10QSB

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-QSB

þ Quarterly report under Section 13 or 15(d) of the Securities Exchange Act of 1934.

For the fiscal quarter ended June 30, 2007

OR

o Transition report under Section 13 or 15(d) of the Exchange Act.

For the transition period from       to       .

Commission file number 000-52426

E ENERGY ADAMS, LLC

(Exact name of small business issuer as specified in its charter)

Nebraska	20-2627531
(State or other jurisdiction of	(I.R.S. Employer Identification No.)
incorporation or organization)

510 Main Street, P.O. Box 49, Adams, Nebraska 68301
(Address of principal executive offices)

(402) 988-4655
(Issuer’s telephone number)

Check whether the issuer: (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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.   þ Yes   o No

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   o Yes   þ No

State the number of shares outstanding for each of the issuer’s classes of common equity as of the latest practicable date:

As of July 31, 2007 there were 5,133 units outstanding.

Transitional Small Business Disclosure Format (Check one):   o Yes   þ No

INDEX

	Page No.
PART I. FINANCIAL INFORMATION		3
Item 1. Financial Statements.		3
Item 2. Management’s Discussion and Analysis and Plan of Operations		14
Item 3. Controls and Procedures		27
PART II. OTHER INFORMATION		27
Item 1. Legal Proceeding		27
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		27
Item 3. Defaults Upon Senior Securities		28
Item 4. Submission of Matters to a Vote of Security Holders		28
Item 5. Other Information		28
Item 6. Exhibits		29
SIGNATURES		29
Exhibit 10.25
Exhibit 10.26
Exhibit 31.1
Exhibit 31.2
Exhibit 32.1
Exhibit 32.2

2

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.

E ENERGY ADAMS, LLC
(A Development Stage Company)

Condensed Balance Sheet

	June 30,
	2007
	(Unaudited)
ASSETS
Current Assets
Cash and equivalents	$	4,131,118
Restricted cash		2,709,532
Prepaid and other		89,928
Total current assets		6,930,578
Property and Equipment
Land		1,438,162
Computers and office equipment		122,693
Leasehold improvements		4,408
Construction in progress		67,174,675
Total property and equipment		68,739,938
Less accumulated depreciation		13,735
Net property and equipment		68,726,203
Other Assets
Restricted cash		592,499
Investments		93,436
Debt issuance costs, net of amortization		574,437
Total other assets		1,260,372
Total Assets	$	76,917,153
LIABILITIES AND MEMBERS’ EQUITY
Current Liabilities
Current maturities of long-term debt	$	1,237,500
Derivative instruments		1,682,512
Accounts payable		45,785
Accrued expenses		93,778
Construction and retainage payable		2,509,027
Construction and retainage payable — related party		8,465,826
Line of credit		2,129,000
Total current liabilities		16,163,428
Long-Term Debt, less current maturities		13,397,500
Commitments and Contingencies
Members’ Equity
Member contributions, net of issuance costs related to capital contributions, 5,133 units outstanding		49,957,383
Deficit accumulated during development stage		(2,601,158	)
Total members’ equity		47,356,225
Total Liabilities and Members’ Equity	$	76,917,153

Notes to Unaudited Financial Statements are an integral part of this Statement.

3

E ENERGY ADAMS, LLC
(A Development Stage Company)

Condensed Statement of Operations

	Quarter			Quarter
	Ended			Ended
	June 30,			June 30,
	2007			2006
	(Unaudited)			(Unaudited)
Revenues	$	—		$	—
Operating Expenses
Professional and consulting fees		53,900			180,687
Project coordinator		—			24,585
General and administrative		359,993			96,894
Total operating expenses		413,893			302,166
Operating Loss		(413,893	)		(302,166	)
Other Income (Expense)
Other income		1,600			—
Loss on derivative instruments		(287,404	)		—
Interest income		55,287			2,998
Interest expense		—			(30,082	)
Total other expense		(230,517	)		(27,084	)
Net Loss	$	(644,410	)	$	(329,250	)
Weighted Average Units Outstanding		5,133			194
Net Loss Per Unit	$	(126	)	$	(1,697	)

Notes to Unaudited Financial Statements are an integral part of this Statement.

4

E ENERGY ADAMS, LLC
(A Development Stage Company)

Condensed Statement of Operations

	Nine Months			Nine Months			From Inception
	Ended			Ended			(March 25, 2005)
	June 30,			June 30,			to June 30,
	2007			2006			2007
	(Unaudited)			(Unaudited)			(Unaudited)
Revenues	$	—		$	—		$	—
Operating Expenses
Professional and consulting fees		345,628			383,358			1,026,240
Project coordinator		—			76,585			231,789
General and administrative		695,412			247,955			1,141,527
Total operating expenses		1,041,040			707,898			2,399,556
Operating Loss		(1,041,040	)		(707,898	)		(2,399,556	)
Other Income (Expense)
Other income		146,876			—			151,876
Loss on derivative instruments		(1,546,528	)		—			(1,546,528	)
Interest income		662,257			9,924			1,235,816
Interest expense		(6,725	)		(30,082	)		(42,766	)
Total other expense		(744,120	)		(20,158	)		(201,602	)
Net Loss	$	(1,785,160	)	$	(728,056	)	$	(2,601,158	)
Weighted Average Units Outstanding		5,133			194			2,114
Net Loss Per Unit	$	(348	)	$	(3,753	)	$	(1,230	)

Notes to Unaudited Financial Statements are an integral part of this Statement.

5

E ENERGY ADAMS, LLC
(A Development Stage Company)

Condensed Statement of Cash Flows

	Nine Months			Nine Months			From Inception
	Ended			Ended			(March 25, 2005)
	June 30,			June 30,			to June 30,
	2007			2006			2007
	(Unaudited)			(Unaudited)			(Unaudited)
Cash Flows from Operating Activities
Net loss	$	(1,785,160	)	$	(728,056	)	$	(2,601,158	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		10,360			1,898			13,735
Gain on investment		(92,436	)		—			(92,436	)
Changes in assets and liabilities
Restricted cash		(3,302,031	)		—			(3,302,031	)
Derivative instruments		1,682,512			—			1,682,512
Prepaid and other		142,700			(14,292	)		(89,928	)
Accounts payable		(60,394	)		3,945			45,785
Accrued expenses		90,808			19,803			93,778
Net cash used in operating activities		(3,313,641	)		(716,702	)		(4,249,743	)
Cash Flows from Investing Activities
Payments for investment		(1,000	)		—			(1,000	)
Capital expenditures		(50,033,590	)		(1,057,404	)		(57,765,085	)
Net cash used in investing activities		(50,034,590	)		(1,057,404	)		(57,766,085	)
Cash Flows from Financing Activities
Debt issuance costs		(200,687	)		(27,500	)		(574,437	)
Proceeds from bridge loan		—			2,000,000			—
Proceeds from line of credit		2,129,000			—			2,129,000
Proceeds from TIF financing		5,035,000			—			5,035,000
Proceeds from construction loan		9,600,000			—			9,600,000
Member contributions		—			—			50,360,000
Costs related to capital contributions		—			(261,107	)		(402,617	)
Net cash provided by financing activities		16,563,313			1,711,393			66,146,946
Net Increase (Decrease) in Cash and Equivalents		(36,784,918	)		(62,713	)		4,131,118
Cash and Equivalents – Beginning of Period		40,916,036			737,053			—
Cash and Equivalents – End of Period	$	4,131,118		$	674,340		$	4,131,118
Supplemental Cash Flow Information
Cash paid during the period for:
Interest	$	—		$	15,288		$	36,041
Capitalized interest		31,560			—			31,560
Total	$	31,560		$	15,288		$	67,601
Supplemental Disclosure of Noncash Investing and Financing Activities
Land options exercised for land purchased	$	—		$	7,000		$	7,000
Deferred offering costs in accounts payable	$	—		$	39,377		$	—
Construction in progress in construction payable	$	10,974,853		$	—		$	10,974,853
Deferred offering costs offset against equity	$	—		$	—		$	402,617

Notes to Unaudited Financial Statements are an integral part of this Statement.

6

E ENERGY ADAMS, LLC
(A Development Stage Company)

Notes to Condensed Financial Statements (Unaudited)

June 30, 2007

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accompanying unaudited condensed financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted as permitted by such rules and regulations. These financial statements and related notes should be read in conjunction with the financial statements and notes thereto included in the Company’s audited financial statements for the year ended September 30, 2006, contained in the Company’s annual report on Form 10-KSB for 2006.

In the opinion of management, the interim condensed financial statements reflect all adjustments considered necessary for fair presentation. The adjustments made to these statements consist only of normal recurring adjustments.

Nature of Business

E Energy Adams, LLC, (a Nebraska Limited Liability Company) was organized with the intentions of developing, owning and operating a 50 million gallon dry mill corn-processing ethanol plant in Gage County, Nebraska. The Company was formed on March 25, 2005 to have an indefinite life. As of June 30, 2007, the Company is in the development stage with its efforts being principally devoted to organizational activities and construction of the plant. The Company anticipates completion of the plant in fall of 2007.

Fiscal Reporting Period

The Company has adopted a fiscal year ending September 30 for reporting financial operations.

Accounting Estimates

Management uses estimates and assumptions in preparing these financial statements in accordance with generally accepted accounting principles. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could differ from those estimates.

Cash and Equivalents

The Company maintains its accounts primarily at two financial institutions. At times throughout the year the Company’s cash balances may exceed amounts insured by the Federal Deposit Insurance Corporation.

Derivative Instruments

The Company accounts for derivative instruments and hedging activities in accordance with Statement of Financial Accounting Standards (SFAS) No. 133, Accounting for Derivative Instruments and Hedging Activities, as amended. SFAS No. 133 requires the recognition of derivatives in the balance sheet and the measurement of these instruments at fair value.

In order for a derivative to qualify as a hedge, specific criteria must be met and appropriate documentation maintained. Gains and losses from derivatives that do not qualify as hedges, or are undesignated, must be recognized immediately in earnings. If the derivative does qualify as a hedge, depending on the nature of the hedge, changes in the fair value of the derivative will be either offset against the change in fair value of the hedged assets, liabilities, or firm commitments through earnings or recognized in other comprehensive income until the hedged item is recognized in earnings. Changes in the fair value of undesignated derivatives are recorded in other income and expense since the Company has not yet commenced operations.

7

E ENERGY ADAMS, LLC
(A Development Stage Company)

Notes to Condensed Financial Statements (Unaudited)

June 30, 2007

Additionally, SFAS No. 133 requires a company to evaluate its contracts to determine whether the contracts are derivatives. Certain contracts that literally meet the definition of a derivative may be exempted as “normal purchases or normal sales”. Normal purchases and normal sales are contracts that provide for the purchase or sale of something other than a financial instrument or derivative instrument that will be delivered in quantities expected to be used or sold over a reasonable period in the normal course of business. Contracts that meet the requirements of normal purchases or sales are documented as normal and exempted from accounting and reporting requirements of SFAS No. 133, and therefore, are not marked to market in our financial statements.

Property and Equipment

Property and equipment is stated at the lower of cost or estimated fair value. Depreciation is provided over an estimated useful life by use of the straight line depreciation method. Maintenance and repairs are expensed as incurred; major improvements and betterments are capitalized.

The Company capitalizes construction costs until the assets are placed in service, at which time depreciation will be provided over the assets estimated useful life. As of June 30, 2007, the Company had a construction and retainage payable of approximately $10,975,000.

Debt Issuance Costs

Debt issuance costs are being amortized over the term of the related debt by use of the effective interest method.

Fair Value of Financial Instruments

The carrying value of cash and equivalents, derivative instruments and construction and retainage payables approximate fair value.

Recently Issued Accounting Pronouncements

Management has reviewed recently issued, but not yet effective, accounting pronouncements and does not expect the implementation of these pronouncements to have a significant effect on the Company’s financial statements.

2. MEMBERS’ EQUITY

As specified in the Company’s operating agreement, the Company is authorized to issue additional units as needed. The Company has one class of membership units, which include certain transfer restrictions as specified in the operating agreement and pursuant to applicable tax and securities laws. Income, losses and distributions are allocated to all members based upon their respective percentage units held. A member is entitled to one vote for each member unit held.

The Company was initially capitalized by a member who contributed $400,000 for 80 membership units. Additionally, the Company was further capitalized by 25 additional members, contributing an aggregate of $570,000 for 114 units.

8

E ENERGY ADAMS, LLC
(A Development Stage Company)

Notes to Condensed Financial Statements (Unaudited)

June 30, 2007

The Company raised additional equity through a Form SB-2 Registration Statement with the Securities and Exchange Commission (SEC), which was declared effective May 15, 2006. The Offering was for a minimum of 1,990 and up to 5,810 membership units for sale at $10,000 per unit. The minimum purchase requirement was two units for a minimum investment of $20,000. The offering was closed on February 23, 2007 with the issuance of 4,939 units totaling $49,390,000. The Company offset proceeds from the equity offering with offering costs of approximately $402,600.

3. DERIVATIVE INSTRUMENTS

In order to reduce risk caused by market fluctuations, the Company hedges its anticipated corn purchases by entering into futures contracts. These contracts are used with the intention to fix the purchase price of the Company’s anticipated requirements of corn in production activities. The fair value of these contracts is based on quoted prices in active exchange-traded or over-the-counter markets. The fair value of derivatives is continually subject to change due to changing market conditions. The Company does not formally designate these instruments as hedges and, therefore, records in earnings adjustments caused from marking these instruments to market on a monthly basis.

At June 30, 2007, the Company had recorded restricted cash, related to derivative instruments, of approximately $2,285,000 and a corresponding liability related to corn options and future positions of approximately $1,683,000. The Company has recorded a combined loss of approximately $1,547,000, which includes a realized gain of approximately $136,000 and an unrealized loss of approximately $1,683,000.

4. BANK FINANCING

In August 2006, the Company entered into a credit agreement with a financial institution for the purpose of funding a portion of the cost of the ethanol plant. Under the credit agreement, the lender has provided a construction term loan for $35,000,000 and a construction revolving loan of $14,500,000, which are both secured by substantially all assets. An additional revolving loan for $3,000,000 is being provided for the financing of grain inventory, receivables and margin account equity. The Company is required to make monthly interest payments for all loans at a variable rate equivalent to the three-month LIBOR short term index rate plus 3.05% during the construction period. The variable rate will be adjusted to the three month London Inter-Bank Offer Rate (LIBOR) for any year after the first year of operations in which, at the end of the preceding year, the Company’s owners’ equity, is equal to or greater than 60%. Interest will be calculated on a 360 day basis.

In February 2007, the Company amended certain terms of its additional revolving loan, allowing the Company to begin drawing funds, as needed, beginning in February 2007, and requiring the Company to pay interest monthly until February 1, 2008, when the entire unpaid principal, plus accrued interest and any unpaid fees, costs or expenses shall be due. Prior to this amendment, the funds under this revolving loan would have been available beginning in November 2007, and due in November 2008.

In May 2007, the Company amended certain terms of its construction term loan, construction revolving loan and the additional revolving loan. The amendment temporarily limited the advances available under the construction term loan to $15,000,000 until the Company received the tax increment financing (TIF) as discussed below. The construction revolving loan terms were amended to allow the Company to advance funds under this loan, immediately, but the advances are limited to $3,000,000 until such time that the funds available under the construction term loan have been advanced in its entirety. The additional revolving term loan was amended to increase the amount available from $3,000,000 to $10,000,000.

9

E ENERGY ADAMS, LLC
(A Development Stage Company)

Notes to Condensed Financial Statements (Unaudited)

June 30, 2007

Long-term debt consists of the following at June 30, 2007:

Term note payable to lending institution, see terms below	$	9,600,000
Tax increment financing, see terms below		5,035,000
Totals		14,635,000
Less amounts due within one year		(1,237,500	)
Net long-term debt	$	13,397,500

The estimated maturities of long-term debt at June 30, 2007 are as follows:

2008	$	1,237,500
2009		5,045,000
2010		3,617,500
2011		225,000
2012		245,000
After 2013		4,265,000
Total long-term debt	$	14,635,000

Construction Term Loan

The Company is required to make 29 principal installments of $1,237,500 plus accrued interest quarterly beginning six months following substantial completion, but no later than April 1, 2008 until October 1, 2015. In addition to the required payments, the Company will have to make additional principal payments equal to 65% of the Company’s excess cash flow as defined in the loan agreement not to exceed $2,000,000 per fiscal year and an aggregate total of $8,000,000.

Construction Revolving Loan

The Company is required to pay interest monthly until three months after the repayment of the term loan or January 1, 2016, at which point the Company is required to make 10 quarterly installments of $1,450,000 plus interest until April 1, 2018.

Additional Revolving Loan

For the additional revolving loan, the Company is required to pay interest monthly until February 1, 2008, when the entire unpaid principal, plus accrued interest and any unpaid fees, costs or expenses shall be due. As of June 30, 2007, the outstanding balance on the line of credit is $2,129,000. If the Company prepays any portion of the construction loans prior to April 1, 2009, the Company will owe a prepayment charge of 3% in addition to certain surcharges. The prepayment charge will be reduced by 1% each year thereafter and any prepayment made on the construction loan after April 1, 2011 will not be subject to a prepayment charge.

The Company has paid approximately $424,000 in debt financing costs and is obligated to pay an annual servicing fee of $25,000. Additionally, the Company will pay the lender an unused commitment fee quarterly equal to 0.5% of the average unused portion of the $14,500,000 revolving loan beginning May 8, 2007 and of the $10,000,000 revolving loan beginning February 1, 2007.

10

E ENERGY ADAMS, LLC
(A Development Stage Company)

Notes to Condensed Financial Statements (Unaudited)

June 30, 2007

Covenants

The Company is subject to various financial and non-financial loan covenants that include among other items minimum working capital amounts, debt coverage ratio and net worth requirements. The Company is permitted to make distributions once a year not to exceed 40% of the net income as long as the Company is in compliance with these and other loan covenants. For fiscal years ending 2008 and thereafter, the Company may make distributions which may exceed 40% of the net income as long as the Company has made the excess cash flow payments and is in compliance with these and other loan covenants on a post-distribution basis.

Tax Increment Financing (TIF)

In May 2007 the Company entered into a redevelopment contract with the Community Development Agency of the Village of Adams, Nebraska, (“Authority”), for the redevelopment of the ethanol plant site. Pursuant to the contract, the Authority will provide a grant to the Company to reimburse the Company for certain expenditures which are payable from proceeds of the TIF indebtedness. The loan proceeds are to be used for “Project costs” as defined in the agreement, for the establishment of special funds held by the bond trustee for interest and principal payments and reserves (the “Capitalized Interest Fund” and the “Debt Service Reserve Fund”), and for debt issuance costs. The approximate amounts of the uses of the loan proceeds are as follows: available for Project costs $3,865,000; Capitalized Interest Fund $514,000; Debt Service Reserve Fund $503,000; and debt issuance costs $153,000. This loan bears interest at 9.15%, until the reset date of June 1, 2014, at which time the interest rate will be determined based on the U.S. Treasury Constant Maturity Index average for the prior month, plus 398 bps, not to exceed 10.0% or fall below 7.5%. The loans are secured by and payable from the grant and assignment of the Series A and Series B Notes, pledged revenues, consisting of pledged tax increment revenues, payment in lieu of taxes (PILOT) payments, and liquidated damages amount and amounts on deposit.

The Company may not convey, assign, or transfer the Project prior to the expiration of the 15 year period without the prior written consent of the Authority. If the Company were to default on the Contract under circumstances construed to be within the Company’s control, liquidated damages plus interest could be charged against the Company.

The Company will be assessed taxes on the value of the Project (“Tax Increment Revenues”) which will be paid by the Company to a special debt service fund and then used to pay the payments required on the loans. The Company has guaranteed that if such assessed Tax Increment Revenues are not sufficient for the required bond payments, the Company will provide such funds as are needed to fund the shortfall.

The loan matures in semi-annual increments commencing June 1, 2009. The semi-annual increments commence at $95,000 and increase to $730,000, with a final maturity of December 1, 2021. Interest on the loans is payable semi-annually on June 1 and December 1, commencing on December 1, 2007.

In connection with the bond issuance, the Authority also authorized a Series 2007B Note to the Company under which additional funding to the Company is contingently committed. Under the terms of the agreement the Authority may provide additional funding to the Company up to $2,500,000 to reimburse the Company for Project costs the Company has paid. However, any such funding to the Company would only be paid if there were Tax Increment Revenues remaining once the bonds have been fully paid. This funding commitment bears no interest and no amounts have been recorded in the accompanying financial statements due to the contingent nature of the agreement.

11

E ENERGY ADAMS, LLC
(A Development Stage Company)

Notes to Condensed Financial Statements (Unaudited)

June 30, 2007

5. COMMITMENTS AND CONTINGENCIES

Design build agreement

The total cost of the project, including the construction of the ethanol plant and start-up expenses, is expected to approximate $103,100,000. The Company has signed a lump sum design-build contract with a contractor, an unrelated party, to design and build the ethanol plant at a total contract price of approximately $67,860,000. As part of the contract, the Company paid a mobilization fee of approximately $5,000,000, subject to retainage. Monthly applications will be submitted for work performed in the previous period. Final payment will be due when final completion has been achieved. The design-build agreement includes a provision whereby the general contractor receives an early completion bonus of $10,000 per day for each day the construction is complete prior to 485 days from the date construction began. However, the total amount paid for the early completion bonus shall not exceed $1,000,000. The contract may be terminated by the Company upon a ten day written notice subject to payment for work completed, termination fees, and any applicable costs and retainage. As of June 30, 2007, the Company has incurred approximately $54,952,000 for these services with approximately $8,466,000 included in construction and retainage payable.

Construction contracts

In March 2007, the Company entered into an agreement with an unrelated party for the construction of a spur track for approximately $3,516,000. The Company will make monthly progress payments until substantial completion at which time all remaining amounts will be due. As of June 30, 2007, the Company has incurred approximately $1,685,000 for these services, all of which is included in construction and retainage payable.

In March 2007, the Company entered into an agreement with an unrelated contractor for the construction of storage silos with fill and unload equipment for approximately $2,547,000. The Company was required to make a down payment of approximately $255,000 at the time the agreement was executed and will make progressive monthly payments thereafter. As of June 30, 2007, the Company has incurred approximately $1,911,000 for these services with approximately $627,000 included in construction and retainage payable.

Grants

In September 2006, the Company entered into a Memorandum of Understanding with the Nebraska Department of Economic Development (“DED”) and the Village of Adams, Nebraska (“Village”) for the award of a $355,000 Community Development Block Grant (“CDBG”) from DED to the Village, $5,000 of which is unconditionally granted for the Village’s costs of administration of the grant, and the remaining $350,000 is conditionally granted to the Village from the DED for a portion of the costs for the development of certain public streets for the benefit of E Energy Adams. The Village will provide matching funds up to $350,000, which will come from tax increment financing funds. E Energy Adams is required to satisfy certain job requirements and if the job requirements are not met, E Energy Adams will be obligated to repay the Village and the Village will be obligated to repay the DED for the conditional amount of $350,000. The job creation and maintenance requirements imposed on E Energy Adams are as follows:

1.	The Company must create at least 26 new permanent jobs on a full-time basis at our facility in Adams, Nebraska within 18 months from September 1, 2006, and 51% or more of all these jobs must be held by or at least made available to low-to-moderate income persons;
2.	The Company must maintain the 26 jobs for 12 months from the date of hire for each respective job; and
3.	The Company must pay all of our employees a minimum hourly rate of $9.50 per hour, and provide all employees with an appropriate employee benefits package.

Utility Contracts

In March 2007, the Company entered into an agreement with an unrelated party for specialty water treatment chemicals, engineering services, environmental support services, and plant startup assistance. The Company will pay approximately $8,400 per month for these services, commencing September 18, 2007 and lasting for a period of three years. The maximum annual cost for chemicals is approximately $111,000. Either party may terminate the agreement by providing a 30 day advance written notice.

12

E ENERGY ADAMS, LLC
(A Development Stage Company)

Notes to Condensed Financial Statements (Unaudited)

June 30, 2007

Marketing Agreement

In March 2007, the Company entered into a marketing agreement with an unrelated party for the marketing, sale and delivery of distiller’s dried grains with solubles (DDGS), wet distillers grains (WDG), and solubles the Company is expected to produce. The Company will receive payment for the products sold based on a percentage (98% for DDGS, 96% for WDG, but not at a price of less than $1.50/ton fee for DDGS and WDG, and a $2.00/ton fee for solubles) of the actual sales price as defined in the agreement. The initial term is for one year commencing as of the startup of production and will continue until terminated by either party providing a 90 day advance written notice.

Corn Contracts

Currently, the Company has forward corn purchase contracts for delivery through March 2009 for a total commitment of approximately $8,900,000. Of the total corn purchase contracts, approximately less than 11% are with members of the Company.

Safety Services Agreement

In June 2007, the Company entered into a safety service agreement with an unrelated party for a safety program, employee manuals and on-site audits of the Company. The Company will pay $38,000 for these services, commencing July 2007 and lasting until November 2008. The Company may terminate the agreement by providing a 60 day advance notice; however no fees shall be reimbursed to the Company. The contracted party may terminate the agreement if certain insurance conditions are not maintained. In such case, a partial rebate of the fee will be negotiated.

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13

Item 2. Management’s Discussion and Analysis and Plan of Operations.

Forward Looking Statements

This report contains forward-looking statements that involve future events, our future performance and our expected future operations and actions. In some cases you can identify forward-looking statements by the use of words such as “may,” “should,” “anticipate,” “believe,” “expect,” “plan,” “future,” “intend,” “could,” “estimate,” “predict,” “hope,” “potential,” “continue,” or the negative of these terms or other similar expressions. These forward-looking statements are only our predictions and involve numerous assumptions, risks and uncertainties. Our actual results or actions may differ materially from these forward-looking statements for many reasons, including the following factors:

• Construction delays and technical difficulties in constructing the plant;

• Availability of sufficient capital to construct the plant and begin operations;

• Increases in the price of corn as the corn market becomes increasingly competitive;

• Our inelastic demand for corn, as it is the only available feedstock for our plant;

• Changes in federal and/or state laws (including the elimination of any federal and/or state ethanol tax incentives);

• Changes in our business strategy, capital improvements or development plans;

• The loss of any license or permit;

• Changes in the environmental regulations or in our ability to comply with the environmental regulations that apply to our plant site and our anticipated operations;

• Changes in general economic conditions or the occurrence of certain events causing an economic impact in the agriculture, oil or automobile industries;

• Changes in the availability and price of natural gas and the market for distillers grains;

• Changes and advances in ethanol production technology; and

• Competition in the ethanol industry and from other alternative fuel additives.

Our actual results or actions could and likely will differ materially from those anticipated in the forward-looking statements for many reasons, including the reasons described in this report. We are not under any duty to update the forward-looking statements contained in this report. We cannot guarantee future results, levels of activity, performance or achievements. We caution you not to put undue reliance on any forward-looking statements, which speak only as of the date of this report. You should read this report and the documents that we reference in this report and have filed as exhibits completely and with the understanding that our actual future results may be materially different from what we currently expect. We qualify all of our forward-looking statements by these cautionary statements.

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Overview

E Energy Adams, LLC is a development-stage Nebraska limited liability company. It was formed on March 25, 2005 for the purpose of raising capital to develop, construct, own and operate a 50 million gallon dry mill corn-based ethanol plant near Adams, Nebraska. References to “we,” “us,” “our” and the “Company” refer to E Energy Adams, LLC. We are in the process of constructing the plant and have not yet engaged in the production of ethanol and distillers grains. Based upon engineering specifications from Fagen, Inc., we expect the ethanol plant to process approximately 20.4 million bushels of corn per year and use as much as 1,870,000 Million British Thermal Units (“MMBtu”) of natural gas per year to produce approximately 55 million gallons of fuel grade ethanol and 186,000 tons of distillers grains for animal feed each year. We expect to market all of the ethanol and distillers grains the plant produces. We expect to complete construction of our plant on our 172 acre site in fall of 2007. As of July 31, 2007, we estimate that construction of our plant is 75% complete.

Our current estimated total project cost is $103,100,000, and we are currently on budget to meet our total project cost. We are financing the development and construction of the ethanol plant with a combination of equity and debt. We raised equity in a public offering registered with the Securities and Exchange Commission and as of our fiscal quarter ended on June 30, 2007, we have issued 4,939 units and received $49,390,000 in offering proceeds. Until we received offering proceeds, our development activities were funded with our seed capital equity of $970,000. Effective February 23, 2007, we formally closed the registered public offering. On August 25, 2006, we entered into a Credit Agreement with Farm Credit Services of America, FLCA and Farm Credit Services of America, PCA (“Farm Credit”) establishing a senior credit facility with Farm Credit for the construction of the plant. The construction financing is in the amount of $49,500,000 consisting of a $35,000,000 term loan and a $14,500,000 revolving loan. We also have entered into a $10,000,000 line of credit. In addition, we received Tax Increment Financing of approximately $5,035,000 (of which $3,865,000 is available for project costs) and we had earned approximately $244,000 in interest on our offering proceeds that were contained in our escrow account prior to their release from escrow on August 11, 2006. Taken together, our current sources of capital total $114,004,000. Therefore, based on our current total project cost estimate of $103,100,000, we expect our equity and debt capital sources to be sufficient to complete plant construction and begin start-up operations.

We have entered into a Lump Sum Design-Build Agreement with Fagen, Inc. to design and build a 50 million gallon per year dry grind ethanol production facility on our plant site located near the village of Adams, and we have engaged Aventine Renewable Energy, Inc. to market our ethanol and Commodity Specialist Company (“CSC”) to market our distillers grains. Subsequent to the quarter end, we were notified that CSC has been purchased by CHS, Inc. and our marketing agreement has been assigned to CHS, Inc.

As of the date of this report, we have obtained all of our necessary environmental permits to construct our plant from the Nebraska Department of Environmental Quality (NDEQ). We will need to obtain additional permits prior to the start up of operations. We are still in the development phase, and until the proposed ethanol plant is operational, we will generate no revenue. We anticipate that accumulated losses will continue to increase until the ethanol plant is operational. Since we have not yet become operational, we do not yet have comparable income, production or sales data.

Plan of Operations for the Next 12 Months

We expect to spend at least the next 12 months (as measured from the date of this report) focused on completion of plant construction, hiring of our remaining necessary employees, and starting operations. We expect construction of our plant to be complete in the next 3-6 months, with production beginning in fall 2007.

Due to our successful completion of the registered offering and the related debt financing, we expect to have sufficient cash on hand to cover all costs associated with construction of the project, including, but not limited to staffing, site development, utilities, construction and equipment acquisition, office costs, audit, legal, compliance and staff training. In the event that we do not have sufficient cash from our registered offering and debt financing, we may seek additional equity, debt or a combination of both. We estimate that it will cost approximately $103,100,000 to complete the project.

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Project Capitalization

Seed Capital Offering

During the time period beginning with E Energy Adams’ formation on March 25, 2005 and ending on May 31, 2005, we raised $970,000 in seed capital through a private placement. We issued a total of 194 units to our seed capital investors at a price of $5,000 per unit.

Registered Offering

We filed a Registration Statement for an initial public offering of our units with the Securities and Exchange Commission on Form SB-2 (SEC Registration No. 333-123473), as amended, which became effective on May 15, 2006. We issued 4,939 units in the registered offering and have received offering proceeds in the amount of $49,390,000. Effective February 23, 2007, we formally closed the offering..

Senior Debt Financing

On August 25, 2006, we entered into a Credit Agreement with Farm Credit Services of America, FLCA and Farm Credit Services of America, PCA (“Farm Credit”) establishing a senior credit facility with Farm Credit for the construction of a 50 million gallon per year dry mill ethanol plant. The construction financing is in the amount of $49,500,000 consisting of a $35,000,000 term loan and a $14,500,000 revolving loan. The Credit Agreement also included a $3,000,000 line of credit. On May 8, 2007, we entered into a Second Amendment to the Credit Agreement, amending the Credit Agreement, dated August 25, 2006. Under the Second Amendment to the Credit Agreement, our advance limit under the revolving loan has been amended to $3,000,000 until the term loan has been advanced to its entirety. The $3,000,000 line of credit has been increased to $10,000,000, with advances available until February 1, 2008. Upon execution of the Second Amendment to the Credit Agreement we paid Farm Credit Services $50,000 for the re-structuring of the line of credit. Under the Second Amendment to Credit Agreement, we are obligated to repay the line of credit plus accrued interest, unpaid fees, costs or expenses by February 1, 2008.

We are obligated to repay the term construction loan in 29 equal, consecutive, quarterly installments of $1,237,500 plus accrued interest commencing on the first of the month which is six months following substantial completion of our ethanol plant, but no later than April 1, 2008, and the last installment due no later than October 1, 2015. On the earlier of January 1, 2016 or three months following repayment of the term loan we will begin repayment on the revolving term loan in ten equal, consecutive, quarterly principal installments of $1,450,000 plus accrued interest with the last installment due by April 1, 2018. During the term of the construction loan, we are required to make special principal payments in an annual amount equal to 65% of our excess cash flow for each year, not to exceed $2,000,000 in any fiscal year and the aggregate total of those payments will not exceed $8,000,000.

The loans are secured by a first mortgage on our real estate and a lien on all of our personal property. During the term of the loans, we are subject to certain financial loan covenants consisting of a minimum working capital, minimum debt coverage, and minimum tangible net worth. After the construction phase, we are only allowed to make annual capital expenditures up to $500,000 annually without prior approval. We are also prohibited from making distributions to our members; however, for each fiscal year commencing with the fiscal year ending 2008, we may make a distribution to our members of 40% of the net profit for such fiscal year after our lender has received audited financial statements for the fiscal year and provided no event of default or potential default exists. We may exceed 40% only if we have made the required free cash flow payment for that fiscal year. We must be in compliance with all financial ratio requirements and loan covenants before and after any distributions to our members.

Upon an occurrence of an event of default or an event which will lead to our default, Farm Credit may upon notice terminate its commitment to loan funds and declare the entire unpaid balance of the loans, plus accrued interest, immediately due and payable. An event of default includes, but is not limited to, our failure to make payments when due, insolvency, any material adverse change in our financial condition or our breach of any of the covenants, representations or warranties we have given in connection with the transaction.

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Tax Increment Financing (“TIF”)

On May 1, 2006, we entered into a Redevelopment Contract with the Community Development Agency of the Village of Adams (the “Authority”) under which the Authority will provide a grant to us to reimburse certain expenditures which are payable from proceeds of the Tax Increment Financing (“TIF”) indebtedness. However, on May 29, 2007 we entered into a First Amended and Restated Redevelopment Contract with the Authority, which increased the assessed valuation of the real estate from $20,000,000 to $32,366,105, which translated to an increase in the amount of our loan proceeds. Pursuant to the contract, the loan proceeds are to be used for “Project costs” as defined in the contract, for the establishment of special funds held by the bond trustee for interest and principal payments and reserves (the “Capitalized Interest Fund” and the “Debt Service Reserve Fund”), and for debt issuance costs.

On June 29, 2007, we entered into a Loan Agreement with Security First Bank and other participants Under the loan agreement, we received a loan proceeds in the amount of $5,035,000. The approximate amounts of the uses of the loan proceeds are as follows: available for Project costs $3,865,000; Capitalized Interest Fund $514,000; Debt Service Reserve Fund $503,000; and debt issuance costs $153,000. This loan bears interest at 9.15%, until the reset date of June 1, 2014, at which time the interest rate will be determined based on the U.S. Treasury Constant Maturity Index average for the prior month, plus 398 bps, not to exceed 10.0% or fall below 7.5%. The loans are secured by and payable from the grant and assignment of the Series A and Series B Notes, pledged revenues, consisting of pledged tax increment revenues, payment in lieu of taxes (PILOT) payments, and liquidated damages amount and amounts on deposit.

We may not convey, assign, or transfer the our project prior to the expiration of the 15 year period without the prior written consent of the Authority. If we were to default on the Contract under circumstances construed to be within our control, liquidated damages plus interest could be charged against the us.

We will be assessed taxes on the value of the Project (“Tax Increment Revenues”) which we will pay to a special debt service fund and then the funds will be used to pay the payments required on the loans. We have guaranteed that if such assessed Tax Increment Revenues are not sufficient for the required bond payments, we will provide such funds as are needed to fund the shortfall.

The loan matures in semi-annual increments commencing June 1, 2009. The semi-annual increments commence at $95,000 and increase to $730,000, with a final maturity of December 1, 2021. Interest on the loans is payable semi-annually on June 1 and December 1, commencing on December 1, 2007.

In connection with the bond issuance, the Authority also authorized a Series 2007B Note to us under which additional funding to the Company is contingently committed. Under the terms of the agreement the Authority may provide additional funding to us up to $2,500,000 to reimburse us for Project costs we have paid. However, any such funding would only be paid to us if there were Tax Increment Revenues remaining once the bonds have been fully paid. This funding commitment bears no interest and no amounts have been recorded in the accompanying financial statements due to the contingent nature of the agreement.

We have also agreed to reimburse Gage County for up to $1,000,000 for the redevelopment of certain county roads near the plant site. In January 2007, we entered into an agreement with Smith Hayes as the exclusive placement agent for this TIF proposal. We paid a non-refundable retainer of $5,000 when we executed the agreement with Smith Hayes and an amount equal to 2% of the total bonds financed was paid at closing.

Nebraska Department of Economic Development Community Development Block Grant

On September 1, 2006, we entered into a Memorandum of Understanding with the Nebraska Department of Economic Development (“DED”) and the Village of Adams, Nebraska (“Village”) for the award of a $355,000 Community Development Block Grant (“CDBG”) from DED to the Village, $5,000 of which is unconditionally granted for the Village’s costs of administration of the grant, and the remaining $350,000 is conditionally granted to the Village from the DED for a portion of the costs for the development of certain public streets for the benefit of E Energy Adams. The Village will provide matching funds up to $350,000, which will come from tax increment financing funds. E Energy Adams is required to satisfy certain job requirements and if the job requirements are not met, E Energy Adams will be obligated to repay the Village and the Village will be obligated to repay the DED for the conditional amount of $350,000. The job creation and maintenance requirements imposed on E Energy Adams are as follows:

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1.	We must create at least 26 new permanent jobs on a full-time basis at our facility in Adams, Nebraska within 18 months from September 1, 2006, and 51% or more of all of these jobs must be held by or at least made available to low-to-moderate income persons;
2.	We must maintain the 26 jobs for 12 months from the date of hire for each respective job; and
3.	We must pay all of our employees a minimum hourly rate of $9.50 per hour, and provide all employees with an appropriate employee benefits package.

As of the date of this report, we have received approval from the Governor of the state of Nebraska for this funding.

Plant Construction and Project Development Activities

Plant construction is progressing on schedule with no significant deviation from our original construction timetable to date. We anticipate completion of plant construction during fall 2007. As of July 31, 2007, we estimate that plant construction is approximately 75% complete.

We entered into a Lump Sum Design-Build Agreement with Fagen, Inc. on August 4, 2006 to establish a 50 million gallon per year dry mill ethanol production facility on our plant site located near the Village of Adams, Nebraska. Pursuant to the Lump Sum Design-Build Agreement, the effective date is August 1, 2006. The final Contract Price was set at $67,500,000, based an increase in the Construction Cost Index (“CCI”). Subsequent to the increase in Contract Price due to the CCI, the final Contract Price increased to approximately $67,860,000 due to change orders agreed to by both Fagen, Inc. and E Energy Adams. The Contract Price with Fagen, Inc. is subject to any mutually agreed-upon adjustments and previously paid amounts that may be treated as credits. As part of the contract, we have paid a mobilization fee of $5,000,000. Fagen, Inc. will design and build the plant using ICM, Inc., technology. We currently expect the construction to be completed in fall of 2007; however, there is no assurance or guarantee that construction will stay on schedule or that we will be able to commence operations at the plant by fall 2007.

We also agreed under the Design-Build Agreement with Fagen, Inc. that if the plant was substantially complete within 485 days (16 months) for each day that substantial completion was achieved prior to 485 days from the date construction began, we would pay Fagen, Inc. an early completion bonus of $10,000 per day for each day that substantial completion was achieved prior to 485 days from the date construction began. However, in no event will we have to pay Fagen, Inc. an early completion bonus of more than $1,000,000. We expect that initial start-up and operations of the plant will also be under the general direction and guidance of Fagen, Inc. employees and our own personnel, who will have experience in ethanol production or will have received on-site training provided by Fagen, Inc. We further anticipate that additional on-site support will be provided by Fagen, Inc. for the first 30 days of plant operation.

The construction of our railroad spur track is underway under our agreement with Kelly-Hill Company dated March 23, 2007. The project was designed by Antioch International, Inc. The cost of this construction is approximately $3,516,000. We will make monthly progress payments on the basis of Kelly-Hill’s monthly applications for payment. This construction will provide our plant with access to and from the BNSF Railroad main line, which will allow for the transport of our corn for the plant, as well as for the transport of our ethanol and distiller’s grains.

Marketing and Natural Gas Agreements

We have entered into an ethanol marketing agreement with Aventine Renewable Energy, Inc., an unrelated party, for the marketing, sale and delivery of most of the ethanol produced by E Energy Adams, LLC. Under this agreement, we have the flexibility to market 10% of our ethanol ourselves to local markets. The initial term of the agreement with Aventine will run for three years from October 9, 2006, the date of entering into the agreement. After that, it will automatically renew for successive one year terms, unless terminated by either Party with at least one year written notice prior to such expiration date, or for breach of terms.

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We have entered into a distiller’s grain marketing agreement with Commodity Specialist Company (“CSC”), wherein CSC agrees to buy, and we agree to sell, the entire bulk feed grade DDGS, WDG and Solubles output from our plant. The term of this agreement is for one year commencing as of completion of construction and start-up of production of the plant, which is expected to be by the end of 2007. Subsequent to the quarter end, we were notified that CSC has been purchased by CHS, Inc. and our marketing agreement has been assigned to CHS, Inc.

We have also entered into an agreement with Natural Gas Pipeline Company of America for the transportation of natural gas to our plant. Natural Gas Pipeline Company of America will transport the natural gas at an agreed upon rate ranging from $3.0417 to $3.1177 per Dth/month, for up to 4,400 Dth/day, as specified in the agreement. Our service will begin in September of 2007 and will continue for ten years thereafter. We intend to purchase our natural gas from a number of different venders on an as needed basis once we begin production.

Permitting and Regulatory Activities

We are subject to extensive air, water and other environmental regulations and we will need to construct and operate our plant in accordance with a number of environmental permits. As of the date of this report, we have obtained all of the necessary environmental permits to construct our plant from the NDEQ. We will be required to obtain additional permits prior to start-up of our operations. We engaged ICM, Inc. to coordinate and assist us with obtaining certain environmental permits, and to advise us on general environmental compliance. We retained Olsson Associates to obtain our National Pollutant Discharge Elimination System (“NPDES”) permits.

Even though we have received all required permits from the State of Nebraska to construct our ethanol plant, we will be required to obtain additional operational permits as we approach substantial completion of our plant. We may also be subject to regulatory oversight from the EPA. Currently, the EPA’s statutes and rules do not require us to obtain separate EPA approval in connection with the construction and operation of the proposed plant. Nebraska is authorized to enforce the EPA’s federal emissions program. However, the EPA does retain authority to take action if it decides that Nebraska is not correctly enforcing its emissions program. Additionally, environmental laws and regulations, both at the federal and state level, are subject to change, and changes can be made retroactively. Consequently, even though we have the proper permits at the present time, we may be required to invest or spend considerable resources to comply with future environmental regulations or new or modified interpretations of those regulations to the detriment of our financial performance.

Environmental Permits Obtained as of the Date of this Report

• Minor construction permit for air emissions

• State Archeological and Endangered Species Research and approval from the United States Department of Interior, Fish and Wildlife Service

• Above Ground Storage Tank Permit

• Waste Water National Pollutant Discharge Elimination System Permits (NPDES Permit)

• Industrial Storm Water Discharge Permit and Storm Water Pollution Prevention Program (General NPDES Permits)

Environmental Permits and Plans to be in Place Prior to the Start of Operations

• Spill Prevention, Control, and Countermeasures Plan

• Risk Management Plan

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• Alcohol Fuel Producer’s Permit

• Hydrostatic Testing Water Discharge Permit

• Public Water Supply Permit

There are a number of additional environmental standards which may effect the construction and operation of the plant going forward. The Prevention of Significant Deterioration (“PSD”) regulation creates more stringent and complicated permit review procedures for construction permits. It is possible, but not expected, that the plant may exceed applicable PSD levels for NOx, CO, and VOCs. The plant will also be subject to New Source Performance Standards for both the plant’s distillation processes and the storage of volatile organic compounds used in the denaturing process. These duties include initial notification, emissions limits, compliance, monitoring requirements, and record keeping requirements. Even if we receive all Nebraska environmental permits for our plant, we will also be subject to oversight activities by the EPA. There is always a risk that the EPA may enforce certain rules and regulations differently than Nebraska’s environmental administrators. Nebraska or EPA rules and regulations are subject to change, and any such changes may result in greater regulatory burdens.

Trends and Uncertainties Impacting the Ethanol Industry and Our Future Operations

If we are able to complete construction of the plant and begin operations, we will be subject to industry-wide factors that affect our operating and financial performance. These factors include, but are not limited to, the available supply and cost of corn from which our ethanol and distillers grains will be processed; the cost of natural gas, which we will use in the production process; dependence on our ethanol marketer and distillers grains marketer to market and distribute our products; the intensely competitive nature of the ethanol industry; possible changes in legislation at the federal, state and/or local level; possible changes in federal ethanol tax incentives and the cost of complying with extensive environmental laws that regulate our industry.

We expect ethanol sales to constitute the bulk of our future revenues. Ethanol prices have been much higher than their 10 year average, but are experiencing a recent decline and our profit margins may not be as high as they have been in the industry over the past few years once we are operational. A number of factors have contributed to the decline in the price of ethanol, including but not limited to the increased price of corn. In addition, the total domestic production of ethanol is at an all time high, and the ethanol supply is expected to exceed current demand projections by the end of 2007. A greater supply of ethanol on the market from other plants could reduce the price we are able to charge for our ethanol. This would have a negative impact on our future revenues once we become operational. There also exists the potential for a “blend wall problem”, if the expanded ethanol production exceeds the capacity for blending such ethanol into gasoline. Thus, due to the anticipated increase in the supply of ethanol from new ethanol plants scheduled to begin production and the expansion of current plants, we believe current price levels will continue to be subject to downward pressure.

The direct competition of local ethanol plants could significantly affect our ability to operate profitably. A greater supply of ethanol on the market from other plants could reduce the price we are able to charge for our ethanol. This would have a negative impact on our future revenues once we become operational. Our ability to commence operations as quickly as possible will have a significant impact on our ability to be successful.

In order to sustain the ethanol market, the demand for ethanol must meet the current increase in supply. Increased gasoline prices, firm crude oil and gas markets, Federal and State legislative support, a positive political environment and increased consumer acceptance and exposure to ethanol would have a positive impact on the demand for ethanol and we would expect such increased demand to have a positive impact on our ability to operate profitably. For instance, if gasoline prices continue to trend higher, consumers will look for lower priced alternative fuels. Since ethanol blended fuel is currently a cheaper alternative for consumers, the demand for such ethanol blended fuel could increase, thus increasing the overall demand for ethanol. This could positively affect our earnings. However, a greater supply of ethanol on the market from additional plants and plant expansions could reduce the price we are able to charge for our ethanol, especially if supply outpaces demand.

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Demand for ethanol may also increase as a result of consumption of E85 fuel. E85 is a blend of 70% to 85% ethanol and gasoline. According to the Energy Information Administration, E85 consumption is projected to increase from a national total of 11 million gallons in 2003 to 47 million gallons in 2025. E85 is used as an aviation fuel and as a hydrogen source for fuel cells. In the United States, there are currently about 6 million flexible fuel vehicles capable of operating on E85 and approximately 1,244 retail stations supplying it. Automakers have indicated plans to produce an estimated 4 million more flexible fuel vehicles per year.

Consumer resistance to the use of ethanol may affect the demand for ethanol, which could affect our ability to operate profitably and may negatively impact the value of your investment. Some individuals believe that use of ethanol has a negative impact on prices at the pump or that it reduces fuel efficiency to such an extent that it costs more to use ethanol than it does to use gasoline. Many also believe that ethanol adds to air pollution and harms car and truck engines. Still other consumers believe that the process of producing ethanol actually uses more fossil energy, such as oil and natural gas, than the amount of energy contained in the ethanol produced. These consumer beliefs could potentially be wide-spread. If consumers choose not to buy ethanol, it would affect the demand for the ethanol we produce which could also negatively affect our ability to sell our product and our profitability.

The support for and use of ethanol and ethanol-blended fuel has been and will continue to be supported by Federal and State legislation. The Energy Policy Act of 2005 includes various provisions that are expected to favorably impact the ethanol industry by enhancing both the production and use of ethanol. It created a 7.5 billion gallon renewable fuels standard (RFS). The RFS is a national flexible program that promotes ethanol production while allowing refiners to use renewable fuel blends in those areas where it is most cost-effective rather than setting requirements for ethanol use in any particular area or state. The RFS began at 4 billion gallons in 2006, and increases to 7.5 billion gallons by 2012. According to the Renewable Fuels Association, as of August 1, 2007, there were 124 operational ethanol plants nationwide that have the capacity to produce approximately 6.48 billion gallons annually. Thus, current ethanol production capacity exceeds the 2007 RFS requirement of 4.7 billion gallons. This could lead to a short-term oversupply. However, U.S. production of ethanol in 2006 also exceeded the RFS requirement of 4 billion gallons, as total U.S. production for 2006 was approximately 4.8 billion gallons. However, according to the Renewable Fuels Association, the demand for ethanol in 2006 was approximately 5.3 billion gallons, which would indicate that demand for ethanol remains strong. That being said, ethanol production capacity for 2007 is expected to increase significantly due to a number of plants coming on line or expanding their production capacity. Thus, we believe current price levels are subject to downward pressure. This could have an adverse effect on our future earnings.

There has been recent Congressional activity in both the Senate and the House of Representatives to accelerate the current RFS and provide additional incentives for the use of alternative fuels. The BioFuels Security Act, known as S. 23 or H.R. 559, was reintroduced on January 4, 2007, by sponsors Tom Harkin, Richard Luger, and others. If passed, the legislation would accelerate the current renewable fuels standard by requiring 10 billion gallons of renewable fuels to be used by 2010, 30 billion gallons by 2020 and 60 billion gallons by 2030. Other provisions would require additional E85 pumps at branded gasoline stations, increased use of alternative fuels in the federal fleet and an increase in the percentage of flex fuel vehicles produced. The Senate bill (S. 23) has been referred to the Senate Committee on Commerce, Science and Transportation and the corresponding bill in the House of Representatives (H.R. 559) has been referred to the Subcommittee on Government Management, Organization and Procurement. This legislation has not been signed into law, and there is no certainty that they will be passed. In addition, there is no certainty that these pieces of legislation, if passed, would provide any benefit to us or to the industry as a whole.

The Energy Policy Act of 2005 also amended the definition of “small ethanol producer” to increase the size of the plant eligible for the small producer tax credit from 30 million gallons per year to 60 million gallons per year. Small ethanol producers are allowed a 10-cent per gallon production income tax credit on up to 15 million gallons of production annually. The tax credit is capped at $1.5 million per year per producer. The credit is effective for taxable years ending after the date of enactment through 2010. Since we expect to now qualify as a small ethanol producer under the Act, we expect to be eligible for this tax credit this taxable year and to pass this credit on to our members.

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The Energy Policy Act of 2005 also created a new credit that permits taxpayers to claim a 30% credit (up to $30,000) for the cost of installing clean-fuel vehicle refueling equipment, such as an E85 fuel pump, to be used in a trade or business of the taxpayer or installed at the principal residence of the taxpayer. Under the provision, clean fuels are any fuel, at least 85% of the volume of which consists of ethanol, natural gas, compressed natural gas, liquefied natural gas, liquefied petroleum gas, or hydrogen and any mixture of diesel fuel and biodiesel containing at least 20% biodiesel. The provision is effective for equipment placed in service after December 31, 2005, and before January 1, 2010. While it is unclear how this credit will affect the demand for ethanol in the short term, we expect it will help raise consumer awareness of alternative sources of fuel and could positively impact future demand for ethanol.

Ethanol production is also expanding internationally. Imported ethanol is generally subject to a $0.54 per gallon tariff that was designed to offset the $0.51 per gallon ethanol incentive available under the federal excise tax program for refineries that blend ethanol in their fuel. There is, however, a special exemption from this tariff under a program known as the Caribbean Basin Initiative for ethanol imported from 24 countries in Central America and the Caribbean Islands, which is limited to a total of 7% of U.S. ethanol production per year. Imports from the exempted countries may increase as a result of new plants in development. Since production costs for ethanol in these countries are significantly less than what they are in the U.S., the duty-free import of ethanol through the countries exempted from the tariff may negatively affect the demand for domestic ethanol and the price at which we sell our ethanol.

The United States Supreme Court recently held in the case of Massachusetts v. EPA , that the EPA has a duty under § 202 of the Clean Air Act to regulate the level of emissions of the four main “greenhouse gases”, including carbon dioxide, from new motor vehicles. Other similar lawsuits have been filed seeking to require the EPA to regulate the level of carbon dioxide emissions from stationary sources, such as ethanol plants. If these lawsuits are successful, our cost of complying with new or changing environmental regulations may increase in the future.

Technology Developments

Ethanol is typically produced from the starch contained in grains, such as corn. However, ethanol can potentially be produced from cellulose, the main component of plant cell walls and the most common organic compound on earth. The main attraction towards cellulosic ethanol is based on the idea that the products used to make it are less expensive than corn. However, the downfall is that the technology and equipment needed to convert such products into ethanol are more complicated and more expensive than the technology currently used for the production of corn based ethanol. Recently, there has been an increased interest in cellulosic ethanol due to the relatively low maximum production capacity of corn-based ethanol. The products used to produce cellulosic ethanol exist in a far greater quantity than corn, and therefore cellulosic ethanol production may be an important aspect of expanding ethanol production capacity. Recognizing this need, Congress supplied large monetary incentives in the Energy Policy Act of 2005 to help initiate the creation of cellulosic ethanol plants in the United States. If such cellulosic ethanol plants are constructed and begin production on a commercial scale, the production of potentially lower-cost cellulosic ethanol may hinder our ability to compete effectively.

Trends and Uncertainties Impacting the Corn and Natural Gas Markets and Our Future Cost of Goods Sold

We expect our future cost of goods sold will consist primarily of costs relating to the corn and natural gas supplies necessary to produce ethanol and distillers grains for sale. We anticipate that the cost of corn will be the largest cost of producing our ethanol, consisting of between 60% and 70% of our total cost of production, followed by natural gas as the second largest cost of producing our ethanol.

The increased production of ethanol has placed upward pressure on the price and supply of corn, resulting in higher than normal corn prices. The spread between petroleum prices and corn prices has narrowed, which has reduced ethanol plant profit margins from the levels reached during 2006. However, the rise in corn prices has motivated farmers to plant additional acres of corn in 2007, which has helped to offset the upward pressure on the price of corn in the short-term. According to a July 12, 2007 report released by the United States Department of Agriculture, corn growers planted approximately 92.9 million of acres of corn in 2007, which is up 19% from 2006. Current market trends show that U.S. corn prices are currently averaging about $3.41 per bushel, and may be slightly lower for fall 2007 than the previous quarter. However, some local crops in our area are being negatively impacted by drought. The result is that national trends could lead to lower corn prices, but these could be partially offset by negative local conditions.

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Generally, higher corn prices will produce lower profit margins. There is no assurance that a shortage will not develop, particularly with other area ethanol plants competing for corn, an extended drought or other production problems. Because the market price of ethanol is not related to grain prices, ethanol producers are generally not able to compensate for increases in the cost of grain feedstock through adjustments in prices charged for their ethanol. We, therefore, anticipate that our plant’s profitability will be negatively impacted during periods of high corn prices. However, we are building additional grain storage silos on our site, which will enable us to increase the percentage of corn purchased directly from local producers rather than purchasing through the commercial industry. This will lower our costs for corn procurement and we also expect that our usage of local producer corn will yield more gallons of ethanol per bushel due to fewer quality concerns with producer corn.

We have hired a Commodities Manager to ensure the consistent scheduling of corn deliveries and to establish and fill forward contracts. The Commodities Manager will utilize forward contracting and hedging strategies, including certain derivative instruments such as futures and option contracts, to manage our commodity risk exposure and optimize finished product pricing on our behalf. We anticipate that most of our grain will be acquired in this manner. Forward contracts allow us to purchase corn for future delivery at fixed prices without using the futures market. The corn futures market allows us to trade in standard units of corn for delivery at specific times in the future. Option contracts consist of call options (options to purchase a fixed amount of a commodity) and put options (options to sell a fixed amount of a commodity). We expect to use a combination of these derivative instruments in our hedging strategies to help guard against corn price volatility. Hedging means protecting the price at which we buy corn and the price at which we will sell our products in the future. It is a way to attempt to reduce the risk caused by price fluctuation. The effectiveness of such hedging activities will depend on, among other things, the cost of corn and our ability to sell enough ethanol and distillers grains to use all of the corn subject to futures and option contracts we have purchased as part of our hedging strategy. Although we will attempt to link hedging activities to sales plans and pricing activities, such hedging activities themselves can result in additional costs because price movements in corn contracts are highly volatile and are influenced by many factors that are beyond our control. We may incur such costs and they may be significant.

Natural gas is also an important input commodity to our manufacturing process. We estimate that our natural gas usage will be approximately 10% to 15% of our annual total production cost. We will use natural gas to (a) operate a boiler that provides steam used in the production process, (b) operate the thermal oxidizer that will help us comply with emissions requirements, and (c) dry our distillers grain products to moisture contents at which they can be stored for long periods of time, and can be transported greater distances. Recently, the price of natural gas has risen along with other energy sources. Natural gas prices are considerably higher than the 10-year average. Global demand for natural gas is expected to continue to increase, further driving up prices. As a result, we expect natural gas prices to remain higher than average in the short to mid-term. Increases in the price of natural gas will increase our cost of production and may negatively impact our future profit margins.

Operating Expenses

As the ethanol plant nears completion, we expect to incur various operating expenses, such as supplies, utilities and salaries for administration and production personnel. Along with operating expenses, we anticipate that we will have significant expenses relating to financing and interest. We have allocated funds in our budget for these expenses, but cannot assure that the funds allocated will be sufficient to cover these expenses. We may need additional funding to cover these costs if sufficient funds are not available or if costs are higher than expected.

Liquidity and Capital Resources

Estimated Sources of Funds

The following schedule sets forth our current sources of funds to capitalize the construction and start-up of operations of the ethanol plant to be located near Adams, Nebraska. See Project Capitalization under the section entitled “Management’s Discussion and Analysis and Plan of Operations” above.

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			Percent
Sources of Funds		Amount	of total
Offering Proceeds (1)	$	49,390,000		43.34	%
Seed Capital Proceeds (2)	$	970,000		0.85	%
Senior Debt Financing (3)	$	49,500,000		43.43	%
Revolving Line of Credit (4)	$	10,000,000		8.77	%
Estimated Tax Increment Financing (5)	$	3,865,000		3.40	%
Interest on Escrow (6)		244,000		0.21	%
Total Sources of Funds	$	113,969,000		100.00	%

(1)	We received funds from investors for approximately $49,390,000.
(2)	We have issued a total of 194 units to our seed capital investors at a price of $5,000 per unit in our private placement in exchange for proceeds of $970,000.
(3)	We currently have entered into a definitive loan agreement with a senior lender for debt financing in the amount of $49,500,000.
(4)	In addition to our debt financing of $49,500,000, we also have a $10,000,000 revolving line of credit with our senior lender.
(5)	We have entered into a First Amended and Restated Redevelopment Contract with the Village of Adams for the redevelopment of our plant site. The Village has issued TIF indebtedness in the amount of $5,035,000 (of which $3,865,000 was received in proceeds) to assist the Company in the costs of redeveloping the site.
(6)	We earned approximately $244,000 in interest on our escrow account containing the offering proceeds prior to their release from escrow.

Estimated Use of Proceeds

We expect the project to cost approximately $103,100,000 to complete. The following table reflects our estimate of costs and expenditures for the ethanol plant we are building near Adams, Nebraska. These estimates are based on discussions with Fagen, Inc., ICM Inc., our lenders and management research. The following figures are intended to be estimates only, and the actual use of funds may vary significantly from the descriptions given below due to a variety of factors described elsewhere in this report. As the project progresses, any material changes will be reflected in a new budget.

				Percent
Use of Proceeds	Amount			of Total
Plant construction	$	65,900,000	(1)		63.92	%
Road and ditch construction costs		750,000			0.73	%
Land cost		1,100,000			1.06	%
Site development costs		5,278,000			5.12	%
Construction contingency		3,600,000			3.50	%
Construction performance bond		500,000			0.48	%
Construction insurance costs		120,000			0.12	%
Administrative building		400,000			0.39	%
Office equipment		75,000			0.07	%
Computers, Software, Network		150,000			0.15	%
Rail infrastructure		3,594,750			3.49	%
Rolling stock		515,000			0.50	%
Fire Protection / Water Supply		3,180,000			3.08	%
Water treatment system		1,500,000			1.45	%
Capitalized interest		2,000,000			1.94	%
Facility for Additional Grain Storage		3,000,000			2.91	%

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Start up costs:
Financing costs		506,250	0.49	%
Organization costs		1,300,000	1.26	%
Pre production period costs		1,345,000	1.30	%
Inventory — working capital		3,000,000	2.91	%
Inventory — corn		2,000,000	1.94	%
Inventory — chemicals and ingredients		150,000	0.15	%
Inventory — work in process — Ethanol		1,500,000	1.45	%
Inventory — work in process — DDGS		500,000	0.48	%
Inventory spare parts — process equipment		750,000	0.73	%
Operating costs:
Office labor, expense and equipment		165,000	0.16	%
Telephone, Internet, Postage service		25,500	0.03	%
Directors Expense		30,000	0.03	%
Payroll Tax		17,000	0.02	%
Accounting and Legal Fees		55,000	0.05	%
Insurance— D & O and Operations		70,000	0.07	%
Miscellaneous		23,500	0.02	%
Total	$	103,100,000	100.00	%

(1) Our original Contract Price with Fagen, Inc. was approximately $65,900,000. This was increased in October, 2006, to approximately $67,500,000, based on the increase in the Construction Cost Index (“CCI”) as of October 2006 compared to our baseline index as of April 2006. Subsequent to the increase based on the CCI, the Contract Price has been increased to approximately $67,860,000 due to change orders agreed to by both Fagen, Inc. and E Energy Adams. We anticipate that our Construction Contingency will cover the increase to the Contract Price.

Quarterly Financial Results for Fiscal Quarter Ended June 30, 2007

As of June 30, 2007, we have total assets of approximately $76,917,000 consisting primarily of cash, cash equivalents, land and construction in progress. We have current liabilities of approximately $16,163,000 consisting primarily of construction and retainage payable. Total long-term liabilities as of June 30, 2007 were approximately $13,398,000. Total members’ equity as of June 30, 2007, was approximately $47,356,000. Since our inception, we have generated no revenue from operations. For the three months ended June 30, 2007, we had a net loss of approximately $644,000. This net loss includes a loss on derivative instruments of approximately $287,000. While the plant has not yet begun production, we are currently entering into derivative instruments for hedging purposes for the corn supply for our plant as we near our anticipated start-up date. For the period from inception to June 30, 2007, we had a net loss of approximately $2,601,000, primarily due to start-up business costs.

Derivative Instruments

In order to reduce risk caused by market fluctuations, we hedge our anticipated corn purchases by entering into futures contracts. These contracts are used with the intention to fix the purchase price of our anticipated requirements of corn in production activities. The fair value of these contracts is based on quoted prices in active exchange-traded or over-the-counter markets. The fair value of derivatives is continually subject to change due to changing market conditions. We do not formally designate these instruments as hedges and, therefore, records in earnings adjustments caused from marking these instruments to market on a monthly basis.

As of June 30, 2007, we had recorded restricted cash, related to derivative instruments, of approximately $2,285,000 and a corresponding liability related to corn options and future positions of approximately $1,683,000. We have recorded a combined loss of approximately $1,547,000, which includes a realized gain of approximately $136,000 and an unrealized loss of approximately $1,683,000, for the nine month period ended June 30, 2007.

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Employees

Prior to commencement of operations, we intend to hire approximately 40 full-time employees. Approximately sixteen of our employees will be involved primarily in management and administration and the remainder will be involved primarily in plant operations.

The following table sets forth the anticipated positions within the plant and whether the particular positions are currently filled.

	# Full-Time
	Expected		# Positions
Position	Personnel		Filled
CEO		1		1
CFO		1
Plant Manager		1		1
Commodities Manager		1		1
Production Manager		1		1
EHS Manager		1		1
Human Resource Manager		1		1
Purchasing Agent/Planner Scheduler		1
Accounting/Clerical		4		3
Lab Manager		1		1
Lab Technician		1
Maintenance Manager		1		1
Maintenance Technicians		3
Material Handlers		2
Commodity Department Staff		4		4
Plant Operators/Shift Supervisors		16
TOTAL		40		15

The positions, titles, job responsibilities and number allocated to each position may differ when we begin to employ individuals for each position. As of the date of this report, we have hired 15 employees, including our CEO, Human Resources Manager, Plant Manager, Commodities Manager, Production Manager, Environmental, Health and Safety Manager, Maintenance Manager, four commodities staff personnel and three accounting/clerical staff personnel.

On July 17, 2007, Larry G. Brees tendered his resignation as Chief Financial Officer, effective as of July 17, 2007. We agreed to the terms of a severance agreement under which Mr. Brees received consideration of $15,834. In addition, Mr. Brees received $1,977 to cover approximate costs of health and dental insurance coverage for two months. The confidentiality, non-competition, and non-solicitation provisions in Mr. Brees’ pre-existing employment agreement are to remain in full force and effect.

Off Balance Sheet Arrangements

We currently have no off-balance sheet arrangements.

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Item 3. Controls and Procedures

Our management, including our Chief Executive Officer (the principal executive officer), Carl D. Sitzmann, along with our Treasurer (the principal financial and accounting officer), Nicholas J. Cusick, have reviewed and evaluated the effectiveness of our disclosure controls and procedures as of June 30, 2007. Based upon this review and evaluation, these officers believe that our disclosure controls and procedures are effective in ensuring that material information related to us is recorded, processed, summarized and reported within the time periods required by the forms and rules of the Securities and Exchange Commission.

Our management, consisting of our Chief Executive Officer and our Treasurer, have reviewed and evaluated any changes in our internal control over financial reporting that occurred as of June 30, 2007, and there has been no change that has materially affected or is reasonably likely to materially affect our internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

None.

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

During the time period beginning with E Energy Adams’ formation on March 25, 2005 and ending on May 31, 2005, we raised $970,000 in seed capital through a private placement. We issued a total of 194 units to our seed capital investors at a price of $5,000 per unit. Our seed capital private placement was made directly by us without use of an underwriter or placement agent and without payment of commissions or other remuneration.

Our private placement was made under the registration exemption provided for in Section 4(2) of the Securities Act and Rule 504 of Regulation D. With respect to the exemption, neither we, nor any person acting on our behalf, offered or sold the securities by means of any form of general solicitation or advertising. Prior to making any offer or sale, we had reasonable grounds to believe and believed that each prospective investor was capable of evaluating the merits and risks of the investment and were able to bear the economic risk of the investment. Each purchaser represented in writing that the securities were being acquired for investment for such purchaser’s own account and agreed that the securities would not be sold without registration under the Securities Act or exemption therefrom. Each purchaser agreed that a legend was placed on each certificate evidencing the securities stating the securities have not been registered under the Securities Act and setting forth restrictions on their transferability.

We filed a Registration Statement for an initial public offering of our units with the Securities and Exchange Commission on Form SB-2 (SEC Registration No. 333-128902), which was declared effective on May 15, 2006. We commenced our initial public offering of our units shortly thereafter. Certain of our officers and directors offered and sold the units on a best efforts basis without the assistance of an underwriter. We did not pay these officers or directors any compensation for services related to the offer or sale of the units.

We registered a total of 5,810 units at $10,000 per unit for an aggregate maximum gross offering price of $58,100,000. As of the date of this report, we have issued 4,939 units, for an aggregate amount of $49,390,000. Our units are subject to transfer restrictions under our operating agreement and by applicable tax and securities laws. Except for transfers in limited circumstances, such as a transfer made without consideration to or in trust for an investor’s descendants or spouse or involuntary transfers by operation of law, members will not be able to transfers their units prior to the time that our ethanol plant is substantially operational. Once we begin substantial operations, transfers will still be subject to approval by our board and must be made in compliance with applicable tax and securities laws. As a result, investors will not be able to easily liquidate their investment in our company. Pursuant to our prospectus, all subscription payments from the offering were deposited in an escrow account. On August 11, 2006, we met the conditions to breaking escrow and received our offering proceeds at that time. We closed the offering on February 23, 2007.

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The following is a breakdown of units registered and units sold in the offering as of June 30, 2007:

	Aggregate price		Aggregate price
Amount	of the amount		of the amount
Registered	registered	Amount Sold	sold
5,800	$58,000,000	4,939	$49,390,000

Our total expense related to the registration and issuance of these units was approximately $402,600, which was netted against the offering proceeds when the units were issued and the offering proceeds were released from escrow in August 2006. All of these expenses were direct or indirect payments to unrelated parties. Our net offering proceeds, including the $970,000 we raised in seed capital, after deduction of expenses were approximately $49,957,000. The following table describes our approximate use of net offering proceeds from the date of effectiveness of our registration statement (May 15, 2006) through our quarter ended June 30, 2007:

Plant Construction(1)	$	45,279,000
Financing Costs(2)	$	424,000
Real Estate Purchases and Land Improvements(3)	$	1,438,000
Repayment of Indebtedness(4)	$	2,000,000
Other Expenses(5)	$	816,000
Total	$	49,957,000

(1)	This includes approximate expenses incurred as of June 30, 2007 for plant construction, rail infrastructure construction, and natural gas pipeline construction and maintenance and other miscellaneous equipment and construction costs.
(2)	We incurred approximately $424,000 in a bank commitment fee for our senior debt financing and TIF funds.
(3)	We have paid approximately $1,438,000 to purchase and improve the real estate for our plant site.
(4)	We incurred approximately $2,000,000 for the repayment of our bridge loan.
(5)	This includes payments to directors Bill Riechers and Jack Alderman, and former director Everett Larson pursuant to consulting agreements entered into between the forgoing individuals and E Energy Adams.

All of the foregoing payments were direct or indirect payments to persons or entities other than our directors, officers, or unit holders owning 10% or more of our units, except for the payments to Bill Riechers, Jack Alderman and Everett Larson.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Submission of Matters to a Vote of Security Holders

None.

Item 5. Other Information

None.

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Item 6. Exhibits

The following exhibits are incorporated by reference in this report:

Exhibit			Method of
No.		Description	Filing
	10.25	First Amended and Restated Redevelopment Agreement between E Energy Adams, LLC and the Village of Adams dated May 29, 2007	*
	10.26	Loan Agreement between E Energy Adams, LLC and Security First Bank dated June 29, 2007	*
	31.1	Certificate pursuant to 17 CFR 240 15d-14(a)	*
	31.2	Certificate pursuant to 17 CFR 240 15d-14(a)	*
	32.1	Certificate pursuant to 18 U.S.C. Section 1350	*
	32.2	Certificate pursuant to 18 U.S.C. Section 1350	*

(*) Filed herewith.

SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	E ENERGY ADAMS, LLC
Date: August 14, 2007	/s/ Carl D. Sitzmann
	Carl D. Sitzmann
	Chief Executive Officer
Date: August 14, 2007	/s/ Nicholas J. Cusick
	Nicholas J. Cusick
	Treasurer and Director (Principal Financial Officer)

29

EX-10.25

Exhibit 10.25

FIRST AMENDED AND RESTATED
REDEVELOPMENT CONTRACT

By

THE VILLAGE OF ADAMS, NEBRASKA

and

E ENERGY ADAMS, LLC.

May 29, 2007

TABLE OF CONTENTS

	Page
PARTIES		1
RECITALS		1
ARTICLE I DEFINITIONS AND INTERPRETATION
Section 1.01 Terms Defined in this Redevelopment Contract		2
Section 1.02 Construction and Interpretation		4
ARTICLE II REPRESENTATIONS
Section 2.01 Representations by Village		5
Section 2.02 Representations of Redeveloper		6
ARTICLE III OBLIGATIONS OF THE VILLAGE
Section 3.01 Division of Taxes		8
Section 3.02 Issuance of TIF Indebtedness		9
Section 3.03 Pledge of TIF Revenues		9
Section 3.04 Grant of Proceeds of Bonds		9
Section 3.05 Creation of Fund		10
ARTICLE IV OBLIGATIONS OF REDEVELOPER
Section 4.01 Construction of Project; Insurance		10
Section 4.02 Cost Certification		11
Section 4.03 Redeveloper to Operate Project		11
Section 4.04 No Discrimination		11
Section 4.05 Pay Real Estate Taxes		12
Section 4.06 Payment in Lieu of Taxes		12
Section 4.07 No Assignment or Conveyance		13

	Page
ARTICLE V FINANCING REDEVELOPMENT PROJECT; ENCUMBRANCES
Section 5.01 Financing		14
Section 5.02 Encumbrances		14
ARTICLE VI DEFAULT, REMEDIES; INDEMNIFICATION
Section 6.01 General Remedies of Village and Redeveloper		15
Section 6.02 Additional Remedies of Village		15
Section 6.03 Remedies in the Event of Other Redeveloper Defaults		17
Section 6.04 Forced Delay Beyond Party’s Control		17
Section 6.05 Limitation of Liability; Indemnification		18
ARTICLE VII MISCELLANEIOUS
Section 7.01 Notice Recording		19
Section 7.02 Governing Law		19
Section 7.03 Binding Effect; Amendment		19
Execution by the Issuer		S-
Execution by the Redeveloper		S-
Exhibit A — Description of Redevelopment Area
Exhibit B — Description of Project
Exhibit C — TIF Indebtedness
Exhibit D — Project Costs

REDEVELOPMENT CONTRACT

This First Amended and Restated Redevelopment Contract is made and entered into as of the 29th day of May, 2007, by and between the Village of Adams, Nebraska, acting as the Community Development Agency of the Village of Adams, Nebraska (“Village”), and E Energy Adams, LLC, a Nebraska limited liability company (“Redeveloper”).

WITNESSETH:

WHEREAS, the Village of Adams, Nebraska (the “Village”), in furtherance of the purposes and pursuant to the provisions of Section 2 of Article VIII of the Nebraska Constitution and Sections 18-2101 to 18-2154, Reissue Revised Statutes of Nebraska, 1997, as amended (collectively the "Act”), and pursuant to Resolution No. 2006-3 of the Village dated April 10, 2006, has designated an area in the Village as blighted and substandard; and

WHEREAS, pursuant to Section 18-2119 of the Act, the Village has solicited proposals for redevelopment of the blighted and substandard area and Redeveloper submitted a redevelopment contract proposal;

WHEREAS, Village and Redeveloper desire to enter into this Redevelopment Contract for acquisition and redevelopment of a parcel in the blighted and substandard area;

NOW, THEREFORE, in consideration of the Redevelopment Area and the mutual covenants and agreements herein set forth, Village and Redeveloper do hereby covenant, agree and bind themselves as follows:

1

ARTICLE I
DEFINITIONS AND INTERPRETATION

Section 1.01 Terms Defined in this Redevelopment Contract.

Unless the context otherwise requires, the following terms shall have the following meanings for all purposes of this Redevelopment Contract, such definitions to be equally applicable to both the singular and plural forms and masculine, feminine and neuter gender of any of the terms defined:

“Act” means Section 2 of Article VIII of the Nebraska Constitution, Sections 18-2101 through 18-2154, Reissue Revised Statutes of Nebraska, 1997, as amended, and acts amendatory thereof and supplemental thereto.

“Agency” means the Community Development Agency of the Village of Adams, Nebraska.

“Certificate of Completion” means a certificate, executed by a Manager or other duly authorized officer of Redeveloper, representing and warranting that the Project is substantially complete.

“Governing Body” means the Chairman and Board of Trustees of the Village.

“Holder” means the holders of TIF Indebtedness issued by the Village from time to time outstanding.

“Liquidated Damages Amount” means the amounts to be repaid to Village by Redeveloper pursuant to Section 6.02 of this Redevelopment Contract.

“Project” means the improvements to the Redevelopment Area, as further described in Exhibit B attached hereto and incorporated herein by reference and, as used herein, shall include the Redevelopment Area real estate.

2

“Project Cost Certification” means a statement prepared and signed by an independent certified public accountant verifying the payment of Project Costs identified on Exhibit D.

“Project Costs” means only costs or expenses incurred by Redeveloper to acquire, construct and equip the Project pursuant to the Act as identified on Exhibit D.

“Redeveloper” means E Energy Adams, LLC, a Nebraska limited liability company.

“Redevelopment Area” means that certain real property situated in the Village of Adams, Gage County, Nebraska, which has been declared blighted and substandard by the Village pursuant to the Act, and which is more particularly described on Exhibit A attached hereto and incorporated herein by this reference.

“Redevelopment Contract” means this redevelopment contract between the Village and Redeveloper with respect to the Project.

“Redevelopment Plan” means the Redevelopment Plan for the Redevelopment Area as set forth in the Redevelopment Contract, prepared by the Agency and approved by the Village pursuant to the Act, as amended from time to time.

“Resolution” means the Resolution of the Village, as supplemented from time to time, approving this Redevelopment Contract.

“TIF Indebtedness” means any bonds, notes, loans, and advances of money or other indebtedness, including interest and premiums, if any, thereon, incurred by the Village pursuant to Article III hereof and secured in whole or in part by TIF Revenues.

“TIF Revenues” means incremental ad valorem taxes generated by the Project which are allocated to and paid to the Village pursuant to the Act.

“Village” means the Village of Adams, Nebraska.

3

Section 1.02 Construction and Interpretation.

The provisions of this Redevelopment Contract shall be construed and interpreted in accordance with the following provisions:

(a) Wherever in this Redevelopment Contract it is provided that any person may do or perform any act or thing the word “may” shall be deemed permissive and not mandatory and it shall be construed that such person shall have the right, but shall not be obligated, to do and perform any such act or thing.

(b) The phrase “at any time” shall be construed as meaning “at any time or from time to time.”

(c) The word “including” shall be construed as meaning “Including, but not limited to.”

(d) The words “will” and “shall” shall each be construed as mandatory.

(e) The words “herein,” “hereof,” “hereunder,” “hereinafter” and words of similar import shall refer to the Redevelopment Contract as a whole rather than to any particular paragraph, section or subsection, unless the context specifically refers thereto.

(f) Forms of words in the singular, plural, masculine, feminine or neuter shall be construed to include the other forms as the context may require.

(g) The captions to the sections of this Redevelopment Contract are for convenience only and shall not be deemed part of the text of the respective sections and shall not vary by implication or otherwise any of the provisions hereof.

4

ARTICLE II
REPRESENTATIONS

Section 2.01 Representations by Village.

The Village makes the following representations and findings:

(a) The Agency is a duly organized and validly existing community development agency under the Act.

(b) The Redevelopment Plan has been duly approved and adopted by the Village pursuant to Section 18-2109 through 18-2117 of the Act.

(c) The Village has requested proposals for redevelopment of the Redevelopment Area pursuant to section 18-2119 of the Act, and deems it to be in the public interest and in furtherance of the purposes of the Act to accept the proposal submitted by Redeveloper as specified herein.

(d) The Redevelopment Project will achieve the public purposes of the Act by, among other things, increasing employment, improving public infrastructure, increasing the tax base, and lessening conditions of blight and substandard in the Redevelopment Area.

(e) (1) The Redevelopment Plan is feasible and in conformity with the general plan for the development of the Village as a whole and the plan is in conformity with the legislative declarations and determinations set forth in the Act, and

(2) (i) the Project would not be economically feasible without the use of tax-increment financing,

(ii) the Project would not occur in the Redevelopment Area without the use of tax-increment financing, and

5

(iii) the costs and benefits of the Project, including costs and benefits to other affected political subdivisions, the economy of the community, and the demand for public and private services have been analyzed by the Village and have been found to be in the long-term best interest of the community impacted by the Project.

(f) The Village has determined that the proposed land uses and building requirements in the Redevelopment Area are designed with the general purpose of accomplishing, in conformance with the general plan, a coordinated, adjusted, and harmonious development of the Village and its environs which will, in accordance with present and future needs, promote health, safety, morals, order, convenience, prosperity, and the general welfare, as well as efficiency and economy in the process of development; including, among other things, adequate provision for traffic, vehicular parking, the promotion of safety from fire, panic, and other dangers, adequate provision for light and air, the promotion of the healthful and convenient distribution of population, the provision of adequate transportation, water, sewerage, and other public utilities, schools, parks, recreational and community facilities, and other public requirements, the promotion of sound design and arrangement, the wise and efficient expenditure of public funds, and the prevention of the recurrence of insanitary or unsafe dwelling accommodations, or conditions of blight.

Section 2.02 Representations of Redeveloper.

The Redeveloper makes the following representations:

(a) The Redeveloper is a Nebraska limited liability company, having the power to enter into this Redevelopment Contract and perform all obligations contained herein and by proper action has been duly authorized to execute and deliver this Redevelopment Contract.

6

(b) The execution and delivery of the Redevelopment Contract and the consummation of the transactions therein contemplated will not conflict with or constitute a breach of or default under any bond, debenture, note or other evidence of indebtedness or any contract, loan agreement or lease to which Redeveloper is a party or by which it is bound, or result in the creation or imposition of any lien, charge or encumbrance of any nature upon any of the property or assets of the Redeveloper contrary to the terms of any instrument or agreement.

(c) There is no litigation pending or to the best of its knowledge threatened against Redeveloper affecting its ability to carry out the acquisition, construction, equipping and furnishing of the Project or the carrying into effect of this Redevelopment Contract or, except as disclosed in writing to the Village, as to any other matter materially affecting the ability of Redeveloper to perform its obligations hereunder.

(d) Any financial statements of the Redeveloper or its Members delivered to the Village prior to the date hereof are true and correct in all respects and fairly present the financial condition of the Redeveloper and the Project as of the dates thereof; no materially adverse change has occurred in the financial condition reflected therein since the respective dates thereof; and no additional borrowings have been made by the Redeveloper since the date thereof except in the ordinary course of business, other than the borrowing contemplated hereby or borrowings disclosed to or approved by the Village.

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ARTICLE III
OBLIGATIONS OF THE VILLAGE

Section 3.01 Division of Taxes.

In accordance with Section 18-2147 of the Act, the Village hereby provides that any ad valorem tax on real property in the Project for the benefit of any public body be divided for a period of fifteen years after the effective date of this provision as set forth in this section. The effective date of this provision shall be January 1, 2007.

(a) That proportion of the ad valorem tax which is produced by levy at the rate fixed each year by or for each public body upon the Redevelopment Project Valuation (as defined in the Act) shall be paid into the funds of each such public body in the same proportion as all other taxes collected by or for the bodies; and

(b) That proportion of the ad valorem tax on real property in the Redevelopment Area in excess of such amount, if any, shall be allocated to, is pledged to, and, when collected, paid into a special fund of the Village to pay the principal of, the interest on, and any premiums due in connection with the bonds, loans, notes or advances of money to, or indebtedness incurred by, whether funded, refunded, assumed, or otherwise, such Village for financing or refinancing, in whole or in part, such Project. When such bonds, loans, notes, advances of money, or indebtedness, including interest and premium due have been paid, the Village shall so notify the County Assessor and County Treasurer and all ad valorem taxes upon real property in such Project shall be paid into the funds of the respective public bodies.

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Section 3.02 Issuance of TIP indebtedness.

Village shall incur TIF Indebtedness in the form and principal amount and bearing interest and being subject to such terms and conditions as are specified on the attached Exhibit C.

No TIF Indebtedness will be issued until Redeveloper has (a) acquired fee title to the Redevelopment Area; (b) obtained financing commitments as described in Section 5.01; (c) obtained approvals necessary for construction of the Project from the Nebraska Department of Environmental Quality; and (d) entered into a contract for construction of the Project. The Village shall have no obligation to find a lender or investor to acquire the TIF Indebtedness, but rather shall issue the TIF Indebtedness to or to the order of Redeveloper upon payment of the principal amount thereof. The Village may (but is not obligated to), from time to time and subject to the provisions of the Act, issue additional TIF Indebtedness secured by the TIF Revenues for the purpose of funding additional Project Costs, if projected TIF Revenues are projected to be sufficient to pay principal and interest on such additional TIF Indebtedness. Section 3.03 Pledge of TIF Revenues.

The Village hereby pledges the TIF Revenues as security for the TIF Indebtedness. Section 3.04

Section 3.04 Grant of Proceeds of Bonds.

The Village will grant to Redeveloper the proceeds of the TIF Indebtedness incurred as described on Exhibit C. An amount equal to interest payable on such TIF Indebtedness prior to projected receipt of TIF Revenues shall be retained by the Village and applied for such purpose or, at the option of the Village, deposited in a reserve fund of Redeveloper to be applied for such purpose.

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Notwithstanding the foregoing, the amount of the grant shall not exceed the amount of Project Costs certified pursuant to Section 4.02. The grant shall be paid to the Redeveloper upon receipt of requisitions for Project Costs which include supporting documentation requested by Village and shall, if requested by Redeveloper, be made in one or more advances.

Section 3.05 Creation of Fund.

The Village will create a special fund to collect and hold the TIF Revenues. Such special fund shall be used for no purpose other than to pay TIF Indebtedness issued pursuant to Sections 3.02 and 3.03 above.

ARTICLE IV
OBLIGATIONS OF REDEVELOPER

Section 4.01 Construction of Project: Insurance.

(a) Redeveloper will complete the Project and install all improvements, buildings, fixtures, equipment and furnishings necessary to operate the Project. Redeveloper shall be solely responsible for obtaining all permits and approvals necessary to acquire, construct and equip the Project. The Village agrees, subject to its governing ordinances, to approve a use permit for construction and operation of the Project. Until construction of the Project has been completed, Redeveloper shall make reports in such detail and at such times as may be reasonably requested by the Village as to the actual progress of Redeveloper with respect to construction of the Project. Promptly after completion by the Redeveloper of the Project, the Redeveloper shall furnish to the Village a Certificate of Completion. The certification by the Redeveloper shall be a conclusive determination of satisfaction of the agreements and covenants in this Redevelopment Contract with respect to the obligations of Redeveloper and its successors and assigns to construct the Project. As used herein, the term “completion” shall mean substantial completion of the Project.

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(b) Any contractor chosen by the Redeveloper or the Redeveloper itself shall be required to obtain and keep in force at all times until completion of construction, policies of insurance including coverage for contractors’ general liability and completed operations and a penal bond as required by the Act. The Village and the Redeveloper shall be named as additional insureds. Any contractor chosen by the Redeveloper or the Redeveloper itself, as an owner, shall be required to purchase and maintain property insurance upon the Project to the full insurable value thereof. This insurance shall insure against the perils of fire and extended coverage and shall include “All Risk” insurance for physical loss or damage. The contractor or the Redeveloper, as the case may be, shall furnish the Village with a Certificate of Insurance evidencing policies as required above. Such certificates shall state that the insurance companies shall give the Village prior written notice in the event of cancellation of or material change in any of the policies.

Section 4.02 Cost Certification.

Redeveloper shall submit to Village a certification of Project Costs, on or before the date of submission of the Certificate of Completion, prepared by a certified public accountant acceptable to Village, which shall contain detail and documentation showing the payment of Project Costs specified on the attached Exhibit D in an amount at least equal to the grant to Redeveloper pursuant to Section 3.05.

Section 4.03 Redeveloper to Operate Project.

Redeveloper will operate the Project for not less than 15 years from the effective date of the provision specified in Section 3.01 of this Redevelopment Contract.

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Section 4.04 No Discrimination.

Redeveloper agrees and covenants for itself, its successors and assigns that as long as any TIF Indebtedness is outstanding, it will not discriminate against any person or group of persons on account of race, sex, color, religion, national origin, ancestry, disability, marital status or receipt of public assistance in connection with the Project. Redeveloper, for itself and its successors and assigns, agrees that during the construction of the Project, Redeveloper will not discriminate against any employee or applicant for employment because of race, religion, sex, color, national origin, ancestry, disability, marital status or receipt of public assistance. Redeveloper will comply with all applicable federal, state and local laws related to the Project.

Section 4.05 Pay Real Estate Taxes.

Redeveloper intends to create a taxable real property valuation of the Redevelopment Area and Project of Ten Million Dollars ($10,000,000) no later than as of January 1, 2007 and Thirty Two Million Three Hundred Thirty Six Thousand One Hundred Five Dollars ($32,336,105) no later than as of January 1, 2008. During the period that any TIF Indebtedness is outstanding, Redeveloper will (1) not protest a real estate property valuation on the Redevelopment Area of Thirty Two Million Three Hundred Thirty Six Thousand One Hundred Five Dollars ($32,336,105) or less after substantial completion or occupancy; (2) not convey the Redevelopment Area or structures thereon to any entity which would be exempt from the payment of real estate taxes or cause the nonpayment of such real estate taxes; and (3) cause all real estate taxes and assessments levied on the Redevelopment Area and Project to be paid prior to the time such become delinquent during the term that any Bonds are outstanding.

Section 4.06 Payment in Lieu of Taxes.

Redeveloper agrees to make payments in lieu of taxes, immediately upon receipt of notice from Village, if for any reason at any time TIF Revenues received by the Village are not sufficient to pay principal and interest on the TIF Indebtedness when due. This payment in lieu of tax obligation may be represented by a note or other evidence of indebtedness and shall, if required by Village, be secured by a mortgage or deed of trust on the Redevelopment Area in favor of the Village.

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Section 4.07 No Assignment or Conveyance.

Redeveloper shall not convey, assign or transfer the Redevelopment Area, the Project or any interest therein prior to the termination of the 15 year period commencing on the effective date specified in Section 3.01 hereof, without the prior written consent of the Village, which the Village shall grant or deny within fifteen (15) days of receipt of written request from Redeveloper, which consent shall not be unreasonably withheld, and which the Village may make subject to any terms or conditions it deems appropriate, except for the following conveyances, which shall be permitted without consent of Village:

(a) any conveyance as security for indebtedness incurred by Redeveloper for Project Costs or any subsequent physical improvements to the Redevelopment Area, provided that any such conveyance shall be subject to the obligations of the Redeveloper pursuant to this Redevelopment Contract:

(b) any conveyance to any person or entity which owns more than 50% of the voting equity interests of Redeveloper (if Redeveloper is a corporation, partnership, limited liability company or other entity) or with respect to which Redeveloper owns more than 50% of the voting equity interests, provided that any such successor owner of the Project agrees to assume all obligations of the Redeveloper and be bound by all terms and conditions of this Redevelopment Contract;

(c) if Redeveloper is a corporation, partnership or limited liability company, any merger, consolidation. split off, split-up, spin off or other reorganization of Redeveloper which does not result in a substantial change of control or management of the Redeveloper, provided that any such successor owner of the Project agrees to assume all obligations of the Redeveloper and be bound by all terms and conditions of this Redevelopment Contract.

13

ARTICLE V
FINANCING REDEVELOPMENT PROJECT; ENCUMBRANCES

Section 5.01 Financing.

Redeveloper shall pay all Project Costs and any and all other costs related to the Redevelopment Area and the Project which are in excess of the amounts paid from the proceeds of the TIF Indebtedness granted to Redeveloper. Prior to issuance of the TIF Indebtedness, Redeveloper shall provide Village with evidence satisfactory to the Village that private funds have been committed to the Redevelopment Project in amounts sufficient to complete the Redevelopment Project. Redeveloper shall timely pay all costs, expenses, fees, charges and other amounts associated with the Project.

Section 5.02 Encumbrances.

Redeveloper shall not create any lien, encumbrance or mortgage on the Project or the Redevelopment Area without the prior written consent of the Village except (a) encumbrances which secure indebtedness incurred to acquire, construct and equip the Project or for any other physical improvements to the Redevelopment Area; and (b) encumbrances which secure indebtedness which, when added to all indebtedness secured by encumbrances on the Project or Redevelopment Area, do not exceed seventy percent (70%) of the fair market value of the Project and the Redevelopment Area.

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ARTICLE VI
DEFAULT, REMEDIES; INDEMNIFICATION

Section 6.01 General Remedies of Village and Redeveloper.

Subject to the further provisions of this Article VI, in the event of any failure to perform or breach of this Redevelopment Contract or any of its terms or conditions, by any party hereto or any successor to such party, such party, or successor, shall, upon written notice from the other, proceed immediately to commence such actions as may be reasonably designed to cure or remedy such failure to perform or breach which cure or remedy shall be accomplished within a reasonable time by the diligent pursuit of corrective action. In case such action is not taken, or diligently pursued, or the failure to perform or breach shall not be cured or remedied within a reasonable time, this Redevelopment Contract shall be in default and the aggrieved party may institute such proceedings as may be necessary or desirable to enforce its rights under this Redevelopment Contract, including, but not limited to, proceedings to compel specific performance by the party failing to perform or in breach of its obligations.

Section 6.02 Additional Remedies of Village.

In the event that:

(a) The Redeveloper, or successor in interest, fails to commence construction of the Project (which, for purposes of this paragraph shall mean expenditure (or binding commitments to incur expenditures) of an amount equal to at least ten percent (10%) of the total projected cost of the Project) by July 1, 2006;

(b) The Redeveloper, or successor in interest, shall fail to complete the construction of the Project on or before January 1, 2008, or shall abandon construction work for any period of 90 days;

15

(c) The Redeveloper, or successor in interest, shall fail to pay real estate taxes or assessments on the Redevelopment Area or any part thereof or payments in lieu of taxes pursuant to Section 4.07 when due; or

(d) There is, in violation of Section 4.08 of this Redevelopment Contract, and such failure or action by the Redeveloper has not been cured within 30 days following written notice from Village, then the Redeveloper shall be in default of this Redevelopment Contract.

In the event of such failure to perform, breach or default occurs and is not cured in the period herein provided, the parties agree that the damages caused to the Village would be difficult to determine with certainty and that a reasonable estimation of the amount of damages that could be incurred is the amount of the grant to Redeveloper pursuant to Section 3.04 of this Redevelopment Contract, less any reductions in the principal amount of the TIF Indebtedness, plus interest on such amounts as provided herein (the “Liquidated Damages Amount”). The Liquidated Damages Amount shall be paid by Redeveloper to Village within 30 days of demand from Village.

Interest shall accrue on the Liquidated Damages Amount at the rate of one percent (1%) over the prime rate as published and modified in the Wall Street Journal from time to time and interest shall commence from the date that the Village gives notice to the Redeveloper demanding payment.

Payment of the Liquidated Damages Amount shall not relieve Redeveloper of its obligation to pay real estate taxes or assessments or payments in lieu of taxes with respect to the Project.

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Section 6.03 Remedies in the Event of Other Redeveloper Defaults.

In the event the Redeveloper fails to perform any other provisions of this Redevelopment Contract (other than those specific provisions contained in Section 6.02), the Redeveloper shall be in default. In such an instance, the Village may seek to enforce the terms of this Redevelopment Contract or exercise any other remedies that may be provided in this Redevelopment Contract or by applicable law; provided, however, that the default covered by this Section shall not rive rise to a right or rescission or termination of this Redevelopment Contract, and shall not be covered by the Liquidated Damages Amount.

Section 6.04 Forced Delay Beyond Party’s Control.

For the purposes of any of the provisions of this Redevelopment Contract, neither the Village nor the Redeveloper, as the case may be, nor any successor in interest, shall be considered in breach of or default in its obligations with respect to the conveyance or preparation of the Redevelopment Area for redevelopment, or the beginning and completion of construction of the Project, or progress in respect thereto, in the event of forced delay in the performance of such obligations due to unforeseeable causes beyond its control and without its fault or negligence, including, but not restricted to, acts of God, or of the public enemy, acts of the Government, acts of the other party, fires, floods, epidemics, quarantine restrictions, strikes, freight embargoes, and unusually severe weather or delays in subcontractors due to such causes; it being the purpose and intent of this provision that in the event of the occurrence of any such forced delay, the time or times for performance of the obligations of the Village or of the Redeveloper with respect to construction of the Project, as the case may be, shall be extended for the period of the forced delay: Provided, that the party seeking the benefit of the provisions of this section shall, within thirty (30) days after the beginning of any such forced delay, have first notified the other party thereof in writing, and of the cause or causes thereof and requested an extension for the period of the forced delay.

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Section 6.05 Limitation of Liability: Indemnification.

Notwithstanding anything in this Article VI or this Redevelopment Contract to the contrary, neither the Village, nor their officers, directors, employees, agents or their governing bodies shall have any pecuniary obligation or monetary liability under this Redevelopment Contract. The sole obligation of the Village under this Redevelopment Contract shall be the issuance of the TIF Indebtedness and granting of a portion of the proceeds thereof to Redeveloper, as specifically set forth in Sections 3.02 and 3.04. The obligation of the Village on any TIF Indebtedness shall be limited solely to the TIF Revenues pledged as security for such TIF Indebtedness. Specifically, but without limitation, Village shall not be liable for any costs, liabilities, actions, demands, or damages for failure of any representations, warranties or obligations hereunder. The Redeveloper releases the Village from, agrees that the Village shall not be liable for, and agrees to indemnify and hold the Village harmless from any liability for any loss or damage to property or any injury to or death of any person that may be occasioned by any cause whatsoever pertaining to the Project,

The Redeveloper will indemnify and hold each of the Village and their directors, officers, agents, employees and member of their governing bodies free and harmless from any loss, claim, damage, demand, tax, penalty, liability, disbursement, expense, including litigation expenses, attorneys’ fees and expenses, or court costs arising out of any damage or injury, actual or claimed, of whatsoever kind or character, to property (including loss of use thereof) or persons, occurring or allegedly occurring in, on or about the Project during the term of this Redevelopment Contract or arising out of any action or inaction of Redeveloper, whether or not related to the Project, or resulting from or in any way connected with specified events, including the management of the Project, or in any way related to the enforcement of this Redevelopment Contract or any other cause pertaining to the Project.

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ARTICLE VII
MISCELLANEOUS

Section 7.01 Notice Recording.

This Redevelopment Contract or a notice memorandum of this Redevelopment Contract shall be recorded with the County Register of Deeds in which the Redevelopment Area is located.

Section 7.02 Governing Law.

This Redevelopment Contract shall be governed by the laws of the State of Nebraska, including but not limited to the Act.

Section 7.03 Binding Effect: Amendment.

This Redevelopment Contract shall be binding on the parties hereto and their respective successors and assigns. This Redevelopment Contract shall run with the Redevelopment Area. The Redevelopment Contract shall not be amended except by a writing signed by the party to be bound.

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IN WITNESS WHEREOF, Village and Redeveloper have signed this Redevelopment Contract as of the date and year first above written.

ATTEST:	VILLAGE OF ADAMS, NEBRASKA
/s/ Lorie Parde	By:	Chris Schiebar
Village Clerk		Board Chairperson

STATE OF NEBRASKA	)
	) ss.
COUNTY OF GAGE	)

The foregoing instrument was acknowledged before me this 29^th day of May, 2007, by Chris Schiebar and Lorie Parde, Chairman of the Village Board and Village Clerk, respectively, of the Village of Adams, Nebraska, on behalf of the Village.

(SEAL)
	/s/ Andrew K. Carothers
	E ENERGY ADAMS, LLC
	By:	/s/ Carl Sitzmann, CEO
		Manager

STATE OF NEBRASKA	)
	) ss.
COUNTY OF GAGE	)

The foregoing instrument was acknowledged before me this 1st day of June, 2007, by Carl
Sitzmann, Manager of E Energy Adams, LLC, on behalf of the limited liability company.

(SEAL)
	/s/ Jenny Moerer
	Notary Public

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EXHIBIT A

DESCRIPTION OF REDEVELOPMENT AREA

A tract of land composed of the East Half of the Northwest Quarter of the Northeast Quarter (E/2 NW/4 NE/4); the Southwest Quarter of the Northeast Quarter (SW/4 NE/4); the Northwest Quarter of the Southeast Quarter (NW/4 SE/4); the Northeast Quarter of Southwest Quarter (NE/4 SW/4); the Southeast Quarter of the Southwest Quarter (SE/4 SW/4); a portion of the Southeast Quarter of the Northwest Quarter (SE/4 NW/4); a portion of the Southwest Quarter of the Southeast Quarter (SW/4 SE/4); a portion of the Southeast Quarter of the Southeast Quarter (SE/4 SE/4); a portion of the Northeast Quarter of the Southeast Quarter (NE/4 SE/4); located in Section Seventeen (17); and a portion of the Northeast Quarter of the Northeast Quarter (NE/4 NE/4) of Section Twenty (20); all in Township Six (6) North, Range Eight (8) East of the 6^th P.M., Gage County, Nebraska, except for railroad right-of-way of record, described as follows:

Beginning at the Southeast corner of the Northeast Quarter of the Northeast Quarter (NE/4 NE/4) of said Section Twenty (20); thence on an assumed bearing of South 88 Degrees, 46 Minutes, 05 Seconds West, along the South line of said Northeast Quarter of the Northeast Quarter (NE/4 NE/4), a distance of 307.42 feet to a point being 300.00 feet southwest of the southwesterly right-of-way line of the existing B.N.S.F. Railroad; thence North 19 Degrees, 33 Minutes, 28 Seconds West, along a line 300.00 feet southwesterly from and parallel with the southwesterly right-of-way line of said B.N.S.F. Railroad, a distance of 1433.70 feet to a point of curvature; thence on a curve to the left with a 3469.72 feet radius, a central angle of 20 Degrees, 55 Minutes, 37 Seconds, an arc distance of 1267.28 feet, with a chord which bears North 30 Degrees, 01 Minutes, 17 Seconds West, and chord distance of 1260.25 feet to a point; thence North 40 Degrees, 29 Minutes, 04 Seconds West, along a line 300.00 feet southwesterly from and parallel with the southwesterly right-of-way line of said B.N.S.F. Railroad, a distance of 219.15 feet to a point on the North line of the Southwest Quarter of the Southeast Quarter (SW/4 SE/4) of said Section 17; thence South 88 Degrees, 49 Minutes, 24 Seconds West, along the North line of said Southwest Quarter of the Southeast Quarter (SW/4 SE/4) of said Section 17, a distance of 1043.24 feet to the Northwest Corner of said Southwest Quarter of the Southeast Quarter (SW/4 SE/4) of the said Section 17; thence South 00 Degrees, 12 Minutes, 22 Seconds West, along the West line of said Southwest Quarter of the Southeast Quarter (SW/4 SE/4) of said Section 17, a distance of 1319.04 feet to the Southeast corner of the Southeast Quarter of the Southwest Quarter (SE/4 SW/4) of said Section 17; thence South 88 Degrees, 45 Minutes, 10 Seconds West, along the South line of said Southeast Quarter of the Southwest Quarter (SE/4 SW/4) of said Section 17, a distance of 1314.74 feet to the Southwest Corner of said Southeast Quarter of the Southwest Quarter (SE/4 SW/4) of said Section 17; thence North 00 Degrees, 18 Minutes, 29 Seconds East, along the West line of the Southeast Quarter of the Southwest Quarter (SE/4 SW/4) and the West line of the Northeast Quarter of the Southwest Quarter (NE/4 SW/4) of said Section 17, a distance of 2641.13 feet to the Northwest Corner of said Northeast Quarter of the Southwest Quarter (NE/4 SW/4) of said Section 17; thence North 00 Degrees, 18 Minutes, 35 Seconds East, along the West Line of the Southeast Quarter of the Northwest Quarter (SE/4 NW/4) of said Section 17, a distance of 263.42 feet to a point;

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thence North 49 Degrees, 30 Minutes, 56 Seconds East, a distance of 887.87 feet to a point 200.00 feet southwesterly from the southwesterly right-of-way line of said B.N.S.F. Railroad; thence North 40 Degrees, 29 Minutes, 04 Seconds West, along a line 200.00 feet southwesterly from and parallel with the southwesterly right-of-way line of said B.N.S.F. Railroad, a distance of 637.98 feet to a point on the North line of said Southeast Quarter of the Northwest Quarter (SE/4 NW/4) of said Section 17; thence North 88 Degrees, 57 Minutes, 14 Seconds East, along the North line of said Southeast Quarter of the Northwest Quarter (SE/4 NW/4) of said Section 17, a distance of 1051.27 feet to the Northeast corner of said Southeast Quarter of the Northwest Quarter (SE/4 NW/4) of said Section 17; thence North 88 Degrees, 57 Minutes, 50 Seconds East, along the North line of the Southwest Quarter of the Northeast Quarter (SW/4 NE/4) of said Section 17, a distance of 653.70 feet to the Southwest corner of the East Half of the Northwest Quarter of the Northeast Quarter (E/2 NW/4 NE/4) of said Section 17; thence North 00 Degrees, 11 Minutes, 42 Seconds East, along the West Line of said East Half of the Northwest Quarter of the Northeast Quarter (E/2 NW/4 NE/4) of said Section 17, a distance of 1318.71 feet to the Northwest corner of said East Half of the Northwest Quarter of the Northeast Quarter (E/2 NW/4 NE/4) of said Section 17; thence North 89 Degrees, 00 Minutes, 36 Seconds East, along the North line of said East Half of the Northwest Quarter of the Northeast Quarter (E/2 NW/4 NE/4) of said Section 17, a distance of 652.60 feet to the Northeast corner of the Northwest Quarter of the Northeast Quarter (NW/4 NE/4) of said Section 17; thence South 00 Degrees, 06 Minutes, 15 Seconds West, along the East line of said Northwest Quarter of the Northeast Quarter (NW/4 NE/4), and the East line of the Southwest Quarter of the Northeast Quarter (SW/4 NE/4) of said Section 17, a distance of 2634.95 feet to the Northeast corner of the Northwest Quarter of the Southeast Quarter (NW/4 SE/4) of said Section 17; thence South 00 Degrees, 02 Minutes, 44 Seconds West, along the East line of said Northwest Quarter of the Southeast Quarter (NW/4 SE/4) of said Section 17, a distance of 1177.98 feet to a point on the southwesterly right-of-way line of said B.N.S.F. Railroad; thence South 40 Degrees, 29 Minutes, 04 Seconds East, along the southwesterly right-of-way line of B.N.S.F. Railroad, a distance of 153.94 feet to a point of curvature; thence on a curve to the right, with a 3769.72 feet radius, a central angle of 20 Degrees, 55 Minutes, 37 Seconds, an arc distance of 1376.87 feet, with a chord which bears South 30 Degrees, 01 Minutes, 17 Seconds East, and a chord distance of 1369.23 feet to a point; thence South 19 Degrees, 33 Minutes, 28 Seconds East, along said southwesterly right-of-way line of the B.N.S.F. Railroad, a distance of 1508.48 feet to a point on the East line of the Northeast Quarter of the Northeast Quarter (NE/4 NE/4) of said Section 20; thence South 00 Degrees, 54 Minutes, 51 Seconds West, along the East line of said Northeast Quarter of the Northeast Quarter (NE/4 NE/4) of said Section 20, a distance of 23.36 feet to the point of beginning. Containing 221.57 acres, more or less.

22

EXHIBIT B

DESCRIPTION OF PROJECT

An ethanol production facility, including all necessary receiving, storage, processing, pollution control, waste handling, and shipping buildings, equipment and furnishings and ancillary facilities sufficient to produce, from corn, approximately 50 million gallons of anhydrous ethanol annually. The Project does not include any public roads.

23

EXHIBIT C

TIF INDEBTEDNESS

1.       Principal Amount:	The maximum amount, which, together with interest accruing thereon, can be fully amortized by December 31, 2021, solely from projected TIF Revenues based on the current aggregate ad valorem tax rate (together with the City’s ad valorem tax rate) applicable to the Redevelopment Area times an assumed project valuation of $32,366,105.00.
2.       Payments:	Semi-annually or more frequent, with interest only until 2009, in substantially equal amounts sufficient to fully pay the TIF Indebtedness in full on or before December 31, 2021.
3.       Interest Rate:	To be determined by Redeveloper, not to exceed ten percent (10%).
4.       Maturity Date:	On or before December 31, 2021.

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EXHIBIT D

PROJECT COSTS

All Project Costs payable from the proceeds of TIF Indebtedness pursuant to the Act including:

1.	Redevelopment Area Acquisition cost
2.	Site work and site preparation
3.	Utility extensions, installation of gas, water, sewer and electrical lines and equipment
4.	Construction of roadways and rail service lines
5.	Pollution control equipment

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EX-10.26

Exhibit 10.26

LOAN AGREEMENT

by and between

Security First Bank,
as Lead Lender

and

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

Dated as of June 29, 2007

TABLE OF CONTENTS

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

(i)

LOAN AGREEMENT

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

RECITALS:

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

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

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

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

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

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

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

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

THE AGREEMENT

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Origination Fees:		$	2,000.00
Bond Counsel:		$	55,000.00
Placement Agent:	($100,700 — 5,000 paid out of new money)	$	95,700.00

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

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

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

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

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

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

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

Section 4. The Loan.

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

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

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

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

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

Section 6. The Pledge.

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

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Section 7. Loan Repayments and Prepayments.

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

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

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

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

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

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

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

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

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

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Section 8. Debt Service Reserve Fund.

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

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

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

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

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

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

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

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

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Section 9. Capitalized Interest Fund.

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

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

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

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

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

Section 10. Disbursement of Loan Proceeds.

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

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

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

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

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

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

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

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

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

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

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

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

Section 11. Transfer and Assignments.

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

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

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

Section 12. Participations.

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

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

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

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

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

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

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

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

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

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

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

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

To the Borrower:	E Energy Adams, LLC
	510 Main Street
	PO Box 49
	Adams, NE 68301
	Attention: Larry Brees
	Phone: (402) 988-4655
	Fax: (402) 988-5205
With a copy to:	Crosby Guenzel, LLP
	Suite 400
	Federal Trust Building
	134 South 13th Street
	Lincoln, NE 68508
	Attention: Dave Jarecke
	Phone: (402) 434-7329
	Fax: (402) 434-7303
To the Lead Lender:	Security First Bank
	5710 South 53rd St.
	Lincoln, NE 68512
	Attention: Aaron Bell
	Phone: (402) 323-8006
	Fax: (402) 323-8021
	Email: abell@security1stbank.com

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

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

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

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

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

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

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

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

SECURITY FIRST BANK, as Lead Lender, on behalf of all Participants
By:	/s/ John Daubert
	John Daubert
	President / CEO

E ENERGY ADAMS, LLC, a Nebraska limited liability company as Borrower
By:	/s/ Jack L. Alderman
	Its: Chairman

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SCHEDULE 1

LIST OF PARTICIPANTS

Lead Bank	Portion of Total Loan ($)		Participation Interest (%)
Security First Bank Attn: John Daubert 57103 S 53rd St Lincoln, NE 68516 (402) 323-8011	$	2,535,000		50.34757	%
Participants
Commercial National Bank of Ainsworth Attn: Doug Weiss 200 N Main St P.O. Box 6 Ainsworth, NE 69210 (402) 387-2381	$	500,000		9.93049	%
First National Bank Attn: Jack Beard Main St & Parker St P.O. Box 248 Lewellen, NE 69147 (308) 778-5361	$	500,000		9.93049	%
Exchange Bank Attn: Brian Schardt 1204 Allen Dr Grand Island, NE 68803	$	500,000		9.93049	%
Plattsmouth State Bank Attn: Joan Lewis 446 Main St Plattsmouth, NE 68048 (402) 296-2194	$	500,000		9.93049	%
The Gothenburg State Bank & Trust Company Attn: Luke Rickertsen 900 Lake Ave P.O. Box 81 Gothenburg, NE 69138 (308) 537-7181	$	250,000		4.96524	%
Curtis State Bank Attn: John Wilkinson 301 Center Ave P.O. Box 69025 (308) 367-4155	$	250,000		4.96524	%
TOTAL	$	5,035,000		100	%

EXHIBIT A

QUALIFIED PROJECT COSTS

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

EXHIBIT B

CLOSING COSTS

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

B-1

EXHIBIT C

RESOLUTION OF BORROWER

RESOLUTION OF BOARD OF DIRECTORS
OF
E ENERGY ADAMS, LLC

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

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

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

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

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

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

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

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

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

Dated effective: June 20, 2007.

/s/ Dennis L. Boesiger	/s/ Ron Miller
/s/ Tom Roode	/s/ Vinson VanEngen
/s/ Duane Wollenburg	s/ Steve Dean
/s/ Kenneth Brinkman	/s/ Jack L. Alderman
/s/ Mark Weber
/s/ Gary Bentzinger
/s Amy Johnston

EXHIBIT D

FORM OF BORROWER’S NOTE

PROMISSORY NOTE

$5,035,000.00 June 29, 2007

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

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

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

(C) Payment of Interest and Principal.

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

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

D-1

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

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

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

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

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

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

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

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

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

(D) Debt Service Coverage Event.

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

D-2

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

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

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

(E) Definitions.

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

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

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

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

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

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

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

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

D-3

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

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

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

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

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

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

D-4

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

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

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

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

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

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

[Signatures appear on following page]

D-5

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

WITNESS:	BORROWER:
	E ENERGY ADAMS, LLC,
	a Nebraska limited liability company
	By:
	Its:
	Hereunto duly authorized

D-6

Schedule 1
Principal and Interest Payments

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

D-7

EXHIBIT E

FORM OF SECURITY AGREEMENT

SECURITY AGREEMENT

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

RECITALS:

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

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

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

AGREEMENT

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

Definitions.

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

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

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

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

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

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

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

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

E-1

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

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

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

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

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

Perfection of Security Interests.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

If to Pledgee:

Security First Bank
5710 S 53^rd St.
Lincoln, NE 68512
Attention: Aaron Bell
Facsimile: (402) 323-8021

If to Pledgor:

E Energy Adams
510 Main Street
P.O. Box 49
Adams, NE 68301
Attention: Larry Brees
Facsimile: (402) 988-5205

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

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

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

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

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

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

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

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

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

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

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

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

[Remainder of this page intentionally left blank.]

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[signature page to Security Agreement]

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

PLEDGOR

E ENERGY ADAMS, LLC,
a Nebraska limited liability company

By:

Its:

PLEDGEE

SECURITY FIRST BANK,
on behalf of all Participants

John Daubert

President / CEO

Consent of Issuer:

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

THE VILLAGE OF ADAMS, NEBRASKA

By:

Its:

E-6

EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO 17 CFR 240.15d-14(a)
(SECTION 302 CERTIFICATION)

I, Carl Sitzmann, certify that:

1.	I have reviewed this quarterly report on Form 10-QSB of E Energy Adams, LLC;
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 small business issuer, as of, and for, the periods presented in this report;
4.	The small business issuer’s other certifying officers 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 small business issuer, 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 small business issuer, 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 small business issuer’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 changes in the small business issuer’s internal control over financial reporting that occurred during the small business issuer’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the small business issuer’s internal control over financial reporting; and

5. The small business issuer’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the small business issuer’s auditors and the audit committee of the small business issuer’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 small business issuer’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 small business issuer’s internal controls over financial reporting.

Date: August 14, 2007	/s/ Carl Sitzmann
	Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO 17 CFR 240.15d-14(a)
(SECTION 302 CERTIFICATION)

I, Nicholas J. Cusick, certify that:

1.	I have reviewed this quarterly report on Form 10-QSB of E Energy Adams, LLC;
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 small business issuer, as of, and for, the periods presented in this report;
4.	The small business issuer’s other certifying officers 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 small business issuer, 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 small business issuer, 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 small business issuer’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 changes in the small business issuer’s internal control over financial reporting that occurred during the small business issuer’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the small business issuer’s internal control over financial reporting; and

5. The small business issuer’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the small business issuer’s auditors and the audit committee of the small business issuer’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 small business issuer’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 small business issuer’s internal controls over financial reporting.

Date: August 14, 2007	/s/ Nicholas J. Cusick
	Treasurer (Principal Financial Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION 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 on Form 10-QSB of E Energy Adams, LLC (the “Company”) for the quarter ended June 30, 2007, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Carl Sitzmann, 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:

1.	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
2.	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Carl Sitzmann  

Chief Executive Officer  

Dated: August 14, 2007 

EX-32.2

Exhibit 32.2

CERTIFICATION 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 on Form 10-QSB of E Energy Adams, LLC (the “Company”) for the quarter ended June 30, 2007, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Nicholas J. Cusick, Treasurer (Principal 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:

1.	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
2.	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Nicholas J. Cusick  

Treasurer (Principal Financial Officer) 

Dated: August 14, 2007