at any time without prior notice. For all purposes hereof, the term “Potential Default” means the occurrence of any event which, with the passage of time or the giving of notice or both would become an Event of Default. In addition, upon the occurrence and during the continuance of any Event of Default, Farm Credit or Agent may, upon notice to the Company, terminate any commitment and declare the entire unpaid principal balance of the loans, all accrued interest thereon, and all other amounts payable under this agreement, all Supplements, and the other Loan Documents to be immediately due and payable. Upon such a declaration, the unpaid principal balance of the loans and all such other amounts shall become immediately due and payable, without protest, presentment, demand, or further notice of any kind, all of which are hereby expressly waived by the Company. In addition, upon such an acceleration:

(A) Enforcement. Farm Credit or Agent may proceed to protect, exercise, and enforce such rights and remedies as may be provided by this agreement, any other Loan Document or under Law. Each and every one of such rights and remedies shall be cumulative and may be exercised from time to time, and no failure on the part of Farm Credit or Agent to exercise, and no delay in exercising, any right or remedy shall operate as a waiver thereof, and no single or partial exercise of any right or remedy shall preclude any other or future exercise thereof, or the exercise of any other right. Without limiting the foregoing, Agent may, upon the occurrence and during the continuance of any Event of Default, hold and/or set off and apply against the Company’s obligation to Farm Credit the proceeds of any equity in Farm Credit or Agent, any cash collateral held by Farm Credit or Agent, or any balances held by Farm Credit or Agent for the Company’s account (whether or not such balances are then due).

(B) Application of Funds. Agent may apply all payments received by it to the Company’s obligations to Farm Credit in such order and manner as Agent may elect in its sole discretion.

In addition to the rights and remedies set forth above: (1) upon the occurrence and during the continuance of an Event of Default, then at Agent’s option in each instance, the entire indebtedness outstanding hereunder and under all Supplements shall bear interest from the date of such Event of Default until such Event of Default shall have been waived or cured in a manner satisfactory to Agent at 4.00% per annum in excess of the rate(s) of interest that would otherwise be in effect on that loan; and (2) after the maturity of any loan (whether as a result of acceleration or otherwise), the unpaid principal balance of such loan (including without limitation, principal, interest, fees and expenses) shall automatically bear interest at 4.00% per annum in excess of the rate(s) of interest that would otherwise be in effect on that loan. All interest provided for herein shall be payable on demand and shall be calculated on the basis of a year consisting of 360 days.

SECTION 14. Broken Funding Surcharge. Notwithstanding any provision contained in any Supplement giving the Company the right to repay any loan prior to the date it would otherwise be due and payable, the Company agrees to provide three Business Days’ prior written notice for any prepayment of a fixed rate balance and that in the event it repays any fixed rate balance prior to its scheduled due date or prior to the last day of the fixed rate period applicable thereto (whether such payment is made voluntarily, as a result of an acceleration, or otherwise), the Company will pay to Agent a surcharge in an amount equal to the greater of: (A) an amount which would result in Farm Credit, Agent, and all subparticipants being made whole (on a present value basis) for the actual or imputed funding losses incurred by Farm Credit, Agent, and all subparticipants as a result thereof; or (B) $300.00. Notwithstanding the foregoing, in the event any fixed rate balance is repaid as a result of the Company refinancing the loan with another lender or by other means, then in lieu of the foregoing, the Company shall pay to Agent a surcharge in an amount sufficient (on a present value basis) to enable Farm Credit, Agent, and all subparticipants to maintain the yield they would have earned during the fixed rate period on the amount repaid. Such surcharges will be calculated in accordance with methodology established by Farm Credit, Agent, and all subparticipants (a copy of which will be made available to the Company upon request).

SECTION 15. Complete Agreement, Amendments. This agreement, all Supplements, and all other instruments and documents contemplated hereby and thereby, are intended by the parties to be a complete and final expression of their agreement. No amendment, modification, or waiver of any provision hereof or thereof, and no consent to any departure by the Company herefrom or therefrom, shall be effective unless approved by Agent and contained in a writing signed by or on behalf of Agent, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. In the event this agreement is amended or restated, each such amendment or restatement shall be applicable to all Supplements hereto.

SECTION 16. Other Types of Credit. From time to time, Farm Credit may issue letters of credit or extend other types of credit to or for the account of the Company. In the event the parties desire to do so under the terms of this agreement, such extensions of credit may be set forth in any Supplement hereto and this agreement shall be applicable thereto.

SECTION 17. Applicable Law. Without giving effect to the principles of conflict of laws and except to the extent governed by federal law, the Laws of the State of Colorado, without reference to choice of law doctrine, shall govern this agreement, each Supplement and any other Loan Documents for which Colorado is specified as the applicable law, and all disputes and matters between the parties to this agreement, including all disputes and matters whatsoever arising under, in connection with or incident to the lending and/or leasing or other business relationship between the parties, and the rights and obligations of the parties to this agreement or any other Loan Documents by and between the parties for which Colorado is specified as the applicable law.

SECTION 18. Notices. All notices hereunder shall be in writing and shall be deemed to be duly given upon delivery if personally delivered or sent by telegram or facsimile transmission, or three days after mailing if sent by express, certified or registered mail, to the parties at the following addresses (or such other address for a party as shall be specified by like notice):

(Continued on next page)

If to Agent, as follows:   For general correspondence purposes: CoBank, ACB P.O. Box 5110 Denver, Colorado 80217-5110   For direct delivery purposes, when desired: CoBank, ACB 5500 South Quebec Street Greenwood Village, Colorado 80111-1914   Attention: Credit Information Services Fax No.: (303) 224-6101 If to the Company, as follows:   Green Plains Shenandoah LLC 450 Regency Parkway Omaha, Nebraska 68114   Attention: Executive Vice President & Treasurer Fax No.: (402) 884-8776   With copy to:   Green Plains Shenandoah LLC 450 Regency Parkway Omaha, Nebraska 68114   Attention: General Counsel

SECTION 19. Taxes and Expenses. To the extent allowed by law, the Company agrees to pay all reasonable out-of-pocket costs and expenses (including the fees and expenses of counsel retained or employed by Agent, including expenses of in-house counsel of Agent) incurred by Agent and any participants from Farm Credit in connection with the origination, administration, collection, and enforcement of this agreement and the other Loan Documents, including, without limitation, all costs and expenses incurred in perfecting, maintaining, determining the priority of, and releasing any security for the Company’s obligations to Farm Credit, and any stamp, intangible, transfer, or like tax payable in connection with this agreement or any other Loan Document.

SECTION 20. Effectiveness and Severability. This agreement shall continue in effect until: (A) all indebtedness and obligations of the Company under this agreement, all Supplements, and all other Loan Documents shall have been paid or satisfied; (B) Farm Credit has no commitment to extend credit to or for the account of the Company under any Supplement; and (C) either party sends written notice to the other terminating this agreement. Any provision of this agreement or any other Loan Document which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof or thereof.

SECTION 21. Successors and Assigns. This agreement, each Supplement, and the other Loan Documents shall be binding upon and inure to the benefit of the Company and Farm Credit and their respective successors and assigns, except that the Company may not assign or transfer its rights or obligations under this agreement, any Supplement or any other Loan Document without the prior written consent of Agent.

SECTION 22. Participations, Etc. From time to time, Farm Credit may sell to one or more banks, financial institutions, or other lenders a participation in one or more of the loans or other extensions of credit made pursuant to this agreement. However, no such participation shall relieve Farm Credit of any commitment made to the Company hereunder. In connection with the foregoing, Farm Credit may disclose information concerning the Company and its Subsidiaries, if any, to any participant

or prospective participant, provided that such participant or prospective participant agrees to keep such information confidential. Farm Credit agrees that all Loans that are made by Farm Credit and that are retained for its own account or repurchased may be entitled to patronage distributions in accordance with the bylaws of Farm Credit and its practices and procedures related to patronage distribution. Accordingly, all Loans that are included in a sale of participation interest and not retained or repurchased shall not be entitled to patronage distributions from Farm Credit. A sale of a participation interest may include certain voting rights of the participants regarding the loans hereunder (including without limitation the administration, servicing, and enforcement thereof). Farm Credit agrees to give written notification to the Company of any sale of a participation interest.

SECTION 23. Administrative Fee. The Company agrees to pay to Agent on each November 20, for as long as the Company has commitments from Farm Credit, an administrative fee in the amount of $25,000.00.

SECTION 24. Counterpart Signatures. This agreement, each Supplement and any other Loan Document may be executed in any number of counterparts and by the different parties hereto in separate counterparts, each of which when executed shall be deemed to be an original and shall be binding upon all parties and their respective permitted successors and assigns, and all of which taken together shall constitute one and the same agreement.

IN WITNESS WHEREOF, the parties have caused this agreement to be executed by their duly authorized officers as of the date shown above.

FARM CREDIT SERVICES OF AMERICA, FLCA		GREEN PLAINS SHENANDOAH LLC
By:	/s/ Kathryn J. Frahm	By:	/s/ Ron B. Gillis
Title:	VP - Commercial Lender	Title:	EVP Finance, Treasurer

EX-10.4

Exhibit 10.4

REVOLVING TERM LOAN SUPPLEMENT

THIS SUPPLEMENT to the Master Loan Agreement dated September 28, 2011 (the “MLA”), is entered into as of September 28, 2011 between FARM CREDIT SERVICES OF AMERICA, FLCA (“Farm Credit”) and GREEN PLAINS SHENANDOAH LLC, Shenandoah, Iowa (the “Company”), and amends and restates the Supplement dated January 30, 2006 and numbered RI0355T02, as previously amended.

SECTION 1. The Revolving Term Loan Commitment. On the terms and conditions set forth in the MLA and this Supplement, Farm Credit agrees to make loans to the Company from the date hereof, up to and including November 1, 2016, in an aggregate principal amount not to exceed, at any one time outstanding, $17,000,000.00 less the amounts scheduled to be repaid during the period set forth below in Section 5 (the “Commitment”). Within the limits of the Commitment, the Company may borrow, repay, and reborrow.

SECTION 2. Purpose. The purpose of the Commitment is to provide working capital to the Company.

SECTION 3. Term. Intentionally Omitted.

SECTION 4. Interest. The Company agrees to pay interest on the unpaid balance of the loan(s) in accordance with one or more of the following interest rate options, as selected by the Company:

(A) One-Month LIBOR Index Rate. At a rate (rounded upward to the nearest 1/100th and adjusted for reserves required on “Eurocurrency Liabilities” [as hereinafter defined] for banks subject to “FRB Regulation D” [as hereinafter defined] or required by any other federal law or regulation) per annum equal at all times to 3.10% above the rate quoted by the British Bankers Association (the “BBA”) at 11:00 a.m. London time for the offering of one (1)-month U.S. dollars deposits, as published by Bloomberg or another major information vendor listed on BBA’s official website on the first “U.S. Banking Day” (as hereinafter defined) in each week, with such rate to change weekly on such day. The rate shall be reset automatically, without the necessity of notice being provided to the Company or any other party, on the first “U.S. Banking Day” of each succeeding week, and each change in the rate shall be applicable to all balances subject to this option. Information about the then-current rate shall be made available upon telephonic request. For purposes hereof: (1) “U.S. Banking Day” shall mean a day on which Agent (as that term is defined in the MLA) is open for business and banks are open for business in New York, New York; (2) “Eurocurrency Liabilities” shall have the meaning as set forth in “FRB Regulation D”; and (3) “FRB Regulation D” shall mean Regulation D as promulgated by the Board of Governors of the Federal Reserve System, 12 CFR Part 204, as amended.

(B) Quoted Rate. At a fixed rate per annum to be quoted by Agent in its sole discretion in each instance. Under this option, rates may be fixed on such balances and for such periods, as may be agreeable to Agent in its sole discretion in each instance, provided that: (1) the minimum fixed period shall be 30 days; (2) amounts may be fixed in increments of $100,000.00 or multiples thereof; and (3) the maximum number of fixes in place at any one time shall be five.

(C) LIBOR. At a fixed rate per annum equal to “LIBOR” (as hereinafter defined) plus 3.10%. Under this option: (1) rates may be fixed for “Interest Periods” (as hereinafter defined) of 1, 3, 6, or 9 months, as selected by the Company; (2) amounts may be fixed in increments of $100,000.00 or multiples thereof; (3) the maximum number of fixes in place at any one time shall be five; and (4) rates may only be fixed on a “Banking Day” (as hereinafter defined) on three Banking Days’ prior written notice. For purposes hereof: (a) “LIBOR” shall mean the rate (rounded upward to the nearest sixteenth

and adjusted for reserves required on “Eurocurrency Liabilities” [as hereinafter defined] for banks subject to “FRB Regulation D” [as herein defined] or required by any other federal law or regulation) quoted by the British Bankers Association (the “BBA”) at 11:00 a.m. London time two Banking Days before the commencement of the Interest Period for the offering of U.S. dollar deposits in the London interbank market for the Interest Period designated by the Company, as published by Bloomberg or another major information vendor listed on BBA’s official website; (b) “Banking Day” shall mean a day on which Agent is open for business, dealings in U.S. dollar deposits are being carried out in the London interbank market, and banks are open for business in New York City and London, England; (c) “Interest Period” shall mean a period commencing on the date this option is to take effect and ending on the numerically corresponding day in the next calendar month or the month that is 3, 6, or 9 months thereafter, as the case may be; provided, however, that: (i) in the event such ending day is not a Banking Day, such period shall be extended to the next Banking Day unless such next Banking Day falls in the next calendar month, in which case it shall end on the preceding Banking Day; and (ii) if there is no numerically corresponding day in the month, then such period shall end on the last Banking Day in the relevant month; (d) “Eurocurrency Liabilities” shall have meaning as set forth in “FRB Regulation D”; and (e) “FRB Regulation D” shall mean Regulation D as promulgated by the Board of Governors of the Federal Reserve System, 12 CFR Part 204, as amended.

The Company shall select the applicable rate option at the time it requests a loan hereunder and may, subject to the limitations set forth above, elect to convert balances bearing interest at the variable rate option to one of the fixed rate options. Upon the expiration of any fixed rate period, interest shall automatically accrue at the variable rate option unless the amount fixed is repaid or fixed for an additional period in accordance with the terms hereof. Notwithstanding the foregoing, rates may not be fixed for periods expiring after the maturity date of the loans and rates may not be fixed in such a manner as to cause the Company to have to break any fixed rate balance in order to pay any installment of principal. All elections provided for herein shall be made electronically (if applicable), telephonically or in writing and must be received by Agent not later than 12:00 Noon Company’s local time in order to be considered to have been received on that day; provided, however, that in the case of LIBOR rate loans, all such elections must be confirmed in writing upon Agent’s request. Interest shall be calculated on the actual number of days each loan is outstanding on the basis of a year consisting of 360 days and shall be payable monthly in arrears by the 20th day of the following month or on such other day in such month as Agent shall require in a written notice to the Company; provided, however, in the event the Company elects to fix all or a portion of the indebtedness outstanding under the LIBOR interest rate option above, at Agent’s option upon written notice to the Company, interest shall be payable at the maturity of the Interest Period and if the LIBOR interest rate fix is for a period longer than three months, interest on that portion of the indebtedness outstanding shall be payable quarterly in arrears on each three-month anniversary of the commencement date of such Interest Period, and at maturity.

SECTION 5. Promissory Note. The Company promises to repay on the dates set forth below, the outstanding principal, if any, that is in excess of the listed amounts:

Payment Date	Reducing Commitment Amount
November 1, 2013	$	14,600,000.00
May 1, 2014	$	12,200,000.00
November 1, 2014	$	9,800,000.00
May 1, 2015	$	7,400,000.00
November 1, 2015	$	5,000,000.00
May 1, 2016	$	2,600,000.00
November 1, 2016	$	0.00

Provided, however, that if Multiple Advance Term Loan Supplement No. RI0355T01D dated September 28, 2011, as amended, has been repaid prior to its maturity date of May 20, 2013, then repayment for this loan shall begin on the first day of the month that is six months after the first day of the month following the repayment of RI0355T01D, and reductions in principal as noted above shall occur every six months thereafter. If any installment due date is not a day on which Agent is open for business, then such payment shall be made on the next day on which Agent is open for business. In addition to the above, the Company promises to pay interest on the unpaid principal balance hereof at the times and in accordance with the provisions set forth in Section 4 hereof. This note replaces and supersedes, but does not constitute payment of the indebtedness evidenced by, the promissory note set forth in the Supplement being amended and restated hereby.

SECTION 6. Security. The Company’s obligations hereunder and, to the extent related hereto, the MLA, including without limitation any future advances under any existing mortgage or deed of trust, shall be secured as provided in the Security Section of the MLA.

SECTION 7. Commitment Fee. In consideration of the Commitment, the Company agrees to pay to Agent a commitment fee on the average daily unused portion of the Commitment at the rate of 0.50% per annum (calculated on a 360-day basis), payable monthly in arrears by the 20th day following each month. Such fee shall be payable for each month (or portion thereof) occurring during the original or any extended term of the Commitment.

SECTION 8. Amendment Fee. In consideration of the amendment, the Company agrees to pay to Agent on the execution hereof a fee in the amount of $20,000.00.

(Signatures on following page)

IN WITNESS WHEREOF, the parties have caused this Supplement to be executed by their duly authorized officers as of the date shown above.

FARM CREDIT SERVICES OF AMERICA, FLCA		GREEN PLAINS SHENANDOAH LLC
By:	/s/ Kathryn J. Frahm	By:	/s/ Ron B. Gillis
Title:	VP - Commercial Lender	Title:	EVP Finance, Treasurer

EX-10.5

Exhibit 10.5

MULTIPLE ADVANCE TERM LOAN SUPPLEMENT

THIS SUPPLEMENT to the Master Loan Agreement dated September 28, 2011 (the “MLA”), is entered into as of September 28, 2011 between FARM CREDIT SERVICES OF AMERICA, FLCA (“Farm Credit”) and GREEN PLAINS SHENANDOAH LLC, Shenandoah, Iowa (the “Company”), and amends and restates the Supplement dated August 26, 2010 and numbered RI0355T01C.

SECTION 1. The Term Loan Commitment. As of the date hereof, Farm Credit’s obligation to extend credit to the Company has expired and the unpaid principal balance of the loans is $7,267,534.00 (the “Commitment”).

SECTION 2. Purpose. The purpose of the Commitment was and remains to partially finance the Company’s construction of a 50 million gallon (annual) dry mill ethanol plant and to provide working capital to the Company.

SECTION 3. Term. Intentionally Omitted.

SECTION 4. Interest. The Company agrees to pay interest on the unpaid balance of the loan(s) in accordance with one or more of the following interest rate options, as selected by the Company:

(A) One-Month LIBOR Index Rate. At a rate (rounded upward to the nearest 1/100th and adjusted for reserves required on “Eurocurrency Liabilities” [as hereinafter defined] for banks subject to “FRB Regulation D” [as hereinafter defined] or required by any other federal law or regulation) per annum equal at all times to 3.10% above the rate quoted by the British Bankers Association (the “BBA”) at 11:00 a.m. London time for the offering of one (1)-month U.S. dollars deposits, as published by Bloomberg or another major information vendor listed on BBA’s official website on the first “U.S. Banking Day” (as hereinafter defined) in each week, with such rate to change weekly on such day. The rate shall be reset automatically, without the necessity of notice being provided to the Company or any other party, on the first “U.S. Banking Day” of each succeeding week, and each change in the rate shall be applicable to all balances subject to this option. Information about the then-current rate shall be made available upon telephonic request. For purposes hereof: (1) “U.S. Banking Day” shall mean a day on which Agent (as that term is defined in the MLA) is open for business and banks are open for business in New York, New York; (2) “Eurocurrency Liabilities” shall have the meaning as set forth in “FRB Regulation D”; and (3) “FRB Regulation D” shall mean Regulation D as promulgated by the Board of Governors of the Federal Reserve System, 12 CFR Part 204, as amended.

(B) Quoted Rate. At a fixed rate per annum to be quoted by Agent in its sole discretion in each instance. Under this option, rates may be fixed on such balances and for such periods, as may be agreeable to Agent in its sole discretion in each instance, provided that: (1) the minimum fixed period shall be 180 days; (2) amounts may be fixed in increments of $100,000.00 or multiples thereof; and (3) the maximum number of fixes in place at any one time shall be five.

(C) LIBOR. At a fixed rate per annum equal to “LIBOR” (as hereinafter defined) plus 3.10%. Under this option: (1) rates may be fixed for “Interest Periods” (as hereinafter defined) of 1, 3, 6,or 9 months, as selected by the Company; (2) amounts may be fixed in increments of $500,000.00 or multiples thereof; (3) the maximum number of fixes in place at any one time shall be five; and (4) rates may only be fixed on a “Banking Day” (as hereinafter defined) on three Banking Days’ prior written notice. For purposes hereof: (a) “LIBOR” shall mean the rate (rounded upward to the nearest sixteenth and adjusted for reserves required on “Eurocurrency Liabilities” [as hereinafter defined] for banks subject to “FRB Regulation D” [as herein defined] or required by any other federal law or regulation) quoted by

the British Bankers Association (the “BBA”) at 11:00 a.m. London time two Banking Days before the commencement of the Interest Period for the offering of U.S. dollar deposits in the London interbank market for the Interest Period designated by the Company, as published by Bloomberg or another major information vendor listed on BBA’s official website; (b) “Banking Day” shall mean a day on which Agent is open for business, dealings in U.S. dollar deposits are being carried out in the London interbank market, and banks are open for business in New York City and London, England; (c) “Interest Period” shall mean a period commencing on the date this option is to take effect and ending on the numerically corresponding day in the next calendar month or the month that is 3, 6, or 9 months thereafter, as the case may be; provided, however, that: (i) in the event such ending day is not a Banking Day, such period shall be extended to the next Banking Day unless such next Banking Day falls in the next calendar month, in which case it shall end on the preceding Banking Day; and (ii) if there is no numerically corresponding day in the month, then such period shall end on the last Banking Day in the relevant month; (d) “Eurocurrency Liabilities” shall have meaning as set forth in “FRB Regulation D”; and (e) “FRB Regulation D” shall mean Regulation D as promulgated by the Board of Governors of the Federal Reserve System, 12 CFR Part 204, as amended.

The Company shall select the applicable rate option at the time it requests a loan hereunder and may, subject to the limitations set forth above, elect to convert balances bearing interest at the variable rate option to one of the fixed rate options. Upon the expiration of any fixed rate period, interest shall automatically accrue at the variable rate option unless the amount fixed is repaid or fixed for an additional period in accordance with the terms hereof. Notwithstanding the foregoing, rates may not be fixed for periods expiring after the maturity date of the loans and rates may not be fixed in such a manner as to cause the Company to have to break any fixed rate balance in order to pay any installment of principal. All elections provided for herein shall be made electronically (if applicable), telephonically or in writing and must be received by Agent not later than 12:00 Noon Company’s local time in order to be considered to have been received on that day; provided, however, that in the case of LIBOR rate loans, all such elections must be confirmed in writing upon Agent’s request. Interest shall be calculated on the actual number of days each loan is outstanding on the basis of a year consisting of 360 days and shall be payable monthly in arrears by the 20th day of the following month or on such other day in such month as Agent shall require in a written notice to the Company; provided, however, in the event the Company elects to fix all or a portion of the indebtedness outstanding under the LIBOR interest rate option above, at Agent’s option upon written notice to the Company, interest shall be payable at the maturity of the Interest Period and if the LIBOR interest rate fix is for a period longer than three months, interest on that portion of the indebtedness outstanding shall be payable quarterly in arrears on each three-month anniversary of the commencement date of such Interest Period, and at maturity.

SECTION 5. Promissory Note. The Company promises to repay the loans as follows: (1) in six equal, consecutive quarterly installments of $1,200,000.00, with the first such installment due on November 20, 2011, and the last such installment due on February 20, 2013; and (2) followed by a final installment in an amount equal to the remaining unpaid principal balance of the loans on May 20, 2013. If any installment due date is not a day on which Agent is open for business, then such installment shall be due and payable on the next day on which Agent is open for business. In addition to the above, the Company promises to pay interest on the unpaid principal balance hereof at the times and in accordance with the provisions set forth in Section 4 hereof. This note replaces and supersedes, but does not constitute payment of the indebtedness evidenced by, the promissory note set forth in the Supplement being amended and restated hereby.

In addition, for each fiscal year end, the Company shall also, within ninety (90) days after the end of such fiscal year, make a special payment of an amount equal to 65% of the “Free Cash Flow” (as defined below) of the Company, such payment not to exceed $2,500,000.00 in any fiscal year of the Company; provided, however that: (1) if such payment would result in a covenant default under this Supplement or the MLA, the amount of the payment shall be reduced to an amount which would not result in a covenant default; (2) if such payment would result in a breakage of a fixed interest rate, the applicable broken funding surcharges would still apply; and (3) the aggregate of such payments shall not exceed $8,000,000.00. The term “Free Cash Flow” is defined as the Company’s annual profit before taxes, plus the respective fiscal year’s depreciation and amortization expense, minus allowable capitalized expenditures of $500,000.00 for fixed assets, allowed distributions to members/owners, and scheduled term loan payments to Agent. This special payment shall be applied to the principal installments in the inverse order of their maturity.

SECTION 6. Prepayment. Subject to the broken funding surcharge provision of the MLA, the Company may on one Business Day’s prior written notice prepay all or any portion of the loan(s). Unless otherwise agreed by Agent, all prepayments will be applied to principal installments in the inverse order of their maturity and to such balances, fixed or variable, as Agent shall specify.

SECTION 7. Security. The Company’s obligations hereunder and, to the extent related hereto, the MLA, including without limitation any future advances under any existing mortgage or deed of trust, shall be secured as provided in the Security Section of the MLA.

IN WITNESS WHEREOF, the parties have caused this Supplement to be executed by their duly authorized officers as of the date shown above.

FARM CREDIT SERVICES OF AMERICA, FLCA		GREEN PLAINS SHENANDOAH LLC
By:	/s/ Kathryn J. Frahm	By:	/s/ Ron B. Gillis
Title:	VP - Commercial Lender	Title:	EVP Finance, Treasurer

EX-10.6

Exhibit 10.6

AMENDED AND RESTATED

MASTER LOAN AGREEMENT

by and among

GREEN PLAINS BLUFFTON LLC

f/k/a INDIANA BIO-ENERGY, LLC

and

AGSTAR FINANCIAL SERVICES, PCA

dated

as of

September 30, 2011

TABLE OF CONTENTS

		Page
ARTICLE I.    DEFINITIONS AND ACCOUNTING MATTERS			1
Section 1.01.	Certain Defined Terms		1
Section 1.02.	Accounting Matters		9
Section 1.03.	Construction		9
ARTICLE II    AMOUNTS AND TERMS OF THE LOANS			9
Section 2.01.	The Loans		9
Section 2.02.	Term Loan		9
Section 2.03.	Term Revolving Loan		10
Section 2.04.	Fixed Rate Loan		12
Section 2.05.	Letter of Credit Procedures / Fees / Reimbursement		12
Section 2.06.	Adjustments to Interest Rate		13
Section 2.07.	Default Interest		14
Section 2.08.	Late Charge		15
Section 2.09.	Prepayment of Loans		15
Section 2.10.	Changes in Law Rendering Certain LIBOR Rate Loans Unlawful		15
Section 2.11.	Payments and Computations		15
Section 2.12.	Maximum Amount Limitation		16
Section 2.13.	Lender Records		16
Section 2.14.	Loan Payments		16
Section 2.15.	Purchase of Equity Interests in AgStar Financial Services, PCA		16
Section 2.16.	Compensation		17
Section 2.17.	Excess Cash Flow		17
ARTICLE III    CONDITIONS PRECEDENT			18
Section 3.01.	Conditions Precedent to Funding		18
ARTICLE IV.    REPRESENTATIONS AND WARRANTIES			21
Section 4.01	Representations and Warranties of the Borrower		21
ARTICLE V.    COVENANTS OF THE BORROWER			24
Section 5.01.	Affirmative Covenants		24
Section 5.02.	Negative Covenants		29
ARTICLE VI.    EVENTS OF DEFAULT AND REMEDIES			32
Section 6.01.	Events of Default		32
Section 6.02.	Remedies		35

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Section 6.03.	Remedies Cumulative	35
ARTICLE VII.    MISCELLANEOUS		36
Section 7.01.	Amendments, etc	36
Section 7.02.	Notices, etc	36
Section 7.03.	No Waiver; Remedies	36
Section 7.04.	Costs, Expenses and Taxes	37
Section 7.05.	Right of Set-off	37
Section 7.06.	Severability of Provisions	37
Section 7.07.	Binding Effect; Successors and Assigns; Participations	38
Section 7.08.	Consent to Jurisdiction	38
Section 7.09.	Governing Law	39
Section 7.10.	Execution in Counterparts	39
Section 7.11.	Survival	39
Section 7.12.	WAIVER OF JURY TRIAL	39
Section 7.13.	Entire Agreement	39

LIST OF SCHEDULES AND EXHIBITS

Schedule 3.01(d)	Real Property
Schedule 4.01(a)	Description of Certain Transactions Related to the Borrower’s Stock
Schedule 4.01(f)	Description of Certain Threatened Actions, etc.
Schedule 4.01(k)	Location of Inventory and Farm Products; Third Parties in Possession; Crops
Schedule 4.01(l)	Office Locations; Fictitious Names; Etc.
Schedule 4.01(p)	Intellectual Property
Schedule 4.01(t)	Environmental Compliance
Schedule 5.01(o)	Management
Schedule 5.02(a)	Description of Certain Liens, Lease Obligations, etc.
Schedule 5.02(k)	Transactions with Affiliates
Exhibit A	Compliance Certificate

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AMENDED AND RESTATED

MASTER LOAN AGREEMENT

This AMENDED AND RESTATED MASTER LOAN AGREEMENT dated as of September 30, 2011, is made and entered into by and between AGSTAR FINANCIAL SERVICES, PCA, a United States instrumentality (the “Lender”) and GREEN PLAINS BLUFFTON LLC, an Indiana limited liability company f/k/a INDIANA BIO-ENERGY, LLC, an Indiana limited liability company (the “Borrower”).

RECITALS

A. Borrower and Lender entered into a (i) Master Loan Agreement dated as of February 27, 2007, which was amended by the First Amendment to Master Loan Agreement dated October 15, 2008, the Second Amendment to Master Loan Agreement dated April 16, 2009, the Third Amendment to Master Loan Agreement dated June 30, 2009, the Fourth Amendment to Master Loan Agreement dated December 31, 2009, and the Fifth Amendment to Master Loan Agreement dated December 31, 2010 (together, as amended, the “Original MLA”); (ii) a First Supplement to Master Loan Agreement dated as of February 27, 2007, which was amended by the First Amendment to First Supplement dated as of June 30, 2009 (together, as amended, the “First Supplement”); and (iii) Second Supplement to Master Loan Agreement dated as of February 27, 2007, which was amended by the First Amendment to Second Supplement dated as of June 30, 2009 (together, as amended, the “Second Supplement”) by which the Lender agreed to extend certain financial accommodations to the Borrower.

B. At the request of Borrower, Borrower and Lender have agreed to make certain modifications to the Original MLA, all in accordance with the terms and conditions of this Agreement.

C. With the execution and delivery of this Agreement, this Agreement shall supersede and replace in its entirety the Original MLA, the First Supplement and the Second Supplement and all supplements, amendments, and restatements thereof, which shall thereafter be of no force or effect. All of the terms of the other Loan Documents shall remain in full force and effect. Nothing contained in this Agreement shall be deemed to constitute a waiver of any rights of the Lender, or to affect, modify, or impair any of the Lender’s rights under the Loan Documents.

AGREEMENT

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

ARTICLE I.

DEFINITIONS AND ACCOUNTING MATTERS

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

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

“Affiliate” means, as to any Person, any other Person: (a) that directly or indirectly, through one or more intermediaries, controls or is controlled by, or is under common control with, such Person; (b) that

1

directly or indirectly beneficially owns or holds ten percent (10%) or more of any class of voting stock or membership interests (units) of such Person; or (c) ten percent (10%) or more of the voting stock or membership interests (units) of which is directly or indirectly beneficially owned or held by the Person in question.

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

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

“Applicable Rate” means, in relation to any Loan which bears interest on a variable rate, the interest rate per annum which is equal to the greater of the (i) LIBOR Rate and (ii) two percent (2.0%).

“Borrower” means Green Plains Bluffton LLC, an Indiana limited liability company.

“Business Day” means any day other than a Saturday, Sunday, or other day on which commercial banks are authorized to close under the Laws of the State of Minnesota, or are in fact closed in, the state where the Lender’s Office is located and, if such day relates to any LIBOR Rate, means any such day on which Lender is open for business, dealings in U.S. dollar deposits are being carried out in the London interbank market, and banks are open for business in New York City and London, England.

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

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

“Change in Control” means (a) the acquisition of ownership, directly or indirectly, beneficially or of record, by any Person or group (within the meaning of the Securities Exchange Act of 1934 and the rules of the Securities and Exchange Commission thereunder as in effect on the date hereof), of equity interests representing 50% or more of the aggregate ordinary voting power represented by the issued and outstanding equity interests of the Borrower or GPRE; or (b) occupation of a majority of the seats (other than vacant seats) on the board of directors of the Borrower or GPRE by Persons who were neither (i) nominated by the board of directors of the Borrower or GPRE, as the case may be, or in accordance with the Shareholders’ Agreement as it relates to GPRE, nor (ii) appointed by directors so nominated; or (c) Borrower ceases to own, directly or indirectly, and Control any subsidiary.

“Closing Date” means September 30, 2011.

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

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

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

“Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise.

“Conversion Date” means December 31, 2008.

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

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

“Distribution” means any dividend, distribution, payment, or transfer of property by the Borrower to any member of the Borrower, including Allowed Distributions, Reinvestment Distributions and Excess Distributions.

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

“Environmental Laws” shall have the meaning ascribed to such term in the Environmental Indemnity Agreement.

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“Equity Contributions” means for any period, the sum of all amounts received by Borrower that would, in accordance with GAAP consistently applied, be Included as additions to Borrower’s owner equity.

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

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

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

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

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

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

“Fixed Charge Coverage Ratio” means, for the measurement period of 12 consecutive months the ratio of (a) EBITDA divided by (b) the sum of (i) scheduled principal payments for the Loans, (ii) scheduled principal payments for Subordinated Debt, (iii) interest on the Loans, (iv) interest on Subordinated Debt, (v) Distributions, (vi) Maintenance Capital Expenditures, and (v) less Equity Contributions. Solely for purposes of the computation of the Fixed Charge Coverage Ratio, Equity Contributions shall be reduced by the amount that Capital Expenditures, other than Maintenance Capital Expenditures, exceed $1,000,000, if any.

“Fixed Rate Loan” means that portion of the Term Loan, if any, which accrues interest at a fixed rate of interest pursuant to Section 2.04.

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

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

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

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

“GPRE” means Green Plains Renewable Energy, Inc.

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

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

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“Interest Expense” means for any period, the total interest expense of the Borrower.

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

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

“Lender” means AgStar Financial Services, PCA, and its successors and assigns.

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

“Letter of Credit” means the letters of credit issued by Lender pursuant to the terms of this Agreement.

“LIBOR Rate” (London Interbank Offered Rate) means the One Month London Interbank Offered Rate (“One Month LIBOR”), rounded upward to the nearest ten thousandth of one percent, reported on the tenth day of the month preceding each Interest Period by the Wall Street Journal in its daily listing of money rates, defined therein as the average of interbank offered rates for dollar deposits in the London market. If a One Month LIBOR rate is not reported on the tenth day of a month, the One Month LIBOR rate reported on the first business day preceding the tenth day of the month will be used. If this index is no longer available, Lender will select a new index which is based upon comparable information.

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

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

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

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

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

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

“Maintenance Capital Expenditures” means all Capital Expenditures made in the ordinary course of business to maintain existing business operations of the Borrower in any fiscal year, determined in accordance with GAAP, consistently applied; provided however that for purposes of the Fixed Coverage Ratio if any such expenditure is separately funded by Borrower’s parent or an Affiliate of the Borrower, through an equity investment in Borrower or under approved subordinated indebtedness consistent with the terms of this Agreement, it shall not be included as a Maintenance Capital Expenditure.

“Material Adverse Effect” means any set of circumstances or events which: (i) has or could reasonably be expected to have any material adverse effect upon the validity or enforceability of any Loan Documents or any material term or condition contained therein; (ii) is or could reasonably be expected to be material and adverse to the condition (financial or otherwise), business assets, operations, or property of the Borrower or any of Borrower’s subsidiaries when considered as a whole; (iii) materially impairs or could reasonably be expected to materially impair the ability of the Borrower to perform the obligations under the Loan Documents; or (iv) is or could reasonably be expected to be material and adverse to the condition (financial or otherwise), business assets, operations, or property of any Operating Affiliate when considered as a whole and such condition impairs or could reasonably be expected to materially impair the ability of the Borrower to perform the obligations under the Loan Documents or such condition impairs or could reasonably be expected to materially impair the ability of any Operating Affiliate to perform the obligation under its agreements or contracts with Borrower.

“Material Contract” means (i) any contract or any other agreement, written or oral, or any of the Borrower or its Subsidiaries involving monetary liability of or to any such person in an amount in excess of $250,000.00 per annum; and (ii) any other contract or agreement, written or oral, of the Borrower or any of its Subsidiaries the failure to comply with which could reasonably be expected to have a Material Adverse Effect on the Borrower or its Subsidiaries; provided, however, that any contract or agreement which is terminable by a party other than the Borrower or its Subsidiaries without cause upon notice of 90 days or less shall not be considered a Material Contract.

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

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

“Monthly Payment Date” means the first (1st) day of each calendar month.

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“Mortgage” means that certain Construction/Permanent Mortgage, Security Agreement, Assignment of Leases and Rents, Financing Statement and Fixture Filing dated February 27, 2007, pursuant to which a mortgage interest shall be given by the Borrower to the Lender in the Real Property to secure payment to the Lender of the Loan Obligations, as the same has been and may hereafter be amended or otherwise modified.

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

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

“Operating Affiliate” means any Affiliate of the Borrower which is now or in the future becomes a party to any Material Contract, Long Term Marketing Agreement or similar contract or agreement with Borrower.

“Ordinary Trade Payable Dispute” means trade accounts payable, in an aggregate amount not in excess of $150,000.00 with respect to the Borrower, and with respect to which: (a) there exists a bona fide dispute between Borrower and the vendor; (b) the Borrower is contesting the same in good faith by appropriate proceedings; and (c) the Borrower has established appropriate reserves on its financial statements.

“Outstanding Credit” means, at any time of determination, the aggregate amount of Advances then outstanding.

“Outstanding Revolving Advance” means the total Outstanding Credit under the Term Revolving Note.

“Permitted Liens” shall have the meaning as set forth in Section 5.02(a) hereof.

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

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

“Project” means any and all buildings, structures, fixtures, and other improvements made to the Real Property as part of the acquisition and construction of ethanol production facility in Bluffton, Indiana, for which the Loans to Borrower are being or were made hereunder.

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

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

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

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“Security Agreement” means the Security Agreement dated February 27, 2007, pursuant to which a security interest shall be granted by Borrower to the Lender in the Personal Property to secure payment to the Lender to the Loan Obligations and includes any agreements executed by Borrower which evidence, govern, represent, or create a Security Interest, as the same has been and may hereafter be amended or otherwise modified.

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

“Shareholders’ Agreement” means that certain Shareholders’ Agreement dated as of May 7, 2008, by and among GPRE, Bioverda International Holdings Limited, Bioverda US Holdings LLC, Wilon Holdings S.A. and Wayne Hoovestol.

“Subordinated Debt” means Debt held by the US Bank, National Association, as trustee.

“Tangible Net Worth” means the excess of total assets over total liabilities except subordinated debt, total assets and total liabilities each to be determined in accordance with GAAP consistent with those applied in the preparation of the financial statements referred to in Section 5.01(c) for the Borrower, excluding, however, from the determination of total assets: (i) goodwill, organizational expenses, research and development expenses, trademarks, trade names, copyrights, patents, patent applications, licenses and rights in any thereof, and other similar intangibles; (ii) treasury stock; (iii) securities which are not readily marketable; (iv) any write-up in the book value of any asset resulting from a revaluation thereof after the Closing Date; and (v) any items not included in clauses (i) through (v) above which are treated as intangibles in conformity with GAAP.

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

“Term Note” means that certain Construction Note dated February 27, 2007, executed and delivered to the Lender by the Borrower, as the same has been and may hereafter be amended or otherwise modified.

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

“Term Revolving Advance” means an Advance under the Term Revolving Note.

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

“Term Revolving Note” means that certain Term Revolving Note dated February 27, 2007, executed and delivered to the Lender by the Borrower in the amount of $20,000,000.00, as the same has been and may hereafter be amended or otherwise modified.

“Working Capital” means the current assets of the Borrower plus, in the event the Term Loan and Term Revolving Loan are deemed to be current liabilities of the Borrower, the unused portion of the Term Revolving Loan less the current liabilities of the Borrower as determined in accordance with GAAP. For

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clarification purposes, in the event the Term Revolving Loan and Term Loan are deemed to be current liabilities strictly due to the accounting reclassification as a result of (i) Maturity Date for the Term Loan or the Term Revolving Loan being less than 12 months from the date of covenant measurement, or (ii) projections, forecasts or other forward looking statements concerning future business conditions provided to certified public accountants, the available portion of the unused Term Revolving Loan will not be made available as an element of the current assets for Working Capital purposes and the Term Loan and Term Revolving Loan shall be excluded from the current liabilities in the Working Capital covenant measurement. Notwithstanding the foregoing, reclassification of the Term Loan and the Term Revolving Loan as a result of an Event of Default shall result in the inclusion of such Loans in current liabilities.

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

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

ARTICLE II

AMOUNTS AND TERMS OF THE LOANS

Section 2.01. The Loans. Subject to the terms and conditions of this Agreement and in reliance upon the representations and warranties set forth in this Agreement, the Lender has agreed to lend to Borrower the following amounts, for the purposes as further described below:

(a) Term Loan. Lender agrees to lend to the Borrower and the Borrower agrees to borrow from the Lender a term loan in the amount of Seventy Million and No/100 Dollars ($70,000,000.00) pursuant to the terms and conditions set forth in Section 2.02 and the Term Note.

(b) Term Revolving Loan. Lender agree to lend to the Borrower from time to time during the term of the Term Revolving Loan on a revolving basis, an amount not to exceed Twenty Million and No/100 Dollars ($20,000,000.00), pursuant to the terms and conditions set forth in Section 2.03 and the Term Revolving Note.

Section 2.02. Term Loan. Subject to the terms and conditions of this Agreement and in reliance upon the representations and warranties set forth in this Agreement, the Lender has agreed to lend to Borrower and Borrower has agreed to borrow from Lender $70,000,000.00. Such amount shall be loaned by Lender pursuant to the terms and conditions set forth in this Agreement.

(a) Purpose. The Term Loan may be used to fund the payment of Project Costs. The Borrower agrees that the proceeds of the Term Loan are to be used only for the purposes set forth in this Section 2.02(a).

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(b) Term Loan Interest Rate. The portion of the Term Loan that has not been converted to a Fixed Rate Loan pursuant to subsection (e) below shall bear interest at a rate equal to the Applicable Rate plus 325 basis points.

(c) Term Loan Payments. On the first (1st) day of each month until the Maturity Date, the Borrower shall pay all accrued interest plus equal payments of principal in the amount of $583,333.00 on the Term Loan. In addition to all other payments of principal and interest required under this Section and under this Agreement, the Borrower shall annually remit to Lender the Excess Cash Flow Payment pursuant to Section 2.17.

(d) Term Loan Term. The Term Loan shall be due and payable in full on the Maturity Date.

(e) Conversion to Fixed Rate Loan. As provided in Section 2.04 of this Agreement, on the Conversion Date, the Borrower had the right to convert up to fifty (50%) percent of the outstanding principal balance of the Term Loan into a Fixed Rate Loan, with the consent of the Lender which shall not be unreasonably withheld, which shall bear interest at a fixed rate per annum equal to the rate listed in the “Government Agency and Similar Issues” section of the Wall Street Journal for the Federal Farm Credit Bank or the Federal Home Loan Bank having a maturity approximately equal to the Maturity Date, or another rate as agreed upon by the Lender and Borrower, which is in effect at the time of conversion plus 300 basis points. Borrower shall provide written notice to Lender at least 30 days prior to the Conversion Date of its intention to convert any portion of the Term Loan to a Fixed Rate Loan. Such written notice shall specify the specific dollar amount that Borrower is electing to convert to a Fixed Rate Loan. Any amount subject to a fixed rate of interest pursuant to this Section shall not be subject to any adjustments under Section 2.06 of this Agreement.

Section 2.03. Term Revolving Loan. Subject to the terms and conditions of this Agreement and in reliance upon the representations and warranties set forth in this Agreement, the Lender has agreed to make one or more Advances to the Borrower, during the period beginning on the Conversion Date and ending on the Business Day immediately preceding the Maturity Date (the “Term Revolving Loan Termination Date”) in an aggregate principal amount outstanding at any one time not to exceed $20,000,000.00 (the “Term Revolving Loan Commitment”). The Term Revolving Loan Commitment shall expire at 12:00 noon Central time on the Maturity Date. Under the Term Revolving Loan Commitment amounts borrowed and repaid or prepaid may be reborrowed at any time prior to and including the Term Revolving Loan Termination Date provided, however, that at no time shall the sum of the Outstanding Revolving Advances exceed $20,000,000.00.

(a) Purpose. Advances under the Term Revolving Loan may be used for cash, inventory management and general working capital purposes of the Borrower and its subsidiaries, including closing costs and fees associated with the Term Revolving Loan. The Borrower agrees that the proceeds of the Term Revolving Loan are to be used only for the purposes set forth in this Section 2.03(a).

(b) Interest Rate. Subject to the provisions of this Agreement, including without limitation Section 2.06, each Term Revolving Advance shall bear interest at a rate equal to the Applicable Rate plus 325 basis points.

(c) Repayment of the Term Revolving Loan. The Borrower shall pay interest on the Term Revolving Loan on the first (1st) day of each month, commencing on the first (1st) Monthly Payment Date following the date on which the first Advance is made on the Term Revolving Loan and continuing on each Monthly Payment Date thereafter until the Maturity Date. On the Maturity Date, the unpaid principal balance of the Term Revolving Loan, accrued and unpaid interest, and any and all other amounts due and owing hereunder or under any other Loan Document shall be due and payable in full. If any payment date is not a Business Day, then the principal installment then due shall be paid on the next Business Day and shall continue to accrue interest until paid.

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(d) Availability. During the period commencing on the date on which all conditions precedent to the initial Advance under the Term Revolving Loan are satisfied (the “Availability Date”) and ending on the Term Revolving Loan Termination Date, Advances under the Term Revolving Loan will be made as provided in Section 2.03(e).

(e) Making the Advances.

(i) Term Revolving Advances. Each Term Revolving Advance shall be made, on notice from the Borrower (a “Request for Advance”) to the Lender delivered before 12:00 Noon (Minneapolis, Minnesota time) on a Business Day which is at least three (3) Business Days prior to the date of such Advance specifying the amount of such Advance, provided that, no Term Revolving Advance shall be made while an Event of Default exists. Any Request for Advance received after 12:00 Noon (Minneapolis, Minnesota time) shall be deemed to have been received and be effective on the next Business Day. The amount so requested from the Lender shall, subject to the terms and conditions of this Agreement, be made available to the Borrower by: (i) depositing the same, in same day funds, in an account of the Borrower; or (ii) wire transferring such funds to a Person or Persons designated by the Borrower in writing.

(ii) Requests for Advances Irrevocable. Each Request for Advance shall be irrevocable and binding on the Borrower and the Borrower shall indemnify the Lender against any loss or expense it may incur as a result of any failure to borrow any Advance after a Request for Advance is received by Lender (including any failure resulting from the failure to fulfill on or before the date specified for such Advance the applicable conditions set forth herein), including, without limitation, any loss (including loss of anticipated profits) or expense incurred by reason of the liquidation or reemployment of deposits or other funds acquired by the Lender to fund such Advance when such Advance, as a result of such failure, is not made on such date.

(iii) Minimum Amounts. Each Term Revolving Advance shall be in a minimum amount equal to $50,000.00.

(iv) Unused Commitment Fee. In addition to all other cost, fees and expenses required to be paid under this Agreement, Borrower agrees to pay to the Lender an unused commitment fee on the average daily unused portion of the Term Revolving Loan Commitment from the Conversion Date until the Maturity Date at the rate of 0.35% per annum, payable in arrears in quarterly installments payable on the first (1st) day of each January, April, July and October after the Conversion Date.

(v) Conditions Precedent to All Advances. The Lender’s obligation to make each Advance under the Term Revolving Note shall be subject to the terms, conditions and covenants set forth in this Agreement, including, without limitation, the following further conditions precedent:

(i) Representations and Warranties. The representations and warranties set forth in this Agreement are true and correct in all material respects as of the date of the Request for Advance, except as disclosed in writing to the Lender, to the same extent and with the same effect as if made at and as of the date thereof except as disclosed in writing to the Lender;

(ii) No Defaults. The Borrower is not in default under the terms of this Agreement, any other Loan Document or any Material Contract; and

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(iii) Government Action. No license, permit, permission or authority necessary for the construction or operation of the Project has been revoked or challenged by or before any Governmental Authority.

(f) Letters of Credit. The Borrower may request an Advance on the Term Revolving Loan, and the Lender, subject to the terms and conditions of this Agreement including under Section 2.05, may in its sole discretion, issue one or more letters of credit for any Borrower’s account (such letters of credit, being hereinafter referred to collectively as the “Letters of Credit”); provided, however, that:

(i) the aggregate amount of outstanding Letter of Credit Liabilities shall not at any time exceed the amount of $3,000,000.00.

(ii) the sum of the outstanding Letters of Credit plus the outstanding Term Revolving Advances shall not at any time exceed the Term Revolving Loan Commitment.

(iii) the expiration date for each Letter of Credit shall be no later than the Maturity Date.

Section 2.04. Fixed Rate Loan. On the Conversion Date, the Borrower shall have the right to convert up to 50% of the Term Loan into a Fixed Rate Loan, which shall bear interest at a rate equal to the rate listed in the “Government Agency and Similar Issues” section of the Wall Street Journal for the Federal Farm Credit Bank or the Federal Home Loan Bank having a maturity approximately equal to the Maturity Date, which is in effect at the time of the Conversion Date plus 300 basis points, or another rate as agreed upon by the Lender and Borrower. Should the Borrower elect such fixed rate option, such rate of interest shall not be subject to any adjustments under Section 2.06.

Section 2.05. Letter of Credit Procedures / Fees / Reimbursement. All Letters of Credit that are issued under this Agreement are subject to the following:

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

(b) Letter of Credit Fees. The Borrower shall pay to the Lender (i) all fees, costs, and expenses of the Lender arising in connection with any Letter of Credit, including the Lender’s customary fees for amendments, transfers, and drawings on Letters of Credit and (ii) on the date of the issuance of the Letter of Credit, and at the anniversary date of issuance of such Letter of Credit, an issuance fee equal to two and one-half (2.5%) percent, on an annualized basis, of the maximum amount available to be drawn under the Letter of Credit.

(c) Funding of Drawings. Upon receipt from the beneficiary of any Letter of Credit of any demand for payment or other drawing under such Letter of Credit, the Lender shall promptly notify the Borrower

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as to the amount to be paid as a result of such demand or drawing and the respective payment date. Any notice pursuant to the forgoing sentence shall specify the amount to be paid as a result of such demand or drawing and the respective payment date.

(e) Reimbursements. After receipt of the notice delivered pursuant to clause (c) of this Section 2.05 with respect to a Letter of Credit, the Borrower shall be irrevocably and unconditionally obligated to reimburse the Lender for any amounts paid by the Lender upon any demand for payment or drawing under the applicable Letter of Credit, without presentment, demand, protest, or other formalities of any kind other than the notice required by clause (c) of this Section 2.05. Such reimbursement shall occur no later than 3:00 P.M. (Minneapolis, Minnesota time) on the date of payment under the applicable Letter of Credit if the notice under clause (c) of this Section 2.05 is received by 2:00 P.M. (Minneapolis, Minnesota time) on such date or by 11:00 A.M. (Minneapolis, Minnesota time) on the next Business Day, if such notice is received after 2:00 P.M. (Minneapolis, Minnesota time). All payments on or of the Reimbursement Obligations (including any interest earned thereon) shall be made to the Lender for the account of the Lender in U.S. dollars and in immediately available funds, without set-off, deduction, or counterclaim.

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

(g) Issuer Responsibility. Borrower assumes all risks of the acts or omissions of any beneficiary of any Letter of Credit with respect to its use of such Letter of Credit. Neither the Lender, nor any of its respective officers or directors shall have any responsibility or liability to the Borrower or any other Person for: (a) errors, omissions, interruptions, or delays in transmission or delivery of any messages; or (b) the validity, sufficiency, or genuineness of any draft or other document, or any endorsement(s) thereon, even if any such draft, document or endorsement should in fact prove to be in any and all respects invalid, insufficient, fraudulent, or forged or any statement therein is untrue or inaccurate in any respect. The Lender may accept documents that appear on their face to be in order, without responsibility for further investigation, regardless of any notice or information to the contrary.

Section 2.06. Adjustments to Interest Rate. Notwithstanding any other provision of this Agreement or the other Loan Documents, the rate of interest under any Loan which bears interest on a variable rate, shall be adjusted according to the following schedule should the Tangible Owner’s Equity/Tangible Net Worth of the Borrower, achieve the levels set forth below:

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Tangible Owner’s Equity (“TOE”) and/or Tangible Net Worth (“TNW”)	Interest Rate
TOE Less than 49.99% AND TNW less than $78,800,000.00	Applicable Rate plus 400 basis points
TOE Less than 49.99% AND TNW greater than $78,800,000.00	Applicable Rate plus 325 basis points
TOE from 50% through 60%	Applicable Rate plus 300 basis points
TOE from 61% through 70%	Applicable Rate plus 275 basis points
TOE greater than 70%	Applicable Rate plus 250 basis points

Upon delivery of the audited financial statements pursuant to Section 5.01(c)(i) for each fiscal year end of the Borrower, the rate of interest for any month shall automatically be adjusted in accordance with the Tangible Owner’s Equity/Tangible Net Worth set forth therein and the rates set forth above. Such automatic adjustment to the rate of interest shall take effect as of the first Business Day of the month following the month in which the Lender received the related audited financial statements pursuant to Section 5.01 (c)(i). If the Borrower fails to deliver such audited financial statement which so sets forth the Tangible Owner’s Equity/Tangible Net Worth within the period of time required by Section 5.01(c)(i) hereof; fails to meet any financial covenants in this Agreement or any other Loan Document; or if any Event of Default occurs, the rate of interest shall automatically be adjusted to the Applicable Rate plus 400 basis points, such automatic adjustments: (a) to take effect as of the first Business Day after the last day on which the Borrower was required to deliver the applicable audited financial statement in accordance with Section 5.01(c)(i) hereof or in the case of an Event of Default, on the date the written notice is given to the Borrower; and (b) to remain in effect until subsequently adjusted in accordance herewith upon the delivery of such audited financial statements or, in the case of an Event of Default, when such Event of Default has been cured to the satisfaction of the Lender.

Section 2.07. Default Interest. In addition to the rights and remedies set forth in this Agreement and notwithstanding any Note: (i) if the Borrower fails to make any payment to Lender when due, subject to any applicable cure periods (including, without limitation, any purchase of equity of Lender as required by Section 2.15 of this Agreement), then at Lender’s option in each instance, such obligation or payment shall bear interest from the date due (subject to any applicable cure periods) to the date paid at 2% per annum in excess of the rate of interest that would otherwise be applicable to such obligation or payment; (ii) upon the occurrence and during the continuance of an Event of Default beyond any applicable cure period, if any, at Lender’s option in each instance, the unpaid balances of the Loans shall bear interest from the date of the Event of Default or such later date as Lender shall elect at 2% per annum in excess of the rate(s) of interest that would otherwise be in effect on the Loans under the terms of the applicable Note; (iii) after the maturity of any Loan, whether by reason of acceleration or otherwise, the unpaid principal balance of the Loan (including without limitation, principal, interest, fees and expenses) shall automatically bear interest at 2% per annum in excess of the rate of interest that would otherwise be in effect on the Loan under the terms of the applicable Note. Interest payable at the Default Rate shall be payable from time to time on demand or, if not sooner demanded, on the first day of each calendar month.

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Section 2.08. Late Charge. If any payment of principal or interest due hereunder or under any Note is not paid within ten (10) days of the due date thereof (other than following acceleration of the Maturity Date by Lender, or any required principal prepayments pursuant to this Agreement), the Borrower shall, in addition to such amount, pay a late charge equal to five percent (5%) of the amount of such payment.

Section 2.09. Prepayment of Loans. The Borrower may, by notice to the Lender, prepay the outstanding amount of the Loans in whole or in part with accrued interest to the date of such prepayment on the amount prepaid, without penalty or premium, except as otherwise provided in this Agreement.

Section 2.10. Changes in Law Rendering Certain LIBOR Rate Loans Unlawful. In the event that any change in any applicable law (including the adoption of any new applicable law) or any change in the interpretation of any applicable law by any judicial, governmental or other regulatory body charged with the interpretation, implementation or administration thereof, should make it (or in the good-faith judgment of the Lender should raise a substantial question as to whether it is) unlawful for the Lender to make, maintain or fund LIBOR Rate Loans, then: (a) the Lender shall promptly notify Borrower; and (b) the obligation of the Lender to make LIBOR rate loans of such type shall, upon the effectiveness of such event, be suspended for the duration of such unlawfulness. During the period of any suspension, Lender shall make loans to Borrower that are deemed lawful and that as closely as possible reflect the terms of this Agreement.

Section 2.11. Payments and Computations.

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

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

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

(d) Proceeds of Collateral. All proceeds received by the Lender from the sale or other liquidation of the Collateral when an Event of Default exists shall first be applied as payment of the accrued and unpaid fees and expenses of the Lender hereunder, including, without limitation, under Section 7.04 and then to all other unpaid or unreimbursed Loan Obligations (including reasonable attorneys’ fees and expenses) owing to the Lender and then any remaining amount of such proceeds shall be applied to the unpaid amounts of Loan Obligations, until all the Loan Obligations have been paid and satisfied in full or cash collateralized. After all the Loan Obligations (excluding any contingent Loan Obligations for which no claim has been asserted) have been paid and satisfied in full, all Commitments terminated and all other obligations of the Lender to the Borrower otherwise satisfied, any remaining proceeds of Collateral shall be delivered to the Person entitled thereto as directed by the Borrower or as otherwise determined by applicable law or applicable court order.

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(e) Computations. Except as expressly provided otherwise herein, all computations of interest and fees shall be made on the basis of actual number of days lapsed over a year of 365 days. Interest shall accrue from and include the date of borrowing, but exclude the date of payment.

Section 2.12. Maximum Amount Limitation. Anything in this Agreement, any Note, or the other Loan Documents to the contrary notwithstanding, Borrower shall not be required to pay unearned interest on any Note or any of the Loan Obligations, or ever be required to pay interest on any Note or any of the Loan Obligations at a rate in excess of the Maximum Rate, if any. If the effective rate of interest which would otherwise be payable under this Agreement, any Note or any of the other Loan Documents would exceed the Maximum Rate, if any, then the rate of interest which would otherwise be contracted for, charged, or received under this Agreement, any Note or any of the other Loan Documents shall be reduced to the Maximum Rate, if any. If any unearned interest or discount or property that is deemed to constitute interest (including, without limitation, to the extent that any of the fees payable by Borrower for the Loan Obligations to the Lender under this Agreement, any Note, or any of the other Loan Documents are deemed to constitute interest) is contracted for, charged, or received in excess of the Maximum Rate, if any, then such interest in excess of the Maximum Rate shall be deemed a mistake and canceled, shall not be collected or collectible, and if paid nonetheless, shall, at the option of the holder of such Note, be either refunded to the Borrower, or credited on the principal of such Note. It is further agreed that, without limitation of the foregoing and to the extent permitted by applicable law, all calculations of the rate of interest or discount contracted for, charged or received by the Lender under its Note, or under any of the Loan Documents, that are made for the purpose of determining whether such rate exceeds the Maximum Rate applicable to the Lender, if any, shall be made, to the extent permitted by applicable laws (now or hereafter enacted), by amortizing, prorating and spreading during the period of the full terms of the Advances evidenced by the Notes, and any renewals thereof all interest at any time contracted for, charged or received by Lender in connection therewith. This Section 2.12 shall control every other provision of all agreements among the parties to this Agreement pertaining to the transactions contemplated by or contained in the Loan Documents, and the terms of this Section 2.12 shall be deemed to be incorporated in every Loan Document and communication related thereto.

Section 2.13. Lender Records. All advances and all payments or prepayments made thereunder on account of principal or interest may be evidenced by the Lender in accordance with its usual practice in an account or accounts evidencing such advances and all payments or prepayments thereunder from time to time and the amounts of principal and interest payable and paid from time to time thereunder; in any legal action or proceeding in respect of the Notes, the entries made in such account or accounts shall be prima facie evidence of the existence and amounts of all advances and all payments or prepayments made thereunder on account of principal or interest. Lender shall provide monthly statements of such entries to Borrower for the purpose of confirming the accuracy of such entries.

Section 2.14. Loan Payments. During the continuance of an Event of Default, the Lender may deduct any obligations due or any other amounts due and payable by the Borrower under the Loan Documents from any accounts maintained with the Lender.

Section 2.15. Purchase of Equity Interests in AgStar Financial Services, PCA. In addition to (and not in lieu of) the other amounts payable by Borrower under this Agreement, Borrower shall purchase $1,000.00 of equity interests in AgStar Financial Services, PCA. The purchase price for the equity interests shall be payable in full on or prior to the date hereof. Such purchase of equity interests shall comply with AgStar Financial Services, PCA’s by-laws and capital plans applicable to borrowers generally. Borrower hereby acknowledges

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receipt of the following information and materials pertaining to AgStar Financial Services, PCA prior to the execution of this Agreement: (i) copies of the by-laws of AgStar Financial Services, PCA; (ii) a written description of the terms and conditions under which the equity interests are issued; (iii) a copy of the most recent annual reports of AgStar Financial Services, PCA; and (iv) if more recent than the latest annual reports, the latest quarterly reports of AgStar Financial Services, PCA. AgStar Financial Services, PCA shall possess a statutory security interest in its equity interests.

Borrower acknowledges and agrees that: (a) only the portions of the Loans provided to Borrower by AgStar Financial Services, PCA are entitled to patronage distributions in accordance with the bylaws of AgStar Financial Services, PCA and its practices and procedures; and (b) any patronage or similar payments to which Borrower is entitled as a result of its ownership of the equity interests in AgStar Financial Services, PCA will not be based on any of the Loans not belonging to AgStar Financial Services, PCA or in which AgStar Financial Services, PCA has granted a participation interest at any time.

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

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

Section 2.17. Excess Cash Flow. In addition to all other payments of principal and interest required under this Agreement and the Notes, at the end of each fiscal year until the Maturity Date, the Borrower shall remit to Lender, an amount equal to 75% of the Borrower’s. Excess Cash Flow, calculated based upon that fiscal year’s interim financial statements, on or before 120 days after the end of each fiscal year of the Borrower (the “Excess Cash Flow Payment”), provided however, that the total Excess Cash Flow Payments required hereunder shall not exceed $4,000,000.00 in any fiscal year (the “Maximum Excess Cash Flow Payment”) and provided that immediately prior to the Excess Cash Flow Payment required by this Section 2.17, or after giving effect thereto, no default or Event of Default shall exist. For clarity, if the Excess Cash Flow Payment would cause a default, then the Excess Cash Flow Payment shall be reduced by no more than the amount needed to maintain compliance with the requirements set forth in this Section 2.17. Such payment shall be applied first to the reduction of the outstanding principal of any variable rate Term Loan and then to the reduction of the outstanding principal balance of the Term Revolving Loan. The Excess Cash Flow Payment shall be calculated annually based upon audited fiscal year-end financial statements required by Section 5.01 (c)(1) of this Agreement. Borrower shall, within 30 days of Lender’s request remit to Lender any additional amounts due Lender under this Section in an amount not to exceed the Maximum Excess Cash Flow Payment. Any Excess Cash Flow Payment shall not constitute a prepayment with respect to which a prepayment fee under this Agreement is required to be paid.

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Notwithstanding the foregoing, the Excess Cash Flow Payment shall not exceed an aggregate amount of $16,000,000.00 for the term of this Agreement. No Excess Cash Flow Payments shall be required during any fiscal year should the Tangible Owner’s Equity be greater than 70% at the end of the immediately preceding fiscal year of the Borrower.

ARTICLE III.

CONDITIONS PRECEDENT

Section 3.01. Conditions Precedent to Funding. The effectiveness of this Agreement and the obligation of the Lender to make any Advance hereunder, are subject to the conditions precedent that the Lender shall have received the following to the extent not previously received by Lender, in form and substance reasonably satisfactory to the Lender:

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

(b) [Intentionally Omitted];

(c) The Term Note and the Term Revolving Note duly executed by the Borrower;

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

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

(f) A copy of all permits and government approvals obtained relating to the construction of the Project;

(g) [Intentionally Omitted];

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

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

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

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

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

(m) An ALTA mortgagee title insurance policy issued by a title insurance company acceptable to Lender, with respect to the Real Property, assuring the Lender that the Mortgage creates a valid and enforceable encumbrance on the Real Property, free and clear of all defects and encumbrances except Permitted Liens and containing: (i) a comprehensive endorsement (ALTA form 9); (ii) a zoning endorsement (ALTA form 3.0) specifying an ethanol production facility as a permitted use for all of the parcels included in the Real Property; and (iii) a restrictions, encroachments, minerals-owners endorsement (ALTA Form 9.2) and (iv) such endorsements as the Lender shall reasonably require. All such title insurance policies shall be in form and substance reasonably satisfactory to the Lender and shall provide for affirmative insurance and such reinsurance as the Lender may reasonably request, all of the foregoing in form and substance reasonably satisfactory to the Lender;

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

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

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

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

(r) Legal opinion of Krieg DeVault LLP, legal counsel for the Borrower, reasonably acceptable to Lender in form and substance;

(s) An intercreditor and subordination agreement between the Lender and any holder of Subordinated Debt, including without limitation the tax increment financing debt evidenced by that certain Indenture of Trust by and between the US Bank, National Association, as Trustee, and Borrower, as to the priority of the Lender’s security interests in the Collateral, rights to payment following an Event of Default, and as to such other matters as reasonably requested by the Lender;

(t) Evidence that the costs and expenses (including, without limitation, attorney’s fees) referred to in Section 7.04, to the extent incurred and invoiced, shall have been paid in full;

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

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

(w) An environmental site assessment that complies with the standards set forth in the ASTM E1527-05 Phase I Environmental Site Assessment Process and such additional information as Lender shall require in order to establish that Lender has made “all appropriate inquiries” as provided under Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) and 40 C.F.R. Part 312;

(x) A schedule, certified by Borrower as accurate and complete, setting forth the necessary licenses, permits and consents required by applicable federal, state, and local governmental entities required for the lawful construction and operation of the Project;

(y) [Intentionally Omitted]

(z) [Intentionally Omitted]

(aa) A deposit account control agreement for all deposit accounts kept and maintained by the Borrower;

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

(cc) Borrower shall have established and shall maintain all its primary deposit accounts excluding payroll accounts with Home Federal Savings Bank as long as Home Federal Savings Bank is a participant in the Loans with Lender.

ARTICLE IV.

REPRESENTATIONS AND WARRANTIES

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

(a) Borrower. The Borrower is a limited liability company duly organized and validly existing under the laws of the State of Indiana and is qualified to do business in all jurisdictions in which the nature of its business makes such qualification necessary and where failure to so qualify would have a Material Adverse Effect on its respective financial condition or operations. The Borrower has the power and authority to own and operate its assets and to carry on its business and to execute, deliver, and perform its obligations under the Loan Documents to which it is or may become a party. There are no outstanding subscriptions, options, warrants, calls, or rights (including preemptive rights) to acquire, and no outstanding securities or instruments convertible into, membership interests (units) of the Borrower, except for those transactions set forth on Schedule 4.01(a);

(b) The Loan Documents. The execution, delivery and performance by the Borrower of the Loan Documents are within the Borrower’s powers, have been duly authorized by all necessary action, do not contravene: (i) the articles of organization or operating agreements of the Borrower; or (ii) any law or any contractual restriction binding on or affecting the Borrower, and do not result in or require the creation of any lien, security interest or other charge or encumbrance (other than pursuant to the terms thereof) upon or with respect to any of its respective properties;

(c) Governmental Approvals. No consent, permission, authorization, order or license of any Governmental Authority or of any party to any agreement to which the Borrower is a party or by which it or any of its respective property may be bound or affected, is necessary in connection with the construction of the Project, acquisition or other activity being financed by this Agreement, the execution, delivery, performance or enforcement of the Loan Documents or the creation and perfection of the liens and security interest granted thereby, except as such have been obtained and are in full force and effect or which are required in connection with the exercise of remedies hereunder;

(d) Enforceability. This Agreement is, and each other Loan Document to which the Borrower is a party when delivered will be, legal, valid and binding obligations of the Borrower enforceable against the Borrower in accordance with their respective terms, except as may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws affecting the enforcement of creditor’s rights generally and by general principles of equity;

(e) Financial Condition and Operations. The balance sheet of the Borrower with respect to the period ended December 31, 2010, the related statement of cash flow of the Borrower for the fiscal period then ended, copies of which have been furnished to the Lender, fairly present in all material respects the financial condition of the Borrower as at such date, and the results of the operations of the Borrower for the period ended on such dates and since December 31, 2010, there has been no material adverse change in such condition or operations;

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(f) Litigation. Except as described on Schedule 4.01(f), there is no pending or threatened action or proceeding affecting the Borrower or any of the transactions contemplated hereby before any court, governmental agency or arbitrator, which, if adversely determined, may result in a Material Adverse Effect. There are no outstanding judgments against the Borrower;

(g) Use of Proceeds of Advances, etc. (i) No proceeds of the Loans will be used to acquire any security in any transaction which is subject to Sections 13 and 14 of the Securities Exchange Act of 1934 (provided, however, that this provision shall not prohibit Borrower from investing in certain value added cooperatives for the purposes of carrying out their overall business operations); (ii) the Borrower is not engaged in the business of extending credit for the purpose of purchasing or carrying margin stock (within the meaning of Regulation U issued by the Board of Governors of the Federal Reserve System); and (iii) no proceeds of the Loans will be used to purchase or carry any margin stock or to extend credit to others for the purpose of purchasing or carrying any margin stock;

(h) Liens. Except as created by the Loan Documents and as constitute Permitted Liens, there is no lien, security interest or other charge or encumbrance, and no other type of preferential arrangement, upon or with respect to any of the properties or income of the Borrower, which secures Debt of any Person;

(i) Taxes. The Borrower has filed or caused to be filed all federal, state and local tax returns that are required to be filed and has paid all other taxes, assessments, and governmental charges or levies upon it and its property, income, profits and assets which are due and payable, except where the payment of such tax, assessment, government charge or levy is being contested in good faith and by appropriate proceedings and adequate reserves in compliance with GAAP have been set aside on the Borrower’s books therefore;

(j) Solvency. As of and from and after the date of this Agreement, the Borrower: (i) owns and will own assets the fair saleable value of which are: (A) greater than the total amount of liabilities (including contingent liabilities); and (B) greater than the amount that will be required to pay the probable liabilities of its then existing debts as they become absolute and matured considering all financing alternatives and potential asset sales reasonably available to it; (ii) has capital that is not unreasonably small in relation to its business as presently conducted or any contemplated or undertaken transaction; and (iii) does not intend to incur and does not believe that it will incur debts beyond its ability to pay such debts as they become due;

(k) Location of Inventory and Farm Products; Third Parties in Possession; Crops. The Borrower’s inventory and farm products pledged as collateral under the Security Agreement are located at the places (or, as applicable, jurisdictions) specified in Schedule 4.01(k) for the Borrower, except to the extent any such inventory and farm products are in transit. Schedule 4.01(k) correctly identifies, as of the date hereof, the landlords or mortgagees, if any, of each of its locations identified in Schedule 4.01(k) currently leased or owned by the Borrower. Except for the Persons identified on Schedule 4.01(k), no Person other than the Borrower and the Lender has possession of any of the Collateral. Except as described in above, none of its Collateral has been located in any location within the past four months other than as set forth on Schedule 4.01(k) for the Borrower;

(l) Office Locations; Fictitious Names; Predecessor Companies; Tax I.D. Number. The Borrower’s chief place of business, its chief executive office, and its jurisdiction of organization is located at the place identified for the Borrower on Schedule 4.01(l). Within the last four months it has not had any other chief place of business, chief executive office, or jurisdiction of organization. Schedule 4.01(l) also sets forth all other places where the Borrower keeps its books and records and all other locations where the Borrower has a place of

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business. The Borrower does not do business nor has the Borrower done business during the past five (5) years under any trade-name or fictitious business name except as disclosed on Schedule 4.01(l). Schedule 4.01(l) sets forth an accurate list of all names of all predecessor companies of the Borrower including the names of any entities it acquired (by stock purchase, asset purchase, merger or otherwise) and the chief place of business and chief executive office of each such predecessor company. For purposes of the foregoing, a “predecessor company” shall mean any Person whose assets or equity interests are acquired by the Borrower or who was merged with or into the Borrower within the last four months prior to the date hereof. The Borrower’s United States Federal Income Tax I.D. Number and state organizational identification number are identified on Schedule 4.01(l);

(m) Title to Properties. The Borrower has such title or leasehold interest in and to the Real Property owned or leased by it as is necessary or desirable to the conduct of its business and valid and legal title or leasehold interest in and to all of its Personal Property, including those reflected on the financial statements of the Borrower previously delivered to Lender, except those which have been disposed of by the Borrower subsequent to the date of such delivered financial statements which dispositions have been in the ordinary course of business or as otherwise expressly permitted hereunder;

(n) Disclosure. All factual information furnished by or on behalf of the Borrower or its subsidiaries in writing to the Lender (including, without limitation, all factual information contained in the Loan Documents) for purposes of or in connection with this Agreement, the other Loan Documents or any transaction contemplated herein or therein is, and all other such factual information hereafter furnished by or on behalf of the Borrower to the Lender, will be true and accurate in all material respects on the date as of which such information is dated or certified and not incomplete by omitting to state any fact necessary to make such information not misleading in any material respect at such time in light of the circumstances under which such information was provided;

(o) Operation of Business. The Borrower possesses all licenses, permits, franchises, patents, copyrights, trademarks, and tradenames, or rights thereto, necessary to conduct its business substantially as now conducted and will obtain all such licenses, permits, franchises, patents, copyrights, trademarks, and tradenames, or rights thereto necessary to conduct its business as presently proposed to be conducted except those that the failure to so possess could not reasonably be expected to have a Material Adverse Effect on its financial condition or operations, and the Borrower is not in violation of any valid rights of others with respect to any of the foregoing except violations that could not reasonably be expected to have such a Material Adverse Effect;

(p) Intellectual Property. The Borrower owns, or otherwise has or will have the legal right to use, all patents, trademarks, tradenames, copyrights, technology, know-how and processes necessary for it to conduct its business as currently conducted and will own or obtain the legal right to use all patents, trademarks, tradenames, copyrights, technology, know-how and processes necessary for it to conduct its business as currently conducted (collectively the “Intellectual Property”), except for those the failure to own or have such legal right to use could not reasonably be expected to have a Material Adverse Effect. Set forth in Schedule 4.01(p) is a list of all Intellectual Property registered with the United States Copyright Office or the United States Patent and Trademark Office and owned by the Borrower or that the Borrower has the right to use. Except as provided in Schedule 4.01(p), no claim has been asserted and is pending by any Person challenging or questioning the use of any such Intellectual Property or the validity or effectiveness of any such Intellectual Property, nor does the Borrower know of any such claim, and, to the knowledge of the Borrower, the use of such Intellectual Property by the Borrower does not infringe on the rights of any Person, except for such claims and infringements that, in the aggregate, could not reasonably be expected to have a Material Adverse Effect;

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(q) Employee Benefit Plans. The Borrower is in compliance in all material respects with the applicable provisions of the Employee Retirement Income Security Act of 1974, as amended, and the regulations and published interpretations thereunder, the failure to comply with which could have a Material Adverse Effect on the Borrower;

(r) Investment Company Act. The Borrower is not required to be registered as an “investment company” within the meaning of the Investment Company Act of 1940, as amended;

(s) Compliance with Laws. The Borrower is in compliance in all material respects with all laws, rules, regulations, ordinances, codes, orders, and the like, the failure to comply with which could have a Material Adverse Effect on the Borrower;

(t) Environmental Compliance. Borrower, except as set forth in Schedule 4.01(t), is in material compliance with all applicable Environmental Laws; and

(u) Material Change. The Borrower has performed all of its material obligations, other than those obligations for which performance is not yet due, under all Material Contracts and, to the best knowledge of the Borrower, each other party thereto is in compliance with each such Material Contract. Each such Material Contract is in full force and effect in accordance with the terms thereof. The Borrower has made available a true and complete copy of each such Material Contract for inspection by Lender.

ARTICLE V.

COVENANTS OF THE BORROWER

Section 5.01. Affirmative Covenants. So long as any Loan Obligations (other than contingent claims for which no claim has been asserted) remain unpaid or the Lender shall have any commitment hereunder, the Borrower shall, unless the Lender shall otherwise consent in advance in writing:

(a) Compliance with Laws, etc. Comply in all material respects with all applicable laws, rules, regulations and orders, such compliance to include, without limitation, (i) all applicable zoning and land use laws; (ii) all employee benefit and Environmental Laws, and (iii) paying before the same become delinquent all taxes, assessments and governmental charges imposed upon it or upon its property except to the extent contested in good faith;

(b) Visitation Rights; Field Examination. At any reasonable time and from time to time, permit the Lender or representatives, to (i) examine and make copies of and abstracts from the records and books of account of the Borrower (at Lender’s expense), and (ii) enter onto the property of the Borrower to conduct unannounced field examinations and collateral inspections, provided if no Event of Default has occurred and is then continuing Lender shall limit its field examinations to one (1) per each twelve month period, and (iii) discuss the affairs, finances, and accounts of the Borrower with any of Borrower’s officers or directors. Borrower consents to and authorizes Lender to enter onto the property of Borrower for purposes of conducting the examinations, inspections and discussions provided above. Upon and during the occurrence of an Event of Default or in the event that there are deemed by the Lender to be any material inconsistencies and/or material noncompliance with respect to any financial or other reporting on the part of the Borrower, any and all visits and inspections deemed necessary or desirable on account of such Event of Default, inconsistency and/or noncompliance shall be at the expense of the Borrower. In addition to the foregoing, at any reasonable time and from time to time, the Borrower also shall permit the Lender or representatives thereof, at the expense of the Lender, to examine and make copies of and abstracts from the records and books of account of, and visit the properties of, the Borrower, and to discuss the affairs, finances and accounts of the Borrower with any of its respective officers or directors;

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(c) Reporting Requirements. Furnish to the Lender:

(i) As soon as available, but in no event later than one hundred twenty (120) days after the end of each fiscal year of the Borrower, occurring during the term hereof, audited annual financial statements of GPRE as of the end of such fiscal year (including the income statement, balance sheet, shareholders’ equity, and statement of cash flows along with accompanying footnotes) each prepared on a consolidated and consolidating basis, audited by independent certified public accountants of nationally recognized standing reasonably acceptable to the Agent, prepared in accordance with GAAP consistently applied and certified by an authorized officer of the Borrower; and, reporting of eliminating entries shall be provided in aggregate as well as those attributable to the Borrower, which may be provided in separate documentation delivered with the financial statements required under this subsection, together with a Compliance Certificate which: (A) states that no Event of Default, and no event or condition that but for the passage of time, the giving of notice or both would constitute an Event of Default, has occurred or is in existence; and (B) shows in detail satisfactory to the Agent the calculation of, and Borrower’s compliance with, each of the covenants contained in this Agreement;

(ii) As soon as available and in any event within 30 days after the end of each month, balance sheets of the Borrower as of the end of such month and statement of income of the Borrower for the period commencing at the end of the previous fiscal year and ending with the end of such month, prepared in accordance with GAAP and certified by an authorized officer of the Borrower;

(iii) As soon as available but in no event later than 30 days after the end of each of the first three fiscal quarters of each fiscal year of the Borrower occurring during the term hereof, unaudited quarterly consolidated financial statements of the Borrower, in each case prepared in accordance with GAAP consistently applied (except for the omission of footnotes and for the effect of normal year-end audit adjustments) and in a format that demonstrates any accounting or formatting change that may be required by various jurisdictions in which the business of the Borrower is conducted (to the extent not inconsistent with GAAP). Each of such financial statements shall (i) be prepared in reasonable detail and in comparative form, including a comparison of actual performance to the budget for such quarter and year-to-date, delivered to Lender under Subsection 5.01(c)(vi) below, and (ii) include a balance sheet, a statement of income for such quarter and for the period year-to-date, and such other quarterly statements as Lender may specifically request which quarterly statements shall include any and all supplements thereto. Such quarterly statements shall be certified by an authorized officer of the Borrower, and be accompanied by a Compliance Certificate which: (A) states that no Event of Default, and no event or condition that but for the passage of time, the giving of notice or both would constitute an Event of Default, has occurred or is in existence; and (B) shows in detail satisfactory to the Lender the calculation of, and the Borrower’ compliance with, each of the covenants contained in Sections 5.01(d), 5.01(e), 5.01(f), and 5.01(g);

(iv) promptly upon the Lender’s request therefor, copies of all reports and notices which the Borrower or any of its subsidiaries files under ERISA with the Internal Revenue Service or the Pension Benefit Guaranty Corporation or the U.S. Department of Labor or which the Borrower receives from such Corporation;

(v) notwithstanding the foregoing Section 5.01(c)(iv), provide to Lender within 30 days after it becomes aware of the occurrence of any Reportable Event (as defined in Section 4043 of ERISA) applicable to the Borrower, a statement describing such Reportable Event and the actions it proposes to take in response to such Reportable Event;

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(vi) By the end of December of each fiscal year of the Borrower, an annual (with quarterly breakout) operating and capital assets budget of the Borrower for the immediately succeeding fiscal year containing, among other things, pro forma financial statements and forecasts of all planned lines of business;

(vii) as soon as available but in any event not more than 30 days after the end of each month, production reports for the immediately preceding calendar month setting forth corn inputs, ethanol output, DDGS and, to the extent applicable, CO₂ output, and natural gas usage, together with such additional production information as requested by Lender;

(viii) Promptly, upon the occurrence of an Event of Default or an event or condition that but for the passage of time or the giving of notice or both would constitute an Event of Default, notice of such Event of Default or event;

(ix) Promptly after the receipt thereof, a copy of any management letters or written reports submitted to the Borrower by its independent certified public accountants with respect to the business, financial condition or operation of the Borrower;

(x) Promptly after the receipt thereof, a copy of any notice of default under any Long-Term Marketing Agreement;

(xi) furnish to the Lender, promptly but in no event later than 10 Business Days after transmittal or filing thereof by the Borrower or any of Borrower’s Affiliates, copies of all proxy statements, notices and reports as it shall send to its members and copies of all registration statements (without exhibits) and all reports which it files with the Securities and Exchange Commission (or any governmental body or agency succeeding to the functions of the Securities and Exchange Commission), and promptly after the receipt thereof by the Borrower or any of Borrower’s Affiliates, copies of all management letters or similar documents submitted to the Borrower or any of Borrower’s Affiliates by independent certified public accountants in connection with each annual and any interim audit of the accounts of the Borrower or any of Borrower’s Affiliates;

(xii) Such other information respecting the condition or operations, financial or otherwise, of the Borrower or any of Borrower’s subsidiaries or any Operating Affiliate as the Lender may from time to time reasonably request;

(xiii) promptly after the commencement thereof, notice of the commencement of all actions, suits, or proceedings before any court, arbitrator, or government department, commission, board, bureau, agency, or instrumentality affecting the Borrower or any of its subsidiaries which, if determined adversely, could have a Material Adverse Effect on the Borrower;

(xiv) without limiting the provisions of Section 5.01(c)(xiii) above, promptly after receipt thereof, notice of the receipt of all pleadings, orders, complaints, indictments, or any other communication alleging a condition that may require the Borrower to undertake or to contribute to a cleanup or other response under all laws relating to environmental protection, or which seek penalties, damages, injunctive relief, or criminal sanctions related to alleged violations of such laws, or which claim personal injury or property damage to any person as a result of environmental factors or conditions;

(xx) promptly after filing, receipt or becoming aware thereof, copies of any filings or communications sent to and notices or other communications received by the Borrower from any Governmental Authority, including, without limitation, the Securities and Exchange Commission, the FCC, the PUC, or any

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other state utility commission relating to any material noncompliance by the Borrower or any of its subsidiaries with any laws or with respect to any matter or proceeding the effect of which, if adversely determined, could have a Material Adverse Effect on the Borrower;

(xxi) promptly but in no event later than 5 Business Days after becoming aware thereof, notice of any matter which has had or could have a Material Adverse Effect on the Borrower or any of its subsidiaries or any of its Operating Affiliates;

(xxii) copies of all plans and applications submitted to the Indiana Department of Environmental Management and the U.S. Army Corps of Engineers required by Section 5.01(t) of this Agreement;

(xxiii) A written report on the status of the plans and applications required by Section 5.01(t) within ten (10) days after the end of each month until all such plans are approved and all such permits are obtained;

(xxiv) As soon as available but in no event later than 45 days after the end of each fiscal quarter of each fiscal year of GPRE occurring during the term hereof, unaudited quarterly consolidated financial statements of GPRE, prepared in accordance with GAAP consistently applied (except for the omission of footnotes and for the effect of normal year-end audit adjustments) and in a format that demonstrates any accounting or formatting change that may be required by various jurisdictions in which the business of GPRE is conducted (to the extent not inconsistent with GAAP). Each of such financial statements shall (i) be prepared in reasonable detail and in comparative form, and (ii) include a balance sheet, a statement of income for such quarter and for the period year-to-date, and such other quarterly statements as Lender may specifically request which quarterly statements shall include any and all supplements thereto. Such quarterly statements shall be certified by an authorized officer of GPRE.

(d) Working Capital. Achieve and maintain Working Capital of $12,000,000, which shall be tested monthly based on monthly financial statements of the Borrower delivered in accordance with Section 5.01 and a Compliance Certificate of the Borrower delivered to the Lender within 5 Business Days of the end of each month;

(e) Tangible Net Worth. Achieve and maintain Tangible Net Worth of $82,500,000.00, which shall be tested monthly based on monthly financial statements of the Borrower delivered in accordance with Section 5.01 and a Compliance Certificate of the Borrower delivered to the Lender within 5 Business Days of the end of each month;

(f) Tangible Owner’s Equity. Achieve and maintain Tangible Owner’s Equity of at least 50% measured annually at the end of each fiscal year;

(g) Fixed Charge Coverage Ratio. Maintain a Fixed Charge Coverage Ratio of not less than 1.25 to 1.00, measured annually;

(h) Liens. There shall be no lien, security interest or other charge or encumbrance, and no other type of preferential arrangement, upon or with respect to any of the properties or income of the Borrower, which secures Debt of any Person, except for the security interests of the Security Agreement or except for the Permitted Liens as described in Schedule 5.02(a);

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(i) Landlord and Mortgagee Waivers. Obtain and furnish to the Lender as soon as available, waivers, acknowledgments and consents, duly executed by each: (i) real property owner, landlord and mortgagee having an interest in any of the premises owned or leased by the Borrower or in which any Collateral of the Borrower is located or to be located (and if no Collateral of Borrower is located at a parcel of property not owned or leased by a Borrower, no such waivers, acknowledgments or consents will be required); and (ii) each third party holding any Collateral, all in form and substance acceptable to the Lender, except as otherwise agreed to by the Lender;

(j) Insurance. Maintain insurance with financially sound and reputable insurance companies in such amounts and covering such risks as are usually carried by entities engaged in similar businesses and owning similar properties in the same general areas in which the Borrower operates, and make such increases in the type of amount or coverage as Lender may reasonably request, provided that in any event the Borrower will maintain workers’ compensation insurance, property insurance and comprehensive general liability insurance reasonably satisfactory to the Lender. The Borrower shall maintain, at a minimum, directors and officers liability insurance, commercial liability insurance, business interruption insurance, builder’s risk insurance, and general commercial property insurance. All such policies insuring any collateral for the Borrower’s obligations to Lender shall have lender or mortgagee loss payable clauses or endorsements in form and substance acceptable to Lender. Each insurance policy covering Collateral shall be in compliance with the requirements of the Security Agreement and the Mortgage;

(k) Property and Insurance Maintenance. Maintain and preserve all of its property and each and every part and parcel thereof that is necessary to or useful in the proper conduct of its business in good repair, working order, and condition, ordinary wear and tear excepted, and in substantial compliance with all applicable laws, and make all alterations, replacements, and improvements thereto as may from time to time be necessary in order to ensure that its properties remain in good working order and condition and compliance. The Borrower agrees that upon the occurrence and continuing existence of an Event of Default, at Lender’s request, which request may not be made more than once a year, the Borrower will furnish to Lender a report on the condition of the Borrower’s property prepared by a professional engineer satisfactory to Lender;

(l) Keeping Books and Records. Maintain proper books of record and account in which full, true, and correct entries in conformity with GAAP shall be made of all dealings and transactions in relation to its business and activities;

(m) Food Security Act Compliance. If the Borrower acquires any Collateral which may have constituted farm products in the possession of the seller or supplier thereof, such Borrower shall, at its own expense, use its commercially reasonable efforts to take such steps to insure that all Liens (except the liens granted pursuant hereto) in such acquired Collateral are terminated or released, including, without limitation, in the case of such farm products produced in a state which has established a Central Filing System (as defined in the Food Security Act), registering with the Secretary of State of such state (or such other party or office designated by such state) and otherwise take such reasonable actions necessary, as prescribed by the Food Security Act, to purchase farm products free of liens (except the liens granted pursuant hereto); provided, however, that such Borrower may contest and need not obtain the release or termination of any lien asserted by any creditor of any seller of such farm products, so long as it shall be contesting the same by proper proceedings and maintain appropriate accruals and reserves therefor in accordance with the GAAP. Upon the Lender’s request made, the Borrower agrees to forward to the Lender promptly after receipt copies of all notices of liens and master lists of Effective Financing Statements delivered to the Borrower pursuant to the Food Security Act, which notices and/or lists pertain to any of the Collateral. Upon the Lender’s request, the Borrower agrees to provide the Lender with the names of Persons who supply the Borrower with such farm products and such other information as the Lender may reasonably request with respect to such Persons;

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(n) Warehouse Receipts. If any warehouse receipt or receipts in the nature of a warehouse receipt is issued in respect of any portion of the Collateral, then the Borrower: (i) will not permit such warehouse receipt or receipts in the nature thereof to be “negotiable” as such term is used in Article 7 of the Uniform Commercial Code; and (ii) will deliver all such receipts to the Lender (or a Person designated by the Lender) within five (5) days of the Lender’s request and from time to time thereafter. If no Event of Default exists, the Lender agrees to deliver to such Borrower any receipt so held by the Lender upon such Borrower’s request in connection with such sale or other disposition of the underlying inventory, if such disposition is in ordinary course of such Borrower’s business;

(o) Management of Borrower. Management of the Borrower shall be maintained as set forth on Schedule 5.01(o) hereto, unless prior written notice is provided to the Lender of any change;

(p) Compliance with Other Agreements. Borrower will perform in all material respects all obligations and abide in all material respects by all covenants and agreements contained in the following agreements: (i) any and all Long Term Marketing Agreements; and (ii) any other Material Contracts;

(q) Additional Assurances. Make, execute and deliver to Lender such promissory notes, mortgages, deeds of trust, financing statements, control agreements, instruments, documents and other agreements as Lender or its counsel may reasonably request to evidence and secure the Loans and to perfect all Security Interests;

(r) Release of Restrictive Covenants. Borrower shall use its commercially reasonable efforts to obtain release of the Restrictive Covenants Southwest Bluffton Industrial Park dated June 15, 2004 and recorded with the Wells County Recorder on June 17, 2004, as Document Number 139039;

(s) [Intentionally Omitted.]

(t) Mitigation Plan. Borrower shall have submitted a mitigation plan for the encroachments of the wetlands and streams located on the Property and an application for a permit pursuant to Section 401 Application for Authorization to Discharge Dredged or Fill Material to Isolated Wetlands and / or Waters of the State from the Indiana Department of Environmental Management and a permit from the U.S. Army Corps of Engineers pursuant to Section 404 of the Clean Water Act, and such other permits as may be required by the Indiana Department of Environmental Management and any other governmental agencies having jurisdiction.

Section 5.02. Negative Covenants. So long as any of the Loan Obligations remain unpaid (other than contingent obligations for which no claim has been asserted) or the Lender shall have any commitment hereunder, the Borrower will not, without the prior written consent of the Lender:

(a) Liens, etc. Create or suffer to exist, or permit any of its subsidiaries to create or suffer to exist, any lien, security interest or other charge or encumbrance, or any other type of preferential arrangement, upon or with respect to any of its properties, whether now owned or hereafter acquired, or assign, or permit any of its subsidiaries to assign, any right to receive income, in each case to secure any Debt (as defined below) of any Person, other than (collectively referred to as “Permitted Liens”):

(i) Those described on Schedule 5.02(a) hereto and renewals and extensions on the same or substantially the same terms and conditions and at no increase in the debt or obligation; or

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(ii) liens or security interests which are subject to an intercreditor and subordination agreement in form and substance reasonably acceptable to Lender in Lender’s sole but reasonable discretion; or

(iii) the liens or security interests of the Security Agreement and Mortgage; or

(iv) liens (other than liens relating to environmental liabilities or ERISA) for taxes, assessments, or other governmental charges that are not more than 30 days overdue or, if the execution thereof is stayed, which are being contested in good faith by appropriate proceedings diligently pursued and for which adequate reserves have been established; or

(v) liens of warehousemen, carriers, landlords, mechanics, materialmen, or other similar statutory or common law liens securing obligations that are not yet due and are incurred in the ordinary course of business or, if the execution thereof is stayed, which are being contested in good faith by appropriate proceedings diligently pursued and for which adequate reserves have been established in accordance with GAAP; or

(vi) liens resulting from good faith deposits to secure payments of workmen’s compensation unemployment insurance, or other social security programs or to secure the performance of tenders, leases, statutory obligations, surety, customs and appeal bonds, bids or contracts (other than for payment of Debt); or

(vii) any attachment or judgment lien not constituting an Event of Default; or

(viii) liens arising from filing UCC financing statements regarding leases not prohibited by this Agreement; or

(ix) customary offset rights of brokers and deposit banks arising under the terms of securities account agreements and deposit agreements; or

(x) any real estate easements and easements, covenants and encumbrances that customarily do not affect the marketable title to real estate or materially impair its use; or

(b) Distributions, etc. Declare or pay any dividends, purchase or otherwise acquire for value any of its membership interests (units) now or hereafter outstanding, or make any distribution of assets to its stockholders, members or general partners as such, or permit any of its subsidiaries to purchase or otherwise acquire for value any stock, membership interest or partnership interest of the Borrower, provided, however, the Borrower may: (i) declare and pay dividends and distributions payable in membership interests (units); (ii) purchase or otherwise acquire shares of the membership interests (units) of the Borrower with the proceeds received from the issuance of new membership interests (units); (iii) pay an amount not to exceed, in the aggregate, 35% of the Borrower’s immediately preceding fiscal year’s Net Income for the payment of taxes only (“Allowed Distributions”); (iv) pay dividends or distributions which are immediately reinvested in the Borrower (“Reinvestment Distributions”); (v) complete the transactions reflected on Schedule 4.01(a) and (vi) after payment of the Excess Cash Flow Payment required by Section 2.17, if any, and after all loan covenants are met on a post-dividend basis, pay additional distributions in an amount up to 15% of the Borrower’s immediately preceding fiscal year’s Net Income (“Excess Distributions”), provided, however, that immediately prior to the proposed payment of any dividends or distributions permitted by this Section 5.02(b), or after giving effect thereto, no Default or Event of Default shall exist, and provided, however, that aggregate distributions will not exceed 50% of the Borrower’s immediately preceding fiscal year’s Net Income; or

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(c) Capital Expenditures. Make any investment in fixed assets in excess of the aggregate amount of two million and no/100 Dollars ($2,000,000.00) during any fiscal year during the term of this Agreement; or

(d) Consolidation, Merger, Dissolution, Etc. Directly or indirectly, merge or consolidate with any other Person or permit any other Person to merge into or with or consolidate with the Borrower or any of its subsidiaries if Borrower is not the surviving entity to such merger; or

(e) Indebtedness, etc. Create, incur, assume or suffer to exist any Debt or other Indebtedness, liabilities or obligations, whether matured or unmatured, liqudated or unliquidated, direct or contingent, joint or several, in aggregate principal amount not to exceed $500,000, without the prior written consent of the Lender, except: (i) the liabilities of the Borrowers to the Banks hereunder; (ii) trade accounts payable and accrued liabilities (other than Debt) arising in the ordinary course of the Borrower’s business, (iii)subordinated debt; (iv) payments owed under material contracts; (v) contracts or agreements other than material contracts arising in the ordinary course of the Borrower’s business.; or

(f) Organization; Name; Chief Executive Office. Change its state of organization, name or the location of its chief executive office without the prior written consent of the Lender, except that the principal office shall be moved to the plant site when construction of the administration office is substantially complete; or

(g) Loans, Guaranties, etc. Make any loans or advances to (whether in cash, in-kind, or otherwise) any Person, or directly or indirectly guaranty or otherwise assure a creditor against loss in respect of any indebtedness, obligations or liabilities (contingent or otherwise) of any Person; or

(h) Subsidiaries; Affiliates. Form or otherwise acquire any subsidiary or affiliated business, or acquire the assets of or acquire any equity or ownership interest in any Person, unless such subsidiary, affiliate or Person executes and delivers to the Lender: (i) a guaranty of all of the Loan Obligations, in form and substance acceptable to the Lender in its sole but reasonable discretion; (ii) security agreements in form substantially similar to the Security Agreement; and (iii) such other documents and amendments to this Agreement and the other Loan Documents as the Lender shall reasonably require; or

(i) Transfer of Assets. Sell, lease, assign, transfer, or otherwise voluntarily dispose of any of its assets, or permit any of Borrower’s subsidiaries or any Operating Affiliate to sell, lease, assign, transfer, or otherwise voluntarily dispose of all or substantially all of its assets except: (i) dispositions of inventory in the ordinary course of business; and (ii) dispositions of: (A) obsolete or worn out equipment; (B) equipment or real property not necessary for the operation of its business; or (C) equipment or real property which is replaced with property of equivalent or greater value as the property which is disposed;

(j) Lines of Business. Engage in any line or lines of business activity other than the production of ethanol and related by products;

(k) Transactions with Affiliates. Directly or indirectly enter into or permit to exist any transaction (including the purchase, sale, lease or exchange of any property or the rendering of any service) with any Affiliate or with any director, officer or employee of the Borrower or any Affiliate, except (i) transactions listed on Schedule 5.02(k), (ii) transactions in the ordinary course of and pursuant to the reasonable requirements of the business of the Borrower or any of its subsidiaries and upon fair and reasonable terms which are fully disclosed to Lender and are no less favorable to the Borrower or such subsidiary than would be obtained in a comparable arm’s length transaction with a person or entity that is not an Affiliate, and (iii) payment of

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compensation to directors, officers and employees in the ordinary course of business for services actually rendered in their capacities as directors, officers and employees, provided such compensation is reasonable and comparable with compensation paid by companies of like nature and similarly situated. Notwithstanding the foregoing, upon the election of Lender, no payments may be made with respect to any items set forth in clauses (i) and (ii) of the preceding sentence upon the occurrence and during the continuation of an Event of Default; or

(l) Management Fees and Compensation. Directly or indirectly pay any management, consulting or other similar fees to any person, except legal or consulting fees paid to persons or entities that are not Affiliates of the Borrower or its subsidiaries for services actually rendered and in amounts typically paid by entities engaged in the Borrower’s or such subsidiary’s business;

(m) Material Control or Management. Permit a Change in Control to occur;

(o) Amendments to Organizational Documents. Amend, or permit GPRE to amend its operating agreement, management agreement or any other organizational documents in any respect without the prior written consent of the Lender; or

(p) Flood Insurance. Borrower shall not build, construct, place or otherwise located any Building at any location on the Property for which flood insurance is required under 12 C.F.R. Part 339 or other applicable U.S. or state law or regulation without the prior written consent of the Lender and without first obtaining flood insurance on such Building acceptable to Lender and providing evidence thereof to the Lender in a form acceptable to Lender. For purposes of this Section, “Building” has the meaning provided in 12 C.F.R. 339.2(c).

ARTICLE VI.

EVENTS OF DEFAULT AND REMEDIES

Section 6.01. Events of Default. Each of the following events shall be an “Event of Default”:

(a) The Borrower shall fail to pay any installments of principal or interest, fees, expenses, charges or other amounts payable hereunder or under the other Loan Documents or to make any deposit of funds required under this Agreement within ten (10) days of when due; or

(b) Any representation or warranty made by the Borrower, or any of its officers, members or managers or directors under or in connection with any Loan Document shall prove to have been incorrect in any material respect when made; or

(c) The Borrower shall fail to perform or observe any term, covenant or agreement contained in Sections 5.01 (d), (e), (f) or (g) or take any action as prohibited by Section 5.02, provided however, and notwithstanding anything to the contrary contained in this Section 6, that in the event that Borrower fails to comply with the financial covenants set forth in Sections 5.01 (d), (e), (f) or (g) hereof, Borrower shall have the right (the “Cure Right”) at any time until the date that is five (5) days after the date the Compliance Certificate is required to be delivered pursuant to Section 5.01 (c) hereof to issue equity interests for cash or otherwise receive Equity Contributions (the “Cure Amount”), and thereupon Borrower’s compliance with Sections 5.01(d), (e) (f) or (g) hereof shall be recalculated giving effect to the Cure Amount as if it actually occurred during the fiscal period covered by Compliance Certificate. If, after giving effect to the foregoing recalculations the requirements of Sections 5.01 (d), (e), (f) or (g) hereof shall be satisfied, then such requirements shall be deemed satisfied as of the end of the relevant fiscal period of Borrower with the same effect as though there had been no failure to comply therewith at such date, and the applicable breach or default of Sections 5.01 (d), (e), (f) or (g) hereof shall be deemed cured for the purposes of this Agreement; or

32

(d) The Borrower shall fail to deliver the financial statements or Compliance Certificate under Section 5.01(c) within ten (10) days of the date due; or

(e) The Borrower shall fail to perform or observe any term, covenant or agreement contained in any Loan Document (other than those listed in clauses (a) through (d) of this Section 6.01) on its part to be performed or observed (other than the covenants to pay the Loan Obligations) and any such failure shall remain unremedied for thirty (30) days after written notice thereof shall have been given to the Borrower by the Lender, provided, however, that no Event of Default shall be deemed to exist if, within said thirty (30) day period, Borrower have commenced appropriate action to remedy such failure and shall diligently and continuously pursue such action until such cure is completed, unless such cure is or cannot be completed within sixty (60) days after written notice shall have been given; or

(f) The Borrower shall fail to pay any indebtedness in an amount in excess of $100,000.00 (either in any individual case or in the aggregate) excluding indebtedness evidenced by the Notes and excluding Ordinary Trade Payable Disputes, or any interest or premium thereon, when due (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise) and such failure shall continue after the applicable grace period, if any, specified in the agreement or instrument relating to such indebtedness; or any other default under any agreement or instrument relating to any such indebtedness, or any other event, shall occur and shall continue after the applicable grace period, if any, specified in such agreement or instrument, if the effect of such default or event is to cause a Material Adverse Effect or accelerate, or to permit the acceleration of, the maturity of such indebtedness (excluding Ordinary Trade Payable Disputes); or any such indebtedness in excess of $150,000.00 shall be declared to be due and payable, or required to be prepaid (other than by a regularly scheduled required prepayment), prior to the stated maturity thereof (excluding Ordinary Trade Payable Disputes); or

(g) The Borrower shall admit in writing its inability to pay its debts generally, or shall make a general assignment for the benefit of creditors; or any proceeding shall be instituted by or against the Borrower seeking to adjudicate it a bankrupt or insolvent, or seeking liquidation, winding up, reorganization, arrangement, adjustment, protection, relief, or composition of it or its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors, or seeking the entry of an order for relief or the appointment of a receiver, trustee or other similar official for it or for any substantial part of its property, and, in the case of any such proceeding instituted against it (but not instituted by it) either such proceeding shall remain undismissed or unstayed for a period of 30 days or any of the actions sought in such proceeding (including, without limitation, the entry of an order for relief against it or the appointment of a receiver, trustee, custodian or other similar official for it or for any substantial part of its property) shall occur; or the Borrower shall take any corporate action to authorize any of the actions set forth above in this subsection; or

(h) Any one or more judgment(s) or order(s) for the payment of money in excess of $150,000.00 in the aggregate shall be rendered against the Borrower and either: (i) enforcement proceedings shall have been commenced by any creditor upon such judgment or order; or (ii) there shall be any period of 10 consecutive days during which a stay of enforcement of such judgment or order, by reason of a pending appeal or otherwise, shall not be in effect; or

(i) Without cause by Lender, any provision of any Loan Document shall for any reason cease to be valid and binding on the Borrower or the Borrower shall so state in writing; or

33

(j) The Mortgage or the Security Agreement shall for any reason, except to the extent permitted by the terms thereof, cease to create a valid lien, encumbrance or security interest in any of the property purported to be covered thereby; or

(k) The termination of any Long Term Marketing Agreement prior to its stated expiration date, unless such Long Term Marketing Agreement is replaced by another Long Term Marketing Agreement acceptable to the Lender, within thirty (30) days of the termination of such Long Term Marketing Agreement; or

(l) The Borrower, any of Borrower’s subsidiaries, or any Operating Affiliate dissolves, suspends, or discontinues doing business; or

(m) Any event, change or condition not referred to elsewhere in this Section 6.01 should occur which results in a Material Adverse Effect; or

(n) a Change in Control, without the prior written consent of the Lender shall occur; or

(o) The loss, suspension or revocation of, or failure to renew, any franchise, license, certificate, permit, authorization, approval or the like now held or hereafter acquired by the Borrower or any of its subsidiaries, if such loss, suspension, revocation or failure to renew could reasonably be expected to have a Material Adverse Effect on the Borrower and the Project; or (ii) any regulatory or Governmental Authority replaces the management of the Borrower or any of its subsidiaries or assumes control over the Borrower or such subsidiary; or

(p) The Borrower should breach or be in default under a Material Contract in any material respect, including any material breach or default, or any termination shall have occurred, or any other event which would permit any party other than the Borrower to cause a termination, or any Material Contract shall have ceased for any reason to be in full force and effect prior to its stated or optional expiration date;

(q) The Borrower terminates, changes, amends or restates, without the Lender’s prior consent any Material Contract;

(r) The Borrower fails to (a) maintain the stream mitigation site as required by the U.S. Army Corps of Engineers and the Indiana Department of Environmental Management, (b) provide and maintain such financial assurances as may be required by the U.S. Army Corps of Engineers and the Indiana Department of Environmental Management in conjunction with the issuance of permits pursuant to Borrower’s Section 401 / 404 Permit Application, as amended, modified and resubmitted from time to time, or (c) comply with all of the requirements of the permits issued by the U.S. Army Corps of Engineers and Indiana Department of Environmental Management;

(s) Any enforcement action is commenced by the Indiana Department of Environmental Management or the U.S. Army Corps of Engineers as a result of any encroachments of the wetlands and streams located on the Property; or

(t) There shall have been entered or docketed any order or ruling by either the Indiana Department of Environmental Management or the U.S. Army Corps of Engineers in connection with the plans and applications required by Section 5.01(t) of this Agreement which, in the reasonable opinion of the Lender, may adversely impact the construction or operation of the Project and on or before five (5) Business Days following the entry of such order or ruling, the Borrower shall have failed to deliver to the Lender an irrevocable standby letter of credit in the amount of $1,000,000.00 issued by a financial institution reasonably acceptable to

34

the Lender with an expiration date of not less than twelve months after the date of issuance and automatically renewable for additional periods of at least twelve months which may be drawn upon by the Lender in the event Borrower shall fail to make any payments required by this Agreement or any of the Loan Documents. Such irrevocable standby letter of credit shall be surrendered by Lender on or before five (5) Business Days following Lender’s receipt of a copy of final order releasing, dismissing or reversal of such adverse ruling or order.

Section 6.02. Remedies. Upon the occurrence of an Event of Default and at any time while such Event of Default is continuing, the Lender to the extent permitted by applicable law:

(a) may accelerate the due date of the unpaid principal balance of the Notes, all accrued but unpaid interest thereon and all other amounts payable under this Agreement making such amounts immediately due and payable, whereupon the Notes, all such interest and all such amounts shall become and be forthwith immediately due and payable, without presentment, notice of intent to accelerate or notice of acceleration, demand, protest or further notice of any kind, all of which are hereby expressly waived by the Borrower; provided, however, that in the event of an actual or deemed entry of an order for relief with respect to any of the Borrower under the Federal Bankruptcy Code, the Notes, all such interest and all such amounts shall automatically become due and payable, without presentment, demand, protest or any notice of any kind, all of which are hereby expressly waived by the Borrower;

(b) [Intentionally Omitted];

(c) may, by notice to the Borrower, obtain the appointment of a receiver to take possession of all Collateral of the Borrower, including, but not limited to all personal property, including all fixtures and equipment leased, occupied or used by any of the Borrower. To the extent permitted by applicable law, Borrower hereby irrevocably consents to the appointment of such receiver and agrees to cooperate and assist any such receiver as reasonably requested to facilitate the transfer of possession of the Collateral to such receiver and to provide such receiver access to all books, records, information and documents as requested by such receiver;

(d) may, by notice to the Borrower, require the Borrower to pledge to the Lender as security for the Loan Obligations an amount in immediately available funds equal to the then outstanding Letter of Credit Liabilities, such funds to be held in an interest bearing cash collateral account at the Lender without any right of withdrawal by the Borrower; provided, however, that in the event of an actual or deemed entry of an order for relief with respect to the Borrower or any of its subsidiaries under the Federal Bankruptcy Code, the Borrower shall, without notice, pledge to the Lender as security for the Loan Obligations an amount in immediately available funds equal to the then outstanding Letter of Credit Liabilities, such funds to be held in such an interest bearing cash collateral account at the Lender; and

(e) may exercise all other rights and remedies afforded to the Lender under the Loan Documents or by applicable law or equity.

Section 6.03. Remedies Cumulative. Each and every power or remedy herein specifically given shall be in addition to every other power or remedy, existing or implied, given now or hereafter existing at law or in equity, and each and every power and remedy herein specifically given or otherwise so existing may be exercised from time to time and as often and in such order as may be deemed expedient by Lender, and the exercise or the beginning of the exercise of one power or remedy shall not be deemed a waiver of the right to exercise at the same time or thereafter any other power or remedy. No delay or omission of Lender in the exercise of any right or power accruing hereunder shall impair any such right or power or be construed to be a waiver of any default or acquiescence therein.

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ARTICLE VII.

MISCELLANEOUS

Section 7.01. Amendments, etc. No amendment or waiver of any provision of any Loan Document to which the Borrower is a party, nor any consent to any departure by the Borrower therefrom, shall in any event be effective unless the same shall be agreed or consented to by the Lender and the Borrower, and each such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.

Section 7.02. Notices, etc. All notices and other communications provided for under any Loan Document shall be in writing and mailed, faxed, or delivered at the addresses set forth below, or at such other address as such party may specify by written notice to the other parties hereto:

If to the Borrower:	Green Plains Bluffton LLC 450 Regency Parkway, Suite 400 Omaha, NE 68114 Telephone: (402) 315-1603 Fax: (402) 315-1603 Attention: CFO
With a copy (which shall not constitute notice) to:	Green Plains Renewable Energy, Inc. 450 Regency Parkway, Suite 400 Omaha, NE 68114 Telephone: (402) 315-1629 Fax: (402) 315-1629 Attention: Michelle Mapes, Corp. Sec.
If to the Lender :	AgStar Financial Services, PCA 3555 9th Street NW Suite 400 Rochester MN 55903 Telephone: (507) 386-4242 Facsimile: (507) 344-5088 Attention: Mark Schmidt
With copies (which shall not constitute notice) to:	Gray Plant Mooty 1010 West St. Germain, Suite 600 St. Cloud, MN 56301 Facsimile: (320) 252-4482 Attention: Phillip L. Kunkel

All such notices and communications shall have been duly given and shall be effective: (a) when delivered; (b) when transmitted via facsimile to the number set forth above; (c) the Business Day following the day on which the same has been delivered prepaid (or pursuant to an invoice arrangement) to a reputable national overnight air courier service; or (d) the third Business Day following the day on which the same is sent by certified or registered mail, postage prepaid. Any confirmation sent by the Lender to the Borrower of any borrowing under this Agreement shall, in the absence of manifest error, be conclusive and binding for all purposes.

Section 7.03. No Waiver; Remedies. No failure on the part of the Lender to exercise, and no delay in

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exercising, any right under any Loan Document shall operate as a waiver thereof; nor shall any single or partial exercise of any right under any Loan Document preclude any other or further exercise thereof or the exercise of any other right. The remedies provided in the Loan Documents are cumulative and not exclusive of any remedies provided by law.

Section 7.04. Costs, Expenses and Taxes.

(a) The Borrower agrees to pay on demand all reasonable and necessary costs and expenses in connection with the preparation, execution, delivery, filing, recording and administration of the Loan Documents and the other documents to be delivered under the Loan Documents, including, without limitation, the reasonable fees and out-of-pocket expenses of counsel for the Lender (who may be in-house counsel), and local counsel who may be retained by said counsel, with respect thereto and with respect to advising the Lender as to its respective rights and responsibilities under the Loan Documents, and all costs and expenses (including reasonable counsel fees and expenses) for the Lender in connection with the filing of the Financing Statements and the enforcement of the Loan Documents and the other documents to be delivered under the Loan Documents, including, without limitation, in the context of any bankruptcy proceedings. In addition, the Borrower agrees to pay on demand the expenses described in Section 5.01(b). In addition, the Borrower shall pay any and all stamp and other taxes and fees payable or determined to be payable in connection with the execution, delivery, filing and recording of the Loan Documents and the other documents to be delivered under the Loan Documents, and agrees to save the Lender harmless from and against any and all liabilities with respect to or resulting from any delay in paying or omission to pay such taxes and fees.

(b) If, due to payments made by the Borrower pursuant to Section 2.09 or due to acceleration of the maturity of the Advances pursuant to Section 6.01 or due to any other reason (other than payments made pursuant to Section 2.17 of this Agreement), the Lender receives payments of principal of any Loan other than on the last day of an Interest Period relating thereto, the Borrower shall pay to the Lender on demand any amounts required to compensate the Lender for any additional losses, costs or expenses which it may incur as a result of such payment, including, without limitation, any loss (including loss of anticipated profits), cost or expense incurred by reason of the liquidation or reemployment of deposits or other funds acquired by the Lender to fund or maintain such Loan.

(c) Upon the request of Borrower, Lender shall provide copies of all invoices for costs and expenses to be reimbursed by Borrower under this Agreement or under any of the Loan Documents.

Section 7.05. Right of Set-off. The Lender is hereby authorized at any time and from time to time, to the fullest extent permitted by law following the occurrence and only during the continuation of an Event of Default, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other indebtedness at any time owing by the Lender to or for the credit or the account of the Borrower against any and all of the Loan Obligations, irrespective of whether or not the Lender shall have made any demand under such Loan Document and although deposits, indebtedness or such obligations may be unmatured or contingent. The Lender agrees promptly to notify the Borrower after any such set-off and application, provided that the failure to give such notice shall not affect the validity of such set-off and application. The rights of the Lender under this Section are in addition to other rights and remedies (including, without limitation, other rights of set-off) which the Lender may have.

Section 7.06. Severability of Provisions. Any provision of this Agreement or of any other Loan Document which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof or thereof or affecting the validity or enforceability of such provision in any other jurisdiction.

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Section 7.07. Binding Effect; Successors and Assigns; Participations.

(a) This Agreement shall be binding upon and inure to the benefit of the Borrower, the Lender and their respective successors and assigns, except that the Borrower shall not have the right to assign or otherwise transfer its rights hereunder or any interest herein without the prior written consent of the Lenders.

(b) Provided Lender provides notice of such transfer or participation to Borrower, Borrower agrees and consents to Lender’s sale or transfer, whether now or later, of one or more participation interests in the Loans to one or more purchasers, whether related or unrelated to Lender. Lender may provide, without any limitation whatsoever, to any one or more purchasers, or potential purchasers, any information or knowledge Lender may have about Borrower or about any other matter relating to the Loans, and Borrower hereby waives any rights to privacy it may have with respect to such matters; provided, however, that any information received by any such purchaser or potential purchaser under this provision which concerns the personal, financial or other affairs of the Borrower shall be received and kept by the purchaser or potential purchaser in full confidence and will not be revealed to any other persons, firms or organizations nor used for any purpose whatsoever other than for determining whether or not to participate in the Loans and in accord with the rights of Lender if a participation interest is acquired. Provided Borrower has been provided notice by Lender of Lender’s sale of a participation interest to such party or parties, Borrower also agrees that the purchasers of any such participation interests will be considered as the absolute owners of such interests in the Loans and will have all the rights granted under the participation agreement or agreements governing the sale of such participation interests. Borrower further waives all rights of offset or counterclaim that it may have now or later against Lender or against any purchaser of such a participation interest arising out of or by virtue of the participation and unconditionally agrees that either Lender or such purchaser may enforce Borrower’s obligation under the Loans irrespective of the failure or insolvency of any holder of any interests in the Loans. Borrower further agrees that the purchaser of any such participation interests may enforce its interests irrespective of any personal claims or defenses that Borrower may have against Lender.

Section 7.08. Consent to Jurisdiction.

(a) The Borrower hereby irrevocably submits to the jurisdiction of any Minnesota state court or federal court over any action or proceeding arising out of or relating to this Agreement, the Note and any instrument, agreement or document related hereto or thereto, and the Borrower hereby irrevocably agrees that all claims in respect of such action or proceeding may be heard and determined in such Minnesota state court or federal court. The Borrower hereby irrevocably waives, to the fullest extent it may effectively do so, the defense of an inconvenient forum to the maintenance of such action or proceeding. The Borrower irrevocably consents to the service of copies of the summons and complaint and any other process which may be served in any such action or proceeding by the mailing of copies of such process to Borrower at its address specified in Section 7.02. The Borrower agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.

(b) Nothing in this Section 7.08 shall affect the right of the Lender to serve legal process in any other manner permitted by law or affect the right of the Lender to bring any action or proceeding against the Borrower or its property in the courts of other jurisdictions.

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Section 7.09. Governing Law. THIS AGREEMENT, THE SUPPLEMENTS AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF MINNESOTA.

Section 7.10. Execution in Counterparts. This Agreement may be executed in any number of counterparts and on telecopy counterparts, each of which when so executed shall be deemed to be an original and all of which when taken together shall constitute but one and the same agreement.

Section 7.11. Survival. All covenants, agreements, representations and warranties made by the Borrower in the Loan Documents and in the certificates or other instruments delivered in connection with or pursuant to this Agreement or any other Loan Document shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery of the Loan Documents and the making of any Advances and issuance of any Letters of Credit, regardless of any investigation made by any such other party or on its behalf and notwithstanding that Lender may have had notice or knowledge of any Event of Default or incorrect representation or warranty at the time any credit is extended hereunder, and shall continue in full force and effect as long as any Loan Obligations are outstanding and unpaid (other than contingent claims for which no claim has been asserted) and so long as the Lender has any unexpired commitments under this Agreement or the Loan Documents. The expense reimbursement, additional cost, capital adequacy and indemnification provisions of this Agreement shall survive and remain in full force and effect regardless of the consummation of the transactions contemplated hereby, the repayment of the Loan Obligations or the termination of this Agreement or any provision hereof.

Section 7.12. WAIVER OF JURY TRIAL. THE BORROWER AND THE LENDER HEREBY IRREVOCABLY WAIVE ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENT TO WHICH IT IS A PARTY OR ANY INSTRUMENT OR DOCUMENT DELIVERED THEREUNDER.

Section 7.13. Entire Agreement. THIS AGREEMENT, THE NOTES, AND THE OTHER LOAN DOCUMENTS REFERRED TO HEREIN EMBODY THE FINAL, ENTIRE AGREEMENT AMONG THE PARTIES HERETO AND SUPERSEDE ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS, REPRESENTATIONS, AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TO THE SUBJECT MATTER HEREOF AND MAY NOT BE CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OF THE PARTIES HERETO. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES THERETO.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers and duly authorized, as of the date first above written.

BORROWER ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS AGREEMENT, AND BORROWER AGREES TO ITS TERMS. THIS AGREEMENT IS DATED AS OF THE DATE FIRST ABOVE STATED.

[SIGNATURE PAGE ON FOLLOWING PAGE]

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SIGNATURE PAGE TO:

AMENDED AND RESTATED

MASTER LOAN AGREEMENT

by and among

GREEN PLAINS BLUFFTON LLC

and

AGSTAR FINANCIAL SERVICES, PCA

Dated: September 30, 2011

BORROWER:	LENDER:
GREEN PLAINS BLUFFTON LLC, an Indiana limited liability company	AGSTAR FINANCIAL SERVICES, PCA, a United States instrumentality
/s/ Todd Becker	/s/ Mark Schmidt
By	By Mark Schmidt
Its President	Its Vice President

STATE OF Nebraska	)
	) SS:
COUNTY OF Douglas	)

Before me the undersigned, a Notary Public in and for said County and State personally appeared Todd Becker, the President of GREEN PLAINS BLUFFTON LLC, an Indiana limited liability company, who executed the foregoing instrument on behalf of such entity.

Witness my hand and Notarial Seal this 30 day of September, 2011.

My Commission Expires: October 28, 2014
	/s/ Sharon Mize
	Notary Public
My county of Residence: Douglas

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EXHIBIT A

COMPLIANCE CERTIFICATE

TO:     AgStar Financial Services, PCA (the “Lender”)

Pursuant to that certain Amended and Restated Master Loan Agreement dated September 30, 2011, by and between GREEN PLAINS BLUFFTON LLC, an Indiana limited liability company f/k/a INDIANA BIO-ENERGY, LLC (the “Borrower”), and the Lender, and any amendments thereto and extensions thereof (the “Loan Agreement”), the undersigned hereby represents, warrants and certifies to the Lender as follows:

1. The financial statement(s) attached hereto are complete and correct in all material respects and fairly present the financial condition of the Borrower as of the date of said financial statement(s) and the result of its business operations for the period covered thereby;

2. Repeats and reaffirms to the Lender each and all of the representations and warranties made by the Borrower in the Loan Agreement and the agreements referred to therein or related thereto (except as such representations and warranties relate to financial statements as of the date thereof, and represents and warrants to the Lender that each and all of said warranties and representations are true and correct as of the date hereof, except as disclosed in writing to the Lender;

3. No Event of Default (as that term is defined in the Loan Agreement), and no event which with the giving of notice or the passage of time or both would constitute an Event of Default, has occurred and is continuing as of the date hereof; and

4. All the calculations set forth below are made pursuant to the terms of the Loan Agreement and are true and accurate as of the date of the attached financial statements:

1.      Section 5.01(d) – Working Capital.
(a)    Required Working Capital
(a)    Current Assets	$
(b)    Current Liabilities	$
Line (a) less line (b)	$
In Compliance
	Yes             No
2.      Section 5.01(e) – Tangible Net Worth.
(a)    Required Tangible Net Worth ($80,000,000.00)
(b)    Actual Tangible Net Worth	$
(1)    Total Assets	$
(2)    Less Intangible Assets (per definition)	$
(3)    Total Tangible Assets (line (l) minus line (2)	$

(4)    Total Liabilities	$
(5)    Sub Debt	$
(6)    Tangible Net Worth	$
(line (3) minus line (4) plus Line (5))
In Compliance	Yes             No
3.      Section 5.01(f) – Owner Equity Ratio
(a)    Tangible Net Worth	$
(b)    Total Assets	$
(c)    Owner Equity Percentage
(percent of line (b) to (c))	%
Required Percentage of 50%
In Compliance	Yes             No
4.      Section 5.01(g) – Fixed Charge Ratio
(tested annually beginning at the end of the first operating year)
(a)    EBITDA	$
(b)    Scheduled Principal Payments for the Loans	$
(c)    Scheduled Principal Payments for Subordinated Debt	$
(d)    Interest on the Loans	$
(e)    Interest on the Subordinated Debt	$
(f)     Distributions	$
(g)    Maintenance Capital Expenditures	$
(h)    Denominator (sum of lines (b) through (g))	$
Ratio of line (a) to (h)	to 1.00
Required Ratio of 1.25 to 1.00
In Compliance
	Yes             No

IN WITNESS WHEREOF, the undersigned has signed and delivered this Certificate to the Lender as of the              day of                                     ,             .

BORROWER:

GREEN PLAINS BLUFFTON LLC,

an Indiana limited liability company

By

    Its

Schedule 3.01(d)

Real Property

The following described real estate located in Weils County, Indiana:

Parcel No. 90-08-08-100-001.000-002

Part of the Northeast Quarter of Section 8, Township 26 North, Range 12 East, Harrison Township, Wells County, Indiana, described as follows: Beginning at the Northwest corner of said Northeast Quarter found per record witness; thence easterly, 2229.08 feet along the north line of said Northeast Quarter to a 5/8” rebar stake set on the westerly right-of-way line of the Norfolk and Western Railway Company; thence southwesterly, deflecting right 111 degrees 41 minutes 00 seconds, 2861.11 feet along said westerly right-of-way line to a 5/8” rebar stake set on the south line of said Northeast Quarter; thence westerly, deflecting right 67 degrees 21 minutes 40 seconds, 1121.70 feet along said south line to a 5/8” rebar state set at the Southwest Corner of said Northeast Quarter; thence northerly, deflecting right 89 degrees 52 minutes 40 seconds, 2677.84 feet along the west line of said Northeast Quarter to the place of beginning. Containing 102.50 acres.

Parcel No. 90-08-08-200-001.000-010; 90-08-08-200-002.000-010

Part of the Northwest Quarter of Section 8, Township 26 North, Range 12 East, Harrison Township, Wells County, Indiana, described as follows:

Beginning at the Southwest corner of said Northwest Quarter found per record witness; thence Northerly, 1208.78 feet along the West line of said Northwest Quarter to a P.K. nail at the Southwest corner of the 17.04 acre tract described in Deed Record 130, Page 872; thence Northeasterly, deflecting right 65 degrees 20 minutes 38 seconds, 2931.66 feet along the South line of said 17.04 acre tract to a 5/8” rebar stake on the East line of said Northwest Quarter; thence Southerly, deflecting right 114 degrees 57 minutes 47 seconds, 1112.76 feet along said East line to a 5/8” rebar stake at the Southeast corner of the Northeast Quarter of said Northwest Quarter; thence Westerly, deflecting right 90 degrees 04 minutes 33 seconds, 1329,23 feet to a 5/8” rebar stake at the Southwest corner of the Northeast Quarter of said Northwest Quarter; thence Southerly, deflecting left 90 degrees 13 minutes 45 seconds, 1337.85 feet to a 5/8” rebar stake at the Southeast corner of the Southwest Quarter of said Northwest Quarter; thence Westerly, deflecting right 90 degrees 16 minutes 33 seconds, 1325.66 feet along the South line of said Northwest Quarter to the place of beginning. Containing 70.79 acres more or less.

Parcel No. 90-08-08-300-002.000-002

Tract I: The Southeast Quarter of the Northwest Quarter of Section 8, Township 26 North, Range 12 East, Wells County, Indiana, containing 40 acres, more or less.

Tract II: The east half of the Southwest Quarter of Section 8, Township 26 North, Range 12 East, Wells County, Indiana, containing 80 acres, more or less.

EXCEPTING THEREFROM, Part of the Southwest Quarter of Section 8, Township 26 North, Range 12 East, Harrison Township, Wells County, Indiana, described as follows: Starting at the southeast corner of said Southwest Quarter found per record witness; thence westerly, 451.42 feet along the south line of said Southwest Quarter to a P.K. nail which shall be the place of beginning; thence continuing westerly, 253.58 feet along said south fine, to a P.K. nail; thence northerly, deflecting right 90 degrees 00 minutes 00 seconds, 280.00 feet to a 5/8” rebar stake; thence easterly, deflecting right 90 degrees 00 minutes 00 seconds, 253.58 feet parallel with the south line of said Southwest Quarter to a 5/8” rebar stake; thence southerly, deflecting right 90 degrees 00 minutes 00 seconds, 280.00 feet to the place of beginning. Containing 1.63 acres, more or less.

Containing in all 118.37 acres, after exception.

Parcel No. 90-08-08-400-027.000-010

Part of the Northwest Quarter of Section 8, Township 26 North, Range 12 East, Harrison Township, Wells County, Indiana, described as follows:

Starting at the northwest corner of said Northwest Quarter; thence southerly, 1185.11 feet, along the west line of said Northwest Quarter to its intersection with the southerly right-of-way line of the Norfolk and Western Railway Company, which shall be the place of beginning; thence northeasterly, deflecting left 114 degrees 39 minutes 22 seconds, 2804.95 feet, along said right-of-way line to the north line of said Northwest Quarter; thence easterly, deflecting right 24 degrees 59 minutes 26 seconds, 116.37 feet, along said north line to the northeast corner of said Northwest Quarter; thence southerly, deflecting right 89 degrees 58 minutes 17 seconds, 226.16 feet, along the east line of said Northwest Quarter; thence southwesterly, deflecting right 65 degrees 02 minutes 17 seconds, 2931.66 feet, parallel with the southerly right-of-way line of the Norfolk and Western Railway Company to the west line of said Northwest Quarter; thence northerly, deflecting right 114 degrees 39 minutes 22 seconds, 279.69 feet, along said west line to the place of beginning. Containing 17.04 acres.

Parcel No. 90-08-08-200-001.000-010; 90-08-08-200-002.000-010

Part of the Northwest Quarter of Section 8, Township 26 North, Range 12 East, Harrison Township, Wells County, Indiana, described as follows:

Beginning at the Southwest corner of said Northwest Quarter found per record witness; thence Northerly, 1208.78 feet along the West line of said Northwest Quarter to a P.K. nail at the Southwest corner of the 17.04 acre tract described in Deed Record 130, Page 872; thence Northeasterly, deflecting right 65 degrees 20 minutes 38 seconds, 2931,66 feet along the South line of said 17.04 acre tract to a 5/8” rebar stake on the East line of said Northwest Quarter; thence Southerly, deflecting right 114 degrees 57 minutes 47 seconds, 1112.76 feet along said East line to a 5/8” rebar stake at the Southeast corner of the Northeast Quarter of said Northwest Quarter; thence Westerly, deflecting right 90 degrees 04 minutes 33 seconds, 1329.23 feet to a 5/8” rebar stake at the Southwest corner of the Northeast Quarter of said Northwest Quarter; thence Southerly, deflecting left 90 degrees 13 minutes 45 seconds, 1337,85 feet to a 5/8” rebar stake at the Southeast corner of the Southwest Quarter of said Northwest Quarter; thence Westerly, deflecting right 90 degrees 16 minutes 33 seconds, 1325.66 feet along the South line of said Northwest Quarter to the place of beginning. Containing 70.79 acres more or less.

Parcel No. 90-08-08-300-001.000-002

Part of the Southwest Quarter of Section 8, Township 26 North, Range 12 East, Harrison Township, Wells County, Indiana, described as follows: Starting at the southeast corner of said Southwest Quarter found per record witness; thence westerly, 451.42 feet along the south line of said Southwest Quarter to a P.K. nail which shall be the place of beginning; thence continuing westerly, 253.58 feet along said south line, to a P.K. nail; thence northerly, deflecting right 90 degrees 00 minutes 00 seconds, 280.00 feet to a 5/8” rebar stake; thence easterly, deflecting right 90 degrees 00 minutes 00 seconds, 253.58 feet parallel with the south line of said Southwest Quarter to a 5/8” rebar stake; thence southerly, deflecting right 90 degrees 00 minutes 00 seconds, 280.00 feet to the place of beginning. Containing 1.63 acres, more or less.

Parcel No. 90-08-08-300-006.000-010

THE NORTHWEST QUARTER OF THE SOUTHWEST QUARTER OF SECTION 8, TOWNSHIP 26 NORTH, RANGE 12 EAST, HARRISON TOWNSHIP, WELLS COUNTY, INDIANA, CONTAINING 40.46 ACRES.

Parcel No. 90-08-08-300-004.000-010

ALSO: THE SOUTHWEST QUARTER OF THE SOUTHWEST QUARTER OF SECTION 8, TOWNSHIP 26 NORTH, RANGE 12 EAST, HARRISON TOWNSHIP, WELLS COUNTY, INDIANA, CONTAINING 40.40 ACRES.

EXCEPTING THEREFROM: PART OF THE SOUTHWEST QUARTER OF SECTION 8, TOWNSHIP 26 NORTH, RANGE 12 EAST, HARRISON TOWNSHIP, WELLS COUNTY, INDIANA, DESCRIBED AS FOLLOWS:

BEGINNING AT THE SOUTHWEST CORNER OF SAID SOUTHWEST QUARTER FOUND PER RECORD WITNESS; THENCE NORTHERLY, 527.00 FEET ALONG THE WEST LINE OF SAID SOUTHWEST QUARTER TO A P.K. NAIL; THENCE EASTERLY, DEFLECTING RIGHT 90 DEGREES 00 MINUTES 16 SECONDS, 655.00 FEET PARALLEL WITH THE SOUTH LINE OF SAID SOUTHWEST QUARTER TO A 5/8” REBAR STAKE; THENCE SOUTHERLY, DEFLECTING RIGHT 89 DEGREES 59 MINUTES 44 SECONDS, 527.00 FEET PARALLEL WITH THE WEST LINE OF SAID SOUTHWEST QUARTER TO A P.K. NAIL ON THE SOUTH LINE OF SAID SOUTHWEST QUARTER; THENCE WESTERLY, DEFLECTING RIGHT 90 DEGREES 00 MINUTES 16 SECONDS, 655.00 FEET ALONG SAID SOUTH LINE TO THE PLACE OF BEGINNING. CONTAINING 7.92 ACRES.

CONTAINING AFTER SAID EXCEPTION 32.48 ACRES.

Parcel No. 90-08-08-400-004,000-002

Commencing at the southwest corner of the southeast quarter of section eight (8), in township 26 north, range 12 east, and running thence north 1324.70 feet to the northwest corner of the south half of said quarter, thence east 558.20 feet to the west line of the right of way of the Ft. Wayne, Cincinnati and Louisville railroad company, thence in a southwesterly direction along the west line of said Railroad right of way a distance of 1437.50 feet to the south line of said Section 8, thence west 12 feet to the place of beginning, containing 8,67 acres.

Parcel No. 90-08-08-400-020.000-002

PART OF THE NORTH HALF OF THE SOUTHEAST QUARTER OF SECTION 8, TOWNSHIP 26 NORTH, RANGE 12 EAST, HARRISON TOWNSHIP, WELLS COUNTY, INDIANA, DESCRIBED AS FOLLOWS:

STARTING AT THE NORTHEAST CORNER OF SAID SOUTHEAST QUARTER FOUND PER RECORD WITNESS; THENCE WESTERLY, 1528.71 FEET ALONG THE NORTH LINE OF SAID SOUTHEAST QUARTER TO THE WESTERLY
RIGHT-OF-WAY LINE OF THE NORFOLK & WESTERN RAILROAD, WHICH SHALL BE THE PLACE OF BEGINNING; THENCE SOUTHWESTERLY, DEFLECTING LEFT 67 DEGREES 21 MINUTES 32 SECONDS, 617.57 FEET ALONG SAID WESTERLY RIGHT-OF-WAY LINE; THENCE SOUTHWESTERLY, DEFLECTING RIGHT 00 DEGREES 02 MINUTES 05 SECONDS, 816.82 FEET ALONG SAID WESTERLY RIGHT-OF-WAY LINE TO THE SOUTH LINE OF THE NORTH HALF OF SAID SOUTHEAST QUARTER; THENCE WESTERLY, DEFLECTING RIGHT 67 DEGREES 09 MINUTES 58 SECONDS, 565.65 FEET ALONG THE SOUTH LINE OF THE NORTH HALF OF SAID SOUTHEAST QUARTER TO THE WEST LINE OF SAID SOUTHEAST QUARTER; THENCE NORTHERLY, DEFLECTING RIGHT 90 DEGREES 03 MINUTES 19 SECONDS, 1325.61 FEET ALONG THE WEST LINE OF SAID SOUTHEAST QUARTER TO THE NORTHWEST CORNER OF SAID SOUTHEAST QUARTER; THENCE EASTERLY, DEFLECTING RIGHT 90 DEGREES 07 MINUTES 21 SECONDS, 1120.66 FEET ALONG THE NORTH LINE OF SAID SOUTHEAST QUARTER TO THE PLACE OF BEGINNING. CONTAINING 25.64 ACRES MORE OR LESS.

NOW KNOWN AS:

PARCEL 1:

PART OF SECTION 8, TOWNSHIP 26 NORTH, RANGE 12 EAST, HARRISON TOWNSHIP, WELLS COUNTY, INDIANA, DESCRIBED AS FOLLOWS;

BEGINNING AT THE SOUTHWEST CORNER OF THE NORTHWEST QUARTER OF SAID SECTION 8; THENCE NORTH 00 DEGREES 09 MINUTES 53 SECONDS WEST, (ASSUMED AND THE BASIS FOR THESE BEARINGS), 1488.47 FEET ALONG THE WEST LINE OF SAID NORTHWEST QUARTER TO THE SOUTHERLY RIGHT-OF-WAY LINE OF THE NORFOLK AND SOUTHERN RAILROAD; THENCE NORTH 65

DEGREES 10 MINUTES 45 SECONDS EAST, 2804.95 FEET ALONG SAID SOUTHERLY RIGHT-OF-WAY LINE TO THE NORTH LINE OF SAID NORTHWEST QUARTER, THENCE SOUTH 89 DEGREES 49 MINUTES 48 SECONDS EAST 116.37 FEET ALONG SAID NORTH LINE TO THE NORTHWEST CORNER OF THE NORTHEAST QUARTER OF SAID
SECTION 8; THENCE SOUTH 88 DEGREES 46 MINUTES 46 SECONDS EAST, 2227.06 FEET ALONG THE NORTH LINE OF SAID NORTHEAST QUARTER TO THE WESTERLY RIGHT-OF-WAY LINE OF THE NORFOLK AND SOUTHERN RAILROAD; THENCE SOUTH 22 DEGREES 53 MINUTES 10 SECONDS WEST, 3478.34 FEET ALONG SAID WESTERLY
RIGHT-OF-WAY LINE; THENCE SOUTH 22 DEGREES 55 MINUTES 15 SECONDS WEST, 2255.13 FEET ALONG SAID WESTERLY RIGHT-OF-WAY LINE TO THE SOUTH LINE OF THE SOUTHEAST QUARTER OF SAID SECTION 8; THENCE SOUTH 89 DEGREES 54 MINUTES 33 SECONDS WEST, 8.77 FEET ALONG THE SOUTH LINE OF SAID SOUTHEAST QUARTER TO THE SOUTHEAST CORNER OF THE SOUTHWEST QUARTER OF SAID SECTION 8; THENCE NORTH 90 DEGREES 00 MINUTES 00 SECONDS WEST, 1322.25 FEET ALONG THE SOUTH LINE OF SAID SOUTHWEST QUARTER TO THE SOUTHWEST CORNER OF THE EAST HALF OF SAID SOUTHWEST QUARTER; THENCE NORTH 00 DEGREES 04 MINUTES 08 SECONDS, EAST, 2657,35 FEET ALONG THE WEST LINE OF THE EAST HALF OF SAID SOUTHWEST QUARTER TO THE NORTH LINE OF SAID SOUTHWEST QUARTER; THENCE NORTH 89 DEGREES 44 MINUTES 08 SECONDS WEST, 1325.66 FEET ALONG SAID NORTH LINE TO THE PLACE OF BEGINNING. CONTAINING 346.08 ACRES MORE OR LESS,

PARCEL 2:

Tract 1:

THE NORTHWEST QUARTER OF THE SOUTHWEST QUARTER OF SECTION 8, TOWNSHIP 26 NORTH, RANGE 12 EAST, HARRISON TOWNSHIP, WELLS COUNTY, INDIANA, CONTAINING 40.46 ACRES.

Tract 2:

ALSO: THE SOUTHWEST QUARTER OF THE SOUTHWEST QUARTER OF SECTION 8, TOWNSHIP 26 NORTH, RANGE 12 EAST, HARRISON TOWNSHIP, WELLS COUNTY, INDIANA, CONTAINING 40.40 ACRES.

EXCEPTING THEREFROM: PART OF THE SOUTHWEST QUARTER OF SECTION 8, TOWNSHIP 26 NORTH, RANGE 12 EAST, HARRISON TOWNSHIP, WELLS COUNTY, INDIANA, DESCRIBED AS FOLLOWS:

BEGINNING AT THE SOUTHWEST CORNER OF SAID SOUTHWEST QUARTER FOUND PER RECORD WITNESS; THENCE NORTHERLY, 527.00 FEET ALONG THE WEST LINE OF SAID SOUTHWEST QUARTER TO A P.K. NAIL; THENCE EASTERLY, DEFLECTING RIGHT 90 DEGREES 00 MINUTES 16 SECONDS, 655.00 FEET PARALLEL WITH THE SOUTH LINE OF SAID SOUTHWEST QUARTER TO A 5/8” REBAR STAKE; THENCE SOUTHERLY, DEFLECTING RIGHT 89 DEGREES 59 MINUTES 44 SECONDS, 527.00 FEET PARALLEL WITH THE WEST LINE OF SAID SOUTHWEST QUARTER TO A P.K. NAIL ON THE SOUTH LINE OF SAID SOUTHWEST QUARTER; THENCE WESTERLY, DEFLECTING RIGHT 90 DEGREES 00 MINUTES 16 SECONDS, 655.00 FEET ALONG SAID SOUTH LINE TO THE PLACE OF BEGINNING. CONTAINING 7.92 ACRES.

CONTAINING AFTER SAID EXCEPTION 32.48 ACRES.

Schedule 4.01(a)

Description of Certain Transactions Related to the Borrowers’ Stock

Schedule 4.01(f)

Description of Certain Threatened Actions, etc.

1) Aventine- see SEC filings updated periodically.

Schedule 4.01(k)

Location of Inventory and Farm Products; Third Parties in Possession; Crops

1441 South Adams, PO Box 297, Bluffton, Indiana 46714

Schedule 4.01(l)

Office Locations; Fictitious Names; Etc.

1441 South Adams, PO Box 297, Bluffton, Indiana 46714

FNA Indiana Bio-Energy LLC

Office of President and CEO

450 Regency Parkway, Suite 400, Omaha NE 68114

Schedule 4.01(p)

Intellectual Property

None

Schedule 4.01(t)

Environmental Compliance

None

Schedule 5.01(o)

Management

Todd Becker	President and CEO
Jerry Peters	CFO
Ron Gillis	EVP Finance and Treasurer
Michelle Mapes	EVP General Counsel and Corporate Secretary
Glen Kampschneider	Assistant Secretary

Schedule 5.02(a)

Description of Certain Liens, Lease Obligations, etc.

Liens

None other than AgStar

Leases

No operating leases

Schedule 5.02(k)

Transactions with Affiliates

Normal course- parent reimbursement /allocation of overhead

Green Plains Commodities Corn Oil Extraction Agreement

Green Plains Trade Group LLC- Ethanol and DDG Marketing

EX-31.1

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO RULE 13a-14(a) AND SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Todd A. Becker, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Green Plains Renewable Energy, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 1, 2011	/s/ Todd A. Becker
	Todd A. Becker
	President and Chief Executive Officer (Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO RULE 13a-14(a) AND SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Jerry L. Peters, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Green Plains Renewable Energy, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 1, 2011	/s/ Jerry L. Peters
	Jerry L. Peters
	Chief Financial Officer (Principal Financial Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Green Plains Renewable Energy, Inc. (the “Company”) on Form 10-Q for the fiscal quarter ended September 30, 2011 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Todd A. Becker, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

1) The Report fully complies with the requirements of Sections 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 1, 2011	/s/ Todd A. Becker
	Todd A. Becker
	President and Chief Executive Officer

EX-32.2

Exhibit 32.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Green Plains Renewable Energy, Inc. (the “Company”) on Form 10-Q for the fiscal quarter ended September 30, 2011 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Jerry L. Peters, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

1) The Report fully complies with the requirements of Sections 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 1, 2011	/s/ Jerry L. Peters
	Jerry L. Peters
	Chief Financial Officer

XML

Consolidated Balance Sheets (Parenthetical) (USD $) In Thousands, except Share data	Sep. 30, 2011	Dec. 31, 2010
Consolidated Balance Sheets [Abstract]
Accounts receivable, allowances	$ 243	$ 121
Property and equipment, accumulated depreciation	$ 112,955	$ 76,063
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	75,000,000	50,000,000
Common stock, shares issued	36,414,508	35,793,501
Common stock, shares outstanding	32,914,508	35,793,501
Treasury stock, shares	3,500,000	0

XML

Consolidated Statements Of Operations (USD $) In Thousands, except Per Share data	3 Months Ended		9 Months Ended
	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2011	Sep. 30, 2010
Consolidated Statements Of Operations [Abstract]
Revenues	$ 957,018	$ 496,149	$ 2,630,921	$ 1,376,499
Cost of goods sold	909,725	464,191	2,510,742	1,275,590
Gross profit	47,293	31,958	120,179	100,909
Selling, general and administrative expenses	18,248	15,016	53,350	41,580
Operating income	29,045	16,942	66,829	59,329
Other income (expense)
Interest income	59	97	222	223
Interest expense	(9,440)	(6,544)	(27,438)	(17,452)
Other, net	(284)	2	(470)	(321)
Total other expense	(9,665)	(6,445)	(27,686)	(17,550)
Income before income taxes	19,380	10,497	39,143	41,779
Income tax expense	6,979	3,082	14,191	9,989
Net income	12,401	7,415	24,952	31,790
Net (income) loss attributable to noncontrolling interests	28	(49)	200	(163)
Net income attributable to Green Plains	$ 12,429	$ 7,366	$ 25,152	$ 31,627
Earnings per share:
Income attributable to Green Plains stockholders - basic	$ 0.35	$ 0.23	$ 0.70	$ 1.06
Income attributable to Green Plains stockholders - diluted	$ 0.32	$ 0.23	$ 0.66	$ 1.05
Weighted average shares outstanding:
Basic	35,624	31,369	36,075	29,769
Diluted	42,151	31,584	42,611	30,080

XML

Document And Entity Information	9 Months Ended
	Sep. 30, 2011	Oct. 31, 2011
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2011
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2011
Entity Registrant Name	Green Plains Renewable Energy, Inc.
Entity Central Index Key	0001309402
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		32,904,882

XML

Derivative Financial Instruments

9 Months Ended

Sep. 30, 2011

Derivative Financial Instruments [Abstract]

Derivative Financial Instruments

7. DERIVATIVE FINANCIAL INSTRUMENTS

At September 30, 2011, the Company's consolidated balance sheet reflects unrealized losses, net of tax, of $7.0 million in accumulated other comprehensive loss. The Company expects all of the deferred losses at September 30, 2011 will be reclassified into income over the next 12 months as a result of hedged transactions that are forecasted to occur. The amount ultimately realized in income, however, will differ as commodity prices change.

Fair Values of Derivative Instruments

The following table provides information about the fair values of our derivative financial instruments and the line items in the consolidated balance sheets in which the fair values are reflected.

		Asset Derivatives						Liability Derivatives
Derivative Instruments Consolidated Balance Sheet Location		Fair Value at						Fair Value at
Consolidated Balance Sheet Location		September 30,			December 31,			September 30,		December 31,
		2011			2010			2011		2010
	Derivative financial instruments (1)	$	22,598	(2)	$	1,470	(3)	$	-	$	-
	Financing costs and other		-			409			-		-
	Accrued and other liabilities		-			-			13,157		2,570
	Other liabilities		-			-			376		229
	Total	$	22,598		$	1,879		$	13,533	$	2,799
(1) Derivative financial instruments per the balance sheet include margin deposits of $34.0 million and $43.4 million at September 30, 2011
	and December 31, 2010, respectively.
(2) Balance at September 30, 2011, includes $15.4 million of net unrealized losses on derivative financial instruments designated as cash flow
	hedging instruments.
(3) Balance at December 31, 2010, includes $477 thousand of net unrealized gains on derivative financial instruments  designated as cash
	flow hedging instruments.

Refer to Note 3 - Fair Value Disclosures, which also contains fair value information related to derivative financial instruments.

Effect of Derivative Instruments on Consolidated Statements of Operations and Consolidated Statements of Stockholders' Equity and Comprehensive Income

The following tables provide information about the gain or loss recognized in income and other comprehensive income on our derivative financial instruments and the line items in the financial statements in which such gains and losses are reflected.

	Gains (Losses) on Derivative Instruments Not Designated in a Hedging Relationship							Three Months Ended September 30,																		Nine Months Ended  September 30,
	Consolidated Statements of Operations Location							2011									2010									2011						2010
	Revenue							$	1,535								$		(114)							$		617				$	375
	Cost of goods sold								(9,718)										(13,817)									(29,831)					(4,161)
	Net decrease recognized in earnings							$	(8,183)								$		(13,931)							$		(29,214)				$	(3,786)
	Locations of Gain (Loss) Due to Ineffectiveness of Cash Flow Hedges				Three Months Ended September 30,																	Nine Months Ended September 30,
	Consolidated Statements of Operations Location				2011								2010									2011								2010
	Revenue				$		340						$		(35)							$		320						$	(35)
	Cost of goods sold						(576)								114									(1,231)							123
	Net decrease recognized in earnings				$		(236)						$		79							$		(911)						$	88
	Location of Gains (Losses) Reclassified from Accumulated Other Comprehensive Income (Loss) into Net Income
				Three Months Ended September 30,																Nine Months Ended September 30,
	Consolidated Statements of Operations Location			2011								2010								2011							2010
	Revenue			$		(9,608)						$		(377)						$	(31,097)						$		(377)
	Cost of goods sold					(5,342)								(39)							8,649								(39)
	Net increase (decrease) recognized in earnings			$		(14,950)						$		(416)						$	(22,448)						$		(416)
Effective Portion of Cash Flow Hedges Recognized in Other Comprehensive Income (Loss)		Three Months Ended September 30,														Nine Months Ended September 30,
		2011								2010						2011							2010
Commodity Contracts		$	(16,806)							$	107					$		(33,031)					$		284

There were no gains or losses due to the discontinuance of cash flow hedge treatment during the nine months ended September 30, 2011.

The table below summarizes the volumes of open commodity derivative positions as of September 30, 2011 (in thousands):

	September 30, 2011
Derivative Instruments	Exchange Traded		Non-Exchange Traded
	Net Long & (Short) (1)		Long (2)	(Short) (2)	Unit of Measure	Commodity
Futures	(16,498)				Bushels	Corn, Soybeans and Wheat
Futures	42,715	(3)			Bushels	Corn
Futures	(22,050)				Gallons	Ethanol
Futures	(143,304)	(3)			Gallons	Ethanol
Options	691				Bushels	Corn
Options	(2,796)				Gallons	Ethanol
Options	448				mmBTU	Natural Gas
Options	(840)	(4)			Pounds	Soybean Oil
Forwards			21,753	(8,174)	Bushels	Corn, Soybeans and Wheat
Forwards			11,768	(93,827)	Gallons	Ethanol
Forwards			40	(118)	Tons	Distillers Grains
(1) Exchange traded futures and options are presented on a net long and (short) position basis.
Options are presented on a delta-adjusted basis.
(2) Non-exchange traded forwards are presented on a gross long and (short) position basis.
(3) Futures used for cash flow hedges.
(4) Soybean oil options are used to hedge corn oil.

Energy trading contracts that do not involve physical delivery are presented net in revenues on the consolidated statements of operations. Revenues and cost of goods sold under such contracts are summarized in the table below for the periods indicated (in thousands).

	Three Months Ended September 30,				Nine Months Ended September 30,
	2011		2010		2011		2010
Revenue	$	83,909	$	8,792	$	107,721	$	22,912
Cost of goods sold	$	82,703	$	9,095	$	105,502	$	22,817

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Treasury Stock

9 Months Ended

Sep. 30, 2011

Treasury Stock [Abstract]

Treasury Stock

12. TREASURY STOCK

On September 9, 2011, the Company repurchased 3.5 million shares of common stock at a price of $8.00 per share from a subsidiary of NTR plc, which is a principal shareholder of the Company. The Company paid 50% of the amount at the time of repurchase. The remaining balance and interest charges, if any, are due on December 15, 2011. The payment obligation is recorded on the balance sheet as a short-term note payable and the repurchased shares are recorded at cost as treasury stock at September 30, 2011.

Shares of common stock repurchased by the Company are recorded at cost as treasury stock and result in a reduction of stockholders' equity in the accompanying consolidated balance sheets. When shares are reissued, the Company will use the weighted average cost method for determining the cost basis. The difference between the cost of the shares and the issuance price will be added or deducted from additional paid-in capital. The Company does not have a share repurchase program and does not intend to retire the repurchased shares.

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Fair Value Disclosures

9 Months Ended

Sep. 30, 2011

Fair Value Disclosures [Abstract]

Fair Value Disclosures

3. FAIR VALUE DISCLOSURES

The following methods, assumptions and valuation techniques were used in estimating the fair value of the Company's financial instruments:

Level 1 – unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. Level 1 unrealized gains and losses on commodity derivatives relate to exchange-traded open trade equity and option values in the Company's brokerage accounts.

Level 2 – directly or indirectly observable inputs such as quoted prices for similar assets or liabilities in active markets other than quoted prices included within Level 1; quoted prices for identical or similar assets in markets that are not active; and other inputs that are observable or can be substantially corroborated by observable market data by correlation or other means. Grain inventories held for sale in the agribusiness segment are valued at nearby futures values, plus or minus nearby basis levels.

Level 3 – unobservable inputs that are supported by little or no market activity and that are a significant component of the fair value of the assets or liabilities. The Company currently does not have any recurring Level 3 financial instruments.

There have been no changes in valuation techniques and inputs used in measuring fair value. On September 30, 2011, exchange-traded futures for corn were classified as a Level 2 measurement to reflect the price limit set by the exchange for that day.

The following tables set forth the Company's assets and liabilities by level that were accounted for the periods indicated (in thousands):

						Fair Value Measurements at September 30, 2011
						Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Reclassification for Balance Sheet
						(Level 1)		(Level 2)		Presentation		Total
Assets
		Cash and cash equivalents				$                  117,928		$                         -		$                            -		$    117,928
		Restricted cash				38,707		-		-		38,707
		Margin deposits				34,044		-		-		34,044
		Inventories carried at market				-		47,553		-		47,553
		Unrealized gains on derivatives				44,518		19,123		(41,043)		22,598
				Total assets measured at fair value		$                  235,197		$                 66,676		$                   (41,043)		$    260,830
Liabilities
		Unrealized losses on derivatives				$                         885		$                 53,691		$                   (41,043)		$      13,533
		Inventory financing arrangements				$                           -		8,805		-		8,805
				Total liabilities measured at fair value		$                         885		$                 62,496		$                   (41,043)		$      22,338
					Fair Value Measurements at December 31, 2010
					Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Reclassification for Balance Sheet
					(Level 1)		(Level 2)		Presentation		Total
Assets
	Cash and cash equivalents				$                  233,205		$                         -		$                            -		$    233,205
	Restricted cash				32,183		-		-		32,183
	Margin deposits				43,394		-		-		43,394
	Inventories carried at market				-		96,916		-		96,916
	Unrealized gains on derivatives				3,303		30,663		(32,087)		1,879
			Total assets measured at fair value		$                  312,085		$               127,579		$                   (32,087)		$    407,577
Liabilities
	Unrealized losses on derivatives				$                    32,317		$                   2,569		$                   (32,087)		$        2,799
			Total liabilities measured at fair value		$                    32,317		$                   2,569		$                   (32,087)		$        2,799

The Company believes the fair value of its debt approximates book value, which was $678.2 million and $669.0 million at September 30, 2011 and December 31, 2010, respectively. The Company also believes the fair value of its accounts receivable and accounts payable approximate book value, which were $121.1 million and $139.0 million, respectively, at September 30, 2011 and $89.2 million and $151.1 million, respectively, at December 31, 2010.

Although the Company currently does not have any recurring Level 3 financial measurements, the fair values of the tangible assets and goodwill acquired in the Global and Otter Tail acquisitions represent Level 3 measurements and were derived using a combination of the income approach, the market approach and the cost approach as considered appropriate for the specific assets being valued.

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Stock-Based Compensation

9 Months Ended

Sep. 30, 2011

Stock-Based Compensation [Abstract]

Stock-Based Compensation

9. STOCK-BASED COMPENSATION

The Company has 2007 and 2009 Equity Incentive Plans which reserve a combined total of 3.5 million shares of common stock for issuance pursuant to the terms of the plans. The plans provide for the granting of shares of stock, including options to purchase shares of common stock, stock appreciation rights tied to the value of common stock, non-vested stock and non-vested stock unit awards to eligible employees, non-employee directors and consultants. The Company measures share-based compensation grants at fair value on the grant date, adjusted for estimated forfeitures. The Company records noncash compensation expense related to equity awards in its financial statements over the requisite service period on a straight-line basis. All of the Company's existing share-based compensation awards have been determined to be equity awards.

A summary of stock option activity for the nine months ended September 30, 2011 is as follows:

		Shares	Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value (in thousands)
Outstanding at December 31, 2010		1,170,500	$	15.42
	Granted	-		-
	Exercised	(14,999)		6.94			$	73
	Forfeited	(11,333)		10.74
	Expired	(7,251)		17.41
Outstanding at September 30, 2011		1,136,917	$	15.57		4.3	$	1,310
Exercisable at September 30, 2011		939,084	$	16.87		3.7	$	960

The Company's option awards allow employees to exercise options through cash payment to the Company for the shares of common stock or through a simultaneous broker-assisted cashless exercise of a share option, through which the employee authorizes the exercise of an option and the immediate sale of the option shares in the open market. The Company uses newly-issued shares of common stock to satisfy its share-based payment obligations.

The following table summarizes non-vested stock award and DSU activity for the nine months ended September 30, 2011:

		Weighted-Average Number of Non-vested Shares and DSU's	Weighted-Average Grant-Date Fair Value		Weighted-Average Remaining Vesting Term (in years)
Nonvested at December 31, 2010		371,486	$	10.15
	Granted	392,056		12.01
	Forfeited	(2,500)		16.95
	Vested	(236,507)		10.41
Nonvested at September 30, 2011		524,535	$	11.39		1.9

Compensation costs expensed for share-based payment plans described above were approximately $0.9 million and $3.5 million during the three and nine months ended September 30, 2011. Compensation costs expensed for share-based payment plans described above were approximately $0.6 million and $2.3 million during the three and nine months ended September 30, 2010. At September 30, 2011, there were $4.9 million of unrecognized compensation costs from share-based compensation arrangements, which is related to non-vested awards. This compensation is expected to be recognized over a weighted-average period of approximately 1.9 years. The potential tax benefit realizable for the anticipated tax deductions of the exercise of share-based payment arrangements generally would approximate 36% of these expense amounts.

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Income Taxes

9 Months Ended

Sep. 30, 2011

Income Taxes [Abstract]

Income Taxes

14. INCOME TAXES

The Company records income tax expense during interim periods based on its best estimate of the annual effective tax rate. Certain items are given discrete period treatment and, as a result, the tax effects of such items are reported in full in the relevant interim period.

Income tax expense for the three and nine months ended September 30, 2011 was $7.0 million and $14.2 million, respectively. Income tax expense for the three and nine months ended September 30, 2010 was $3.1 million and $10.0 million, respectively. The effective tax rate (calculated as the ratio of income tax expense to income before income taxes) was approximately 36% and 24% for the first nine months of 2011 and 2010, respectively. The effective tax rates for each of these periods reflect the release of a portion of valuation allowances provided against certain of the Company's deferred tax assets, primarily federal and state net operating losses and tax credits due to anticipated income in future periods.

The Company's unrecognized tax benefits at September 30, 2011 were $0.1 million, compared to $1.1 million at December 31, 2010. The decrease was recorded as a result of a settlement reached with tax authorities regarding the timing of certain deductions in prior tax returns. There was no change in the Company's liabilities related to unrecognized tax benefits during the first nine months of 2010.

The 2011 annual effective tax rate can be affected as a result of variances among the estimates and amounts of full-year sources of taxable income (among the various states), the realization of tax credits, adjustments that may arise from the resolution of tax matters under review, variances in the release of valuation allowances and the Company's assessment of its liability for uncertain tax positions.

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Earnings Per Share

9 Months Ended

Sep. 30, 2011

Earnings Per Share [Abstract]

Earnings Per Share

10. EARNINGS PER SHARE

Basic earnings per common shares ("EPS") is calculated by dividing net income available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted EPS is computed by dividing net income on an as-if-converted basis available to common stockholders by the weighted average number of common shares outstanding during the period, adjusted for the dilutive effect of any outstanding dilutive securities. The calculation of diluted earnings per share gives effect to common stock equivalents, if dilutive. The reconciliations of net income to net income on an as-if-converted basis and basic and diluted earnings per share are as follows (in thousands):

		Three Months Ended		Nine Months Ended
		September 30,		September 30,
		2011	2010	2011	2010
Net income attributable to Green Plains		$   12,429	$     7,366	$   25,152	$   31,627
Weighted average shares outstanding - basic		35,624	31,369	36,075	29,769
	Income attributable to Green Plains stockholders - basic	$       0.35	$       0.23	$       0.70	$       1.06
Net income attributable to Green Plains		$   12,429	$     7,366	$   25,152	$   31,627
Interest on convertible debt		1,294	-	3,881	-
Amortization of debt issuance costs related to convertible debt		151	-	447	-
Tax effect of interest on convertible debt		(520)	-	(1,558)	-
Net income attributable to Green Plains on an as-if-converted basis		$   13,354	$     7,366	$   27,922	$   31,627
Weighted average shares outstanding - basic		35,624	31,369	36,075	29,769
Effect of dilutive convertible debt		6,280	-	6,280	-
Effect of dilutive stock options		247	215	256	311
	Total potential shares outstanding	42,151	31,584	42,611	30,080
	Income attributable to Green Plains stockholders - diluted	$       0.32	$       0.23	$       0.66	$       1.05

Excluded from the computations of diluted EPS were stock-based compensation awards totaling 0.7 million and 0.9 million shares for the three and nine months ended September 30, 2011, respectively, and awards totaling 1.0 million and 0.7 million shares for the three and nine months ended September 30, 2010, respectively, because the exercise prices or the grant-date fair value, as applicable, of the corresponding awards were greater than the average market price of the Company's common stock during the respective periods. As consideration for the Global acquisition, the Company issued warrants for 700,000 shares of its restricted stock at a price of $14.00 per share. The warrants are excluded from the computations of diluted EPS as the exercise price is greater than the average market price of the Company's common stock for the three and nine months ended September 30, 2011.

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Debt

9 Months Ended

Sep. 30, 2011

Debt [Abstract]

Debt

8. DEBT

The principal balances of the components of debt are as follows (in thousands):

		September 30,		December 31,
		2011		2010
Green Plains Bluffton:
	$70.0 million term loan	$	49,768	$	56,000
	$20.0 million revolving term loan		20,000		20,000
	$22.0 million revenue bond		19,120		20,615
Green Plains Central City:
	$55.0 million term loan		47,787		52,200
	$30.5 million revolving term loan		28,645		30,500
	$11.0 million revolver		10,094		6,239
	Equipment financing loan		186		230
Green Plains Holdings II:
	$34.1 million term loan		29,414		34,136
	$42.6 million revolving term loan		38,359		42,214
	$15.0 million revolver		15,000		15,000
	Other		387		387
Green Plains Obion:
	$60.0 million term loan		28,070		40,930
	$37.4 million revolving term loan		36,200		36,200
	Note payable		95		124
	Equipment financing loan		482		591
	Economic development grant		1,447		1,514
Green Plains Ord:
	$25.0 million term loan		21,862		23,800
	$13.0 million revolving term loan		12,151		13,000
	$5.0 million revolver		3,349		2,500
Green Plains Otter Tail:
	$30.3 million term loan		28,500		-
	$4.7 million revolver		4,675		-
	$19.2 million note payable		18,854		-
	Capital lease payable		193		-
Green Plains Shenandoah:
	$30.0 million term loan		7,268		13,368
	$17.0 million revolving term loan		17,000		17,000
	Economic development loan		-		45
Green Plains Superior:
	$40.0 million term loan		22,125		26,250
	$10.0 million revolving term loan		10,000		10,000
	Equipment financing loan		172		219
Green Plains Grain:
	$20.0 million term loan		17,500		19,000
	$100.0 million revolving loans		9,421		68,004
	Inventory financing arrangements		8,805		-
	Equipment financing loans		429		915
	Notes payable		2,000		3,288
Green Plains Trade:
	$70.0 million revolving loan		61,169		21,179
Corporate:
	$90.0 million convertible notes		90,000		90,000
	Note payable to related party		14,000		-
Other			3,666		3,520
Total debt			678,193		668,968
	Less: current portion of long-term debt		(74,993)		(51,885)
	Less: short-term notes payble and other		(93,394)		(89,183)
Long-term debt		$	509,806	$	527,900

Ethanol Production Segment

• Term Loans

• Scheduled principal payments (plus interest) are as follows:

• Green Plains Bluffton                         $0.6 million per month
• Green Plains Central City                   $0.6 million per month
• Green Plains Holdings II                    $1.5 million per quarter
• Green Plains Obion                              $2.4 million per quarter
• Green Plains Ord                                  $0.3 million per month
• Green Plains Otter Tail                        $0.5 million per month
• Green Plains Shenandoah                  $1.2 million per quarter
• Green Plains Superior                          $1.4 million per quarter

• Final maturity dates (at the latest) are as follows:

• Green Plains Bluffton                         November 19, 2013
• Green Plains Central City                   July 1, 2016
• Green Plains Holdings II                    January 1, 2015
• Green Plains Obion                              August 20, 2014
• Green Plains Ord                                  July 1, 2016
• Green Plains Otter Tail                        September 1, 2018
• Green Plains Shenandoah                  May 20, 2014
• Green Plains Superior                          July 20, 2015

·Revolving Term Loans – The revolving term loans are generally available for advances throughout the life of the commitment, subject to borrowing base restrictions. Allowable advances under the Green Plains Shenandoah loan agreement are reduced by $2.4 million each six-month period commencing on the first day of the month beginning approximately six months after repayment of the term loan, but in no event later than November 1, 2014. Allowable advances under the Green Plains Superior loan agreement are reduced by $2.5 million each six-month period commencing on the first day of the month beginning approximately six months after repayment of the term loan, but in no event later than January 1, 2016. Interest-only payments are due each month on all revolving term loans until the final maturity date for the Green Plains Bluffton, Green Plains Central City, Green Plains Ord, Green Plains Otter Tail, Green Plains Shenandoah, and Green Plains Superior loan agreements. The Green Plains Obion loan agreement requires additional semi-annual payments of $4.675 million beginning March 1, 2015. The Green Plains Holdings II loan agreement requires semi-annual payments of $2.7 million.

• Final maturity dates (at the latest) are as follows:

• Green Plains Bluffton                         November 19, 2013
• Green Plains Central City                   July 1, 2016
• Green Plains Holdings II                    April 1, 2016
• Green Plains Obion                              September 1, 2018
• Green Plains Ord                                  July 1, 2016
• Green Plains Otter Tail                        March 23, 2012
• Green Plains Shenandoah                  November 1, 2017
• Green Plains Superior                          July 1, 2017

Green Plains Bluffton also received $22.0 million in Subordinate Solid Waste Disposal Facility Revenue Bond funds from the City of Bluffton, Indiana. The revenue bond requires: (1) semi-annual principal and interest payments of approximately $1.5 million during the period commencing on March 1, 2010 through March 1, 2019, and (2) a final principal and interest payment of $3.745 million on September 1, 2019. At September 30, 2011, Green Plains Bluffton had $2.5 million of cash that was restricted as to use for payment towards the current maturity and interest of the revenue bond. Such cash is presented as restricted cash on the consolidated balance sheet.

Green Plains Holdings II, under its Amended and Restated Loan and Security Agreement, is required to maintain monthly working capital in an amount not less than ($2.5) million. As of July 31, 2011, the actual working capital was ($3.4) million. The identified covenant violation was waived by the lenders and the default did not affect other debt agreements of the Company. The Company believes that it will be able to comply with the covenant for the next twelve months and was in compliance at August 31, 2011 and September 30, 2011. The Company is in the process of amending the Amended and Restated Loan and Security Agreement and once finalized, anticipated in 2011, the Company expects to consistently maintain compliance with this covenant in the future.

During the nine months ended September 30, 2011, amendments were made to the Green Plains Bluffton, Green Plains Central City, Green Plains Holdings II, Green Plains Obion, Green Plains Ord, Green Plains Shenandoah and Green Plains Superior agreements. None of the amendments resulted in material changes to the agreements. All of the Company's ethanol production subsidiaries were in compliance with their debt covenants as of September 30, 2011.

Agribusiness Segment

The Green Plains Grain loan, amended in May 2011, is comprised of a $20.0 million amortizing term loan, a $45.0 million revolving term loan, a $20.0 million seasonal revolver and a $42.0 million bulge seasonal revolver. Scheduled payments under the term loan of $0.5 million are due on the first business day of each calendar quarter, with any remaining amount payable at expiration on August 1, 2013. The bulge seasonal revolver was reduced from a $42.0 million facility to a $35.0 million facility on April 1, 2011 and matures on November 1, 2011. The revolving term loan and the seasonal revolver were to mature on November 1, 2011. However, in October 2011, Green Plains Grain entered into a new $30.0 million amortizing term loan and a new $195.0 million revolving credit facility that provide the Company's agribusiness operations with additional working capital funding. Outstanding amounts under the prior $20.0 million term loan and the $100.0 million revolving facilities were repaid. As of September 30, 2011, Green Plains Grain was in compliance with all debt covenants.

On August 15, 2011, the Company entered into two short-term inventory financing arrangements with a financial institution. Under the terms of the financing agreements, the Company sold quantities of grain totaling $10.0 million, issued warehouse receipts to the financial institution and simultaneously entered into agreements to repurchase the grain in future periods. The agreements mature on January 11, 2012 and February 10, 2012. The Company has accounted for the agreements as short-term notes, rather than sales, and has elected the fair value option to offset fluctuations in market prices of the inventory At September 30, 2011, grain inventory and the short-term note payable were valued at $8.8 million and were measured using Level 2 inputs.

Marketing and Distribution Segment

The Green Plains Trade loan is comprised of a senior secured revolving credit facility. Under the loan agreement, as amended in January 2011, the lender will loan up to $70.0 million, subject to a borrowing base equal to 85% of eligible receivables. At September 30, 2011, Green Plains Trade had $36.1 million cash that was restricted as to use for payment towards the loan agreement. Such cash is presented as restricted cash on the consolidated balance sheet. The amended revolving credit facility expires on March 31, 2014. As of September 30, 2011, Green Plains Trade was in compliance with all debt covenants.

Corporate Activities

        In November 2010, the Company issued $90.0 million of 5.75% Convertible Senior Notes due 2015, or Notes. The Notes represent senior, unsecured obligations of the Company, with interest payable on May 1 and November 1 of each year. The Notes may be converted into shares of the Company's common stock and cash in lieu of fractional shares of the common stock based on a conversion rate initially equal to 69.7788 shares of the common stock per $1,000 principal amount of Notes, which is equal to an initial conversion price of $14.33 per share. The conversion rate is subject to adjustment upon the occurrence of specified events. The Company may redeem for cash all, but not less than all, of the Notes at any time on and after November 1, 2013, if the last reported sale price of the Company's common stock equals or exceeds 140% of the applicable conversion price for a specified time period, at a redemption price equal to 100% of the principal amount of the Notes, plus accrued and unpaid interest.

In conjunction with the purchase of treasury stock on September 16, 2011, the Company signed a promissory note in the amount of $14.0 million to a subsidiary of NTR plc. The balance and interest charges, if any, are due on December 15, 2011.

Capitalized Interest

The Company had no capitalized interest during the quarterly and nine-month periods ended September 30, 2011 and 2010.

Restricted Net Assets

At September 30, 2011, there were approximately $527.2 million of net assets at the Company's subsidiaries that were not available to be transferred to the parent company in the form of dividends, loans, or advances due to restrictions contained in the credit facilities of these subsidiaries.

Other Information

For further information on the debt obligations of the Company, refer to Note 11, Long-Term Debt, in the consolidated financial statements included in the Company's annual report on Form 10-K for the year ended December 31, 2010, as amended.

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Basis Of Presentation, Description Of Business And Summary Of Significant Accounting Policies

9 Months Ended

Sep. 30, 2011

Basis Of Presentation, Description Of Business And Summary Of Significant Accounting Policies [Abstract]

Basis Of Presentation, Description Of Business And Summary Of Significant Accounting Policies

1. BASIS OF PRESENTATION, DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

References to the Company

References to "we," "us," "our," "Green Plains" or the "Company" in the consolidated financial statements and in these notes to the consolidated financial statements refer to Green Plains Renewable Energy, Inc., an Iowa corporation, and its subsidiaries.

Consolidated Financial Statements

The consolidated financial statements include the accounts of the Company, its wholly-owned subsidiaries and entities which it controls. Intercompany balances and transactions are eliminated on a consolidated basis for reporting purposes. Unconsolidated entities are included in the financial statements on an equity basis. Results for the interim periods presented are not necessarily indicative of results to be expected for the entire year.

The accompanying unaudited consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles, or GAAP, for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. The financial statements should be read in conjunction with the Company's annual report filed on Form 10-K for the year ended December 31, 2010, as amended.

The unaudited financial information reflects all adjustments which are, in the opinion of management, necessary for a fair presentation of the results of operations, financial position and cash flows for the periods presented. The adjustments are of a normal recurring nature, except as otherwise noted.

Use of Estimates in the Preparation of Consolidated Financial Statements

The preparation of consolidated financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Reclassifications

Certain amounts previously reported within the consolidated financial statements have been reclassified to conform to the current year presentation. The Company previously reported margin deposits required for exchange-traded activity as deposits in the consolidated balance sheet. The liabilities associated with this exchange-traded activity were previously reported as a derivative financial instrument liability. Since this activity has a right of offset, the Company reclassified cash deposits of approximately $43.4 million at December 31, 2010, and derivative liabilities of approximately $32.1 million at December 31, 2010, to derivative financial instruments in current assets.

Description of Business

Green Plains is North America's fourth largest ethanol producer. The Company markets and distributes approximately one billion gallons of ethanol on an annual basis, including 740 million gallons per year, or mmgy, of expected production from its nine ethanol plants. The Company also markets corn oil and distillers grains produced at its ethanol plants. Additionally, the Company owns and operates grain handling and storage assets and provides complementary agronomy services to local grain producers through its agribusiness segment. The Company owns and operates nine blending and terminaling facilities with approximately 495 mmgy of total throughput capacity. The Company is a partner in a joint venture that was formed to commercialize advanced photo-bioreactor technologies for the growing and harvesting of algal biomass.

Revenue Recognition

The Company recognizes revenue when all of the following criteria are satisfied: persuasive evidence of an arrangement exists; risk of loss and title transfer to the customer; the price is fixed and determinable; and collectability is reasonably assured.

For sales of ethanol, distillers grains and corn oil, revenue is recognized when title to the product and risk of loss transfer to an external customer. Revenues related to the Company's marketing operations for third parties are recorded on a gross basis in the consolidated financial statements, as the Company takes title to the product and assumes risk of loss. Unearned revenue is reflected on the consolidated balance sheet for goods in transit for which the Company has received payment and title has not been transferred to the customer. Revenues from the Company's ethanol transload and splash blending services are recognized as these services are rendered.

The Company routinely enters into fixed-price, physical-delivery ethanol sales agreements. In certain instances, the Company expects that the agreements will be settled in cash rather than by product delivery. These transactions are reported net as a component of revenues. Revenues also include related realized gains and losses on derivative financial instruments, ineffectiveness on cash flow hedges, and reclassifications of realized gains and losses on effective cash flow hedges from accumulated other comprehensive income (loss).

Sales of agricultural commodities, fertilizers and other similar products are recognized when title to the product and risk of loss transfer to the customer, which is dependent on the agreed upon sales terms with the customer. These sales terms provide for passage of title either at the time shipment is made or at the time the commodity has been delivered to its destination and final weights, grades and settlement prices have been agreed upon with the customer. Shipping and handling costs are presented gross in the statements of operations with amounts billed included in revenues and also as a component of cost of goods sold. Revenues from grain storage are recognized as services are rendered. Revenues related to grain merchandising are presented gross.

Cost of Goods Sold

Cost of goods sold includes costs for direct labor, materials and certain plant overhead costs. Direct labor includes all compensation and related benefits of non-management personnel involved in the operation of the Company's ethanol plants. Grain purchasing and receiving costs, other than labor costs for grain buyers and scale operators, are also included in cost of goods sold. Direct materials consist of the costs of corn feedstock, denaturant and process chemicals. Corn feedstock costs include unrealized gains and losses on related derivative financial instruments not designated as cash flow hedges, inbound freight charges, inspection costs and internal transfer costs. Corn feedstock costs also include related realized gains and losses on derivative financial instruments, ineffectiveness on cash flow hedges, and reclassifications of realized gains and losses on effective cash flow hedges from accumulated other comprehensive income (loss). Plant overhead costs primarily consist of plant utilities, plant depreciation and outbound freight charges. Shipping costs incurred directly by the Company, including railcar lease costs, are also reflected in cost of goods sold.

The Company uses exchange-traded futures and options contracts to minimize the effects of changes in the prices of agricultural commodities on the agribusiness segment's grain inventories and forward purchase and sales contracts. Exchange-traded futures and options contracts are valued at quoted market prices. Commodity inventories, forward purchase contracts and forward sale contracts in the agribusiness segment are valued at market prices, where available, or other market quotes adjusted for differences, primarily transportation, between the exchange-traded market and the local markets on which the terms of the contracts are based. Changes in the market value of grain inventories, forward purchase and sale contracts, and exchange-traded futures and options contracts in the agribusiness segment, are recognized in earnings as a component of cost of goods sold. These contracts are predominantly settled in cash. The Company is exposed to loss in the event of non-performance by the counter-party to forward purchase and forward sales contracts.

Derivative Financial Instruments

To minimize the risk and the effects of the volatility of commodity price changes primarily related to corn, natural gas and ethanol, the Company uses various derivative financial instruments, including exchange-traded futures, and exchange-traded and over-the-counter options contracts. The Company monitors and manages this exposure as part of its overall risk management policy. As such, the Company seeks to reduce the potentially adverse effects that the volatility of these markets may have on its operating results. The Company may take hedging positions in these commodities as one way to mitigate risk. While the Company attempts to link its hedging activities to purchase and sales activities, there are situations where these hedging activities can themselves result in losses.

By using derivatives to hedge exposures to changes in commodity prices, the Company has exposures on these derivatives to credit and market risk. The Company is exposed to credit risk that the counterparty might fail to fulfill its performance obligations under the terms of the derivative contract. The Company minimizes its credit risk by entering into transactions with high quality counterparties, limiting the amount of financial exposure it has with each counterparty and monitoring the financial condition of its counterparties. Market risk is the risk that the value of the financial instrument might be adversely affected by a change in commodity prices or interest rates. The Company manages market risk by incorporating monitoring parameters within its risk management strategy that limit the types of derivative instruments and derivative strategies the Company uses, and the degree of market risk that may be undertaken by the use of derivative instruments.

The Company evaluates its contracts that involve physical delivery to determine whether they may be deemed "normal purchases or normal sales" that are expected to be used or sold over a reasonable period in the normal course of business. Any contracts that do not meet the normal purchase or normal sales criteria are recorded at fair value with the change in fair value recorded in operating income unless the contracts qualify for, and the Company elects, hedge accounting treatment.

Certain qualifying derivatives within the ethanol production segment are designed as cash flow hedges. Prior to entering into cash flow hedges the Company evaluates the derivative instrument to ascertain its effectiveness. For cash flow hedges, any ineffectiveness is recognized in current period results, while other unrealized gains and losses are reflected in accumulated other comprehensive income/loss until gains and losses from the underlying hedged transaction are realized. In the event that it becomes probable that a forecasted transaction will not occur, the Company would discontinue cash flow hedge treatment, which would affect earnings. These derivative financial instruments are recognized in other current assets or liabilities at fair value.

Recent Accounting Pronouncements

Effective January 1, 2011, the Company adopted the second phase of the amended guidance in Accounting Standards Codification (ASC) Topic 820, Fair Value Measurements and Disclosures, which requires the Company to disclose information in the reconciliation of recurring Level 3 measurements regarding purchases, sales, issuances and settlements on a gross basis, with a separate reconciliation for assets and liabilities. The Company did not experience an impact from the additional disclosure requirements.

Effective January 1, 2012, the Company will be required to adopt the third phase of amended guidance in ASC Topic 820, Fair Value Measurements and Disclosures. The purpose of the amendment is to achieve common fair value measurement and disclosure requirements by improving comparability of fair value measurements presented and disclosed in financial statements prepared in accordance with GAAP and those prepared in conformity with International Financial Reporting Standards, or IFRS. The amended guidance clarifies the application of existing fair value measurement requirements and requires additional disclosure for Level 3 measurements regarding the sensitivity of fair value to changes in unobservable inputs and any interrelationships between those inputs. The Company currently would not be impacted by the additional disclosure requirements as the Company does not have any recurring Level 3 measurements.

Effective January 1, 2012, the Company will be required to adopt the amended guidance in ASC Topic 220, Comprehensive Income. This accounting standards update, which helps to facilitate the convergence of GAAP and IFRS, is aimed at increasing the prominence of other comprehensive income in the financial statements by eliminating the option to present other comprehensive income in the statement of stockholders' equity, and rather requiring that net income and other comprehensive income be presented in either a single continuous statement or in two separate but consecutive statements. The Company has determined that the changes to the accounting standards will affect the presentation of consolidated financial information but will not have a material effect on the Company's financial position or results of operations.

Amended guidance in ASC Topic 350, Intangibles – Goodwill and Other is effective for the Company beginning January 1, 2012, although early adoption is permitted. The amended guidance permits an entity to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test. The more-likely-than-not threshold is defined as having a likelihood of more than 50 percent. The Company has determined that the changes to the accounting standards will not impact its disclosure or reporting requirements.

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Segment Information

9 Months Ended

Sep. 30, 2011

Segment Information [Abstract]

Segment Information

4. SEGMENT INFORMATION

Company management reviews financial and operating performance in the following four separate operating segments: (1) production of ethanol and distillers grains, collectively referred to as ethanol production, (2) corn oil production, (3) grain warehousing and marketing, as well as sales and related services of agronomy and petroleum products, collectively referred to as agribusiness, and (4) marketing and distribution of Company-produced and third-party ethanol, distillers grains and corn oil, collectively referred to as marketing and distribution. Selling, general and administrative expenses, primarily consisting of compensation of corporate employees, professional fees and overhead costs not directly related to a specific operating segment, are reflected in the table below as corporate activities.

In the second quarter of 2011, the Company redefined its operating segments to include corn oil production as a reportable segment. Corn oil production, which the Company initiated in October 2010, was previously reported as a component of the marketing and distribution segment. The Company added the corn oil production segment to reflect the manner in which the Company's executive management currently manages, allocates resources, and measures performance of its businesses. Prior period segment results have been reclassified to reflect this change.

During the normal course of business, the Company enters into transactions between segments. Examples of these intersegment transactions include, but are not limited to, the ethanol production segment selling ethanol to the marketing and distribution segment, the corn oil production segment selling corn oil to the marketing and distribution segment and the agribusiness segment selling grain to the ethanol production segment. These intersegment activities are recorded by each segment at prices approximating market and treated as if they are third-party transactions. Consequently, these transactions impact segment performance. However, revenues and corresponding costs are eliminated in consolidation and do not impact the Company's consolidated results.

The following are certain financial data for the Company's operating segments for the periods indicated (in thousands):

							Three Months Ended September 30,								Nine Months Ended September 30,
							2011				2010				2011				2010
Revenues:
		Ethanol production
			Revenue from external customers				$	35,077			$	11,168			$	97,377			$	43,298
			Intersegment revenue					551,987				239,253				1,501,031				698,040
				Total segment revenue				587,064				250,421				1,598,408				741,338
		Corn oil production
			Revenue from external customers					393				-				1,464				-
			Intersegment revenue					15,115				-				28,886				-
				Total segment revenue				15,508				-				30,350				-
		Agribusiness
			Revenue from external customers					95,065				65,309				233,959				128,610
			Intersegment revenue					48,863				33,039				149,676				75,062
				Total segment revenue				143,928				98,348				383,635				203,672
		Marketing and distribution
			Revenue from external customers					826,483				419,672				2,298,121				1,204,591
			Intersegment revenue					98				99				375				227
				Total segment revenue				826,581				419,771				2,298,496				1,204,818
		Revenue including intersegment activity						1,573,081				768,540				4,310,889				2,149,828
		Intersegment eliminations						(616,063)				(272,391)				(1,679,968)				(773,329)
		Revenue as reported					$	957,018			$	496,149			$	2,630,921			$	1,376,499
					Three Months Ended September 30,								Nine Months Ended September 30,
					2011				2010				2011				2010
Gross profit:
	Ethanol production				$	24,846			$	19,856			$	63,880			$	70,372
	Corn oil production					9,642				-				18,098				-
	Agribusiness					8,223				5,998				20,425				14,916
	Marketing and distribution					5,069				6,227				17,332				15,646
	Intersegment eliminations					(487)				(123)				444				(25)
					$	47,293			$	31,958			$	120,179			$	100,909
Operating income:
	Ethanol production				$	20,941			$	17,215			$	52,184			$	62,480
	Corn oil production					9,632				-				18,040				-
	Agribusiness					2,151				421				3,934				1,313
	Marketing and distribution					1,923				3,271				7,078				7,056
	Intersegment eliminations					(481)				(123)				474				(26)
	Corporate activities					(5,121)				(3,842)				(14,881)				(11,494)
					$	29,045			$	16,942			$	66,829			$	59,329

The following table sets forth revenues by product line for the periods indicated (in thousands):

			Three Months Ended September 30,		Nine Months Ended September 30,
			2011	2010	2011	2010
Revenues
	Ethanol		$        732,061	$        389,660	$     2,050,683	$     1,123,971
	Corn oil		15,508	-	30,350	-
	Distillers grains		109,168	39,434	302,393	115,535
	Grain		84,416	57,559	189,403	93,086
	Agronomy products		9,027	6,669	40,174	31,834
	Other		6,838	2,827	17,918	12,073
		Total revenues	$        957,018	$        496,149	$     2,630,921	$     1,376,499

The following are total assets for our operating segments for the periods indicated (in thousands):

		September 30,		December 31,
		2011		2010
Total assets:
	Ethanol production	$	900,661	$	850,049
	Corn oil production		23,721		7,204
	Agribusiness		165,716		239,595
	Marketing and distribution		223,277		169,148
	Corporate assets		111,537		142,666
	Intersegement eliminations		(23,101)		(10,883)
		$	1,401,811	$	1,397,779

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Inventories

9 Months Ended

Sep. 30, 2011

Inventories [Abstract]

Inventories

5. INVENTORIES

Inventories are carried at the lower of cost or market, except grain held for sale, which is valued at market value. The components of inventories are as follows (in thousands):

	September 30,		December 31,
	2011		2010
Finished goods	$	59,704	$	38,231
Grain held for sale		47,553		96,916
Raw materials		35,112		23,306
Petroleum & agronomy items held for sale		17,960		9,011
Work-in-process		13,180		9,408
Supplies and parts		9,159		8,016
	$	182,668	$	184,888

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Stockholders' Equity

9 Months Ended

Sep. 30, 2011

Stockholders' Equity [Abstract]

Stockholders' Equity

13. STOCKHOLDERS' EQUITY

Components of stockholders' equity are as follows (in thousands):

						Additional Paid-in Capital	Retained Earnings	Accum. Other Comp. Loss			Total		Total Stockholders' Equity
											Green Plains	Non-
				Common Stock					Treasury Stock		Stockholders'	controlling
				Shares	Amount				Shares	Amount	Equity	Interest
Balance, December 31, 2010				35,793	$      36	$ 431,289	$ 57,343	$        (420)	-	$           -	$       488,248	$      9,394	$        497,642
	Net income (loss)			-	-	-	25,152	-	-	-	25,152	(200)	24,952
	Unrealized loss on derivatives,
		net of tax		-	-	-	-	(6,531)	-	-	(6,531)	-	(6,531)
			Total comprehensive income	-	-	-	-	-	-	-	18,621	(200)	18,421
	Repurchase of common stock			-	-	-	-	-	3,500	(28,201)	(28,201)	-	(28,201)
	Purchase of noncontrolling
		interest in Blendstar, net of tax		-	-	5,572	-	-	-	-	5,572	(8,944)	(3,372)
	Stock-based compensation			607	-	2,743	-	-	-	-	2,743	-	2,743
	Stock options exercised			15	-	104	-	-	-	-	104	-	104
Balance, September 30, 2011				36,415	$      36	$ 439,708	$ 82,495	$     (6,951)	3,500	$  (28,201)	$       487,087	$         250	$        487,337

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Goodwill

9 Months Ended

Sep. 30, 2011

Goodwill [Abstract]

Goodwill

6. GOODWILL

Changes in the carrying amount of goodwill attributable to each business segment during the nine-month period ended September 30, 2011were as follows (in thousands):

	Ethanol Production	Marketing and Distribution	Total
Balance, December 31, 2010	$            12,527	$            10,598	$            23,125
Adjustment to Global purchase price allocation	15,152	-	15,152
Acquisition of Otter Tail	2,600	-	2,600
Balance, September 30, 2011	$            30,279	$            10,598	$            40,877

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Related Party Transactions

9 Months Ended

Sep. 30, 2011

Related Party Transactions [Abstract]

Related Party Transactions

16. RELATED PARTY TRANSACTIONS

Short-Term Note Payable

In September 2011, the Company repurchased 3.5 million shares from a subsidiary of NTR plc, which is a principal shareholder of the Company. The Company paid 50% of the repurchase amount at the time of repurchase, with the remaining balance to be repaid by December 15, 2011. At September 30, 2011, $14.0 million was outstanding on the related party note payable.

Sales and Financing Contracts

Three subsidiaries of the Company have executed separate financing agreements for equipment with AXIS Capital Inc. Gordon F. Glade, President and Chief Executive Officer of AXIS Capital is a member of our Board of Directors. A total of $0.6 million and $1.1 million were included in debt at September 30, 2011 and December 31, 2010, respectively, under these financing arrangements. Payments, including principal and interest, totaled $0.2 million and $0.5 million during the three and nine months ended September 30, 2011, respectively. Payments, including principal and interest, totaled $0.2 million and $0.5 million during the three and nine months ended September 30, 2010, respectively. The highest amount outstanding during the three months ended September 30, 2011 was $0.7 million, and the weighted average interest rate for all financing agreements with AXIS Capital was 7.3%.

The Company has entered into fixed-price ethanol purchase and sale agreements with Center Oil Company. Gary R. Parker, President and Chief Executive Officer of Center Oil, is a member of our Board of Directors. During the three and nine months ended September 30, 2011, cash receipts from Center Oil totaled $24.1 million and $89.4 million, respectively. Additional payments to Center Oil totaled $3.1 million and $5.2 million for the same periods, respectively, on these contracts. During the three and nine months ended September 30, 2010, cash receipts totaled $11.5 million and $55.4 million and payments totaled $0.7 million and $4.5 million, respectively, on these contracts. The Company had $1.8 million and $6.0 million included in accounts receivable from Center Oil at September 30, 2011 and December 31, 2010, respectively, $0.8 million in outstanding payables at September 30, 2011and no outstanding payables at December 31, 2010 under these purchase and sale agreements.

Aircraft Lease

The Company has entered into an agreement with Hoovestol Inc. for the lease of an aircraft. Wayne B. Hoovestol, President of Hoovestol Inc., is Chairman of our Board of Directors. The Company has agreed to pay $6,667 per month for use of up to 100 hours per year of the aircraft. Any flight time in excess of 100 hours per year will incur additional hourly-based charges. During the three and nine months ended September 30, 2011, payments related to this agreement totaled $33 thousand and $105 thousand, respectively. During the three and nine months ended September 30, 2010, payments related to this agreement totaled $25 thousand and $94 thousand, respectively. The Company did not have any outstanding receivables from Hoovestol Inc. and had an outstanding payable to Hoovestol Inc. of $3 thousand at September 30, 2011. The Company did not have any receivables from or payables to Hoovestol Inc. at December 31, 2010.

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Consolidated Statements Of Cash Flows (USD $) In Thousands	9 Months Ended
	Sep. 30, 2011	Sep. 30, 2010
Cash flows from operating activities:
Net income	$ 24,952	$ 31,790
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	36,848	26,383
Amortization of debt issuance costs	1,703	983
Loss on sale or property and equipment	106
Deferred income taxes	10,467	9,959
Stock-based compensation expense	2,743	2,300
Undistributed equity in loss of affiliates	470	321
Allowance for doubtful accounts	122	5
Changes in operating assets and liabilities before effects of business combinations:
Accounts receivable	(31,949)	(16,566)
Inventories	7,210	(38,649)
Deposits	1,109	5,796
Derivative financial instruments	(16,543)	(27,723)
Prepaid expenses and other assets	(3,433)	2,699
Accounts payable and accrued liabilities	(5,994)	22,736
Unearned revenues	(12,307)	1,806
Other	444	(1,237)
Net cash provided by operating activities	15,948	20,603
Cash flows from investing activities:
Purchases of property and equipment	(35,526)	(11,862)
Investment in unconsolidated subsidiaries	(1,363)	(333)
Acquisition of businesses, net of cash acquired	(8,115)	(22,388)
Other	239
Net cash used by investing activities	(44,765)	(34,583)
Cash flows from financing activities:
Proceeds from the issuance of long-term debt	110,088	39,622
Payments of principal on long-term debt	(160,732)	(61,714)
Proceeds from short-term borrowings	2,640,404	1,401,152
Payments on short-term borrowings	(2,648,963)	(1,369,298)
Proceeds from issuance of common stock		79,732
Payments for repurchase of common stock	(14,201)
Acquisition of noncontrolling interest in Blendstar	(3,125)
Change in restricted cash	(8,724)	740
Payments of loan fees	(1,702)	(847)
Other	495
Net cash provided by (used in) financing activities	(86,460)	89,387
Net change in cash and equivalents	(115,277)	75,407
Cash and cash equivalents, beginning of period	233,205	89,779
Cash and cash equivalents, end of period	117,928	165,186
Supplemental disclosures of cash flow:
Cash paid for income taxes	955	69
Cash paid for interest	26,078	19,629
Supplemental noncash investing and financing activities:
Assets acquired in acquisitions and mergers	62,686	28,213
Less: liabilities assumed	(54,571)	(5,825)
Net assets acquired	8,115	22,388
Short-term note payable issued to acquire treasury stock	$ 14,000

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Acquisitions

9 Months Ended

Sep. 30, 2011

Acquisitions [Abstract]

Acquisitions

2. ACQUISITIONS

Acquisition of Global Ethanol, LLC

In October 2010, the Company acquired Global Ethanol, LLC, or Global, which owned two operating ethanol plants with an expected combined annual production capacity of approximately 160 million gallons. The Company valued the transaction at approximately $174.2 million, including approximately $147.6 million for the ethanol production facilities and the balance in working capital. The value of the transaction includes the assumption of outstanding debt, which totaled approximately $97.7 million at that time. Upon closing, Global was renamed Green Plains Holdings II LLC, or Holdings II. At closing of the transaction, all outstanding units of Global were exchanged for aggregate consideration consisting of 4,386,027 shares of restricted Company common stock valued at $53.9 million, warrants to purchase 700,000 shares of restricted Company common stock, valued at $3.1 million and $19.5 million in cash. The warrants, recorded as a component of additional paid-in capital, are not transferable, except in certain limited circumstances, and are exercisable for a period of three years from the closing date at a price of $14.00. In conjunction with the transaction, Holdings II entered into an amendment to its existing credit agreement and the Company contributed $10.0 million of cash equity to Holdings II, $6.0 million of which was utilized to reduce outstanding debt. The operating results of Holdings II have been included in the Company's consolidated financial statements since October 22, 2010.

Amounts of identifiable assets acquired and liabilities assumed (in thousands)
Inventory		$	12,749
Other current assets			15,005
Property and equipment, net			133,970
Current liabilities			(11,143)
Other, net			(110)
	Total identifiable net assets		150,471
Goodwill			23,734
	Purchase price	$	174,205

During the second quarter of 2011, the purchase price allocation for the acquisition was finalized. The revisions to the allocation resulted in a reduction of net property and equipment and an increase in goodwill of $15.2 million. Depreciation expense for the three months ended June 30, 2011 has been reduced by approximately $462 thousand for the cumulative effect of previously-recorded depreciation expense based on the preliminary purchase price allocation relating to the period from date of acquisition through March 31, 2011. The effect of prospectively recognizing the finalized purchase price allocation in the consolidated financial statements is not material to the current or any prior periods. Goodwill related to the acquisition is tax deductible and results largely from economies of scale expected to be realized in the Company's operations.

Acquisition of Otter Tail

In March 2011, the Company acquired an ethanol plant with an expected annual production capacity of 60 mmgy and certain other assets near Fergus Falls, Minnesota from Otter Tail Ag Enterprises, LLC, or Otter Tail, for $59.7 million. Consideration included $19.2 million of indebtedness to MMCDC New Markets Fund II, LLC, valued at $18.8 million, and $35.0 million in financing from a group of nine lenders, led by AgStar Financial Services, with the remaining $5.9 million paid in cash. The operating results of Otter Tail have been included in the Company's consolidated financial statements since March 24, 2011.

Amounts of identifiable assets acquired and liabilities assumed (in thousands)
Inventory		$	4,986
Other current assets			738
Property and equipment, net			51,925
Current liabilities			(409)
Other			(138)
	Total identifiable net assets		57,102
Goodwill			2,600
	Purchase price	$	59,702

During the third quarter of 2011, the purchase price allocation, including the values of net property and equipment, current liabilities, goodwill and assumed long-term debt, for the acquisition were finalized. There were not any significant changes made to the preliminary purchase price allocation. Goodwill related to the acquisition is tax deductible and results largely from economies of scale expected to be realized in the Company's operations.

Consolidated pro forma revenue and operating income, had the acquisitions of the Global and Otter Tail ethanol plants occurred on January 1, 2010, would have been $2.7 billion and $67.0 million, respectively, for the nine months ended September 30, 2011; $1.0 billion and $29.0 million, respectively, for the three months ended September 30, 2011; $1.7 billion and $80.8 million, respectively, for the nine months ended September 30, 2010; and $0.6 billion and $23.1 million, respectively, for the three months ended September 30, 2010. This unaudited information is based on historical results of operations and is not necessarily indicative of the results that would have been achieved had the acquisitions occurred on such date.

Acquisition of Remaining Interest in Blendstar

In January 2009, the Company acquired a 51% ownership interest in Blendstar, LLC, which operates nine blending and terminaling facilities with approximately 495 mmgy of total throughput capacity in seven states in the south central U.S. On July 19, 2011, the Company acquired the remaining 49% of Blendstar from the noncontrolling holders. Blendstar's operations are included in the marketing and distribution segment.

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Comprehensive Income

9 Months Ended

Sep. 30, 2011

Comprehensive Income [Abstract]

Comprehensive Income

11. COMPREHENSIVE INCOME

Comprehensive income is as follows (in thousands):

		Three Months Ended				Nine Months Ended
		September 30,				September 30,
		2011		2010		2011		2010
Net income attributable to Green Plains		$	12,429	$	7,366	$	25,152	$	31,627
	Unrealized gain (loss) on derivatives		(1,856)		523		(10,583)		700
	Tax effect		683		-		4,052		-
Comprehensive income attributable to Green Plains		$	11,256	$	7,889	$	18,621	$	32,327

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Commitments And Contingencies

9 Months Ended

Sep. 30, 2011

Commitments And Contingencies [Abstract]

Commitments And Contingencies

15. COMMITMENTS AND CONTINGENCIES

Operating Leases

The Company leases certain facilities and parcels of land under agreements that expire at various dates. For accounting purposes, rent expense is based on a straight-line amortization of the total payments required over the lease term. The Company incurred lease expenses of $4.2 million and $11.8 million during the three and nine months ended September 30, 2011, respectively, and $6.8 million and $7.9 million during the three and nine months ended September 30, 2010, respectively. Aggregate minimum lease payments under these agreements for the remainder of 2011 and in future fiscal years are as follows (in thousands):

Year Ending December 31,		Amount
	2011	$	4,568
	2012		16,227
	2013		14,284
	2014		6,843
	2015		5,575
	Thereafter		7,740
	Total	$	55,237

Commodities

As of September 30, 2011, the Company had contracted for future grain deliveries valued at approximately $293.2 million, natural gas deliveries valued at approximately $20.8 million, ethanol product deliveries valued at approximately $31.7 million and distillers grains product deliveries valued at approximately $7.4 million.

Legal

In April 2011, Aventine Renewable Energy, Inc. filed a complaint in the United States Bankruptcy Court for the District of Delaware in connection with its Chapter 11 bankruptcy naming as defendants Green Plains Renewable Energy, Inc., Green Plains Obion LLC, Green Plains Bluffton LLC, Green Plains VBV LLC and Green Plains Trade Group LLC. This action alleges $24.4 million of damages from preferential transfers or, in the alternative, $28.4 million of damages from fraudulent transfers under an ethanol marketing agreement and an unspecified amount of damages for a continuing breach of a termination agreement related to rail cars. The Company is unable to predict the outcome of these matters at this time, and any views formed as to the viability of these claims or the financial exposure which could result may change as the matters proceed through their course. The Company intends to defend these claims vigorously.

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Consolidated Balance Sheets (USD $) In Thousands	Sep. 30, 2011	Dec. 31, 2010
ASSETS
Cash and cash equivalents	$ 117,928	$ 233,205
Restricted cash	36,507	27,783
Accounts receivable, net of allowances of $243 and $121, respectively	121,108	89,170
Inventories	182,668	184,888
Prepaid expenses and other	11,393	7,222
Deferred income taxes	20,643	8,463
Deposits	9,982	11,091
Derivative financial instruments	56,642	44,864
Total current assets	556,871	606,686
Property and equipment, net of accumulated depreciation of $112,955 and $76,063, respectively	783,639	747,421
Investment in unconsolidated subsidiaries	3,661	2,768
Goodwill	40,877	23,125
Other assets	16,763	17,779
Total assets	1,401,811	1,397,779
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable	138,961	151,112
Accrued and other liabilities	34,433	27,742
Unearned revenue	10,274	22,581
Short-term notes payable and other borrowings	93,394	89,183
Current maturities of long-term debt	74,993	51,885
Total current liabilities	352,055	342,503
Long-term debt	509,806	527,900
Deferred income taxes	47,726	25,079
Other liabilities	4,887	4,655
Total liabilities	914,474	900,137
Stockholders' equity
Common stock, $0.001 par value; 75,000,000 and 50,000,000 shares authorized; 36,414,508 and 35,793,501 shares issued, and 32,914,508 and 35,793,501 shares outstanding, respectively	36	36
Additional paid-in capital	439,708	431,289
Retained earnings	82,495	57,343
Accumulated other comprehensive loss	(6,951)	(420)
Treasury stock, 3,500,000 and 0 shares, respectively	(28,201)
Total Green Plains stockholders' equity	487,087	488,248
Noncontrolling interests	250	9,394
Total stockholders' equity	487,337	497,642
Total liabilities and stockholders' equity	$ 1,401,811	$ 1,397,779