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