EXHIBIT 10.20


 


SECURED PROMISSORY NOTE


 


$600,000


 


FOR
VALUE RECEIVED, Heron Lake BioEnergy, LLC, a Minnesota limited liability
company, (Borrower) promises to pay Federated Rural Electric Association, a
Minnesota cooperative corporation (Lender), [1] the principal sum of Six
Hundred Thousand and no/100 ($600,000) Dollars, with interest on the unpaid
principal balance from the date of this Note, until paid, at the rate of zero
percent (0.0 %) per annum; and [2] an annual handling fee of 1 percent of the
unpaid balance from time to time, payable on the anniversary date of the note.  All payments under and pursuant to this Note
shall be payable at the offices of Federated Rural Electric Association., 77100
US Highway 71, PO Box 69, Jackson, MN 56143 or such other place as Lender may
designate; and principal is payable in consecutive monthly installments of Six
Thousand two Hundred fifty ($6,250.00) Dollars, on the 10th day of each month,
beginning on October, 2009.  Such monthly
installments of principal shall continue until the entire indebtedness
evidenced by this Note is fully paid, except any remaining indebtedness, if not
sooner paid, shall be due and payable not later than


 


This
Note is issued pursuant to the terms of the resolution of the Lender’s Board of
Directors dated December 28, 2007, and is secured by assets identified on
the Security Agreement dated December 28, 2007 between Federated Rural
Electric Association, and Heron Lake BioEnergy, LLC.  (This Secured Promissory Note, Loan
Agreement, Legal Opinion, the Security Agreement, Certified Resolution and the
Loan Amortization Schedule collectively may be referred to as the “Borrower
Documents.”)


 


This
Note shall be construed in accordance with the laws of the State of Minnesota
and the Uniform Commercial Code (“UCC”) as adopted in Minnesota.  Borrower hereby irrevocably [1] submits to
the jurisdiction of any Minnesota court over any action or proceeding brought
by the Borrower, the Lender, or any holder of the Note arising out of or
relating to the Borrower Documents, and [2] agrees that all claims with respect
to such action or proceeding may be heard and determined in such Minnesota
state court.


 


If any
monthly installment under this Note is not paid when due and remains unpaid,
the entire principal amount shall at once become due and payable at the option
of the Note holder.  The Note holder may
exercise this option to accelerate during any default by Borrower regardless of
any prior forbearance, and any such prior forbearance shall not constitute a waiver.  If suit is brought to collect this Note, the
Note holder shall be entitled to collect all reasonable costs and expenses of
suit, including, but not limited to, reasonable attorney fees.


 


Borrower
may prepay the principal amount outstanding in whole or in part without penalty
or premium.  The Note holder may require
that any partial prepayments be made on the date monthly installments are due
and be in the amount of that part of one or more monthly installments which
would be applicable to principal.  Any
partial prepayment shall be applied against the principal amount outstanding
and shall not change the amount of such installments, unless the Note holder
shall otherwise agree in writing.


 

















 


All
makers, sureties, guarantors and endorsers hereby waive presentment, notice of
dishonor, and protest hereof.  This Note
shall be the joint and several obligations of all makers, sureties, guarantors,
and endorsers, and shall be binding upon them and their successors and assigns.


 


Any
notice to Borrower provided for in this Note shall be given by mailing such
notice by first class mail addressed to Borrower at the property address stated
below, or to such other address as Borrower may designate by notice to the Note
holder, and shall constitute notice to Borrower and all guarantors as if
individual notices have been affected.  Any
notice to the Note holder shall be given by mailing such notice by certified
mail, return receipt requested, to the Note holder at the address stated in the
first paragraph of this Note, or at such other address as may have been
designated by notice to Borrower.


 


	
  Address:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Borrower:

  	
   

  	
   

  
	
  Heron Lake BioEnergy,
  LLC

  	
   

  	
   

  	
   

  	
   

  
	
  91246 390th Avenue, PO
  Box 198

  	
   

  	
  Heron Lake BioEnergy,
  LLC

  	
   

  	
   

  
	
  Heron Lake, MN 56137

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ Robert J. Ferguson

  
	
  Dated

  	
   12/28/2007

  	
   

  	
  By: Mr. Robert
  Ferguson

  	
   

  	
   

  
	
   

  	
  Its: President