Exhibit 10.1

 

THIRD AMENDMENT TO MASTER LOAN AGREEMENT

 

This THIRD AMENDMENT TO MASTER LOAN AGREEMENT (this “Amendment”) is entered into
as of September 10, 2010, by and between HOMELAND ENERGY SOLUTIONS, LLC, an Iowa
limited liability company (“Borrower”), and HOME FEDERAL SAVINGS BANK, a
federally chartered stock savings bank organized under the laws of the United
States (“Lender”).

 

RECITALS

 

A.            Borrower and Lender have entered into a Master Loan Agreement
dated November 30, 2007, as amended by that certain First Amendment dated August
29, 2008, and as further amended by that certain Second Amendment dated
September 28, 2009, and a First Supplement dated November 30, 2007, a Second
Supplement dated November 30, 2007, and a Third Supplement dated November 30,
2007 (collectively, the “Loan Agreement”) under which Lender agreed to extend
certain financial accommodations to Borrower.

 

B.            Borrower has requested that amounts being held in the Debt Service
Reserve Account be released for prepayment of the Term Loan, and Lender has
agreed to such release upon the terms and conditions set forth herein.

 

NOW THEREFORE, in consideration of the facts set forth in the foregoing
Recitals, which the parties agree are true and correct, and in consideration for
entering into this Amendment and the related documents to be executed
concurrently herewith or pursuant hereto, the parties agree as follows:

 

AMENDMENT

 

1.             Amendments to Loan Agreement.  Section 5.01(t) of the Loan
Agreement is hereby amended and restated in its entirety, as follows:

 

(t)            Debt Service Reserve Account.  Upon demand by Lender, Borrower
shall be unconditionally obligated to replenish the Debt Service Reserve Account
to an amount equal to $10,000,000.00, without presentment, demand, protest, or
other formalities of any kind.  Amounts held in the Debt Service Reserve Account
shall be disbursed or applied to repayment of the Loans in such order and manner
as Lender may elect in its sole discretion.  So long as no Event of Default
exists, Lender will release the Debt Service Reserve Account and Borrower’s
obligation to replenish said account will terminate when Borrower achieves and
maintains Tangible Net Worth of greater than or equal to sixty-five percent
(65%) and compliance with all covenants in this Agreement and the Supplements. 
Notwithstanding the foregoing, amounts held in the Debt Service Reserve Account
may be disbursed or applied to repayment of the Loans prior to the time when
Borrower has achieved and maintained Tangible Net Worth of greater than or equal
to sixty-five percent (65%) with the prior written consent of Lender, in such
order and manner as Lender may elect in its sole discretion; provided that
Borrower is in compliance with all covenants in this Agreement and the
Supplements.  In the event Lender agrees to allow Borrower to disburse the
amount held in the Debt Reserve Account early, Lender shall not demand that
Borrower replenish the Debt Service Reserve Account until

 

--------------------------------------------------------------------------------

 

after Borrower’s Tangible Net Worth is calculated at the next applicable
measurement date.  For purposes of this Section 5.01(t) Borrower’s Tangible Net
Worth shall be measured quarterly based on Borrower’s quarterly financial
statements provided pursuant to Section 5.01(c).

 

2.             Effect on Loan Agreement.  Except as expressly amended by this
Amendment, all of the terms, conditions, covenants and agreements of the Loan
Agreement shall be unaffected by this Amendment and shall remain in full force
and effect.  Nothing contained in this Amendment shall be deemed to constitute a
waiver of any events of default or to affect, modify, or impair any of the
rights of Lender as provided in the Loan Agreement.

 

3.             Conditions Precedent to Effectiveness of this Amendment.  The
obligations of the Lender hereunder are subject to the conditions precedent that
Lender shall have received the following, in form and substance satisfactory to
Lender:

 

a.             this Amendment duly executed by Borrower and Lender;

 

b.             $10,000,000.00 from Borrower, by the method provided in Section
2.12 of the Loan Agreement, as and for prepayment of all accrued and unpaid
interest on the Term Loan as of the date of this Amendment, with the balance of
such amount applied to the outstanding principal balance of the Term Loan.  Upon
receipt of such amount, Lender shall release $10,000,000.00 from the Debt
Service Reserve Account and apply such amount to the outstanding principal
balance of the Term Loan;

 

c.             all other documents, instruments, or agreements required to be
delivered to Agent under the Credit Agreement and not previously delivered to
Agent; and

 

d.             payment for all cost and expenses (including attorney’s fees) of
Lender associated with the documentation, execution and delivery of this
Amendment.

 

4.             Representations and Warranties of Borrower.  Borrower hereby
agrees, affirms, and acknowledges as follows:

 

a.             Section 5.01(t) of the Loan Agreement, shall remain in full force
and effect, as amended hereby, and all amounts currently held in the Debt
Service Reserve Account in excess of the $10,000,000.00 being released pursuant
to this Amendment, shall remain in the Debt Service Reserve Account until
released in accordance with the terms of the Loan Agreement.

 

b.             The representations and warranties contained in the Loan
Agreement are true and correct as of the date of this Amendment in all material
respects, except as otherwise previously disclosed in writing to Lender except
to the extent they relate solely to an earlier date.

 

c.             Borrower has full power and authority to execute, deliver, and
perform this Amendment and all documents, instruments and agreements required or
contemplated hereby, and when executed and delivered to Lender will constitute
the valid, binding and legally enforceable obligations of Borrower in accordance
with their respective terms and conditions, except as enforceability may be
limited by applicable bankruptcy or insolvency laws.

 

5.             Counterparts.  It is understood and agreed that this Amendment
may be executed in several counterparts, each of which shall be deemed an
original, and all of such counterparts, when taken together, shall constitute
one and the same agreement.

 

--------------------------------------------------------------------------------

 

SIGNATURE PAGE TO

THIRD AMENDMENT TO MASTER LOAN AGREEMENT

BY AND BETWEEN

HOMELAND ENERGY SOLUTIONS, LLC

AND

HOME FEDERAL SAVINGS BANK

 

DATED: September 10, 2010

 

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed
as of the date first above written.

 

BORROWER:

 

HOMELAND ENERGY SOLUTIONS, LLC,

an Iowa limited liability company

 

 

/s/ Walter Wendland

 

By:  Walter Wendland

Its: President/CEO

 

LENDER:

 

HOME FEDERAL SAVINGS BANK,

a federally chartered stock savings bank

organized under the laws of the United States

 

 

/s/ Eric Oftedahl

 

By:  Eric Oftedahl

Its: Vice President

 

--------------------------------------------------------------------------------