Exhibit 10.2

 

AMENDMENT NO. 2 TO

AMENDED AND RESTATED FIFTH SUPPLEMENT

TO THE MASTER LOAN AGREEMENT

(REVOLVING LINE OF CREDIT LOAN)

 

This Amendment No. 2 to Amended and Restated Fifth Supplement to the Master Loan
Agreement dated December 30, 2010 (which document was erroneously captioned
First Amendment to Fifth Supplement to the Master Loan Agreement) (this
“Amendment”) is effective as of April 27, 2011, by and between HERON LAKE
BIOENERGY, LLC, a Minnesota limited liability company (“Borrower”), and AGSTAR
FINANCIAL SERVICES, PCA (“Lender”).

 

RECITALS

 

A.                                   Unless otherwise expressly defined herein,
capitalized terms used herein shall have the same meaning ascribed to them in
that certain Fourth Amended and Restated Master Loan Agreement dated as of
October 1, 2007 (as the same has been amended, supplemented, modified, extended
or restated from time to time, the “MLA”) or in the Amended and Restated Fifth
Supplement to the Master Loan Agreement dated December 30, 2010 (which document
was erroneously captioned First Amendment to Fifth Supplement to the Master Loan
Agreement), which was amended by that certain First Amendment to Amended and
Restated Fifth Supplement dated March 1, 2011 (as amended, the “Fifth
Supplement”), as applicable.

 

B.                                     Under the MLA and Fifth Supplement,
Lender extended various credit facilities to Borrower for purposes relating to
the operation, among other things, of an ethanol production facility in Jackson
County, Minnesota.

 

C.                                     Borrower and Lender have agreed to make
certain modifications to the MLA subject to the terms and conditions set forth
herein.

 

AGREEMENT

 

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

 

1.                                       Amendments to Fifth Supplement.  The
following defined term, as used in the Fifth Supplement and the other Loan
Documents, is hereby amended and restated as follows

 

“Revolving Line of Credit Loan Maturity Date” the earlier of (i) July 1, 2011 or
(ii) the occurrence of an Event of Default under that certain Third Amendment to
Forbearance Agreement between Lender and Borrower dated April 27, 2011.

 

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

 

a.                                       this Amendment duly executed by the
Borrower and the Lender;

 

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b.                                      the Allonge No. 2 to the Revolving Line
of Credit Note duly executed by the Borrower and the Lender;

 

c.                                       the Third Amendment to Forbearance
Agreement, and all documents, instruments and agreements identified or
contemplated therein, duly executed by the Borrower and the Lender; and

 

d.                                      all other documents, instruments, or
agreements required to be delivered to the Lender under the Loan Agreement and
not previously delivered to the Lender.

 

3.                                       Representations and Warranties of
Borrower.  The Borrower hereby agrees with, reaffirms, and acknowledges as
follows:

 

a.                                       The execution, delivery and performance
by Borrower of this Amendment is within Borrower’s power, has been duly
authorized by all necessary action, and does not contravene:  (i) its articles
of organization or operating agreement; or (ii) any law or any contractual
restriction binding on or affecting Borrower; and does not result in or require
the creation of any lien, security interest or other charge or encumbrance upon
or with respect to any of its properties;

 

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

 

c.                                       All other representations, warranties
and covenants contained in the MLA, Fifth Supplement and the other Loan
Documents are true and correct and in full force and effect.

 

4.                                       Miscellaneous.

 

a.                                       Effect; Ratification.  The amendments
set forth herein are effective solely for the purposes set forth herein and
shall be limited precisely as written, and shall not be deemed to (i) be a
consent to, or an acknowledgment of, any amendment, waiver or modification of
any other term or condition of the MLA or Fifth Supplement, including, without
limitation, a waiver of any rights or remedies available to the Lender on
account of any default or Event of Default, which may have occurred prior to the
date of this Amendment, or (ii) prejudice any right or remedy which Lender may
now have or may have in the future under or in connection with the MLA and Fifth
Supplement, as amended hereby, or any other instrument or agreement referred to
therein. It is further understood and agreed by and between the Borrower and the
Lender that all other terms and provisions of the MLA and Fifth Supplement shall
remain in full force and effect, enforceable by the Lender against the Borrower
as fully as though no amendments had been made hereby, and this Amendment shall
not be deemed to hinder, compromise or lessen the enforceability of the MLA,
Fifth Supplement, the Notes, or any mortgage, security interest, or guaranty
securing repayment of the Loans, in any way.  Each reference in the MLA, Fifth
Supplement and in any other Loan Document to the “Fifth Supplement” shall mean
the Fifth Supplement, as amended hereby.

 

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b.                                      Loan Documents.  This Amendment is a
Loan Document executed pursuant to the MLA and shall be construed, administered
and applied in accordance with the terms and provisions thereof.

 

c.                                       Defined Terms.  All terms used and not
otherwise defined herein shall have the meanings assigned to them in the MLA or
the Fifth Supplement, as applicable.

 

d.                                      Counterparts.  This Amendment may be
executed in any number of counterparts, each such counterpart constituting an
original and all of which when taken together shall constitute one and the same
instrument.

 

e.                                       Severability.  Any provision contained
in this Amendment which is held to be inoperative, unenforceable or invalid in
any jurisdiction shall, as to that jurisdiction, be inoperative, unenforceable
or invalid without affecting the remaining provisions of this Amendment in that
jurisdiction or the operation, enforceability or validity of such provision in
any other jurisdiction.

 

f.                                         GOVERNING LAW.  THIS AMENDMENT SHALL
BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF MINNESOTA.

 

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

 

{SIGNATURE PAGE FOLLOWS}

 

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SIGNATURE PAGE TO

AMENDMENT NO. 2 TO

AMENDED AND RESTATED FIFTH SUPPLEMENT

TO THE MASTER LOAN AGREEMENT

BY AND BETWEEN

HERON LAKE BIOENERGY, LLC

AND

AGSTAR FINANCIAL SERVICES, PCA

DATED AS OF:  April 27, 2011

 

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

 

 

BORROWER:

 

 

 

HERON LAKE BIOENERGY, LLC,

 

a Minnesota limited liability company

 

 

 

 

 

By:

/s/ Robert J. Ferguson

 

 

Robert J. Ferguson

 

 

Its: President

 

 

 

LENDER:

 

 

 

AGSTAR FINANCIAL SERVICES, PCA,

 

a United States corporation

 

 

 

 

 

By:

/s/ Mark Schmidt

 

 

Mark Schmidt

 

 

Its: Vice President

 

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